SCHEDULE 14A INFORMATION
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
CONSYGEN, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
--------------------------------------------------------------------------------
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:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
----------------------------------------------------
4) Date Filed:
------------------------------------------------------
<PAGE>
CONSYGEN, INC.
125 South 52nd Street
Tempe, AZ 85281
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
NOVEMBER 17, 2000
To the Stockholders:
Notice is hereby given that the 2000 Annual Meeting of the Stockholders of
CONSYGEN, INC. will be held on Friday, November 17, 2000 at 3:00 P.M. at Fiesta
Inn, 2100 South Priest Drive, Tempe, AZ 85282, for the following purposes:
1. To elect a Board of seven Directors, to serve until the next annual
meeting of stockholders and until their successors shall be elected and
qualified, as more fully described in the accompanying Proxy Statement;
2. To ratify the Board of Directors' selection of King, Weber & Associates,
P.C. as independent public accountants for the fiscal year ended May 31, 2001;
3. To consider an amendment to the Corporation's Articles of Incorporation
to increase the number of authorized shares from 40,000,000 to 60,000,000
shares; and
4. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on October 12, 2000
as the record date for the determination of stockholders having the right to
notice of, and to vote at the meeting. Only stockholders of record on the record
date are entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHETHER
OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By Order of the Board of Directors
Amelia C. Ulep, Secretary
Tempe, Arizona
October 12, 2000
<PAGE>
CONSYGEN, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ConSyGen, Inc. (the "Company") for use at
2000 Annual Meeting of Stockholders to be held on Friday, November 17, 2000, at
the time and place set forth in the attached notice of the meeting, and at any
adjournments thereof. The approximate date on which this Proxy Statement and the
enclosed Proxy are first being sent to stockholders is October 13, 2000.
If the enclosed Proxy is properly executed and returned, it will be voted
in the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person giving a proxy has the power to revoke it by voting in
person at the meeting, or by giving written notice of revocation to the
Secretary of the Company at any time before the proxy is exercised.
The holders of a majority in interest of all common stock, par value $.003
per share ("Common Stock") issued, outstanding and entitled to vote are required
to be present in person or to be represented by proxy at the meeting in order to
constitute a quorum for transaction of business. The election of nominees for
Director will be decided by a majority vote of the Common Stock entitled to vote
at the meeting. Abstentions and "non-votes" are counted as present in
determining whether the quorum requirement is satisfied. Abstentions and
"non-votes" have the same effect as votes against proposals presented to
stockholders, other than election of directors. Abstentions and "non-votes" will
have no effect on the election of directors. A "non-vote" occurs when a nominee
holding shares for a beneficial owner votes on one proposal, but does not vote
on another proposal because the nominee does not have discretionary voting power
and has not received instructions from the beneficial owner.
The Company will bear the cost of the solicitation. It is expected that the
solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telegraph,
telecopy, electronic mail and in person and arrange for brokerage houses and
other custodians, nominees and fiduciaries to send proxies and proxy materials
to their principals at the expense of the Company.
The Company's principal executive offices are located at 125 South 52nd
Street, Tempe, Arizona 85281, and its telephone number is (480) 394-9100.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on October 12, 2000
are entitled to notice of and to vote at the meeting. On October 6, 2000, the
Company had outstanding and entitled to vote 31,874,306 shares of Common Stock.
Each outstanding share of the Company's Common Stock entitles the record holder
to one vote.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Seven Directors of the Company are to be elected to hold office until the
next annual meeting and until their successors shall be duly elected and
qualified. The persons named in the accompanying proxy will vote, unless
authority is withheld, for the election of the seven nominees named below. If
any of such nominees should become unavailable for election, which is not
anticipated, the persons named in the enclosed proxy will vote for such
substitutes as management may recommend. No nominee is related to any other
nominee or to any executive officer of the Company or its subsidiaries.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A POSITION WITH THE COMPANY OR PRINCIPAL
NAME OF NOMINEE AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
--------------- --- -------- -------------------------------------
<S> <C> <C> <C>
A. Lewis Burridge 80 1998 Mr. Burridge is President and Chief Executive Officer of the
Company since March 1999, elected as Chairman on April 2000 and
has been a Member of the Board of Directors since June 1998. Mr.
Burridge has had a long and distinguished career spanning 30
years with Sterling Drug Inc. as Corporate Vice President and
President of Sterling Asia. Mr. Burridge focused developing
Sterling manufacturing and marketing companies throughout Asia
for its medical and consumer products in the Asia-Pacific area.
Mr. Burridge was President of the American Chamber of Commerce
both of Japan and the Philippines and was Chairman of the
Asia-Pacific Counsel of the American Chamber of Commerce. Since
1992, Mr. Burridge was Chief Operating Officer of Digitel Inc., a
telecommunications and Internet Company and Director of
Environment 1. He is currently a Director of Integrated
Transportation Network Group (ITNG), Director of Massa, Inc.,
Trustee/Director of the Trinity College of Vermont and Director
of the United States-Philippines Tourism Advisory Council.
John L. Caldwell 60 1999 Mr. Caldwell was elected to the Board on June 24, 1999. He is
President of U.S. Trading & Investment Company (USTIC),
international business firm that develops foreign markets for
American products, services and technologies and structures
business transactions worldwide. Mr. Caldwell has had extensive
experience in successfully developing and concluding projects and
contracts and establishing joint ventures, strategic alliances,
licensees, distribution networks and sales representatives in the
Asia Pacific region, European Union, Eastern Europe, Russia,
Latin America, Africa and the Middle East.
Mr. Caldwell was Managing Director, United States Trading Company
(1982), Senior Vice President and General Manager, Carl Byoir and
Associates (1981-1982) and Vice President, International, for the
U.S. Chamber of Commerce (1966-1980). He is currently a member of
the International Policy Committee of the U.S. Chamber of
Commerce and a lecturer at the Elliot School of International
Affairs, The George Washington University.
