===============================================================================
(LETTERHEAD)
COHNE, RAPPAPORT & SEGAL
525 East 100 South Fifth Floor
Salt Lake City, UT 84102
(801) 532-2666
July 14, 2000
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Re: Cyclo3pss Corporation - SEC File No. 0-22720
Definitive Proxy Statement
Dear Sir or Madam:
On or about July 7, 2000, Cyclo3pss Corporation filed a Preliminary Proxy
Statement in connection with the Company's Annual Meeting of Stockholders to be
held August 28, 2000. The Preliminary Proxy Statement was filed due to the
intent of the Board of Directors of the Company to present a proposal to the
Company's Stockholders to consider and vote upon a reverse stock split. The
Board of Directors subsequently determined that the reverse stock split proposal
will not be presented at the Annual Meeting. Accordingly, the only proposal
which is known by the Board of Directors to be presented to stockholders is the
election of directors. Filed herewith is the revised Notice of Annual Meeting of
Stockholders, Proxy Statement and Proxy as definitive Proxy Materials.
If you have any questions regarding this matter, please contact the
undersigned
Sincerely,
COHNE, RAPPAPORT & SEGAL
/s/ A. O. Headman, Jr.
A. O. Headman, Jr.
<PAGE>
July 14, 2000 SEC File No. 0-22720
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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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CYCLO3PSS CORPORATION
(Name of Registrant as Specified In Its Charter)
CYCLO3PSS CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] No Fee Required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
4) Proposed maximum aggregate value of transaction:
N/A
[ ] 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 free 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:
N/A:
2) Form, Schedule or Registration Statement No.:
N/A:
3) Filing Party: N/A
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<PAGE>
CYCLO3PSS CORPORATION
3646 West 2100 South
Salt Lake City, UT 84120
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held AUGUST 28, 2000
TO THE STOCKHOLDERS OF CYCLO3PSS CORPORATION
The Annual Meeting of the Stockholders of Cyclo3pss Corporation (the
"Company"), will be held at the Company's offices located at 3646 West 2100
South, Salt Lake City, UT 84120 on August 28, 2000, at 11:00 a.m. local time,
for the following purposes:
1. To elect five (5) directors to serve until the 2001 Annual Meeting of
Stockholders or until their successors shall have been duly elected
and qualified; and
2. To transact such other business as may come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on July 24, 2000 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting and any adjournments thereof. Consequently, only holders
of common stock of record on the transfer books of the Company at the close of
business on July 24, 2000 will be entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors
of Cyclo3pss Corporation
William R. Stoddard
Chief Executive Officer
Salt Lake City, Utah
Dated: July 25, 2000
-------------------------------------------------------------------------------
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any shareholder attending the meeting may
vote in person even if he or she has returned a proxy.
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<PAGE>
CYCLO3PSS CORPORATION
3646 West 2100 South
Salt Lake City, UT 84120
------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
------------
To Be Held August 28, 2000
This Proxy Statement is dated July 24, 2000, and is first being mailed to
Cyclo3pss Corporation Shareholders on or about July 25, 2000.
INFORMATION CONCERNING SOLICITATION AND VOTING
General
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cyclo3pss Corporation, a Delaware
corporation (the "Company") to be voted at the Annual Meeting of Shareholders to
be held August 28, 2000 and at any adjournment(s) thereof. The Meeting of
Shareholders ("Meeting") will be held at the Company's offices at 3646 West 2100
South, Salt Lake City, Utah 84120 at 11:00 a.m., local time. The Company
anticipates mailing this Proxy Statement and accompanying proxy card commencing
on or about July 25, 2000, to all Shareholders entitled to vote at the meeting.
Matters to Be Considered at the Meeting
The purpose of the Annual Meeting is for the shareholders of the Company to:
1. Elect five Directors of the Company, each of whom is to hold office until
the Annual Meeting of Shareholders in 2001 and until the due election and
qualification of his successor; and
2. Consider and act upon any other matters as may properly come before the
Meeting or any adjournments or postponements of the Meeting.
The Board of Directors recommends a vote "for" each of the nominees listed
on pages 4- 5 below.
