SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant [ ]
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[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] 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
URECOATS INDUSTRIES INC.
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(Name of the Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other then the Registrant)
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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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2. Form, Schedule or Registration Statement No.:
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PRELIMINARY COPY
[LOGO]
Urecoats Industries Inc.
Powerline Business Park
4100 North Powerline Road
Suite F-1
Pompano Beach, FL 33073
May , 2000
Dear Stockholder:
On behalf of your Board of Directors and Management, you are cordially
invited to attend the Annual Meeting of Common Stockholders to be held on
Tuesday, June 20, 2000, at 10:00 a.m., at the Company's offices, located at
Powerline Business Park, 4100 North Powerline Road, Suite L-1, Pompano
Beach, Florida 33073.
The enclosed Notice and Proxy Statement contain details concerning the
business to come before the meeting. You will note that the Board of
Directors of the Company recommends a vote "FOR" approving an amendment to
the Company's Restated Certificate of Incorporation to provide for an
increase in the common stock capitalization of the Company, "FOR" the
election of the nominated directors to serve until the next Annual Meeting
of Stockholders, "FOR" ratification of the Company's 2000 Stock Purchase
and Option Plan and "FOR" ratification of the selection of Baum & Company,
P.A. as the Company's independent accountants.
Whether or not you attend the Annual Meeting, please vote as soon as
possible by returning the enclosed proxy card. Your vote is important, and
voting by written proxy will ensure your representation at the Annual
Meeting. You may revoke your proxy in accordance with the procedures
described in the Proxy Statement at any time prior to the time it is voted.
Thank you for your support of Urecoats.
Sincerely,
/ /
- -------------------------------------
Larry T. Clemons
PRESIDENT AND CHIEF OPERATING OFFICER
- ------------------------------------------------------------------------------
This proxy statement and the accompanying proxy card are being mailed to
Urecoats common stockholders beginning about May __, 2000.
PRELIMINARY COPY
[LOGO]
Urecoats Industries Inc.
Powerline Business Park
4100 North Powerline Road
Suite F-1
Pompano Beach, Florida 33073
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
Urecoats annual stockholders' meeting will be held on Tuesday, June 20, 2000
at 10:00 a.m. at its offices located at Powerline Business Park, Suite L-1,
Pompano Beach, Florida.
At the meeting, stockholders will be asked to:
1. Elect Urecoats' entire board of directors,
2. Ratify the selection of Urecoats' independent auditors for 2000,
3. Increase Urecoats' authorized common stock from 100 million to
140 million shares of common stock, par value $.01, per share,
4. Approve the Urecoats 2000 Stock Purchase and Option Plan, and
5. Consider any other business properly brought before the meeting.
The close of business on May 5, 2000 is the record date for determining
stockholders entitled to vote at the annual meeting. A list of these
stockholders will be available at Urecoats' headquarters, Powerline Business
Park, 4100 North Powerline Road, Suite F-1, Pompano Beach, before the meeting.
PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE, SO THAT YOUR SHARES WILL BE REPRESENTED WHETHER OR NOT YOU ATTEND
THE ANNUAL MEETING.
In order to facilitate planning for the Annual Meeting, please indicate on
the enclosed proxy whether or not you plan to attend the meeting.
By order of the board of directors
/ /
Michael T. Adams
CORPORATE SECRETARY
May , 2000
PRELIMINARY COPY
CONTENTS
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ABOUT THE ANNUAL MEETING 1 APPROVAL OF URECOATS 2000 STOCK
PURCHASE AND OPTION PLAN 15
ANNUAL REPORT 3 The Plan 16
Federal Income Tax
STOCK OWNERSHIP 3 Consequences 17
ELECTION OF DIRECTORS 4 SUBMISSION OF FUTURE STOCKHOLDER
PROPOSALS 18
The Nominees 5
Meetings of the Board of Directors 7 COST OF ANNUAL MEETING AND PROXY
SOLICITATION 18
Directors' Compensation 7
ANNEX A A-1
EXECUTIVE COMPENSATION 8 PROPOSED AMENDMENT TO
URECOATS' RESTATED
Compensation Tables 8 CERTIFICATE OF INCORPORATION
Employment Agreements 12
ANNEX B B-1
URECOATS 2000 STOCK PURCHASE
AND OPTION PLAN
RATIFICATION OF SELECTION 13
OF AUDITORS
APPROVAL OF AN INCREASE IN
AUTHORIZED COMMON STOCK 13
ABOUT THE ANNUAL MEETING
- ------------------------
WHO IS SOLICITATING MY VOTE?
The board of directors of Urecoats is soliciting your vote at the 2000
annual meeting of Urecoats' common stockholders.
WHAT WILL I BE VOTING ON?
1. Election of Urecoats' board of directors (see page 4).
2. Ratification of BAUM & COMPANY, P.A., as Urecoats' auditors for 2000
(see page 13).
3. An increase in Urecoats' authorized common stock (see page 13).
4. Approval and adoption of the Urecoats 2000 Stock Purchase and Option
Plan (see page 15).
HOW MANY VOTES DO I HAVE?
You will have one vote for every share of Urecoats common stock you owned
on May 5, 2000 (the record date).
HOW MANY VOTES CAN BE CAST BY ALL COMMON STOCKHOLDERS?
One vote for each of Urecoats' 95,237,469 shares of common stock that were
outstanding on the record date. The common stock will vote as a single
class on all matters scheduled to be voted on at the annual meeting. There
is no cumulative voting.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
A majority of the votes that can be cast, or 47,618,736 votes. We urge you
to vote by proxy even if you plan to attend the annual meeting, so that we
will know as soon as possible that enough votes will be present for us to
hold the meeting.
HOW DO I VOTE?
You can vote either in person at the annual meeting or by proxy without
attending the annual meeting.
To vote by proxy, you must fill out the enclosed proxy card, date and sign
it, and return it in the enclosed postage-paid envelope.
If you want to vote in person at the annual meeting, and you hold your
Urecoats stock through a securities broker (that is, in street name), you
must obtain a proxy from your broker and bring that proxy to the meeting.
Page 1
CAN I CHANGE MY VOTE?
Yes. Just send in a new proxy card with a later date, or send a written
notice of revocation to Urecoats' Secretary at the address on the cover of
this proxy statement. If you attend the annual meeting and want to vote in
person, you can request that your previously submitted proxy not be used.
WHAT IF I DO NOT VOTE FOR SOME OF THE MATTERS LISTED ON MY PROXY CARD?
If you return a signed proxy card without indicating your vote, your shares
will be voted "FOR" the nominees listed on the card, "FOR" Baum & Company,
P.A., "FOR" the increase in Urecoats' authorized common stock, and "FOR"
the Urecoats 2000 Stock Purchase and Option Plan.
WHAT IF I VOTE "ABSTAIN"?
A vote to "abstain" on any matter will have the effect of a vote against.
CAN MY SHARES BE VOTED IF I DO NOT RETURN MY PROXY CARD AND DO NOT ATTEND
THE ANNUAL MEETING?
If you do not vote your shares held in street name, your broker can vote
your shares on any of the matters scheduled to come before the meeting.
If you do not vote your shares held in street name, and your broker does not
vote them, the votes will be broker nonvotes, which will have no effect on
the vote for any matter scheduled to be considered at the annual meeting
other than the proposed increase in authorized common stock where broker
nonvotes will have the effect of a vote against the proposal.
If you do not vote your shares held in your name, your shares will not be
voted.
COULD OTHER MATTERS BE DECIDED AT THE ANNUAL MEETING?
We do not know of any other maters that will be considered at the annual
meeting. If a stockholder proposal that was excluded from this proxy
statement is brought before the meeting, we will vote the proxies against
the proposal. If any other matters arise at the annual meeting, the
proxies will be voted at the discretion of the proxy holders.
WHAT HAPPENS IF THE MEETING IS POSTPONED OR ADJOURNED?
Your proxy will still be valid and may be voted at the postponed or
adjourned meeting. You will still be able to change or revoke your proxy
until it is voted.
Page 2
ANNUAL REPORT
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The Company has included herewith a copy of its Annual Report for the fiscal
year ended December 31, 1999 ("1999 Annual Report"). Additional copies of
the 1999 Annual Report may be obtained by Shareholders without charge by
writing to the Mr. Michael T. Adams, Secretary, at Powerline Business Park,
4100 North Powerline Road, Suite F-1, Pompano Beach, Florida 33073.
STOCK OWNERSHIP
- ---------------
Urecoats completed development and testing of its first proprietary and
patent pending RUBBER SEALANT MEMBRANE(RSM)(TM), URECOATS 100(TM), product
and system for its spray application. Urecoats encourages stock ownership
by its directors, officers and employees to align their interests with the
interests of stockholders. Urecoats believes this policy has played a
significant role in the progress of the company and will, ultimately, lead
to beneficial future returns for Urecoats' stockholders.
Urecoats fosters stock ownership by all of its employees through various
measures, such as stock option grants, restricted stock awards, and
participation in developing programs, including, if it is approved by
stockholders at the annual meeting, the Urecoats 2000 Stock Purchase and
Option Plan that is the subject of the fourth item to be voted on at the
annual meeting.
The following table sets forth certain information as of the record date,
regarding the beneficial ownership of the common stock by each of the
executive officers and directors of the Company and by all officers and
directors of the Company as a group of the outstanding shares of the
common stock.
