SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[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
GLOBAL TECHNOLOGIES, LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
----------------------------------------------------
4) Date Filed:
------------------------------------------------------
<PAGE>
[GTL LOGO]
GLOBAL TECHNOLOGIES, LTD.
1811 CHESTNUT STREET, SUITE 120
PHILADELPHIA, PENNSYLVANIA 19103
April 14, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Global Technologies, Ltd. (the "Company"), to be held at
_________________________, located at ______________, New York, New York, on
Thursday May 11, 2000, at _____ a.m., local time.
The official notice of the meeting together with a proxy statement and form
of proxy are enclosed. We hope you will take the time to study this information
carefully. To assure your representation at the meeting, even if you presently
plan to attend, please complete, sign, date and return the enclosed proxy card
promptly in the accompanying self-addressed postage prepaid envelope. If you do
join us at the Annual Meeting and wish to vote in person, you may revoke your
proxy at that time.
Your copy of the Company's Annual Report for the transition period ended
June 30, 1999 and Letter to Shareholders are also enclosed. We appreciate your
interest in the Company and thank you for your attention to this important
matter.
Sincerely,
/s/ IRWIN L. GROSS
----------------------------------------
Irwin L. Gross
Chairman of the Board and
Chief Executive Officer
YOUR VOTE IS IMPORTANT
TO VOTE YOUR SHARES, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED, WHETHER OR NOT YOU INTEND TO BE PRESENT AT
THE ANNUAL MEETING.
<PAGE>
GLOBAL TECHNOLOGIES, LTD.
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 2000
----------------------------------------
TO OUR STOCKHOLDERS:
The 2000 Annual Meeting of Stockholders of Global Technologies, Ltd., a
Delaware corporation (the "Company"), will be held at _________________________,
located at ______ ________, New York, New York, on Thursday May 11, 2000, at
_____ a.m., local time, for the following purposes, all as more fully described
in the attached Proxy Statement:
1. To elect directors;
2. To vote on the proposal to ratify the grant of options to purchase
1,500,000 shares of the Company's common stock to Irwin L. Gross, Chief
Executive Officer of the Company;
3. To vote on the proposal to ratify the appointment of KPMG LLP, certified
public accountants, as the Company's independent auditors for the fiscal year
ending June 30, 2000; and
4. To transact such other business as may properly come before the Annual
Meeting and any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on March 16, 2000 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting and any postponements or adjournment thereof.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. SHARES
CAN BE VOTED AT THE ANNUAL MEETING ONLY IF THE HOLDER IS PRESENT IN PERSON OR IS
REPRESENTED BY PROXY. ACCORDINGLY, THE COMPANY EARNESTLY REQUESTS THAT YOU DATE,
SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE PROVIDED FOR
THAT PURPOSE (WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES) WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON. THE PROXY IS REVOCABLE
BY YOU AT ANY TIME PRIOR TO ITS EXERCISE AND WILL NOT AFFECT YOUR RIGHT TO VOTE
IN PERSON IN THE EVENT YOU ATTEND. THE PROMPT RETURN OF THE PROXY WILL BE OF
ASSISTANCE IN PREPARING FOR THE ANNUAL MEETING AND YOUR COOPERATION IN THIS
RESPECT IS GREATLY APPRECIATED.
April 14, 2000 By Order of the Board of Directors
/s/ DAVID N. SHEVRIN
----------------------------------------
David N. Shevrin
Secretary
<PAGE>
GLOBAL TECHNOLOGIES, LTD.
1811 CHESTNUT STREET, SUITE 120
PHILADELPHIA, PENNSYLVANIA 19103
--------------------
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being furnished to
stockholders of Global Technologies, Ltd., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company for use in voting at the 2000 Annual Meeting of
Stockholders, which will be held at _______________ _________, located at
_______________, New York, New York, on Thursday May 11, 2000, at _____ a.m.,
local time, and at any postponements or adjournments thereof (the "Annual
Meeting"). This Proxy Statement and the accompanying proxy card, together with a
copy of the Annual Report of the Company for the transition period ended June
30, 1999 and Letter to Shareholders, are first being mailed or delivered to
stockholders of the Company on or about April 14, 2000.
At the Annual Meeting, stockholders will be asked to consider and vote upon
the following proposals:
1. To elect five directors who will serve until the 2001 annual meeting
(for Class I Directors), the 2002 annual meeting (for Class II Directors) or the
2003 annual meeting (for the Class II Director), and until their respective
successors have been duly elected and qualified;
2. To vote on the proposal to ratify the grant of options to purchase
1,500,000 shares of the Company's common stock to Irwin L. Gross, Chief
Executive Officer of the Company;
3. To vote on the proposal to ratify the appointment of KPMG LLP, certified
public accountants, as the Company's independent auditors for the fiscal year
ending June 30, 2000; and
4. To transact such other business as may properly come before the Annual
Meeting and any postponements or adjournments thereof.
VOTE REQUIRED AND PROXY INFORMATION
The enclosed proxy provides that you may specify that your shares be voted
"For", "Against" or "Abstain" from voting with respect to each of the proposals.
If the enclosed proxy is properly executed, duly returned to the Company in time
for the Annual Meeting and not revoked, your shares will be voted in accordance
with the instructions contained thereon. Where a signed proxy is returned, but
no specific instructions are indicated, your shares will be voted "FOR" each of
the proposals. Proxies marked as abstaining will be treated as present for
purposes of determining a quorum for the Annual Meeting, but will not be counted
as voting in respect of any matter as to which abstinence is indicated.
<PAGE>
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted at the Annual Meeting. Proxies may be revoked by: (i) filing
with the Assistant Secretary of the Company, at or before the Annual Meeting, a
written notice of revocation bearing a later date than the proxy; (ii) duly
executing a subsequent proxy relating to the same shares and delivering it to
the Assistant Secretary of the Company at or before the Annual Meeting; or (iii)
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute revocation of a proxy). Any
written notice revoking a proxy should be delivered to S. Lance Silver,
Assistant Secretary, Global Technologies, Ltd., 1811 Chestnut Street, Suite 120,
Philadelphia, Pennsylvania 19103.
