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
[ ] 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 Sections 240.14a-11(c) or Section 240.14a-
12
SAFESCIENCE, INC.
(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)(4) 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>
PROXY
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
SAFESCIENCE, INC.
June 29, 1999
_________________________________________ }
Name(s) of Stockholder(s)
_________________________________________ }
This Proxy is solicited by the Board of Directors.
The undersigned hereby appoints B. David Sandberg, counsel to the Company, as
proxy with power of substitution to vote the shares of stock of SAFESCIENCE,
INC. which the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held on June 29, 1999 at I p.m., and at any adjournment
thereof, as follows:
1. Election of Directors ___ For all nominees (except as
marked below to the contrary:)
Bradley J. Carver __
David Platt __
David Dube __
Richard A. Salter __
Theodore J. Host __
Brian G.R. Hughes __
___ Withhold authority to vote for all nominees
2. Selection of Auditors ___ For selection of Arthur Andersen LLP as
independent auditors for 1999
___ Withhold such approval
3. Amendment of Articles ___ For approval of amendment of the Company's
Articles of Incorporation to increase
authorized common shares from
25,000,000 to 100,000,000
___ Withhold such approval
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR QUESTIONS 1, 2 AND 3 LISTED ABOVE.
In his discretion, the proxy is authorized to vote upon such other business as
may lawfully come before the meeting. The undersigned hereby revokes any proxies
as to said shares heretofore give by the undersigned and ratifies and confirms
all that said proxy may do by virtue hereof.
When this Proxy is properly executed, the shares to which the Proxy relates will
be voted as specified, and if no other specification is made, will be voted for
all nominees for Directors, for selection of Arthur Andersen LLP as independent
auditors. It is understood that this Proxy confers discretionary authority in
respect of matters not known or determined at the time of mailing of the Notice
of Annual Meeting of Stockholders to the undersigned. The proxy intends to vote
the shares represented by this Proxy on such matters, if any, as determined by
the Board of Directors.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders furnished herewith.
Dated and signed: _________________1999
------------------------------------------
------------------------------------------
[NOTE: These signature(s) should agree
exactly with the name(s) printed at the
beginning of this Proxy. Executors,
administrators, trustees, guardians and
attorneys should so indicate when
signing]
THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
<PAGE>
SAFESCIENCE, INC.
31 ST. JAMES AVENUE, SUITE 520
BOSTON, MA 02116
(617) 422-0674
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 29, 1999
Notice is hereby given that the Annual Meeting of Stockholders of
SafeScience, Inc. (the "Company") will be held at the Park Plaza Hotel, 64
Arlington Street, Boston, Massachusetts, on Tuesday, June 29, 1999 at I p.m.
Eastern daylight time.
The Annual Meeting will be held for the following purposes:
1. Election of Directors. Election of directors of the Company
by holders of Common Stock.
2. Ratification of Auditors. Ratification of the appointment
of Arthur Andersen LLP as auditors for the Company for the fiscal year
ending December 31, 1999.
3. Amendment of Articles. For approval of amendment of the
Company's Articles of Incorporation to increase the number of the
Company's authorized common shares from 25,000,000 to 100,000,000.
4. Other Business. Such other matters as may properly come
before the meeting or any adjournment thereof.
Stockholders of record at the close of business on May 18, 1999 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
We urge you to read the enclosed Proxy Statement carefully so that you
may be informed about the business to come before the meeting, or any
adjournment thereof. At your earliest convenience, please sign and return the
accompanying proxy in the postage-paid envelope furnished for that purpose.
A copy of our Annual Report for the fiscal year ended December 31, 1998
is enclosed. The Annual Report is not a part of the proxy soliciting material
enclosed with this letter.
By Order of the Board of Directors
_____________________________________
Boston, Massachusetts David Platt, Chairman
May 31, 1999 and Chief Executive Officer
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE,
WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE
SIGN, DATE AND COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
SAFESCIENCE, INC.
