SCHEDULE 14A
(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. )
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 Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
AQUAGENIX, INC.
(Name of Registrant as Specified in Its Charter)
AQUAGENIX, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
AQUAGENIX, INC.
6500 N.W. 15TH AVENUE
FORT LAUDERDALE, FLORIDA 33309
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 1, 1997
----------------
To the Stockholders of
AQUAGENIX, INC.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders
(the "Annual Meeting") of Aquagenix, Inc., a Delaware corporation (the
"Company"), will be held at 5:00 p.m., local time, on Friday, August 1, 1997, at
The Naples Registry Resort, 475 Seagate Drive, Naples, Florida 33942, for the
following purposes:
(1) To elect five members to the Company's Board of Directors to
hold office until the Company's 1998 Annual Meeting of
Stockholders or until their successors are duly elected and
qualified;
(2) To ratify the appointment of Coopers & Lybrand, L.L.P.,
independent certified public accountants, as the Company's
auditors; and
(3) To transact such other business as may properly come before
the Annual Meeting and any adjournments or postponements
thereof.
All stockholders are cordially invited to attend; however, only
stockholders of record at the close of business on June 9, 1997 are entitled to
vote at the Annual Meeting or any adjournments thereof.
By Order of the Board of Directors
ANDREW P. CHESLER
CHAIRMAN OF THE BOARD
Fort Lauderdale, Florida
June 17, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. STOCKHOLDERS
WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY
AND VOTE THEIR SHARES IN PERSON.
<PAGE>
1997 ANNUAL MEETING OF STOCKHOLDERS
OF
AQUAGENIX, INC.
----------------
PROXY STATEMENT
----------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Aquagenix, Inc., a Delaware corporation (the
"Company"), of proxies from the holders of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), for use at the 1997 Annual Meeting of
Stockholders of the Company to be held at 5:00 p.m., local time, on Friday,
August 1, 1997, or at any adjournment(s) or postponement(s) thereof (the "Annual
Meeting"), pursuant to the foregoing Notice of Annual Meeting of Stockholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to stockholders is June 17, 1997. Stockholders should
review the information provided herein in conjunction with the Company's 1996
Annual Report, which accompanies this Proxy Statement. The Company's principal
executive offices are located at 6500 N.W. 15th Avenue, Fort Lauderdale, Florida
33309, and its telephone number is (305) 975-7771.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any stockholder giving the proxy so desire. Stockholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Stockholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies. The Company may reimburse
such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's stockholders will consider and
vote upon the following matters:
(1) The election of five members to the Company's Board of
Directors to serve until the Company's 1998 Annual Meeting of
Stockholders or until their successors are duly elected and
qualified;
(2) To ratify the appointment of Coopers & Lybrand, L.L.P.,
independent certified public accountants, as the Company's
auditors; and
(3) Such other business as may properly come before the Annual
Meeting, including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (a) FOR the election of the five nominees for director named
below, and (b) FOR the proposal to ratify the appointment of
<PAGE>
Coopers & Lybrand, L.L.P., independent public accountants, as the Company's
auditors. In the event a stockholder specifies a different choice by means of
the enclosed proxy, his shares will be voted in accordance with the
specification so made. The Board of Directors does not know of any other matters
that may be brought before the Annual Meeting nor does it foresee or have reason
to believe that proxy holders will have to vote for substitute or alternate
nominees. In the event that any other matter should come before the Annual
Meeting or any nominee is not available for election, the persons named in the
enclosed Proxy will have discretionary authority to vote all proxies not marked
to the contrary with respect to such matters in accordance with their best
judgment.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on June 9, 1997 as
the record date (the "Record Date") for determining stockholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were 4,463,624 shares of Common Stock issued and outstanding, all of which
are entitled to be voted at the Annual Meeting. Each share of Common Stock is
entitled to one vote on each matter submitted to stockholders for approval at
the Annual Meeting. Stockholders do not have the right to cumulate their votes
for directors.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by a plurality of
the votes cast by the shares of Common Stock represented in person or by proxy
at the Annual Meeting. If less than a majority of outstanding shares entitled to
vote are represented at the Annual Meeting, a majority of the shares so
represented may adjourn the Annual Meeting to another date, time or place, and
notice need not be given of the new date, time or place if the new date, time or
place is announced at the meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine the
number of shares of Common Stock represented at the meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive, count and
tabulate ballots and votes and determine the results thereof.
