SCHEDULE 14A
(Rule(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to SectionPROXY STATEMENT PURSUANT TO SECTION 14(a) of the Securities
Exchange Act ofOF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No.(AMENDMENT NO. )
Filed by the Registrant [ x ]
Filed by a Party other than the RegistrantFILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[ x ] Preliminary Proxy StatementCHECK THE APPROPRIATE BOX:
[X] PRELIMINARY PROXY STATEMENT
[ ] Definitive Proxy StatementDEFINITIVE PROXY STATEMENT
[ ] Definitive Additional MaterialsDEFINITIVE ADDITIONAL MATERIALS
[ ] Soliciting Material Pursuant to RuleSOLICITING MATERIAL PURSUANT TO RULE 14a-11(c) or RuleOR RULE 14a-12
FIBERCHEM, INC.
(Name of Registrant as Specified In Its Charter)
None
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NONE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[ x ] No fee required.[X] NO FEE REQUIRED.
[ ] Fee computed on table below per Exchange Act RulesFEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14a-6(i)(1) andAND 0-11.
(1) Title of each class of securities to which transaction applies:TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
(2) Aggregate number of securities to which transaction applies:AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act RulePER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION
COMPUTED PURSUANT TO EXCHANGE ACT RULE 0-11:(1)
(4) Proposed maximum aggregate value of transaction:PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
(5) Total fee paid:TOTAL FEE PAID:
[ ] Fee paid previously with preliminary materials:FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act RuleCHECK 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.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:AMOUNT PREVIOUSLY PAID:
(2) Form, Schedule or Registration Statement No.FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
(3) Filing Party:FILING PARTY:
(4) Date Filed:DATE FILED:
- ---------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.SET FORTH THE AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE
HOW IT WAS DETERMINED.
FCI FiberChem, Inc. A Delaware Corporation
1181 Grier Drive, Suite B, Las Vegas, NV 89119
(702) 361-9873[LETTERHEAD]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
AUGUST 10, 1998
To the Stockholders of FiberChem, Inc.NOVEMBER 29, 2000
TO THE STOCKHOLDERS OF FIBERCHEM, INC.:
You are cordially invited to attend the Annual Meeting of the
Stockholders (the "Annual Meeting"YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING OF THE
STOCKHOLDERS (THE "ANNUAL MEETING") of FiberChem, Inc.OF FIBERCHEM, INC., which will be held
at the Company's offices, 1181 Grier Drive, Suite B, Las Vegas, Nevada at("FIBERCHEM" OR
THE "COMPANY") WHICH WILL BE HELD AT THE DOUBLETREE CLUB HOTEL, 7250
POLLOCK DRIVE, LAS VEGAS, NEVADA AT 10:00 a.m.A.M., Pacific time, on August 10, 1998, to consider and act upon the
following matters:PACIFIC TIME, ON
NOVEMBER 29, 2000, TO CONSIDER AND ACT UPON THE FOLLOWING MATTERS:
(1) To elect three (3) Class A members, three (3) Class B
members and two (2) Class C members to the Board of
Directors to hold
office for a three-year term and until their successors are duly
elected and qualified.Directors. The personsmembers nominated by the Board of
Directors (Messrs. Gerald T. Owens and Byron A. Denenberg) are described in the accompanying Proxy
Statement.
(2) To renew authorization to effect a reverse stock split of the
Company's Common Stock.
(3) To consider and act upon a proposal to amend the
Company's Certificate of Incorporation to increase
the number of authorized shares of Common Stock of
the Company, $.0001 par value ("Common Stock"), by one hundred (100) millionfrom
150,000,000 to 500,000,000 shares of common stock.Common Stock.
(3) To approve an amendment to the Company's Certificate
of Incorporation authorizing a change of the
Company's name to "DecisionLink, Inc."
(4) To approve and adopt the 2000 Stock Option Plan for
the Company.
(5) To ratify the appointment of Goldstein Golub Kessler
& Company,
P.C.LLP as the Company's auditors for the fiscal year endingyears
ended September 30, 1998.
(5)1999 and September 30, 2000.
(6) To transact such other business as may properly come
before the Annual Meeting or any adjournments
thereof.
The additional shares of Common Stock authorized in item 2 above would
be used in part for issuance upon conversion or exchange of securities issued to
acquire Intrex Data Communications Corp., a British Columbia corporation
("Intrex"). An explanation of the business combination with Intrex which was
completed on July 27, 2000 is set forth in Exhibit A attached hereto. The change
in the Company's name to DecisionLink, Inc. is also being proposed to carry out
a requirement of the Intrex business combination agreement. The new name
reflects the wider scope of the combined companies activities.
Only stockholders of record at the close of business on June 30, 1998,October 5,
2000, will be entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof.
i
Stockholders are cordially invited to attend the Annual Meeting.
Whether or not you expect to attend the Annual Meeting in person, please
complete, date and sign the accompanying proxy card and return it without delay
in the enclosed postage prepaid envelope. Your proxy will not be used if you are
present and prefer to vote in person or if you revoke the proxy.
Dated: July __, 1998October 10, 2000
BY ORDER OF THE BOARD OF DIRECTORS,
MELVIN W. PELLEY, SECRETARY
iii
FIBERCHEM, INC.
1181 GRIER DRIVE, SUITE B
LAS VEGAS, NEVADA 89119
(702) 361-9873
-------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 10, 1998NOVEMBER 29, 2000
These proxy materials are furnished in connection with the solicitation
of proxies by the Board of Directors of FiberChem, Inc., a Delaware corporation
(the("FiberChem" or the "Company"), for use at the Fiscal 19971998 and1999 Annual
Meeting of Stockholders of the Company and for any adjournment or adjournments
thereof (the "Annual Meeting"), to be held at the Company's offices, 1181 GrierDoubleTree Club Hotel, 7250
Pollock Drive, Suite B, Las Vegas, Nevada at 10:00 a.m., Pacific time, on August 10,
1998,November 29,
2000, for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. A Board of Directors' proxy (the "Proxy") for the Annual Meeting
is enclosed, by means of which you may indicate your votes as to each of the
proposals described in this Proxy Statement. All Proxies which are properly
completed, signed and returned to the Company prior to the Annual Meeting, and
which have not been revoked, will be voted in accordance with the stockholder's
instructions contained in such Proxy.
The affirmative vote by holders of a majorityplurality of the Common Stock and
Preferred Stock voting together representedvotes cast for
the election of directors at the Annual Meeting is required for the election of
Directors, for the approvalDirectors. The affirmative vote of a majority of all outstanding shares of
common stock and all of the proposal to authorize
a reverse stock split ofoutstanding shares with voting rights including the Company's
Common Stock, for amendingSeries A, Pandel Series, and Special Series preferred stock
(collectively, the "Voting Securities") is necessary to amend the Company's
Certificate of Incorporationincorporation to increase the number of authorized shares of
Common Stock of the Company, $.0001$0.0001 par value ("Common Stock"), by
one hundred (100) millionfrom
150,000,000 to 500,000,000 shares of common stockCommon Stock. The affirmative vote of a
majority of all Voting Securities is necessary approve an amendment to the
Certificate of Incorporation authorizing a change of the Company's name to
"DecisionLink, Inc." The affirmative votes of a majority of the shares present
in person or by proxy at the Annual Meeting and entitled to vote is required for
ratifyingapproval of the Company's 2000 Stock Option Plan and to ratify the appointment
of Goldstein Golub Kessler, & Company, P.C.LLP as the Company's auditors.auditors for the fiscal years
ended September 30, 1999 and September 30, 2000.
Directors and Officers of the Company beneficially own approximately 11.5%48.7% of the
outstanding Voting Securities. In the absence of contrary instructions, shares
represented by such Proxy will be voted FOR the election of the nominees for
Directors as set forth herein, FOR the
ratification of the authorization of the reverse stock split, FOR the amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock of the
Company, FOR an amendment to the Company's Certificate of Incorporation
authorizing a change of the Company's name to "DecisionLink, Inc", FOR adoption
of the 2000 Stock Option Plan and FOR the ratification of the appointment of the
Company's auditors for the fiscal year
endingyears ended September 30, 1998.1999 and September
30, 2000. Shares represented by proxies which are marked "abstain" for Proposals
2, 3, 4, and 45 on the proxy card and proxies which are
marked to deny discretionary authority on all other matters will not be included in the vote totals, and
therefore will have nothe effect on theof a negative vote. In addition, where brokers
are prohibited from exercising discretionary authority for beneficial owners who
have not provided voting instructions (commonly referred to as "broker
non-votes"), those shares will not be included in the vote totals.
-1-
The Board of Directors does not anticipate that any of its nominees will be
unavailable for election and does not know of any other matters that may be
brought before the Annual Meeting. In the event that any other matter shall come
before the Annual Meeting or any nominee isthe nominees are not available for election, the
persons named in the enclosed Proxy will have discretionary authority to vote
all Proxies not marked to the contrary with respect to such matter in accordance
with their best judgment.
A stockholder may revoke his Proxy at any time before it is exercised
by filing with the Secretary of the Company at its executive offices in Las
Vegas, Nevada, either a written notice of revocation or a duly executed Proxy
bearing a later date, or by appearing in person at the Annual Meeting and
expressing a desire to vote his or her shares in person. All costs of this
solicitation are to be borne by the Company.
A list of stockholders entitled to vote at the Annual Meeting will be
open to examination by any stockholder, for any purpose genuinegermane to the meeting,
at the executive offices of the Company, 1181 Grier Drive, Suite B, Las
-1-
Vegas,
Nevada 89119, during ordinary business hours for ten days prior to the Annual
Meeting. Such list shall also be available during the Annual Meeting.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders, the Proxy, the 19971999 Annual Report to Stockholders, and the
Quarterly Report on Form 10-QSB for March 31, 1998June 30, 2000, are expected to be mailed
commencing on or about July __, 1998October 10, 2000 to stockholders of record on June 30,
1998.October 5,
2000 (the "Record Date").
VOTING SECURITIES
June 30, 1998, has been fixed as the record date for the determination
of stockholdersThe securities entitled to notice of and to vote at the Annual Meeting or
any adjournment or adjournments thereof. Asannual meeting
consist of that date, the Company had
outstanding 26,014,707 shares ofCompany's Common Stock, $.0001 par value and
218,998 shares of$.0001 per share, which is
entitled to one vote per share; the Series A Preferred Stock, or an aggregate of 28,204,687 voting
securities (the "Voting Securities") outstanding. Holders of Preferred Stock
havepar value $.01 per
share, which is entitled to ten votes per share ofshare; the Company's preferred stock
designated as Special Shares, which is entitled to 100 votes per share; and the
Company's Convertible Preferred Stock, held and Common Stockholders have
one votePandel Series, which is entitled to 100
votes per shareshare. All holders of the Common Stock held, upon all mattersand the classes of preferred
stock possessing voting power vote together as a single class, except where an
additional class vote of the Common Stock or a class or series of preferred
stock may be required by law. Under Delaware law, a class vote of the Common
Stock is required to approve the proposal to amend the certificate of
incorporation to increase the authorized number of common shares from
150,000,000 shares to 500,000,000 shares.
The following table sets forth as of the Record Date, October 5, 2000,
the number of shares of voting securities of each class outstanding, the number
of votes entitled to be considered at
the Annual Meeting. Holders of Preferred Stock vote together withcast by the holders of Common Stock as oneeach class of voting securities,
the percentage of the total voting power represented thereby and the total
number of votes entitled to be cast by the holders of all voting securities:
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
Total number
Shares of Percentage
Title of Class Outstanding votes of votes
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
Common Stock, par value $.0001 per share (1 vote per 66,069,634 66,069,634 19.53%
share)
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
Series A preferred stock, par value $.01 per share (ten 207,848 2,078,480 *
votes per share)
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
-2-
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
Special Shares, par value $.01 per share (100 votes per 1,803,473 180,347,300 58.44%
share)
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
Pandel Series Preferred Stock, par value $.01 per share 675,282.22 67,528,222 21.36%
(100 votes per share)
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
Total 316,023,636 100%
- ----------------------------------------------------------- ----------------------- ---------------- ---------------
- ----------------
* Less than 1%
Directors and officers of the Company who own voting securities
entitled to cast 153,982,104 (48.7%) votes at the annual meeting have indicated
that they will cast all of their votes in favor of the election of management's
nominees for director and in favor of Proposals 2,3,4 and 5. These directors and
officers include Geoffrey F. Hewitt, Melvin W. Pelley, David S. Peachey, and
Peter J. Lagergren who have entered into a voting agreement under which they
have agreed, until July 27, 2002, to cast their votes in accordance with the
recommendation of the Board of Directors on all matters submitted to
a vote of
stockholders, except where a class vote of Preferred Stockholders may be
required by law.stockholders.
The following table sets forth certain information concerning those
persons known to the Company, based on information obtained from such
persons,as of September 25,
2000 with respect to the beneficial ownership (as such term is defined in Rule
13d-3 under the Securities Exchange Act of 1934) of shares of Common
Stock, $.0001 par value,each class of the
CompanyCompany's voting securities by (i) each person known by the Company to be the
owner of more than 5% of the outstanding shares of Common
Stock,voting securities of any
class, (ii) each nominee and Director of the Company, (iii) each executive
officer named in the Summary Compensation Table and (iv) all Officers and
Directors as a group:
- ---------------------------------------------------------------------------------------------------------------------
Percentage of
Name and Address Amount and Nature of Percentagevotes entitled
of Beneficial Owner Beneficial OwnershipOwnership(% of class) (1) of Class (2)to be cast(2)
------------------- ------------------------------------ ----------
- -------------------- ------------------------ ---------------------------------------------------------------------------------------------------------------------------------
Geoffrey F. Hewitt (3) 1,946,311 shares Common Stock (2.9%)(4) *
- ---------------------------------------------------------------------------------------------------------------------
David S. Peachey 17.7%
1500 West Georgia St., Suite 1400
Vancouver, British Columbia 56,018,224 shares Common Stock (45.9%)(5)
V6G 2Z6 560,182 shares special stock (31.1%)
- ---------------------------------------------------------------------------------------------------------------------
Melvin W. Pelley (3) 2,316,489 shares of Common Stock (3.4%)(6) *
- ---------------------------------------------------------------------------------------------------------------------
Peter J. Lagergren 18.8%
3033 Kellway Drive, Suite 118 59,493,464 shares Common Stock (47.4%)(7)
Carrollton, TX 75006 594,934.64 shares Pandel Series Stock (88.1%)
- ---------------------------------------------------------------------------------------------------------------------
Thomas A. Collins (3) 509,962 shares Common Stock (*)(8) *
- ---------------------------------------------------------------------------------------------------------------------
Brian O'Neil 5.8%
1102-1425 West 6th Avenue 18,384,023 shares Common Stock (21.4%)(9)
- ---------------------------------------------------------------------------------------------------------------------
-3-
- ---------------------------------------------------------------------------------------------------------------------
Vancouver, British Columbia 183,840 shares special stock(10.2%)
V6G 4H5
- ---------------------------------------------------------------------------------------------------------------------
Walter Haemmerli 3,749,844(5) 13.2%1.4%
Manport AG
Basteiplatz 3, CH 8001 6,589,659 shares Common Stock (9.4%)(10)
Zurich, Switzerland Gerald T. Owens 226,823(6) (4)
147 Paddington Way
San Antonio, TX 78209168,872 shares of Series A Preferred Stock (81.3%)
- ---------------------------------------------------------------------------------------------------------------------
Irwin J. Gruverman 300,470(7) 1.2%*
30 Ossipee Road 1,153,235 shares Common Stock (1.7%)(11)
Newton, MA 02164 8,161 shares of Series A Preferred Stock (3.9%)
- ---------------------------------------------------------------------------------------------------------------------
Trevor S. Nelson 3.4%
575 Main Street, Suite 201 10,856,652 shares Common Stock (14.1%)(12)
Penticton B.C., Canada V2A 5C6 108,566 shares special stock (6.0%)
- ---------------------------------------------------------------------------------------------------------------------
Byron A. Denenberg 190,000(8) (4)*
RCT Systems, Inc.
