UNITED STATES
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Controlled Environment Aquaculture Technology, Inc.
(Name of Registrant as specified in its charter)
Payment of Filing Fee (Check the Appropriate Box):
[ X ] No Fee Required.
Controlled Environment Aquaculture Technology, Inc.
1000 Bishop Street, Suite 303
Honolulu, Hawaii 96813
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held Friday, September 22, 2000
The 2000 Annual Meeting of Shareholders of Controlled
Environment Aquaculture Technology, Inc. (the "Company"), a
Colorado corporation, will be held on Friday, September 22, 2000 at
10:00 a.m., local time, at the Waimea Plantation Cottages located at
9400 Kaumualii, Kauai, Hawaii 96796 to act on the following
matters:
1. To elect five directors to serve for the ensuing year and
until their successors are elected; and
2. To approve the Company's Stock Compensation Plan; and
3. To ratify the appointment of Carpenter, Kuhen &
Sprayberry of Oxnard, California, as the Company's
independent certified public accountants for the fiscal year
ended January 31, 2001; and
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
These matters are more fully described in the Proxy Statement
accompanying this Notice.
Only shareholders of record at the close of business on August
8, 2000 are entitled to notice of and to vote at the 2000 Annual
Meeting and any adjournment thereof.
All shareholders are cordially invited to attend the meeting in
person. Any shareholder attending the meeting may vote in person
even if the shareholder has previously returned a proxy.
By Order of the Board of Directors
Ronald W. K. Yee
Corporate Secretary
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND
THE 2000 ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED
PROXY IN THE ENVELOPE PROVIDED.
Controlled Environment Aquaculture Technology, Inc.
1000 Bishop Street, Suite 303
Honolulu, Hawaii 96813
Proxy Statement for
2000 Annual Meeting of Shareholders
The enclosed Proxy is solicited on behalf of Controlled
Environment Aquaculture Technology, Inc., (the "Company") for use
at the 2000 Annual Meeting of Shareholders (the "Annual Meeting")
to be held on Friday, September 22, 2000, at 10:00 a.m., local time,
and at any adjournment thereof, for the purposes set forth herein and
in the accompanying Notice of Annual Meeting of Shareholders.
The Annual Meeting will be held at Waimea Plantation
Cottages located at 9400 Kaumualii, Kauai, Hawaii 96796. The
Company's principal executive office is located at 1000 Bishop Street,
Suite 303, Honolulu, Hawaii 96813. The Company's telephone
number is (808) 550-4977.
These proxy solicitation materials were mailed on or about
August 22, 2000, to all shareholders entitled to vote at the Annual
Meeting. A copy of the Company's Report on Form 10-KSB for its
fiscal year ended January 31, 2000 accompanies this Proxy Statement.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date
Shareholders of record at the close of business on August 8, 2000 (the
"Record Date") are entitled to notice of the meeting and to vote at the
meeting. As of the Record Date, 4,355,450 shares of the Company's
Common Stock (the "Common Stock") were issued and outstanding
and entitled to vote at the Annual Meeting. No shares of Preferred
Stock were issued and outstanding as of the Record Date.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the
Secretary of the Company a written notice of revocation or a duly
executed proxy bearing a later date or by attending the meeting and
voting in person.
Voting and Solicitation
Every shareholder voting for the election of directors is entitled to one
vote for each share of Common Stock held for each of the five
directors to be elected. Holders of Common Stock do not have the
right to cumulate their votes in the election of directors. On all other
matters, each share of Common Stock is likewise entitled to one vote
on each proposal or item that comes before the meeting.
Votes cast by proxy or in person at the Meeting will be tabulated by
the Company's Corporate Secretary, which will serve as the Inspector
of Elections (the "Inspector"). The Inspector will also determine
whether or not a quorum is present. In general, the affirmative vote of
a majority of shares present in person or represented by proxy at a
duly held meeting at which a quorum is present is required under
Colorado law for approval of proposals presented to shareholders. The
Company's Articles of Incorporation provide that a quorum consists
of one-third of the shares of each voting group entitled to vote and
present or represented by proxy at the meeting.
Any proxy that is returned using the form of proxy enclosed and that
is not marked as to a particular item will be voted for the election of
all of the Company's director nominees named herein, for approval of
the Company's Stock Compensation Program, for ratification of the
appointment of the designated independent certified public
accountants, and as the proxy holders deem advisable on other matters
that may properly come before the meeting. If a broker indicates on
the enclosed proxy or its substitute that it does not have discretionary
authority as to certain shares to vote on a particular matter ("broker
non-votes"), those shares will not be considered as present with
respect to that matter.