Amount of Shares
Name and Address Position(s) Beneficially Owned(*)
- -------------------------- ------------------------ -------------------
Richard J. Kurtz Chairman and CEO 23,250,923(1)
David M. Goldblatt Director 1,020,416(2)
Arthur J. Gregg Director 75,000(3)
Larry T. Clemons Director, President, 2,000,000(4)
COO, and Treasurer
Michael T. Adams Executive Vice President 1,117,369(5)
and Secretary
Ponswamy Rajalingam, Ph.D. Vice President 3,044,412(6)
R. Uma Umarani, Ph.D. Vice President 1,000,000(7)
Officers and Directors as a Group 31,508,120
Page 3
- ---
(*) Beneficial ownership is determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 (the "Exchange Act") and
includes voting and investment power with respect to shares of common
stock. Shares of common stock subject to options currently exercisable or
exercisable within 60 days of the record date, are deemed outstanding for
the person holding such options.
(1) Includes 100,000 shares of common stock issuable on the exercise
of outstanding stock options granted on November 23, 1998 and 1,000,000
shares of common stock issuable on the exercise of outstanding stock
options granted on January 4, 2000, under the Company's 1999 Plan, all of
which are immediately exercisable. See Compensation Tables.
(2) Includes 150,000 shares of common stock issuable on the exercise
of outstanding stock options granted on November 23, 1998 and 50,000
shares of common stock issuable on the exercise of outstanding stock
options granted on February 8, 1999, under the Company's 1999 Plan, all
of which are immediately exercisable. See Compensation Tables.
(3) Includes 75,000 shares of restricted common stock issued for
agreeing to serve on the Company's Board of Directors.
(4) Includes 1,000,000 shares of restricted common stock awarded in
lieu of a restricted option to purchase restricted common stock as part of
his compensation. Such issuance of shares and cancellation of option were
effected on January 4, 2000. See Executive Compensation.
(5) Includes 250,000 shares of common issued upon exercise of 75,000
of the stock options on March 1, 1999, and 175,000 on February 21, 2000,
granted on November 23, 1998, under the Company's 1999 Plan. See
Compensation Tables.
(6) Includes 350,000 shares of common stock issued upon exercise of
stock options, under the Company's 1999 Plan, and 850,000 shares of
restricted common stock issued pursuant to a consulting agreement.
(7) Includes 250,000 shares of common stock issued upon exercise of
stock options, under the Company's 1999 Plan, and 372,000 shares of
restricted common stock issued pursuant to a consulting agreement.
PROPOSAL ONE
ELECTION OF DIRECTORS
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The Board of Directors has nominated all of the current directors for
re-election at the 2000 annual meeting, except Stuart B. Krost, whose
resignation as a director was accepted by the Board on April 12, 2000. In
addition, on April 12, 2000, the board of directors elected Larry T. Clemons
as a new member of the board. All directors serve until the next annual
meeting of stockholders or until their successors are duly elected and
qualified. The one-year terms of all of Urecoats' directors expire at the
annual meeting.
Page 4
THE NOMINEES
The following section gives information - provided by the nominees - about
their principal occupation, business experience and other matters.
THE BOARD RECOMMENDS THAT YOU
VOTE "FOR" EACH OF THE FOLLOWING NOMINEES.
NAME, AGE, POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, DIRECTORSHIPS
- -----------------------------------------------------------------------------
RICHARD J. KURTZ (59) - Chairman of the Board and Chief Executive Officer of
the Company since February 8, 1999. Mr. Kurtz is also president and chief
executive officer of the Kamson Corporation, a privately held corporation,
and has been for the past 26 years. Kamson Corporation has its principal
executive offices located in Englewood Cliffs, New Jersey and currently owns
and operates sixty eight (68) investment properties in the Northeastern
United States. Mr. Kurtz is a graduate of the University of Miami and a
member of its President's Club. He was formerly a director of the Inter-
Community Bank located in Springfield, New Jersey. Mr. Kurtz is also an
active member of the Board of Directors of Heavenlydoor.com, a public
company trading on the NASDAQ Small Caps market. Most notably, he was chosen
"Man of the Year" by the Chamber of Commerce in Englewood Cliffs and the Boy
Scouts of America. Mr. Kurtz resides in Alpine, New Jersey and is currently
Vice President and a member of the Board of Directors for the Jewish
Community Center on the Palisades in Tenafly, New Jersey. He is also proud to
be an elected member of the Board of Trustees and the Foundation Board for
the Englewood Hospital and Medical Center of New Jersey.
DAVID M. GOLDBLATT (56) - Has been a director of the Company since July 1994.
Mr. Goldblatt has over 27 years of experience in trading, selling and
financing United States Government securities and money market instruments.
For the past five years, Mr. Goldblatt has been engaged as a Securities
principal with Seaboard Securities. In 1970, Mr. Goldblatt traded short
term U.S. government securities at William E. Pollack and Co. In 1972, he
was hired as Vice President at Cantor Fitzgerald and Company, where he was
required to sell and finance the Firms trading and matched book positions.
In 1976, Mr. Goldblatt was employed by Loeb, Rhodes & Company, as a Senior
Vice President. He was responsible for hiring sales personnel for the money
market department. In addition, he was in charge of selling and financing
the Firm's money market and matched book positions. In 1980, Mr. Goldblatt
was a partner in Resource Management. The Firm specialized in trading U.S.
government securities and short-term money market instruments. In 1992, Mr.
Goldblatt initiated and developed the fixed income department at Seaboard
Securities. This division specializes in U.S. government securities. Mr.
Goldblatt earned his Master's Degree from Hunter College in New York City.
Page 5
ARTHUR J. GREGG (72) - Has been a director since February 21, 2000. General
Gregg (retired Lieutenant General, U.S. Army) has more than 44 years of
distinguished professional experience, having held senior level management
and command positions in the military and several executive positions in
industry. As a result of his extensive military and executive experience,
he is well known and respected within federal government agencies, and
private industry. General Gregg continues an active schedule as a member
of several corporate and academic boards. He chairs three of these boards.
From 1994 to 1996 General Gregg was President, James Martin Government
Intelligence, Inc., an information technology firm providing senior level
consulting services to law enforcement, intelligence and defense agencies.
From 1992 to 1994 General Gregg was Executive Vice President and Chief
Operating Officer, Steel Tech Manufacturing, Inc., a company engaged in
metal fabrication and paint finishing. From 1989 to 1992 he was Executive
Vice President and Chief Operating Officer of American Coastal Industries,
Inc. From 1987 to 1989 General Gregg was an Independent Consultant, engaged
in general management and cable television consulting services. From 1984
to 1987 He was Vice President and General Manager, Cox Cable, New Orleans,
LA, managing an 80,000 customer cable television system; 250 employees and
$30 million in annual revenue. General Gregg also held various other
positions such as President, UCI, Inc., Springfield, VA (1982-1984); Deputy
Chief of Staff for Logistics, U.S. Army, Washington, D.C. (1979-1981);
Director for Logistics, Organization of the Joint Chiefs of Staff,
Washington, D.C. (1977-1979); Deputy Chief of Staff for Logistics, U.S.
Army, Europe (1975-1977); Commander, Army and Air Force Exchange Service,
Europe (1973-1975); Deputy Director and later Director of the Troop Support
Directorate, Office of the Deputy Chief of Staff for Logistics Department
of the Army, Washing, DC (1971-1973); Commander, Nahbollenbach Army Depot,
Germany (1969-1971); and Logistic Staff Officer in the Joint Petroleum
Office, United States European command (1968-1969). General Gregg attended
Harvard University, John F. Kennedy School of Government - Concentrated
Executive Program in National Security; Saint Benedict College Atchison,
Kansas - Bachelor of Science in Business Administration (Summa cum Laude);
Army War College, Carlisle Barracks, Pennsylvania - One year graduate level
college; and Command and General Staff College, Fort Leavenworth, Kansas -
One year graduate level college.
LARRY T. CLEMONS (42) - Has been a Director since April 12, 2000, President
and Chief Operating Officer since February 8, 1999, and Treasurer since
March 1, 1999, Treasurer of Urecoats International since March 1, 1999, and
Treasurer of Urecoats Technologies since July 1, 1999. Mr. Clemons has
extensive experience in taking products from Design and Function, Marketing
and Sales, Corporate Implementation, Drawing Board to Factory, and Showroom
Floor, to the Consumer within short periods of time. Mr. Clemons moved to
South Florida in 1983 and started Raffles Bar & Grill, Dadeland Mall, Miami,
FL. From 1981-1983, he taught speed reading at the Reading Learn Center of
South Florida. From 1983-1986, Mr. Clemons worked for Holman Enterprises
(Fort Lauderdale Lincoln-Mercury), in Fort Lauderdale, FL. He started the
fleet operation department and was the Director of ASC McLaren sales and
Ford development (Prototype Convertible) OEM Program, where he developed
the first automotive showroom and sales in the Galleria Mall. Starting from
the ground up, he directed 3 new divisions for Holman Enterprises and Fort
Lauderdale Lincoln Mercury and achieved the top 10 Sales Award in the
Page 6
Nation for 3 consecutive years. From 1986 to 1989, he worked for ASC,
Southgate, Michigan. Mr. Clemons was hired by Heinz Prechter, Industrialist
of the Year and Chairman of ASC, as Project Sales and Marketing Coordinator.