Pursuant to Delaware law, abstentions and broker non-votes are counted
as present for purposes of determining the presence of a quorum. However,
abstentions are treated as present and entitled to vote and will be counted as
votes cast at the Annual Meeting, but will not be counted as votes cast for or
against any given matter. A broker non-vote on a matter is considered not
entitled to vote on that matter and thus is not counted in determining whether a
matter requiring approval of a majority of the shares present and entitled to
vote has been approved or whether a plurality of the shares present and entitled
to vote has been voted.
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Company's offices, 6500 N.W. 15th Avenue, Fort Lauderdale,
Florida 33309, for a period of ten days prior to the Annual Meeting and at the
Annual Meeting itself for examination by any stockholder.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of May 20, 1997, the number of
shares of Common Stock which were owned beneficially by (i) each person who is
known by the Company to own beneficially more than 5% of its Common Stock, (ii)
each director, (iii) each executive officer and (iv) all directors and executive
officers as a group:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OF AMOUNT AND NATURE OF OUTSTANDING SHARES
BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) OWNED(2)
- ------------------- ----------------------- ------------------
DIRECTORS
<S> <C> <C>
Andrew P. Chesler.............................. 950,088(3) 21.3%
Jeffrey T. Katz................................ 148,000(4) 3.3%
Fred S. Katz .................................. 47,500(5) 1.1%
Abraham S. Fischler............................ 20,000(6) 0.4%
Allen H. Stern ................................ 5,000(7) 0.1%
OTHER EXECUTIVE OFFICER
Helen Chia..................................... 5,000(8) 0.1%
All directors and executive officers
as a group (six persons).................... 1,175,588(3)-(8) 26.3%
BENEFICIAL STOCKHOLDERS (5%)
Nicolas Berggruen.............................. 428,028(9) 9.6%
The Equitable Life Assurance Society of
the United States.......................... 351,197(10) 7.9%
Dabney Resnick Imperial, L.L.C................. 336,349(11) 7.5%
Ray A. and Shirley J. Spirnock................. 270,000(12) 6.0%
</TABLE>
- -------------------------------------
(1) Unless otherwise indicated, the address of each beneficial owner is
Aquagenix, Inc., 6500 N.W. 15th Avenue, Fort Lauderdale, Florida 33309.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon
exercise of options and warrants. Each beneficial owner's percentage
ownership is determined by assuming that options and warrants that are
held by such person (but not those held by any other person) and that
are exercisable within 60 days from the date hereof have been
exercised.
(3) Includes (i) 1,600 shares of Common Stock held by Mr. Chesler's wife,
and (ii) 230,000 shares of Common Stock issuable upon the exercise of
options granted under the Company's Employee Stock Option Plan.
(4) Represents (i) 141,000 shares of Common Stock, (ii) 2,000 shares
issuable upon the exercise of Warrants of the Company, and (iii) 5,000
shares of Common Stock issuable upon the exercise of options granted
under the Company's Amended and Restated Directors Stock Option Plan.
Does not include 5,000 shares of Common Stock issuable upon the
exercise of options granted under the same Plan, which options are
presently not exercisable.
3
<PAGE>
(5) Represents 47,500 shares of Common Stock.
(6) Represents (i) 12,500 shares of Common Stock, and (ii) 7,500 shares
issuable upon the exercise of options granted under the Company's Amended
and Restated Directors Stock Option Plan. Does not include 12,500 shares
of Common Stock issuable upon the exercise of options granted under the
same Plan, which options are presently not exercisable.