327 Messner Drive 1,730,476 shares Common Stock (2.6%)(13)
Wheeling, IL 60090
Geoffrey F. Hewitt (3) 576,429(9) 2.2%
-2-
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership (1) of Class (2)
- -------------------- ------------------------ ------------
Melvin W. Pelley (3) 293,863(10) 1.2%
Thomas A. Collins (3) 175,000(11) (4)---------------------------------------------------------------------------------------------------------------------
All Directors and Officers of 48.7%
FiberChem as 5,512,429 18.3% a Group (7(10 persons) 158,998,495 shares Common Stock (73.1%)(14)
852,588 shares special stock (47.3%)
594,934.64 shares Pandel Series Stock
(88.1%)
- ---------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------
* Represents less than one percent.
(1) Unless otherwise noted, the CompanyFiberChem believes that all persons named in the
table have sole investment power with respect to all shares of Common Stockvoting securities
beneficially owned by them. A person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the date
hereof upon the exercise of warrants, options or optionsother rights or upon the
conversion of convertible securities. Each beneficial owner's percentage
ownership of any class of voting securities is determined by assuming that
options, or warrants or shares of Convertible
Preferred Stockother rights or convertible securities that are held by
such person (but not those held by any other person) and which are exercisable
or convertible within 60 days from the date hereof have been exercised or
converted.
(2) Based on 26,014,707the total number of votes entitled to be cast and the number of
shares issued andof Voting Securities outstanding as of June 18, 1998.on the record date.
(3) The address of this person is c/o FCI Environmental, Inc., 1181 Grier Drive,
Suite B, Las Vegas, Nevada 89119.
(4) Represents less than one percent ownership.
(5) Includes 32,000 Class D Common Stock Purchase Warrants, 3,586 shares of
Convertible Preferred Stock convertible into 35,860 shares of Common Stock,
and an aggregate of 29,000765,000 shares of Common Stock issuable upon
exercise of a like number of options. Also includes 704,000159 shares of Common Stock
held by Mr. Hewitt's minor child.
-4-
(5) Includes 10,209,006 shares of Common Stock issuable in exchange for a like
number of Intrex Class B Shares and 36,912,602 common shares issuable in
exchange for a like number of Intrex Class B Shares upon the occurrence of
certain events. Also includes 2,410,983 shares of Common Stock issuable in
exchange for a like number of Intrex Class B Shares owned by Estero Capital
Corp. and 6,485,633 shares of Common Stock issuable in exchange for a like
number of Intrex Class B Shares owned by Estero Capital Corp. upon the
occurrence of certain events. Mr. Peachey is the sole stockholder of Estero
Capital Corp.
(6) Includes an aggregate of 530,000 shares of Common Stock issuable upon
exercise of a like number of options and 555,958 shares of Common Stock issuable
upon conversion of $65,000 in Convertible 9% Notes.
(7) Includes 13,561,700 shares of Common Stock issuable upon conversion of
135,617 shares of Pandel Series Preferred Stock and 45,931,764 common shares
issuable upon conversion of 459,317.64 shares of Pandel Series Preferred Stock
upon the occurrence of certain events.
(8) Includes an aggregate of 395,000 shares of Common Stock issuable upon
exercise of a like number of options.
(9) Includes 9,418 shares of Common Stock issuable in exchange for a like number
of Intrex Class B Shares and 25,334 common shares issuable in exchange for a
like number of Intrex Class B Shares upon the occurrence of certain events. Also
includes 4,972,652 shares of Common Stock issuable in exchange for a like number
of Intrex Class B Shares owned by Pentland Resources Ltd., a Barbados
corporation, and 13,376,619 shares of Common Stock issuable in exchange for a
like number of Intrex Class B Shares owned by Pentland Resources Ltd. upon the
occurrence of certain events. Mr. O'Neil is the beneficiary of a trust that owns
99% of the voting stock of Pentland Resources Ltd., however, such trust has no
power to vote or dispose of the securities. A second trust has the power to
appoint the sole director of Pentland Resources Ltd.. Mr. O'Neil does not have
the power to control said second trust. The securities are deemed beneficially
owned by the reporting person by reason of Rule 16a-8(a)(3). Mr. O'Neil
disclaims beneficial ownership for any other purpose.
(10) Includes 32,000 Class D Common Stock Purchase Warrants, 3,586 shares of
Series A Convertible Preferred Stock convertible into 35,860 shares of Common
Stock, an aggregate of 125,000 shares of Common Stock issuable upon exercise of
a like number of options, $156,000 of Senior Convertible 8% notes convertible
into 678,261 shares of Common Stock held by Manport AG, of which company Mr.
Haemmerli is Chief Executive Officer, and a $50,000 9% note convertible into
384,615 shares of Common Stock. Also includes 1,582,500 shares of Common Stock,
863,800 Class D Common Stock Purchase Warrants, and 165,286 shares of Series A
Convertible Preferred Stock convertible into 1,652,860 shares of Common Stock,
all held by Privatbank Vermag A.G., Chur Switzerland, as custodian for certain
customers, of which company Mr. Haemmerli is Vice-Chairman.
Also includes $150,000 of Senior Convertible 8% notes convertible into
367,824 shares of Common Stock held by Manport AG, of which company Mr.
Haemmerli is Chief Executive Officer.
(6)(11) Includes 39,965 Class D Common Stock Purchase Warrants and an aggregate of 82,000 shares of Common Stock issuable upon exercise of a like number of
options.
(7) Includes 66,880164,000 shares of Common Stock issuable upon
exercise of a like number of options. Also includes 67,500430,770 shares of Common
Stock, held by G&G
Diagnostics, L.P. I, 48,2008,161 shares of Series A Convertible Preferred Stock, convertible into
81,610 shares of Common Stock, and a $50,000 note convertible into 384,615
shares of Common Stock held by G&G Diagnostics, L.P. II, and 8,161 shares of Convertible Preferred Stock convertible into
81,610 shares of Common Stock held by G&G Diagnostics, L.P. III, all of which Mr. Gruverman
is a principal.
(8)(12) Includes an aggregate of 58,1422,942,153 shares of Common Stock issuable upon
exercise ofin exchange for a like
membernumber of options.
(9)Intrex Class B Shares and 7,914,499 common shares issuable in exchange
for a like number of Intrex Class B Shares upon the occurrence of certain
events.
-5-
(13) Includes an aggregate of 486,247138,142 shares of Common Stock issuable upon
exercise of a like number of options.
(10)(14) Includes an aggregate of 75,000all shares of Common Stock issued and issuable upon
exercise of a like number of options.
(11) Includes an aggregate of 175,000 shares of Common Stock issuable upon
exercise of a like number of options.as described in
Notes 4 -13 above.
-6-
PROPOSAL 11: ELECTION OF DIRECTORS
Pursuant to Section 2 of Article III of the Company's By-Laws, as
amended, the Board of Directors is divided into three classes, each of which is
to be elected for staggered three-year terms.terms subject to phase in terms of two
years for the Class B and one year for the Class C Directors to be elected at
the meeting. The Company's Board of Directors currently -3-
has five (5)eight (8) Directors,
three (3) of which are to be elected as Class A Directors, three (3) as Class B
Directors and two (2) of which are to be elected as Class C Directors at the Annual
Meeting to hold office, subject to the provisions of the Company's By-Laws, for
a three-yearstaggered term and until their successors arehis successor is duly elected and qualified. The
twoClass A nominees are Geoffrey F. Hewitt, David S. Peachey and Irwin J.
Gruverman. The Class B nominees are Peter J. Lagergren, Brian A. O'Neil and
Walter Haemmerli. The Class C nominees (thenominee is Trevor S. Nelson (collectively the
Class A, B and C Nominees are the "Nominees") are
Gerald T. Owens and Byron A. Denenberg, who have served as Directors since
1987 and 1995, respectively. Of the. The remaining three (3) membersmember of the
Board of Directors, one (1)Byron A. Denenberg, a Class C Director, was elected in
May 1996August of 1998 for his respective three-year term. There is one vacancy on the
Board for A Class C Director to be mutually agreed to by Geoffrey F. Hewitt and
two (2) were elected in June
of 1997 for their respective staggered terms with the ending date of their
terms of office set forth below.David Peachey.
It is intended that the accompanying form of Proxy will be voted FOR
the election as Directors of the two (2) Nominees named below, unless the Proxy contains
contrary instructions. Proxies which direct the Proxy holders to abstain and do
not direct the Proxy holders to vote for or withhold authority in the matter of
electing Directors will be voted for the election of the two
(2) Nominees named below.
Proxies cannot be voted for a greater number of persons than the number of
nominees named in the Proxy Statement.
Management has no reason to believe that any of the NomineesNominee will not be a
candidate or will be unable to serve. However, in the event that any of the
NomineesNominee should
become unable or unwilling to serve as a Director, the Proxy will be voted for
the election of such person or persons as shall be designated by the Directors.
The following persons are currently serving as Directors of the Company
for their respective staggered terms withincluding the ending date of their terms of
directorship set forth below, including Messrs. Owens and Denenbergseven Directors who are
nominees for re-election for a new three-year term.Nominees:
Name Age Position Term
- ------------------- --- ---------------------------- ----------NAME AGE POSITIONS WITH OUR COMPANY TERM
----------------------------- ------- ---------------------------------- ----------------------------------
Geoffrey F. Hewitt 55 President,56 Chairman, Chief Executive
May 2000
Officer, and Class A Director Walter Haemmerli 682000-2003
David S. Peachey 56 President, Chief Operating
Officer, Class A Director 2000-2003
Irwin J. Gruverman 66 Class A Director 2000-2003
Peter J. Lagergren 53 Executive Vice President and
Group President Communications
Technology Division and Chief
Technology Officer, Class B
Director May 1999
Gerald T. Owens2000-2002
Brian A. O'Neil 54 Executive Vice President,
Corporate Development, Class B
Director 2000-2002
-7-
Walter Haemmerli 71 Class B Director 2000-2002
Trevor S. Nelson 37 Class C Director July 1998
Irwin J. Gruverman 64 Class A Director May 20002000-2001
Byron A. Denenberg 6365 Class C Director July 1998
The names, ages and respective positions of the Executive Officers and
Directors of FCI Environmental, Inc. ("Environmental"), a wholly-owned
subsidiary of the Company, are as follows:
Name Age Position
- ------------------- --- ----------------------------
Geoffrey F. Hewitt 55 Chairman of the Board of Directors, Chief
Executive Officer and Director
Thomas A. Collins 51 President and Director
-4-
Melvin W. Pelley 53 Chief Financial Officer and Secretary of
the Company and Chief Financial Officer,
Secretary and Director1998-2001
GEOFFREY F. HEWITT has served as Chairman of the Board of Directors
since November
14, 1997, and as President and Chief Executive Officer of the Company as well as Chief Executive Officer of FCI Environmental since August
1995.April 1998. Mr.
Hewitt was appointed as a Director of the Company on September 11, 1996. He has
also served as a Director of FCI Environmental since April 1994 and as its
President from April 1994 to November 1996. He served1996 and as its Chairman and Chief
OperatingExecutive Officer of FCI Environmental from April 1994 tosince August 1995. Prior thereto, from 1977 until March 1994,
Mr. Hewitt served as Vice President of worldwide sales and marketing for H.N.U.
Systems, Inc., a manufacturer of environmental and material analysis
instrumentation.
DAVID S. PEACHEY has served as President, Chief Operating Officer and
Director of the Company since July 27, 2000. He has served as a director of
Intrex since October 1994 and as President and Chief Executive Officer of Intrex
since July 1997. Since 1992, he has also served as President of Estero Capital
Corp., a private investment company, which participates in investment and
administration of industrial and high-tech based companies.
IRWIN J. GRUVERMAN has served as Director of the Company since May
1994. Since 1990, Mr. Gruverman has served as the General Partner for G&G
Diagnostics Funds, a venture capital business, and in 1982 founded and currently
serves as Chairman of the Board of Directors and Chief Executive Officer of
Microfluidics Corporation, an equipment manufacturer and process research and
development company.
PETER J. LAGERGREN has served as Director, President of the
Communication Technology Division and Chief Technology Officer of the Company
since July 27, 2000. He has served as an Officer and Director of Intrex since
December 1994, and as President of Firebird Data Communications, Inc., now a
subsidiary of Intrex, since 1992. Until 1997 and for more than five years prior
thereto, Mr. Lagergren was also President of Pandel Instruments, Inc. a company
engaged in the development, production and marketing of intelligent flow meters,
satellite interface programs, mapping programs for tracking ships, fuel
management systems, tank measuring devices, and communications software. Pandel
Instruments, Inc. is now a subsidiary of FiberChem.
BRIAN A. O'NEIL has served as Executive Vice President and a Director
of the Company since July 27, 2000. Mr O'Neil has served as a director of Intrex
since July 1997 and as its Vice President since July 1999. From 1996 to 1999 Mr.
O'Neil was a Director of, and from 1996 to 1997 was Chief Executive Officer of
Foreword Demonstrations Inc., Vancouver, BC, an Internet software development
company specializing in the delivery of travel products to the on-line consumer.
Mr. O'Neil also served as a consultant to Intravelnet.com Inc., an Internet and
timeshare travel club sales organization from 1997 to 1999. From 1976 to 1995
Mr. O'Neil was founder and Chief Executive Officer of Fiorucci Fashions Ltd., a
leading New Zealand
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garment distributor. Mr. O'Neil is a director of Paravision Technologies, Inc.
Mainsbourne Communications, Inc., and Atex Garments, Ltd..
WALTER HAEMMERLI has served as a Director of the Company since February
1990. Mr. Haemmerli has been the Chief Executive Officer since 1978 of Manport
AG, Zurich, Switzerland, an investment management company owned by him. Mr.
Haemmerli was employed by Union Bank of Switzerland, Geneva, Basel and Zurich
from 1960 to 1978, holding the position of Vice President from 1970. Mr.
Haemmerli serves on the Board of Directors and is Vice-Chairman of Privatbank
Vermag AG, Chur, Switzerland, and is a Member of the Board of Directors forof
American Cold Storage, Inc., Louisville, Kentucky.
GERALD T. OWENSTREVOR S. NELSON has served as a Director of the Company since December
1987. Mr. Owens served with Mobil Oil from 1962 to 1983 when he retired. At
retirement, he was President of Mobil Sales and Supply Corporation, a
wholly-owned subsidiary of Mobil Oil, and he was a Vice President of Mobil
Oil. From 1951 to 1961, Mr. Owens practiced law with the law firm of Andrews
and Kurth in Houston, Texas. Mr. Owens received an L.L.B. degree from the
University of Texas in 1950 and a B.A. degree in history in 1948 from the
University of Texas.July 27,
2000. He serves as Chairman of the Board of Trustees for the
Kenny Stout Memorial Golf Foundation, and as a member of the Board of
Trustees for the Monterey Institute of International Studies.
IRWIN J. GRUVERMAN has served as a Director of the CompanyIntrex since May
1994. Since 1990,January 1996 and as Corporate
Secretary of Intrex since July, 1997. Mr. GruvermanNelson is a Chartered Accountant and
since 1994 he has served as the General Partner for G&G
Diagnostics Funds,managing partner of The Stewart Thomas Group of
Penticton, British Columbia, an independent financial planning company of which
he was a venture capital business, and in 1982 founded and
currently servesfounder. Mr. Nelson has also served as Chairman ofa member on the Board of
Directors and Chief Executive
Officer of Microfluidics Corporation, an equipment manufacturer and process
research and development company.Schmitt Industries, Inc. of Portland, Oregon since 1991.
BYRON A. DENENBERG has served as a Director of the Company since August
1995. Mr. Denenberg has beenis a private investor since 1991.Managing Partner of K B Partners, LLC, a venture
capital firm specializing in early-stage technology investments. Mr. Denenberg
was co-founder in 1969 of MDA Scientific, Inc. ("MDA"), a manufacturer and
marketer of toxic gas monitoring systems, where he was CEO from inception until
1991. MDA was purchased by ZwellwegerZellweger Uster AG in 1988. Mr. Denenberg received a
B.S. degree in Mechanical Engineering from Bucknell University, Lewisburg,
Pennsylvania. He currently serves as a Director of RCT Systems, Inc., and Orbit
Commerce, Inc. Mr. Denenberg was Chairman of MST Measurement Systems, Inc., FPM Analytics, Inc., until its
merger with ATMI, Inc. in November 1999.
The following are the names, ages and Microsensor
Technologies, GmbH.