He was responsible for bringing the prototype ASC McLaren Convertible to
Ford Dealerships nationwide, under the newly designed Ford Mustang chassis
and image, prototype Chevrolet Camaro convertible, achieving full production
OEM status within one year of development, General Motors Pontiac Division
approving and purchasing production rights for the Pontiac Firebird
Convertible, and developing the "Sun In The Fun" program for South Florida
Ford Dealers with the Ford Escort. From 1989-1991, he maintained a personal
relationship with Heinz Prechter and worked independently in sales and
consulting on vintage cars. In 1992, he owned and operated his first Art
Museum and Gallery in Fort Lauderdale, FL, "Peace for the Planet" Museum and
Gallery; 1993, "Hermitage Museum", St. Petersburg, Russia (Leningrad); 1994
to 1999, owned and operated "Gallery 721" Fort Lauderdale, FL; and initiated
the Flagler Village real estate project in Fort Lauderdale, FL. Mr. Clemons
attended the University of Kentucky, Lexington, KY, from 1977 to 1979.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met four times in 1999. There were no committees
established in 1999 due to the business being in its development stage.
The Company is coming out of research and development with its products
and delivery systems. As such, the participation activity requirements of
each member of the Board are increasing. Management is aggressively
pursuing and implementing marketing and other strategies set forth by the
Board. The Nominees, if elected, will establish Executive, Audit and
Compensation committees in accordance with the procedures in the Company's
by-laws.
DIRECTORS' COMPENSATION
Directors' compensation is determined by the Board. The Board does not have
a standard policy regarding compensation of members of the board of
directors. The Board has granted directors stock options and restricted
common stock, in order to assure that the directors have an opportunity
for and/or have an ownership interest in common with other stockholders. The
Nominees, if elected, will ensure the Compensation committee establishes a
standard policy regarding compensation of members of the Board.
Page 7
EXECUTIVE COMPENSATION
- ----------------------
COMPENSATION TABLES
The following Summary Compensation Table sets forth the compensation earned
by the persons who served as the Company's chief executive officer and other
executive officers other than the chief executive officer ("Named Officers")
for services rendered in all capacities during the last fiscal year.
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation
----------------------------------
(a) (b) (c) (d) (e)
Other
Annual
Name and Salary Bonus Compensation
Principal Position Year ($) ($) ($)
- -------------------------------- ---- -------- --------- ------------
(1) Richard J. Kurtz 1999 $ -0- $ -0- $ -0-
Chairman of the Board
and CEO
(2) Larry T. Clemons 1999 $ 86,431 $ -0- $ -0-
President, COO
and Treasurer
(3) Michael T. Adams 1999 $ 78,098 $ 12,000 $ 6,750(a)
Executive Vice President
and Secretary
(4) Ponswamy Rajalingam 1999 $ -0- $ -0- $ 170,850(b)
Vice President
(5) R. Uma Umarani 1999 $ -0- $ -0- $ 104,000(c)
Vice President
(6) Howard Weiser 1999 $ 70,000 $ -0- $ -0-
President and CEO
(resigned Feb. 8, 1999)
Secretary
(resigned Mar. 1, 1999)
(7) Edgar M. Reynolds 1999 $ 16,000 $ -0- $ -0-
Vice President and
Treasurer
(resigned Mar. 1, 1999)
- ---
(a) This figure represents the dollar value of the difference between the
price paid for securities of the Company and the fair market value of such
securities at the date of purchase.
Page 8
(b) This figure represents cash and non-cash consulting fees paid under a
consulting agreement, and the dollar value of the difference between the
price paid for securities of the Company and the fair market value of such
securities at the date of purchase, which amounts are $74,000, $82,425,
and $14,425, respectively.
(c) This figure represents cash and non-cash consulting fees paid under a
consulting agreement, and the dollar value of the difference between the
price paid for securities of the Company and the fair market value of such
securities at the date of purchase, which amounts are $71,000, $32,400,
and $600, respectively.
SUMMARY COMPENSATION TABLE
--------------------------
(CONTINUED)
Long-Term Compensation
--------------------------------------------
Awards Payouts
------------------------ -------
(a) (f) (g) (h) (i)
Restricted Securities
Stock Underlying All Other
Name and Awards Options/ LTIP Compensation
Principal Position ($) SARs (#) ($) ($)
- --------------------------- ---------- ---------- ------- ------------
(1) Richard J. Kurtz $ -0- -0- $ -0- $ -0-
Chairman of the Board
and CEO
(2) Larry T. Clemons $ 350,000(a) 160,000 $ -0- $ -0-
President, COO and
Treasurer
(3) Michael T. Adams $ -0- 175,000 $ -0- $ -0-
Vice President and
Secretary
(4) Ponswamy Rajalingam $ 145,400(b) 100,000 $ -0- $ -0-
Vice President
(5) R. Uma Umarani $ 42,660(c) -0- $ -0- $ -0-
Vice President
(6) Howard Weiser $ -0- 400,000 $ -0- $ -0-
President and CEO
(resigned Feb. 8, 1999)
Secretary
(resigned Mar. 1, 1999)
(7) Edgar M. Reynolds $ -0- 150,000 $ -0- $ -0-
Vice President and
Treasurer
(resigned Mar. 1, 1999)
Page 9
The following table contains information concerning all types of stock
options granted to the Named Officers for the fiscal year ended December
31, 1999. No stock appreciation rights were granted during the year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
----------------------------------------------------------
(a) (b) (c)
Number of Percent of total
securities options/SARs
underlying granted to
options/SARs employees in
Name granted(#)(A) fiscal year
---------------------- ------------ ----------------
(1) Richard J. Kurtz 100,000(a) 1.46%
(2) Larry T. Clemons 1,000,000(d) 11.11%
(3) Michael T. Adams 250,000(a) 3.64%
(4) Ponswamy Rajalingam, Ph.D. 75,000(b) 1.09%
240,000(c) 2.67%
120,000 1.75%
25,000 .36%
(5) R. Uma Umarani, Ph.D. 144,000(b) 2.10%
18,000 .26%
(6) Howard Weiser(*) 400,000(a) 5.83%
(7) Edgar M. Reynolds(**) 150,000(a) 2.19%
- ---
(a) These options were granted upon establishment of the 1999 Plan, on
November 23, 1998, subject to an increase in the authorized common stock
capitalization of the Company or some other action taken by the board of
directors making shares available for issuance underlying the options. On
February 8, 1999, the common stock capitalization of the Company was
increased by approval of a majority of the common stock shareholders of the
Company, rendering the options exercisable on that date.
(b) These options were granted on February 8, 1999, subject to an increase
in the authorized common stock capitalization of the Company or some other
action taken by the board of directors making shares available for issuance
underlying the options. On February 8, 1999, the common stock capitalization
of the Company was increased by approval of a majority of the common stock
shareholders of the Company, rendering the options exercisable on that date.
(c) These options were originally granted under the Company's 1998 Plan, on
June 1, 1998 in connection with a consulting agreement, and subsequently
transferred to the Company's 1999 Plan.
(d) This restricted option was authorized by the board of directors
pursuant to an executive compensation agreement described elsewhere in this
proxy. See Employment Agreement.
Page 10
OPTION/SAR GRANTS IN LAST FISCAL YEAR
------------------------------------------------------------------
(CONTINUED)
(d) (e)
Exercise or base
price ($/Sh) Expiration date
---------------- ---------------
(1) Richard J. Kurtz $.16 / 100,000 11/23/2003
(2) Larry T. Clemons $.16 /1,000,000 N/A
(3) Michael T. Adams $.16 / 250,000 11/23/2003
(4) Ponswamy Rajalingam, Ph.D. $.315 / 75,000 2/8/2004
$.21 / 240,000 6/1/2000
$.195 / 120,000 6/1/2000
$.21 / 25,000 4/9/2004
(5) R. Uma Umarani, Ph.D. $.25 / 144,000 1/1/2000
$.21 / 18,000 7/1/2001
(6) Howard Weiser(*) $.16 / 400,000 11/23/2003
(7) Edgar M. Reynolds(**) $.16 / 150,000 11/23/2003
- ---
(*) Resigned as President and CEO on February 8, 1999 and Secretary on
March 1, 1999.
(**) Resigned as Vice President and Treasurer on March 1, 1999.
(A) The total options outstanding at the end of 1999 for each of the Named
Officers is shown as "Number of Securities Underlying Unexercised Options/
SARs at FY-end" in the table "Aggregated Option/SAR Exercises in Last Fiscal
Year and FY-end Option/SAR Values" below.
The following table sets forth information concerning option exercises and
option holdings for the fiscal year ended December 31, 1999 with respect to
the Named Officers. No stock appreciation rights have been granted by the
Company.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
---------------------------------------------------------------
(a) (b) (c)
Shares acquired
Name on exercise (#) Value realized($)(A)
--------------------- --------------- --------------------
(1) Richard J. Kurtz N/A N/A
(2) Larry T. Clemons N/A N/A
(3) Michael T. Adams 75,000 $ 6,750
(4) Ponswamy Rajalingam, Ph.D. 360,000 $ 14,425
(5) R. Uma Umarani, Ph.D. 162,000 $ 600
(6) Howard Weiser(*) N/A N/A
(7) Edgar M. Reynolds(**) N/A N/A
Page 11
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
------------------------------------------------------------------------
(CONTINUED)
(d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options/SARs
Options/SARs at FY-end at FY-End($)(B)
(#)
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------- -------------------------
(1) Richard J. Kurtz 100,000 / N/A $ -0- / N/A
(2) Larry T. Clemons N/A / 1,000,000 $ N/A /$ -0-
(3) Michael T. Adams 175,000 / N/A $ -0- / N/A
(4) Ponswamy Rajalingam N/A / 100,000 $ N/A /$ -0-
(5) R. Uma Umarani N/A / N/A $ N/A / N/A
(6) Howard Weiser(*) 400,000 / N/A $ -0- / N/A
(7) Edgar M. Reynolds(**) 150,000 / N/A $ -0- / N/A
- ---
(*) Resigned as President and CEO on February 8, 1999 and Secretary on
March 1, 1999.