(7) Represents 5,000 shares of Common Stock issuable upon the exercise of
options granted under the Company's Amended and Restated Directors Stock
Option Plan. Does not include 5,000 shares of Common Stock issuable upon
the exercise of options granted under the same Plan, which options are
presently not exercisable.
(8) Includes 5,000 shares of Common Stock issuable upon the exercise of
options granted under the Company's Employee Stock Option Plan. Does not
include 40,000 shares of Common Stock issuable upon the exercise of
options granted under the same Plan, which options are not presently
exercisable.
(9) Represents 295,528 shares and 132,500 shares of Common Stock held by
Tarragona Fund, Inc. and Alpha Atlas Holdings, LDC, respectively, both
companies of which are beneficially owned by Mr. Berggruen.
(10) Represents warrants to purchase an aggregate of 351,197 shares of the
Company's Common Stock pursuant to an Amended and Restated Senior Secured
Note and Warrant Purchase Agreement, dated as of December 15, 1995 in
relation to the funding of the acquisition of AmerAquatic, Inc. in
October 1995.
(11) Represents warrants to purchase an aggregate of 336,349 shares of the
Company's Common Stock pursuant to certain warrant agreements in relation
to the provision of financial consulting services.
(12) Represents shares of Common Stock issued pursuant to the terms of a Stock
Purchase Agreement, dated as of June 7, 1996, for the acquisition of
Aquatic and Right of Way Control, Inc.
ELECTION OF DIRECTORS; NOMINEES
The Company's Bylaws provide that the number of directors shall be
fixed from time to time by resolution of the Board of Directors within the units
specified by the Company's Certificate of Incorporation. The Board of Directors
has fixed at five the number of directors that will constitute the Board of
Directors for the ensuing year. Each director elected at the Annual Meeting will
serve for a term expiring at the Company's 1998 Annual Meeting of Stockholders
or when his successor has been duly elected and qualified.
The Company has nominated each of Andrew P. Chesler, Abraham S.
Fischler, Fred S. Katz, Allen H. Stern and Jeffrey T. Katz to be elected as a
director at the Annual Meeting. The Board of Directors has no reason to believe
that any nominee will refuse or be unable to accept election; however, in the
event that one or more nominees are unable to accept election or if any other
unforeseen contingencies should arise, each Proxy that does not direct otherwise
will be voted for the remaining nominees, if any, and for such other persons as
may be designated by the Board of Directors.
4
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND SIGNIFICANT EMPLOYEES
The executive officers, directors and significant employees of the
Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- ------ ----------------------------------------------------
<S> <C> <C>
Andrew P. Chesler.................... 30 Chairman of the Board, Chief Executive Officer,
President and Treasurer
Helen Chia........................... 33 Chief Financial Officer and Secretary
Abraham S. Fischler.................. 69 Director
Fred S. Katz......................... 58 Director
Allen H. Stern....................... 38 Director
Jeffrey T. Katz...................... 29 Director
John P. Hart......................... 50 Executive Vice President
William E. Lloyd..................... 52 President of Aquagenix Land-Water Technologies
of Arizona, Inc.
Joseph J. Campolong.................. 30 Vice President, Production of Aquagenix Land-
Water Technologies, Inc.
Robert Craig Smith................... 32 Vice President, Sales of Aquagenix Land-Water
Technologies, Inc.
Garry Seitz.......................... 51 Chief Compliance Officer of Aquagenix Land-Water
Technologies, Inc.
</TABLE>
ANDREW P. CHESLER has served as the Company's Chairman of the Board,
Chief Executive Officer, President and Treasurer since February 1996. Mr.
Chesler co-founded the Company and had been Executive Vice President of the
Company since June 1993. Mr. Chesler also co-founded ALWT and has been Chairman,
President and Chief Operating Officer since October 1990. From 1990 to present,
Mr. Chesler has also served as the Company's Chief Information Officer.