Proxy Solicitation
The Board of Directors is soliciting your proxy pursuant to this Proxy
Statement. The entire cost of soliciting management proxies will be borne by the
Company. Officers, directors and regular employees of the Company may solicit
proxies in person or by telephone. They will receive no additional compensation
for their services. The Company has requested brokers and nominees who hold
stock in the Company in their names to furnish this Proxy Statement to their
customers and the Company will reimburse these brokers and nominees for their
related out-of-pocket expenses.
Record Date and Voting Securities
The securities of the Company entitled to vote at the Meeting consist of
shares of the Company's
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<PAGE>
$.001 par value common stock. Only shareholders of record at the close of
business on July 24, 2000, the record date for the Meeting, will be entitled to
notice of and to vote at the Meeting. On the record date, the Company had
outstanding 27,782,853 shares of common stock which were owned by approximately
390 shareholders of record.
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of common stock entitled to vote
at the Meeting will be necessary to constitute a quorum. If a broker that is a
record holder of common stock does not return a signed proxy, the shares of
common stock represented by such proxy will not be considered present at the
meeting and will not be counted toward establishing a quorum. If a broker that
is a record holder of common stock does return a signed proxy, but is not
authorized to vote on one or more matters, each such vote being a broker
non-vote, the shares of common stock represented by such proxy will be
considered present at the Meeting for purposes of determining the presence of a
quorum.
Assuming a quorum is present, directors of the Company will be elected by a
plurality of the votes cast by shareholders present, in person or by proxy, and
entitled to vote for the election of directors at the meeting (there will be no
cumulative voting in the election of directors).
Abstentions will be treated as present and entitled to vote at the Meeting.
Therefore, abstentions will be counted in determining whether a quorum is
present and will have the effect of a vote against a matter. A broker non-vote
on a matter (i.e., shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and as to which the broker or nominee does not have discretionary power to vote
on a particular matter) is considered not entitled to vote on that matter and,
therefore, will not be counted in determining whether a quorum is present or
whether a matter requiring approval of a majority of the shares present and
entitled to vote has been approved.
All proxies received pursuant to this solicitation will be voted at the
Meeting and at any adjournments thereof as indicated in the Proxy. If no
instructions are given, all shares represented by valid proxies received
pursuant to this solicitation (and not revoked before they are exercised) will
be voted FOR the election of the nominees for director and in the discretion of
the proxy holder as to any other business that comes before the meeting. In the
event a shareholder specifies a different choice by means of the proxy card or a
vote which is made by telephone, those shares will be voted in accordance with
such shareholder's selections.
A form of proxy is enclosed herewith for use. Any proxy given pursuant to
this solicitation may be revoked by the person giving it at any time before its
use by delivering to the Secretary of the Company a written notice of revocation
or a duly executed proxy bearing a later date or by attending the Meeting and
voting in person.
PRINCIPAL STOCKHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding shares of the Company's
common stock owned beneficially as of July 24, 2000, by (i) each director of the
Company, (ii) all officers and directors as a group and (iii) each person known
by the Company to beneficially own 5% or more of the outstanding shares of the
Company's Common Stock:
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<PAGE>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class Ownership
-------------------------------------------------------------------------------
William R. Stoddard(2)(3) 4,150,957 10.7%
3646 West 2100 South
Salt Lake City, UT 84120
Steve Sarich, Jr.(2)(4) 1,280,881 3.3%
505 Madison Street
Suite 220
Seattle, WA 98104
Mondis Nkoy(2)(5) 453,392 1.2%
3646 West 2100 South
Salt Lake City, UT 84120
Michael J. Lakis(2) 590,107 1.5%
3646 West 2100 South
Salt Lake City, UT 84120
Durand Smith (6)(2) 1,456,981 3.8%
3646 West 2100 South
Salt Lake City, UT 84120
Richard C. Nelson (1)(2) 61,536 0.2%
3646 West 2100 South
Salt Lake City, UT 84120
All Officers and Directors
as a Group (6 Persons) 10,966,827 28.31%
(1) As of July 24, 2000, there were 27,235,758 shares of the Company's common
stock issued and outstanding and entitled to vote at the annual meeting.
Additionally, there are currently exercisable options and warrants to purchase
11,496,581 shares of the Company's common stock. Therefore, under the rules of
the Securities and Exchange Commission, there are deemed to be 38,732,339 shares
of the Company's common stock issued and outstanding for purposes of the table
above. The shares issuable upon the exercise of the options can only be voted at
a shareholders meeting if the options are exercised and the shares issued prior
to the record date for the meeting. The shares issuable upon the conversion of
promissory notes can only be voted at a shareholders meeting if the notes are
converted and the shares issued prior to the record date of the meeting.
