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SCHEDULE 14A
(RULE 14a-101)
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 Rule 14a-11(c) or Rule 14a-12
BIO-PLEXUS, 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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(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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BIO-PLEXUS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 19, 1999
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Shareholders (the
"Meeting") of Bio-Plexus, Inc., a Connecticut corporation (the "Company"), will
be held on Monday, July 19, 1999, at 1:30 p.m., local time, at Rensselaer
Polytechnic Institute At Hartford, 275 Windsor Street, Hartford, Connecticut
06120, for the following purposes:
1. To elect a Board of Directors to hold office until the next annual
meeting of shareholders and until their successors have been duly elected
and qualified;
2. To consider and act upon a proposal to amend the Company's
Certificate of Incorporation to increase to Twenty-Five Million
(25,000,000) the number of shares of Common Stock that the Company is
authorized to issue;
3. To ratify the selection of independent public accountants for the
current fiscal year; and
4. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on June 7, 1999, as
the record date for the determination of shareholders who are entitled to notice
of and to vote at the Meeting and any adjournments or postponements thereof. The
holders of record of the voting stock at said record date are entitled to notice
of and to vote at the Meeting and any adjournments or postponements thereof.
The Company's Proxy Statement, Proxy, and Annual Report for the fiscal year
ended December 31, 1998 are submitted herewith.
By Order of the Board of Directors,
NANCY S. LAUTENBACH
Secretary
Vernon, Connecticut
June 18, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, TO ASSURE YOUR
REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE ENCLOSED
FOR THAT PURPOSE. ANY SHAREHOLDER ATTENDING THE MEETING MAY VOTE IN PERSON, EVEN
IF HE OR SHE HAS RETURNED A PROXY.
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BIO-PLEXUS, INC.
129 RESERVOIR ROAD
VERNON, CONNECTICUT 06066
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 19, 1999
INFORMATION CONCERNING THE ANNUAL MEETING,
SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Bio-Plexus, Inc., a Connecticut corporation having its principal offices at 129
Reservoir Road, Vernon, Connecticut 06066 (the "Company"), for use at the Annual
Meeting of Shareholders (the "Meeting") to be held on Monday, July 19, 1999, at
1:30 p.m., local time, at Rensselaer Polytechnic Institute At Hartford, 275
Windsor Street, Hartford, Connecticut 06120 and at any adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation, including
preparation, assembly, printing and mailing of this Proxy Statement, the proxy,
and any additional materials furnished to the shareholders. Copies of the
solicitation materials will also be furnished to brokerage houses, fiduciaries,
and custodians holding in their names shares which are beneficially owned by
others to be forwarded to such beneficial owners. The Company may reimburse such
persons for their cost of forwarding the solicitation materials to such
beneficial owners. Original solicitations of proxies by mail may be supplemented
by telephone, telegram, facsimile, or personal solicitation by directors,
officers or employees of the Company. No additional compensation will be paid
for such services. Except as described above, the Company does not intend to
solicit proxies other than by mail.
If not revoked, properly executed proxies will be voted in accordance with
the instructions contained thereon. Unless a contrary specification is made
thereon, it is the intention of the persons named on the accompanying proxy to
vote FOR the election of the nominees for Director of the Company listed on the
first proposal, and to vote FOR each one of the other proposals on the
accompanying Notice of Meeting.
The Corporation intends to mail this Proxy Statement and accompanying proxy
on approximately June 18, 1999.
REVOCABILITY OF PROXY
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke such proxy at any time before it is exercised. Proxies may
be revoked by either (i) sending to the Secretary of the Company, Nancy S.
Lautenbach, a duly executed written instrument of revocation or a duly executed
proxy bearing a date later than that on the proxy being revoked, or (ii)
attending the Meeting AND VOTING IN PERSON. Attendance at the Meeting will not
in and of itself constitute revocation of a proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on June 7, 1999, as
the record date for the determination of shareholders entitled to receive notice
of and vote at the Meeting. On that date the Company had issued and outstanding
13,509,081 shares of its common stock ("Common Stock"). The holders of record of
the Common Stock at said record date are entitled to notice of and to vote at
the Meeting and any
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adjournments and postponements thereof. On each matter submitted to a
shareholder vote, each share of Common Stock entitles its holder to one (1)
vote.