The Inspector will treat express abstentions as shares that are present
and entitled to vote for purposes of determining the presence of a
quorum, but will not treat express abstentions as votes in favor of
approving any matter submitted to shareholders for a vote.
The Company believes that the tabulation procedures to be followed
by the Inspector are consistent with the general statutory requirements
in Colorado concerning voting of shares and determination of a
quorum.
The cost of this solicitation will be borne by the Company. The
Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners. Certain of
the Company's directors, officers, and employees, without additional
compensation, also may solicit proxies personally or by telephone,
letter or facsimile.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
The Company anticipates that the 2001 Annual Meeting of
Stockholders will be held in September 2001. Therefore, proposals of
stockholders of the Company which are intended to be presented by
such stockholders at the Company's 2001 Annual Meeting of
Stockholders must be received by the Company no later than April
30, 2001 (approximately 120 days before the meeting), in order to be
considered for inclusion in the proxy statement and form of proxy
relating to that meeting.
PRINCIPAL SHARE OWNERSHIP
The Record Date for purposes of determining the shareholders entitled
to vote at the Annual Meeting was August 8, 2000. As of the Record
Date, the Company had a total of 4,355,450 shares of Common Stock
and 2,760,149 Class A Common Stock Purchase Warrants ("Class A
Warrants") issued and outstanding. The Company has given notice of
cancellation of the Class A Warrants effective September 18, 2000.
The following table sets forth information, as of August 8, 2000, with
respect to the beneficial ownership of the Company's common stock
by: (i) each stockholder known by the Company to be the beneficial
owner of more than 5% of the Company's common stock; (ii) each
director; (iii) named executive officers; and (iv) all current named
executive officers and directors as a group:
<TABLE>
<CAPTION>
Name and Amount and Nature of Percent
Address Beneficial Ownership of Class
<S> <C> <C>
Unity House Inc. 600,000 13.78%
444 Hobrun Lane
Honolulu, HI 96815
John Chen 538,500 12.36%
2137 Kahala Circle
Castle Rock, CO 80104
J. A. Garcia & 405,500 9.31%
Ruth E. Garcia
16105 Woodvale Road
Encino, CA 91436
Ernest K. Dias 300,000 6.89%
3375 Koapaka St, Ste. H402
Honolulu, HI 96819
Hibiscus Investments,
Inc. (1) 280,000 6.43%
9010 Miramar Road, Suite 100
San Diego, CA 92126
Ronald L. Ilsley 150,000 3.44%
1014 Riverside Dr
Burbank, CA 91506
Gordon J. Mau 148,000 3.40%
1000 Bishop Street, Suite 303
Honolulu, HI 96813
Charles S. Spira 74,000 1.70%
2700 Neilson Way, Apt 1721
Santa Monica, CA 90405
Directors and
named executive officers
as a group (5 persons) 1,210,500 27.79%
</TABLE>
(1) The Company has issued two 7.75% convertible subordinated
debentures totalling $1,000,000 to Hibiscus Investments, Inc. Such
debentures entitle the holder to convert the debenture, together with
accrued but unpaid interest thereon, into fully paid shares of Common
Stock. The conversion price is $1.00 per share. This table does not
include shares issuable upon conversion of the debentures.
(2) The foregoing table does not take into account 1,224,000 shares
that may be acquired by the named directors upon exercise of
outstanding Class A Common Stock Purchase Warrants that will be
canceled by the Company effective September 18, 2000. Such Class A
warrants constitute "restricted securities" as that term is defined in
Rule 144 under the Securities Act of 1933, and accordingly, may not
be sold or transferred by the holders thereof in the absence of an
effective registration statement or an opinion of counsel satisfactory to
the Company that a proposed transfer does not violate applicable
securities laws.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and the
holders of 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of equity securities of the Company.
To the best knowledge and belief of the Company, each of the
directors, officers or beneficial owners of more than 10% of the
Company's securities named herein has filed all reports required to be
filed by Section 16(a) of the Securities Exchange Act of 1934.
PROPOSAL ONE
ELECTION OF DIRECTORS
A board of five (5) directors is to be elected at the Annual Meeting of
Shareholders. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the Company's five nominees named
below, three of whom are presently directors of the Company. In the
event that any nominee of the Company is unable or declines to serve
as a director at the time of the meeting, the proxies will be voted for
any nominee who shall be designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominee will
be unable or will decline to serve as a director. The term of office of
each person elected as a director will continue until the next Annual
Meeting of Shareholders or until a successor has been elected and
qualified.