All shares of the Company's capital stock present in person or represented
by proxy and entitled to vote at the meeting, no matter how they are voted or
whether they abstain from voting, will be counted in determining the presence of
a quorum for each of the matters on which stockholders will vote at the Annual
Meeting. If the Annual Meeting is adjourned because of the absence of a quorum,
those stockholders entitled to vote who attend the adjourned meeting, although
constituting less than a quorum as provided herein, shall nevertheless
constitute a quorum for the purpose of electing directors.
The presence or representation by proxy of a majority of the shares
entitled to vote at the Annual Meeting will constitute a quorum. In all matters
other that the election of directors, the affirmative vote of the majority of
shares present in person or represented by proxy at the Annual Meeting and
entitled to vote on the subject matter will be required for approval of such
subject matter. Directors will be elected by a plurality of the votes of the
shares present in person or represented by proxy at the Annual Meeting.
At the close of business on March 16, 2000, the record date for the
determination of stockholders entitled to receive notice of, and to vote at, the
Annual Meeting, the Company's outstanding securities consisted of 10,498,488
shares of Class A Common Stock, par value $0.01 per share. Each share of Class A
Common Stock is entitled to one vote.
The cost of this solicitation of proxies will be borne by the Company.
Directors, officers and regular employees of the Company may solicit proxies in
person, by telephone, by mail or by other means of communication, but such
persons will not be specially compensated for such services. The Company will,
on request, reimburse American Stock Transfer & Trust Company and stockholders
of record who are brokers, dealers, banks or voting trustees, or their nominees,
for their reasonable expenses in sending proxy materials and annual reports to
the beneficial owners of the shares they hold of record.
2
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1 ON THE PROXY CARD)
The Board of Directors currently consists of five members. The Company
amended its Certificate of Incorporation in August 1999. The Company's Amended
and Restated Certificate of Incorporation provides for the classification of the
Board of Directors into three classes (Class I, Class II and Class III). This is
the first annual meeting since the foregoing amendment to the Company's
Certificate of Incorporation, so each director will stand for election as
required therein. At the Annual Meeting or any adjournments or postponements
thereof, the Class I directors will be elected to hold office for a term
expiring at the next succeeding annual meeting (2001), the Class II directors
will be elected to hold office for a term expiring at the second succeeding
annual meeting (2002), and the Class III director will be elected to hold office
for a term expiring at the third succeeding annual meeting (2003).
Each proxy received will be voted for the election of the persons named
below, unless the stockholder signing such proxy withholds authority to vote for
one or more of these nominees in the manner described on the proxy. Should any
of the listed persons be unable to accept nomination or election (which the
Board of Directors does not anticipate), it is the intention of the persons
named in the enclosed proxy to vote for the election of such persons as the
Board of Directors may recommend.
Each of the nominees for election as director is now a director of the
Company. Each has served as a director of the Company since September 1998 and
was re-elected to the Board of Directors at the 1998 Annual Meeting held on
October 30, 1998.
The following information about the Company's nominees for election as
directors is based, in part, on information furnished by the nominees.
Name Class Age Title
---- ----- --- -----
M. Moshe Porat I 52 Director
James W. Fox I 49 Director, President and Chief
Operating Officer
Charles T. Condy II 59 Director
Stephen Schachman II 55 Director
Irwin L. Gross III 56 Chairman of the Board and Chief
Executive Officer
M. MOSHE PORAT has been a Director of the Company since September 1998 and
a Director of The Network Connection, a majority owned operating subsidiary of
the Company, since May 18, 1999. Since September 1996, Dr. Porat has served as
the Dean of the School of Business and Management at Temple University. From
1988 to 1996 he was Chairman of the Risk Management, Insurance and Actuarial
Science Department at Temple University. Dr. Porat received his undergraduate
degree in economics and statistics (with distinction) from Tel Aviv University,
3
<PAGE>
his M.B.A. (Magna Cum Laude) from the Recanati Graduate School of Management at
Tel Aviv University, and completed his doctoral work at Temple University. Dr.
Porat holds the Chair of the Joseph E. Boettner Professorship in Risk Management
and Insurance and has won several awards in the insurance field. Prior to his
academic work, Dr. Porat served as deputy general manager of a large
international. He holds the CPCU professional designation and is a member of
ARIA (American 25 Risk and Insurance Association), IIS (International Insurance
Society), RIMS (Risk and Insurance Management Society) and Society of CPCU. Dr.
Porat has authored several monographs on captive insurance companies and their
use in risk management, has published numerous articles on captive insurance
companies, self insurance and other financial and risk topics.
JAMES W. FOX has been a Director of the Company since September 1998. Mr.
Fox is the President and Chief Operating Officer of the Company. He was formerly
the Managing Partner of First Lawrence Capital Corp., and was responsible for
the firm's management and the growth of its mergers and acquisitions advisory
and principal investment activities. From 1989 to 1996, Mr. Fox was a director
with national practice development and management responsibility with Coopers &
Lybrand in New York, with primary responsibility for mergers and acquisitions
activities. He has held senior mergers and acquisitions positions with General
Foods Corp., Arthur Young and W.R. Grace Co. Mr. Fox has a Bachelor of Arts
degree in Mathematics and History from Amherst College and an M.B.A. in Finance
from the University of Pennsylvania's Wharton School.
CHARLES T. CONDY has been a Director of the Company since September 1998.
Mr. Condy was a director of Rare Medium, Inc. from 1996 to 1999. Mr. Condy is
the founder, chairman and chief executive officer of Next Century Restaurants,
Inc., a private company which is the owner of Aqua, and Charles of Nob Hill,
both of which are in San Francisco, and Aqua of Las Vegas. He is founder and has
been chairman and chief executive officer of Proven Alternatives, Inc., a
privately held international energy management company, since 1991. Mr. Condy
was chairman and chief executive officer of California Energy Company, Inc., a
geothermal energy company which he founded in 1971, and which become the largest
geothermal energy company in the world. Prior to founding California Energy
Company, Mr. Condy was executive vice president--Western region of John Nuveen
and Company, members of the New York Stock Exchange. In the public policy area,
Mr. Condy helped found and has served as a board member of the Business Council
for a Sustainable Energy Future and the Coalition for Energy Efficiency and
Renewable Technologies. Mr. Condy currently advises the U.S. Department of
Energy, the U.S. Agency for International Development, and the U.S. Asian
Environmental Partnership on energy efficiency technology transfer and related
funding to developing economies.