(2) These individuals are the directors and/or officers of the Company as of
July 24, 2000.
(3) Mr. Stoddard is the record owner of 618,031 of these shares. The 4,150,957
figure includes 3,504,354 shares which may be acquired by Mr. Stoddard from the
Company pursuant to a currently exercisable option and 28,572 shares which may
be purchased pursuant to a currently exercisable Warrant.
(4) The 1,280,881 shares of total beneficial ownership shown for Mr. Sarich
includes 1,237,309 shares owned of record by Mr. Sarich and an affiliated
company (321 Investments), 15,000 shares
6
<PAGE>
which may be acquired upon exercise of a currently exercisable stock option and
28,572 shares which may be purchased pursuant to a currently exercisable
Warrant.
(5) The 453,392 shares of total beneficial ownership shown for Ms. Nkoy includes
5,000 shares owned of record by Ms. Nkoy, the controller and the Corporate
Secretary of the Company and 448,392 shares which may be acquired by Ms. Nkoy
from the Company pursuant to employment stock option agreements. All of these
options are currently exercisable.
(6) The 1,456,981 shares of total beneficial ownership shown for Dr. Smith
includes 71,000 shares owned of record by Dr. Smith, a director and employee
(vice president of research and development) of the Company and 1,385,981 shares
which may be acquired by Dr. Smith from the Company pursuant to employment stock
option agreements. All of these options are currently exercisable.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
The Company's Board of Directors consists of such number of Directors as
may be determined by the Board of Directors from time to time. The full Board of
Directors currently consists of five Directors. All five of the directors will
be elected at the Meeting. Such directors will serve until the next annual
meeting of shareholders and until their successors are duly elected and
qualified. Shareholders do not have cumulative voting rights in the election of
directors (each common shareholder is entitled to vote one vote for each share
held for each director). Unless authority is withheld, it is the intention of
the persons named in the enclosed form of proxy to vote "FOR" the election as
directors of the persons identified as nominees for directors in the table
below. If the candidacy of any one or more of such nominees should, for any
reason, be withdrawn, the proxies will be voted "FOR" such other person or
persons, if any, as may be designated by the Board of Directors. The Board has
no reason to believe that any nominee herein named will be unable or unwilling
to serve.
The following table sets forth certain information with respect to the
nominees.
Name Age Director Since
----------------------------------------------------------
William R. Stoddard 47 1990
Durand M. Smith 52 1999
Steve Sarich, Jr. 78 1993
Michael J. Lakis, Jr. 63 1997
Richard C. Nelson 69 1999
William R. Stoddard. Mr. Stoddard has been an officer and director of the
Company since 1990. From 1986 to 1989, Mr. Stoddard was the Chief Financial
Officer of Medivest, Inc. and its subsidiaries. From 1988 to 1990, he was Chief
Financial Officer of Medivest Aviation Group, Inc.
Durand M. Smith, Ph.D. Dr. Smith has been the Vice President of Research
and Development for the Company since March 1998 and has been a director of the
Company since April 1999. Dr. Smith is the former Manager of Advanced Space
Programs for General Electric's Aerospace and Defense Group (1973-1988) and Vice
President of Engineering for Ithaco Inc, a
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<PAGE>
spacecraft-hardware-engineering firm (1988-1993). Dr. Smith also served as
COO of Orion International Technologies (1993-1996), an engineering services
company. Prior to joining Cyclopss, Dr. Smith served as the Governor's Science
Advisor for the State of New Mexico.
Michael J. Lakis. Mr. Lakis joined the board of directors on December 1,
1997. Most recently, he served as President and Chief Operating Officer - North
America for Del Monte Fresh Produce Company. Prior to this post, Mr. Lakis was
with Chiquita Brands Inc., where he built up over 37 years of experience and
serving as President from 1979 to 1992.
Richard C. Nelson. Mr. Nelson joined the Company on March 24, 1999. Mr.
Nelson is Vice President Emeritus and Consultant of Hyatt Hotels and Resorts. In
June 1996, he retired from the day-to-day operations as Vice President and
Managing Director of the Grand Hyatt Washington, a 900 room hotel he opened in
1987.