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of June 8, 1999 (unless otherwise
specified) for: ( i) each person who is known by the Company to beneficially own
more than 5% of the Common Stock; (ii) each of the Company's directors; (iii)
the Company's chief executive officer and all other executive officers with
compensation in excess of $100,000 (determined as of December 31, 1998) (the
"Named Executive Officers"); and (iv) all the directors and executive officers
as a group.
PERCENT OF
AMOUNT AND NATURE CLASS
NAME AND ADDRESS (1) OF BENEFICIAL BENEFICIALLY
OF BENEFICIAL OWNER OWNERSHIP (2) OWNED
- -------------------- ----------------- ------------
Herman Gross (3)....................................... 1,616,168 12.0%
Richard L. Higgins (4)................................. 54,999 *
Carl R. Sahi (5)....................................... 578,500 4.3%
David Himick (6)....................................... 1,599,512 12.0%
Lucio Improta (7)...................................... 20,000 *
Kimberley A. Cady (8).................................. 10,000 *
Richard D. Ribakove (9)................................ 42,730 *
All directors and executive officers as a group (8
persons)............................................. 3,921,909 29%
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* Less than 1% of the class.
(1) Unless otherwise indicated, the address of each named holder is c/o
Bio-Plexus, Inc., 129 Reservoir Road, Vernon, Connecticut 06066.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock subject
to options, warrants and convertible notes currently exercisable or
convertible, or exercisable or convertible within sixty (60) days, are
deemed outstanding for computing the percentage of the person holding such
options but are not deemed outstanding for computing the percentage of any
other person. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table have sole
voting and investment power with respect to all shares of common stock shown
as beneficially owned by them.
(3) Includes 75,000 shares issuable upon the exercise of warrants owned by Mr.
Gross which are presently exercisable.
(4) Includes 54,999 shares of common stock issuable upon the exercise of options
owned by Mr. Higgins which are presently exercisable.
(5) Includes 50,000 shares of common stock held by E.B. Hanson, Inc., a company
controlled by Mr. Sahi and 125,000 shares of common stock issuable upon the
exercise of warrants held by Mr. Sahi which are presently exercisable.
(6) Includes 145,378 shares owned jointly by Mr. Himick and his wife and as to
which they share voting and investment power and 77,000 shares issuable upon
the exercise of warrants and options owned by Mr. Himick which are presently
exercisable.
(7) Includes 20,000 shares of common stock issuable upon the exercise of options
owned by Mr. Improta which are presently exercisable.
(8) Includes 10,000 shares of common stock issuable upon the exercise of options
owned by Ms. Cady which are presently exercisable.
(9) Includes 28,430 shares owned jointly by Mr. Ribakove and his wife in tenancy
by their entirety. As to such shares, Mr. Ribakove and his wife share voting
and investment power. Also includes 13,000 shares
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of common stock issuable upon the exercise of options owned by Mr. Ribakove,
and 600 shares held in custodial accounts for the Ribakoves' minor children.
VOTING PROCEDURES
Pursuant to the Company's by-laws, to constitute a quorum for the
transaction of business at any meeting of shareholders, there must be present,
in person or by proxy, the holders of a majority of the voting power of the
issued and outstanding shares of voting stock of the Company. Once a share is
represented for any purpose at the meeting, it is deemed present for quorum
purposes for the remainder of the meeting. A plurality of the vote cast by the
shares of stock entitled to vote, in person or by proxy, at the Meeting will
elect directors as long as a quorum is present. If a quorum exists, action on
each other question to be voted upon will be approved if votes, in person or by
proxy, cast by shareholders favoring the action exceed the vote cast by
shareholders opposing the action. In certain circumstances, a shareholder will
be considered to be present at the Meeting for quorum purposes, but will not be
deemed to have voted in the election of directors or in connection with other
matters presented for approval at the Meeting. Such circumstances will exist
where a shareholder is present but specifically abstains from voting, or where
shares are represented at a meeting by a proxy conferring authority to vote on
certain matters but not for the election of directors or on other matters. Under
Connecticut law, such abstentions and non-votes have a neutral effect on the
election of management's nominees for directors and on the approval or
disapproval of the other matters presented for shareholder action.
