SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GENELINK, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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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GENELINK, INC.
100 S. Thurlow Street
Margate, New Jersey 08402
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 2003
To the Shareholders of GeneLink, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of
GeneLink, Inc. (the "Company"), a Pennsylvania corporation, will be held at 9:00
a.m. on May 27, 2003 at The Atlantic City Hilton, Boston Avenue and the
Boardwalk, Pacific Room "C", 3rd Floor, Atlantic City, New Jersey (the
"Meeting"), for the following purposes:
1. To elect two (2) directors to serve until the next Annual Meeting of
Shareholders or until their respective successors are elected and
qualified; and
2. To transact such other business as may properly be brought before the
Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on April 25, 2003,
are entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
Whether or not you plan to be present at the Meeting, you are requested to
sign and return the enclosed proxy in the envelope provided so that your shares
will be represented. The giving of such proxy will not affect your right to vote
in person should you later decide to attend the Meeting. Please date and sign
the enclosed proxy and return it promptly in the enclosed envelope.
By Order of the Board of Directors,
John R. DePhillipo
Chairman of the Board
Margate, New Jersey
April 28, 2003
GENELINK, INC.
100 S. THURLOW STREET
MARGATE, NEW JERSEY 08402
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 27, 2003
This Proxy Statement is furnished to shareholders of GeneLink, Inc. (the
"Company"), a Pennsylvania corporation, in connection with the solicitation of
proxies on behalf of the management of the Company for use at the Annual Meeting
of Shareholders to be held at The Atlantic City Hilton, Pageant Room, Boston
Avenue and the Boardwalk, Pacific Room "C", 3rd Floor, Atlantic City, New Jersey
on May 27, 2003, at 9:00 a.m. and at any and all adjournments thereof (the
"Meeting"), for the purpose of considering and acting upon the matters referred
to in the preceding Notice of Annual Meeting and more fully discussed below.
This Proxy Statement and the accompanying form of proxy were first mailed
to shareholders of the Company entitled to notice of, and to vote at, the
Meeting on or about April 28, 2003.
Quorum and Voting
The presence, in person or by proxy, of the holders of a majority of the
shares of Common Stock issued and outstanding, voting together as a single class
is necessary to constitute a quorum at the Meeting. Shareholders are entitled to
one vote per share of Common Stock held on any matter which may properly come
before the Meeting. Any shareholder executing and delivering the accompanying
proxy has the power to revoke the same by giving notice to the Secretary of the
Company. The presence at the Meeting of a shareholder will not revoke his proxy.
Proxies in the accompanying form which are properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
therein. The candidates receiving the highest number of votes up to the number
of directors to be elected shall be elected directors of the Company. IF NO
INSTRUCTION IS GIVEN WITH RESPECT TO ANY PROPOSAL TO BE ACTED UPON, THE PROXY
WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES NAMED IN THE PROXY. No
matter is expected to be considered at the Meeting other than the proposals set
forth in the accompanying Notice of Annual Meeting, but if any other matters are
properly brought before the Meeting for action, it is intended that the persons
named in the proxy and acting thereunder will vote their discretion on such
matters.
Record Date and Shares Outstanding
The close of business on April 25, 2003 has been fixed as the record date
for the determination of shareholders entitled to receive notice of, and to vote
at, the Meeting. The
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stock transfer books will not be closed. As of April 22, 2003, there were issued
and outstanding 20,182,556 shares of the Company's Common Stock.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of March 31, 2003 regarding
(i) each person known to the Company to beneficially own more than five percent
of it Stock and (ii) the Company's directors as a group.
Number of Shares Approximate Percentage
Name Beneficially Owned Of Stock Outstanding
---- ------------------ --------------------
Maria D. DePhillipo 5,438,820(1) 23.5%
John R. DePhillipo 4,968,820(2) 21.5%
Robert P. Ricciardi 4,710,000(3) 21.9%
Edmund T. and 2,250,000 11.5%
Linda J. DelGuercio
Directors as a Group 9,678,820(2)(3) 38.5%
(1) Includes currently exercisable options to acquire 3,648,820 shares of the
Company's Common Stock held by John R. DePhillipo, the spouse of Mrs.