Steve Sarich. Mr. Sarich has been a director of the Company since July
1993. Mr. Sarich is, and has been for the last 15 years, president of 321
Investment Co. Mr. Sarich is a director of Omega Environmental, Wall Data, Back
Technologies, Inc., Ark Systems, Inc., Flo Scan Instrument, Multiple Zones
International and Talus Imaging Co. Mr. Sarich has been president of Arctic
Ventures, Inc. and C.S.S. Management Co. since 1988.
Committees and Meetings
The Board of Directors held twelve (12) meetings during the last fiscal
year. The number of meetings attended by each director is as follows: William R.
Stoddard-12; Durand M. Smith - 6; Michael J. Lakis, Jr. - 12; Steve Sarich, Jr.
- 12; and Richard C. Nelson - 11.
The Board of Directors has established the following committees: (i) Audit
Committee; and (ii) Compensation Committee..
The Audit Committee recommends annually to the Board of Directors the
appointment of the independent public accountants of the Company, discusses and
reviews the scope and the fees of the prospective annual audit, reviews the
results of the annual audit with the Company's independent public accountants,
reviews compliance with existing major accounting and financial policies of the
Company, reviews the adequacy of the financial organization of the Company,
reviews management's procedures and policies relative to the adequacy of the
Company's internal accounting controls and compliance with federal and state
laws relating to accounting practices, and reviews and approves transactions, if
any, with affiliated parties. The Audit Committee is comprised of Messrs Sarich
and Nelson and held one meeting during the fiscal year.
The Compensation Committee conducts an annual performance review of the
Company's senior management and establishes their salaries, bonuses and stock
ownership awards. The Compensation Committee consists of Messers Sarich and
Lakis. The Compensation Committee held 2 meetings during the year ended February
29, 2000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE
NOMINEES LISTED ABOVE.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning compensation
for services rendered for the past three years to the Company's Chief Executive
Officer and to the Company's most highly compensated executive officers other
than the CEO, whose annual salary and bonus exceeded $100,000:
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------------------------
Awards Payouts
--------------------------------------------
Year Other Options/ LTIP
Name and Position ended 2/28 Salary Bonus Compensation Stock Awards SAR's(#) Payouts Other Comp
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William R. Stoddard 2000 $150,000(2) -0- -0- 2,654,354(1) -0- -0- -0-
Chairman, CEO 1999 $150,000(2) -0- -0- 450,000(1) -0- -0- -0-
1998 $150,000 -0- -0- -0- -0- -0- -0-
John M. Williams 2000 -0- -0- -0- -0- -0- -0- -0-
Chairman/CEO 1999 -0- -0- -0- -0- -0- -0- -0-
(Retired December, 1998 $96,000 -0- -0- -0- -0- -0- -0-
1997)
Durrand M. Smith 2000 $120,000 -0- -0- 1,105,981(1) -0- -0- -0-
Vice-President, 1999 $120,000 -0- -0- 350,000(1) -0- -0- -0-
Research and Development
Gary Bratcher 2000 -0- -0- -0- -0- -0- -0- -0-
Chairman, CEO (March 1999 $235,000 -0- -0- -0- -0- -0- -0-
of 1999 to resignation
August of 1999)
(1) Options to acquire shares of common stock
(2) William R. Stoddard has deferred $59,375 of his annual salary for
fiscal 1999 and $31,875 for fiscal 2000, for a total of $91,250, due to cash
constraints of the Company
</TABLE>
Stock Options Granted to Executives
On April 19, 1999, a grant was made for 450,000 shares to Mr. Stoddard at
$.10 per share. At the same time, options were granted to Dr. Durand Smith for
350,000 shares at $.10 per share. These options vested on the date of grant and
were exercisable on that date. A Form S-8 was filed on May 13, 1999 to register
common shares underlying these options.
On December 6, 1999, an additional grant was made for 2,654,354 shares to
Mr. Stoddard at $.065 per share. At the same time, additional options were
granted for Dr. Durand Smith for 1,105,981 shares at $.065 per share and for
Mondis Nkoy for 442,392 shares at $.065. These options vested on the date of
grant and were exercisable on that date. A Form S-8 was filed on March 7, 2000
to register common shares underlying these options.