HELEN CHIA has served as the Company's Chief Financial Officer since
January 1996. Ms. Chia was appointed as Secretary for the Company in February
1996. She joined the Company in April 1995 as Corporate Controller for the
Company. From February 1992 to December 1994, she served as Corporate Controller
for Milk Products Holdings (SEA) Pte Ltd, a Singapore-based company with an
annual sales of approximately $500 million, whose principal business is in the
trading of dairy products through its eight subsidiaries and nine associates
operating throughout Southeast Asia, South Africa and the Indian subcontinent.
From January 1986 to December 1991, she was with the public accounting firm of
KPMG Peat Marwick.
5
<PAGE>
ABRAHAM S. FISCHLER has been a director of the Company since September
1994. Since July 1992, Mr. Fischler has been President Emeritus of Nova
University, Fort Lauderdale, Florida. From July 1970 to July 1992, Mr. Fischler
served as President of Nova University.
FRED S. KATZ has been a director of the Company since November 1994.
Mr. Katz has been Managing Director of Whale Securities Co., L.P. for more than
the past five years. Mr. Katz has been a director of UNSI Corp. since 1992. He
has been Chairman of the Board and Chief Executive Officer of Cyclone
Incorporated, a manufacturer of cyclone fences, since December 1994.
ALLEN H. STERN has been a director of the Company since February 1996.
Mr. Stern is currently a Senior Vice President with the Corporate Finance
Department of Dabney Resnick, Inc., a Beverly Hills, California-based investment
bank and has been with Dabney Resnick, Inc. since 1993. From 1987 to 1993, Mr.
Stern was Senior Vice President in Binswanger Company, where he was the founder
of the Corporate Finance Real Estate Department. From 1980 to 1986, Mr. Stern
was in leveraged leasing and equipment project finance with First NH Resources
and Bank New England Leasing.
JEFFREY T. KATZ has been a director of the Company since March 1996.
Mr. Katz is currently the President, Chief Executive Officer and founder of
Blueberry Intermodal Inc., a chassis leasing company founded in 1995 which
leases chassis for newly designed "large-spec"containers for international
shipping and has operations in the Continental United States. In 1991, Mr. Katz
was the co-founder of Porter Capital Management, a hedge fund based in
Sausalito, California and continues currently as a limited partner. Between 1989
to 1991, Mr. Katz was in the securities industry on the Pacific Stock Options
Exchange with Adler, Coleman & Co. and Casey Securities, Inc.
JOHN P. HART joined the Company in April 1997 as the President and
Chief Executive Officer of Aquagenix Land-Water Technologies, Inc., the largest
subsidiary of the Company. He was also appointed as Executive Vice President of
the Company in May 1997. Mr. Hart was previously the Senior Vice President and
director of Metcalf & Eddy's southern region, an environmental engineering and
consulting firm, where he led the firm through significant growth in Florida,
Georgia and Texas. From 1983 to 1995, he served as an elected city and county
official of various civic and political associations, including Chairman of the
Board of County Commissioners, Broward County, Florida and Council member and
Mayor of City of North Lauderdale, Florida, where he directed and managed policy
and budget operations for the regional governments in southern Florida.
WILLIAM E. LLOYD joined the Company in November 1995 as Vice President,
Marketing/Special Projects. In May 1997, he was appointed as President of
Aquagenix Land-Water Technologies of Arizona, Inc. From 1981 to 1995, Mr. Lloyd
was Vice-President of AmerAquatic, Inc. Prior to his tenure at AmerAquatic, he
was President of Lakes and Waterways Management Services, a subsidiary of The 3M
Company from 1978 and 1980. Mr. Lloyd holds a Juris Doctor law degree and a
Bachelor of Science in Marketing and Management from the University of Florida.
JOSEPH J. CAMPOLONG, Vice President, Production, has been with the
Company since June 1990 and has been instrumental in the expansion of the
Company's production unit. His current responsibility is the management of all
production activities in the Southeastern United States. Additionally, he is the
Chief Compliance Officer for the Company.
6
<PAGE>
ROBERT CRAIG SMITH has been with the Company since 1990. Mr. Smith has
been and is directly involved in the sales growth of the Company's aquatic and
vegetation management operations throughout Florida and the South Eastern United
States. Mr. Smith is currently responsible for the developing new client
business, maintaining existing customer relations and overseeing all sales
representatives of the branch offices.