Luther H. Hodges, Jr. 63 2000 Mr. Hodges was appointed as a Director on June 6, 2000. Since
1990, he has been Chairman/Publisher of The Santa Fean Magazine,
and is an owner/manager of Santa Fe Hospitality and the Hotel
Santa Fe. He has recently served on a range of government
advisory committees in New Mexico, and is a member of the Arizona
Business Leadership Association. In 1979, he served as
Undersecretary of the U.S. Department of Commerce and in 1980 as
the First Deputy Secretary of Commerce. Mr. Hodges has also
served on the boards of numerous community, educational, and
corporate organizations, and he has been a member of the faculty
of the University of North Carolina (Chapel Hill) and Duke
University.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A POSITION WITH THE COMPANY OR PRINCIPAL
NAME OF NOMINEE AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
--------------- --- -------- -------------------------------------
<S> <C> <C> <C>
Donald P. Knode 77 1999 Mr. Knode was appointed to the Board of Directors on December 28,
1999. Mr. Knode headed Merrill Lynch Tokyo from 1961 to 1967 and
was appointed to Vice President of Merrill Lynch, Inc. due to his
accomplishments in Asia. In the 1990's, Mr. Knode consulted with
the Bull Market Technology Companies such as IBM, Microsoft,
Honeywell, Nasdaq, and United Technologies. Mr. Knode also
represented Blue Chip Companies like Proctol & Gamble. Mr. Knode
brings vast national experience to ConSyGen's Board.
Andrew Lee 51 1998 Mr. Lee was appointed to the Board of Directors on February 24,
1998 to fill an existing vacancy. Mr. Lee is President and a
Director of Integrated Transportation Network Group Inc. Since
1997, Mr. Lee has been the Co-Chairman of the Board and Co-Chief
Executive Officer of Greater Alliance Corporation, a financial
service corporation. Since 1992, Mr. Lee has been the President
and Chief Executive Officer of First Shanghai Corporation, a
merchant bank, BOXX International Corporation, a computer and
electronics company, and TowerCom Inc., a software company. Mr.
Lee also is Chairman of the Board of Valentine USA Inc., a
company that manufactures ladies' apparel.
Russell B. Stevenson, Jr. 59 2000 Mr. Stevenson was appointed as a Director on July 6, 2000. Since
2000, he has been Executive Vice President and General Counsel of
ARBROS Communications, Inc., a provider of integrated
communications services. From 1996 to 2000, he served as Senior
Vice President and General Counsel of CyberCash, Inc., a provider
of software and services for electronic commerce. Prior to that,
he practiced law at Ballard Spahr Andrews & Ingersoll. His law
practice has concentrated on securities and corporate law, with
an emphasis on technology-based companies and venture capital. He
has served on the faculty of George Washington University, and is
a member of the bars of the District of Columbia and the United
States Supreme Court.
Robert L. Stewart 81 1996 Mr. Stewart was appointed as a Director on March 24, 1999 and as
Chairman of the Board from August 2, 1999 until April 19,2000.
Prior to this, he had been the Chairman of the Board from 1980
until January 1999 and had served as President and Chief
Executive Officer of ConSyGen-Arizona from 1980 until January 15,
1997. He was also President and Chief Executive Officer of
ConSyGen-Texas from September 5, 1996 to January 15, 1997. Mr.
Stewart is currently a Director of Integrated Transportation
Network Group.
</TABLE>
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended May 31, 2000, the Board of Directors held a
total of 4 meetings; all meetings were in person at the Company's office in
Arizona. Meetings were held on June 24, 1999, December 13, 1999, January 31,
2000 and April 19, 2000. All in person meetings were attended by all incumbent
directors except for Mr. Lee who missed the last two meetings. All actions as a
result thereof were taken by unanimous written consent.
COMMITTEES OF THE BOARD OF DIRECTORS
Pursuant to action taken by unanimous written consent dated June 29, 1998,
the Board of Directors established an Audit Committee and a Compensation &
Benefits Committee. The Board of Directors does not have a nominating committee
or any committee performing similar functions.
3
<PAGE>
At May 3, 2000, the Audit Committee members were Messrs. John L. Caldwell
and Donald P. Knode. The Audit Committee had no meeting during the fiscal year
ended May 31, 2000. On September 25, 2000, Mr. Russell B. Stevenson, Jr. was
added as a third member of the Audit Committee. The Audit Committee has not
adopted a written charter. Based on the definition of "independent director" in
Rule 4200(a)(14) of the Rules of the National Association of Securities Dealers,
Inc., in the opinion of the Board of Directors of the Company, all current
members of the Company's Audit Committee are independent directors.
The Compensation and Benefits Committee consists of Messrs. Donald Knode
and John Caldwell. The Compensation Committee held one meeting during the fiscal
year ended May 31, 1999. Meeting was held on April 19, 2000. All actions as a
result thereof were taken by unanimous written consent during the Board of
Directors Meeting that was held the same day.
On June 24, 1999, an Executive Committee was formed to address various
Board level matters and development solutions only when the Board of Directors
is not in session but all major issues will be referred to the Board for
approval. Current members are Messrs. A. Lewis Burridge and Luther H. Hodges,
Jr. The Executive Committee had five Executive Memo sent out for the fiscal year
ended May 31, 2000, all actions as a result thereof were taken by unanimous
written consent.
AUDIT COMMITTEE REPORT
To the Board of Directors of ConSyGen, Inc.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended May 31, 2000.
We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communications with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-KSB for the year ended May 31, 2000.
Members of Audit Committee:
John L. Caldwell
Donald P. Knode
Russell B. Stevenson, Jr.
DIRECTOR COMPENSATION
The Compensation Committee recommended in their April 19, 2000 meeting to
change the Company's standard compensation arrangement whereby Directors who are
not also executive officers or employees of the Company will now receive
compensation in the amount of $1,500 for each meeting of the Board of Directors
or of a committee of the Board of Directors of which any such Director is a
member which is physically attended by such Directors and $500 for each
telephone meeting. In addition, the Company has increased the stock option grant
to such Directors to 25,000 shares of the Company's common stock under the
Company's 1997 Amended and Restated Non-Qualified Stock Option Plan. The
following table shows information concerning options granted to Directors during
the Company's fiscal year ended May 31, 2000.