STEPHEN SCHACHMAN has been a Director of the Company since September 1998
and a Director of The Network Connection since May 18, 1999. Since 1995, Mr.
Schachman has been the owner of his own consulting firm, Public Affairs
Management, which is located in the suburban Philadelphia area. From 1992 to
1995, Mr. Schachman was an executive officer and consultant to Penn Fuel Gas
Company, a supplier of natural gas products. Prior thereto, he was an attorney
with the Philadelphia law firm Dilworth, Paxson, Kalish & Kaufman. Mr. Schachman
was also an Executive Vice President of Bell Atlantic Mobile System and prior
4
<PAGE>
thereto, President of the Philadelphia Gas Works, the largest municipally owned
gas company in the United States. Mr. Schachman has a Bachelor of Arts degree
from the University of Pennsylvania and Juris Doctor degree from the Georgetown
University Law School.
IRWIN L. GROSS has been the Chairman of the Board of Directors and Chief
Executive Officer of the Company since September 1998 and Chairman of the Board
of Directors and Chief Executive Officer of The Network Connection since May 18,
1999. Mr. Gross also currently sits on the Board of Directors of U.S. Wireless
Corporation, a publicly-held company listed on the Nasdaq Small Cap Market. Mr.
Gross is a founder of Rare Medium, Inc., a publicly held company listed on the
Nasdaq National Market, and was Chairman and a Director of Rare Medium from 1984
to 1998. In addition, Mr. Gross served as the Chief Executive Officer of
Engelhard/ICC, a joint venture between Rare Medium and Engelhard. Mr. Gross has
served as a consultant to, investor in and director of, numerous publicly-held
and private companies and serves on the board of directors of several charitable
organizations. Mr. Gross has a Bachelor of Science degree in Accounting from
Temple University and a Juris Doctor degree from Villanova University.
None of the nominees has any family relationship to any other director,
executive officer of nominee.
MEETINGS OF THE BOARD OF DIRECTORS
The business affairs of the Company are managed under the direction of the
Board of Directors. Members of the Board of Directors are kept informed through
various reports and documents sent to them, through operating and financial
reports routinely presented at Board and committee meetings by Irwin L. Gross,
as the Chairman of the Board, and other officers, and through other means. In
addition, directors of the Company discharge their duties throughout the year
not only by attending Board meetings but also through personal meetings and
other communications, including considerable telephone contact, with the Chief
Executive Officer and others regarding matters of interest and concern to the
Company.
The entire Board of Directors was replaced with the current Board of
Directors in September 1998. Each member of the current Board was re-elected at
the 1998 Annual Meeting on October 30, 1998. From October 30, 1998 through the
end of the transition period ended June 30, 1999, the Company's Board of
Directors held nine (9) meetings. No director attended fewer than 75% of the
meetings held during that period.
BOARD COMMITTEES
The Board of Directors does not have a nominating committee.
The Board of Directors has an Audit Committee whose purpose is to recommend
the auditing firm to be selected each year as independent auditors of the
Company's financial statements and to perform services related to the completion
of such audit. The Audit Committee also has responsibility for (i) reviewing the
scope and results of the audit, (ii) reviewing the Company's financial condition
and results of operations with management, (iii) considering the adequacy of the
internal accounting and control procedures of the Company, and (iv) reviewing
5
<PAGE>
any non-audit services and special engagements to be performed by the
independent auditors and considering the effect of such performance on the
auditors' independence. The Audit Committee currently consists of Messrs. Condy
and Schachman. There was one Audit Committee meeting during the period from
October 1998 through June 1999, and all were present.
The Board of Directors also has a Compensation Committee which currently
consists of Messrs. Condy and Porat. The Compensation Committee is responsible
for approving the compensation arrangements of senior management and
recommending approval by the Board of Directors of amendments to the Company's
benefit plans. There was no Compensation Committee in session during any of the
meetings of the Board of Directors during the period from October 1998 through
June 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION OF EACH OF THE NOMINEES
FOR ELECTION TO THE BOARD OF DIRECTORS.
GRANT OF OPTIONS TO IRWIN L. GROSS
(PROPOSAL NO. 2 ON THE PROXY CARD)
The stockholders are being asked to approve the grant by the Board of
Directors on October 8, 1999, with Irwin L. Gross abstaining, of options to
Irwin L. Gross, Chairman and Chief Executive Officer of the Company, to purchase
1,000,000 shares of Class A Common Stock at the closing market price of the
common stock on the day prior to the grant, pursuant to a separate option
agreement with Mr. Gross. As a result of the three-for-two stock split of the
Company on February 15, 2000, the options currently entitle Mr. Gross to
1,500,000 shares upon exercise. One quarter of these options vested immediately
and one quarter vest, subject to certain conditions, over three years beginning
October 8, 2000. The remaining 750,000 options vest on the sixth anniversary of
the date of grant, subject to accelerated vesting pursuant to a three-year
vesting schedule in the event of the achievement of certain performance
milestones and other conditions. The exercise price of the options is $1.83
(split-adjusted). The options expire in October 2009. The Board of Directors,
with Mr. Gross abstaining, has approved such grant.
The option granted to Mr. Gross, as approved by the Board, is not by its
terms subject to stockholder approval. Nasdaq has advised the Company that it is
Nasdaq's view that such grant did require approval of the stockholders pursuant
to Marketplace Rule 4460(i)(1)(A). Rule 4460(i)(1)(A) provides in pertinent part
that when a stock option (other than an option granted pursuant to a broadly
based plan) is granted to an officer or director, the issuer shall require
stockholder approval prior to such grant; provided, however, that in the case of
a grant to a person not previously employed by the Company, as an inducement
essential to the individual's entering into an employment contract with the
Company, stockholder approval will generally not be required. While the Company
originally granted the option based upon a belief that such rule did not apply
to the grant, because it viewed the grant as an inducement essential to Mr.