GARRY SEITZ joined the Company in January 1997 as Chief Compliance
Officer of Aquagenix Land-Water Technologies, Inc. Dr. Seitz was the owner of
Green Pastures, Inc., the Georgia-based vegetation management firm acquired by
the Company in December 1996. Prior to forming Green Pastures in 1980, Dr. Seitz
held a variety of research and agronomist positions with Chemlawn Corp. of
Atlanta, a national landscape organization. He holds a Ph.D. in Agronomy from
the University of Florida.
ELECTION OF DIRECTORS AND EXECUTIVE OFFICERS
The Company's officers are elected annually by the Board of Directors
and serve at the discretion of the Board of Directors. The Company's directors
hold office until the next annual meeting of stockholders and until their
successors have been duly elected and qualified.
In connection with the IPO, the Company agreed with Whale Securities
Co., L.P., who acted as the underwriter (the "Underwriter"), for a period of
five years, to nominate and use its best efforts to elect a designee of the
Underwriter as a director of the Company. In November 1994, the Underwriter
exercised this right and named Fred S. Katz as its designee.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has four committees, the Audit Committee, Compensation
Committee, Employee Stock Option Committee and the Directors Stock Option
Committee. The members of the Audit Committee consist of Andrew P. Chesler,
Abraham S. Fischler and Fred S. Katz. The principal functions of the Audit
Committee are to recommend the annual appointment of the Company's independent
auditors, to consult and review with the Company's auditors concerning the scope
of the audit and the results of their examination, to review and approve any
material accounting policy changes affecting the Company's operating results and
to review the Company's internal control procedures.
The Compensation Committee, whose members consist of Abraham S.
Fischler, Allen H. Stern and Jeffrey T. Katz, reviews and recommends
compensation and benefits for the executives of the Company. The Employee Stock
Option Committee and Director Stock Option Committee, has the sole and exclusive
authority to grant stock options to employees and to directors who are also
employees or consultants of the Company, respectively. The Employee Stock Option
Committee consists of Allen H. Stern and Jeffrey T. Katz, and the only member of
the Directors Stock Option Committee is Andrew P. Chesler.
During the fiscal year ended December 31, 1996, the Company's Board of
Directors held meetings and took action by unanimous written consent a total of
six (6) times.
COMPENSATION OF DIRECTORS
The Company pays directors who are not employees of the Company a fee
of $250 per meeting of the Board, and reimburses all directors for their
expenses in connection with their activities as directors of the Company. In
1995, the Company also paid Mr. Trent consulting fees
7
<PAGE>
of $9,750. Directors of the Company who are also employees of the Company do not
receive options under the Company's Directors Stock Option Plan (the "Directors
Plan"). The Directors Plan was amended in May 1996 ("the Amended and Restated
Directors Stock Option Plan") to effect the following changes: (I) to increase
the number of shares available for issuance thereunder from 50,000 shares to
250,000 shares; (ii) the Directors Stock Option Committee will have the
authority to determine the annual amount of options to be granted to a
non-employee director; (iii) all options granted shall be exercisable in two
equal installments each on the first and second anniversary dates following the
date of the grants; and (iv) any unexercised portion of the options shall
automatically terminate on the date the optionee ceases to be a director of the
Company except upon death whereupon the options will expire within sixty days.
This amended Directors Plan has been approved by the written consent of the
holders of a majority of the Company's outstanding stock as at December 31,
1996. Any options granted pursuant to the Directors Plan have a term of five
years and have an option price equal to the fair market value of the Company's
Common Stock on the date of grant.
During 1994 and 1995, in accordance with the Directors Plan, the
Company granted a total of 15,000 options to purchase 15,000 shares of Common
Stock to non-employee directors. During 1996, under the Amended and Restated
Directors Stock, a total of 85,000 options to purchase 85,000 shares of the
Company's common stock at an exercise price of $3.88 were granted to the four
non-employee directors of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the outstanding Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of beneficial ownership on Form
3 and reports of changes in beneficial ownership of Common Stock on Forms 4 or
5. Such persons are required by SEC regulation to furnish the Company with
copies of all such reports they file.