4
<PAGE>
NUMBER OF
SECURITIES
UNDERLYING EXERCISE
OPTIONS PRICE EXPIRATION
NAME DATE GRANTED $/SHARE DATE
---- ---- ------- ------- ----
Andrew Lee 02/24/98 10,000 $0.50 (1) 02/24/08
04/19/00 15,000 $1.1875 (2) 04/19/10
John Caldwell 06/24/99 10,000 $0.50 (1) 06/24/09
04/19/00 15,000 $1.1875 (2) 04/19/10
Donald Knode 12/28/99 10,000 $0.50 (1) 12/28/09
04/19/00 15,000 $1.1875 (2) 04/19/10
Luther Hodges 06/06/00 25,000 $0.9062 (3) 06/06/10
Russell Stevenson 07/06/00 25,000 $1.00 (3) 07/06/10
----------
(1) Options are exercisable 50% at date of grant and 50% 1 year from such date.
(2) Options will vest over the next 12 months through 04/19/01 at 1/12 per
month.
(3) 5,000 shares are immediately exercisable and the remaining 20,000 Option
Shares shall be exercisable in twelve equal monthly installments.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by, or
paid to the Company's Chief Executive Officer and each of the Company's
Executive Officers (other than the Chief Executive Officer) whose total annual
salary and bonus exceeded $100,000 (collectively the "Named Executive Officers")
for all services rendered in all capacities to the Company and its subsidiaries
for each of the Company's last three completed fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPEN-
ANNUAL COMPENSATION SATION AWARDS
--------------------------------- --------------
OTHER SECURITIES
NAME AND YEAR ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION(1)(2) ENDED SALARY BONUS COMPENSATION OPTIONS(#)(4) COMPENSATION(5)
------------------------- ----- ------ ----- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
A. Lewis Burridge 05/31/00 $116,250 -- -- -- --
President & CEO 05/31/99 $ 22,769 -- -- 1,010,000 --
Jason M. Genet 05/31/00 $ 84,303 -- -- 495,000 --
Executive Vice President 05/31/99 $ 6,225 -- -- 5,000 --
Chief Operating Officer(3)
Thomas S. Dreaper 05/31/99 $ 83,231 -- -- -- --
Former President & CEO
Ronald I. Bishop 05/31/99 $ 87,500 -- -- 669,095 --
Former President & CEO 05/31/98 $107,708 $1,083 900,000
05/31/97 $ 26,250 -- -- 400,000 --
J. Stephen Kelly 05/31/99 $ 46,269 -- -- 64,685 --
Former EVP & Chief
Admin Officer
Robert L. Stewart 05/31/99 $119,750 -- -- -- --
Former President & CEO 05/31/98 $ 94,333 $1,429
05/31/97 $ 65,250 -- -- -- --
Carl H. Canter
Former President & CEO 05/31/97 -- -- -- -- --
05/31/96 -- -- -- -- $36,000
</TABLE>
5
<PAGE>
--------
(1) Mr. Lewis Burridge joined the Company as President and Chief Executive
Officer effective March 24, 1999.
(2) Mr. Thomas S. Dreaper served as President and Chief Executive Officer from
July 17, 1998 to March 23, 1999. For information regarding Mr. Dreaper's
compensation arrangements, see "Certain Relationships and Related
Transactions." Mr. Bishop served as President and CEO of the Company from
January 15, 1997 to June 30, 1998. Mr. Stewart served as President and CEO
of the Company from September 5, 1996, the date the Company acquired
ConSyGen-Arizona, through January 15, 1997. Mr. Canter served as President
and CEO of the Company until September 4, 1996. For information regarding
compensation arrangements and changes in terms of options in connection
with Mr. Bishop's termination of employment, see "Certain Relationships and
Related Transactions."
(3) Mr. Genet joined the Company on April 5, 1999.
(4) 1,000,000 options were granted to Mr. A. Lewis Burridge at $1.50 on March
30, 1999 which was repriced to $0.50 on October 1, 1999. Options were
granted to Ronald I. Bishop under the 1997 Amended and Restated
Non-Qualified Stock Option Plan. In November 1997, options to purchase
400,000 shares granted at an option price of $8.875 per share in March 1997
and options to purchase 500,000 shares granted at an option price of $5.50
per share in September 1997 were canceled and replaced by options to
purchase 900,000 shares at an option price of $4.00 per share. See "Stock
Option Plans - Option Grants in Fiscal Year Ended May 31, 1998" and "Report
of Ronald I. Bishop and the Board of Directors on Executive Compensation
and Repricing of Options."
(5) Represents amounts accrued by the Company and payable to The Canter
Corporation, a consulting firm controlled by Mr. Canter, for consulting
services provided by The Canter Corporation to the Company. In connection
with the acquisition, The Canter Corporation forgave this indebtedness.
EMPLOYMENT AGREEMENTS
The Company has prepared Employment Agreements, containing a range of
standard provisions as set out below, with the executive officers listed below.
Standard agreement provisions include:
* initial employment term of five years, automatically extended for
successive five-year periods if neither the Company nor the officer
provides the other party with notice of termination;
* officer eligibility to receive an annual bonus of up to 100% of base
salary;
* officer eligibility to receive fringe benefits, including monthly
lease payments for an automobile, as may be accorded other executives
under the Company's established plans and programs;
* officer eligibility to receive a non-qualified stock option to
purchase shares of the Company's stock (as listed below);
* in the event the Company terminates the officer without cause or if
the officer terminates employment for good reason, the Company must
pay to the officer an amount equal to five times base salary at the
time of termination, plus any bonus awarded but not yet paid and any
deferred bonus. Officer will be entitled to immediate vesting of all
restricted stock and unvested stock options, and the Company must
continue to pay the cost of health and welfare benefits for a period
of five years;
* in the event of the officer's death or termination for cause, the
Company must pay an amount equal to base salary earned and unpaid as
of the date of termination; and
6
<PAGE>
* in the event of a change in control, the officer shall be entitled to,
among other benefits, a cash payment equal to three times base salary.