31 ST. JAMES AVENUE, SUITE 520
BOSTON, MA 02116
(617) 422-0674
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1999
This Proxy Statement is being furnished to the holders of Common Stock,
$.01 par value per share (the "Common Stock"), of SafeScience, Inc. (the
"Company"), a Nevada corporation, in connection with the solicitation of proxies
by the Board of Directors of the Company to be voted at the 1999 Annual Meeting
of Stockholders to be held at 1 p.m., Eastern daylight time, on Tuesday, June
29, 1999, at the Park Plaza Hotel, 64 Arlington Street, Boston, Massachusetts,
and at any adjournment of such meeting. This Proxy Statement is expected to be
mailed to stockholders on or about May 31, 1999.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained herein. If no contrary instructions are given, each proxy
received will be voted for each of the matters described below and, upon the
transaction of such other business as may properly come before the meeting, in
accordance with the best judgment of the persons appointed as proxies.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (31 St. James Avenue, Suite 520, Boston, MA 02116), (ii)
submitting a duly executed proxy bearing a later date, or (iii) by appearing at
the Annual Meeting and giving the Secretary notice of his or her intention to
vote in person. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournment thereof and will not be used for any other meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record at the close of business on May 18, 1999
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 15,046,656 shares of the Common Stock issued and
outstanding. Each share of Common Stock is entitled to one vote on all matters
properly presented at the Annual Meeting.
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of the Voting Record Date, by each
person who is known by the Company to own beneficially more than 5% of the
Company's outstanding securities. Unless otherwise indicated, the named
beneficial owner has sole voting and dispositive power with respect to the
shares reported.
<PAGE>
Number of Shares of Common
Name, Stock, and Address Stock Beneficially Owned at Percentage Beneficially
of Beneficial Owner Voting Record Date (1) Owned (1)
- --------------------------------------------------------------------------------
David Platt (2) 2,959,550 19.7%
Bradley Carver (2) 2,557,686 17.0%
(1) The Information presented with respect to stock ownership and related
percentage information is based on Common Stock as a percentage of the
aggregate number of shares of Common Stock outstanding. The number of
shares of Common Stock outstanding, 15,046,656, does not include shares
issuable upon exercise of warrants or certain outstanding stock options
or shares reserved for issuance pursuant to the Company's 1996 Stock
Option Plan or its 1998 Stock Option Plan or shares issuable upon
exercise of options which will become exercisable upon attainment by
the Company of certain pre-determined milestones.
(2) The business address of Dr. Platt and Mr. Carver is c/o SafeScience,
Inc., 31 St. James Avenue, Suite 520, Boston, MA 02116.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's By-Laws provide that a plurality of the votes cast at the
Annual Meeting of stockholders shall elect a Board of Directors. Directors are
elected for one-year terms and serve until the next annual meeting of
stockholders and until their successors are elected or until their death,
resignation or removal. Currently, the Board of Directors has six members, all
of whom will be elected at the Annual Meeting. The nominees for director are
Bradley J. Carver, David Dube, Theodore J. Host, Brian G.R. Hughes, Dr. David
Platt and Richard A. Salter.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees named above. If any
person named as a nominee should be unable or unwilling to stand for election at
the time of the Annual Meeting, the proxy holders will nominate and vote for a
replacement nominee recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why the nominees listed above may not be
able to serve as directors if elected.
The following table sets forth certain information regarding the
nominees for election as a director including the number and percent of shares
of the Company's voting securities beneficially owned by such persons as of the
Voting Record Date. No nominee for director is related to any other nominee for
director or executive officer of the Company by blood, marriage, or adoption,
and there are no arrangements or understandings between any nominee and any
other person pursuant to which such nominee was selected. The table also sets
forth the number of shares of the Company's voting securities beneficially owned
by each executive officer of the Corporation and by all directors and executive
officers of the Company as a group.