DePhillipo. Mrs. DePhillipo disclaims beneficial ownership of the options held
by John R. DePhillipo. Mrs. DePhillipo is the trustee of various family trusts
owning an aggregate of 470,000 shares of Common Stock and disclaims any
beneficial ownership of these shares.
(2) Includes currently exercisable options to acquire 3,648,820 shares of the
Company's Common Stock. Includes 1,320,000 shares held by Maria D. DePhillipo,
the spouse of Mr. DePhillipo. Mr. DePhillipo disclaims beneficial ownership of
the shares held by Maria D. DePhillipo.
(3) Includes currently exercisable options to acquire 2,000,000 shares of the
Company's Common Stock.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Year Annual Compensation Long-Term Compensation
---- ----------------------------------- ----------------------------------------
Awards Payouts
------------------------- ------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities LTIP All Other
Name and Principal Year Salary Bonus Other Annual Restricted Under-Lying Payouts Compensation
Position ($) ($) Compensation Stock Options/ ($) ($)
($) Award(s) SARs
($) (#)
- ----------------------- ---- ---------- ----- ------------ ---------- ----------- ------------ ------------
John R. DePhillipo, 2002 $183,012(1) --- --- --- --- $ 100,000(3) $ 4,800(4)
Chief Executive Officer
2001 $166,375(1) --- --- --- --- $ 100,000(3) $ 4,800(4)
2000 $151,250(1) --- --- --- --- $ 100,000(3) $ 4,800(4)
Robert P. Ricciardi, 2002 $ 79,860(2) --- --- --- --- $ 100,000(3) ---
Ph.D., Treasurer
2001 $ 72,600(2) --- --- --- --- $ 100,000(3) ---
2000 $ 60,000(2) --- --- --- --- $ 100,000(3) ---
(1) - As of December 31, 2002, the Company owed Mr. DePhillipo an aggregate of
$84,071 for salary earned but not received.
(2) - As of December 31, 2002, the Company owed Dr. Ricciardi an aggregate of
$248,460 for compensation earned but not received.
(3) - Represents the value of vested $.10 options issued for deferred
compensation.
(4) - Represents the cost of life insurance premiums provided from the Company.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
- -------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of Securities Percent of Total Options/
Underlying Option/ SARs Granted to Exercise of Base Expiration
Name SARs Granted (#) Employees in Fiscal Year Price ($/Sh) Date
---- ---------------- ------------------------ ------------ ----
John R. DePhillipo 1,200,000 100% $0.82 4/10/07
Robert P. Ricciardi 0 0 --- ---
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AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND F/Y-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options/SARs
Shares Acquired Options/SARs at Fiscal Year-End (#) at Fiscal Year-End ($)
Name On Exercise (#) Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- -------------- ------------------------- -------------------------
John R. DePhillipo 0 -- 2,198,820/1,600,000 $55,835/$0
Robert P. Ricciardi 0 -- 1,900,000/100,000 $56,000/$0
EQUITY COMPENSATION PLAN INFORMATION
Weighted-average
exercise price of
Number of outstanding options
securities to be warrants and rights Number of
issued upon exercise compensation plans securities remaining
of outstanding (excluding securities available for future
options, warrants reflected in column issuance under
and rights (a)) Equity
Plan Category (a) (b) (c)
------------- -------------------- -------------------- --------------------
Equity 1,500,000 $0.40 0
compensation
plans approved
by security
holders
Equity 5,931,445 $0.64 0
compensation
plans not
approved
by security
holders
-------------------- -------------------- --------------------
Total 7,431,445 $0.59 0
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Employment Agreements with Executive Officers
The Company entered into a five (5) year employment agreement with John
DePhillipo, the Chief Executive Officer and President of the Company, dated
January 1, 2003. The initial base compensation is $275,000 for 2003. Each
calendar year thereafter, the base shall increase by the greater of $25,000 or a
larger amount determined by the Board. The employment agreement also calls for
an annual bonus equal to ten percent (10%) of earnings of the Company in each
calendar year in excess of $1,500,000. In addition, pursuant to the employment
agreement, Mr. DePhillipo has been granted options to acquire 1,500,000 shares
of the Company's Common Stock at an exercise price of $1.00 per share, vesting
in five (5) equal annual installments commencing December 1, 2003.
