UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. _________]
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PREFERENCE TECHNOLOGIES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i(4)) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PREFERENCE TECHNOLOGIES, INC.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 21, 2000
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TO OUR STOCKHOLDERS:
Notice is hereby given that the 2000 annual meeting (the "Meeting") of
the stockholders of Preference Technologies, Inc. (the "Company") will be held
at 333 North Rancho Drive, Suite 421, Las Vegas, Nevada 89106, on Wednesday,
June 21, 2000 at 10:00 AM, Pacific Daylight Time, for the following purposes:
1. Election of Directors. To elect five directors to hold office until
the annual meetings of stockholders to be held in 2001 and until
their respective successors have been elected and qualified;
2. Ratification of Appointment of Independent Auditors. To ratify the
appointment of Singer Lewak Greenbaum & Goldstein LLP as the
Company's independent certified public accountants for the year
ending December 31, 2000; and
3. Other Business. To transact such other business as properly
may come before the Meeting or any adjournments or postponements
thereof.
Only stockholders of record of the Common Stock of the Company at the
close of business on May 22, 2000 (the "Stockholders") are entitled to notice of
and to vote at the Meeting and at any adjournments or postponements thereof.
The Proxy Statement which accompanies this Notice contains additional
information regarding the proposals to be considered at the Meeting, and
Stockholders are encouraged to read it in its entirety.
As set forth in the enclosed Proxy Statement, proxies are being
solicited by and on behalf of the Board of Directors of the Company. All
proposals set forth above are proposals of the Company. It is expected that
these materials first will be mailed to Stockholders on or about May 26, 2000.
By Order of the Board Of Directors
PREFERENCE TECHNOLOGIES, INC.
/s/ Michael Calderone
-----------------------------
Michael Calderone
Secretary
Las Vegas, Nevada
May 19, 2000
TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE.
IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN
PERSON. THE PROXY MAY BE REVOKED AT ANY TIME BEFORE ITS EXERCISE.
PREFERENCE TECHNOLOGIES, INC.
333 North Ranch Drive, Suite 810
Las Vegas, Nevada 89106
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 21, 2000
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GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Preference Technologies, Inc., a Nevada
corporation (the "Company"), for use at the 2000 annual meeting of stockholders
of the Company (the "Meeting") to be held at 333 North Rancho Drive, Suite 421,
Las Vegas, Nevada 89106, on Wednesday, June 21, 2000 at 10:00 AM, Pacific
Daylight Time, and at any adjournments or postponements thereof, for the
purposes set forth herein and in the attached Notice of Annual Meeting of
Stockholders. Accompanying this Proxy Statement is a proxy card (the "Proxy"),
which you may use to indicate your vote on the proposals described in this Proxy
Statement. Only stockholders of record (the "Stockholders") on May 22, 2000 (the
"Record Date") are entitled to notice of and to vote in person or by proxy at
the Meeting and any adjournments or postponements thereof.
Matters to be Considered
The matters to be considered and voted upon at the Meeting will be:
1. Election of Directors. To elect five directors to hold office
until the annual meetings of stockholders to be held in 2001 and
until their respective successors have been elected and qualified.
The following persons are the Board of Directors' nominees for
directors:
Michael Calderone
Robert Forbuss
William Louden
Frank Marino
Leo Verheul
2. Ratification of Appointment of Independent Auditors. To ratify the
appointment of Singer Lewak Greenbaum & Goldstein LLP as the
Company's independent certified public accountants for the year
ended December 31, 2000; and
3. Other Business. To transact such other business as properly may
come before the Meeting or at any adjournments or postponements
thereof.
Cost of Solicitation of Proxies
This Proxy solicitation is made by the Board of Directors of the
Company, and the Company will bear the costs of this solicitation, including the
expense of preparing, assembling, printing and mailing this Proxy Statement and
any other material used in this solicitation of Proxies. The solicitation of
Proxies will be made by mail and may be supplemented by telephone or other
1
personal contact to be made without special compensation by regular officers and
employees of the Company. If it should appear desirable to do so to ensure
adequate representation at the Meeting, officers and regular employees may
communicate with Stockholders, banks, brokerage houses, custodians, nominees and
others, by telephone, facsimile transmissions, telegraph, or in person to
request that Proxies be furnished. The Company will reimburse banks, brokerage
houses and other custodians, nominees and fiduciaries for their reasonable
expenses in forwarding proxy materials to their principals. The total estimated
cost of the solicitation of Proxies is $6,000.00.