Specific terms for each officer's employment agreement are:
AGREEMENT INITIAL TERM BASE SALARY AS OF STOCK
NAME DATE DATE JUNE 30, 2000 OPTIONS
---- ---- ---- ------------- -------
A. Lewis Burridge June 6, 2000 June 6, 2005 $175,000 1,000,000
Jason M. Genet June 6, 2000 June 6, 2005 $150,000 500,000
John D. Roskelley June 6, 2000 June 6, 2005 $ 90,000 300,000
Eric J. Strasser June 6, 2000 June 6, 2005 $100,000 300,000
Amelia C. Ulep June 6, 2000 June 6, 2005 $ 42,000 115,000
STOCK OPTIONS
In April 2000, the Company adopted the ConSyGen 2000 Combination Stock
Option Plan. This Plan was designed to supplement earlier stock option plans,
and to increase the total number of shares available for issuance within the
Company's stock option plans by 5,000,000 to a total of 10,500,000, either as
incentive stock options or non-qualified stock options. As of August 31, 2000,
options to purchase 3,685,577 shares of common stock were outstanding or
committed for issuance under the plan. Specific terms for grants under the Plan
are in the discretion of the Board or the Committee. The standard terms provide
that employees' options become exercisable in 48 equal monthly installments. The
standard maximum term for exercising options is ten years.
The following tables set forth with respect to each Named Executive Officer
certain information concerning (a) stock options granted during the Company's
fiscal year ended May 31, 2000 and (b) stock options exercised during the fiscal
year ended May 31, 2000 and unexercised at the end of such fiscal year.
OPTION GRANTS IN FISCAL YEAR ENDED MAY 31, 2000
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR $/SHARE DATE 5% ($) 10% ($)
---- ------- ----------- ------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Jason M. Genet 45,000 1.69% $0.50 07/16/09 52,999 97,720
250,000 9.36% $0.50 01/25/10 1,007,082 1,677,651
200,000 7.49% $0.50 02/01/10 531,034 904,816
John D. Roskelley 50,000 1.87% $0.50 07/21/09 81,693 144,890
50,000 1.87% $0.50 01/25/10 201,416 335,530
200,000 7.49% $0.50 02/01/10 531,034 904,816
Eric J. Strasser 300,000 11.23% $0.50 01/28/10 766,253 1,308,980
</TABLE>
----------
(1) The 5% and 10% assumed rates of annual compounded stock price appreciation
are mandated by the rules of the Securities and Exchange Commission and do
not represent the Company's estimate or projection of future prices of the
Company's common stock or of the potential realizable value of the options
granted.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS AT 5/31/00 IN-THE-MONEY OPTIONS AT 5/31/00
NAME EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- -------- ----------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
A. Lewis Burridge -- -- 743,333 / 266,667 673,460 / 241,600
Jason M. Genet 162,000 89,210 215,930 / 166,667 273,612 / 151,000
John D. Roskelley 30,000 24,124 170,000 / 100,000 154,020 / 90,600
Eric J. Strasser 35,000 43,750 165,000 / 100,000 149,490 / 90,600
</TABLE>
----------
(1) Represents the excess of the fair market value of the shares on the date of
exercise over the exercise price and does not necessarily reflect cash
realized upon the sale of such shares.
(2) Value based on the last quoted price of our common stock at $0.906 on May
31, 2000, as quoted on the National Association of Securities Dealers,
Inc.'s OTC Bulletin Board.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On June 26, 1998, Andrew Lee and Robert L. Stewart were elected to serve as
Members of the Compensation and Benefits Committee, which persons served as such
members for the duration of the fiscal year ended May 31, 1999. On December 13,
1999, John L. Caldwell was elected to replace Mr. Lee and on April 19, 2000,
Donald P. Knode was elected to replace Mr. Stewart. The Compensation Committee
had one meeting during the fiscal year ended May 31, 2000. Except for Mr.
Stewart, no member of the Compensation Committee was, during or prior to the
close of such fiscal year, an officer or employee of the Company or any of its
subsidiaries. However, during the fiscal year ended May 31, 2000, all
deliberations and determinations concerning (i) executive officer salary and
bonus compensation were first made by Mr. Lewis Burridge, the Company's
President and Chief Executive Officer, with the approval of the Board of
Directors, until the Compensation and Benefits Committee met on April 19, 2000,
and (ii) grants of options were also made by the Compensation Committee on that
same meeting. During the fiscal year ended May 31, 2000, the Company's Board of
Directors consisted of Mr. Stewart, Lewis Burridge (from June 29, 1998), Andrew
Lee (from February 24, 1998), John Caldwell (from June 24, 1999), Donald Knode
(from December 28, 1999), Luther Hodges (from June 6, 2000), Russell Stevenson
(from July 6, 2000) Harvey Dietrich (from February 11, 1999 to December 8,
1999), and Jeffrey Weiss (from October 6, 1998 to June 24, 1999).
REPORT OF A. LEWIS BURRIDGE AND THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION AND REPRICING OF OPTIONS
For the fiscal year ended May 31, 2000, the compensation of the Company's
executive officers was first determined by A. Lewis Burridge, the President and
Chief Executive Officer, with the approval of the Board of Directors as
indicated below and described under the caption "Compensation Committee
Interlocks and Insider Participation" up to the time that the Compensation and
Benefits Committee met on April 19, 2000.
The Company's objective with respect to executive compensation is to
provide a level of total compensation that allows the Company to attract and
retain superior talent, to achieve its business objectives, and to align the
financial interests of the executive officers with the stockholders of the
Company. To that end, the Company has implemented and will continue to implement
a compensation strategy that includes a competitive salary and substantial
equity-based incentive compensation. On April 19, 2000, the Compensation and
Benefits Committee met for the purpose of considering and making recommendations
to the Board for such purposes.
8
<PAGE>
In their consideration of the compensation for the Company's executive
officers, the Compensation Committee considered the past performance of the
officers, their level of responsibilities, overall performance with the Company,
and their view of the level of compensation necessary to attract and retain
talented individuals. No particular weight was assigned to any one factor, or to
corporate performance, and the deliberations are viewed an exercise of
subjective judgment, subject to the above-mentioned criteria.
The executive officers of the Company are eligible to receive options under
the Company's 1996 Non-Qualified Stock Option Plan and the Company's 1997
Amended and Restated Non-Qualified Stock Option Plan. The purpose of these plans
is to provide equity-based incentive compensation based on the long-term
appreciation in value of the Company's Common Stock and to promote the interests
of the Company and its stockholders by encouraging greater management ownership
of the Company's Common Stock. Most of the options granted to executive officers
under these stock option plans vest over a period of approximately two years,
thereby providing a continuing incentive and encouraging a long-term
relationship between such persons and the Company. For the fiscal year ended May
31, 2000, options to purchase 1,025,000 shares were granted by the Board of
Directors to executive officers of the Company. The following Table sets forth
certain information concerning all repricings of options held by any executive
officer of the Company since the adoption of the Company's 1996 and 1997
Non-Qualified Stock Option Plan.