Gross's entering into an employment contract with the Company on October 1,
1999, the Company has determined to seek stockholder approval to comply with
Nasdaq's request. If the stockholders do not ratify the grant of these options
at the Annual Meeting, the Company may be in violation of the Nasdaq rules and
could be subject to delisting.
6
<PAGE>
The Board of Directors of the Company has determined that Mr. Gross has
halted the downward spiral of the Company and is implementing a strategy to
increase value for all of the holders of the Company's common stock and that he
should be able to participate in such enhancement of shareholder value. The
market price per share increased over 350% in 1999 and continues to increase in
2000. The Company shares traded for approximately $1.50 per share
(split-adjusted) on September 15, 1998 and traded for approximately $15.75 on
March 22, 2000.
THE BOARD OF DIRECTORS BELIEVES THAT THE GRANT OF OPTIONS TO MR. GROSS IS IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR"
RATIFICATION OF THE GRANT.
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 3 ON THE PROXY CARD)
The Board of Directors has renewed the Company's arrangement for KPMG LLP
("KPMG") to act as its independent accountants for the fiscal year ending June
30, 2000. KPMG has acted as the Company's independent accountants since 1996.
The stockholders are being asked to approve the appointment of KPMG by the
Board of Directors for the fiscal year ending June 30, 2000. In the event the
appointment is not approved, the Board of Directors will reconsider its
selection.
Representatives of KPMG are expected to be present at the Annual Meeting
and available to respond to appropriate questions by stockholders. Such
representatives also will be afforded an opportunity, should they so desire, to
make any statements to the stockholders that they deem appropriate.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF KPMG LLP AS
THE INDEPENDANT AUDITORS OF THE COMPANY.
7
<PAGE>
EXECUTIVE COMPENSATION
ON JANUARY 5, 2000, THE BOARD OF DIRECTORS APPROVED A THREE-FOR-TWO STOCK
SPLIT TO BE EFFECTED BY WAY OF A STOCK DIVIDEND OF ONE SHARE FOR EACH TWO SHARES
OF COMMON STOCK HELD BY STOCKHOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS
FEBRUARY 15, 2000. THE DIVIDEND WAS PAYABLE ON FEBRUARY 29, 2000; FRACTIONAL
SHARES WERE PAID OUT IN CASH. THE FIGURES DISCLOSED HEREIN HAVE BEEN ADJUSTED TO
REFLECT THE EFFECT OF THIS STOCK DIVIDEND.
In August 1999, the Company changed its fiscal year-end from October 31 to
June 30. The summary compensation table below sets forth the aggregate
compensation paid or accrued by the Company for the transition period ended June
30, 1999 and the Company's prior three fiscal years ended October 31, 1998, 1997
and 1996 to the Chief Executive Officer and the Company's other executive
officers who were serving as executive officers at June 30, 1999 and whose total
annual salary and bonus exceeded $100,000 (collectively, the "Named
Executives").
SUMMARY COMPENSATION TABLE
Long Term
Annual Annual Compensation
Fiscal Compensation Compensation Stock Option
Name and Principal Position Year Salary ($) Bonus ($) Awards (#)
- --------------------------- ---- ---------- --------- ----------
Irwin L. Gross, Chief 1999 -- -- --
Executive Officer 1998 -- -- --
1997 -- -- --
1996 -- -- --
James W. Fox, President (1) 1999 104,718 -- 105,000
1998 -- -- 45,000
1997 -- -- --
1996 -- -- --
Morris C. Aaron, Chief 1999 130,289 -- 75,000
Financial Officer (2) 1998 18,590 -- --
1997 -- -- --
1996 -- -- --
David Shevrin, Secretary (3) 1999 71,924 -- 75,000
1998 8,462 -- --
1997 -- -- --
1996 -- -- --
Frank Gomer, President and 1999 101,042 43,797 --
Chief Operating Officer of 1998 153,686 54,445 7,667
The Network Connection (4) 1997 90,658 20,000 9,000
1996 -- -- --
- ----------
(1) Mr. Fox started employment with the Company on January 1, 1999.
(2) Mr. Aaron is currently the Executive Vice President and Chief Financial
Officer of The Network Connection. At the end of the transition period
ended June 30, 1999 and until December 15, 1999, Mr. Aaron was the Chief
Financial Officer of the Company. On December 15, 1999, the Company hired
Patrick J. Fodale, Vice President and Chief Financial Officer of the
Company.
(3) Mr. Shevrin started employment with the Company on September 15, 1998.
(4) Dr. Gomer is currently President of the Systems Group for The Network
Connection. At the end of the transition period ended June 30, 1999 and
until March 6, 2000, Dr. Gomer was President and Chief Operating Officer of
The Network Connection. On March 6, 2000, Robert Pringle was hired as the
President and Chief Operating Officer of The Network Connection.
8
<PAGE>
OPTION GRANTS IN FISCAL YEAR
The following table sets forth the grant of stock options made during the
1998 fiscal year and the transition period ended June 30, 1999 to the Named
Executives:
Number of Percent of Total
Securities Options Granted
Underlying to Employees in
Options in Transition Exercise Price Expiration
Name Granted(#) Period(1) ($/Share) Date
---- ---------- --------- --------- ----
Irwin L. Gross -- -- -- --
James W. Fox (2) 105,000 33.2% 1.67 01/01/2009
Morris C. Aaron (3) 75,000 23.7% 1.13 12/12/2008
David Shevrin (4) 75,000 23.7% 1.13 12/12/2008
Frank Gomer (5) 6,750 2.2% 1.75 02/19/2008
- ----------
(1) Based on a total of 316,047 options granted to employees during the
transition period ended June 30, 1999.
(2) 42,000 options are currently exercisable, and 4,000 become exercisable on
each of December 31, 2000, January 1, 2002 and December 31, 2002.