Outstanding Securities and Voting Rights; Revocability of Proxies
The authorized capital of the Company consists of 200,000,000 shares of
common stock, $.001 par value ("Common Stock"), and 10,000,000 shares of
preferred stock, .001 par value ("Preferred Stock"). 28,691,964 shares of Common
Stock were issued and outstanding on the Record Date. No shares of Preferred
Stock had been issued as of the Record Date. A majority of the outstanding
shares of the Common Stock constitutes a quorum for the conduct of business at
the Meeting. Abstentions will be treated as shares present and entitled to vote
for purposes of determining the presence of a quorum.
Each Stockholder is entitled to one vote, in person or by proxy, for
each share of Common Stock standing in his or her name on the books of the
Company as of the Record Date on any matter submitted to the Stockholders,
except that in the election of directors, each Stockholder has cumulative voting
rights and is entitled to as many votes as the number of shares held multiplied
by the number of directors to be elected (two). All such votes may be cast for a
single candidate or distributed among any or all of the candidates as the
Stockholder sees fit. However, no Stockholder shall be entitled to cumulate
votes unless the candidate's name has been placed in nomination prior to the
voting and the Stockholder, or any other Stockholder, has given notice at the
meeting prior to the voting of their intention to cumulate their votes in the
election of directors, and the enclosed Proxy grants discretionary authority for
such purpose.
The election of directors requires the affirmative vote to each
candidate of a plurality of the votes cast. Each other proposal described herein
requires the affirmative vote of a majority of the outstanding shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Meeting. Abstentions and broker non-votes will be included in the number of
shares present at the Meeting for the purpose of determining the presence of a
quorum. Abstentions will be counted toward the number of votes cast on proposals
submitted to the Stockholders and will have the effect of a negative vote, while
broker non-votes will not be counted as votes cast for or against such matters.
Of the shares of Common Stock outstanding on the Record Date,
15,761,200 shares of Common Stock (or approximately 55% of the issued and
outstanding shares of Common Stock) were owned by directors and executive
officers of the Company.
2
A Proxy for use at the Meeting is enclosed. The Proxy must be signed
and dated by you or your authorized representative or agent. Telegraphed, cabled
or telecopied Proxies are also valid. You may revoke a Proxy at any time before
it is exercised at the Meeting by submitting a written revocation to the
Secretary of the Company or a duly executed Proxy bearing a later date or by
voting in person at the Meeting. Michael Calderone, the designated proxy holder
(the "Proxy holder"), is a member of the Company's management.
If you hold Common Stock in "street name" and you fail to instruct your
broker or nominee as to how to vote for such Common Stock, your broker or
nominee may, in its discretion, vote such Common Stock "FOR" the election of the
Board of Directors' nominees and "FOR" the ratification of the appointment of
Singer Lewak Greenbaum & Goldstein LLP as the Company's independent auditors.
Unless revoked, the shares of Common Stock represented by Proxies will
be voted in accordance with the instructions given thereon. In the absence of
any instruction in the Proxy, such shares of Common Stock will be voted "FOR"
the election of the Board of Directors' nominees and "FOR" the ratification of
the appointment of Singer, Lewak, Greenbaum & Goldstein LLP as the Company's
independent auditors.
Recently, the Securities and Exchange Commission (the "SEC") amended
its rule governing a company's ability to use discretionary proxy authority with
respect to stockholder proposals which were not submitted by the stockholders in
time to be included in the proxy statement. As a result of that rule change, in
the event a stockholder proposal was not submitted to the Company prior to May
15, 2000, the enclosed Proxy will confer authority on the Proxyholders to vote
the shares in accordance with their best judgment and discretion if the proposal
is presented at the Meeting. As of the date hereof, no stockholder proposal has
been submitted to the Company, and management is not aware of any other matters
to be presented for action at the Meeting. However, if any other matters
properly come before the Meeting, the Proxies solicited hereby will be voted by
the Proxyholders in accordance with the recommendations of the Board of
Directors. Such authorization includes authority to appoint a substitute nominee
for any Board of Directors' nominee identified herein where death, illness or
other circumstance arises which prevents such nominee from serving in such
position and to vote such Proxy for such substitute nominee.