MELVIN W. PELLEY has beenrespective positions of the Chief Financial Officer and Secretaryexecutive
officers of the Company, since April 1994 and has been Chief Financial Officer and
Secretary of FCI Environmental since June 1993. Prior thereto, from 1988 he
was Vice President of Finance and Administration of Acoustic Imaging
Technologies Corporation, Phoenix, Arizona, a manufacturer of diagnostic
ultrasound medical equipment. From 1983 to 1988 he was Director of Costs,
Financial Planning and Analysis of Advanced Technology Laboratories, Inc.,
Bothell, Washington, which manufactures and markets real-time ultrasound
medical equipment. From 1977 to 1983, Mr. Pelley was Chief Financial and
Administrative Officer for Advanced Diagnostic Research Corporation, Tempe,
Arizona, a designer, manufacturer and marketer of diagnostic ultrasound
medical equipment.who are not directors:
THOMAS A. COLLINS has served as President of the Sensor Division since
July 27, 2000, President of FCI Environmental since November 1996, and as Vice
President of International Marketing and Product Development from March 1996 to
November 1996. Prior thereto, from 1992, he was Director of International Sales
and Product Marketing of Arizona Instrument Corporation, a
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manufacturer of
environmental and control instrumentation; from 1990 to 1992 he was Director of
Marketing of Wayne Division, Dresser Industries, Inc., a manufacturer of
dispensing equipment for the gasoline industry; from 1986 to 1989 he was Manager
of Domestic Retail Marketing for Diebold, Inc., a manufacturer of transaction
terminals in the petroleum retailing market; and from 1968 to 1986 he held
marketing and engineering positions at ARCO Petroleum Products Co.
MELVIN W. PELLEY has been the Chief Financial Officer and Secretary of
the Company since April 1994. Prior thereto, from 1988 he was Vice President of
Finance and Administration of Acoustic Imaging Technologies Corporation,
Phoenix, Arizona, a manufacturer of diagnostic ultrasound medical equipment.
From 1983 to 1988 he was Director of Costs, Financial Planning and Analysis of
Advanced Technology Laboratories, Inc., Bothell, Washington, which manufactures
and markets real-time ultrasound medical diagnostic equipment. From 1977 to
1983, Mr. Pelley was Chief Financial and Administrative Officer for Advanced
Diagnostic Research Corporation, Tempe, Arizona, a designer, manufacturer and
marketer of diagnostic ultrasound scanners.
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Officers serve at the discretion of the Board of Directors. All
Directors hold office until the expiration of their terms and the election and
qualification of their successors. The Company's Board of Directors is divided
into three classes of approximately equal size with the members of each class
elected, after an initial phase-in-period, to three-year terms expiring in
consecutive years.
Mr. Haemmerli was elected to a three-year term
as Director at the Company's May 1996 Annual Meeting of Stockholders, and Mr.
Owens was elected to a three-year term as Director at the Company's May 1995
Annual Meeting of tockholders. Mr. Gruverman was appointed to the Board of
Directors in May 1994; Mr. Denenberg was appointed to the Board of Directors
in August 1995; and Mr. Hewitt was appointed to the Board of Directors in
September 1996.
In January 1993, the Company established a Stock Option Committee. The
Stock Option Committee is responsible for the granting of stock options under
the Company's Stock Option Plans and during the fiscal year ended September
30, 1997 (the "Fiscal 1997") the Stock Option Committee met two times.Plans. The Company also established a Compensation
Review Committee, which is responsible for reviewing the compensation of the
Company's executives and employees. The Compensation Review Committee met two times during Fiscal
1997. In August 1995, Mr.Gerald T. Owens, a former
Director, and Mr. Haemmerli were appointed to a single Compensation Review and
Stock Option Committee. The Compensation and Stock Option Committee met two
times during Fiscal 1998 and two times during Fiscal 1999. Also, in August 1995,
Mr. Owens was appointed to a newly established Audit Committee and Mr. Gruverman
was appointed to the Audit Committee in November 1997. The Audit Committee is
responsible for recommending the independent public accountants to serve as the
Company's auditors, reviewing and considering the actions of management in
matters relating to audit functions, reviewing with such accountants the scope
and results of their audit engagement, reviewing the financial statements and
information included in the Company's filings with the Securities and Exchange
Commission, reviewing the Company's system of internal controls and procedures
and reviewing the effectiveness of procedures intended to prevent violations of
laws and regulations. The Audit Committee met sixtwo times in Fiscal 1997. The Board of Directors did not have a
standing nomination committee or committee performing similar functions1998 and two
times during Fiscal 1997.
The Company held three meetings of the Board of Directors during Fiscal
1997 and conducted other business by unanimous written consent. Each member
of the Board of Directors (at the time of such meeting) attended all of the
meetings either in person or telephonically.
EXECUTIVE COMPENSATION
The compensation paid and/or accrued to each of the Executive Officers
of the Company and its subsidiaries and of all executive officers as a group,
whose annual compensation exceeds $100,000, for services rendered to the
Company during the three fiscal years ended September 30, 1997, was as
follows:
-6-1999.
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(a) SUMMARY COMPENSATION TABLE
Long-Term Compensation
-------------------------------------------
Annual Compensation
------------- ------------ -----------------
Other
Name of Individual Fiscal Salary($) Bonus($) Annual
and Principal Position Year Compensation($)
- --------------------------- -------- ------------- ------------ -----------------
Geoffrey F. Hewitt 1999 $217,134(1)
President and CEO of 1998 $211,932(1) $ - $ -
FiberChem, Inc. and CEO 1997 $205,000(2) $ - $ -
of FCI Environmental, Inc.
Melvin W. Pelley 1999 $139,479(3)
Chief Financial Officer of 1998 $139,200(3)
FiberChem, Inc. and of 1997 $136,708 (4) $ - $ -
FCI Environmental, Inc.
Thomas A. Collins 1999 $132,479(5)
President of 1998 $132,200(5)
FCI Environmental, Inc. 1997 $129,708 (6) $ - $ -
Long Term Compensation
----------------------------------
Awards Payouts
------------------------------------- --------------------------- -------------- Other---------------- -----------------
Restricted Securities Long-Term All
Name of Individual Fiscal Annual Stock Underlying Incentive Plan Other
and Principal Position Year Salary($) Bonus($) Compensation($) Awards($) Options/SARs(#) Payouts($) Compensation($)
- ---------------------- ------ -------------------------------------- -------- --------------- ---------- --------------- -------------- ------------------------------- ----------------- -------------------
Geoffrey F. Hewitt 1997 $205,000(1) $ - $ - - 125,000 $ - $ -1999 300,000
President and CEO of 1996 $195,768 $ - $ - - 100,0001998 240,000 $ - $ -
FiberChem, Inc. and 1995 $177,596 $CEO 1997 - $ - - 75,000 $ - $ -
CEO125,000
of FCI Environmental, Inc.
Dale W. Conrad 1997 $ - $ - $ 2,709(2) 25,000 $ - $ -
Chairman of the Board 1996 $ 18,730 $ - $13,594(2) - 35,000 $ - $ -
of FCI Environmental, 1995 $112,535 $ - $ - - 60,000 $ - $ -
Inc.(3)
Melvin W. Pelley 1997 $136,708(4) $ - $ - - 75,000 $ - $ -1999 275,000
Chief Financial Officer 1996 $126,461 $ - $ - - 50,000 $ - $ -
of 1998 180,000
FiberChem, Inc. and 1995 $113,346 $of 1997 - $ - - 25,000 $ - $ -
of FCI Environmental,
Inc.
Thomas A. Collins 1997 $129,708(5) $ - $ - - 75,000 $ - $ -
President of 1996 $ 70,192 $ - $ - - 100,000 $ - $ -
FCI Environmental, Inc.
1995 $Thomas A. Collins 1999 200,000
President of 1998 120,000
FCI Environmental, Inc. 1997 - $ - -75,000 $ - $ -
- ----------------------------
(1) Includes accrued but unpaid salary earned during Fiscal 1998 of $55,000 and
during Fiscal 1999 of $55,000.
(2) Includes $14,808 in accrued but unpaid salary, earned during the period from
June 15 through September 30, 1997. Payment has been deferred until
after January 1, 1998 at the Company's discretion. From June 15, 1997
through June 19, 1998, a total of $55,000 has been deferred.
(2) Consulting fees of $2,709 paid(3) Includes accrued but unpaid salary earned during Fiscal 1997; Directors' compensation1998 of $11,194$32,000 and consulting fees of $2,400 paid
during Fiscal 1996. Amounts
earned are net1999 of applicable taxes, and reduced the Promissory notes issued
by Mr. Conrad to the Company for the exercise of options.
(3) Mr. Conrad resigned from all positions with the Company on April 8, 1998.$36,123.
(4) Includes $8,615 in accrued but unpaid salary, earned during the period from
June 15 through September 30, 1997.
Payment has been deferred until after
January 1,(5) Includes accrued but unpaid salary earned in Fiscal 1998 at the Company's discretion. From June 15, 1997 through
June 19, 1998, a total of $32,000 has been deferred.
(5) Hired March 1, 1996 as Vice President$25,000 and
during Fiscal 1999 of International Marketing and
Product Development; President of FCI Environmental since November 1996.$25,000.
(6) Includes $6,730 in accrued but unpaid salary, earned during the period from
June 15 through September 30, 1997.
Payment has been deferred until after
January 1, 1998 at the Company's discretion. From June 15, 1997 through
June 19, 1998, a total of $25,000 has been deferred.
-7--11-
(b) OPTION/SAR GRANTS IN LAST FISCAL YEAR
Number of Securities Percent of Total
UnderlyingSecurities Options/SARs
Underlying Granted Exercise
Options/SARs to Employees orOr Base Expiration
Name of Individual Granted In Fiscal Year Price($/Share) Date
- ------------------ ------------ -------------------- -------------- ------------------------------------------------------------------------------------------------------------------------------------
Geoffrey F. Hewitt 125,000(3) 27.8% $1.00 September 12, 2007
Dale W. Conrad 25,000(4) 5.6% $0.22 May, 29, 2007300,000 18.6% $ 0.125 July 19, 2009
Melvin W. Pelley 75,000(3) 16.7% $0.25 September 12, 2007
David R. LeBlanc -- --275,000 17.1% $ --0.125 July 19, 2009
Thomas A. Collins 75,000(3) 16.7% $0.25 September 12, 2007200,000 12.4% $ 0.125 July 19, 2009
(c) AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR
END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Name of Individual Shares Underlying Unexercised In-The-Money Shares Options/SARs
Options/SARsExercisable/ Acquired on ValueOptions/SARs at Fiscal Year End (#) at Fiscal Year End ($)
Name of IndividualUnexercisable Exercise Value End (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------- ------------- ------------ ------------------------- ---------------------------------------- ------------------------------- ----------------------------
Geoffrey F. Hewitt 18,961 $(3,262)(1) 486,247 / - - 765,000/$0 $(255,740) (2) / $0
Dale W. Conrad -- $1,500/$ - 120,000 / 0 $ (20,781) (2) / $0
Melvin W. Pelley 74,712 $(9,068)(1) 75,000 / - - 534,000/$0 $ (2,344) (2) / $0
David R. LeBlanc 1,375/$0 $ 0 98,350 / 0 $ (21,514) (2) / $0
Thomas A. Collins - - 395,000/$0 $1,000/$0 175,000 / 0 $ (69,531) (2) / $0
(1) Certain options were exercised at exercise prices which exceeded fair
market value at the time of exercise, resulting in negative "Value
Realized."
(2) The options' exercise price exceeded their fair market value as of
September 30, 1997, resulting in negative "Value of Unexercised
In-The-Money Options."
(3) Exercisable from the date of grant on September 12, 1997 until
September 12, 2007 at $0.25 per share.
(4) Exercisable from the date of grant on May 29, 1997 until May 29,
2007 at $0.22 per share.
(d) LONG-TERM INCENTIVE PLANS
Effective January 1, 1994, the Company implemented an Internal Revenue
Code Section 401(k) Profit Sharing Plan (the "Plan"). The Plan provides for
voluntary contributions by employees into the Plan subject to the limitations
imposed by Internal Revenue Code Section 401(k). The Company will match employee
contributions at a rate of 50% of the employee's contribution up to a maximum of
2% of the employee's compensation. The Company matching funds are determined at
the discretion of management and are subject to a five-year vesting schedule
from the date of original employment.
(e) DIRECTORS COMPENSATION
In September 1996, the existing base compensation fee of $10,000 per
year for non-managementNon-management directors was eliminated, replaced by the granting ofreceive options to purchase 25,000 shares of Common Stock
of the Company. FeesCompany for attendance atserving on the Board meetings, was suspended. Feesof Directors and for service as Chairman and
fees for committee service were also eliminated and replaced byon official
committees of the granting
ofBoard.
On July 19, 1999, the Company granted options to purchase from 4,000 to 12,500 shares of Common Stock of the
Company.
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On May 29, 1997, the Company granted to each of its six non-management
Directors options to purchase 25,00050,000 shares of
Common Stock at $0.22$0.125 per share, which was the market value of the Common Stock
on that date.date, to each of its four non-management Directors. In addition the
Company granted options to purchase an aggregate of 36,50050,000 shares of the Common
-12-
Stock to three of its non-management directors for service as Chairman (12,500 shares) and members of itsthe
Audit Committee (8,000(15,000 shares to each of its two members) and Compensation and
Stock Options Committee (4,000(10,000 shares to each of its two members).
(f) EMPLOYMENT CONTRACTS
Geoffrey F. Hewitt serves under an employment and non-competition agreement
with the Company, effective October 1, 1997.July 27, 2000. Mr. Hewitt is currently compensated
at a rate of $205,000 per annum and is entitled to receive bonuses, if any, at
the discretion of the Board of Directors. The employment contract is terminable
for cause. Since June 15, 1997, payment of approximately 27% (or $55,000)$55,000 per
annum) of Mr. Hewitt's salary has been deferred. PaymentIn December 1998, Mr. Hewitt
applied his total unpaid salary from June 1997 through December 1998 of $84,615
to the purchase of unsubscribed Units in the Company's Rights Offering ($16,640
after taxes). In July 1999, Mr. Hewitt applied his total unpaid salary from
January 1999 through June 1999 of $27,500 ($16,640 after taxes) to the purchase
of restricted shares of the earned butCompany's Common Stock. In June 2000 Mr. Hewitt
applied the total unpaid amountsalary from July 1999 through June 2000 to the exercise
of Class E Common Stock Purchase Warrants. The same proportion of Mr. Hewitt's
salary continues to be deferred.
David S. Peachey serves under an employment and non-competition agreement
with the Company, effective July 27, 2000. Mr. Peachey is currently compensated
at a rate of $200,000 per annum, and is entitled to receive bonuses, if any, at
the discretion of the Company andBoard of Directors. The Employment contract is expected to be paid when
the Company's financial position allows.terminable
for cause. Since July 27, 2000, payment of approximately 25% (or $50,000 per
annum) of Mr. Peachey's salary has been deferred.
Melvin W. Pelley serves under an employment and non-competition agreement
with the Company, effective October 1, 1997.July 27, 2000. Mr. Pelley is currently compensated
at a rate of $132,000 per annum, and is entitled to receive bonuses, if any, at
the discretion of the Board of Directors. The employment contract is terminable
for cause. Since June 15, 1997, payment of approximately 24% (or $32,000)$32,000 per
annum) of Mr. Pelley's salary has been deferred. PaymentIn December 1998, Mr. Pelley
applied his total unpaid salary from June 1997 through December 1998 of $49,230
to the purchase of unsubscribed Units in the Company's Rights Offering ($29,395
after taxes). In July 1999, Mr. Pelley applied his total unpaid salary from
January 1999 through June 1999 of $16,000 ($8,970 after taxes) to the purchase
of restricted shares of the earned butCompany's Common Stock. In June 2000 Mr. Pelley
applied his total unpaid amountsalary from July 1999 through June 2000 to the exercise
of Class E Common Stock Purchase Warrants.
The same proportion of Mr. Pelley's salary continues to be deferred.
Peter J. Lagergren serves under an employment and non-competition agreement
with the Company, effective July 27, 2000. Mr. Lagergren is currently
compensated at a rate of $185,000 per annum, and is entitled to receive bonuses,
if any, at the discretion of the Company andBoard of Directors. The Employment contract is
expected to be paid when
the Company's financial position allows.terminable for cause. Since July 27, 2000, payment of approximately 22% (or
$40,000 per annum) of Mr. Lagergren's salary has been deferred.