1. NOMINATION AND ELECTION OF DIRECTORS
One of the purposes of the Meeting is the election of the Board of
Directors of the Company to hold office until the 2000 Annual Meeting of
Shareholders, and until their successors have been duly elected and qualified.
Shares represented by executed proxies will be voted, if authority to do so is
not withheld, for the election of the nominees named below, unless one or more
of such nominees should become unavailable for election by reason of death or
other unexpected occurrence, in which event such shares will be voted for the
election of such substitute nominees as the Board of Directors may propose. Each
person consented to being named a nominee in this Proxy Statement and has agreed
to serve if elected. The Company knows of no reason why any of the listed
nominees would be unavailable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" ALL
NOMINEES FOR ELECTION AS DIRECTORS.
NOMINEES FOR DIRECTORS
A board of five directors is proposed to be elected at the Meeting.
The names of the nominees, all of whom are currently directors of the
Company, and certain information about them are set forth below.
NAME OF NOMINEE AGE POSITION(S)
--------------- --- -----------
Richard D. Ribakove (1)(2)........... 44 Chairman of the Board and Director
Richard L. Higgins................... 56 President, Chief Executive Officer and
Director
Carl R. Sahi......................... 42 Vice President, Technology and Business
Development, Treasurer and Director
David Himick (1)(2).................. 73 Director
Herman Gross (1)(2).................. 81 Director
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(1) Member of Compensation Committee.
(2) Member of Audit and Finance Committee.
MR. RIBAKOVE is Chairman of the Board of Directors, a Director of the
Company and an attorney in private practice in New York City. Mr. Ribakove has
been a Director of the Company since its founding in
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September 1987. He was named Chairman of the Board of Directors in June 1999. He
is also the Vice President of Mooney-General Paper Co., a large distributor of
paper products. He is a graduate of Hofstra University with a Bachelor's degree
in Business Administration and is a graduate of Brooklyn Law School. Mr.
Ribakove is currently serving as President of the Garden State Paper Trade
Association of New Jersey.
MR. HIGGINS is a Director of the Company and the Company's President and
Chief Executive Officer. He joined the Company on a part-time basis as a
consultant in May 1992 and became a full time employee in September 1993. From
July 1996 to January 1998, Mr. Higgins served as the Company's Vice President,
Finance. Mr. Higgins assumed his current position in January 1998. From February
1992 through September 1993, Mr. Higgins was self-employed as a business
consultant. From June 1966 through February 1992, Mr. Higgins was employed by
the State of Connecticut during which time he helped establish the Connecticut
Development Authority ("CDA"). He served as the CDA's Executive Director from
1975 to 1992. Mr. Higgins holds a Bachelor of Arts degree from the University of
Connecticut.
MR. SAHI is a Director of the Company and the Company's Vice President,
Technology and Business Development and Treasurer. Mr. Sahi founded the Company
in September 1987 and has been a Director since that time. Between September
1987 and October 1997, Mr. Sahi served as President of the Company. Prior to
1987, Mr. Sahi had seven years of entrepreneurial experience in developing
products, services and small companies. His experience includes the development
of a polyvinyl chloride gasketed plastic bottle cap, the formation and
management of a company that assembled plastic immunoassay diagnostic test kits
and the formation, management and sale of a janitorial maintenance company. Mr.
Sahi is the principal inventor of the Company's self-blunting needle and founded
the Company in order to design, develop, manufacture and market that product.