Based solely on a review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, during the year ended December 31, 1996, all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following compensation table sets forth, for the three fiscal years
ended December 31, 1994, 1995 and 1996, the cash and certain other compensation
paid by the Company to Andrew P. Chesler, the Company's Chief Executive Officer,
and the Company's previous two executive officers whose compensation for 1995
and 1996 exceeded $100,000 (collectively, the "Named Executive Officers"). No
other executive officer had an annual salary and bonus in excess of $100,000
during such years.
8
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ -------------
OTHER ANNUAL
SALARY BONUS COMPENSATION OPTIONS/SARS
NAME AND
PRINCIPAL POSITION YEAR ($) ($) ($) (#)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Andrew P. Chesler
Chairman of the Board 1994 $157,665 - (1)
Chief Executive Officer 1995 $170,000 - (1) 20,000(2)
President and Treasurer 1996 $176,000 $20,000 - 60,000(3)
100,000(4)
50,000(5)
Alan H. Chesler 1994 $94,000 - (1) -
Former Chairman of
the Board, 1995 $170,000 - (1) -
Secretary and Treasurer 1996 - - (1) -
Robert Radler 1994 $154,361 - (1) -
Former President 1995 $170,000 - (1) -
1996 - - - -
- ----------
</TABLE>
(1) Represents certain perquisites, the value of which did not exceed the
lesser of $50,000 or ten percent of the Named Executive Officer's cash
compensation.
(2) Represents options granted under the Company's Employee Stock Option Plan
at an exercise price of $5.00 per share, the initial public offering price
of the Common Stock.
(3) Represents options granted under the Company's Employee Stock Option Plan
at an exercise price of $3.88 per share.
(4) Represents options granted under the Company's Employee Stock Option Plan
at an exercise price of $5.13 per share.
(5) Represents options granted under the Company's Employee Stock Option Plan
at an exercise price of $7.50 per share.
EMPLOYMENT AGREEMENTS
In June 1993, the Company entered into five-year employment agreements
with each of Alan H. Chesler, Robert A. Radler and Andrew P. Chesler, which are
automatically renewable and provide for initial annual base compensation of
$94,000, $150,000 and $150,000, respectively, and such increases in such base
compensation and bonuses as the Board of Directors may from time to time
determine. The employment agreements provide for employment on a full-time basis
(except for the Company's agreement with Alan H. Chesler, which requires him to
devote at least 75% of his business time to the Company), and contain a
provision that the employee will not compete or engage in a business competitive
with the current or anticipated business of the Company for the term of the
agreement and for one year thereafter if the executive is terminated for cause
or the executive terminates his employment. The employment agreements also
provide that the executive or the Company can terminate the employment
agreement, without cause, upon sixty days notice. If the executive is terminated
for cause, as defined in each employment agreement, the executive is not
entitled to receive
9
<PAGE>
severance pay. If the executive is terminated without cause, he is entitled to
receive his then current salary for the remaining term of the employment
agreement.
In February 1996, the annual base salaries for Alan H. Chesler and Robert
A. Radler were reduced to $127,500 and $158,000, respectively. In the same
month, both Alan H. Chesler and Robert A. Radler resigned as executive officers
of the Company. However, they agreed to provide outside consulting services to
the Company.
In April 1996, both Mr. Alan H. Chesler and Mr. Robert A. Radler ceased
providing any consulting services to the Company. It was mutually agreed with
Mr. Alan H. Chesler that his employment agreement with the Company was
terminated. However, in order to maintain the base compensation for Mr. Radler
at the current level, the Company entered into a settlement agreement with him
to continue his compensation until June 1998 subject to certain conditions and
obligations by Mr. Radler.
OPTIONS GRANTS TABLE
The following table sets forth information concerning the grant of stock
options to Mr. Andrew P. Chesler during the year ended December 31, 1996. No
stock appreciation rights were granted.