<TABLE>
<CAPTION>
Principal Director
Name of Nominee Age Occupation Since
<S> <C> <C> <C>
John Chen 41 President, Plum Creek Villages 1998
Ernest K. Dias 61 President, Chief Operating Officer
and Director 1997
Gordon J. Mau 52 Chairman, Board of Directors 1998
Anthony Rutledge President, Unity House, Inc.
Shinichiro Watari 53 Chairman, Hibiscus Investments, Inc.
</TABLE>
Mr. Chen has been a member of the Board of Directors since 1998.
Mr. Chen serves as President and Owner of Plum Creek Golf &
Country Club and Plum Creek Villages, a 500-acre residential
community surrounding the golf course in Castle Rock, Colorado,
where he is also a member of various local economic development
organizations. Mr. Chen also serves as President and Owner of
Carlton Oaks Golf & Country Club located in Santee, California.
Mr. Dias has been President, Chief Operating Officer and a Director
of the Company since 1997. From 1988 to 1997, he was Manager of
Facilities Development and Construction for The Oceanic Institute in
Honolulu, Hawaii. Mr. Dias holds a bachelor of science degree in
Engineering from San Jose State University.
Mr. Mau has been Chairman of the Board of Directors since October
1999 and a member of the Board since 1998. Mr. Mau is a practicing
attorney in Hawaii specializing in real estate and serves as an officer
and/or director of various organizations including Hawaii National
Bank, Overseas Investors, Inc., Henry H. Wong Foundation and the
Waialae Country Club, among others. Mr. Mau is a graduate of
Lafayette College (B.A. Economics) and New York Law School
(J.D.).
Mr. Rutledge is President and Chief Executive Officer of Unity
House, Inc. Mr. Rutledge has over 30 years experience in labor union
management, real estate investments and trust fund administration. In
addition, Mr. Rutledge served as the Financial Secretary-Treasurer of
the Hotel Employees and Restaurant Employees Union in Hawaii from
1986 to 2000. Mr. Rutledge also serves as a member of the Board of
various Hawaii-based organizations.
Mr. Watari is Chairman of Hibiscus Investments, Inc., a major
shareholder and investor in the Company. Mr. Watari is also
President and Chief Executive Officer of Cornes & Co., Ltd. (Japan
and Hong Kong), Chairman of Quicksilver Connections, Ltd.
(Australia) and Chairman of Pacific World (Holdings) Ltd. (Hong
Kong). Mr. Watari holds both a Bachelor of Arts and Master of
Architecture degrees from Washington University in St. Louis,
Missouri. He also attended the Program for Management
Development at Harvard Business School and the Executive Training
Program at Chase Manhattan Bank, New York.
Board Meetings and Committees
The Board of Directors of the Company held six formal meetings
during the fiscal year ended January 31, 2000. All incumbent
directors attended at least 80% of the Board meetings held, either in
person or telephonically.
The Board of Directors has both an audit committee and a
compensation committee, each of which included the same three
members, Messrs. Ilsley, Spira and Mau, for the fiscal year ended
January 31, 2000. These committees did not have any meetings
during the last fiscal year.
Compensation of Directors
The Board of Directors does not currently have a plan to compensate
members for their attendance at Board meetings, but they are
reimbursed for expenses actually incurred in connection with attending
meetings of the Board of Directors.
During the fiscal year ended January 31, 2000, no executive officer
received compensation in excess of $100,000 for service rendered in
all capacities to the Company and no officer or director held any stock
options, or received any other form of non-cash compensation.
The Company had no employment contracts with any of its officers or
directors during the fiscal year ended January 31, 2000. In addition,
the Company's directors do not receive any cash compensation for
service on the Board of Directors, but are reimbursed for expenses
actually incurred in connection with attending meetings of the Board
of Directors.
Vote required; Recommendation of the Board of Directors
With respect to the election of directors, the five candidates receiving
the highest number of "for" votes shall be elected to the Company's
Board of Directors. An abstention will have the same effect as a vote
withheld for the election of directors, and a broker non-vote will not
be treated as voting in person or by proxy on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE NOMINEES SET FORTH HEREIN.
PROPOSAL TWO
APPROVAL FOR THE COMPANY'S STOCK COMPENSATION
PROGRAM
The Stock Compensation Program ("Program") adopted by the Board
of Directors on August 16, 2000 and recommended for shareholder
approval, is intended to provide an incentive to executive officers,
directors, employees, independent contractors or agents of the
Company who are responsible for or contribute to the management,
growth and/or profitability of the Company. The purpose of granting
options to such persons under the Program is to attract them to
consider employment with or service to the Company, to encourage
their continued employment or service, and to give them incentive to
provide their best efforts to the Company for purposes of enhancing
shareholder value.