<PAGE>
<TABLE>
NUMBER OF SHARES OF PERCENTAGE
COMMON STOCK BENEFICIALLY
NAMES OF OFFICERS DIRECTOR OF COMPANY BENEFICIALLY OWNED AT OWNED (1)
AND DIRECTORS SINCE VOTING RECORD DATE
Director Nominees
- -----------------
<S> <C> <C> <C>
David Platt 1995 2,959,550 19.7%
Bradley Carver (2) 1995 2,557,686 17.0%
David Dube (2)(3) 1998 8,000 (4)
Richard Salter 1998 253,300 (5) 1.7%
Theodore Host (3) 1998 8,000 (4)
Brian Hughes (2)(3) 1998 20,500 (4)
Other Executive
- ---------------
Officers
- --------
Richard Daoust 2,500 (6)
All directors, executive
- ------------------------
officers and nominees
- ---------------------
for directors as a group
- ------------------------
(7 persons) 5,803,536 38.6%
Less than 1%.
(1) The information presented with respect to stock ownership and related
percentage information is based on Common Stock as a percentage of the
aggregate number of shares of Common Stock outstanding. The number of
shares of Common Stock outstanding, 15,046,656, does not include shares
issuable upon exercise of warrants or of certain outstanding stock
options or reserved for issuance pursuant to the Company's 1996 Stock
Option Plan or its 1998 Stock Option Plan or shares issuable upon
exercise of options which will become exercisable upon attainment by
the Company of certain pre-determined milestones.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Includes shares issuable upon the exercise of options which were
granted to such individual upon election as a director which have
vested as of the Voting Record Date or will vest within 60 days
thereafter. Excludes 12,000 shares issuable upon the exercise of
options to purchase Common Stock which will not vest within 60 days
after the Voting Record Date.
(5) Excludes shares issuable upon the exercise of options to purchase
Common Stock which have not vested as of the Voting Record Date or
within 60 days thereafter. Such options vest at the rate of 5,000
shares per month until July, 1999. Mr. Salter's contract also provides
for the grant of additional options upon the Company's achievement of
certain milestones. 10,000 of such options have vested and been
exercised as of the Voting Exercise Date. In addition, such number of
shares excludes 100,000 shares issuable upon the exercise of options
that will vest in January, 2000.
(6) Excludes shares issuable upon the exercise of options to purchase
Common Stock which have not vested as of the Voting Record Date or
within 60 days thereafter.
</TABLE>
<PAGE>
Dr. Platt, 45, has been the Chief Executive Officer, Secretary and
Chairman of the Board of Directors since March 1995 and has been the Chief
Executive Officer, Secretary and the Chairman of the Board of Directors of
International Gene Group, Inc. ("IGG"), the Company's wholly-owned subsidiary
for the development of human therapeutics since December 1992. Dr. Platt has
been Chief Executive Officer, Secretary and Chairman of the Board of Directors
of SafeScience Products, Inc., a wholly owned subsidiary of the Company since
its inception on June 23, 1995. Dr. Platt received a Doctor of Philosophy degree
(1989), Masters of Science degree (1983), and Bachelor of Science degree (1978)
from the Hebrew University of Jerusalem, Israel and a Bachelor of Engineering
degree (1980) from Technion, Haifa, Israel.
Mr. Carver, 37, has been President, Chief Financial Officer, Treasurer
and a member of the Board of Directors of the Company since March 1995 and has
been the President, Chief Financial Officer, Treasurer and a member of the Board
of Directors of IGG since February 1993. Mr. Carver has been President, Chief
Financial Officer, Treasurer and a member of the Board of Directors of
SafeScience Products, Inc., a wholly owned subsidiary of the Company since its
inception on June 23, 1995. From June 1992 to October 1994, Mr. Carver has been
a consultant with Cyrowski and Associates, which is engaged in the business of
commercial real estate. From March 1991 to October 1994, Mr. Carver has been a
consultant with Circuit Master, Inc., a Michigan corporation, which is an
electronics design and engineering firm engaged in the production of audio power
amplifiers. Mr. Carver received a Bachelor of Arts degree in management from
Michigan State University in 1983.
Mr. Dube, 42, has been a director of the Company since May, 1998. Mr.