On October 1, 1999, the Board of Directors determined that certain stock
options issued to the employees had an exercise price significantly higher than
the market value of the Company's common stock. The Board further noted that
employees had suffered materially through the Company's financial difficulties,
including failure to meet payrolls and remuneration commitments. To redress this
situation and to reward the dedication of the employees, the Board approved a
re-pricing of all options granted to that date, including the named executive
officers, to an exercise price of $0.50, the then fair market value of the
common stock. Subsequent option grants to new employees have been at the current
market price at the date of each grant.
<TABLE>
<CAPTION>
ORIGINAL LENGTH OF
NUMBER OF MARKET PRICE EXERCISE ORIGINAL
SECURITIES OF STOCK PRICE OF OPTION TERM
UNDERLYING AT CANCELLED NEW REMAINING AT
OPTIONS TIME OF OR AMENDED EXERCISE DATE OF
NAME DATE REPRICED REPRICING OPTION PRICE(1) REPRICING
---- ---- -------- --------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
A. Lewis Burridge 03/30/99 1,000,000 $0.4688 $1.50 $0.50 exp. 3/30/09
06/29/98 10,000 $0.4688 $2.875 $0.50 exp. 6/29/08
Jason M. Genet 04/04/99 5,000 $0.4688 $1.38 $0.50 exp. 4/04/09
07/16/99 45,000 $0.4688 $1.03 $0.50 exp. 7/16/09
John Roskelley 06/21/99 25,000 $0.4688 $1.31 $0.50 exp. 6/21/09
Ronald I. Bishop (2) 11/21/97 400,000 $6.125 $8.875 $4.00 exp. 3/18/07
11/21/97 500,000 $6.125 $5.50 $4.00 exp. 9/10/07
</TABLE>
----------
(1) Fair market value on date of grant as determined by the Board of Directors.
(2) See also the Summary Compensation Table, Table of Option Grants in Fiscal
Year Ended May 31, 1999, and related Notes.
9
<PAGE>
COMPENSATION OF A. LEWIS BURRIDGE, PRESIDENT AND CHIEF EXECUTIVE OFFICER
The compensation of A. Lewis Burridge, President and Chief Executive
Officer of the Company for the fiscal year ended May 31, 2000, was evaluated and
determined by the Board of Directors, using the same criteria that were used to
determine the compensation of other executive officers, as described above,
without assigning any weight to the relationship of such compensation to the
performance of the Company. During the fiscal year ended May 31, 2000, Mr.
Burridge received a salary of $116,250. Mr. Burridge's salary was set at the
minimum level of income appropriate for his position, and stock options were
granted to him such that his total compensation would be comparable to others in
similar industries.
The foregoing report has been approved by all members of the Board of
Directors.
BOARD OF DIRECTORS
Robert L. Stewart
A. Lewis Burridge
Andrew Lee
John L. Caldwell (1)
Donald P. Knode (2)
Luther H. Hodges, Jr. (3)
Russell B. Stevenson, Jr. (4)
----------
(1) From June 24, 1999
(2) From December 28, 1999
(3) From June 6, 2000
(4) From July 6, 2000
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of May 31, 2000 certain information with
respect to beneficial ownership of the Company's Common Stock by: (i) each
person known by the Company to own beneficially more than 5% of the Company's
Common Stock; (ii) each of the Company's directors, (iii) each of the executive
officers of the Company; and (iv) all directors and executive officers as a
group. This information is based upon information received from or on behalf of
the named individual. Unless otherwise noted, each person identified possesses
sole voting and investment power over the shares listed.
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL
BENEFICIAL OWNER (11) OWNERSHIP** PERCENT OF CLASS
--------------------- ----------- ----------------
A. Lewis Burridge 1,010,000 (1) 3.30%
President & Chief Executive Officer
John L. Caldwell 25,000 (2) *
Director
Jason M. Genet 275,000 (3) *
Chief Operating Officer
Luther H. Hodges, Jr. 18,333 (4) *
Director
Donald P. Knode 25,000 *
Director
Andrew Lee 25,000 (5) *
Director
John D. Roskelley 232,500 (6) *
Vice President, Business Development
Russell B. Stevenson, Jr. 11,667 (7) *
Director
Robert L. Stewart 5,414,500 (8) 15.46%
Director
Eric J. Strasser 227,500 (9) *
Chief Financial Officer
Rodney R. Shoemann, Sr. 2,336,242 (10) 7.62%
3904 Wheat Drive
Metarie, LA 70002
All executive officers and Directors
as a Group (10 persons) 7,265,000 23.09%
----------
* Less than one percent
** Unless otherwise noted, each person identified possesses sole voting and
investment power with respect to the shares listed, except to the extent
shared by spouses under applicable law.
(1) Includes 33,333 shares issuable pursuant to immediately-exercisable stock
options.
(2) Includes 1,250 shares issuable pursuant to immediately-exercisable stock
options.
(3) Includes 41,666 shares issuable pursuant to immediately-exercisable stock
options.
11
<PAGE>
(4) Includes 3,334 shares issuable pursuant to immediately-exercisable stock
options.
(5) Includes 1,250 shares issuable pursuant to immediately-exercisable stock
options.
(6) Includes 25,000 shares issuable pursuant to immediately-exercisable stock
options.
(7) Includes 3,334 shares issuable pursuant to immediately-exercisable stock
options.
(8) Includes 1,000,000 shares held by a Hong Kong corporation controlled by Mr.
Stewart.
(9) Includes 25,000 shares issuable pursuant to immediately-exercisable stock
options.
(10) Includes 700,000 shares issuable pursuant to immediately-exercisable stock
options.