The Company has entered into a consulting agreement with Dr. Ricciardi dated
February 24, 1998, which provides for initial compensation of $30,000 per year
in 1998 and $60,000 per year in 1999, a ten percent (10%) increase in
compensation each year thereafter, an initial term of (5) years, the grant of
options to acquire 1,000,000 shares at an exercise price of $0.10 per share, and
requires Dr. Ricciardi to perform eight (8) hours of consulting services per
week.
Compensation of Directors
Directors of the Company are not paid any fees for service as directors of
the Company.
REPORT ON EXECUTIVE COMPENSATION
Introduction
The Board of Directors is responsible for establishing and maintaining the
Company's executive compensation program which is designed to attract and retain
executives who are committed to long-term success of the Company and the
enhancement of shareholder value.
Compensation Components
Base salary is received annually and any increases are based on the
performance of the Company. Due to the Company's financial and cash flow
position, it was not able to make regular payments of monetary compensation to
any of its executive officers under the agreements described above through 2002.
The incentive compensation component is paid in the form of stock option grants.
The Board has taken into consideration the inability of the Company to pay
monetary compensation to its executive officers in determining the number of
stock options it granted to the Company's executive officers in 2002.
Interlocks and Insider Participation
None of the executive officers of the Company serve as a director of
another corporation where an executive officer of such other corporation serves
as a director of the Company.
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REPORT FROM THE AUDIT COMMITTEE
The members of the Audit Committee are Mr. DePhillipo and Dr. Ricciardi.
The Audit Committee is responsible for considering management's recommendation
of independent certified public accountants for each fiscal year, recommending
the appointment or discharge of independent accountants to the board of
directors and confirming the independence of the accountants. It is also
responsible for reviewing and approving the scope of the planned audit, the
results of the audit and the accountants' compensation for performing such
audit, reviewing the Company's audited financial statements, and reviewing and
approving the Company's internal accounting controls and discussing such
controls with the independent accountants.
In connection with the audit of the Company's financial statements for the
year ended December 31, 2002, the Audit Committee met with representatives from
Siegal & Drossner, P.C., the Company's independent auditors. The Audit Committee
reviewed and discussed with Siegal & Drossner the Company's financial management
and financial structure, as well as the matters relating to the audit required
to be discussed by Statements on Auditing Standards 61 and 90.
In addition, the Audit Committee reviewed and discussed with the Company's
management the Company's audited financial statements relating to fiscal year
ended December 31, 2002.
Based upon the review and discussions described above, the Audit Committee
recommended to the Board of Directors that the Company's financial statements
audited by Siegal & Drossner be included in the Company's Annual Report on Form
10-K for fiscal year ended December 31, 2002.
John R. DePhillipo
Robert P. Ricciardi
INDEPENDENT PUBLIC ACCOUNTANTS
Siegal & Drossner, P.C. was the Company's independent public accountants
for 2002. Representatives of Siegal & Drossner, P.C. are expected to be present
at the Annual Meeting, but are not expected to make any statements or answer any
questions. The Company has not yet selected independent public accountants for
2003. Siegal & Drossner, P.C. will not be the Company's independent accountants
for 2003 as they have informed the Company that they will not register to the
Public Company Accounting Oversight Board.
Audit Fees
The aggregate fees billed to the Company by Siegal & Drossner, P.C., the
Company's independent public accountants, for professional services rendered for
our fiscal year 2002 audit
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of the Company's annual financial statements and interim financial statements
reviews related to fiscal year 2002 were $40,500.