Dube has been a Senior Vice President, Investment Banking with RAS Securities
Corporation since March, 1998, specializing in early stage financings, strategic
financial planning and advisory services relating to mergers, acquisitions,
capital formation and restructuring for private and public companies and was
previously, from September, 1997 to February, 1998, a project finance consultant
to the firm. Mr. Dube has been the President and Chief Executive Officer of
Optimax Industries, Inc., a publicly traded company with interests in the
horticultural, decorative giftware and truck part accessories industries from
July, 1996 to September, 1997. From February, 1991 to June, 1996, Mr. Dube had
been the principal of Dube & Company, a financial consulting firm. Mr. Dube
serves on the boards of directors of publicly traded Helmstar Group, Inc., a
merchant banking firm and privately-held Meyers Capital Management, LLC, a
registered investment advisory firm. Mr. Dube is a Certified Public Accountant
in the state of New Hampshire.
Mr. Salter, S6, has been a director of the Company since December, 1998
and the Company's Executive Vice President since January, 1998. Prior thereto,
Mr. Salter was the Company's Vice President -Corporate Development from June,
1997 through January, 1998 and served the Company as a consultant from June,
1996 through July, 1997. Prior thereto, from 1989 through 1996 Mr. Salter
rendered consulting services in the areas of sales and marketing to a variety of
small businesses and companies. From 1971 to 1989, Mr. Salter was co-founder and
Senior Vice President of International Weekends, a travel and leisure company
which was the most profitable charter vacation company in the United States,
with $250,000,000 in annual revenues and 600 employees. Mr. Salter is a graduate
of the Boston University School of Law.
Mr. Host, 53, has been a director of the Company since December, 1998.
From 1991 through 1996 Mr. Host was the President and Chief Operating Officer,
and later Chief Executive Officer, of The Scotts Company. Prior thereto, Mr.
Host was Senior Vice President - Marketing for Coca-Cola, USA in Atlanta,
Georgia from 1990 to 1991. From 1967 through 1990 Mr. Host held a variety of
positions with American Home Products, a $14 billion company involved primarily
in the health care industry.
Mr. Hughes, 44, has been a director of the Company since December,
1998. Mr. Hughes is president-select of the Association of Alumni and Alumnae of
the Massachusetts Institute of Technology (MIT). Since 1978 Mr. Hughes has held
a variety of positions with the MIT Corporation, the board which governs MIT.
From 1989 through 1995 Mr. Hughes was Vice Chairman and then CEO of American
Rocket Company, which worked to develop and commercialize safe, clean, low cost
hybrid rocket propulsion. Prior thereto, from 1984 through 1989, he was
co-founder and Executive Vice President of PTAT System Inc., which co-built a
private, transatlantic fiber optic cable system. PTAT System Inc. was sold to
Sprint in August, 1989. Prior thereto, from 1982 through 1984 Mr. Hughes was
Senior Vice President of U.S. Aviation Underwriters, Inc. in Washington, DC.
Dr. Daoust joined the Company as its Vice President - Agriculture in
February, 1999. From 1997 to 1999 Dr. Daoust was the cofounder of BioSolutions
International, Inc., a start-up biotechnology company. Prior thereto, from 1985
through 1997, Dr. Daoust held a variety of positions with Ecogen Inc., an
agricultural biotechnology company specializing in the development and sale of
naturally-occurring and genetically modified biologically-based pesticides. Such
positions included Director for International Marketing and Distribution and
General Manager of Ecogen Europe. Prior thereto, from 1978 through 1985 Dr.
Daoust was a research scientist, host-country coordinator and postdoctoral
research fellow at the Boyce Thompson Institute at Cornell University in Ithaca,
New York and in Goias, Brazil.
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1998, the Board of Directors
of the Company met once in addition to taking a number of actions by unanimous
written consent. During fiscal year 1998, no incumbent director of the Company
attended fewer than 85% of the aggregate of the total number of Board meetings.
The Board has an Audit Committee, consisting of Mr. Carver, Mr. Dube and Mr.
Hughes. The Audit Committee held no meetings during 1998. The board also has a
Compensation Committee, consisting of Mr. Dube, Mr. Host and Mr. Hughes. The
Compensation Committee held no meetings during 1998.