(11) Unless otherwise noted, the address of each person in the table is c/o
ConSyGen, Inc. 125 South 52nd Street, Tempe, Arizona 85281.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 5, 1996, the Company acquired all of the issued and
outstanding common stock of ConSyGen-Arizona from the stockholders of such
corporation, including Robert L. Stewart, its Chief Executive officer and
controlling shareholder (the "Acquisition"). In connection with the Acquisition,
the Company issued an aggregate of 13,125,000 shares of its common stock, of
which 9,275,000 shares were issued to the stockholders of ConSyGen-Arizona,
including 8,187,000 shares to Robert L. Stewart. As a result of the Acquisition,
the former stockholders of ConSyGen-Arizona, including Mr. Stewart, became the
beneficial owners, in the aggregate, of approximately 69% of the issued and
outstanding common stock of the Company, and Mr. Stewart became the beneficial
owner of approximately 61% of such shares. As set forth in the Table under the
caption "Security Ownership of Certain Beneficial Owners and Management," Mr.
Stewart is currently the beneficial owner of approximately 48.47% of the
Company's common stock and, through his share ownership, may be deemed to
control the company. Carl H. Canter, the former controlling stockholder,
relinquished control as a result of the Acquisition.
At December 31, 1995, Robert L. Stewart, then Chairman and President of
ConSyGen-Arizona, had advanced an aggregate of $859,000 to ConSyGen-Arizona on
an as-needed basis to fund its continuing operations. These advances were
unsecured, non-interest bearing and had no stated maturity. In June 1996,
ConSyGen-Arizona issued 700,000 shares of its Common Stock to The Loreto F.
Stewart and Robert L. Stewart Family Trust, a trust of which Mr. Stewart is the
sole trustee (the "Trust"), in satisfaction of $350,000 of the indebtedness to
Mr. Stewart. The shares were valued at $0.50 per share, which was management's
best estimate of fair market value at the time of issuance. In June 1996, Mr.
Stewart forgave an additional $350,000 of such indebtedness without additional
consideration. During 1996, cash principal payments were made to Mr. Stewart on
account of such debt in the amount of $16,000; during the five months ended May
31, 1997, additional cash principal payments were made in the amount of $5,000.
In October 1997, the Company issued 18,610 shares of its common stock to Mr.
Stewart in satisfaction of the remaining indebtedness of the Company to Mr.
Stewart.
In June 1996, ConSyGen-Arizona issued an aggregate of 1,777,006 shares of
Common Stock to the Trust in consideration of services rendered by Mr. Stewart
to ConSyGen-Arizona from its inception through the date of issuance. These
shares were valued at $0.50 per share, which was management's best estimate of
fair market value at the time of issuance.
12
<PAGE>
In May 1997, the Trust sold 300,000 shares of Common Stock in a private
Sale, and pursuant to the agreement made in connection with such sale, the
Company included such shares (and shares held by certain other shareholders) in
a registration statement on Form S-1 filed in November 1997.
In July 17, 1998, Thomas S. Dreaper joined the company as President and
Chief Executive Officer. The terms of Mr. Dreaper's employment provide for an
annual salary of $120,000 and options to purchase 1,000,000 shares of the common
stock of the Company. The options were granted to Mr. Dreaper at an exercise
price of $2.8125 per share, and are currently exercisable to the extent of
500,000 shares if and when the Company's common stock attains a closing price of
$5.00 per share, and to the extent of the remaining 500,000 shares if and when
the share price attains closing price of $10.00 per share. On March 24, 1999,
Mr. Dreaper resigned as the Company's Chairman, Director, President and Chief
Executive Officer.
In July 1998, in connection with the termination of his employment and
position as President and Chief Executive Officer of the Company, Ronald I.
Bishop, was provided, as severance compensation, cash compensation in the amount
of $75,000 (6 months' salary), and an amended and restated Stock Option
Agreement fixing as vested 669,205 out of the total number of 900,000 shares
with respect to which options had been granted thereunder, and extending the
period within which options may be exercised after termination of employment
from 3 months to 3 years.
In July 1998, in connection with the termination of his employment as Vice
President and Director of Sales and Marketing-International, Jeffrey R.
Richards, was provided, as severance compensation, cash compensation in the
amount of $19,750 (3 months' salary), and an amended and restated Stock Option
Agreement fixing as vested 125,000 out of the total number of 250,000 shares
with respect to which options had been granted thereunder, and extending the
period within which options may be exercised after termination of employment
from 3 months to 1 year from September 14, 1998.
In March 24, 1999, A. Lewis Burridge was elected President and Chief
Executive Officer of the Company. The terms of Mr. Burridge's employment provide
for an annual salary of $120,000 which was increased to $135,000 in October 1999
and options to purchase 1,000,000 shares of the common stock of the Company. The
options were granted to Mr. Burridge at an exercise price of $1.50 per share,
re-priced to $0.50 in October 1999, and as of January 25, 2000, 50% of the
1,000,000 shares were immediately exercisable while the remaining 50% is vested
equally over the next 12 months (through January 25, 2001) at 1/12 per month.
ConSyGen, Inc. has contracted with Boxx International for the manufacturer
and assembly of Counterfeit Cop. Boxx corporate headquarters and product design
center are maintained in Westchester, New York; research and development (R&D)
center in Taiwan; and cost effective manufacturing facilities in Asian countries
such as China and Malaysia. Boxx International's management, engineering, design
and marketing teams are drawn from highly experienced, international
professionals led by CEO, Mr. Andrew Lee, a leading executive with extensive
expertise in technology, marketing, and finance particularly related to the US
and the Far East. Mr. Andrew Lee became a member of ConSyGen's Board of
Directors in February 1998.
13
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF THE BOARD OF DIRECTORS'
SELECTION OF KING, WEBER & ASSOCIATES, P.C. AS
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDED MAY 31, 2001
The Board of Directors has appointed King, Weber & Associates, P.C. as
independent public accountants to audit the consolidated financial statements of
the Company and its subsidiaries for the fiscal year ended May 31, 1999 to
replace Wolinetz, Gottlieb & Lafazan, P.C., who performed such functions for the
fiscal year ended May 31, 1998, the 5 months ended May 31, 1997 and the fiscal
year ended December 31, 1996. The reason for the change in independent
accountants is the convenience of the proximity of the offices of King, Weber &
Associates, which is located in Tempe, Arizona, to the location of the Company's
principal offices. Wolinetz, Gottlieb & Lafazan, P.C. is located in Rockville
Centre, New York.