Security Ownership of Principal Stockholders and Management
The following table sets forth information regarding beneficial
ownership as of May 19, 2000, of the Company's outstanding common stock by any
person who is known to the Company to be a beneficial owner of more than five
percent of the Company's voting securities and the Company's equity security
held by each director and officer and by directors and officers of the Company
as a group.
3
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Name and Address of Beneficial Class of Stock Amount and Nature of Percent of
------------------------------ -------------- --------------------- ----------
Owner Beneficial Ownership(1) Class (1)
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Michael Calderone Common 18,201,200(1) 57%
Preference Technologies, Inc.
333 N. Ranch Drive, Suite 650
Las Vegas, NV 89106
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William Louden Common 450,000(2) 1%
Preference Technologies, Inc.
333 N. Rancho Drive, Suite 650
Las Vegas, NV 89106
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Leo Verheul Common 100,000(3) *
Preference Technologies, Inc.
333 N. Rancho Drive, Suite 650
Las Vegas, NV 89106
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Paul Yeager Common 400,000(4) 1%
Preference Technologies, Inc.
333 N. Rancho Drive, Suite 650
Las Vegas, NV 89106
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Executive Officers and Directors As Common 19,151,200 60%
a Group Consisting of 4 Persons
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<FN>
* indicates less than 1%
1 Total includes 15,761,200 Common Shares solely owned by Mr. Calderone; 2,400,000 Common
Shares that can be purchased upon exercise of stock options; and 40,000 Common shares owned
by Mr. Calderone's minor child.
2 Total includes 450,000 Common Shares that can be purchased upon exercise of stock options,
solely by Mr. Louden.
3 Total includes 100,000 Common Shares that can be purchased upon exercise of stock options,
solely owned by Mr. Verheul.
4 Total includes 400,000 Common Shares that can be purchased upon exercise of stock options,
solely by Mr. Yeager.
</FN>
PROPOSAL 1
ELECTION OF DIRECTORS
Directors and Executive Officers
The Articles of Incorporation of the Company provide that the number of
directors of the Company shall be fixed from time to time in such manner as
provided in the Company's Bylaws. The Company's Bylaws provide that the
authorized number of directors shall be not less than one nor more than five.
4
Unless otherwise instructed, the Proxyholders will vote the Proxies
received by them for the nominees named below. If any nominee is unable or
unwilling to serve as a director at the time of the Meeting or any postponement
or adjournment thereof, the Proxies will be voted for such other nominee(s) as
shall be designated by the current Board of Directors to fill any vacancy. The
Company has no reason to believe that any nominee will be unable or unwilling to
serve if elected as a director. Each director will hold office until the next
annual meeting of stockholders or until the election of her or her successor.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
LISTED BELOW.
Michael Calderone
Robert Forbuss
William Louden
Frank Marino
Leo Verheul
None of the directors, nominees for director or executive officers were
selected pursuant to any arrangement or understanding, other than with the
directors and executive officers of the Company acting within their capacity as
such. There are no family relationships among directors or executive officers of
the Company and, except as set forth below, as of the date hereof, no
directorships are held by any director in a company which has a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or subject to the requirements of Section
15(d) of the Exchange Act or any company registered as an investment company
under the Investment Company Act of 1940. Officers serve at the discretion of
the Board of Directors.
The following table sets forth certain information with respect to the
nominees, continuing directors and executive officers of the Company:
Name Age Position Since
---- --- -------- -----
Michael Calderone 40 Chief Executive Officer, 1999
Chairman of the Board
Robert Forbuss 50 Nominee 2000
William Louden 53 President, Chief Operating 2000
Officer
Frank Marino 37 Nominee 2000
Leo Verheul 54 Chief Information Officer, 1999
Director
Paul Yeager 61 Chief Financial Officer 1999
5
Michael Calderone. Michael Calderone has 17 years of business
experience. Mr. Calderone has served as Chief Executive Officer and President of
the Company since February 3, 1999. From 1988 through 1991 Mr. Calderone was the
President of two companies, Express Tel 900, which was a long distance service
for 800 and 900 lines, and Access Media Network, a direct response advertising
agency. From 1995 to 1998 Mr. Calderone was President of Marketing Direct
Concepts Inc., a financial public relations firm. Prior to forming Marketing
Direct Concepts, Inc., Mr. Calderone trained race horses.