DIRECTOR COMPENSATION
Directors who are not also employees of the Company receive a
non-qualified option to purchase 20,000 shares of Common Stock, which vests over
two consecutive one-year terms. Such options vest and become exercisable as
follows: Options to purchase 4,000 shares become exercisable at the time the
optionee becomes a director; and options to purchase an additional 2,000 shares
become exercisable at the end of each full calendar quarter thereafter. After
the expiration of such two one-year terms, each director may be granted options
to purchase additional shares for subsequent periods of service. The exercise
price with respect to all options granted to directors will be the average
closing bid price of the Common Stock during the twenty trading days prior to
the date of grant. Such options will be exercisable for a period of ten years
from the date of grant. All vesting of options will cease at such time as any
optionee ceases to be a non-employee director of the Company for any reason, and
any options theretofore granted which have not vested will be cancelled and
forfeited to the Company.
THE DIRECTORS WILL BE ELECTED UPON RECEIPT OF A PLURALITY OF ALL VOTES
CAST BY HOLDERS OF COMMON STOCK AT THE ANNUAL STOCKHOLDERS MEETING.
<PAGE>
PROPOSAL 11 -- RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors recommends the ratification by the stockholders
at the Annual Meeting of the appointment of Arthur Andersen LLP as independent
auditors for the fiscal year ended December 31, 1999. A representative of Arthur
Andersen LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he or she so desires. He or she will also be
available to respond to any appropriate questions stockholders may have.
RATIFICATION OF THE APPOINTMENT OF AUDITORS REQUIRES THAT THE VOTES
CAST (IN PERSON OR BY PROXY) AT THE ANNUAL MEETING OR AT ANY ADJOURNMENT THEREOF
IN FAVOR OF RATIFICATION EXCEED THOSE CAST AGAINST.
PROPOSAL III -- AMENDMENT OF ARTICLES OF INCORPORATION
The Company's Articles of Incorporation (the "Articles") presently
provide that the Company's authorized capital stock consists of 25,000,000
shares of Common Stock, of which 14,291,160 are issued and outstanding as of the
Voting Record Date, and 5,000,000 shares of Preferred Stock, of which none are
issued and outstanding as of the Voting Record Date. The Board proposes to amend
the Articles to increase the number of authorized shares of Common Stock from
25,000,000 to 100,000,000.
The Board believes that, as a result of the Company's plans to expand
its sales and distribution channels, its commencement of Phase II FDA clinical
testing for its human therapeutic product, GBC-590, its aggressive pursuit of
additional licensing and technology opportunities and its forecasted increase in
its general and administrative expenses, the Company will have cash requirements
during the upcoming twelve to eighteen months which it may wish to meet through
the issuance of additional capital stock. While the Board has authority to issue
stock which is authorized, only the stockholders of the Company may increase the
Company's authorized capital. Therefore, in order to be able to provide for the
Company's capital needs for the foreseeable future, the Board has determined to
increase the number of the Company's authorized shares of Common Stock from
25,000,000 to 100,000,000 shares. Such increase must be effected by an amendment
to the Company's Articles of Incorporation. There will be no change in the
number of authorized shares of Preferred Stock.
The Board of Directors recommends that the Stockholders vote for
amendment of the Articles.
ADOPTION OF THE AMENDMENT REQUIRES THAT THE VOTES CAST (IN PERSON OR BY
PROXY) AT THE ANNUAL MEETING OR AT ANY ADJOURNMENT THEREOF IN FAVOR OF ADOPTION
EXCEED THOSE CAST AGAINST.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued during
1998 and 1997 for services rendered during such period by the chief executive
officer, the president, and the senior vice president (the "named executive
officers"). No other executive officer of the Company had aggregate compensation
from the Company exceeding $100,000 in 1998.