(3) 15,000 options are immediately exercisable, and 15,000 become exercisable
on each of December 12, 1999, 2000, 2001 and 2002.
(4) 25,667 options become exercisable on each of December 12, 1999, 2000 and
2001.
(5) Represents 3,000 and 3,750 options repriced from $14.63 and $9.00,
respectively, on April 10, 1999.
STOCK OPTION REPRICINGS
On February 10, 1998, the Company's former Board of Directors adopted a
plan to reduce the exercise price on the stock options under the 1994 Plan and
the 1997 Plan. The exercise price on one-half of each outstanding option was
reduced to $1.75 per share (the split-adjusted closing price for the Company's
stock on February 10, 1998) on October 10, 1998, and on the other half of each
outstanding option on April 10, 1999, provided the option holder was still
employed by the Company on such dates. The plan amendment was approved by the
Board of Directors to retain key employees, retain appropriate levels of
incentive and maintain competitive compensation levels.
As a result of this action, 6,000 options and 7,500 options held by Dr.
Gomer with exercise prices of $14.626 and $9.00, respectively, were repriced to
$1.75.
9
<PAGE>
OPTION EXERCISES AND YEAR-END VALUES
The following table provides certain information regarding the number of
exercisable and unexercisable options held by the Named Executives as of June
30, 1999 (none of these persons exercised any options during the 1998 fiscal
year or the transition period ended June 30, 1999):
Value of Unexercised
Number of Unexercised Options In-the-money Options at
at June 30, 1999 (#) June 30, 1999 ($)
Name Exercisable/Unexercisable (1) Exercisable/Unexercisable
---- ----------------------------- -------------------------
Irwin L. Gross --/-- --/--
James W. Fox 21,000/129,000 24,500/172,750
Morris C. Aaron 10,000/40,000 25,620/102,480
David Shevrin --/50,000 --/128,100
Frank Gomer 7,065/9,102 11,481/18,541
(1) None of these options had an exercise price less than the closing bid price
per share of the Class A Common Stock on the Nasdaq National Market of
$2.83 at June 30, 1999.
DIRECTOR COMPENSATION
Outside directors receive $1,000 for each meeting of the Board of
Directors, and $500 for each committee meeting, attended in person or by
telephone. In addition, all directors are reimbursed for expenses actually
incurred in connection with each meeting of the Board of Directors or any
Committee thereof attended. Each director has also received grants of options
under the Company's 1997 Stock Option Plan.
The Company's 1994 Stock Option Plan (the "1994 Plan") provides for the
automatic grant of non-qualified stock options to directors of the Company who
are not employees or principal stockholders of the Company ("Eligible
Directors") to purchase shares of common stock ("Director Options"). On the date
an Eligible Director becomes a director of the Company, he or she is granted
Director Options to purchase 1,000 shares of the Company's Class A Common Stock
(the "Initial Director Options"). On the day immediately following the date of
the annual meeting of stockholders for the Company for each fiscal year, each
Eligible Director, other than directors who received Initial Director Options
since the Company's prior annual meeting, is granted Director Options to
purchase 1,000 shares of the Company's Class A Common Stock (each an "Automatic
Grant"), as long as such director is a member of the Board of Directors on such
day. The exercise price for each share subject to a Director Option shall be
equal to the fair market value of the Class A Common Stock on the date of grant,
except for directors who receive incentive options and who own more than 10% of
the voting power, in which case the exercise price shall be not less than 110%
of the fair market value on the date of grant. Director Options are exercisable
in four equal annual installments, commencing one year from the date of grant.
Director Options will expire the earlier of 10 years after the date of grant or
90 days after the termination of the director's service on the Board of
Directors. The 1994 Plan and the Company's 1997 Stock Option Plan (the "1997
Plan") also allow grants to directors in addition to or in lieu of an Automatic
Grant.
10
<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
Irwin L. Gross serves as Chief Executive Officer pursuant to the terms of
an employment agreement that terminates on September 30, 2002. Mr. Gross
receives a minimum annual base salary of $250,000 and, subject to the
achievement of assigned goals, bonuses of not less than 20% of his annual
salary. Mr. Gross also received 1,500,000 10-year options, 25% of which vested
immediately, 25% of which vest, subject to certain conditions, in three annual
increments beginning on October 8, 2000, and the balance of which vest on the
sixth anniversary of the date of grant, subject to accelerated vesting pursuant
to a three-year vesting schedule in the event of the achievement of certain
performance milestones and other conditions. The employment agreement provides
for a severance payment in the event that the Company terminates Mr. Gross other
than for "cause" as defined in the employment agreement. The severance payment
would be equal to two times the remaining balance of his base salary for the
remainder of the then current term. The employment agreement also provides a
payment in the event the Company terminates Mr. Gross due to a termination of
the Company's business as defined in the employment agreement. In the event of
the termination of the Company's business, Mr. Gross would receive an amount
equal to two times his remaining base salary for the then current term, but not
less than his annual base salary for one year. The employment agreement also
provides that the company may pay other incentive compensation as may be set by
the Board of Directors from time to time, and for such other fringe benefits as
are paid to other executive officers of the Company. Such fringe benefits take
the form of medical and dental coverage and an automobile allowance of $1,000
per month.
Dr. Frank Gomer currently serves as President of the Systems Group for The
Network Connection pursuant to the terms of an employment agreement that
terminates on June 10, 2001. Dr. Gomer receives a minimum annual base salary of
$215,000. Beginning June 11, 1999 and ending June 11, 2003, Dr. Gomer also
receives 75,000 10-year options under the Company's Stock Option Plan, which
vest in increments of 15,000 options per year pursuant to the terms and
conditions of the employment agreement. The employment agreement also provides
for a severance payment in the event that the Company terminates Dr. Gomer other
than for "cause" as defined in the employment agreement. The severance payment
would be equal to two times the remaining balance of his base salary for the
remainder of the then current term. The employment agreement also provides a
payment in the event the Company terminates Dr. Gomer due to a termination of
the Company's business as defined in the employment agreement or upon
termination without cause following a change in control. In either such event,
Dr. Gomer would receive an amount equal to two times his remaining base salary
for the then current term, but not less than his annual base salary for one
year. The employment agreement also provides that the company may pay other
incentive compensation as may be set by the Board of Directors from time to
time, and for such other fringe benefits as are paid to other executive officers
of the Company. Such fringe benefits take the form of medical and dental
coverage and an automobile allowance of $500 per month.