<TABLE>
<CAPTION>
OPTIONS GRANTED IN THE YEAR ENDED DECEMBER 31, 1996
- ----------------------------------------------------------------------------------------------------------------------
% OF TOTAL OPTIONS
NUMBER OF GRANTED TO EMPLOYEES EXERCISE
OPTIONS IN THE YEAR ENDED PRICE PER EXPIRATION
NAME GRANTED (1) DECEMBER 31, 1996 SHARE (2) DATE
- ------------------------------------- ----------------- -------------------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Andrew P. Chesler . . . . . . . 60,000 10.5% $3.88 3/8/06
100,000 17.5% $5.13 11/1/06
50,000 8.8% $7.50 11/1/06
210,000 36.8%
</TABLE>
- -------------------------
(1) Total number of options granted during the year ended December 31,
1996 was 570,000.
(2) Options granted in 1996 are pursuant to the Company's Employee Stock
Option Plan. Options granted under the Employee Stock Option Plan have
a term of ten years and vest over a five-year period at the rate of 20%
each year. However, the Employee Stock Option Committee, may in its
sole discretion, accelerate the exercise of any employee options.
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning
unexercised stock options held by Mr. Andrew P. Chesler as of December 31, 1996.
No stock options were exercised by him during the period ended December 31,
1996. No stock appreciation rights were granted or are outstanding.
10
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
HELD AT DECEMBER 31, 1996 OPTIONS AT DECEMBER 31, 1996(1)
----------------------------------- --------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ --------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Andrew P. Chesler............. 8,000 222,000 $10,000 $269,200
</TABLE>
- ------------------------
(1) The closing sale price of the Common Stock on December 31, 1996 as
reported by NASDAQ was $6.25 per share. Value is calculated by multiplying
(a) the difference between $6.25 and the option exercise price by (b) the
number of shares of Common Stock underlying the option.
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or pension plans.
CERTAIN TRANSACTIONS
GUARANTEES
In 1996, the revolving line of credit with SunTrust has been personally
guaranteed by Alan H. Chesler, Andrew P. Chesler and Robert A. Radler. The
Company anticipates that no further personal guarantees of the Company's
indebtedness by its executive officers will be granted in any future borrowings.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with each of
its executive officers and directors pursuant to which the Company has agreed to
indemnify each such person for all expenses and liabilities, including criminal
monetary judgments, penalties and fines, incurred by such person in connection
with any criminal or civil action brought or threatened against such person by
reason of such person being or having been an officer, director or employee of
the Company or its subsidiaries. In order to be entitled to indemnification by
the Company, such person must have acted in good faith and in a manner such
person believed to be in the best interests of the Company and, with respect to
criminal actions, such person must have had no reasonable cause to believe his
conduct was unlawful.
TRANSACTIONS WITH AFFILIATES
In December 1993, Alan H. Chesler and Andrew P. Chesler granted Robert
A. Radler six-year options to purchase 24,390 and 12,195 shares of Common Stock,
respectively, at an exercise price of $3.28 per share. As of December 31, 1996,
these options remain unexercised.
In March 1996, Alan H. Chesler granted Andrew P. Chesler an option
until April 9, 1996, to purchase 435,000 shares of Common Stock. The option was
exercised by Andrew P. Chesler. Alan H. Chesler is the father of Andrew P.
Chesler.
During the year ended December 31, 1996, the Company obtained
investment banking services from Dabney Resnick Imperial L.L.C. Allen H. Stern
is the Senior Vice President with
11
<PAGE>
the corporation. In November 1996, the Board of Directors approved the issuance
of 100,000 warrants and a cash payment of $125,000 to Dabney Resnick Imperial
L.L.C. as compensation for future investment banking services rendered by the
corporation. These warrants have a term of five years and are exercisable at
$4.88 per share. The compensation expense of $200,000 in relation to these
warrants have been computed based on the fair value of these warrants on the
date of the grant and is being amortized over three years.