Thomas A. Collins serves under an employment and non-competitive agreement
with the Company, effective October 1, 1997.July 27, 2000. Mr. Collins is currently compensated
at a rate of $125,000 per annum, and is entitled to receive bonuses, if any, at
the discretion of the Board of Directors. The employment contract is terminable
for cause. Since June 15, 1997, payment of approximately 20% (or $25,000)$25,000 per
annum) of Mr. Collins' salary has been deferred. PaymentIn December 1998, Mr. Collins
applied $12,000 (approximately one-third) of his total unpaid salary from June
1997 through December 1998 to the purchase of unsubscribed Units in the
Company's Rights Offering ($6,146 after taxes). In July 1999, Mr. Collins
applied $10,000 of his unpaid salary ($6,500 after taxes) to the purchase of
restricted shares of the earned but unpaid
amount is atCompany's Common Stock. In June 2000 Mr. Collins
-13-
applied $20,000 of his deferred salary to the discretionexercise of the Company and is expectedClass E Common Stock
Purchase Warrants. The same proportion of Mr. Collins' salary continues to be
paid when
the Company's financial position allows.
David R. LeBlanc served until October 5, 1996deferred.
Brian A. O'Neil serves under an employment and non-competition agreement
with FCI Environmental,the Company, effective July 18, 1994.27, 2000. Mr. LeBlanc wasO'Neil is currently compensated
at a rate of $125,000 per annum, and wasis entitled to receive bonuses, if any, at
the discretion of the Board of Directors. The employmentEmployment contract wasis terminable
without cause with 90 days notice.for cause. Since July 27, 2000 payment of approximately 20% (or $25,000 per
annum of Mr. O'Neil's salary has been deferred.
(g) CONSULTING AGREEMENTS
In August 1995, the Company entered into an agreement with Dale W.
Conrad to provide consulting services to the Company on an as requested basis
at an hourly rate. The services include advice and assistance in technical,
operational, and administrative matters. During Fiscal 1997, the Company paid
Mr. Conrad $2,709 under this agreement, all of which was applied to
promissory notes, the exercise of stock options and payment for group
insurance benefits paid by the Company. The agreement is terminable by either
party upon written notice. On April 8, 1998, Mr. Conrad resigned as a
director of the Company and this Agreement was terminated.
On February 14, 1996, the Company entered into an agreement, superseding
earlier verbal and letter agreements, with European Capital Advisors, Ltd.
("ECA") pursuant to which ECA would be compensated for marketing strategy and
business and financial planning services for the Company. In consideration
for these services, ECA was paid $30,000 in cash and was granted warrants to
purchase 75,000 shares of Common Stock of the Company at $0.90 per share,
exercisable until February 13, 2001.
-9-
(h) STOCK OPTIONS
Primarily in order to provide a means to raise additional cash through
existing outstanding options, warrants and promissory notes receivable, on
April 4, 1997, the per share exercise price of all employee stock options,
all Unit and other Warrants (except Class D Warrants) were decreased as
follows: to $0.32 from April 4 through April 11, 1997, and thereafter
adjusted weekly to the average closing bid price for the five prior trading
days less a discount of 10% (but never to a price less than $0.30) through
May 16, 1997, when the prices reverted to the original prices. As a result,
the Company received $39,943 from the exercise of 131,453 options at prices
ranging from $0.30 to $0.32 per share. Effective April 17, 1997 the per share
exercise price of Class D Warrants was decreased to $0.30 through May 16,
1997 when the exercise price reverted to its prior $1.10 per share. As a
result, the Company received approximately $30,954 from the exercise of
103,179 Class D Warrants at $0.30 per share.
As of April 4, 1997 an aggregate of $277,916 had been paid on the
promissory notes receivable (issued in 1994 for the early exercise of stock
options), an aggregate of $47,999 of interest had been paid, and an
additional $248,212 of interest had been accrued (through December 31, 1996)
but remained unpaid.
In conjunction with the temporary reduction of the exercise prices of
the options and warrants effective April 4, 1997 and Class D Warrants
effective April 17, 1997, as described above, the remaining unpaid principal
on the promissory notes could be fully paid in an amount determined by
multiplying the unpaid balance by a fraction, the numerator of which was the
revised exercise price, and the denominator of which was $1.50 (the original
exercise price). If the unpaid principal was not so paid by May 16, 1997 the
underlying collateral shares would be forfeited and all unpaid principal and
accrued interest would be extinguished.
As a result, the Company received $160,875 in payment for 520,252
escrowed shares at prices ranging from $0.30 to $0.32 per share, which amount
liquidated $780,379 of original note principal. The remaining $756,804 of
unpaid note principal was extinguished and the underlying collateral of
504,535 shares were forfeited to the Company and immediately canceled,
thereby reducing the total number of shares outstanding. Unpaid accrued
interest receivable aggregating $248,212 was expensed.None.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Executive Compensation - Stock Options;Directors Compensation; Employment Agreements;Contracts;
and Consulting Agreements" for information concerning stock options granted and
employment and consulting agreements entered into during Fiscal 1996 and
Fiscal 19971997-1999 with
officers and Directors of the Company.
The Company entered intoIn December 1997 and January and February 1998, four directors (Geoffrey
Hewitt, Byron Denenberg, Irwin Gruverman and Walter Haemmerli) and an agreement effective June 30, 1992, to sell
its wholly-owned subsidiary, AgriBioTech, Inc. ("ABT"), to the Company's
former President, its former Vice-President, its former Chairmanofficer
(Melvin Pelley) of the Board
and a fourth individual (collectively, the "Purchaser"). The Purchaser agreed
to purchase all of the issued and outstanding shares of common stock of ABT,
which were all owned byFiberChem each advanced the Company for the approximate book valuea total of ABT.
The net sales price of $425,559 was payable in four equal installments of
principal plus$50,000 and
Mr. Haemmerli advanced an additional $75,000. These advances, aggregating
$325,000, were evidenced by convertible promissory notes bearing interest at athe
rate of 8% per annum commencingdue five years from issuance. Each note and unpaid accrued
interest aggregating $20,275 was cancelled on December 22, 1998 in payment for
unsubscribed Units of the Rights Offering resulting in the issuance to the
directors and officer of 1,569,431 shares of Common Stock and a like number of
Class E Common Stock Purchase Warrants.
Mr. Pelley advanced the Company $25,000 on February 27, 1998, and an
additional $25,000 on July 1, 19931998. Each of these advances is evidenced by a
separate promissory note bearing interest at the rate of 8% per annum and annually thereafter until paid in full. Aswere
originally due on or before August 31, 1998. Mr. Pelley agreed to extend the due
dates of September 30, 1996, the entire principalpromissory notes. Mr. Pelley advanced FiberChem $25,000 on June 2,
1999 and $25,000 on June 3, 1999 evidenced by promissory notes bearing interest
at the rate of 9% per annum and due three years from issuance. On June 19, 2000
these four notes and accrued interest had been paid in full.
In March 1994, the Company's Board of Directors approved a plan by which
employees and directors of the Company and its subsidiaries would be given an
opportunitythereon were applied to exercise stock options eligible under the Company's early
incentive plan through the execution of promissory notes. As of March 15,
1994, the Company received promissory notes aggregating $1,815,099 for the exercise of
1,210,066 stock options.323,626 Class E Common Stock Purchase Warrants held by Mr. Pelley. Mr. Pelley
advanced $25,000 on July 27, 1999 and $40,000 on September 29, 1999, Mr.
Haemmerli advanced $50,000 on August 30, 1999 and Mr. Gruverman advanced $50,000
on July 26, 1999. Each of these advances is evidenced by a convertible
promissory note bearing interest at the rate of 9% per annum and due three years
from the date of issuance. Mr. Pelley advanced $200,000 on January 12, 2000,
evidenced by a promissory note bearing interest at the rate of 12% per annum and
due 3 years from the date of issuance. The promissory notesnote becomes convertible into Common
Stock at the option of the holder only if the Company deems it has sufficient
authorized shares available.
In March and August 1998, the Company obtained loans aggregating
$433,000 from Privatbank Vermag AG, a private investment bank with which Mr.
Haemmerli is associated. These loans (the "Bridge Loans") were provided as
interim financing until the Company completed its Rights Offering. The Bridge
Loans bear interest at 5%approximately 8.5% per annum until September 15, 1994,annum. In addition, the Company
agreed to issue to Privatbank, as additional consideration, 130,000 Units
(consisting of 130,000 shares of Common Stock and at 7% per annum thereafter,Class E Warrants
-14-
to purchase 130,000 shares of Common Stock). The Units were issued in October
1998 as part of the Rights Offering. Also, $50,000 of the Bridge Loans and
$1,920 in accrued interest were initiallyconverted to Common Stock and Warrants as part
of the Rights Offering. The remaining $383,000 of Bridge Loans were due on SeptemberJuly
15, 1995. On April 7, 1995, the Board1999, when principal of Directors
extended the$133,000 and accrued interest of $14,680 were
converted to 1,136,000 shares of Common Stock. The due date of the notesremaining
$250,000 principal amount was extended to MarchOctober 15, 1998. As of April 4, 1997 an
aggregate of $277,916 of principal had been paid on these notes, an aggregate
of $47,999 of interest had been paid,1999 and an additional $248,212 of interest
had been accrued (through December 31, 1996) but remained unpaid.
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In conjunction with the temporary reduction of the exercise prices of
the options and warrants effective April 4, 1997 and Class D Warrants
effective April 17, 1997, as described above, the remaining unpaid principal
on the promissory notes could be fully paid in an amount determined by
multiplying the unpaid balance by a fraction, the numerator of which was the
revised exercise price, and the denominator of which was $1.50 (the original
exercise price). If the unpaid principal was not so paid by May 16, 1997 the
underlying collateral shares would be forfeited and all unpaid principal and
accrued interest would be extinguished. The Company did not wantsubsequently to
penalize
its employees and directors by requiring payment of the promissory notes. The
Company believes that it must provide an incentive when it is compensating
employees and directors for services rendered to the Company in the form of
non-cash compensation.
As a result, the Company received $160,875 in payment for 520,252
escrowed shares at prices ranging from $0.30 to $0.32 per share, which amount
liquidated $780,379 of original note principal. The remaining $756,804 of
unpaid note principal was extinguished and the underlying collateral of
504,535 shares were forfeited to the Company and immediately canceled,
thereby reducing the total number of shares outstanding. Unpaid accrued
interest receivable aggregating $248,212 was expensed.September 29, 2000.
COMPLIANCE WITH SECTION 16(a)16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, Directors and persons who own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
Directors and ten percent shareholders are required by regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on the
Company's copies of such forms received or written representations from certain
reporting persons that no forms were required for those persons, the Company
believes that, during the time period from October 1, 19961998 to September 30,
1997,1999, all filing requirements applicable to its officers, Directors and greater
than ten percent beneficial owners were complied with.
PROPOSAL 2
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO AUTHORIZE, IF
NECESSARY, A REVERSE STOCK SPLIT OF NOT MORE THAN ONE-FOR-FIFTY.
GENERAL
The Board of Directors has approved a proposal to amend the Company's
Certificate of Incorporation to authorize, if necessary, a reverse stock
split of not more than one-for-fifty of the presently issued and outstanding
shares of the Company's Common Stock (the "Reverse Split"), by changing each
of up to fifty issued and outstanding shares of Common Stock into one issued
and outstanding share of Common Stock, (i) to increase the marketability and
liquidity of the Company's Common Stock by attracting an increased number of
market makers and a wider following (Many investment banking firms are
prohibited from trading securities of issuers that trade below $3.00 per
share although they are traded on Nasdaq.), and (ii) to reduce the Company's
stated capital $.0001 for each share of Common Stock changed into up to
one-fiftieth share of Common Stock as a result of the Reverse Split.
REASONS FOR THE REVERSE SPLIT
The Company's shares of Common Stock are quoted on the OTC Bulletin
Board or in the "pink sheets" maintained by the National Quotation Bureau,
Inc. Until February 25, 1998, the Common Stock was listed on the NASDAQ Small
Cap Market. The Company believes that it may be advantageous to apply for a
new listing on the NASDAQ Small Cap Market. Requirements for a new listing on
the NASDAQ SmallCap Market include a minimum bid price of $4.00 per share. In
order to increase the marketability and liquidity of the Company's Common
Stock by attracting an increased number of market members and a wider
following the Company has authorized the Reverse
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Stock Split. Many investment banking firms are prohibited from trading
securities of issuers that trade on the OTC Bulletin Board and many are also
prohibited from trading securities below $3.00 per share. In connection with
any determination by the Board of Directors to such effect, the Board will
also in its discretion, determine the ratio of the Reverse Split based on
prevailing market conditions, the likely effect on the market price of the
Common Stock, and other relevant factors.
EXCHANGE OF SHARES
If the Shareholders approve the Reverse Split and it is determined by
the Board of Directors that the Reverse Split is necessary, upon the filing
of the following amendment to the Company's Certificate of Incorporation with
the Secretary of State of Delaware, the Reverse Split will be deemed
effective. The Reverse Split will be formally implemented by amending the
present Article Fourth of the Company's Certificate of Incorporation as
amended, to add the following Section C:
Fourth: (c) Effective as of 5:00 p.m., Pacific time, on
(_____________________), 1998, all outstanding shares of Common Stock
held by each holder of record on such date shall be automatically
combined at the rate of one-for-fifty without any further action on
the part of the holders thereof or this Corporation. No fractional
shares shall be issued. All fractional shares shall be increased to
the next higher whole number of share.
Following the effectiveness of the amendment, each certificate
representing shares of Common Stock outstanding immediately prior to the
Reverse Split (the "Old Shares") will be deemed automatically, without any
action on the part of the Shareholders, to represent 1/50 of the number of
shares of Common Stock after the Reverse Split (the "New Shares"). After the
Reverse Split becomes effective, Shareholders will be asked to surrender
certificates representing Old Shares in accordance with the procedures set
forth in a letter of transmittal to be sent by the Corporation. SHAREHOLDERS
SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO SO. Upon such
surrender, a certificate representing the New Shares will be issued and
forwarded to the shareholders. However, each certificate representing Old
Shares will continue to be valid and represent New Shares equal to 1/50 of
the number of Old Shares (plus one additional New Share where such Old Shares
are not evenly divisible by 50).
If Proposal 2 is approved by the shareholders and determined by the
Board of Directors that the Reverse Split is necessary, the Reverse Split
will become effective upon filing a Certificate of Amendment of the
Certificate of Incorporation with the Secretary of State of Delaware. If the
Reverse Split is not deemed necessary by the Board of Directors on or prior
to the next Annual Meeting of Shareholders, the Board shall have no further
right to effect the Reverse Split.
PRINCIPAL EFFECTS OF THE REVERSE SPLIT AND THE ADDITIONAL REVERSE SPLIT
Shareholders have no right under the Delaware General Corporation Law
(the "DGCL") or under the Company's Certificate of Incorporation or Bylaws to
dissent from the Reverse Split or to dissent from the rounding to the nearest
whole share of any fractional share resulting from the Reverse Split in lieu
of issuing fractional shares.
The authorized capital stock of the Company will not be reduced or
otherwise affected by the Reverse Split. The number of issued and outstanding
shares of Common Stock of the Company on June 18, 1998, was 26,014,707 and
the number of issued and outstanding shares of Preferred Stock was 218,998.
The Company's stated capital was approximately $2,821. Based upon these
figures, the aggregate number of shares of Common Stock and Preferred Stock
that will be issued and outstanding if the Reverse Split is effected on a
one-for-fifty basis will be approximately 520,294 and 218,998, respectively,
and the stated capital will be approximately $2,821. Although the authorized
shares of Preferred Stock will not be affected by the Reverse Split, the
number of shares of Common Stock issuable upon conversion of the Preferred
Stock will be adjusted in the same proportion.
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The Reverse Split may result in some shareholders owning "odd-lots" of
less than 100 shares of Common Stock. Brokerage commissions and other costs
of transactions in odd-lots are generally somewhat higher than the costs of
transactions in "round-lots" of even multiples of 100 shares.