11
<PAGE>
Morris C. Aaron serves as Executive Vice President and Chief Financial
Officer of TNCi pursuant to the terms of an employment agreement that terminates
on June 10, 2001. Mr. Aaron receives a minimum annual base salary of $215,000.
Beginning June 11, 1999 and ending June 11, 2003, Mr. Aaron also receives 75,000
10-year options under the Company's Stock Option Plan, which vest in increments
of 15,000 options per year pursuant to the terms of the employment agreement.
The employment agreement provides for a severance payment in the event that the
Company terminates Mr. Aaron other than for "cause" as defined in the employment
agreement. The severance payment would be equal to two times the remaining
balance of his base salary for the remainder of the then current term. The
employment agreement also provides a payment in the event the Company terminates
Mr. Aaron due to a termination of the Company's business as defined in the
employment agreement. In the event of the termination of the Company's business,
Mr. Aaron would receive an amount equal to two times his remaining base salary
for the then current term, but not less than his annual base salary for one
year. The employment agreement also provides that the company may pay other
incentive compensation as may be set by the Board of Directors from time to
time, and for such other fringe benefits as are paid to other executive officers
of the Company. Such fringe benefits take the form of medical and dental
coverage and an automobile allowance of $500 per month.
James W. Fox serves as President and Chief Operating Officer pursuant to
the terms of an employment agreement that terminates on December 31, 2000. Mr.
Fox receives a minimum annual base salary of $225,000 and, subject to the
achievement of assigned goals, bonuses of not less than 20% of his annual
salary. Mr. Fox also received 105,000 10-year options under the Company's 1997
Stock Option Plan, which vest in increments of 21,000 options per year pursuant
to the terms of the employment agreement. The employment agreement provides for
a severance payment in the event that the Company terminates Mr. Fox other than
for "cause" as defined in the employment agreement. The severance payment would
be equal to two times the remaining balance of his base salary for the remainder
of the then current term. The employment agreement also provides a payment in
the event the Company terminates Mr. Fox due to a termination of the Company's
business as defined in the employment agreement. In the event of the termination
of the Company's business, Mr. Fox would receive an amount equal to two times
his remaining base salary for the then current term, but not less than his
annual base salary for one year. The employment agreement also provides that the
company may pay other incentive compensation as may be set by the Board of
Directors from time to time, and for such other fringe benefits as are paid to
other executive officers of the Company. Such fringe benefits take the form of
medical and dental coverage and an automobile allowance of $450 per month.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CONSULTING ARRANGEMENTS
The Company's Chief Executive Officer is a principal of Ocean Castle
Partners, LLC which maintains administrative offices for the Company's Chief
Executive Officer, Corporate Secretary and certain other employees. During the
year ended October 31, 1998, Ocean Castle executed consulting agreements with
two principal stockholders of the Company. The rights and obligations of Ocean
Castle under the agreements were assumed by The Network Connection in connection
12
<PAGE>
with the sale of the Company's Interactive Entertainment Division to The Network
Connection. The consulting agreements require payments aggregating $1,000,000 to
each of the consultants through December 2003 in exchange for advisory services.
Each of the consultants also received stock options to purchase 50,000
(split-adjusted) shares of the Company's Class A Common Stock at an exercise
price of $3.00 (split-adjusted). As of June 30, 1999, The Network Connection
determined that the consulting agreements had no future value due to The Network
Connection's shift away from in-flight entertainment into alternative markets
such as leisure cruise and passenger rail transport. Only limited services were
provided in 1999 and no future services will by utilized. Accordingly, The
Network Connection recorded a charge to general and administrative expenses in
the transition period ended June 30, 1999 of $1.6 million representing the
balance due under such contracts.
The Company has entered into a consulting agreement with First Lawrence
Capital Corp. to perform various financial advisory services related to ongoing
business development and management. The former managing director of First
Lawrence is also a director of the Company. The Company retained, on a full time
basis as President and Chief Operating Officer, the services of the former
managing director of First Lawrence effective December 12, 1998. Accordingly,
the Company has entered into an employment contract with such individual. During
the year ended October 31, 1998, the Company paid $11,846 under the First
Lawrence consulting agreement. The Company executed a consulting agreement with
the Whitestone Group, LLC, a shareholder of First Lawrence. Pursuant to the
agreement, the Company paid $250,000 for consulting services received during
fiscal 1998.
On September 15, 1998, the Company entered into consulting agreements with
Messrs. Michail Itkis, Thomas M. Metzler and John W. Alderfer in connection with
the Company's agreements with Swissair. In consideration for such services, the
Company has paid Mr. Itkis $200,000 through September 15, 1999, Mr. Metzler
$300,000 through June 15, 1999 and Mr. Alderfer $235,000 through March 15, 1999.
FORTUNET LICENSE
In October 1994, the Company entered into an Intellectual Property License
and Support Services Agreement with FortuNet, Inc. ("FortuNet"), which was
amended and restated on November 7, 1996 (as amended, the "FortuNet License").