The Board of Directors also approved the issuance of 100,000 stock options
to First Taconic Capital as compensation for investment banking and staffing
services rendered for the year ended December 31, 1996. Fred S. Katz is a
partner of the firm. These options were exercised on February 25, 1997 at an
exercise price of $5.00 per share. The compensation expense of $56,000 in
relation to these warrants have been computed based on the fair value of these
warrants on the date of the grant.
RATIFICATION OF APPOINTMENT OF THE COMPANY'S AUDITORS
The appointment of Coopers & Lybrand, L.L.P. as independent auditors of
the Company for the fiscal year ended December 31, 1997, will be ratified.
Although the Board of Directors of the Company is submitting the
appointment of Coopers & Lybrand, L.L.P. for stockholder approval, it reserves
the right to change the selection of Coopers & Lybrand, L.L.P. as auditors, at
any time during the fiscal year, if it deems such change to be in the best
interest of the Company, even after stockholder approval. Representatives of
Coopers & Lybrand, L.L.P. are not expected to be present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF COOPERS & LYBRAND, L.L.P. AS INDEPENDENT AUDITORS FOR THE
COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
INTEREST OF CERTAIN PERSONS IN
OPPOSITION TO MATTERS TO BE ACTED UPON
The Company is not aware of any substantial interest, direct or
indirect, by securities holdings or otherwise of any officer, director, or
associate of the foregoing persons in any matter to be acted on, as described
herein, other than elections to offices.
OTHER MATTERS
Management is not aware of any other business which may come before the
meeting. However, if additional matters properly come before the meeting,
proxies will be voted at the discretion of the proxy holders.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT THE
COMPANY'S NEXT ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals intended to be presented at the Company's 1998
Annual Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934, as amended, must be received by the Company at its executive offices by
January 30, 1998, for inclusion in the Company's proxy statement and form of
proxy relating to such meeting.
12
<PAGE>
AVAILABILITY OF FORM 10-KSB ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996, including related exhibits as filed with the Securities and
Exchange Commission, is available without charge to stockholders upon request to
Andrew P. Chesler, President, 6500 Northwest 15th Avenue, Fort Lauderdale,
Florida 33309.
By Order Of The Board of Directors
Fort Lauderdale, Florida ANDREW P. CHESLER
June 17, 1997 CHAIRMAN OF THE BOARD
13
<PAGE>
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
AQUAGENIX, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- AUGUST 1, 1997
The undersigned, revoking all previous proxies, hereby appoint(s) Andrew P.
Chesler as Proxy, with full power of substitution, to represent and to vote all
Common Stock of Aquagenix, Inc. owned by the undersigned at the Annual Meeting
of Stockholders to be held in Naples, Florida on Friday, August 1, 1997,
including any original or subsequent adjournment thereof, with respect to the
proposals set forth in the Notice of Annual Meeting and Proxy Statement. No
business other than matters described below is expected to come before the
meeting, but should any other matter requiring a vote of stockholders arise, the
person named herein will vote thereon in accordance with his best judgment. All
powers may be exercised by said Proxy. Receipt of the Notice of Annual Meeting
and Proxy Statement is hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING.
1. ELECTION OF DIRECTORS. Nominees: Andrew P. Chesler, Abraham S. Fischler,
Fred S. Katz, Allen H. Stern and Jeffrey T. Katz
[ ] FOR ALL NOMINEES LISTED (Except as specified here:___________)
OR
[ ] WITHHOLDING AUTHORITY to vote for all nominees listed above
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Proposal to Ratify the Appointment of Independent Auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as directed. IF NO
SPECIFIC DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR THE NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
Dated , 1997
-------------------------
- ----------------------------- ------------------------------------
(Print Name) (Signature)
- ----------------------------- ------------------------------------
(Print Name) (Signature)
Where there is more than one owner, each should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your full
title as such. If executed by a corporation or partnership, the proxy should be
signed in the corporate or partnership name by a duly authorized officer or
other duly authorized person, indicating such officer's or other person's title.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