There can be no assurance that any or all of the foregoing effects will
occur. In particular, there can be no guarantee that the market price for
each New Share after the Reverse Split will be its sum multiple of the market
price (per Old Share) before the Reverse Split and the number of shares of
Common Stock charged for one share of Common Stock, or that such price will
either exceed or remain in excess of the current market price. Furthermore,
there can be no assurance that the market for shares of Common Stock will be
improved or that the Common Stock will be listed on the NASDAQ/SmallCap or
any other market. The Board of Directors cannot predict what effect the
Reverse Split will have on the market for or the market price of the Common
Stock.
DILUTION
The Company has suffered recurring losses from operations. The Company
may issue additional shares of its Common Stock on an ongoing basis in order
to satisfy all or a portion of its need for cash. If and to the extent that
the Company issues additional shares of Common Stock, either prior or
subsequent to the implementation of the Reverse Split, each Shareholder's
percentage ownership interest in the Company and proportional voting power
will be proportionately reduced.
The Company has previously issued, and has outstanding, various options,
warrants, and rights to purchase an aggregate of approximately 20,917,217
shares of Common Stock as of June 19, 1998. In addition, the Company has
filed for the registration of 8,960,337 units (each unit consisting of one
share of Common Stock and one Class E Common Stock Purchase Warrant and the
Common Stock underlying the Class E Warrant) for a total of 17,920,647 shares
of Common Stock to be registered in a rights offering (the "Rights
Offering"). Each existing Common Stockholder will receive one right to
purchase one Unit for every four Shares of Common Stock owned by them on the
record date. Each Unit is purchasable for $.22 and each underlying Warrant is
exercisable at $.22 per warrant for one additional share. Each holder of
outstanding Preferred Stock or Warrants will receive one right to purchase
one Unit for every four Shares of Common Stock issuable upon conversion of
the Preferred Stock or exercise of Warrants. If Proposal 2 is approved, in
general, both the exercise price and the number of shares subject to each
such option, warrant and right will be affected by the Reverse Split.
The Company has previously issued and has outstanding Convertible
Preferred Stock and Convertible Notes currently convertible into
approximately 6,113,256 shares of Common Stock. If Proposal 2 is approved, in
general, both the conversion price and the number of shares subject to such
Preferred Stock and Convertible Notes will be affected by the Reverse Split.
As a result, if the Reverse Split is implemented, it is possible that
the holders of all or a substantial number of the outstanding options,
warrants, rights, Preferred Stock and Convertible Notes to purchase or
convert to shares of the Company's Common Stock will determine that it is not
in their best interests to exercise or convert such options, warrants,
rights, stock or notes. If and to the extent that such is the case, each
Shareholder's percentage ownership interest in the Company and proportional
voting power will not be proportionately maintained as the result of the
exercise of such outstanding options, warrants, and rights.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based
upon the Internal Revenue Code of 1986, as amended, the applicable Treasury
Regulations promulgated thereunder, judicial authority, and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion is for general information only and does not
discuss consequences that may apply to special classes of taxpayers (e.g.,
non-resident aliens, broker-dealers or insurance companies). Shareholders are
urged to consult their own tax advisors to determine the particular
consequences to them.
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The exchange of Old Shares of Common Stock for New Shares of Common
Stock will not result in recognition of gain or loss. The holding period for
the New Shares will include the Shareholder's holding period for the Old
Shares exchanged therefor, provided that the Old Shares were held as a
capital asset. The adjusted basis of the New Shares will be the same as the
adjusted basis of the Old Shares exchanged therefor.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF AND URGES YOU TO VOTE "FOR"
THE PROPOSED AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION IN
THE FOREGOING PROPOSAL 2.
PROPOSAL 32: AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE AMOUNT OF AUTHORIZED COMMON STOCK.STOCK FROM
150,000,000 TO 500,000,000 SHARES.
At the Annual Meeting, Stockholders will be asked to ratify an amendment to
the Company's Certificate of Incorporation (the "Certificate") proposed by
resolution of the Board of Directors which would increase the number of
authorized shares of Common Stock by one hundred (100) millionfrom 150,000,000 to 500,000,000 shares of
common stock.Common Stock.
The additional Common Stock to be authorized by adoption of the amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common Stock
of the Company, except for effects incidental to increasing the number of shares
of the Company's Common Stock outstanding, such as dilution of the earnings per
share and voting rights of current holders of Common Stock. If the amendment is
adopted, it will become effective upon filing of a Certificate of Amendment of
the Company's Amended and Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware.
The Company's authorized capital stock currently consists of 50,000,000a total of
150,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. As
of the Record Date, 26,014,707102,331,380 shares of Common Stock were outstanding 2,116,556or were
reserved for issuance for specific purposes. Of the shares werereserved for
issuance, there are 3,555,442 shares of Common Stock issuable underupon exercise of
outstanding employee options; 500,000 shares issuable upon the 1994 and 1995 Employee Option Plans,exercise of
outstanding consultants' warrants; 1,895,175 shares were issuable upon exercise of
Class D Warrants, 3,333,333Warrants; an aggregate of 10,502,093 shares were issuable upon exercise of
the May 1996 Unitother outstanding Warrants; 3,923,456747,826 shares were
issuable upon the conversion of 8% Senior
Convertible Notes and 2,048,153(assuming a conversion price of $.23); Warrants to purchase
747,826 shares wereupon conversion of the outstanding notes; 1,325,188 shares
issuable upon the exerciseconversion of certain Placement Agentnotes payable to officers, directors and other
warrants. Also, as of the Record Date, 218,980affiliates;
683,784 shares
of Preferred Stock were
issued and outstanding, convertible into 2,189,980 shares of Common Stock and
the Registration Statement for the Rights Offering has been filed with the
Securities and Exchange Commission concerning an aggregate of 17,920,647
shares of Common Stock-15-
issuable upon full exerciseconversion of the Rights to be
offered by the Company. If all options and warrants currently outstanding
were exercised, and if allother notes payable; 2,078,480 shares issuable upon
conversion of Series A Preferred Stock; 4,355,932 shares issuable upon
conversion of Series B Preferred Stock and Senior Convertible Notes were
converted to Common Stock,9,870,000 shares issuable upon
conversion of 12% senior convertible debentures and if all Rights are exercised and all Warrants
are exercised, the Company would exceed its authorized common shares of
50,000,000 by 9,442,034 shares; and if additional options already authorized
were granted and exercised, would exceed its authorized common shares by an
additional 1,125,000 shares.notes. The Common Stock has
no preemptive or other subscription rights.
The additional shares of Common Stock proposed to be authorized would be available and providefor, among other
things, issuance upon conversion or exchange of securities issued to acquire
Intrex Data, Communications Corp., a British Columbia Corporation ("Intrex").
The total consideration that may eventually be issued by the Board of Directors flexibility to meet future
business developments and capital requirements, including, but not limited
to, providing for issuance in connection with the pending Rights Offering,
other financings and acquisition opportunities and for stock dividends or
splits should the Board decide that it would be desirable, in light of market
conditions then prevailing, taking advantage or propitious market conditions,
to broaden the public ownership of, and to enhance the marketCompany for the
business combination with Intrex and Pandel consists of up to approximately
252,220,000 shares of Common Stock. From its inceptionThe number of shares of Common Stock which
the Company has focused on regulated markets
primarily underagreed to issue in the jurisdiction of various national, state and local
environmental agencies. The political climate has since changed, and certain
federally driven programs have been delayed or de-emphasized.
The Board of Directors has chargedbusiness combination presently exceeds
the Company's Management with
reducing the Company's dependence on regulated markets by identifying and
pursuing opportunities in non-regulated, economically driven marketplaces.
This can be achieved either by internal development and growth, or by
acquisition or merger. The Company believes that its technology, and
especially its Sensor-on-a-Chip technology, has potential applications in a number of such areas including for example the health and safety marketplace.
A lack of resources currently limits the Company to its existing markets. The
Company's goal is to expand such commercial opportunities as rapidly as
possible until it is no longer dependent on regulated markets for the
majority of its business. The Company believes that opportunities may arise
for a synergistic merger or acquisition, or mergers and acquisitions, which
would be enhanced by the fact that additional shares had been authorized for such purposes by the stockholders. If approved by the stockholders, the
Company intends to undertake an aggressive review of opportunities that may
exist to enhance both the technical
-14-
as well as commercial potentialsissuance and not reserved for other
purposes. A summary of the technology,business combination with Intrex is set forth in
areas that have
already been commercialized, as well as in areas for future potential
commercialization.
To the extent required by Delaware law, stockholder approval will be
solicited in the event shares of stock are to be issued in connection with a
merger or acquisition.Exhibit A attached hereto.
Additional shares would also be available for issuance for these and other purposes,
which include employee benefit programs, at the discretion of the Board of
Directors of the Company, without the delays and expenses ordinarily attendant
upon obtaining further stockholder approval. In general, the additional
authorized shares may be issued by the Board of Directors for such purposes
without stockholder approval. The issuanceadditional Common Stock would be available for
dividends with respect to the Company's Preferred Stock and for other stock
dividends. Additional shares of suchCommon Stock would also provide needed
flexibility for future financial and capital requirements so that proper
advantage could be taken of propitious market conditions and possible business
acquisitions. Additional shares would dilute the voting power and, in many cases, the liquidation
valueof Common Stock could also be used to discourage
hostile takeover attempts of the outstanding shares.Company. The additional shares could be
privately placed, thereby diluting the stock ownership of persons seeking to
obtain control of the Company.
The affirmative vote of the majority of outstanding shares representedof Common and
entitled
toPreferred Stock (Series A, Special Series, and Pandel Series) and the
affirmative vote atof the Annual Meeting ismajority of outstanding shares of Common Stock voting
separately as a class are required to ratify the amendment to the Certificate.
AMENDMENT TO RESTATED CERTIFICATE
The proposed Amendment to the Certificate is as follows:
"FOURTH: (a) The Corporation is authorized to issue 160,000,000510,000,000 shares,
consisting of 150,000,000500,000,000 shares of common stock,Common Stock, $.0001 par value ("Common
Stock"), and 10,000,000 shares of preferred stock, $.001$.01 par value ("Preferred
Stock")...". . ."
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF AND URGES
YOU TO VOTE "FOR" THE PROPOSED AMENDMENT OF THE
COMPANY'S CERTIFICATE OF INCORPORATION IN THE
FOREGOING PROPOSAL 3.2.
PROPOSAL 43: APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO AUTHORIZE THE CHANGE OF THE COMPANY'S NAME
TO "DECISIONLINK, INC."
The Company's Board of Directors is asking the stockholders to vote on a
proposal to authorize the amendment to the Company's certificate of
Incorporation to change the name of the Company from "FiberChem, Inc." to
"DecisionLink, Inc.," following the completion of the business combination with
Interex.
-16-
The Company's Board of Directors has unanimously approved such an amendment to
the Certificate of Incorporation.
The purpose of the proposed name change is to reflect the broader scope of
the Company's business following the combination of the Company and Intrex.
Upon consummation of the proposed name change it will not be necessary to
surrender stock certificates. Instead when certificates are presented for
transfer, new certificates bearing the name DecisionLink, Inc. will be issued.
If there exists any circumstances which would make consummation of the name
change inadvisable in the judgment of the Company's Board of Directors, this
proposal to amend the Certificate of Incorporation may be terminated by the
Company's Board of Directors either before or after approval of the name change
by the Company's Stockholders.
The affirmative vote of the majority of outstanding shares of Common and
Preferred Stock (Series A, Special Series, and Pandel Series) is required to
ratify the amendment to the Certificate.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF AND URGES YOU TO VOTE "FOR" THE
AUTHORITY TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION CHANGING
THE NAME OF THE COMPANY TO "DECISION LINK, INC." (PROPOSAL 3).
PROPOSAL 4: APPROVAL AND ADOPTION OF THE 2000 STOCK OPTION PLAN FOR THE
COMPANY
The Board of Directors of the Company, subject to stockholder approval, has
adopted the Company's 2000 Stock Option Plan (the "2000 Plan"), which authorizes
the grant of options to purchase an aggregate of 20,000,000 shares of Common
Stock. As of September 25, 2000, no options to purchase shares of Common Stock
have been granted under the 2000 Plan.
The affirmative vote of a majority of the shares of the Voting Securities
represented and entitled to vote at the Annual Meeting is required for approval
of the 2000 Plan. The Board recommends a vote in favor of the 2000 Plan.
The Board of Directors has deemed it in the best interest of the Company to
establish the 2000 Plan so as to provide employees and other persons involved in
the continuing development and success of the Company and its subsidiaries an
opportunity to acquire a proprietary interest in the Company by means of grants
of options to purchase Common Stock. The 2000 Plan authorizes additional options
for grant to eligible participants since no options to purchase shares remain
available for grant under the Company's 1994 Employee Stock Option Plan, 1995
Employee Stock Option Plan, and 1997 Employee Stock Option Plan; and 3,390,000
shares remain available under the 1999 Non-Qualified Stock Option Plan for which
the Company did not obtain shareholder approval. It is the opinion of the Board
of Directors that by providing the Company's employees and other individuals
contributing to the Company and its subsidiaries the opportunity to acquire an
equity investment in the Company, the 2000 Plan will maintain and strengthen
their desire to remain with the Company, stimulate their efforts on the
Company's behalf, and also attract other qualified personnel to provide services
on behalf of the Company.
The following statements summarize certain provisions of the 2000 Plan. All
statements are qualified in their entirety by reference to the text of the 2000
Plan, copies of which are available for examination at the
-17-
Securities and Exchange Commission and at the executive office of the Company,
1181 Grier Drive, Suite B, Las Vegas, Nevada 89119.
The 2000 Plan allows the Company to grant incentive stock options ("ISOs"),
as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code"), Non-Qualified Stock Options ("NQSOs") not intended to qualify
under Section 422(b) of the Code and Stock Appreciation Rights ("SARs"). ISO's,
NQSO's and SAR's may be collectively referred to as "Options." The vesting of
one or more options granted hereunder may be based on the attainment of
specified performance goals of the participant or the performance of the
Company, one or more subsidiaries, parent and/or division of one or more of the
above. The 2000 Plan is intended to provide the employees, directors,
independent contractors and consultants of the Company with an added incentive
to commence or continue their services to the Company and to induce them to
exert their maximum efforts toward the Company's success. The Board of Directors
has deemed it in the best interest of the Company to establish the 2000 Plan so
as to provide employees and the other persons listed above the opportunity to
acquire a proprietary interest in the Company by means of grants of options to
purchase Common Stock. The 2000 Plan is not subject to ERISA.
ELIGIBILITY FOR PARTICIPATION
Under the 2000 Plan, ISOs or ISOs in tandem with SARs, which are subject to
the requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a)-(e), may
be granted, from time to time, to employees of the Company, including officers,
but excluding directors who are not otherwise employees of the Company. Options
may be granted from time to time, under the 2000 Plan, to employees of the
Company, officers, directors, independent contractors, consultants and other
individuals who are not employees of, but are involved in the continuing
development and success of the Company (persons entitled to receive ISOs, NQSOs,
and/or SARs are hereinafter referred to as "Participants"). ISOs and ISOs in
tandem with SARs may not be granted under the 2000 Plan to any person for whom
shares first become exercisable under the 2000 Plan or any other stock option
plan of the Company in any calendar year having an aggregate fair market value
(measured at the respective time of grant of such options) in excess of
$100,000. Any grant in excess of such amount shall be deemed a grant of a NQSO.
As of September 25, 2000, the Company had 32 employees (7 of whom are also
Officers or Directors) who are eligible for grants of one or more types of
Options under the 2000 Plan. The Company cannot presently compute the number of
non-employees who may be entitled to NQSOs.
ADMINISTRATION
The 2000 Plan is to be administered by the Board of Directors of the Company
and/or by a stock option or compensation committee (the administrator of the
2000 Plan, whether the Board of Directors itself or a committee thereof, is
hereinafter referred to as the "Committee" unless the context otherwise
requires) which shall be comprised solely of at least two "outside directors"
(as such term is defined under Section 162(m) of the Code. The Committee will
have the authority, in its discretion, to determine the persons to whom options
shall be granted, the character of such options and the number of shares of
Common Stock to be subject to each option. The Board of Directors may administer
the 2000 Plan; provided, however, that in the event a Committee has been
appointed, the Committee will administer the 2000 Plan with respect to employees
included within the term "covered employee" under Section 162(m) of the Code.