Mr. Sahi has three years of undergraduate business education, holds a Bachelor's
degree in Pathobiology from the University of Connecticut and has six years of
graduate training in Chemistry.
MR. HIMICK is a Director of the Company, a retired business executive, and
a business consultant. Mr. Himick became a Director of the Company in April
1997. He was the founder of several companies including Commercial Wire Rope &
Supply of Detroit, Commercial Wire Rope & Supply of Flint, Commercial Wire Rope
& Supply of Toledo, and Detroit Chain Products Co. He was a director for
Heritage Federal Savings Bank located in Taylor, Michigan between 1982 and 1993
and a director of Heritage Bankcorp Inc. (the holding company of Heritage
Federal Savings), between 1989 and 1993. Mr. Himick currently serves on the
board of directors of Community Bank of Dearborn and the board of directors of
Dearborn Bancorp (the holding company of Community Bank of Dearborn), both of
which positions he assumed in 1994.
MR. GROSS is a Director of the Company and a retired business executive. He
became a Director of the Company in November 1998. He was Chairman of Elliot
International, a company that imports apparel, from 1948 to 1981. He is a
graduate of both City College of New York and Harvard Law School. Mr. Gross is a
member of the New York Bar. He brings to the Company his knowledge of finance,
the international market and his understanding of patent law.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors has two standing committees: the Compensation
Committee and the Audit and Finance Committee. The Board does not have a
nominating committee.
The Compensation Committee acts on all matters related to compensation of
persons providing services to the Company, including the making of grants under
the Company's 1991 Long-Term Incentive Plan. Messrs. Ribakove, Himick and Gross
are the members of the Compensation Committee. During the fiscal year ended on
December 31, 1998, there were two meetings of the Compensation Committee.
The Audit and Finance Committee reviews the results and scope of the annual
audit and other services provided by the Company's independent auditors and
approves proposals for financing the Company. Messrs. Ribakove, Himick and Gross
are the members of the Audit and Finance Committee. There was one meeting
pertaining to the review of the annual audit, and there was one meeting
pertaining to Company financings during the year ended December 31, 1998.
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The Board of Directors held eighteen meetings during the fiscal year ended
December 31, 1998 and acted by unanimous written consent of its members once.
During 1998, no incumbent Director failed to attend at least 75% of the
meetings of the Board of Directors or the committee on which such Director
served.
COMPENSATION OF DIRECTORS
Members of the Board of Directors receive an automatic annual grant of
options for 1,000 shares of Common Stock upon their election or re-election to
the Board of Directors. The options are granted under the 1995 Non-Employee
Directors' Stock Option Plan (the "Directors' Plan") which was adopted on July
6, 1995 at the Company's 1995 Annual Meeting of Shareholders.
Only non-employee members of the Board of Directors of the Company are
eligible to receive grants of options under the Directors' Plan. Participants
who had served as directors prior to the adoption of the Directors' Plan
automatically received an option for 1,000 shares for each calendar year they
served as a director. Accordingly, Mr. Ribakove received options for 9,000
shares of common stock for past services. During the term of the Directors'
Plan, participants automatically receive a grant of an option for 1,000 shares
of common stock on their election or re-election. Messrs. Krampert, Ribakove,
Himick and former director Stanley Jacke have all received an automatic grant
for 1,000 shares of common stock for services in 1998 and Mr. Gross received an
automatic grant for 1,000 shares of common stock upon his election in November
1998. All options granted vest one (1) year after the grant, are exercisable for
the lesser of one (1) year from the termination as a director or five (5) years
from grant, and have an exercise price equal to the fair market value of the
underlying shares of common stock at the time of grant. Vesting is accelerated
upon the death, disability, or retirement of a participant. Should a participant
terminate his or her service as a director for any other reason, shares not
fully vested under an option will be forfeited. Payment of the option exercise
price may be made in cash or by transfer to the Company of shares of common
stock having a fair market value equal to the option exercise price, or by
withholding from the shares that would otherwise be issued under an option, that
number of shares having a fair market value equal to the option exercise price.