The FortuNet License grants the Company a worldwide, perpetual license to
FortuNet's current and future patents, copyrights, trade secrets and related
know-how covering a computerized system for use in all fields other than bingo
halls. Further, this license is exclusive to the Company within the airline
industry. As consideration, the Company must pay FortuNet an annual license fee
of $100,000 in monthly installments through November 2002. The Company was
13
<PAGE>
previously also required to compensate FortuNet for certain development, support
and maintenance services, but this obligation has been terminated. Further, the
restated version of the FortuNet License no longer prohibits the Company from
engaging in any gaming activities outside of airplanes. In exchange for these
amendments to the FortuNet License and certain other modifications, on November
7, 1996, the Company issued to FortuNet a warrant to purchase 25,000
(split-adjusted) shares of Class A Common Stock at a price of $19.50
(split-adjusted) per share, which was repriced on January 6, 1997 to $16.00
(split-adjusted) per share. Under the FortuNet License, an aggregate of $100,000
was paid to FortuNet in fiscal 1998. Subsequent to June 30, 1999, the Company
agreed to a termination of this agreement and paid FortuNet $100,000 plus legal
fees. During the Transition Period ended June 30, 1999, the Company had revised
its estimated accrual to $200,000 which is included in accrued liabilities in
the consolidated balance sheet at June 30, 1999. Additionally, the Company
repriced the exercise price of the stock purchase warrants to $3.00
(split-adjusted) per share.
Yuri Itkis, a former director of the Company, is the President and sole
stockholder of FortuNet and Boris Itkis, a former director of the Company and a
son of Yuri Itkis, is an employee of FortuNet. Michail Itkis, the former Chief
Executive Officer and a former director of the Company, is also a son of Yuri
Itkis and was an employee of FortuNet until October 1994.
STOCKHOLDERS' AGREEMENT
In October 1994, the Company entered into a stockholders' agreement with
Yuri Itkis, Michail Itkis, Boris Itkis, Steven M. Fieldman, Donald H. Goldman
and Lance Fieldman (the "Stockholders' Agreement"). In connection with the May
1996 and November 1996 resignations of Messrs. Goldman, Steven Fieldman and
Lance Fieldman, and in connection with the execution of the Strategic Alliance
Agreement with Hyatt, the parties to the Stockholders' Agreement entered into
agreements which terminated the Stockholders' Agreement as to Messrs. Goldman,
Steven Fieldman and Lance Fieldman, added Hyatt as a Stockholder under the
Stockholders' Agreement, and amended certain terms of the Stockholders'
Agreement. On November 10, 1997 with the termination of the Alliance Agreement
with Hyatt, the Stockholders' Agreement was amended again to terminate Hyatt's
rights.
As amended, the Stockholders' Agreement provided that Michail Itkis and
Yuri Itkis shall each be entitled to designate one nominee to the Company's
Board of Directors. No other parties had any continuing right under the
Stockholders' Agreement to nominate a director. Each stockholder who was a party
to the Stockholders' Agreement agreed to vote all the shares of common stock
owned by him for the election of the directors so nominated and not to take any
action to remove any director so elected (except for the director(s) nominated
by such stockholder). The Stockholders' Agreement was terminated on September
15, 1998.
PURCHASE OF SHARES
Pursuant to the settlement of various lawsuits and other claims instituted
by Barrington Capital Group, L.P. ("Barrington") against the Company, Ocean
Castle and others, Ocean Castle purchased from Barrington 149,313
(split-adjusted) shares of Class A Common Stock of the Company at $3.00
(split-adjusted) per share on October 21, 1998. The Company temporarily loaned
the funds to Ocean Castle to effectuate such purchase and Ocean Castle has
subsequently repaid such loan.
14
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
THE FIGURES DISCLOSED HEREIN HAVE BEEN ADJUSTED TO REFLECT THE EFFECT OF
THE THREE-FOR-TWO STOCK DIVIDEND ON FEBRUARY 15, 2000.
The following table sets forth certain information as of March 31, 2000
regarding the ownership of the Company's Class A Common Stock and of The Network
Connection's common stock by (i) each person known by the Company to own
beneficially more than five percent of any class of the Company's voting
securities, (ii) each director of the Company, (iii) each executive officer of
the Company and (iv) all executive officers and directors of the Company as a
group.
Class A The Network Connection
Common Stock Common Stock
----------------------- -----------------------
Name and Address of Number Percent of Number Percent of
Beneficial Owner (1) of Shares Class (2) of Shares Class (3)
-------------------- --------- --------- --------- ---------
Irwin L. Gross
Ocean Castle Partners, LLC 2,283,108 (4) 21.0% 211,667 (5) 1.6%
Charles T. Condy 32,025 (6) * -- --
Stephen Schachman 26,400 (7) * -- --
M. Moshe Porat 405,000 (8) 3.9% -- --
David N. Shevrin 27,250 (9) * -- --
Morris C. Aaron 24,148(10) * 10,000(11) *
James W. Fox 62,700(12) * -- --
Frank Gomer 6,592(13) * 10,000(14) *
The Shaar Fund, Ltd. 131,250(15) 1.2% 100,000(16) *
Ruki Renov 646,521(17) 6.2% -- --
Esther Stahler 572,671(18) 5.5% -- --
All executive officers and
directors of the Company
as a group (7 persons) 2,867,223(19) 26.0% 231,667(20) 1.8%
- ----------
* Less than 1%.
(1) Except as otherwise indicated below, the address of each beneficial owner
is c/o Global Technologies, Ltd., 1811 Chestnut Street, Philadelphia,
Pennsylvania 19103.
(2) Based on 10,498,488 shares of Class A Common Stock outstanding.
(3) Based on 12,790,046 shares of The Network Connection Common Stock
outstanding.
(4) Includes 50,949 shares owned by trusts for the benefit of Mr. Gross'
children as to which Mr. Gross disclaims beneficial ownership. Also
includes 375,000 shares issuable to Mr. Gross upon exercise of options
exercisable within 60 days.
(5) Includes 125,000 shares which may be acquired upon exercise of vested
options.
(6) Includes 15,000 shares issuable to Mr. Condy upon exercise of options
exercisable within 60 days.
(7) Includes 15,000 shares issuable to Mr. Schachman upon exercise of options
exercisable within 60 days.
(8) Includes 375,000 shares owned by First Lawrence Corp. over which Mr. Porat
retains voting power pursuant to a certain proxy agreement, and 15,000
shares issuable to Mr. Porat upon exercise of options exercisable within 60
days.
(9) Includes 25,000 shares issuable to Mr. Shevrin upon exercise of options
exercisable within 60 days.
15
<PAGE>
(10) Includes 15,000 shares issuable to Mr. Aaron upon exercise of options
exercisable within 60 days.