Robert Forbuss. Robert Forbuss is the founder and former owner/Chief
Executive Officer of Mercy Medical Services, a business he grew to more that $60
million in revenue operating in California, Texas, Washington and Nevada. In
early 1994, Mr. Forbuss sold Mercy to Laidlaw Inc. Mercy was the base of the
company's $1.3 billion in revenue from 1972 to 1994. Mr. Forbuss served as
Senior Vice President and helped facilitate the rollup of 150 separate companies
over a three-year period. As the elected Chairman of the Las Vegas Chamber of
Commerce since 1998, he oversees the 5th largest Chamber in the United States.
In 1999, Mr. Forbuss was appointed to serve as a board member for the Las Vegas
Housing Authority and is concurrently serving a two-year term as
secretary/treasurer on the Las Vegas Convention and Visitors Authority Board of
Directors.
From 1997 to 1999 Mr. Forbuss served as Chief Executive Officer for
both Medical Transportation of America and American Medical Response, Southwest
Division. In addition to his many business achievements he has been an educator,
director of the Clark County Public Education Foundation, vice chairman, Las
Vegas Sister Cities Association, director and past president, Boys and Girls
Clubs, and an elected trustee for the Clark County School District.
William Louden. William Louden is a recent addition to Preference
Technologies, Inc. With more than 20 years of technology and Internet
experience, he has held senior executive positions with LookSmart.com (1999),
Sportline USA (1998), Delphi Internet Services (1994-1998) and was named to the
MicroTimes "Top 100 PC Industry Contributors" list in 1986-1987. In the late
1980's he founded and acted as Chief Executive for GE's GEnie" business unit and
later founded the Interactive Consulting Group. He began his executive career at
CompuServe where he was responsible for product and retailing marketing and OEM
relations.
Frank Marino. Frank Marino is a Co-founder and Partner of Net Cap
Ventures, LLC, Manager of Netcap Ventures Fund I. From 1996 to 1999, Mr. Marino
was President of Millennium Financial Group, Inc., NASD Broker-Dealer
specialized in sourcing capital from European institutional investors for U.S.
companies. Mr. Marino has been actively involved in nearly 20 Public Offerings
or Secondary Offerings as a lead or co-manager with a total of over $300,000,000
in capital raised from investors over a dozen countries. From 1993-1996, Mr.
Marino was President and Founder of Sharper Edge Imaging & United Consumer
Resources, Inc. United Consumer marketed financial services information through
multiple distribution channels. Sharper Edge was a digital imaging and print
brokerage. Mr. Marino managed a staff of over 30 persons. Mr. Marino is a member
of the Los Angeles Venture Association and the Regional Investment Banker's
Association.
6
Leo Verheul. Leo Verheul has served as Chief Information Officer of the
Company since May 17, 1999. From April 1997 to April 1999 he was appointed by
Governor Pete Wilson to the position of Chief Information Officer and deputy
director of the IS Division for the State of California, Department of Motor
Vehicles. From April 1995 to April 1999 he was Chief Information Officer of
Kaiser - Hill, LL., one of the largest engineering, construction and consulting
services companies in the United States, where he assumed the leadership role of
all statewide IT functions. On September 22, 1995, Mr. Verheul filed for
bankruptcy in the Sacramento Division of the U.S. Bankruptcy court. On January
11, 1996, the U.S. Bankruptcy Court - Eastern Division of California (Case No.
95-29029-C-7) entered an order for Discharge of Debtor.