-18-
TERMS OF OPTIONS
The Terms of Options granted under the 2000 Plan are to be determined by the
Board of Directors or the Committee. Each Option is to be evidenced by a stock
option agreement between the Company and the person to whom such option is
granted, and is subject to the following additional terms and conditions:
(a) EXERCISE OF THE OPTION: The Committee will determine the time periods
during which Options granted under the 2000 Plan may be exercised. An Option
must be granted within ten (10) years from the date the 2000 Plan was
adopted or the date the 2000 Plan is approved by the stockholders of the
Company, whichever is earlier. Options will be exercisable in whole or in
part at any time during the period but will not have an expiration date
later than ten (10) years from the date of grant. Unless otherwise provided
in any option agreement issued under the 2000 Plan, any Option granted under
the 2000 Plan may be exercisable in whole or in part at any time during the
exercise period and except for performance based options, must become fully
exercisable within five years from the date of its grant, and not less than
20% of the Option shall become exercisable on an aggregate basis by the end
of any of the first five years of the Option. The Committee may, in its sole
discretion, accelerate any such vesting period after the grant thereof.
Notwithstanding the above, ISOs or SARs granted in tandem with ISOs, granted
to holders owning directly or through attribution more than 10% of the
Company's Common Stock are subject to the additional restriction that the
expiration date shall not be later than five (5) years from the date of
grant. An Option is exercised by giving written notice of exercise to the
Company specifying the number of full shares of Common Stock to be purchased
and tendering payment of the purchase price to the Company in cash or
certified check, or if permitted by the instrument of grant, with respect to
an ISO, or at the discretion of the Committee with respect to NQSOs, by
delivery of Common Stock having a fair market value equal to the Option
Price, by delivery of an interest bearing promissory note having an original
principal balance equal to the Option Price and an interest rate not below
the rate which would result in imputed interest under the Code or by a
combination of cash, shares of Common Stock and promissory notes.
Furthermore, in the case of a NQSO, at the discretion of the Committee, the
Participant may have the Company withhold from the Common Stock to be issued
upon exercise of the Option that number of shares having a fair market value
equal to the exercise price and/or the withholding amount due.
(b) OPTION PRICE: The option price of an NQSO or an SAR granted in tandem
with an NQSO granted pursuant to the 2000 Plan is determined in the sole
discretion of the Committee. The option price of an ISO or SAR granted in
tandem with an ISO pursuant to the 2000 Plan shall not be less than the fair
market value thereof at the date of grant. Such fair market value of an ISO
shall be determined by the Committee and, if the Common Stock is listed on a
national securities exchange or quoted on The Nasdaq Stock Market, Inc., the
fair market value shall be the closing price of the Common Stock, or if
closing prices are not available or the Common Stock is quoted on the
National Association of Securities Dealers, Inc. ("NASD") OTC Bulletin Board
("OTCBB") or otherwise in the over-the-counter market, the mean of the
closing bid and asked prices of the Common Stock as reported by The Nasdaq
Stock Market, Inc., the NASD, the OTCBB or the National Quotation Bureau,
Inc., as the case may be, on such date, or if there is no closing price or
bid or asked price on that day, the closing price or mean of the closing bid
and asked prices on the most recent day preceding the day on which the
Option is granted for which such prices are available. ISOs or SARs granted
in tandem with ISOs, granted to holders owning directly or through
attribution, more than 10% of the Company's Common Stock are subject to the
additional restriction that the option price must be at least 110% of the
fair market value of the Company's Common Stock on the date of grant.
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(c) TERMINATION OF EMPLOYMENT OR CONSULTING AGREEMENT; DEATH; DISABILITY:
Except as provided in the 2000 Plan, or otherwise extended by the Committee
in its sole discretion, upon voluntary termination of employment with the
Company, or, in the case of a consultant, termination of the consulting
relationship prior to the termination of the term thereof a holder of an
Option under the 2000 Plan may exercise such Option to the extent such
Option was exercisable as of the date of termination at any time within
thirty (30) days after the date of such termination. Except as provided
herein, or otherwise determined by the Board of Directors or the Committee
in its sole discretion, if such employment or consulting relationship shall
terminate for any reason other than death, voluntary termination by the
employee or for cause, then such Options may be exercised at anytime within
three (3) months after such termination. Notwithstanding the above, unless
otherwise determined by the Committee in its sole discretion, any Options
granted under the 2000 Plan shall immediately terminate in the event the
Optionee is terminated as a result of the Optionee having not adequately
performed the services for which he/she/it was hired.
Unless extended by the Committee, if the holder of an Option granted under
the 2000 Plan dies (i) while employed by the Company or a subsidiary or
parent corporation or (ii) within three (3) months after the termination of
such holder's employment, such option may be exercised at anytime determined
by the Committee, but in no event within less than six months after death by
a legatee or legatees of such option under such individual's last will or by
such individual's estate, to the extent such option was exercisable as of
the date of death or date of termination of employment, whichever date is
earlier.
If the holder of an Option under the 2000 Plan becomes disabled within the
definition of Section 22(e)(3) of the Code while employed by the Company or
a subsidiary or parent corporation, such Option may be exercised at any time
within six months after such holder's termination of employment due to the
disability.
An Option may not be exercised except to the extent that the holder was
entitled to exercise the option at the time of termination of employment or
death unless otherwise extended by the Committee in its sole discretion, and
in any event it may not be exercised after the original expiration date of
the Option.
(d) NONTRANSFERABILITY OF OPTIONS; NO LIENS: ISOs and SARs granted in
tandem with ISOs shall be nontransferable and nonassignable except by will
or the laws of intestacy, and any ISO or SAR in tandem with an ISO is
exercisable during the lifetime of the Optionee only by the Optionee, or in
the event of his or her death, by a person who acquires the right to
exercise the Option by bequest or inheritance or by reason of the death of
the Optionee. The Board or its Committee has the right to grant options
other than ISO's or SAR's in tandem with ISO's which may or may not be
transferable or assignable.
The option agreement may contain such other terms, provisions and conditions
not inconsistent with the 2000 Plan as may be determined by the Committee.
TERMINATION; MODIFICATION AND AMENDMENT
The 2000 Plan (but not options previously granted under the 2000 Plan) shall
terminate ten years from the earlier of the date of its adoption by the Board of
Directors or the date the 2000 Plan is approved by the stockholders of the
Company. No Option will be granted after termination of the 2000 Plan.
The Board of Directors of the Company may terminate the 2000 Plan at any
time prior to its expiration date, or from time to time make such modifications
or amendments of the 2000 Plan, as it deems advisable. However, the Board of
Directors may not, without the approval of a majority of the then shares of the
capital
-20-
stock of the Company present in person or by proxy at an Annual or Special
Meeting of Stockholders and entitled to vote thereon, except under conditions
described under "Adjustments Upon Changes in Capitalization," increase the
maximum number of shares as to which options may be granted under the 2000 Plan,
materially change the standards of eligibility under the 2000 Plan, or adopt a
new plan.
No termination, modification or amendment of the 2000 Plan may adversely
affect the terms of any outstanding Options without the consent of the holders
of such Options.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event that the number of outstanding shares of Common Stock of the
Company is changed by reason of recapitalization, reclassification, stock split,
stock dividend, combination, exchange of shares, or the like, the Board of
Directors of the Company will make an appropriate adjustment in the aggregate
number of shares of Common Stock available under the 2000 Plan, in the number of
shares of Common Stock reserved for issuance upon the exercise of then
outstanding Options and in the exercise prices of such Options. Any adjustment
in the number of shares will apply proportionately only to the unexercised
portion of Options granted under the 2000 Plan. Fractions of shares resulting
from any such adjustment shall be revised to the next higher whole number of
shares.
In the event of the proposed dissolution or liquidation of substantially all
of the assets of the Company, all outstanding Options will automatically
terminate, unless otherwise provided by the Board of Directors.
Federal Income Tax Consequences.
The following discussion is only a summary of the principal federal income
tax consequences of the Options granted under the 2000 Plan and is based on
existing federal law, which is subject to change, in some cases retroactively.
This discussion is also qualified by the particular circumstances of individual
optionees, which may substantially alter or modify the federal income tax
consequences discussed below. Accordingly, optionees should consult their own
tax advisors.
NQSOs. No income will be recognized by an Option recipient upon the grant of
an NQSO. On the exercise of an NQSO, the optionee will generally have ordinary
income in an amount equal to the excess of the fair market value of the shares
acquired over the exercise price. The income recognized by an optionee who is
also an employee of the Company will be subject to tax withholding. Upon a later
sale of such shares, the optionee will have short-term or long-term capital gain
or loss, as the case may be, in an amount equal to the difference between the
amount realized on such sale and the tax basis of the shares sold.
ISOs. No income will be recognized by an Option recipient upon the grant of
an ISO. Also, the optionee will recognize no income at the time of exercise
(although the optionee will have income for alternative minimum income tax
purposes at that time as if the option were an NQSO). If the acquired shares are
sold or exchanged after the later of (a) one year from the date of exercise of
the options and (b) two years from the date of grant of the option, the
difference between the amount realized by the optionee on that sale or exchange
and the option price will be taxed to the optionee as a long-term capital gain
or loss. If the shares are disposed of before such holding period requirements
are satisfied, then the optionee will have ordinary income in the year of
disposition equal to the difference between the exercise price and the lower of
the fair market value of the stock at the date of the Option exercise or the
sale of the stock and the optionee will have capital gain or loss, long-term or
short-term, as the case may be, in an amount equal to the difference between (i)
the amount realized by the optionee upon that disposition of the shares and (ii)
the option price paid by the optionee increased by the amount of ordinary
income, if any, so recognized by the optionee.
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SARs. The grant of an SAR is generally not a taxable event for the optionee.
Upon the exercise of an SAR the optionee will recognize ordinary income in an
amount equal to the amount of cash and with respect to SARs granted in tandem
with NQSOs, the fair market value of any shares of Common Stock received upon
such exercise, and the Company will be entitled to a deduction equal to the same
amount. However, if the sale of any shares received would be subject to Section
16(b) of the Securities Exchange Act of 1934, ordinary income attributable to
such shares received will be recognized on the date such sale would not give
rise to a Section 16(b) action, valued at the fair market value at such later
time, unless the optionee has made a Section 83(b) election within 30 days after
the date of exercise to recognize ordinary income as of the date of exercise
based on the fair market value at the date of exercise.
The foregoing discussion is only a brief summary of the applicable federal
income tax laws as in effect on this date and should not be relied upon as being
a complete statement. The federal tax laws are complex, and they are subject to
legislative changes and new or revised judicial or administrative
interpretations at any time. In addition to the federal income tax consequences
described herein, an optionee may also be subject to state and/or local income
tax consequences in the jurisdiction in which the grantee works and/or resides.
NEW PLAN BENEFITS
The table of "Option/SAR Grants in Last Fiscal Year" under "Executive
Compensation -- (b) Option/SAR Grants in Last Fiscal Year" provides information
with respect to the grant of options to the Named Executive Officers during
fiscal 1999. Information regarding options granted to non-employee Directors
during fiscal 1999 is set forth under the heading "Executive Compensation -- (e)
Directors Compensation."
As of July 27, 2000, no options had been granted or allocated under the 2000
Plan.
OTHER STOCK OPTION PLANS
In May 1999 the Company's Board of Directors adopted the 1999 Non-Qualified
Stock Option Plan that was not submitted for shareholder approval, covering an
aggregate of 5,000,000 shares of Common Stock. As of September 25, 2000, the
Company has issued options to purchase 1,610,000 shares of Common Stock at a
price of $0.125 per share under the 1999 Plan to Employees and Consultants of
Environmental and Directors of the Company. An aggregate of 3,390,000 options
remain available for grant under the 1999 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE ADOPTION OF THE 2000 STOCK OPTION PLAN (PROPOSAL 4).
PROPOSAL 5: RATIFICATION OF THE APPOINTMENT OF AUDITORS
On January 24, 1997, KPMG Peat Marwick LLP (the "Former Accountant")
resigned as the Company's principal accountants.
The Former Accountant did not state any reason for resigning in its
resignation letter to the Company. However, in its letter to the Audit
Committee and its Material Weakness letter both dated January 10, 1997 and
delivered January 23, 1997, the Former Accountant reported "Disagreements
with Management" on financial accounting and reporting matters and auditing
scope concerning revenue recognition that, if not satisfactorily resolved
(which all were) would have caused a modification of their report on the
fiscal 1996 consolidated financial statements. The disagreements, aggregating
approximately $1,800,000, concerned certain transactions termed
"consignments" by the Former Accountant, products warehoused for customers,
and a research and development effort, none of which met the requirements for
revenue recognition under generally accepted accounting principles.
The Audit Committee of the Board of Directors met with and discussedhas appointed Goldstein Golub Kessler LLP as
Independent auditors for the subject matter of the disagreements with the Former Accountant.
The Former Accountant's report on the consolidated financial statements
for theCompany's fiscal years ended September 30, 19951998 and
1996 contained an
explanatory paragraph concerning1999. This firm has audited the Company's ability to continue as a going
concern. Management plansaccounts of the Company since 1997. This firm
performed audit services in regard to these matters are described in Note 1
toconnection with the Consolidated Financial Statements for September 30, 1996. Theexamination of the consolidated
financial statements do not include any adjustment that might
result from the ultimate outcome of these uncertainties.
The Company has authorized the Former Accountant to respond fully to
inquiries of the successor accountant concerningCompany for its fiscal years ended September 31,
1998 and 1999. In addition the subject matterfirm has rendered other services including the
review of such
disagreements.
-15-financial statements and related
-22-
On April 9, 1997,information in various registration statements and filings with the SEC
including quarterly reports on Form 10-Q.
If this proposal does not receive the affirmative approval of a majority of
the votes cast on the proposal, the Board of Directors appointed Goldstein Golub
Kessler & Company, P.C., certified public accountants, aswill reconsider the
Company's
successor accountant and to audit the books of account and other records of
the Company for the fiscal year ended September 30, 1997. The Company
subsequently retained Goldstein Golub Kessler & Company, P.C. to re-audit the
Company's financial statements for the year ended September 30, 1996.appointment. Representatives of Goldstein Golub Kessler & Company, P.C.LLP are expected to be
present at the Annual Meeting to respond to appropriate questions from
stockholders and to make a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S AUDITORS.AUDITORS (PROPOSAL 5).
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at the
Annual Meeting except the matters set forth in the Notice and described in this
Proxy Statement. Unless otherwise directed, all shares represented by Board of
Directors' Proxies will be voted in favor of the proposal of the Board of
Directors described in this Proxy Statement. If any other matters come before
the Annual Meeting, the persons named in the accompanying Proxy will vote on
those matters according to their best judgment.
EXPENSES
The entire cost of preparing, assembling, printing and mailing this Proxy
Statement, the enclosed Proxy and other materials, and the cost of soliciting
Proxies with respect to the Annual Meeting, will be borne by the Company. The
Company will request banks and brokers to solicit their customers who
beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone and telegram by officers and other regular employees
of the Company, but no additional compensation will be paid to such individuals.
STOCKHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
stockholders' meeting of the Company may seek to have the proposal included in
the proxy statement or form of proxy for such meeting unless that person (a) is
a record beneficial owner of at least 1% or $1,000$2,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
his name, address, the number of shares held by him and the dates upon which he
acquired such shares with documentary support for a claim of beneficial
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Delaware law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of stockholders, will be submitted timely only if the proposal has been received
at the Company's executive offices no later than February __, 1999.June 20, 2001. If the date of
such meeting is changed by more than 30 calendar days from the date such meeting
is scheduled to be held under the Company's By-Laws, or if the proposal is to be
presented at any meeting other than the next annual meeting of stockholders, the
proposal must be received at the Company's principal executive office at a
reasonable time before the solicitation of proxies for such meeting is made.
-23-
Even if the foregoing requirements are satisfied, a person may submit only
one proposal of not more than 500 words with a supporting statement if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
-16-
BY ORDER OF THE BOARD OF DIRECTORS
LAS VEGAS, NEVADA MELVIN W. PELLEY
JULY __, 1998 SECRETARY
Copies of the Company's Annual Report on Form 10-KSB for the year ended
September 30, 1997,1998 and 1999, as amended, the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 2000, and the Company's Current Report on
Form 8-K , as amended, (date of earliest event reported July 27, 2000) as filed
with the Securities and Exchange Commission, including the financial statements
(but without exhibits), can be obtained without charge by stockholders
(including beneficial owners of the Company's Common Stock) upon written request
to Melvin W. Pelley, the Company's Secretary, FiberChem, Inc., 1181 Grier Drive,
Suite B, Las Vegas, Nevada 89119.