The reports of King, Weber & Associates P. C. for the fiscal year ended May
31, 2000 contained no adverse opinion or disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit, scope, or accounting principles,
except that such reports were qualified as to the uncertainty relating to the
Company's ability to continue as a going concern. The Company had no
disagreements with Wolinetz, Gottlieb & Lafazan, P.C. during any of the
above-mentioned fiscal period or for the subsequent interim period preceding the
engagement of King, Weber & Associates, P.C. on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure.
The reports of Wolinetz, Gottlieb & Lafazan P. C. for the fiscal year ended
May 31, 1998, the 5 months ended May 31, 1997, and the fiscal year ended
December 31, 1996 contained no adverse opinion or disclaimer of opinion, and was
not qualified or modified as to uncertainty, audit, scope, or accounting
principles, except that such reports were qualified as to the uncertainty
relating to the Company's ability to continue as a going concern. The Company
had no disagreements with Wolinetz, Gottlieb & Lafazan, P.C. during any of the
above-mentioned fiscal periods on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
A representative of King, Weber & Associates, P.C. is expected to be
present at the meeting and will have the opportunity to respond to appropriate
questions.
At the Annual Meeting, the stockholders will be asked to ratify the Board
of Directors' selection of King, Weber & Associates, P.C. as the Company's
independent accountant for the Company's fiscal year ended May 31, 2001 and
recommends that the stockholders approve such selection.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's directors and executive officers and persons owning more than
10% of the outstanding Common Stock, file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Executive
officers, directors and beneficial owners of more than 10% of the Company's
Common Stock are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
14
<PAGE>
Based solely on copies of such forms furnished as provided above, or
written representations that no Forms 5 were required, the Company believes that
during the fiscal year ended May 31, 1998, all Section 16(a) filing requirements
applicable to its executive officers, directors and beneficial owners of more
than 10% of its Common Stock were complied with, except as follows: Messrs.
Strasser, Stevenson and Hodges each failed to file a Form 3, Initial Statement
of Beneficial Ownership; Messrs. Caldwell, Knode and Lee each failed to file one
Form 4, Statement of Changes in Beneficial Ownership of Securities, relating in
each case to one transaction; Mr. Roskelley failed to file a Form 3 and failed
to file one Form 4 relating to 15 transactions; Mr. Genet failed to file a Form
3 and failed to file two Forms 4 relating to a total of 41 transactions; Mr.
Stewart and the Stewart Family Trust each failed to file five Forms 4 to a total
of 10 transactions by each such reporting person. All of the foregoing reporting
persons filed the Form 5, Annual Statement of Changes in Beneficial Ownership,
for the fiscal year ended May 31, 2000, after the due date for such form. In
addition, during the fiscal year ended May 31, 1999, Mr. Stewart failed to file
two Forms 4 relating to a total of 10 transactions and failed to file a Form 5,
and the Stewart Family Trust failed to file a Form 5.
PROPOSAL NO. 3
CONSIDER AN AMENDMENT TO THE CORPORATION'S
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES FROM 40,000,000 TO 60,000,000 SHARES
Your Board of Directors has approved, subject to stockholder approval, an
amendment of the Company's Articles of Incorporation, as amended (the "Articles
of Incorporation"), to increase the number of authorized shares of Common Stock
from 40,000,000 to 60,000,000. This will provide the Board of Directors with the
flexibility to conduct the Company's future operations. The Board of Directors
recommends that the Company's stockholders approve this amendment.
The Company is currently authorized to issue 40,000,000 shares of Common
Stock, par value $.003 per share (the "Common Stock"). At October 6, 2000, the
status of the Company's Common Stock was as follows:
Shares authorized 40,000,000
Less: Shares issued and outstanding 31,874,306
Shares issuable upon conversion of
outstanding convertible debentures 5,102,472
Shares underlying employee stock option plans 3,655,531
Shares underlying warrants 4,613,000
The Company will not issue in excess of 40,000,000 shares unless and until
the proposal to increase the authorized Common Stock is approved.
Except for shares currently reserved as listed above, we do not have any
present plan, understanding or agreement to issue additional shares of Common
Stock. However, we consider it desirable to have the flexibility, without
further stockholder action, to reserve and issue additional amounts of Common
Stock for proper corporate purposes that may be identified by the Board of
Directors from time to time. This will enable us to act quickly if we have the
opportunity to make an acquisition or raise capital on terms that we deem to be
in the best interests of the Company and its stockholders. The Company does not
currently have any agreements with respect to future acquisitions, but the
Company may consider acquisition opportunities in the future. Further, we
believe the availability of additional shares of Common Stock will enable the
Company to attract and retain talented employees through the grant of stock
options and other stock-based incentives. We do not presently intend to seek
further stockholder approval of any particular issuance of shares unless such
approval is required by law or the rules of The NASDAQ Stock Market.
15
<PAGE>
Stockholders do not have any preemptive or similar rights to subscribe for
any additional securities that may be issued in the future, which means that the
current stockholders do not have a prior right to purchase any new issue of
Common Stock of the Company in order to maintain their proportionate ownership.
Consequently, future issuances of Common Stock may, depending on the
circumstances, have a dilutive effect on the earnings per share, voting power
and other interests of the existing stockholders.
The proposal could have an anti-takeover effect, although that is not its
intention. If the Company was the subject of a hostile takeover attempt, it
could issue additional shares of Common Stock to create voting impediments to
the potential takeover, dilute the voting power of the person seeking to acquire
control or increase the potential cost of the takeover. The Company's ability to
issue the shares could discourage a third party from attempting to acquire
control of the Company. We are not aware of any attempt, or contemplated
attempt, to acquire control of the Company, and this proposal is not being
presented with the intent that it be utilized as a type of anti-takeover device.
The proposed amendment is not part of a plan by the Company to adopt other
measures intended to have or having potential anti-takeover effects.
If the stockholders approve the amendment, Article IV of the Articles of
Incorporation will be replaced in its entirety by the following:
The total number of shares of all classes of stock which the corporation
shall have authority to issue is sixty million (60,000,000) shares of common
stock, par value $0.003 per share.