Paul Yeager. Paul Yeager has served as Chief Financial Officer of the
Company since August 23, 1999. Mr. Yeager comes to the Company from the
privately held Color Spot Nurseries, the largest wholesale nursery in the United
States, where he worked as Chief Financial Officer from January 1997 to August
1998. During his tenure at Color Spot, sales rose from $50 million to more than
$200 million annually. Prior to Color Spot, Mr. Yeager spent 20 years as Chief
Financial Officer for The Scotts Company -- the billion-dollar world leader in
lawn and garden chemical technologies and consumer products -- guiding the
company through its Initial Public Offering and secondary offerings.
Board Meetings and Committees
The Board of Directors held four meetings and acted by written consent
on nine occasions during fiscal 1999. No director attended less than 75% of all
the meetings of the Board of Directors.
Compensation of Directors
The Company's Bylaws permit the Directors of the Company to receive
compensation for their services. However, to date, the Company has not fixed or
awarded such compensation to the Board of Directors.
Executive Compensation
Exclusive officer compensation decisions are made by the Company's
entire board of directors. The compensation of the Company's Chief Executive
Officer, Michael Calderone, was decided by the Board of Directors pursuant to
the terms of the Employment Memorandum dated June 1, 1999 discussed herein.
7
The following table sets forth the annual compensation paid and accrued
by the Company since inception to the executive officers to whom the company
paid in excess of $100,000 (the "Named Executive Officers"), including cash and
issuance of securities.
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Annual Compensation Long Term All Other
------------------- --------- ---------
Compensation Compensation
------------ ------------
---------------------------------------------------------------------------------------------------
Name and Year Salary Bonus Other Restricted Securities
-------- ---- ------ ----- ----- ----------- ----------
Principal Position ($) ($) ($) Stock Underlying
- ------------------ --- --- --- ----- ----------
Awards Options
------ -------
- ----------------------------------------------------------------------------------------------------------------------------
Michael Calderone 1999 $225,000 $0 $36,000(1) 0 2,400,000(2) $0
Chief Executive
Officer
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William Louden 2000 $150,000 $0 $25,000(3) 0 450,000(4) $0
Chief Operating
Officer, President
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Paul Yeager 1999 $100,000 $0 $0 0 400,000(5) $0
Chief Financial
Officer
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<FN>
- -----------------
1. Consists of a $3,000 monthly personal allowance and automobile expense.
2. Granted April 9, 1999 at an exercise price of $2.13 and vesting over 15 months. Such options expire April 2,
2002.
3. Consists of a $25,000 relocation allowance.
4. Granted April 3, 2000 at an exercise price of $7.25 and vesting over 36 months. Such options expire October 2,
2005.
5. Granted August 23, 1999 at an exercise price of $2.13 and vesting over 15 months. Such options expire April 2,
2002.
</FN>
8
Stock Option Grants
The following table sets forth certain information regarding the grant
of stock options made during the fiscal year ended December 31, 1999 to the
Named Executive Officers. No stock appreciation rights were granted to any Named
Executive Officers during fiscal 1999.
OPTION/SAR GRANTS IN FISCAL YEAR 1999
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Potential Realizable Value
--------------------------
at Assumed Annual Rates
-----------------------
Individual Growth of Stock Price Appreciation
----------------- ---------------------------
for Option Term(2)
------------------
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% of Total
----------
Options/SARs Options/SARs Exercise or Expiration
------------ ------------ ----------- ----------
Granted (#) Granted to Base Price Date
----------- ---------- ---------- ----
Employees in ($) 5% ($) 10% ($)
------------- --- ------ -------
Name Fiscal Year(1)
---- --------------
- ----------------------------------------------------------------------------------------------------------------------
Michael Calderone
Chief Financial 2,400,000 56% 2.13 4-2-02 854,400 1,435,200
Officer and
President
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Leo Verheul
Chief Information 100,000 2% 2.13 4-2-02 35,600 59,800
Officer
- ----------------------------------------------------------------------------------------------------------------------
Paul Yeager
Chief Financial 400,000 9% 2.13 4-2-02 142,400 289,200
Officer
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<FN>
- ----------
(1) Options covering an aggregate of 4,579,000 shares were granted to eligible persons during the fiscal year
ended December 31, 1999.