There are fifty thousand (50,000) shares reserved for issuance under the
Directors' Plan. There were twenty-one thousand (21,000) shares subject to
outstanding options as of December 31, 1998. There are also five-thousand
(5,000) options outstanding that were issued to a Director of the Company
outside of the Director's Plan.
Non-employee directors also received $2,500 per quarter for the first three
quarters of 1998 for serving on the Board of Directors. Beginning with the
fourth quarter of 1998, directors receive $2,500 in Company stock valued at 85%
of the 30 day average market price for the stock for the month prior to the
month in which payments would be made.
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MANAGEMENT
The executive officers and directors of the Company are as follows:
NAME AGE POSITION(S)
- ---- --- -----------
Richard D. Ribakove (1)(2)................... 44 Chairman of the Board and Director
Richard L. Higgins........................... 56 President, Chief Executive Officer and
Director
Thomas K. Sutton............................. 39 Executive Vice President
Carl R. Sahi................................. 43 Vice President, Technology and Business
Development, Treasurer and Director
Kimberley A. Cady............................ 33 Vice President, Finance and Chief
Financial Officer
Lucio Improta................................ 54 Vice President, International Business
Development
David Himick (1)(2).......................... 73 Director
Herman Gross (1)(2).......................... 81 Director
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(1) Member of Compensation Committee.
(2) Member of Audit and Finance Committee.
The biographical information for Messrs. Ribakove, Higgins, Sahi, Himick
and Gross are included above under "Nominees for Directors."
Mr. Sutton was appointed Executive Vice President in 1998. He has
responsibility for Marketing and Sales, Human Resources, Quality Assurance,
Engineering and Operations. Mr. Sutton previously served as the Company's Vice
President, U.S. Marketing and Sales from November 1996 to March 1998. Mr. Sutton
has extensive experience in marketing and sales of safety medical needles. Prior
to his work at the Company, Mr. Sutton managed the Protectiv I.V. Catheter
Safety System brand for Johnson & Johnson Medical, Inc. ("JJMI"). Mr. Sutton
served as Product Director for five years at JJMI (1991-1996), and was a Sales
Manager and Representative prior to holding that position. Mr. Sutton was in
commercial banking for six years with the South Carolina National Bank, rising
to the level of Vice President. Mr. Sutton holds a Bachelor of Science degree in
Business Administration and a Master's degree in Business Administration, both
from the University of South Carolina.
Ms. Cady is the Company's Vice President, Finance and Chief Financial
Officer. Between 1994 and 1996, Ms. Cady served as the Company's Cost Accountant
and between 1996 and 1998 as the Company's Controller. Ms. Cady has eleven years
of accounting and finance experience encompassing both public and private
accounting, specializing in manufacturing. From 1989 to 1994, Ms. Cady was
employed with Gerber Technology, Inc., a subsidiary of Gerber Scientific, Inc.,
most recently as their Supervisor of Cost Accounting. Prior to this, she was
employed as an auditor with the public accounting firm of Deloitte & Touche,
LLP. Ms. Cady holds a Bachelor of Science degree in Business Administration from
Bryant College.
Mr. Improta is the Company's Vice President, International Business
Development. In this position, Mr. Improta has the responsibility to introduce
the Company's products overseas, by establishing a network of distributors in
key foreign markets. Prior to his appointment, Mr. Improta was acting as a
consultant to the Company through FRC International, to help establish
distributors in Europe. In 1984, Mr. Improta formed his own company, H-S
Hospital Service, specializing in interventional radiology products, where he
was employed through 1993. He then formed a marketing consulting company, FRC
International, where he was employed until joining the Company in January 1997.
His prior experience includes employment with a number of medical products
companies including Becton, Dickinson & Company, Ital-Gamma and Abbot
Laboratories. Mr. Improta holds a Master's degree in Business Administration
from MCE Europe.