(**) Resigned as Vice President and Treasurer on March 1, 1999.
(A) "Value Realized" is the difference between the exercise price and the
market price on the exercise date, multiplied by the number of options
exercised. "Value Realized" numbers do not necessarily reflect what the
executive might receive if he or she sells the shares acquired by the
option exercise, since the market price o the shares at the time of sale
may be higher or lower than the price on the exercise date of the option.
(B) "Value of Unexercised In-The-Money Options" is the aggregate, calculated
on a grant by grant basis, of the product of the number of unexercised
options at the end of 1999 multiplied by the difference between the exercise
price for the grant and the year-end market price, excluding grants for which
the difference is equal to or less than zero.
EMPLOYMENT AGREEMENTS
The Board of Directors in a Special Meeting dated February 8, 1999, appointed
Larry T. Clemons as President and COO of the Company. The Company agreed to a
compensation arrangement, which has not been set forth in a formal executive
employment agreement as of the date of this proxy, whereby Mr. Clemons is to
receive an initial annual salary in the amount of $75,000 and 1,000,000
shares of restricted common stock of the Company, beginning February 8, 1999.
The annual salary is subject to review on a quarterly basis, and, based on
each $.20 increase in the value of the stock of the Company (with the base
beginning value of the common stock as of February 8, 1999 of $.35), Mr.
Clemons is eligible for increases of $10,000. Additionally, Mr. Clemons has
an option to purchase 1,000,000 shares of restricted common stock at the end
of his first year of employment at a price per share of $.16. During the
year, the Chairman of the Board determined, in the best interests of the
Company, to increase Mr. Clemons' salary, which was $110,000 as of December
31, 1999. Currently, Mr. Clemon's salary is in accordance with his
originally agreed compensation arrangement described hereinabove.
Page 12
The Board of Directors recognized the exemplary contributions made by Mr.
Clemons during his first year of employment and restructured his option to
purchase 1,000,000 shares of restricted common stock, effective February 8,
2000, at $.16 per share. The board of directors canceled his theretofore
approved option for restricted common stock and replaced it with an award
for 1,000,000 shares of restricted common stock on January 4, 2000. See
Stock Ownership.
PROPOSAL TWO
RATIFICATION OF SELECTION OF AUDITORS
-------------------------------------
The Board of Directors has selected BAUM & COMPANY, P.A. ("BAUM") as the
independent auditors of Urecoats for 2000. BAUM has served as the
independent auditors of Urecoats since 1996. Arrangements have been made for
a representative of BAUM to attend the Annual Meeting. The representative
will have an opportunity to make a statement if he or she desires to do so,
and will be available to respond to appropriate stockholder questions. The
selection of BAUM as Urecoats' auditors must be ratified by a majority of
the votes cast at the annual meeting. BAUM is a member of the Securities
and Exchange Division of the American Institute of Certified Public
Accountants ("AICPA") duly authorized to perform audits of SEC registrants.
The firm is current with its peer review system and has maintained an
unqualified quality control status since the inception of the peer review
system established by the AICPA.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF BAUM AS
URECOATS' INDEPENDENT AUDITORS FOR 2000.
PROPOSAL THREE
APPROVAL OF AN INCREASE IN AUTHORIZED COMMON STOCK
--------------------------------------------------
On April 12, 2000, subject to approval of shareholders, the Board of
Directors unanimously approved an amendment to Urecoats' restated
certificate of incorporation to permit Urecoats to issue up to 140 million
shares of common stock. The Board directed that the amendment be voted on
by common stockholders at the next annual meeting of shareholders. The
form of the proposed amendment is attached to this proxy statement as
Annex A.
Urecoats is currently permitted to issue up to an aggregate of 100 million
shares of common stock having a par value of $.01 per share. As of March 21,
2000, a total of 99,098,469 shares of Common Stock were deemed reserved,
issued and outstanding on a fully diluted basis. As of March 21, 2000,
Urecoats was able to issue a total of 901,531 shares of common stock.
Page 13
Subject to stockholder approval, the Board has resolved to increase the
number of shares of common stock that Urecoats may issue in order to enable
it, (a) to pursue its current acquisition policy to acquire additional
assets or companies having assets and/or operations which are compatible
with the Urecoats business; and (b) to provide additional shares for
funding and growth. Although the Company has not yet identified a candidate
for potential acquisition, management believes its policy of growth through
operation and acquisition can best be pursued through utilization of equity
(common stock) as opposed to cash. Urecoats anticipates it will continue to
be in need of its cash reserves for materials, operations and for internal
growth as sales of its products occur and new products are brought to market.
The proposed increase in capitalization is deemed necessary by management to
provide a sufficient amount of shares that may enable the Company to raise
capital and, subject to market value, to be flexible in proposals of cash
and/or stock to acquisition candidates. The increase may provide the
wherewithal for management to consider and aggressively pursue a desirable
acquisition candidate or asset situation (of relatively significant size)
without the necessity of further requesting shareholders to authorize an
increase in the capitalization with the statutory and regulatory delays
which are usually occasioned thereby. In many instances, such a delay could
result in loss of opportunity. The proposed increase in capitalization is
deemed by management to enable it to meet potential anticipated operational
objectives by providing shares for future funding, if necessary or
warranted, and to provide shares for continued growth by acquisition. The
Company plans to consider or pursue a desirable acquisition candidate or
asset situation. Although the Company will enter into discussions with
potential acquisition candidates or asset acquisitions, there are no
negotiations or specific agreements in place for any new acquisition
candidate or asset acquisition at this time. The Company is generally
amenable and will confer with and consider any potential asset or
acquisition candidate that will provide additional synergistic technology,
cash and/or revenue for the Company's future growth.
Newly authorized shares will have the same rights as the outstanding shares
and those presently authorized, including the right to cast one vote per
share and to receive dividends paid by Urecoats. Although the authorization
would not, in itself, have any effect on your rights as a stockholder,
issuance of additional shares of common stock for other than a dividend
would have a dilutive effect on voting rights and earnings per share.
Furthermore any issuances of previously authorized but unissued preferred
stock, if made convertible into common stock, may have similar dilutive
consequences. In addition, a further consequence of increasing the
authorized shares of common stock of the Company is that management will
have the potential ability, without approval of shareholders, to issue such
common shares or create and issue heretofore authorized preferred stock
(convertible into common stock in desirable conversion ratios) so as to
make more difficult, or to stave off hostile and/or friendly takeover
attempts by third parties. The foregoing will be applicable even if such a
transaction may appear, on its face, to be favorable to the interests of
the shareholders. Such anti-takeover measures may include declaring a
dividend and issuing shares to the existing shareholders of the Company, or
selling the shares, on agreeable terms to a friendly investor (a person or
other entity whose interests are not opposed to those of the Company and
Page 14
its shareholders) or taking other measures with its authorized but unissued
shares (without approval of shareholders) within its corporate powers to
stave off takeover attempts. The use by management of anti-takeover
measures which may include the issuance of additional shares, share
dividends, and/or options to acquire shares at favorable prices, may have a
dilutive effect on the Company's book value per share and further erode
percentage ownership of shares by existing shareholders. However, there
are currently no "anti-takeover" measures contemplated by the Company or
included in any debt agreement, By-law or provision of the Company's
Restated Certificate of Incorporation or any amendment thereto and
management does not plan or presently contemplate seeking shareholder
approval for any such amendment to the By-laws. The foregoing
notwithstanding, management believes shareholder approval will not be
necessary should it desire, in the future, to implement the aforementioned
anti-takeover measures heretofore discussed.
The increase in the authorized number of shares together with other
factors may also make the removal of management more difficult even if
such removal would appear to be beneficial to shareholders generally, and
may have the effect of limiting shareholder participation in certain
transactions such as mergers or tender offers whether or not such
transactions are favored by incumbent management. However, it is
essential to note that whatever course of action management chooses to
pursue, it is required and has a fiduciary obligation to do so in the best
interests of the shareholders. Stockholders do not have preemptive rights.
The increase in Urecoats' authorized common stock capitalization must be
approved by a majority of all outstanding common shares.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED AMENDMENT
TO URECOATS' RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 100 MILLION TO
140 MILLION SHARES OF COMMON STOCK.
PROPOSAL FOUR
APPROVAL OF URECOATS' 2000 STOCK PURCHASE AND OPTION PLAN
---------------------------------------------------------
On April 12, 2000, Urecoats Board of Directors approved the Urecoats 2000
Stock Purchase and Option Plan and recommended submitting the plan to
stockholders for approval at the annual meeting. If approved, the plan
will become effective July 1, 2000.