(2) The Potential Realizable Value is the product of (a) the difference between (i) the product of the last
reported sale price per share at the date of grant and the sum of (A) 1 plus (B) the assumed rate of
appreciation of the Common Stock compounded annually over the term of the option and (ii) the per share
exercise price of the option and (b) the number of shares of Common Stock underlying the option at December 31,
1999. These amounts represent certain assumed rates of appreciation only. Actual gains, if any, on stock option
exercises are dependent on a variety of factors, including market conditions and the price performance of the
Common Stock. There can be no assurance that the rate of appreciation presented in this table can be achieved.
</FN>
9
Option Exercises and Holdings
The following table sets forth, for each of the Named Executive
Officers, certain information regarding the exercise of stock options during the
fiscal year ended December 31, 1999, the number of shares of Common Stock
issuable upon the exercise of stock options held at fiscal year end and the
value of options held at fiscal year end based upon the last reported sales
price of the Common Stock on the Over-the-Counter Bulletin Board on December 31,
1999 ($ 7.82 per share).
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1999
AND FISCAL YEAR-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised In-
-------------------- ------------------------
Shares Value Underlying Unexercised The-Money Options/SARs
------ ----- ---------------------- ----------------------
Acquired Realized ($) Options/SARs at Fiscal at Fiscal Year End ($)
-------- ------------ ---------------------- ----------------------
Name on Exercise Year End (#)
---- ----------- ------------
(#) Exercisable/Unexercisable Exercisable/Unexercisable
---
- ----------------------------------------------------------------------------------------------------------------------
Michael Calderone N/A N/A 0/2,400,000 0/13,650,000
- ----------------------------------------------------------------------------------------------------------------------
Leo Verheul N/A N/A 0/ 100,000 0/ 568,750
- ----------------------------------------------------------------------------------------------------------------------
Paul Yeager N/A N/A 0/ 400,000 0/ 2,275,000
- ----------------------------------------------------------------------------------------------------------------------
<FN>
- --------
(1) The value of unexercised "in-the-money" options is the difference between the last reported sale price of
the Common Stock on December 31, 1999 ($7.82 per share) and the exercise price of the option, multiplied by the
number of shares subject to the option.
</FN>
Employment Agreements
On June 1, 1999 the Company entered into an Employment Memorandum with
Michael Calderone, the Company's Chief Executive Officer and President. Pursuant
to such memorandum Mr. Calderone will receive $225,000 annually and a monthly
personal allowance of $3,000, including all automobile expenses.
Certain Relationships and Related Transactions
Preference Technologies, Inc. entered into a Consulting Agreement on
September 1, 1999 with J&B Strategic Alliances, LLC of which nominee Robert
Forbuss is a principal party. The agreement calls for J&B Strategic Alliances,
10
LLC to provide public relation services to Preference Technologies, Inc. for a
period of one year. The compensation agreement is for J&B Strategic Alliances,
LLC to be paid $3,000.00 per month plus additional compensation in the form of
stock options. The said options are to be a total of 30,000 stock options over a
twelve-month period. The stock options shall be exercisable at the rate of 2,500
per month, on the first of each month, at the price of $16.50 per share. The
first month in which 2,500 stock options shall vest was September 1999.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the executive officers, directors and persons who own more than ten
percent of a registered class of equity securities to file reports of ownership
and changes in ownership with the SEC. Executive officers, directors and
greater-than-ten percent stockholders are required by SEC regulations to furnish
us with all Section 16(a) forms they file. Each of Michael Calderone, Paul
Yeager, Leo Verheul and Kerry Nicponski filed late Form 5s on March 31, 2000.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed Singer Lewak Greenbaum & Goldstein
LLP as the Company's certified public accountants for the fiscal year ending
December 31, 2000. Representatives of Singer Lewak Greenbaum & Goldstein LLP
will be invited to be present at the Meeting, will have the opportunity to make
a statement if they desire to do so and will be available to respond to
appropriate questions from shareholders.
Stockholders are being asked to ratify the appointment of Singer Lewak
Greenbaum & Goldstein LLP as the Company's independent public accountants for
the fiscal year ending December 31, 2000. Ratification of the proposal requires
the affirmative vote of a majority of the shares of Common Stock represented and
voting at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF SINGER LEWAK GREENBAUM & GOLDSTEIN LLP AS THE INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS OF THE COMPANY.