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COMPENSATION OF EXECUTIVE OFFICERS
Included below are tables which set forth certain information concerning
compensation paid by the Company to its chief executive officer and all other
executive officers with annual compensation in excess of $100,000 for the year
ended December 31, 1998 (the "Named Executive Officers"). The tables include
columns related to stock options and stock appreciation rights ("SARS")
(contractual rights to compensation measured by increases in the value of the
common stock payable in stock and/or cash). No SARS have been issued by the
Company.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ------------
OTHER ANNUAL SECURITIES
SALARY BONUS COMPENSATION UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) OPTIONS/SARS COMPENSATION
--------------------------- ---- ------- ------ --------------- ------------ ------------
Richard L. Higgins (2).................. 1998 180,017 100,000
Chief Executive Officer 1997 100,000 25,000
1996 90,385
Lawrence C. Krampert (3)................ 1998 15,000
Chairman of the Board 1997 100,000 100,000(4)
Ronald A. Haverl (5).................... 1998 116,667(6)
Chairman of the Board 1997 135,385 83,333(6)
1996 22,000 31,236 593,125
Carl R. Sahi (7)........................ 1998 190,769
Vice President, Business and 1997 220,000
Technology Development and 1996 220,000 593,125
Treasurer
Thomas K. Sutton (10)................... 1998 119,077 30,000
Executive Vice President 1997 103,000 14,401(11) 30,000
1996 14,262 30,395(11)
Lucio Improta (8)....................... 1998 150,000
Vice President, International 1997 144,231 30,000 4,248(9)
Business Development
- ---------------
(1) The amounts shown represent income earned upon the exercise of warrants for
shares of common stock. The warrants were granted in 1991 and were
exercised immediately prior to their expiration.
(2) Mr. Higgins was a Named Executive Officer of the Company in 1997, holding
the office of Vice President, Finance. On January 6, 1998, Mr. Higgins was
elected to the offices of President and Chief Executive Officer of the
Company.
(3) Mr. Krampert was elected Chief Executive Officer of the Company on July 24,
1997 and President on October 29, 1997. Mr. Krampert resigned as an
employee of the Company and assumed the position of Chairman of the Board
of Directors effective January 6, 1998. Mr. Krampert resigned as Chairman
of the Board of Directors effective June 3, 1999.
(4) Mr. Krampert's options expired in accordance with their terms upon his
resignation as an employee of the Company on January 6, 1998.
(5) Mr. Haverl resigned as Chief Executive Officer of the Company on July 24,
1997 and as Chairman of the Board of Directors effective January 5, 1998.
(6) Represents payments to Mr. Haverl in accordance with a severance
arrangement with the Company. See "Employment Agreements."
(7) Mr. Sahi became Treasurer of the Company on July 24, 1997 and Vice
President, Business Technology and Development on October 29, 1997. Mr.
Sahi served as President of the Company from September 1987 to October
1997.
(8) Mr. Improta first became an employee of the Company on January 13, 1997.
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(9) Represents premiums paid for a personal term life insurance policy. Mr.
Improta has no interest in any cash surrender value under the insurance
policy.
(10) Mr. Sutton first became an employee of the Company in November 1996.
(11) Represents a signing bonus paid to Mr. Sutton in 1996 and 1997.
OPTION/GRANT IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES
OF STOCK VALUE
NUMBER OF PERCENT OF APPRECIATION FOR
SECURITIES TOTAL OPTIONS EXERCISE OPTION
UNDERLYING GRANTED TO OR BASE TERM($)(1)
OPTIONS EMPLOYES IN PRICE EXPIRATION -----------------
NAME GRANTED(#) 1998 ($/SH) DATE 5% 10%
- ---- ---------- ---------------- ----------- ---------- ------ -------
Richard L. Higgins......... 100,000 54% 4.75 01/09/08 7.74 12.32
Thomas K. Sutton........... 30,000 16% 4.75 03/30/08 7.74 12.32
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(1) Represents the potential realizable value of each grant assuming the market
price of the underlying security appreciates in value from the date of grant
to the end of the option term at 5% and 10% annually.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Improta dated January 13,
1997 filed as Exhibit 10.15 to the Company's Quarterly Report on Form 10-Q for
the quarter ended on March 31, 1997 and incorporated by reference herein. Under
the terms of the agreement, Mr. Improta receives an annual salary of $150,000
plus commissions and is subject to customary confidentiality and non-competition
provisions. The initial term of the agreement is 18 months which is
automatically renewed for a second 18 month term absent notice of termination
for cause. Subject to the terms of the agreement, either party may terminate the
agreement during the second term, based on certain severance provisions.