The Board of Directors of the Company, or a committee established by the
Board, designated to administer the 2000 Plan, which shall consist of not
less than two Non-Employee Directors satisfying the requirements of
Rule 16b-3.
Page 15
The plan affords key employees, officers, and consultants, who are
responsible for the continued growth of Urecoats, an opportunity to acquire
a proprietary interest in the Company, and, thus, to create in such
individuals a greater concern for the welfare of the Company and its
subsidiaries. The Company, by means of this 2000 Stock Purchase and Option
Plan, seeks to retain the services of persons now holding key positions and
to secure the services of persons capable of filling such positions. The
following summary is qualified by reference to the complete text of the
plan, which is attached as Annex B.
THE PLAN
Up to 5 million shares of common stock, subject to adjustments for stock
dividends, splits and other events that affect the number of shares of
common stock outstanding, may be issued under the plan. Stock subject to
purchase under the plan will be shares of common stock that have been
authorized but unissued, or have been previously issued and reacquired by
Urecoats, or both.
Maximum Purchase. The options offered in the plan are a matter of separate
inducement and are not in lieu of any salary or other compensation for the
services of any key employee or consultant. The options granted under the
plan are intended to be either Incentive Stock Options ("ISO") or Non-
Qualified Stock Options ("NQSO"). The aggregate fair market value of shares
subject to an ISO to a participant's stock purchases in any calendar year
shall not exceed one hundred thousand dollars ($100,000.00).
Option. Participants will receive an option. The option will state the
number of shares of common stock to be purchased underlying the options
granted.
Exercise Price. The purchase price per share purchasable under an option
will be determined by the Administrator, provided, however, that such
purchase price shall not be less than 90% of the fair market value of a
share on the date of grant of such option, provided further, any option
granted to a participant who, at the time such option is granted, is an
officer or director of the Company, the purchase price shall not be less
than 100% of the fair market value of a share on the date of grant of such
option, provided further, however, that in the case of an ISO granted to a
participant who, at the time such option is granted, is deemed to be a 10%
Shareholder, the purchase price for each share will be such amount as the
Administrator in its best judgment shall determine to be not less than 110%
of the fair market value per share at the date the ISO is granted.
Term of Option. The term of each option shall be fixed by the
Administrator which in any event will not exceed a term of 10 years from
the date of the grant, provided, however, that the term of any ISO granted
to any 10% Shareholder will not be exercisable after the expiration of 5
years from the date such ISO was granted.
Termination of Employment. The Administrator will determine the effects of
a participant's retirement, death, disability, leave of absence or any other
termination of employment during the Term of any option.
Page 16
Amendments. The Board may amend, alter, suspend, discontinue or terminate
the plan; provided, however, that, notwithstanding any other provision of
the plan or any option, without approval of the stockholders of the Company,
no such amendment, alteration, suspension, discontinuation or termination
will be made that, absent such approval, (1) would cause Rule 16b-3 to
become unavailable with respect to the Plan, (2) would violate the rules or
regulations of any national securities exchange on which the shares of the
Company are traded or the rules or regulations of the NASD that are
applicable to the Company, or (3) would cause the Company to be unable,
under the Code, to grant ISOs under the plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the federal income tax consequences
under current tax taw of NQSOs and ISOs. It does not purport to cover all
of the special rules, including special rules relating to optionees subject
to Section 16(b) of the Exchange Act and the exercise of an option with
previously-acquired shares, or the state or local income or other tax
consequences inherent in the ownership and exercise of stock options and
the ownership and disposition of the underlying shares.
An optionee will not recognize taxable income for federal income tax
purposes upon the grant of a NQSO or an ISO. Upon the exercise of a NQSO,
the optionee will recognize ordinary income in an amount equal to the excess,
if any, of the fair market value of the shares acquired on the date of
exercise over the exercise price thereof, and the Company will generally be
entitled to a deduction for such amount at that time. If the optionee later
sells shares acquired pursuant to the exercise of a NQSO, he or she will
recognize long-term or short-term capital gain or loss, depending on the
period for which the shares were held. Long-term capital gain is generally
subject to more favorable tax treatment than ordinary income or short-term
capital gain. Upon the exercise of an ISO, the optionee will not recognize
taxable income. If the optionee disposes of the shares acquired pursuant to
the exercise of an ISO more than two years after the date of grant and more
than one year after the transfer of the shares to him or her, the optionee
will recognize long-term capital gain or loss and the Company will not be
entitled to a deduction. However, if the optionee disposes of such shares
within the required holding period, all or a portion of the gain will be
treated as ordinary income and the Company will generally be entitled to
deduct such amount.
In addition to the federal income tax consequences described above, an
optionee may be subject to the alternative minimum tax, which is payable to
the extent it exceeds the optionee's regular tax. For this purpose, upon
the exercise of an ISO, the excess of the fair market value of the shares
over the exercise price therefore is an adjustment which increases
alternative minimum taxable income. In addition, the optionee's basis in
such shares is increased by such excess for purposes of computing the gain
or loss on the disposition of the shares for alternative minimum tax
purposes. If an optionee is required to pay an alternative minimum tax,
the amount of such tax which is attributed to deferral preferences
(including the ISO adjustment) is allowed as a credit against the
optionee's regular tax liability in subsequent years. To the extent the
credit is not used, it is carried forward.
Page 17
Although management believes it is in the interests of shareholders that
the plan be approved in order to attract and retain qualified employees
and consultants, since the plan authorizes the grant of options to
purchase up to 5 million shares of common stock, the future grant and
exercise of the options would tend to dilute the percentage ownership of
shareholders in the Company. Furthermore, the nature of the options is
such that the options would be exercised at a time that the Company likely
would be able to derive a higher price for Company shares than the
exercise price.
The Board believes the plan is an effective means of aligning the interests
of a broad range of employees with the interests of our stockholders.
THE BOARD RECOMMENDS THAT YOUR VOTE "FOR" THE
URECOATS 2000 STOCK PURCHASE AND OPTION PLAN
SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS
- ------------------------------------------
Under Securities and Exchange Commission ("SEC") rules, a stockholder who
intends to present a proposal at the next annual meeting of stockholders
and who wishes the proposal to be included in the proxy statement for that
meeting must submit the proposal in writing to the Secretary of Urecoats,
at the address on the cover of this proxy statement. The proposal must be
received no later than August 9, 2000.
Stockholders who do not wish to follow the SEC rules in proposing a matter
for action at the next annual meeting must notify Urecoats in writing of
the information required by the provisions of Urecoats' by-laws dealing
with stockholder proposals. The notice must be delivered to Uecoats'
Corporate Secretary between September 10, 2000 and October 30, 2000. You
can obtain a copy of Urecoats' by-laws by writing the Corporate Secretary
at the address shown on the cover of this proxy statement.
COST OF ANNUAL MEETING AND PROXY SOLICITATION
- ---------------------------------------------
Urecoats pays the expense of preparing, assembling, printing, mailing and
filing this Proxy Statement and materials used in this solicitation of
proxies with the SEC and its stockholders, which is estimated not to exceed
$50,000. The solicitation will be made by mail. The Company will supply
brokers or persons holding shares of record in their names or in the names
of nominees for other persons, as beneficial owners, with such additional
copies of proxies, proxy materials and Annual Reports as may reasonably be
requested in order for such record holders to send one copy to each
beneficial owner, and will upon request of such record holders, reimburse
them for their reasonable expenses in mailing such material.
Certain directors, officers and employees of the Company, not especially
employed for this purpose, may solicit proxies, without additional
remuneration therefor, by mail, telephone, telegraph or personal interview.
Page 18
ANNEX A
-------
PROPOSED AMENDMENT TO URECOATS'
RESTATED CERTIFICATE OF INCORPORATION
Article FOURTH, Capital Stock, Section A, is hereby amended to read in its
entirety as follows:
"FOURTH: Capital Stock. A. The total number of shares of stock
which the Corporation shall have the authority to issue is One
Hundred and Forty Two Million (142,000,000) shares of which One
Hundred and Forty Million (140,000,000) shall be Common Stock of
the par value of One Cent ($.01) per share (hereinafter called
the "Common Stock") and of which Two Million (2,000,000) shares
shall be Preferred Stock of the par value of One Dollar ($1.00)
per share (hereinafter called the "Preferred Stock")."
Page A-1
ANNEX B
-------
URECOATS INDUTRIES INC.
2000 STOCK PURCHASE AND OPTION PLAN
(effective July 1, 2000)
SECTION I
PURPOSE
URECOATS INDUSTRIES INC. (the "Company"), desires to afford certain of
its key employees, officers, and consultants, who are responsible for the
continued growth of the Company, an opportunity to acquire a proprietary
interest in the Company, and, thus, to create in such individuals a greater
concern for the welfare of the Company and its subsidiaries. The Company,
by means of this 2000 Stock Purchase and Option Plan, seeks to retain the
services of persons now holding key positions and to secure the services of
persons capable of filling such positions. The Options offered herein are
a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any key employee or consultant. The Options
granted hereunder are intended to be either Incentive Stock Options or Non-
Qualified Stock Options.
SECTION II
DEFINITIONS
The terms, as used in this 2000 Plan, shall have the meanings provide below:
(a) Administrator. The Board of Directors of the Company, or a
committee established by the Board, designated to administer the 2000 Plan,
which shall consist of not less than two (2) Non-Employee Directors
satisfying the requirements of Rule 16b-3.