-17-BY ORDER OF THE BOARD OF DIRECTORS
LAS VEGAS, NEVADA MELVIN W. PELLEY
OCTOBER 10, 2000 SECRETARY
-24-
EXHIBIT A
SUMMARY OF THE COMBINATION
The following is a summary of certain information contained elsewhere in
this Proxy Statement and the Annexes hereto. This summary does not contain a
complete statement of all material information relating to the business
combination between the FiberChem, Inc. ("FiberChem" or the "Company") and
Intrex Data Communications Corp of Vancouver, British Columbia ("Intrex") and is
subject to, and is qualified in its entirety by, the more detailed information
and financial statements contained in the Company's current or periodic reports
filed under the Securities Exchange Act of 1934. Certain capitalized terms used
in this summary are defined elsewhere in this Proxy Statement.
This summary includes forward-looking statements relating to the FiberChem's
operations that are based on Management's and third parties' current
expectations, estimates and projections. These statements are not guarantees of
future performances and actual results could differ materially. The statements
in this summary regarding FiberChem's business combination with Intrex, the
combined entity's delivery of services over the Internet and the size of the
market for the combined company's services are forward-looking statements that
involve risks and uncertainties. These risks and uncertainties include the
combined entity's ability to market its services using the two companies'
technologies, the timely development and acceptance of new products, final
promulgation and enforcement of regulations, the impact of competitive products
and pricing, the timely funding of customer's projects, customer payments to
FiberChem and other risks detailed from time to time in FiberChem's SEC reports.
BACKGROUND AND REASONS FOR THE BUSINESS COMBINATION
In 1998, FiberChem's Board of Directors authorized its management to
undertake a strategy of diversification away from total reliance on the
regulated environmental markets on which the Company depended for its
livelihood. This was primarily due to the persistent delays in promulgation and
then, more importantly, enforcement of those governmental regulations on which
the Company's revenues depended. This strategy was outlined in the proxy
material for the Annual Meeting held on August 31, 1998 and received
overwhelming support from the FiberChem shareholders. Over the next several
months, management evaluated several opportunities for mergers and acquisitions.
In April 1999, Intrex retained Entrenet Group, LLC, a business advisory group,
to provide Intrex with advice on strategic planning, including merger and
acquisition strategies. With the assistance of Entrenet, Intrex and FiberChem
began discussions with a view toward a business combination and, in July 1999,
FiberChem and Intrex entered into and announced the signing of a letter of
intent for a business combination and in December 1999 entered into a definitive
Arrangement Agreement. In June, 2000, FiberChem entered into an Amended
Arrangement Agreement.
Management of both companies believe that the combined business, to be known
as DecisionLink, can establish itself as a leading provider of corporate remote
asset monitoring and control systems, combining Intrex's satellite and wireless
communication technology with FiberChem's sensor technology, to greatly reduce
the cost of transmitting and monitoring data acquired from remote, mobile or
difficult to service multiple locations. These large potential cost savings are
expected to open opportunities for the combined company in markets such as
residential and commercial propane gas tanks, oil wells, oil and gas pipelines
and vehicle fleets.
-25-
TERMS OF THE TRANSACTION
On December 6, 1999, FiberChem and Intrex entered into an Arrangement
Agreement providing for a business combination of the two companies on terms
providing each company's shareholders with approximately 50% of the equity in
the combined business. In order to address various tax and legal issues and the
significant contribution expected to result from various Intrex business
opportunities which were not contemplated at the time of the original agreement,
FiberChem and Intrex entered into an Amended Arrangement Agreement on June 3,
2000, a copy which is attached as an Exhibit to the Form 8-K filed with the SEC
on June 21, 2000. The Intrex business combination was completed on July 27,
2000. The terms of the amended business combination provided for (i) the
acquisition by FiberChem of 75.11% of the outstanding Intrex voting shares
through a Plan of Arrangement under British Columbia law and (ii) the
acquisition of the remaining Intrex common shares through the merger of Pandel
Instruments, Inc., a Texas corporation, which owns the remaining 24.89% of
Intrex's outstanding common shares, with and into a wholly-owned subsidiary of
FiberChem (the "Pandel Merger"). The merger consideration issuable in the two
transactions provides Intrex shareholders with approximately 50% of the combined
Company with the opportunity to increase their equity participation in the
combined Company from 50% up to 80% if certain milestones related to the Intrex
business are met during a two year period following the closing. Subsequent to
closing, the only voting shares in Intrex are held by a wholly-owned subsidiary
of FiberChem.
Under the Amended Arrangement Agreement, all the outstanding Intrex shares
other than those acquired through the Pandel Merger, were converted into
175,240,930 shares of a new class of non-voting Intrex stock designated as
Intrex Class B Shares and 1,752,409 shares of a newly designated class of
FiberChem preferred stock designated as Special Shares. Of these shares,
127,758,403 Class B Shares and 1,277,584 Special Shares were deposited by the
Intrex shareholders participating in the Arrangement Agreement into escrow
pursuant to pooling agreements, subject to release to the shareholders in
installments if certain milestones related to Intrex's business are met by the
second anniversary of the closing.
An additional 9,450,000 Class B Shares and 94,500 Special Shares were issued
to David Peachey, Intrex's President and Chief Executive Officer, under a
Compensation Agreement entered into among Mr. Peachey, Intrex and FiberChem. All
9,450,000 shares were deposited in escrow and will be subject to release to Mr.
Peachey upon achievement of the pooling agreement milestones in the same
proportions as the shares under the pooling agreement are released to Intrex
shareholders.
Each Intrex Class B Share (other than the shares on deposit under the
pooling agreements) can be redeemed by the holder beginning not later than
December 31, 2000, in exchange for one share of Common Stock. Until exchanged,
each Class B Share will be entitled to receive the same dividends and
distributions as a share of FiberChem Common Stock and each Special Share will
be entitled to one hundred votes, or the same number of votes possessed by the
shares of FiberChem Common Stock for which the related Class B Shares can be
exchanged. The Special Shares are subject to redemption for nominal
consideration when the related Class B Shares are redeemed. The exchange of
Intrex common shares into Intrex Class B Shares and FiberChem Special Shares is
intended to allow Intrex shareholders to defer what might otherwise be a taxable
disposition if the Intrex shares were directly exchangeable for shares of
FiberChem Common Stock.
Pursuant to the Pandel Merger Agreement, Pandel was merged into Pandel
Mergerco, Inc., a wholly-owned FiberChem subsidiary, which thereby acquired
ownership of Intrex's common shares formerly owned by Pandel. Under the Pandel
Merger Agreement, the Pandel shareholders received 580,782.22 shares of a new
class of FiberChem Convertible Preferred Stock (designated Pandel Series
Preferred Stock and convertible into 58,078,222 shares of Common Stock). The
58,078,222 shares of Common Stock issuable upon conversions of
-26-
the Pandel Series Preferred stock represent the number of Intrex Class B Shares
that Pandel otherwise would have received in exchange for its Intrex common
shares under the Amended Arrangement Agreement. The Pandel shareholders were
required to deposit 423,393.22 shares of Pandel Series Preferred stock (72.90%
of the 580,782.22 Shares of Pandel Series Preferred Stock) under pooling
agreements similar to the Intrex pooling agreement described above. These shares
are also be subject to proportionate release on the same terms and conditions as
the Intrex pooling agreement referred to above. The Pandel Merger transaction is
intended to qualify as a tax free reorganization under Section 368 of the United
States Internal Revenue Code of 1986, as amended.
An additional 94,500 shares of FiberChem's Pandel Series Preferred Stock
have been issued to Peter Lagergren under a Compensation Agreement entered into
between Mr. Lagergren and FiberChem. Mr. Lagergren became President of the
Communications Division, Chief Technology Officer, and a Director of FiberChem
on July 27, 2000. All 94,500 shares were deposited into escrow, pursuant to the
terms of a pooling agreement. These shares will be released to Mr. Lagergren, in
installments, if certain milestones related to FiberChem's business are met by
the second anniversary of the closing.
The business and operations of Pandel are not significant to the combined
companies, except for Pandel's ownership of 24.89% of the outstanding common
shares of Intrex and except that a component of Intrex's proprietary data
communications technology is licensed to Intrex by Pandel. Pandel and Peter
Lagergren, its principal shareholder, have agreed to indemnify FiberChem against
certain liabilities, including liabilities for breach of representations and
warranties made by Pandel and Peter Lagergren in the Pandel Merger Agreement.
As provided in the Pandel Merger Agreement, FiberChem issued the Pandel
Series Preferred Stock because it did not have a sufficient number of authorized
shares of Common Stock to satisfy its obligation to deliver Common Stock
pursuant to the Pandel Merger Agreement or Mr. Lagergren's Compensation
Agreement. The Pandel Series Stock is mandatorily convertible into shares of
Common Stock when a sufficient number of shares of Common Stock are authorized.
As of September 25, 2000, 102,331,380 shares of Common Stock were
outstanding or were reserved for issuance for specific purpose. FiberChem has
available and not reserved for issuance for other purposes a total of 47,668,620
shares of Common Stock, which is not sufficient to cover FiberChem's obligations
to issue Common Stock pursuant to the Arrangement Agreement and the Pandel
Merger Agreement of approximately 252 million shares.
FiberChem agreed in the Arrangement Agreement to call a meeting of its
shareholders to amend FiberChem's certificate of incorporation to increase the
amount of its authorized Common Stock to not less than 500,000,000 shares.
Commencing on the earlier of December 31, 2000, or the date FiberChem notifies
Intrex that the authorized Common Stock of FiberChem has been increased to not
less than 500,000,000 shares, the holders of the Intrex Class B Shares may
require Intrex to redeem the Class B Shares in exchange for proceeds of
redemption equal to the market value of one share of FiberChem Common Stock,
which may be paid at the election of FiberChem by delivery of one share of
FiberChem Common Stock or in cash. If FiberChem does not authorize at least
500,000,000 additional shares of Common Stock by December 31, 2000, FiberChem
will only be able to satisfy its obligation to redeem the Intrex Class B Shares
by payment in cash.
-27-
CLOSING
The business combination closed on July 27, 2000. The proposals in the
accompanying Proxy Statement to change the name to Decision Link and to increase
capitalization are being made pursuant to undertakings made by FiberChem in the
Arrangement Agreement and the Pandel Merger Agreement.
OPINION OF FINANCIAL ADVISORS
The respective Boards of Directors of FiberChem and Intrex received the
opinions of independent financial advisor that the consideration received in the
business combination was fair to their respective shareholders from a financial
point of view.
AGREEMENTS AFFECTING THE COMPANIES AFTER THE COMBINATION
The Arrangement Agreement includes a number of agreements affecting the post
combination management and operations of the combined entity. Set forth below is
a summary of certain of the material terms included in certain of such
agreements. The Amended Arrangement is filed as an exhibit to the Current Report
on Form 8-K (date of the earliest event reported June 2, 2000, filed with the
Securities and Exchange Commission.
LOCK-UP AGREEMENT. Principal stockholders of Intrex and FiberChem who will
initially own approximately 154,091,957 shares (50.5% of the then outstanding
shares) of FiberChem Common Stock (or securities of FiberChem or Intrex
exchangeable for or convertible into such number of shares of Common Stock)
entered into a lock-up agreement limiting their public sales of any Common Stock
owned by them including any shares of Common Stock which may be obtained upon
the release to them under the pooling agreement of securities convertible into
or exchangeable for FiberChem Common Stock during the twelve month period
following the closing of the business combination to the amount which would be
eligible for sale by an affiliate under Rule 144 unless otherwise approved by
FiberChem.
COMPOSITION OF BOARD OF DIRECTORS AND VOTING AGREEMENT. Geoffrey F. Hewitt,
Melvin Pelley, David S. Peachey and Peter Lagergren, the principal executive
officers of FiberChem and Intrex entered into a voting agreement providing that
the FiberChem Voting Securities held by them or over which they have voting
power will be voted by each of them during a two year period following the
closing of the business combination to elect a board of directors consisting of
nine persons, four of whom will be nominated by David S. Peachey and Peter
Lagergren, who are the principal executive officers of Intrex; four of whom will
be nominated by Geoffrey Hewitt, the chief executive officer of FiberChem; and
the ninth of whom will be nominated jointly by Geoffrey Hewitt and David S.
Peachey, or, if they are unable to agree on a nominee, a person chosen by the
other eight directors. The voting agreement will also provide that the
signatories will vote their shares in accordance with the proposals put forward
and recommended by the Board of Directors.
REGISTRATION RIGHTS. If the shares of Common Stock issued to former Intrex
shareholders cannot be sold during the lock-up period in accordance with the
limitations of Rule 144, FiberChem has agreed to file a registration statement
covering the re-sale of such shares, to cause the registration statement to
become effective and to maintain its effectiveness for a period of two years. In
addition, if after the expiration of lock-up period and for a period of two
years thereafter, former Intrex shareholders cannot sell their FiberChem stock
in accordance with the limitations of Rule 144, FiberChem, at the request of the
holders of at least 25% of the remaining shares of Common Stock held by former
Intrex shareholders, will file and cause to become effective a registration
statement covering the re-sale of such shares and will maintain the
effectiveness of such registration statement for a period of two years.
-28-
POOLING AGREEMENT SHARES. Out of a total of approximately 252,220,000 shares
of Common Stock (or securities exchangeable for or convertible into shares of
Common Stock) which have been issued to Intrex and Pandel shareholders as
consideration for the business combination, 189,000,000, or 75%, of the shares
(62% of the 305,096,000 total number of all shares of FiberChem Common Stock to
be issued and outstanding) deposited into escrow pursuant to various pooling
agreements and will be subject to release in whole or in part to the Intrex and
Pandel shareholders only if certain milestones related to Intrex's business are
met during a two year period following the closing of the business combination.
The pooling agreements provide that any shares which have not been released by
the expiration of the two-year period will be cancelled. Holders of shares
subject to the pooling agreements will be entitled to receive dividends paid by
the Company but, except for shares issued to Pandel shareholders and except with
the consent of FiberChem, will not be entitled to associated FiberChem voting
rights.
EMPLOYMENT AND NON-COMPETITION AGREEMENTS. As a condition to the closing,
David S. Peachey, Peter Lagergren, Geoffrey Hewitt, Melvin Pelley, Brian O'Neil
and Thomas Collins each entered into an employment agreement and non-competition
agreement with FiberChem. In addition, as a further condition to the closing,
FiberChem entered into separate Compensation Agreements with each of David S.
Peachey and Peter Lagergren providing for the issuance to each of them of
securities convertible into or exchangeable for 9,450,000 shares of Common
Stock, which securities have been deposited into escrow subject to release to
them, in whole or in part, upon achievement within two years of the Intrex
business milestones contained in the pooling agreements.
FIBERCHEM SPECIAL MEETING OF STOCKHOLDERS. FiberChem agreed in the
Arrangement Agreement that within 90 days after the closing of the business
combination it will call and hold a shareholders' meeting at which the
shareholders of FiberChem will be asked to approve a resolution to increase the
number of authorized shares of Common Stock to 500,000,000 shares. FiberChem has
agreed to use its best efforts to solicit proxies or otherwise cause its
shareholders to vote in favor of the resolution. If FiberChem's stockholders do
not authorize the additional shares of Common Stock by December 31, 2000, then
FiberChem's obligation to redeem each Intrex Class B Share in exchange for one
share of Common Stock can be satisfied only by a cash payment in an amount equal
to the market value of a share of Common Stock. The accompanying Proxy Statement
relates to the special meeting of shareholders of FiberChem which has been
called to satisfy this agreement.
ENTRENET AGREEMENT. On April 12, 2000, FiberChem, Intrex and Entrenet
entered into an agreement providing for the settlement of Intrex's obligation to
compensate Entrenet for advisory services. Under the agreement, upon the closing
of the business combination, Intrex's obligations to Entrenet were settled for a
payment of $3,557 in cash; 3,000,000 shares of Common Stock; a 10% Subordinated
Convertible Note in the amount of $126,500 convertible into Common Stock at a
conversion price of $0.185 per share; and a four year warrant to purchase
960,000 shares of Common Stock at a price of $0.185 per share.