Financial Information Systems Design Implementation
During 2002, the Company did not retain Siegal & Drossner, P.C., the
Company's independent public accountants for any financial information systems
design implementation.
All Other Fees
During 2002, Siegal & Drossner, P.C., our independent public accountants,
billed the Company $2,500 for professional services rendered related to
tax services.
PERFORMANCE GRAPH
COMPARISON OF 49 MONTH CUMULATIVE TOTAL RETURN*
AMONG GENELINK, INC., THE S & P SMALLCAP 600 INDEX
AND THE NASDAQ BIOTECHNOLOGY INDEX
The chart below compares the performance of the Company's Common Stock to
Standard & Poor's Small Cap 600 Index ("S&P Small Cap 600"), and the NASDAQ
Biotechnology Index ("NASDAQ Biotechnology").
[BAR CHART]
Cumulative Total Return
----------------------------------------------------------
11/28/98 12/98 12/99 12/00 12/01 12/02
----------------------------------------------------------
GENELINK, INC. 100.00 86.13 18.25 30.58 50.36 17.52
S & P SMALLCAP 600 100.00 112.38 126.32 141.22 150.46 128.45
NASDAQ BIOTECHNOLOGY 100.00 127.74 294.75 368.50 308.49 191.72
* $100 invested on 11/29/98 in GeneLink, Inc. Common Stock or on 10/31/98 in the
applicable index, including reinvestment of dividends.
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PROPOSAL 1 - ELECTION OF DIRECTORS
In accordance with the Company's By-Laws, the number of directors has been
fixed at two (2) and, accordingly, two (2) directors will be elected at the
Meeting. Each director elected will serve as a director until his or her
successor is elected and shall have qualified. The two (2) persons named below
are management's nominees for election as directors and are the current members
of the Company's Board of Directors.
Management has no reason to believe that any of its nominees will be
unable to serve if elected to office and, to the knowledge of management, its
nominees intend to serve the entire term for which election is sought.
NOMINEES
Information with respect to each of management's nominees is set forth in
the following table:
Shares of Stock Approximate
Beneficially Percentage of Stock
Name Owned as of Outstanding
3/31/03
JOHN R. DEPHILLIPO, 61, Chairman, Chief Executive Officer, President, Secretary 4,968,820(1) 21.5%
and Director of the Company. Mr. DePhillipo, educated at Temple University in
Business Administration, served from 1990 to 1994 as the Chairman/CEO of Applied
Safety, Inc., which developed a retro-fit driver's side airbag for installation
in new or used vehicles.
ROBERT P. RICCIARDI, PH.D., 55, Treasurer and Director of the Company. Dr. 4,710,000(2) 21.9%
Robert Ricciardi is a Professor of Microbiology at the University of
Pennsylvania, where he is Chairman of the Microbiology and Virology Program of
the Molecular Biology Graduate Group. He received his Ph.D. from the University
of Illinois at Urbana in cellular biology. He was a postdoctoral fellow at
Brandeis University and Harvard Medical School in the Department of Biological
Chemistry and was awarded fellowships by the American Cancer Society, National
Institute of Health and Charles A. King Trust. He developed one of the first
techniques in molecular biology which has been widely used both to map genes and
determine the proteins they encode. While most of his research has centered on
basic mechanisms of cancer, he has developed, patented and has a patent pending
for recombinant delivery vectors for use as vaccines and for potential use in
gene therapy. Dr. Ricciardi has served as a consultant to The National
Institutes of Health, Smith Kline and Beckman's Department of Molecular
Genetics, and Children's Hospital of Philadelphia's Department of Infectious
Disease. He has authored 55 publications, has been awarded a NATO Visiting
Professorship at Ferrara Medical School, Italy, and has been an invitational
speaker at various scientific meetings and a seminar guest speaker at the Mayo
Clinic and Johns Hopkins University.
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(1) Includes currently exercisable options to acquire 3,648,820 shares of the
Company's Common Stock. Includes 1,430,000 shares held by Maria D. DePhillipo,
the spouse of Mr. DePhillipo. Mr. DePhillipo disclaims beneficial ownership of
the shares held by Maria D. DePhillipo.