(11) Represents 10,000 shares issuable to Mr. Aaron upon exercise of options
exercisable within 60 days.
(12) Includes 36,000 shares issuable to Mr. Fox upon exercise of options
exercisable within 60 days.
(13) Includes 3,592 shares issuable to Mr. Gomer upon exercise of options
exercisable within 60 days.
(14) Represents 10,000 shares issuable to Mr. Gomer upon exercise of options
exercisable within 60 days.
(15) Represents 131,250 shares issuable to The Shaar Fund, Ltd. upon exercise of
a warrant exercisable within 60 days. The address of The Shaar Fund, Ltd.
is c/o Shaar Fund Advisory Services, Ltd., 62 King George Road, Apartment
4F, Jerusalem, Israel.
(16) Represents 100,000 shares issuable to The Shaar Fund, Ltd. upon exercise of
a warrant exercisable within 60 days.
(17) According to Amendment No. 2 to Schedule 13G dated October 25, 1999 filed
by Ruki Renov, as adjusted for the 2:3 stock split on February 15, 2000.
Mrs. Renov's address is 172 Broadway, Lawrence, NY 11559.
(18) According to Amendment No. 1 to Schedule 13G dated October 25, 1999 filed
by Esther Stahler, as adjusted for the 2:3 stock split on February 15,
2000. Mrs. Stahler's address is 10 Lakeside Drive, Lawrence, NY 11559.
(19) See footnotes 4, 6, 7, 8, 9, 10, 12 and 13.
(20) See footnotes 5, 11 and 14.
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 Company's common stock (collectively, "Reporting Persons"), to file with the
Securities and Exchange Commission ("SEC") reports about their beneficial
ownership of the Company's securities. All Reporting Persons are required by the
SEC to furnish the Company with copies of all reports that they file. Based
solely on a review of Section 16 reports received by the Company from Reporting
Persons, the Company believes that each of Condy, Porat, Schachman, Fox, Aaron
and Shevrin have failed to file a Form 5 on a timely basis for the transition
period ended June 30, 1999.
2001 STOCKHOLDER PROPOSALS
In order for stockholder proposals for the 2001 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's 2001 Proxy Statement,
they must be received by the Company at its principal executive offices, (Attn:
Secretary), on or prior to November 30, 2000. The Board of Directors will review
any stockholder proposals that are filed as required and will determine whether
such proposals meet applicable criteria for inclusion in the Company's 2001
Proxy Statement for the Annual Meeting.
OTHER MATTERS
The Company currently knows of no other business that will be presented for
consideration at the 2000 Annual Meeting. If any other business is properly
brought before the meeting, it is intended that proxies in the enclosed form
will be voted in respect thereof in accordance with the judgment of the persons
voting the proxies. If any such matters are presented at the meeting, then the
proxy agents named in the enclosed proxy card will vote in accordance with their
judgment.
16
<PAGE>
THE COMPANY SHALL PROVIDE TO ANY STOCKHOLDER, WITHOUT CHARGE, A COPY OF THE
COMPANY'S TRANSITION REPORT ON FORM 10-KSB FOR THE TRANSITION PERIOD ENDED JUNE
30, 1999, UPON THE WRITTEN REQUEST THEREFOR TO GLOBAL TECHNOLOGIES, LTD., 1811
CHESTNUT STREET, SUITE 120, PHILADELPHIA, PENNSYLVANIA 19103, ATTENTION: S.
LANCE SILVER, ASSISTANT SECRETARY.
/s/ IRWIN L. GROSS
----------------------------------------
Irwin L. Gross, Chairman of the Board
and Chief Executive Officer
April 14, 2000
17
<PAGE>
PROXY
GLOBAL TECHNOLOGIES, LTD.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Irwin L. Gross and Charles T. Condy (with
full power to act without the other and with power to appoint his substitute) as
the undersigned's proxies to vote all shares of Common Stock of the undersigned
in Global Technologies, Ltd., a Delaware corporation (the "Company"), which the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
the Company to be held at _________________________, located at _______________,
New York, New York, on Thursday May 11, 2000, at _____ a.m., local time, and at
any postponement or adjournments or postponements thereof, in the manner
indicated below and on the reverse side hereof.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders to be held on May 11, 2000 and the Proxy Statement of the
Company, each dated April 14, 2000, and the Company's Annual Report for the
transition period ended June 30, 1999 and Letter to Shareholders.
The undersigned hereby revokes any proxy to vote shares of common stock of
the Company heretofore given by the undersigned.
Please complete, sign on the reverse side and return promptly in the
enclosed envelope.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE INSTRUCTIONS SET FORTH BELOW AND ON THE REVERSE SIDE HEREOF. IN THE
ABSENCE OF ANY INSTRUCTIONS, SUCH SHARES WILL BE VOTED "FOR" THE ELECTION OF ALL
NOMINEES LISTED IN PROPOSAL 1 AND "FOR" THE APPROVAL OF PROPOSALS 2, 3 AND 4.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below:
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
Nominees: M. Moshe Porat, Class I
James W. Fox, Class I
Charles T. Condy, Class II
Stephen Schachman, Class II
Irwin L. Gross, Class III
<PAGE>
2. Proposal to ratify the grant of options to purchase 1,500,000 shares of the
Company's common stock to Irwin L. Gross, Chief Executive Officer of the
Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP, certified
public accountants, as independent auditors of the Company for the fiscal
year ending June 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion such other business as may properly come before the
meeting and any and all adjournments thereof.
Dated ______________________________________
____________________________________________
Signature
____________________________________________
Signatures, if held jointly
____________________________________________
Title ( if applicable)
Please date and sign exactly as name appears
on this proxy card, and promptly return in
the enclosed envelope. When signing as
guardian, executor, administrator, attorney,
trustee, custodian, or in any other similar
capacity, please give full title. If a
corporation, sign in full corporate name by
president or other authorized officer,
giving title, and affix corporate seal. If a
partnership, sign in partnership name by
authorized person. In the case of joint
ownership, each joint owner must sign.