As of February 29, 2000, none of the options granted in the Employment
Agreements have been exercised. The Options granted in the original three-year
Employment Agreements were approved by the Company's stockholders at the Annual
Meeting of Stockholders held December 10, 1993. The shares of common stock
underlying the originally granted Options were registered by the Company with
the filing of Forms S-8 dated August 31, 1995, May 13, 1999, and March 7, 2000
which are incorporated herein by reference.
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<TABLE>
<CAPTION>
Option/SAR Grants in last fiscal year
Individual Grants
Number of Securities % of Total options/SAR
underlying Options/SARs Granted to employees Exercise or
Name Granted (#) In fiscal year Base price Expiration Date
--------- -------------------------- ----------------------- --------------- -----------------
<S> <C> <C> <C> <C>
William R. Stoddard 2,654,354 62% $ .065 12/6/2004
Durand Smith 1,105,981 25% $ .065 12/6/2004
</TABLE>
Aggregate Option Exercises and Number/Value of Unexercised Options
The following table provides information concerning the exercise of
options during the last fiscal year by persons named in the Summary Compensation
Table, the number of unexercised options held by such persons at the end of the
last fiscal year, and the value of such unexercised options as of such date:
<TABLE>
<CAPTION>
Nature of Value of Unexercised
Shares Acquired Value Unexercised Options In-the-Money Options
Name on Exercise (#) Realized ($) at 2/28/99 (#) at 2/29/2000 ($)(1)
------------ ---------------- ------------ -------------------------- ---------------------
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
William R. Stoddard -0- -0- 3,504,354 -0- $2,013,877 0
Durrand Smith -0- -0- 1,455,981 -0- $939,670 0
</TABLE>
1 An "In-the-Money" stock option is an option for which the market price of the
Company's Common Stock underlying the option on February 29, 2000 exceeded the
option exercise price. The value shown is calculated by multiplying the number
of unexercised options by the difference between (I) the closing price for the
Common Stock on Small Cap Bulletin Board Market on February 29, 2000 ($.7188)
and (ii) the exercise price of the stock options ($1.85 for the 300,000
Exercisable options granted under the original Grant and $1.07 for the 100,000
exercisable options granted under the extensions; $5.44 for 6,000 and $.125 for
4,300 exercisable options for Mondis Nkoy; $.10 for Mr. Stoddard's 450,000, Mr.
Smith's 350,000 and Ms. Nkoy's 15,000 exercisable options; and $.065 for Mr.
Stoddard's 2,654,354, Mr.
Smith's 1,105,981 and Ms. Nkoy's 442,392 exercisable options).
Compensation of Directors
The Company's non-employee directors are paid $500 for each Board of
Directors Meeting attended and $250 for each telephonic meeting. On August 26,
1993, the Company's Board of Directors approved a Non-Employee Director's Stock
Option Plan which provides for the issuance of a maximum of 75,000 shares of the
Company's common stock pursuant to the exercise of options granted under the
Plan. The Plan provides that each non-employee director will be issued an option
to purchase 5,000 shares of the Company's common stock on the date of the
Company's Annual Meeting of Stockholders, commencing in 1994. After an option is
granted, it will be exercisable for a period of five years. The Options granted
under this plan are exercisable at $1.85 per share. This Non-Employee Director's
Stock Option Plan was approved by the Company's stockholders at the Annual
Meeting of Stockholders held December 10, 1993. The shares of the Company's
common stock underlying these options were registered by the Company with the
filing of Form S-8 dated August 31, 1994, which is incorporated herein by
reference.
Effective September 1, 1996 the Company's Board of Directors approved an
additional
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<PAGE>
25,000 options to be granted, 5,000 shares each to Non-Employee Directors on the
date of the Company's Annual Meeting of Stockholders in 1997. After these
options were granted, they are exercisable for a period of five years. The
Options granted under this additional plan are exercisable at $1.07 per share,
which is deemed to have been the fair market value of the Company's common stock
on September 1, 1996, the date the plan was approved and enacted. Due to the
cash restraints of the Company, the board compensation was accrued for about a
year and a half, or sixteen telephonic meetings, and was paid pursuant a board
resolution on November 24, 1999, in Company's stock at $.065 per share. These
shares were registered by the Company with the filing of Form S-8 dated March 7,
2000, which is incorporated herein by reference.