<PAGE>
ANNUAL COMPENSATION
Position Year Salary
-------- ---- ------
David Platt, Ph.D., Chairman and 1998 $119,000
Chief Executive Officer 1997 $106,000
Bradley Carver, President and 1997 $119,000
Chief Financial Officer 1998 $104,000
Richard A. Salter 1998 $671,988 (1)
Executive Vice President 1997 $139,781 (2)
(1) Mr. Salter's salary was paid in the form of 190,000 shares of Common
Stock of the Company valued at $671,988. Mr. Salter did not receive any
cash compensation from the Company.
(2) Mr. Salter's salary was paid in the form of 30,000 shares of Common
Stock of the Company valued at $139,781. Mr. Salter did not receive any
cash compensation from the Company. In addition, prior to becoming an
employee of the Company, he received 30,000 shares of Common Stock as a
consultant and exercised options to purchase 57,500 shares of Common
Stock at $0.01 per share which were granted in 1996. The value of the
87,500 shares issued to Mr. Salter as a consultant during 1997 totaled
$281,938.
Option Grant Table. The following table set forth certain information
regarding options granted during the year ended December 31, 1998 to the named
executive officers.
<TABLE>
OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1998
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO EXERCISE ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES OR BASE PRICE APPRECIATION FOR
OPTIONS IN FISCAL PRICE EXPIRATION OPTION TERM (1)
NAME GRANTED (#) YEAR ($/SH.) DATE -----------------
- ---- ----------- ------ ------- ------ 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Richard A. Salter 300,000 81.98% $0.01 (2) 1/2/03 $1,093,012 $1,348,963
(1) These columns show the hypothetical gains or option spreads of the
options granted based on the fair market value of the Common Stock on
the date of grant and assumed annual compound share appreciation rates
of 5% and 10% over the full term of the options. The assumed rates of
appreciation are mandated by the SEC and do not represent the Company's
estimate or projection of future share prices. Actual gains, if any, on
option exercises will depend on the timing of such exercise and the
future performance of the Common Stock. Values are net of the option
exercise prices, but do not include deductions for taxes or other
expenses associated with the exercise.
(2) The Common Stock underlying the options granted to Mr. Salter had a
market price of $3.50 per share on the date of grant; because the
underlying securities were "restricted stock", such price was
discounted by 20% to reach a market value of $2.80 per share.
</TABLE>
Year-end Option Table. The following table set forth certain
information regarding options exercised during the year ended December 31, 1998
and options exercised during the year ended December 31, 1998 by the named
executive officers.
<TABLE>
AGGREGATE OPTION EXERCISES AS OF DECEMBER 31, 1998
AND YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED VALUE UNDERLYING UNEXERCISED IN THE MONEY
ON REALIZED OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END (2)
NAME EXERCISE ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Salter 190,000 $671,988 0 200,000 0 $800,000
(1) The values in this column represent the reported low/bid price (less,
in the case of options to purchase "restricted stock", a 20% discount)
on the respective dates of exercise, less the respective option
exercise prices.
(2) Value is based on the low/bid price (discounted by 20%) of the Common
Stock on December 31, 1998 ($5.00), the last trading of the Company's
1998 fiscal year, less the applicable option exercise price.
</TABLE>
CERTAIN TRANSACTIONS WITH MANAGEMENT AND STOCKHOLDERS
During 1998, the Company issued 1,560,163 shares of Common Stock for
cash consideration of $5,729,892 less associated expenses of $198,420. These
shares include 181,818 shares issued pursuant to an offering under Regulation S
for a total purchase price of $500,000. Also included in this amount are 146,000
shares sold in the first half of 1998, for an aggregate purchase price of
$438,000, in a private placement commenced in the fall of 1997, which private
placement resulted in the issuance of a total (during 1997 and 1998) of 679,867
shares of Common Stock for total consideration of $2,039,601, before expenses.
The stock offered in the 1997-1998 private placement has warrants attached
allowing the purchaser to purchase one additional share, for a purchase price of
$4.75, for every four shares purchased. All such warrants expire five years from
the date of issue, or earlier in the event the market price of the Company's
Common Stock reaches and remains at $11.00 for thirty consecutive trading days.