(b) Affiliate. Any entity that, directly or indirectly through one
or more intermediaries, is controlled by the Company and any entity in which
the Company has a significant equity interest.
(c) Code. The Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
(d) Company. Urecoats Industries Inc., a Delaware corporation.
(e) Eligible Person. Any employee, officer or consultant providing
services to the Company or any Affiliate who the Administrator determines to
be an Eligible Person. A director of the Company who is not also an employee
of the Company or an Affiliate shall be an Eligible Person.
(f) Exchange Act. The Securities Exchange Act of 1934, as amended.
(g) Fair Market Value. The closing "bid" price of the Shares on the
date in question as quoted on NASDAQ, or any successor national stock
exchange on which the Shares are then traded; provided, however, that if on
the date in question there is no public market for the Shares and they are
neither quoted on NASDAQ nor traded on a national securities exchange, then
the Administrator shall, in its sole discretion and best judgment, determine
the Fair Market Value.
Page B-1
(h) Incentive Stock Option. An Option granted under the 2000 Plan
that is intended to meet the requirements of Section 422 of the Code or any
successor provision.
(i) NASDAQ. The National Association of Securities Dealers
Electronic Bulletin Board or Automated Quotation System.
(j) Non-Employee Directors. Directors, as such term is defined in
Rule 16b-3(b)(3)(I) promulgated under the Exchange Act, that have the
qualifications thereunder to satisfy the requirements of Rule 16b-3.
(k) Non-Qualified Stock Option. An Option granted under the 2000
Plan that is not intended nor meets the requirements of Section 422 of the
Code or any successor provision.
(l) Option. An Incentive Stock Option or a Non-Qualified Stock
Option.
(m) Option Agreement. Any written agreement, contract or document
evidencing any Option granted under the 2000 Plan.
(n) Optionee. An Eligible Person granted an Option under the 2000
Plan.
(o) Participant. An Eligible Person designated to be granted an
Option under the 2000 Plan.
(p) Person. Any individual, corporation, partnership, association,
limited liability company, or trust.
(q) Rule 16b-3. The Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor rule or
regulation.
(r) Shares. The shares of common stock, $.01 par value, of the
Company.
(s) 10% Shareholder. A Participant who owns Shares of the Company
or shares of any subsidiary corporation or parent corporation of the
Company possessing more than 10% of the Company or subsidiary corporation
or parent corporation of the Company.
(t) 2000 Plan. This 2000 Stock Purchase and Option Plan.
SECTION III
ADMINISTRATION
The Administrator, subject to the express provisions contained herein
and applicable law, shall administer this 2000 Plan with full power and
authority to:
(a) designate Participants;
(b) determine the types of Options (e.g., whether Incentive Stock
Options or Non-Qualified Stock Options) to be granted to each Participant
under the 2000 Plan;
Page B-2
(c) determine the number of Shares to be covered by each Option;
(d) determine the terms and conditions of any Option Agreement;
(e) amend the terms and conditions of any Option Agreement and
accelerate the exercisability of Options covered thereunder;
(f) determine whether, to what extent and under what circumstances
Options may be exercised in cash, shares, cancellation of indebtedness of
the Company owing to the Optionee, other securities, other property, or any
combination thereof, or canceled, forfeited or suspended;
(g) determine whether, to what extent and under what circumstances
Options shall be deferred either automatically or at the election of the
holder thereof or the Administrator;
(h) interpret and administer the 2000 Plan and any instrument or
Option Agreement relating to, or Option granted under the 2000 Plan;
(i) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the proper
administration of the 2000 Plan; and
(j) make any other determination and take any other action that it
deems necessary or desirable for the administration of the 2000 Plan.
Unless otherwise expressly provided in the 2000 Plan, all
designations, determinations, interpretations and other decisions under or
with respect to the 2000 Plan or any Option shall be within the sole
discretion of the Administrator, may be made at any time and shall be
final, conclusive and binding upon any Participant, any holder or
beneficiary of any Option granted under the 2000 Plan and any employee of
the Company or any Affiliate.
SECTION IV
AVAILABLE SHARES SUBJECT TO OPTION
The Shares underlying the Options granted pursuant to this 2000 Plan,
are subject to the following provisions:
(a) Shares Available. The total number of Shares for which Options
may be granted pursuant to the 2000 Plan shall be 5,000,000 Shares in the
aggregate, subject to adjustments as provided in Section 4(c). If any
Shares covered by an Option or to which an Option relates are not purchased
or are forfeited, or if an Option otherwise expires, then the number of
Shares counted against the aggregate number of Shares available under the
2000 Plan with respect to such Option, to the extent of any such
forfeitures or terminations, shall again be available for Options under the
2000 Plan.
(b) Accounting for Shares Covered by an Option. For purposes of
this Section 4, the number of Shares covered by an Option shall be counted
on the date of grant of such Option against the aggregate number of Shares
available for granting Options under the 2000 Plan.
Page B-3
(c) Adjustments. In the event that the Administrator shall
determine that any dividend or other distribution (whether in the form of
cash, shares, other securities or other property), re-capitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares or
other securities of the Company, issuance of warrants or other rights to
purchase shares or other securities of the Company or other similar
rights to purchase shares or other securities of the Company or other
similar corporation transaction or event affects the Shares subject to
Option grants under the 2000 Plan such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the 2000 Plan, then the Administrator shall, in such
manner as it may deem equitable, adjust any or all of:
(1) the number of Shares which may thereafter be made the
subject of Options;
(2) the number of Shares subject to outstanding Option awards;
and
(3) the purchase or exercise price with respect to any Option,
provided, however, that the number of Shares covered by an Option or to
which such Option relates shall always be a whole number.
(d) Incentive Stock Options. Notwithstanding the foregoing, the
number of Shares available for granting Incentive Stock Options under the
2000 Plan shall not exceed 2,000,000 Shares subject to adjustment as
provided in the 2000 Plan and Section 422 or 424 of the Code or any
successor provisions.
SECTION V
ELIGIBILITY
Any Eligible Person shall be eligible to be designated a Participant.
In determining which Eligible Persons shall receive an Option and the
terms of any Option, the Administrator may take into account the nature of
the services rendered by the respective Eligible Persons, their present
and potential contributions to the success of the Company or such other
factors as the Administrator, in its discretion, shall deem relevant.
Notwithstanding the foregoing, an Incentive Stock Option may only be
granted to full or part-time employees (which term as used herein includes,
without limitation, officers and directors who are also employees) and
shall not be granted to an employee of an Affiliate unless such Affiliate
is also a "subsidiary corporation" of the Company within the meaning of
Section 424(f) of the Code or any successor provision.
SECTION VI
OPTION AWARDS
The Administrator is authorized to grant Options to Participants with
the following terms and conditions and with such additional terms and
conditions not inconsistent with the provisions of the 2000 Plan as the
Administrator shall determine:
Page B-4
(a) Exercise Price. The purchase price per Share purchasable under
an Option shall be determined by the Administrator, provided, however, that
such purchase price shall not be less than ninety percent (90%) of the Fair
Market Value of a Share on the date of grant of such Option, provided
further, any Option granted to a Participant who, at the time such Option
is granted, is an officer or director of the Company, the purchase price
shall not be less than one hundred percent (100%) of the Fair Market Value
of a Share on the date of grant of such Option, provided further, however,
that in the case of an Incentive Stock Option granted to a Participant who,
at the time such Option is granted, is deemed to be a 10% Shareholder, the
purchase price for each Share shall be such amount as the Administrator in
its best judgment shall determine to be not less than one hundred and ten
percent (110%) of the Fair Market Value per Share at the date the Incentive
Stock Option is granted. In determining stock ownership of a Participant
for any purposes under the 2000 Plan, the rules of Section 424(d) of the
Code shall be applied, and the Administrator may rely on representations of
fact made to it by the Participant and believe it to be true.
(b) Option Term. The term of each Option shall be fixed by the
Administrator which in any event shall not exceed a term of ten (10) years
from the date of the grant, provided, however, that the term of any
Incentive Stock Option granted to any 10% Shareholder shall not be
exercisable after the expiration of five (5) years from the date such
Incentive Stock Option was granted.
(c) Maximum Grant of Incentive Stock Options. The aggregate Fair
Market Value (determined on the date the Incentive Stock Option is granted)
of Shares subject to an Incentive Stock Option (when first exercisable)
granted to a Participant by the Administrator in any calendar year shall
not exceed one hundred thousand dollars ($100,000.00).
(d) Time and Method of Exercise. Subject to the provisions of the
2000 Plan, the Administrator shall determine the time or times at which an
Option may be exercised in whole or in part and the method or methods
which shall consist of cash, shares, cancellation of indebtedness of the
Company owing to the Optionee, other property, or any combination thereof,
having a Fair Market Value on the exercise date equal to the relevant
exercise price, in which, payment of the exercise price may be made or
deemed to have been made.
(e) Limits on Transfer of Options. No Option shall be transferable
by a Participant otherwise than by will or by the laws of descent and
distribution, except by gift to family members which is not otherwise
specifically proscribed by the Administrator in its discretion; provided,
however, that, if so determined by the Administrator, a Participant may,
in the manner established by the Administrator, designate a beneficiary or
beneficiaries to exercise the rights of the Participant and receive any
Shares purchased with respect to any Option upon the death of the
Participant. Each Option shall be exercisable during the Participant's
lifetime only by the Participant or, if permissible under applicable law,
by the Participant's guardian or legal representative. No Option or Shares
underlying any Option shall be pledged, alienated, attached or otherwise
encumbered, and any purported pledge, alienation, attachment or
encumbrance shall be void and unenforceable against the Company or any
Affiliate.