COMBINED OPERATIONS
The conclusion of the merger of FiberChem with Intrex Data
Communications Corp. of Vancouver, BC, and Dallas, TX, has resulted in a new
company, to be named DecisionLink, Incorporated, which will operate in the
global wireless remote asset monitoring marketplace.
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The business combination of FiberChem and Intrex has in management's
opinion produced many new marketing opportunities. Management believes that the
ability to collect data on a real time basis through FiberChem's sensor
technology combined with Intrex's communications technology offers the combined
Company a unique opportunity for rapid growth in the expanding wireless data
communications market. It provides us with the ability to transmit and monitor
data from remote or difficult to reach assets and locations.
The combined products and services are particularly suitable for
monitoring individual residential and commercial propane gas tanks, oil and gas
wells, pipelines, compressors, vehicle fleets, fuel storage tanks and other
related applications. The Company will now be able to provide Intrex
communication modules as a new component to its existing business in the above
or below ground storage tank, offshore platform monitoring, and its chemical
sensor marketplaces.
FiberChem/DecisionLink's Intrex Division provides low-cost, proprietary
Internet and communications technology for transmitting data to or from remote
or mobile assets on a real-time basis using ORBCOMM's and Norcom's satellite
services and other wireless data systems. Data is routed through Intrex's global
network that acts as a data gateway and applications service provider. This
allows customers to monitor and control remote or mobile assets such as gas
wells, propane tanks, pipelines, compressors, storage tanks, offshore platforms,
or service vehicles directly from a desktop PC.
FiberChem/DecisionLink's FCI Environmental Division will continue to
develop, manufacture, market and license fiber optic chemical sensors that
produce continuous, real-time information on environmental pollutants in the
air, water and soil. The FCIE product line has been re-engineered to incorporate
Intrex-developed communications technology. These new products offer the
environmental monitoring community FiberChem's state-of-the-art sensing
technology with all the benefits of satellite communications, including
dramatically reduced installation and start-up costs, lower communications
charges, ubiquitous coverage and the ability to receive data on a
customer-specific Web site.
THE DECISIONLINK STRATEGY
Building on the strengths of FiberChem and Intrex, the combined Company
intends to establish itself as a leading provider of corporate remote asset
monitoring, control and data information systems. The Company's SensorFusionO
technology integrates the sensing and messaging functions seamlessly through its
Universal Data Network (UDN) and, with TCP/IP as its base protocol, it allows an
easy interface with most customer-supplied data management systems.
SensorFusionO provides an end-to-end solution for clients with remote assets
that require cost efficient and time effective monitoring and control.
MARKET STRATEGY
The Company's marketing strategy is to target large-scale applications
where the customer requires the functionality of high technology sensors and
integrated communication systems at a low delivery cost.
The Company believes that markets with these characteristics will
provide:
- Significant recurring revenue potential derived from on-going
monitoring and data management fees,
- Significant revenue potential from the sale of hardware and monitoring
software.
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MARKET OPPORTUNITIES
PROPANE TANKS
There are approximately 15 million commercial and residential propane
tanks in the United States alone. Current tank level measurement technology
provides rough estimates of tank fuel levels of limited management value.
Intrex's patented "GasLink" level monitoring system is accurate within 1%. It
will enable a fundamental change in the way propane distribution systems are
managed. Distributors will be able to accurately monitor individual tank fuel
levels from a central location. This will allow them to use more efficient fuel
delivery schedules and better control inventories. This should result in
increased customer satisfaction and an up to 25% reduction in delivery costs. In
addition, this new level of accuracy may permit distributors to change the
billing system from "pay per fill" to a monthly usage based billing system
(similar to a billing system for electricity). The resulting information will
also allow propane distributors to more cost effectively purchase and store
propane. The "GasLink" system has been designed for quick installation on
existing tanks without modification to the tanks and without the need to enter
an end user's premises.
The Company has signed a Memorandum of Understanding (MOU) with
Cornerstone Propane Partners, LP (NYSE :CNO), the fourth largest propane
distributor in the United States, with approximately 460,000 tanks owned or
controlled. The MOU sets out the basic terms for a joint venture between the
Company and Cornerstone for marketing the propane monitoring system to other
major propane delivery companies worldwide. The joint venture will be known as
TankSat LC with the Company owning 50% of the venture. Cornerstone also intends
to install the "GasLink" system throughout the Cornerstone network.
Revenue in this market segment will be derived from monthly monitoring
and data management fees, and the sale of individual tank monitoring and
communication equipment. The Company anticipates its monitoring contracts will
be for a minimum of five-year periods. In addition, it is the Company's belief
that given the proprietary nature of its technology and systems, once installed
it will be difficult for customers to cost justify switching monitoring
services.
OIL PUMPS AND GAS COMPRESSORS
The oil and gas industry has a critical operational need for accurate
measurement and monitoring of operating parameters for oil pumps and pipeline
compressors. Intrex has developed "CompressionLink", which is a monitoring and
communication device for accurately measuring compressor operational status.
Intrex currently has pilot projects underway with Weatherford, Hanover, POI,
Universal Compression Argentina and USA Compression, all leading industry
suppliers. Intrex is also providing monitoring and communication devices to
Weatherford to monitor oil pumps.
The sensing equipment monitors various operating parameters resulting
in the provision of greater operating efficiencies and preventive maintenance
information. The communication systems allow pump and compressor service
companies to ensure they can maintain throughput and operating "up time"
availability. This avoids excessive shutdowns and mechanical damage thereby
helping to limit "out of conformity operations".
Revenue will be derived from recurring monitoring fees and ongoing data
management fees as well as from the sale of the monitoring and communication
equipment.
-31-
GASOLINE VAPOR DETECTION MARKET
SENSOR-ON-A-CHIP-Registered Trademark-, jointly developed by
FiberChem and Texas Instruments, is an optical analytical spectrometer on a
plug-in chip with a standard 20-pin IC package. Applications include
environmental, medical and industrial sensing of gases such as carbon
monoxide, ethanol, ammonia, hydrocarbons and food contaminants.
FiberChem has been working with Gilbarco Inc., the largest supplier of
gas pumps in the United States, to deploy a low cost sensor for the detection of
gasoline vapor in Phase II vapor recovery systems for gasoline dispenser
systems. This device is designed to satisfy the requirements of the newly
enacted regulations promulgated by the California Air Resources Board. FiberChem
estimates there are approximately 100,000 gas stations each with an average of
six pumps that will be required to install vapor detection systems. Each pump
will require two chips with each chip having an expected life of three years.
This would suggest an initial market of 1.2 million chips and a replacement
market of approximately 400,000 chips per year. If the industry is to meet the
mandated compliance date of April 2001, the Company anticipates that shipments
will begin prior to the end of 2000.
ENVIRONMENTAL MONITORING
Management believes, based on their knowledge of the industry, that
FiberChem with its PetroSense-Registered Trademark- fiber optic based
petroleum hydrocarbon sensors is among the world's leaders in the detection
of hydrocarbon in vapor and water. The development of this technology as the
best available in monitoring of leaks from underground storage tanks (USTs)
and aboveground storage tanks (ASTs), pipelines and wastewaters has enabled
the Company to build an impressive list of Fortune 500 clients such as Shell,
Texaco, GATX, Coastal, Florida Power and the Miami, West Palm Beach and
Orlando International Airports.
The development of this market has been hampered by delays in the
enforcement of environmental regulations and the high cost associated with
communicating with the sensor units. However, with over 700,000 ASTs and 1.2
million USTs in the United States, combined with a continuing public requirement
to reduce environmental pollution, the Company perceives continuing and
significant opportunities for its products. Management believes now that Intrex
communications technology has been integrated with FiberChem's sensor
technology, it will allow the Company to more rapidly realize the potential of
this market.
The Company recently sighed a Memorandum of Understanding with
Mainsborne Communications Inc, Vancouver, Canada to develop an interface to the
modem in their automated meter-reading device or AMR. The Company intends to
market this product to utilities with a large rural based cliental and to
developing countries as a low cost method of data recovery and communication for
electricity, water and gas usage. The Company considers there is an enormous
opportunity in the rapidly growing AMR marketplace and is positioning its
technology to become a leader in the communication pathway for remote meter
data.
OTHER MARKETS
In addition, the Company anticipates pursuing the following market
opportunities:
- Heavy Machinery and Transportation Asset monitoring;
- Sensors for chemical detection and measurement.
-32-
CURRENT PRODUCT PORTFOLIO
SMARTTRANS-TM- , a sophisticated hardware and software package,
remotely monitors mobile or fixed industrial assets via satellite or cellular
telephone utilizing the Company's LeoLink-TM- and reports operations to the
customer on demand through IntrexNet-TM- Universal Data Network
LEOLINK-TM- is an extremely flexible microcomputer that stores data and
is an active control system, and data link manager. It collects data from
external electronic components; accepts control commands; controls and monitors
the remote equipment; and interfaces to a wide variety of Remote Terminal Units
(RTUs). LeoLink-TM- is supplied as a complete field installable package.
INTREXNET-TM- is a Universal Data Network that allows customers to send
data using multiple input devices or systems such as satellite, cellular, public
Internet, or private networks and receive decision-making information through
the Internet or private networks, pager networks, or public telephone systems.
FUELMATE-TM-/DATAMATE-TM- monitors output from intelligent flow meters
and electronic engine components which measure multiple functions such as fuel
use, rpm, temperature, injector timing, etc. and transmits the data on demand
via satellite. DataMate-TM- is a generic version of the FuelMate-TM- and has the
ability to be programmed externally to monitor and process any type of digital
input signal.
INTREX ANYWHERE-TM- is a system that allows the IntrexNet-TM- Universal
Data Network customer to build a complete data acquisition system using the
latest IP and data base tools in conjunction with the latest in wireless and
satellite technology without having to invest in people and equipment
infrastructure required to build these systems from scratch.
INTREXNET DATA PORTAL-TM- is a service of the IntrexNEttm Universal
Data Network (UDN),which allows customers access to multistranded communications
networks using either a Virtual Private Network or a Frame Relay connection to
the Universal Data Network. This is a very flexible method for adding value
added services to an OEM's portfolio. The IntrexNet Data Portal-TM- allows the
Company to provide its client OEMs with private labeled wireless communications
services to provide very high quality Internet based data collection and
distribution systems
PETROSENSE-Registered Trademark- CMS-4000 AND CMS-5000 Series are
fiber optic based petroleum hydrocarbon sensors, which can detect hydrocarbons
in vapor and in water. The Company believes that this product line is the
best available technology for monitoring soil vapor and ground water on a
real-time basis. These products are now satellite and Internet enabled.
OILSENSE-Registered Trademark- -4000 AND PHA-100WL replace the now
banned Freon-based instruments used to determine the hydrocarbon content of
produced water from offshore oil production platforms. This niche market
represents a worldwide opportunity for the Company. The OilSense is now
satellite and Internet enabled.
SENSOR-ON-A-CHIP-Registered Trademark- is an optical analytical
spectrometer on a plug-in chip with a standard 20-pin IC package. Utilizing
standard TI components for ease of design compatibility, these devices
incorporate wave-guides onto which a chemical matrix may be coated. The
presence of a chemical causes a reversible change in the wave-guide material
that is detected and measured. The device is an integral component of the
Company's SensorFusion technology.
-33-
GASLINK-SM- is an ultrasound detection and communication device for the
measurement of fluid levels in tanks. This product is patented technology and
proprietary communication systems. There is a worldwide demand for this product.
COMPRESSIONLINK-SM- is a sensor and communication technology
specifically designed for compressor preventive maintenance control and
operational parameters. This is a large market with urgent need in remote oil
flow compressor locations.
PROPRIETARY TECHNOLOGY
The combined Company possesses cutting edge sensor technology, state
of the art satellite communication technology, supervisory control and data
acquisition systems ("SCADA"), and its Universal Data Network system.
The Company owns 23 U.S. patents and 15 International patents
covering the fundamental elements of both fiber and waveguide based chemical
sensors. The Company also owns the key trademarks which identify its
products, including Sensor-on-a-Chip-Registered Trademark-, FOCS-Registered
Trademark-, PetroSense-Registered Trademark-, OilSense-Registered Trademark-,
LeoLink-TM-, SmartTrans-TM-, FuelMate-TM-, DataMate-TM-, EMAP-TM-,
DolphinLink-TM-, the IntrexNet Universal Data Network-TM- and Intrex
Anywhere-TM-.
Through a five-year cross licensing agreement with Bosch Telecom GmbH
the Company licensed Bosch's proprietary chemistry and platforms with an
exclusive right for the medical market and non-exclusive rights as to other
markets in North America.
STRONG RECURRING REVENUE MODEL
The combination of the two companies will accelerate the change in
strategy to a serviced-based company with recurring from fee-for-service sales
model. This is a fundamental and significant change to the recurring revenue
model from one-time sales of sensor equipment to its customers or distributors.
Under this strategy, the Company is focused on providing information to its
customers on a "fee-for-service" basis. The customer is provided with essential
equipment and a monthly service fee is charged for providing information and
linking the customer to its assets. In addition, "value-added" services are
provided to the customer as data is processed through the Universal Data Network
and transmitted to the customer via the Internet providing "real-time" decision
making information. Revenues will be tied to multi-year contracts resulting in a
repetitive revenue stream to the Company.
-34-
FIBERCHEM, INC.
1181 Grier Drive, Suite B
Las Vegas, Nevada 89119
PROXY
The undersigned, a holder of Common Stock of FiberChem, Inc., a
Delaware corporation (the "Company"), hereby appoints GEOFFREY F. HEWITT and
MELVIN W. PELLEY, and each of them, the proxies of the undersigned, each with
full power of substitution, to attend, represent and vote for the undersigned,
all of the shares of the Company which the undersigned would be entitled to
vote, at the Annual Meeting of Stockholders of the Company to be held on
____ __,
1998November 29, 2000 and any adjournments thereof, as follows:
1. The election of twothree (3) Class A members (Geoffrey F. Hewitt, David S.
Peachey and Irwin J. Gruverman), three (3) Class B Members (Peter J.
Lagergren, Brian A. O'Neil and Walter Haemmerli) and one Class C membersDirector
(Trevor Nelson) to the Board of Directors to hold office for a three year term and until their successors are duly
elected and qualified,staggered
terms as provided in the Company's Proxy Statement:
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
(Instructions: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH OR OTHERWISE STRIKE OUT HIS OR HER
NAME BELOW)
Gerald T. OwensGeoffrey F. Hewitt, David S. Peachey, Irwin J. Gruverman, Peter J. Lagergren,
Brian A. O'Neil, Walter Haemmerli, and Byron A. DenenbergTrevor S. Nelson.
2. The renewal of the proposal to amend the Certificate of Incorporation
to authorize, if necessary, a reverse stock split of the Company's
Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The adoption of the proposal to amend the Certificate of Incorporation to
increase the authorized shares of the Company's Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The adoption of the proposal to amend the Certificate of Incorporation
authorizing a change in the Company's name to "DecisionLink, Inc."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve and adopt the 2000 Stock Option Plan for the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. The ratification of the appointment of Goldstein Golub Kessler &
Company, P.C.LLP as the
Company's auditors for the fiscal yearyears ending September 30, 1998.1999 and
September 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5.6. Upon such other matters as may properly come before the meeting or any
adjournments thereof.
The undersigned hereby revokes any other proxy to vote at such Annual
Meeting, and hereby ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof. With respect to matters not
known at the time of the solicitations hereof, said proxies are authorized to
vote in accordance with their best judgment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE TWO DIRECTORS NAMED IN PROPOSAL 1, FOR THE
ADOPTION OF PROPOSALS 2, 3, 4, 5, AND 4;6; AND AS SAID PROXIES SHALL DEEM
ADVISABLE ON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING.
-18-
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated July __, 1998October 10, 2000 relating to the
Annual Meeting, the 19971999 Annual Report to Stockholders for the year ended
September 30, 1999, and the Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1998.
--------------------------------------
--------------------------------------2000.
------------------------
------------------------
Signature(s) of Stockholder(s)
The signature(s) hereon should correspond exactly with the name(s) of
the Stockholder(s) appearing on the Stock Certificate. If stock is jointly held,
all joint owners should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If signer is a corporation,
please sign the full corporate name, and give title of signing officer.
Date: , 1998
-----------------____________, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
FIBERCHEM, INC.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
-19-