(2) Includes currently exercisable options to acquire 2,000,000 shares of the
Company's Common Stock.
ANNUAL REPORT TO THE SEC ON FORM 10-K
Shareholders may obtain, without charge, a copy of the company's Annual
Report on Form 10-K, filed with the Securities and Exchange Commission, by
writing to GeneLink, Inc., 100 S. Thurlow Street, Margate, New Jersey 08402.
Copies of Exhibits to such Annual Reports may be obtained upon payment of the
cost to the Company for copying and mailing such Exhibits.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information filed by the Company at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the
SEC's public reference rooms in New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. The filings of the Company with the SEC are also available to the public
from commercial document retrieval services and at the web site maintained by
the SEC at http://www.sec.gov.
The SEC allows the Company to "incorporate by reference" information into
this document, which means that they can disclose important information to you
by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this document,
except for any information superseded by information in this document. This
document incorporates by reference the documents set forth below that the
Company has previously filed with the SEC. These documents contain important
information about the Company and their finances.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the Company's next
Annual Meeting of Shareholders must be received by the Company at its principal
executive offices on or before 120 days prior to the one year anniversary date
of this year's meeting to be included in the Company's proxy statement and form
of proxy relating to that meeting.
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OTHER MATTERS
As of the date hereof, management does not intend to present, nor has it
been informed that other persons intend to present, any matters for action at
the Meeting, other than those specifically referred to herein. If, however, any
other matters should properly come before the Meeting, it is the intention of
the persons named in the proxies to vote the shares represented thereby in
accordance with their best judgment on such matters.
The expenses of soliciting proxies in the form included with this Proxy
Statement and the cost of preparing, assembling and mailing materials in
connection with such solicitation of proxies will be borne by the Company. In
addition to the use of mail, the Company's directors, executive officers and
employees may solicit proxies personally or by telephone or telegraph.
By Order of the Board of Directors:
John R. DePhillipo
Chairman of the Board
Margate, New Jersey
April 28, 2003
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FORM OF PROXY CARD
GENELINK, INC.
PROXY FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 27, 2003
This proxy is solicited on behalf of the board of directors. The
undersigned shareholder of GeneLink, Inc., a Pennsylvania corporation
("GeneLink"), hereby appoints John R. DePhillipo, as proxy with full power of
substitution, for the undersigned to vote the number of shares of common stock
of GeneLink that the undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders of GeneLink to be held on May 27, 2003, at
9:00 a.m. local time, at The Atlantic City Hilton, Boston Avenue and the
Boardwalk, Pacific Room "C", 3rd Floor, Atlantic City, New Jersey and at any
adjournment or postponement thereof, on the following matters that are more
particularly described in the Proxy Statement dated April 28, 2003.
This proxy when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted "FOR" Proposal 1. Receipt of the Proxy Statement dated April 28, 2003,
is hereby acknowledged.
Your are encouraged to specify your choices by marking the appropriate
boxes, but you need not mark any boxes if you wish to vote in accordance with
the board of directors' recommendation. The proxies cannot vote your shares
unless you sign and return this card.
1. Proposal to elect directors of GeneLink, each to serve until
GeneLink's next annual meeting of stockholders or until their
respective successors have been duly elected and qualified.
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
FOR ALL NOMINEES LISTED
BELOW
John R. DePhillipo and Robert P. Ricciardi, to hold office until the
next annual meeting or until their respective successors have been duly elected
and qualified.
2. To consider and take action upon any other matter which may properly
come before the meeting or any adjournment or postponement thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
--------------------------------------------------
Name of Shareholder(s)
--------------------------------------------------
Signature of Shareholder(s)
Please sign your name exactly as it appears
hereon. Joint owners must each sign. When signing
as attorney, executor, administrator, trustee or
guardian, please give your full title as it
appears thereon.
Date: , 2003
------------------------------
PLEASE MARK, SIGN, DATE AND RETURN USING THE ENCLOSED ENVELOPE