Other than increasing the authorized shares of common stock from 40,000,000
to 60,000,000, the proposed amendment in no way changes the Articles of
Incorporation.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock entitled to vote at the meeting is necessary for approval of
Proposal 3. Therefore, abstentions and broker non-votes effectively count as
votes against the proposal. If approved by the stockholders, the proposed
amendment to the Company's Articles of Incorporation will become effective upon
the filing of Articles of Amendment with the Secretary of State of Texas, which
will occur shortly after the stockholders approve the amendment.
Your Board of Directors recommends that stockholders vote FOR the proposal
to amend the Articles of Incorporation to increase the authorized Common Stock.
Proxies solicited by management will be voted FOR Proposal number 3 unless a
vote against the proposal or abstention is specifically indicated.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to Rules of the Securities and Exchange Commission, proposals
submitted by eligible stockholders which are intended to be presented at the
Company's Annual Meeting of Stockholders to be held in 2001 must be received at
the Company's principal executive offices in Tempe, Arizona on or before June
17, 2001. Receipt by the Company of any such proposal from a qualified
stockholder in a timely manner will not ensure its inclusion in the proxy
materials. The Board of Directors of the Company will determine whether any such
proposal will be included in its 2001 proxy solicitation materials.
16
<PAGE>
OTHER MATTERS
Management knows of no matters which may properly be and are likely to be
brought before the meeting other than the matters discussed herein. However, if
any other matters properly come before the meeting, the persons named in the
enclosed proxy will vote in accordance with their best judgment.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
report of the Board of Directors on executive compensation included in the
section of the Proxy Statement entitled "Report A. Lewis Burridge and the Board
of Directors on Executive Compensation and Repricing of Options," shall not be
deemed to be so incorporated, unless specifically otherwise provided in any such
filing.
10-KSB REPORT
THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE FISCAL YEAR ENDED MAY 31, 2000, WITHOUT CHARGE, UPON RECEIPT
OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO AMELIA
ULEP, CONSYGEN, INC., 125 SOUTH 52nd STREET, TEMPE, ARIZONA 85281.
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendation, its consideration of the best interests of the Company based
upon the factors described above and the other factors they deem material at the
time of the meeting.
By order of the Board of Directors
Amelia C. Ulep, Secretary
Tempe, Arizona
October 12, 2000
18
<PAGE>
[MAP]
HOW TO GET TO CONSYGEN
CONSYGEN IS LOCATED AT 125 SOUTH 52ND STREET
FROM SKY HARBOR AIRPORT
202 East to Priest Dr. exit
Right at Priest Dr (South) to University Dr.
Right at University Dr. (West) to 52nd Street
Right at 52nd Street (North) to ConSyGen
(approximately1/2mile on East side of the street)
FROM FIESTA INN
Take Priest Dr. North to University Dr.
Left at University Dr. (West) to 52nd Street
Right at 52nd Street (North) to ConSyGen
(approximately1/2mile on East side of the street)
HOW TO GET TO FIESTA INN
FIESTA INN IS LOCATED AT 2100 S PRIEST DR.
(SOUTHWEST CORNER OF PRIEST DR. AND BROADWAY RD.)
FROM SKY HARBOR AIRPORT
202 East to Priest Dr. exit
Right at Priest Dr. to Broadway Rd.
FROM CONSYGEN
Left on 52nd Street (South) to University Dr.
Left at University Dr. (east) to Priest Dr.
Right at Priest Dr. (South) to Broadway Rd.
FIESTA INN CONFERENCE FACILITY
The Fiesta Inn Conference facility is detached from Fiesta Inn. It is located on
the South side of Fiesta Dr. Fiesta Dr. is the first street South of Broadway
Rd. It is an easy walk from Fiesta Inn's lobby.
[MAP]
<PAGE>
CONSYGEN, INC.
ANNUAL MEETING OF STOCKHOLDERS - NOVEMBER 17, 2000
The undersigned hereby appoints A. Lewis Burridge and Luther H. Hodges, Jr., and
each of them acting singly, with full power of substitution, proxies to
represent the undersigned at the 2000 Annual Meeting of Stockholders of
CONSYGEN, INC. to be held November 17, 2000 at 3:00 p.m. at Fiesta Inn, 2100
South Priest Drive, Tempe, AZ 85282 and at any adjournment or adjournments
thereof, to vote in the name and place of the undersigned, with all powers which
the undersigned would possess if personally present, all the shares of CONSYGEN,
INC. standing in the name of the undersigned upon the matters set forth in the
Notice of and Proxy Statement for the Meeting in accordance with the
instructions on the reverse side and upon such other business as may properly
come before the Meeting.
SHARES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES
REPRESENTED WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS (I) FOR THE ELECTION OF DIRECTORS, (II) FOR THE SELECTION OF
INDEPENDENT ACCOUNTANTS, (III) FOR THE INCREASE OF THE AUTHORIZED NUMBER OF
SHARES FROM 40,000,000 TO 60,000,000 SHARES, ALL AS SET FORTH IN THE PROXY
STATEMENT.
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
--------------------------------- -----------------------------------
--------------------------------- -----------------------------------
--------------------------------- -----------------------------------
(Continued and to be signed on the reverse side)
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. Election of Directors:
NOMINEES: Robert L. Stewart, A. Lewis Burridge, Andrew Lee, Donald P. Knode,
John L. Caldwell, Luther H. Hodges, Jr. and Russell B. Stevenson, Jr.
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] FOR all nominees [ ] WITHHOLD authority from all nominees [ ] FOR all except
</TABLE>
(Instructions: To withhold Authority to vote for any individual, mark the "For
All Except" box and write that person's name in the space provided below.)
--------------------------------------------------------------------------------
2. To ratify the Board of Directors' selection of King, Weber & Associates,
P.C. as independent public accountants for the fiscal year ended May 31,
2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To increase the Company's authorized shares from 40,000,000 to 60,000,000
shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
RECORD DATE SHARES: _____________________
Mark box at right if you plan to attend the Meeting in person. [ ]
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [ ]
Please be sure to sign and date this Proxy DATE: ___________________, 2000
----------------------------------------
Stockholder sign here
----------------------------------------
Co-owner sign here
Please sign this proxy exactly as your name(s) appear on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, the signature should
be that of an authorized officer who should state his or her title.
DETACH CARD DETACH CARD
CONSYGEN, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the 2000 Annual Meeting of Stockholders to
be held on November 17, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
ConSyGen, Inc.