Also included in this amount are 406,206 shares sold in a private placement in
the third quarter of 1998, for an aggregate purchase price of $1,625,176; an
additional 646,918 shares sold in a private placement in the end of the third
and the beginning of the fourth quarter of 1998, for an aggregate purchase price
of $2,161,744; and 179,222 shares sold in a private placement commenced in
December 1998, for an aggregate purchase price of $806,500.
In January, 1998, the Company amended its employment agreement with
Richard Salter to grant Mr. Salter the title of Senior Vice President. In
connection with such amendment, the Company agreed to issue Mr. Salter options
to purchase up to 300,000 shares of Common Stock for a purchase price of $0.01
per share. Such options have a term of ten years and vest and become exercisable
in equal installments of 100,000 shares each on the first business day of the
years 1998, 1999 and 2000, provided that Mr. Salter is then employed by the
Company in a position of Senior Vice President or a substantially similar
position. All such options are in addition to those which Mr. Salter is entitled
to receive under the terms of his employment contract with the Company, which
provides that at the conclusion of each month of employment with the Company,
until July, 1999, Mr. Salter shall be issued non-qualified options to purchase
5,000 Shares, of which 2,500 Shares shall be "unrestricted" stock which is
registered pursuant to the Company's registration on Form S-8, and the balance
of 2,500 Shares shall be "restricted" stock which is not so registered. The term
of such options is also ten years and they bear an exercise price of $0.01 per
share. In addition, pursuant to an agreement with the Company, Mr. Salter is
entitled to receive additional options upon the occurrence of certain events. As
of the Voting Record Date, 10,000 of such options have vested and been
exercised.
<PAGE>
The following graph compares the cumulative total return to
shareholders of Common Stock of the Company from September 30, 1995 through
December 31, 1998 to cumulative total return of the NASDAQ Stock Market Index
and the NASDAQ Pharmaceutical index for the same period of time. The Company
does not believe any other published industry of line-of-business index
adequately represents the current operations of the Company or that it can
identify a peer group that merits comparison. The graph assumes $100 is invested
in the Company's stock and in each of the two indexes at the closing market
quotations on September 30, 1995 and that dividends are reinvested. The
performances shown on the graph are not necessarily indicative of future price
performance.
[GRAPH]
9/95 12/95 12/96 12/97 12/98
SAFESCIENCE, INC. $100 $215 $169 $223 $323
NASDAQ STOCK MARKET (U.S.) $100 $101 $124 $152 $215
NASDAQ PHARMACEUTICAL $100 $117 $117 $121 $154
<PAGE>
STOCKHOLDER PROPOSALS
Any proposal that a stockholder wishes to have presented at the next
Annual Meeting of the Company anticipated to be held in June 2000 must be
received at the main office of the Company for inclusion in the proxy statement
no later than 120 days in advance of April 30, 2000. Any such proposal shall be
sent to the attention of the Secretary of the Company at 31 St. James Avenue,
Suite 520, Boston, MA 02116.
FILINGS UNDER SECTION 16(A) OF THE 1934 ACT
Section I 6(a) of the Securities Exchange Act of 1934, as amended,
requires that the Company's officers and directors and persons who own more than
10% of the Company's Common Stock file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section I 6(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that during the fiscal
year ended December 31, 1998, all forms applicable to its officers, directors
and greater than 10% beneficial owners with respect to Section 16(a) of the 1934
Act were filed.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described in the Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that the proxies solicited hereby will be voted with respect to
those other matters in accordance with the judgment of the persons voting the
proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to the beneficial owners of the Common Stock. In addition to solicitation by
mail, directors, officers, and employees of the Company may solicit proxies
personally or by telephone without additional compensation.
Each stockholder is urged to complete, date and sign the proxy and
return it promptly in the enclosed return envelope.
Insofar as any of the information in the Proxy Statement may rest
peculiarly within the knowledge of persons other than the Company, the Company
relies upon information furnished by others for the accuracy and completeness
thereof.
By Order of the Board of Directors,
/s/ David Plattw
------------------------------------
David Platt, Chairman
and Chief Executive Officer
May 31, 1999