STOCKHOLDER PROPOSALS
Under certain circumstances, stockholders are entitled to present
proposals at stockholders meetings. Any such proposal to be included in the
proxy statement for the Company's 2001 annual meeting of stockholders must be
submitted by a stockholder prior to January 26, 2001, in a form that complies
with applicable regulations. Recently, the SEC amended its rule governing a
company's ability to use discretionary proxy authority with respect to
stockholder proposals that were not submitted by the stockholders in time to be
included in the proxy statement. As a result of that rule change, in the event a
stockholder proposal is not submitted to the Company prior to April 12, 2001,
the proxies solicited by the Board of Directors for the 2001 annual meeting of
the stockholders will confer authority on the holders of the proxy to vote the
shares in accordance with their best judgment and discretion if the proposal is
presented at the 2001 annual meeting of stockholders without any discussion of
the proposal in the proxy statement for such meeting.
11
ANNUAL REPORT ON FORM 10-K
QUARTERLY REPORT ON FORM 10-Q
The Company's annual report to stockholders for the fiscal year ended
December 31, 1999, and the quarterly report for the quarter ended March 31,
2000, accompany or have preceded this Proxy Statement. The annual report
contains consolidated financial statements of the Company and its subsidiaries
and the report thereon of Singer Lewak Greenbaum & Goldstein LLP, the Company's
independent auditors.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, AND QUARTERLY REPORT ON FROM
10-Q WHICH HAVE BEEN FILED WITH THE SEC FOR THE YEAR ENDED DECEMBER 31, 1999,
WILL BE MADE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO
PREFERENCE TECHNOLOGIES, INC., CHIEF FINANCIAL OFFICER, 333 NORTH RANCH DRIVE,
SUITE 810, LAS VEGAS, NEVADA 89106.
OTHER BUSINESS
Management knows of no business, which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting. If,
however, other matters are properly brought before the Meeting, it is the
intention of the Proxyholders to vote the shares represented by the Proxies on
such matters in accordance with the recommendation of the Board of Directors and
authority to do so is included in the Proxy.
By Order of the Board Of Directors
PREFERENCE TECHNOLOGIES, INC.
/s/ Michael Calderone
-----------------------------
Michael Calderone
Secretary
Las Vegas, Nevada
May 19, 2000
12
PREFERENCE TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned, a stockholder of PREFERENCE TECHNOLOGIES, INC., a Nevada
corporation, (the "Company"), hereby appoints Michael Calderone, the proxy of
the undersigned, with full power of substitution, to attend, vote and act for
the undersigned at the annual meeting of the stockholders of the Company, to be
held on June 21, 2000, and any postponements or adjournments thereof, and in
connection herewith, to vote and represent all of the shares of the Company
which the undersigned would be entitled to vote, as follows:
1. ELECTION OF DIRECTORS.
[ ] For all nominees listed (except [ ] WITHHOLD AUTHORITY to vote
as indicated to the contrary) for all nominees listed
below.
(Instructions: To withhold authority to vote for any nominee,
line through or otherwise strike out his name below)
Michael Calderone Robert Forbuss William Louden
Frank Marino Leo Verheul
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
____ FOR ____ AGAINST ____ ABSTAIN
3. OTHER BUSINESS.
_____ FOR ____ AGAINST ____ ABSTAIN
The undersigned hereby revokes any other proxy to vote at the 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 solicitation hereof, said proxies are authorized to vote in
accordance with their best judgment.
This Proxy will be voted in accordance with the instructions set forth above.
This Proxy will be treated as a GRANT OF AUTHORITY TO VOTE FOR the election of
the Directors named, the ratification of appointment of Singer Lewak Greenbaum &
Goldstein LLP as the Company's independent auditors and as said proxies shall
deem advisable on such other business as may come before the Meeting, unless
otherwise directed.
The undersigned acknowledges receipt of a copy of the Notice of Annual Meeting
and accompanying Proxy Statement dated May 19, 2000 relating to the Meeting.
Date: __________, 2000
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Signature(s) of Stockholder(s)
(See Instructions Below)
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 corporation name, and give
title of signing officer.
THIS PROXY IS SOLICITED BY
THE BOARD OF DIRECTORS OF PREFERENCE TECHNOLOGIES, INC.