In addition to the cash compensation described above, currently, each new
director is granted an option to purchase 5,000 shares of the Company's common
stock upon joining the Board and additional options to purchase 1,500 shares for
each Board Meeting attended. The options for each Board Meeting attended are to
be issued on the date of each Annual Meeting of Shareholders. For the fiscal
year ended February 29, 2000, Directors Sarich and Lakis will be granted, on the
August 28, 2000 (the date of the Annual Meeting of Stockholders), options to
purchase 18,000 shares of the Company's common Stock and on such date, Director
Nelson will be granted an option to purchase 21,500 shares of the Company's
common stock.
Stock Incentive Plan
On December 21, 1992, the Company's Board of Directors approved a Stock
Incentive Plan (the "Plan") which provides for the issuance of a maximum of
270,000 shares of the Company's Common Stock pursuant to the exercise of options
granted under the Plan. Options granted under the Plan are intended to comply
with Section 422 of the Internal Revenue Code of 1986. On May 9, 1994, the Plan
was amended by the Board of Directors. Such amendments did not increase the
number of options which may be issued, change the persons who may be granted
options or in any way materially affect the Plan. The Plan is administered by
the Board of Directors or a committee of the Board which selects the persons to
whom options are granted and the terms of the options. The Plan provides that
the option price may not be less than 100% of the fair market price on the date
the option is granted and that no option may be exercisable for longer than 10
years. The 1992 Stock Incentive Plan was approved by the Company's stockholders
at the Annual Meeting of Stockholders held December 10, 1993. Options under the
Plan may be granted to directors and key employees of the Company. The shares of
common stock underlying the Options granted under the Plan were registered by
the Company with the filing of Form S-8 dated August 31, 1994, which is
incorporated herein by reference.
Options Granted under the Plan. As of July 24, 2000, the following options
have been granted under the 1992 Stock Incentive Plan:
On March 1, 1993, options to purchase an aggregate of 18,000 shares were
granted to three non-management employees. Such options are exercisable at $1.75
per share for a period of 7 years commencing one year from the date such options
were granted and subject to certain provisions of the Incentive Plan. As of
February 29, 2000, 14,000 of these Options have been exercised and 4,000 of
these options were canceled pursuant to the terms of the plan when the
optionee's employment with the Company terminated.
On November 11, 1993, options to purchase a total of 49,000 shares were
granted to 11 employees of the Company, none of whom were officers or directors
of the Company at the time of
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<PAGE>
the grant. These Options are exercisable at $1.85 per share. Subsequently,
36,000 of these Options canceled pursuant to the terms of the plan when the
optionee's employment with the Company terminated. As of February 29, 2000,
13,000 of these Options have been exercised and none were still outstanding.
On January 1, 1995, options to purchase a total of 45,000 shares were
granted to ten employees of the Company, none of whom are officers or directors
of the Company. All of such options are exercisable at $5.44 per share.
Subsequently, 39,000 of these options were canceled pursuant to the terms of the
plan when the optionee's employment with the Company terminated. As of February
29, 2000, 6,000 of these options were still outstanding.
On February 29, 1996, options to purchase a total of 44,500 shares were
granted to twelve employees of the Company, none of whom are officers or
directors. All such Options are exercisable at $2.79 per share. Subsequently,
38,500 of these options were canceled pursuant to the terms of the plan when the
employment of the optionee's with the Company terminated. As of February 29,
2000, 6,000 of these options were still outstanding.
On June 1, 1997, options to purchase a total of 15,000 shares were granted
to an employee of the Company who is an officer. These options are exercisable
at $.94 per share. As of February 28, 1999, all 15,000 of these options were
still outstanding. The exercise price of these options were changed to $ .10 per
share on April 19, 1999.
On May 1, 1998, options to purchase a total of 23,625 shares were granted
to two employees of the Company, none of whom are officers or directors of the
Company. All of such options are exercisable at $1.99 per share. Subsequently,
13,125 of these options were canceled pursuant to the terms of the plan when the
employment of the optionee's with the Company terminated. As of February 29,
2000, 10,500 of these options were still outstanding.
On October 1, 1998, options to purchase a total of 11,250 shares were
granted to an employee of the Company, who is not an officer or director of the
Company. All of such options are exercisable at $.25 per share. Subsequently,
all of these options were canceled pursuant to the terms of the plan when the
employment of the optionee's with the Company terminated. As of February 29,
2000, none of these options were still outstanding.