The Company had an arrangement with Mr. Haverl that became effective upon
his resignation as Chief Executive Officer of the Company, the terms of which
were set forth as Exhibit 10.17 filed with the Company's Annual Report on Form
10-K for the year ended December 31, 1997. Under the terms of the arrangement,
Mr. Haverl received a severance payment of $200,000 less certain adjustments
payable in twelve monthly installments. In addition, Mr. Haverl acted as a
consultant to the Company for an initial term commencing August 1, 1997 and
ending September 30, 1997 at no cost to the Company.
All employees have executed confidentiality agreements with the Company.
INCENTIVE PLAN
In May 1991 the Company adopted its 1991 Long Term Incentive Plan (as
amended, the "Plan"). Pursuant to the Plan, the Compensation Committee of the
Board (the "Committee") has the power to make grants or awards to persons who,
in the judgment of the Committee, have contributed or will contribute, to the
long-term success of the Company. The Board generally may amend, suspend or
terminate the Plan in whole or in part. However, amendments which materially
increase the benefits accruing to participants under the Plan, increase the
number of shares of common stock reserved for purposes of the Plan or materially
modify the requirements as to eligibility to participate in the Plan must also
be approved by the Company's shareholders. Awards and grants under the Plan may
be made in a variety of forms, including warrants to purchase common stock,
stock options, incentive stock options within the meaning of Section 422 of the
Internal Revenue Code ("ISOs"), and restricted stock. Stock options may be
accompanied by SARS, and restricted stock may be accompanied by grants of
performance shares (contractual rights to compensation measured by increases in
the value of the common stock payable in cash). The Committee in its discretion
determines who receives grants or awards under the Plan, the number of warrants,
options, ISOs, SARs,
8
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performance shares, and shares of restricted stock, the option price, and the
duration of the awards. One Million (1,000,000) shares have been reserved for
issuance under the Plan, including 428,900 shares subject to outstanding options
under the Plan as of December 31, 1998. There were 21,000 options exercised
under the Plan during 1998. The exercise prices of options awarded under the
Plan were the fair market value of the underlying shares at the time of the
award, as determined by the Compensation Committee of the Board of Directors.
On January 28, 1999 at a meeting of the Board of Directors, a decision was
made to reduce the exercise prices on existing employee stock options awarded
under the 1991 Long Term Incentive Plan to $2.75 per share. This reduction was
made in an effort to more appropriately value the options given the decline in
the Company's stock price since the original grant dates.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 8, 1998, the Company received $250,000 from Mr. Sahi, a
director and officer of the Company, in exchange for a one-year promissory term
note with warrants. The term note bore interest at 8% per annum and was payable
quarterly in arrears commencing on December 8, 1998. If not required to be paid
sooner, the maturity date of the note was September 8, 1999. On March 31, 1999,
in accordance with the terms and conditions of the note, the Company paid the
outstanding principal balance of $250,000, and all accrued interest thereon.
With the note, there were 30,000 common stock warrants issued with a three-year
life and an exercise price of $2.09.
On September 11, 1998 the Company received $250,000 from Mr. Himick, a
director and shareholder of the Company, in exchange for 124,378 shares of
common stock issued at $2.01 per share.
During the fourth quarter of 1998, Mr. Gross, a director and shareholder of
the Company, invested $1,000,000 in exchange for 510,000 shares of common stock
and 75,000 warrants with a maturity date of December 31, 2001 and an exercise
price of $2.00 per share.