A total of up to 1,000,000 shares of the Company's common stock
has been reserved for the implementation of the Program, either
through the issuance of options to eligible persons in the form of
incentive stock options or non-statutory options, or by issuance of
restricted shares which are subject to restricted property treatment
under Section 83 of the Internal Revenue Code. The Program is to be
administered by a committee of not less than two members of the
Board of Directors appointed by the full Board, and the Program has
a term of ten years, unless sooner terminated by the Board.
It will be the responsibility of the committee administering the
Program to make decisions regarding when and whether to grant
options or issue restricted shares to particular persons. In connection
with the granting of options, the committee also will be responsible in
each case for decisions regarding the type of option to be granted and
the specific terms and conditions of the option, including the exercise
price, vesting schedule, number of shares, exercise term and other
like matters. The committee also will be required to determine when
and whether to issue restricted shares in lieu of granting options, and
upon the issuance of restricted shares, to establish the conditions that
would result in the vesting or forfeiture of such shares.
Any options granted by the committee under the Incentive Stock
Option portion of the Program will be subject to applicable statutory
restrictions that have been incorporated into the Program. For
example, the exercise price of any options granted under the Incentive
Stock Option portion of the Program generally must be not less than
100% of the fair market value of the Company's stock on the date of
the grant of option. In addition, the aggregate fair market value of
incentive stock options exercisable by any one optionee during any
particular calendar year may not exceed $100,000.
Incentive Stock Options may only be granted to persons who are
employees of the Company, and they must include provisions that
allow them to be exercised for only a limited period of time following
either the voluntary termination of employment of the optionee, or the
involuntary termination of employment due to death, disability or
retirement. In addition, persons who own more than 10% of the
outstanding voting stock of the Company are not eligible to receive
incentive stock options under the plan unless the exercise price is at
least 110% of the fair market value of the Company's stock on the
date of the grant of options, and such options are not exercisable for a
period of more than five years after the date of the grant.
Options granted by the committee under the Nonqualified Stock
Option portion of the Program are not required to be subject to the
same statutory restrictions as options granted under the Incentive
Stock Option portion of the Program. As a result, the committee will
have broad discretion to establish the specific terms and conditions of
any nonqualified option it elects to grant under this portion of the
Program.
Under the Restricted Share portion of the Program, the committee
may elect to issue restricted shares of stock, rather than options, to
recipients. Any shares issued under this portion of the Program will
be subject to restrictions on transfer and such additional terms and
conditions concerning vesting and forfeiture as the committee may
determine.
Options granted under either the Incentive Stock Option or
Nonqualified Stock Option portions of the Program would not be
assignable or transferable. Similarly, restricted shares issued under the
Restricted Share portion of the Program will not be available for sale,
pledge, assignment or transfer in any manner during whatever
restricted period the committee may elect to establish at the time of
issuance of such shares.
As of the date of this Proxy Statement, the Board has not yet
appointed a committee to administer the Program. No options have
been granted, and no restricted shares have been issued under the
Program.
Vote Required; Recommendation of the Board of Directors
Approval of the adoption of the Stock Compensation Program will
require the affirmative vote of a majority of the shares represented, in
person or by proxy, and voting at the Annual Meeting, which shares
voting affirmatively also constitute at least a majority of the required
quorum. In the event the shareholders do not approve the adoption of
the Stock Compensation Program, the Board of Directors will
reconsider the plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF ADOPTION OF THE STOCK COMPENSATION
PROGRAM.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Carpenter, Kuhen and
Sprayberry, independent certified public accountants, to audit the
financial statements of the Company for the fiscal year ending January
31, 2001. Carpenter, Kuhen and Sprayberry has audited the
Company's financial statements for the previous three fiscal years. A
representative of Carpenter, Kuhen and Sprayberry is expected to be
present at the meeting, will have the opportunity to make a statement,
and is expected to be available to respond to appropriate questions.
Vote Required; Recommendation of the Board of Directors
The Board of Directors has conditioned its appointment of the
Company's independent certified public accountants upon receipt of
the affirmative vote of a majority of the shares represented, in person
or by proxy, and voting at the Annual Meeting, which shares voting
affirmatively also constitute at least a majority of the required
quorum. In the event the shareholders do not approve the selection of
Carpenter, Kuhen and Sprayberry, the Board of Directors will
reconsider the appointment of the independent certified public
accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THIS PROPOSAL.
OTHER MATTERS
The Company knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, it is
the intention of the persons named in the enclosed proxy to vote the
shares they represent as the Company may recommend.
THE BOARD OF DIRECTORS
Honolulu, Hawaii
August 22, 2000