Page B-5
(f) Restrictions and Securities Exchange Listing. All certificates
for Shares delivered upon the exercise of Options shall be subject to such
stop transfer orders and other restrictions as the Administrator may deem
advisable under the 2000 Plan or the rules, regulations and other
requirements of the Securities and Exchange Commission and any applicable
federal or state securities laws, and the Administrator may cause a legend
or legends to be placed on such certificates to make appropriate reference
to such restrictions. If the Shares or other securities are traded on a
national securities exchange, the Company shall not be required to deliver
any Shares covered by an Option unless and until such Shares have been
admitted for trading on such securities exchange.
(g) Termination of Employment or Consultancy. Termination of
employment or consultancy shall be subject to the following provisions:
(1) Upon termination of the employment or consultancy, as the
case may be, of any Participant, an Option previously granted to the
Participant, unless otherwise specified herein or by the Administrator in
the Option, shall, to the extent not theretofore exercised, not terminate
or become null and void:
(i) If the Participant shall die while in the employ of
the Company or during the one (1) year period, whichever is applicable,
specified in clause;
(ii) below and at a time when such Participant was
entitled to exercise an Option as herein provided, the legal
representative of such Participant, or such Person who acquired such
Option by bequest or inheritance or by reason of the death of the
Participant, may, not later than fifteen (15) months from the date of
death, exercise such Option, to the extent not theretofore exercised, in
respect of any or all of such number of Shares specified by the
Administrator in such Option; and
(iii) If the employment or consultancy of any Participant
to whom such Option shall have been granted shall terminate by reason of
the Participant's retirement (at such age upon such conditions as shall be
specified by the Board of Directors), disability (as described in Section
22(e) of the Code) or dismissal by the Company other than for cause (as
defined below), and while such Participants entitled to exercise such
Option as herein provided, such Participant shall have the right to
exercise such Option so granted, to the extent not theretofore exercised,
in respect of any or all of such number of Shares as specified by the
Administrator in such Option, at any time up to one (1) year from the date
of termination of the Optionee's employment or consultancy by reason of
retirement or dismissal other than for cause or disability, provided, that
if the Optionee dies within such twelve (12) month period, subclause (i)
above shall apply.
(2) If a Participant voluntarily terminates his or her
employment or consultancy, as the case may be, or is discharged for cause,
any Option granted hereunder shall, unless otherwise specified by the
Administrator in the Option, forthwith terminate with respect to any
unexercised portion thereof.
Page B-6
(3) If an Option granted hereunder shall be exercised by the
legal representative of a deceased or disabled Participant, or by a person
who acquired an Option granted hereunder by bequest or inheritance or by
reason of death of any such person, written notice of such exercise shall
be accompanied by a certified copy of letters testamentary or equivalent
proof of the right of such legal representative or other person to exercise
such Option.
(4) For all purposes of the 2000 Plan, the term "for cause"
shall mean:
(i) With respect to a Participant who is a party to a
written employment or consultancy agreement with the Company, as the case
may be, which contains a "for cause" definition or "cause" (or words of
like import) for purposes of termination of employment or consultancy
thereunder by the Company, "for cause" or "cause" as defined in the most
recent of such agreements; or
(ii) In all other cases, as determined by the
Administrator in its sole discretion, that one or more of the following
has occurred:
(A) any failure by a Participant to substantially
perform his or her employment or consultancy duties, as the case may be,
which shall not have been corrected within thirty (30) days following
written notice thereof;
(B) any engaging by such Participant in misconduct
or, in the case of an officer Participant, any failure or refusal by such
officer Participant to follow the directions of the Company's Board of
Directors or Chief Executive Officer of the Company which, in either case,
is injurious to the Company or any Affiliate;
(C) any breach by a Participant of any obligation or
specification contained in the instrument pursuant to which an Option is
granted; or
(D) such Participant's conviction or entry of a plea
of nolo contendere in respect of any felony, or of a misdemeanor which
results in or is reasonably expected to result in economic or reputational
injury to the Company or any of its Affiliates.
SECTION VII
AMENDMENTS, TERMINATION AND ADJUSTMENTS
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Option Agreement or in the 2000 Plan:
(a) Amendments to the 2000 Plan. The Board of Directors of the
Company may amend, alter, suspend, discontinue or terminate the 2000 Plan;
provided, however, that, notwithstanding any other provision of the 2000
Plan or any Option, without approval of the stockholders of the Company, no
such amendment, alteration, suspension, discontinuation or termination
shall be made that, absent such approval:
Page B-7
(1) would cause Rule 16b-3 to become unavailable with respect
to the 2000 Plan;
(2) would violate the rules or regulations of any national
securities exchange on which the Shares of the Company are traded or the
rules or regulations of the National Association of Securities Dealers,
Inc. that are applicable to the Company; or
(3) would cause the Company to be unable, under the Code, to
grant Incentive Stock Options under the 2000 Plan.
(b) Amendments to Option Grants. The Administrator may waive any
conditions or rights of the Company under any outstanding Option grant,
prospectively or retroactively. The Administrator may not amend, alter,
suspend, discontinue or terminate any outstanding Option grant,
prospectively or retroactively, without the consent of the Participant or
holder or beneficiary thereof, except as otherwise herein provided.
(c) Correction of Defects, Omissions and Inconsistencies. The
Administrator may correct any defect, supply any omission or reconcile
any inconsistency in the 2000 Plan or any Option in the manner and to the
extent it shall deem desirable to carry the 2000 Plan into affect.
SECTION VIII
INCOME TAX WITHHOLDING and TAX BONUSES
The exercise of Options and issuance of the underlying Shares under
this 2000 Plan, are subject to the following:
(a) Withholding. In order to comply with all applicable federal or
state income tax laws or regulations, the Company may take such action as
it deems appropriate to ensure that all applicable federal or state
payroll, withholding, income or other taxes, which are the sole and
absolute responsibility of a Participant, are withheld or collected from
such Participant. In order to assist a Participant in paying all or a
portion of the federal and state taxes to be withheld or collected upon
exercise of any Option, the Administrator, in its discretion and subject to
such additional terms and conditions as it may adopt, may permit the
Participant to satisfy such tax obligation by:
(1) electing to have the Company withhold a portion of the
Shares otherwise to be delivered upon exercise of any Option with a Fair
Market Value equal to the amount of such taxes or
(2) delivering to the Company Shares other than the shares
issuable upon exercise of the applicable Option with a Fair Market Value
equal to the amount of such taxes. The election, if any, must be made on
or before the date that the amount of tax to be withheld is determined.
(b) Tax Bonuses. The Administrator, in its discretion, shall have
the authority, at the time of grant of any Option under this 2000 Plan or
at any time thereafter, to approve cash bonuses to designated Participants
to be paid upon their exercise in order to provide funds to pay all or a
portion of federal and state taxes due as a result of such exercise, and
shall have full authority in its discretion to determine the amount of any
such tax bonus.
Page B-8
SECTION IX
EFFECTIVE DATE AND TERM
The effective date and term of this 2000 Plan are as follows:
(a) Effective Date. The effective date of this 2000 Plan shall be
July 1, 2000.
(b) Term of 2000 Plan. Unless the 2000 Plan shall have been
discontinued or terminated as provided for in the provisions of this 2000
Plan, the 2000 Plan shall terminate on June 30, 2010. No Option shall be
granted after the termination of the 2000 Plan. However, unless otherwise
expressly provided in the 2000 Plan or in an applicable Option, any Option
theretofore granted may extend beyond the termination of the 2000 Plan, and
the authority of the Administrator provided for hereunder with respect to
the 2000 Plan and any Option grants, and the authority of the Board of
Directors of the Company to amend the 2000 Plan, shall extend beyond the
termination of the 2000 Plan.
SECTION X
GENERAL PROVISIONS
The general provisions applicable to this 2000 Plan are as follows:
(a) No Rights to Option Grants. No Eligible Person, Participant or
other Person shall have any claim to be granted an Option under the 2000
Plan, and there is no obligation for uniformity of treatment of Eligible
Persons, Participants or holders or beneficiaries of Options granted under
the 2000 Plan. The terms and conditions of Options need not be the same
with respect to any Participant or with respect to different Participants.
(b) Option Agreements. No Participant will have rights under an
Option granted to such Participant unless and until a written Option shall
have been duly executed on behalf of the Company. Each Option shall set
forth the terms and conditions of the Option as granted to a Participant
consistent with the provisions of this 2000 Plan.
(c) Limit on Other Compensation Arrangements. Nothing contained in
the 2000 Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and
such arrangements may be either generally applicable or applicable only
in specific cases.
(d) No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or any Affiliate, nor will it affect in any way the right of
the Company or an Affiliate to terminate such employment at any time, with
or without cause. In addition, the Company or an Affiliate may at any time
dismiss a Participant from employment free from any liability or any claim
under the 2000 Plan, unless otherwise expressly provided in the 2000 Plan
or in any Option.
Page B-9
(e) Governing Law. The validity, construction and effect of the
2000 Plan or any Option granted hereunder, and any rules and regulations
relating to the 2000 Plan or any Option granted hereunder, shall be
determined in accordance with the laws of the State of Delaware except to
the extent preempted by Federal law.