On March 1, 1999, options to purchase a total of 23,328 shares were
granted to six employees of the Company, none of whom are officers or directors
of the Company. All of such options are exercisable at $.125 per share.
Subsequently, 9,100 of these options were canceled pursuant to the terms of the
plan when the employment of the optionee's with the Company terminated. As of
February 29, 2000, 14,228 of these options were still outstanding.
On September 1, 1999, options to purchase a total of 8,500 shares were
granted to two employees of the Company, none of whom are officers or directors
of the Company. All of such options are exercisable at $.1562 per share. As of
February 29, 2000, all of these options were still outstanding.
On October 1, 1998, options to purchase a total of 120,000 shares were
granted to an employee of the Company, who is not an officer or director of the
Company. This option is exercisable at $.08 per share. As of February 29, 2000,
all of these options were still outstanding.
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As of February 29, 2000, there are 165,228 shares granted and outstanding,
which leaves 104,772 shares available for grant under the 1992 Stock Incentive
Plan.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company's financial statements have been examined by Ernst & Young,
independent certified public accountants. The selection of these independent
accountants for the current fiscal year has been made by the Board upon the
recommendation of the Audit Committee. As in the past, a representative of Ernst
& Young, is expected to be present at the meeting and such representative will
have the opportunity to make a statement and respond to appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16 of the Exchange Act requires the filing of reports for sales of
the Company's common stock made by officers, directors, and 10% or greater
shareholders. A Form 4 must be filed within 10 days after the end of the
calendar month in which a sale or purchase occurred. Based upon the review of
the Form 4's filed with the Company, no disclosure is required regarding late
filings.
RIGHTS OF DISSENTING SHAREHOLDERS
The matters to be considered and acted upon at the Meeting do not create
any dissenting shareholders rights under Delaware corporation law.
STOCKHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2001 Annual
Meeting must be received by the Company by May 1, 2001 to be considered for
inclusion in the proxy statement and form of proxy relating to the 2001 Meeting.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the year ended February 29,
2000, is being mailed to stockholders with this Proxy Statement.
OTHER MATTERS
The Company is not presently aware of any matters (other than procedural
matters) which will be brought before the Meeting which are not reflected in the
attached Notice of the Meeting. The enclosed proxy confers discretionary
authority to vote with respect to any and all of the following matters that may
come before the Meeting: (i) matters which the Company did not have notice on or
prior to July 24, 2000 are to be presented at the Meeting; (ii) the election of
any person to any office for which a bona fide nominee named in this Proxy
Statement is unable to serve or for good cause will not serve; and (iii) matters
incident to the conduct of the Meeting. In connection with such matters, the
persons named in the enclosed proxy will vote in accordance with their best
judgment.
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Whether or not you expect to be present at the meeting, please sign the
accompanying form of proxy and return it promptly in the enclosed envelope.
By Order of the Board of Directors
/s/ William R. Stoddard
William R. Stoddard
Chief Executive Officer
July 24, 2000
Attached: Form 10-KSB
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APPENDIX A
PROXY
CYCLO3PSS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
August 28, 2000
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints William R. Stoddard, CEO and director of
Cyclo3pss Corporation, or any member of the Board of Directors with power of
substitution, to represent and vote on behalf of the undersigned, all shares of
common stock of Cyclo3pss Corporation which the undersigned is entitled to vote
at the Annual Meeting of Stockholders to be held on August 28, 2000, at 11:00
a.m., and at any adjournment or adjournments thereof, hereby revoking all
proxies heretofore given with respect to such stock, upon the following
proposals more fully described in the Proxy Statement for the meeting, receipt
of which is hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1)..
1. ELECTION OF DIRECTORS FOR all nominees listed below NO AUTHORITY
(except as marked to the to vote for all
contrary below) ____ nominees listed
below ____
William R. Stoddard, Durand M. Smith, Steve Sarich, Michael J. Latkis, Jr.,
and Richard C. Jensen.
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.
------------------------------------------.
IN THEIR DISCRETION, Proxy holders are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL PROPOSALS SET FORTH ABOVE.
Please sign exactly as the name appears on your stock certificate. When
shares are held by joint tenants, both should sign. Please return this Proxy in
the enclosed envelope.
Dated: ________________ ________________________________________________
Signature
________________________ ________________________________________________
Number of shares owned Please print name clearly
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