(f) Severability. If any provision of the 2000 Plan or any Option
is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the 2000 Plan or any Option under any law
deemed applicable by the Administrator, such provision shall be construed
or deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the
Administrator, materially altering the purpose or intent of the 2000 Plan
or the Option, such provision shall be stricken as to such jurisdiction or
Option, and the remainder of the 2000 Plan or any Option shall remain in
full force & effect.
(g) Section Headings. The section headings included herein are only
for convenience, and they shall have no effect on the interpretation of the
2000 Plan.
IN WITNESS WHEREOF, this 2000 Plan has been duly amended and executed
at Pompano Beach, Florida on this 12th day of April 2000.
URECOATS INDUSTRIES INC.
/s/ Larry T. Clemons
Larry T. Clemons
President
Page B-10
EXHIBIT
-------
OPTION
THE BOARD OF DIRECTORS of Urecoats Industries Inc. (the "Company"),
has authorized and approved the 2000 Stock Purchase and Option Plan
("2000 Plan"). This 2000 Plan provides for the grant of Options to
employees including officers and directors and consultants of the Company.
Unless otherwise provided herein all defined terms shall have the
respective meanings ascribed to them under the 2000 Plan.
1. GRANT OF OPTION. Pursuant to authority granted to it under the
2000 Plan, the Administrator responsible for administering the 2000 Plan
hereby grants to you, as an employee or consultant of the Company and as
of ____________, _______ ("Grant Date"), the following Option ___________.
Each Option permits you to purchase one share of the Company's common
stock, $.01 par value per share ("Shares").
2. CHARACTER OF OPTIONS. Pursuant to the 2000 Plan, Options
granted herein may be Incentive Stock Options or Non-Qualified Stock
Options, or both. To the extent permitted under the 2000 Plan and by law,
such Options shall first be considered Incentive Stock Options.
3. EXERCISE PRICE. The Exercise Price for each Non-Qualified Stock
Option granted herein to consultants shall be $____________ per Share and
employees $ ___________ per Share, and the exercise price for each
Incentive Stock Option granted herein shall be $ _______ per Share, except
that an Incentive Stock Option granted to a 10% Shareholder shall be
$_______ per Share. It is agreed and determined by the Administrator that
the Fair Market Value of the Shares subject to the Options herein on the
date of grant is $________ per Share.
4. PAYMENT OF EXERCISE PRICE. Options represented hereby may be
exercised in whole or in part by delivering to the Company your payment of
the Exercise Price of the Option so exercised in cash, Shares, cancellation
of indebtedness of the Company owing to the Optionee, or in such form
permitted under the 2000 Plan, or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant exercise price of
the relevant Option being exercised.
5. TERMS OF OPTIONS. The term of each Option granted herein shall
be for a term of up to ______ (___) years from the Grant Date, provided,
however, that the term of any Incentive Stock Option granted herein to an
Optionee who is at the time of the grant, the owner of 10% or more of the
outstanding Shares of the Company, shall not be exercisable after the
expiration of five (5) years from the Grant Date.
6. LIMITS ON TRANSFER OF OPTIONS. The Option granted herein shall
not be transferable by you otherwise than by will or by the laws of descent
and distribution, except for gifts to family members subject to any
specific limitation concerning such gift by the Administrator in its
discretion; provided, however, that you may designate a beneficiary or
beneficiaries to exercise your rights and receive any Shares purchased
with respect to any Option upon your death. Each Option shall be
Page B-11
exercisable during your lifetime only by you or, if permissible under
applicable law, by your legal representative. No Option herein granted or
Shares underlying any Option shall be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company or
any Affiliate.
7. TERMINATION OF EMPLOYMENT OR CONSULTANCY. If your employment or
consultancy is terminated with the Company, your Option and/or any
unexercised portion, shall be subject to the provisions below:
(a) Upon the termination of your employment or consultancy
with the Company, to the extent not theretofore exercised, your Option
shall continue to be valid; provided, however, that:
(i) If the Participant shall die while in the employ of
the Company or during the one (1) year period, whichever is applicable,
specified in clause (ii) below and at a time when such Participant was
entitled to exercise an Option as herein provided, the legal
representative of such Participant, or such Person who acquired such
Option by bequest or inheritance or by reason of the death of the
Participant, may, not later than fifteen (15) months from the date of
death, exercise such Option, to the extent not theretofore exercised, in
respect of any or all of such number of Shares specified by the
Administrator in such Option; and
(ii) If the employment or consultancy of any Participant
to whom such Option shall have been granted shall terminate by reason of
the Participant's retirement (at such age upon such conditions as shall
be specified by the Board of Directors), disability (as described in
Section 22(e) of the Code) or dismissal by the Company other than for
cause (as defined below), and while such Participants entitled to
exercise such Option as herein provided, such Participant shall have the
right to exercise such Option so granted, to the extent not theretofore
exercised, in respect of any or all of such number of Shares as specified
by the Administrator in such Option, at any time up to one (1) year from
the date of termination of the Optionee's employment or consultancy by
reason of retirement or dismissal other than for cause or disability,
provided, that if the Optionee dies within such twelve (12) month period,
subclause (i) above shall apply.
(b) If you voluntarily terminate your employment or
consultancy, or are discharged for cause, any Options granted hereunder
shall forthwith terminate with respect to any unexercised portion thereof.
(c) If any Options granted hereunder shall be exercised by
your legal representative if you should die or become disabled, or by any
person who acquired any Options granted hereunder by bequest or
inheritance or by reason of death of any such person written notice of
such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Options.
Page B-12
(d) For all purposes of the 2000 Plan, the term "for cause"
shall mean "cause" as defined in the 2000 Plan or your employment or
consultancy agreement with the Company.
8. RESTRICTION; SECURITIES EXCHANGE LISTING. All certificates for
shares delivered upon the exercise of Options granted herein shall be
subject to such stop transfer orders and other restrictions as the
Administrator may deem advisable under the 2000 Plan or the rules,
regulations and other requirements of the Securities and Exchange
Commission and any applicable federal or state securities laws, and the
Administrator may cause a legend or legends to be placed on such
certificates to make appropriate reference to such restrictions. If the
Shares or other securities are traded on a national securities exchange,
the Company shall not be required to deliver any Shares covered by an
Option unless and until such Shares have been admitted for trading on
such securities exchange.
9. AMENDMENTS TO OPTIONS HEREIN GRANTED. The Options granted
herein may not be amended without your consent.
10. WITHHOLDING TAXES. As provided in the 2000 Plan, the Company
may withhold from sums due or to become due to you from the Company an
amount necessary to satisfy its obligation to withhold taxes incurred by
reason of the disposition of the Shares acquired by exercise of the
Options in a disqualifying disposition (within the meaning of Section
421(b) of the Code), or may require you to reimburse the Company in such
amount.
URECOATS INDUSTRIES INC.
(Printed Name)
(Title)
Date
Page B-13
PRELIMINARY COPY
(Front of Card)
PROXY CARD
URECOATS INDUSTRIES INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 20, 2000
THIS PROXY IS SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints LARRY T. CLEMONS and MICHAEL T. ADAMS,
and each of them, Proxies with power of substitution each, for and in the
name of the undersigned, and hereby authorize them to represent and to vote,
all the shares of common stock of Urecoats Industries Inc., a Delaware
corporation ("Company"), that the undersigned would be entitled to vote at
the Company's Annual Meeting of Stockholders ("Annual Meeting") on June 20,
2000, and at any adjournments thereof, upon the matters set forth in the
Notice of Annual Meeting, hereby revoking any Proxy heretofore given. The
Proxies are further authorized to vote in their discretion upon such other
business as may properly come before the Annual Meeting.
THE BOARD RECOMMENDS A VOTE "FOR" EACH NOMINEE AND FOR PROPOSALS 2, 3, AND 4.
1. Election of Directors (check one box only)
[ ] [ ]
FOR EACH NOMINEE LISTED BELOW WITHHOLD AUTHORITY
(except as marked to (to vote for "all" nominees
the contrary below) listed below)
RICHARD J. KURTZ DAVID M. GOLDBLATT
ARTHUR J. GREGG LARRY T. CLEMONS
(Instruction: To withhold authority to vote for any nominee, circle that
nominee's name in the above list)
(continued and to be signed and dated on reverse side)
1
(Back of Card)
PROXY CARD
(Please sign and date below)
2. To ratify the selection of BAUM & COMPANY, P.A. as independent auditors
for the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase to 140 million the shares of common stock
authorized for issuance.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve the Urecoats 2000 Stock Purchase and Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated: , 2000
------------------
-------------------------------
(Please Print Name)
-------------------------------
(Signature of Stockholder)
-------------------------------
(Title, if applicable)
-------------------------------
(Please Print Name)
-------------------------------
(Signature of Stockholder)
-------------------------------
(Title, if applicable)
NOTE: PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS SET FORTH HEREON. FOR
JOINTLY OWNED SHARES, EACH OWNER SHOUL SIGN. IF SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE INDICATE THE CAPACITY
IN WHICH YOU ARE ACTING. PROXIES EXECUTED BY CORPORATIONS SHOULD BE SIGNED
BY A DULY AUTHORIZED OFFICER.
PLEASE DATE AND SIGN THIS PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
I(We) will[ ] will not[ ] attend the meeting in person.
2