During the first quarter of 1999, Mr. Himick invested $1,000,000 in
exchange for 502,500 shares of common stock and 75,000 warrants with a maturity
date of December 31, 2001 and an exercise price of $2.00 per share.
During the first quarter of 1999, Mr. Gross invested $100,000 in exchange
for 47,058 shares of common stock.
During the second quarter of 1999, Mr. Sutton exercised a warrant to
purchase 30,000 shares of the Company's Common Stock at an exercise price of
$2.75 per share.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The Company is not aware of any delinquent reports required by Section
16(a) of the Securities Exchange Act of 1934, as amended, to be filed with the
Securities and Exchange Commission during the fiscal year ending December 31,
1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Ribakove, Himick and Gross are the members of the Compensation
Committee. Each is a non-employee director of the Company. No executive officers
of the Company serve on the Compensation Committee (or in a like capacity) for
any other entity.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
THE REPORT OF THE COMPENSATION COMMITTEE SHALL NOT BE DEEMED INCORPORATED
BY REFERENCE BY ANY GENERAL STATEMENT OF THE COMPANY INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY OTHER DOCUMENT FILED
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12
BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS
COMPENSATION COMMITTEE REPORT BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED BY THE COMPANY UNDER SUCH ACTS.
INTRODUCTION
The Compensation Committee of the Board of Directors establishes the
general compensation policies of the Company, administers the Company's 1991
Long-Term Incentive Plan, and sets specific compensation levels for executive
officers of the Company. The goal of the Committee is to provide such levels and
forms of compensation as will allow the Company to attract, retain, and motivate
persons important to the growth and success of the Company. Non-employee
directors serve as members of the Compensation Committee.
COMPENSATION PROGRAMS
Base Salary. The Committee establishes base salaries for each of the
executive officers based upon their position with the Company, their experience
level and their individual performance. Base salaries are subject to adjustment
by the Committee, from time to time, in its subjective discretion.
Bonuses. Each executive officer is eligible to receive a cash bonus at the
election of the Committee. The bonus may be awarded at any time during the year
and may be based on a specific goal or achievement or overall performance of the
officer.
Incentive Plan. Executive officers are eligible to participate in the
Company's 1991 Long-Term Incentive Plan (the "Incentive Plan"). Grants under the
Incentive Plan may be made in a variety of forms including warrants to purchase
Common Stock, stock options, incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
restricted stock. Stock options may be accompanied by stock appreciation rights
and restricted stock may be accompanied by grants of performance shares
(contractual rights to compensation measured by increases in the value of Common
Stock payable in cash). Only grants of stock options have been made under the
Incentive Plan. Vesting periods for executive officers vary. Generally, the
options were provided through initial grants at or near the date of hire and
subsequent grants as the Committee deemed appropriate. The intent of the grants
was to create an incentive for the recipient to remain at the Company and to
provide a long-term incentive to achieve or exceed the Company's goals.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Higgins is the Chief Executive Officer of the Company and was first
elected to that office on January 6, 1998. His compensation consisted of a base
salary plus bonus. In 1998, he received an annual base salary of $180,017 and
was awarded 100,000 stock options to purchase Company's common stock.
CODE SECTION 162(M)
In 1993, the Code was amended to add Section 162(m). Section 162(m) places
a limit of $1,000,000 on the amount of compensation that may be deducted by a
public company in any year with respect to certain of the company's higher paid
executives. Certain performance-based compensation that has been approved by
shareholders is not subject to the deduction limitation. The 1998 cash
compensation of the Company's executives was well below the level where this
limitation would apply. The Company believes that options granted under the
Incentive Plan are excluded from the Section 162(m) limitation as
performance-based compensation.
COMPENSATION COMMITTEE:
RICHARD RIBAKOVE
DAVID HIMICK
HERMAN GROSS
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STOCK PERFORMANCE GRAPH
THIS STOCK PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE
BY ANY GENERAL STATEMENT OF THE COMPANY INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY OTHER DOCUMENT FILED BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS STOCK PERFORMANCE GRAPH BY REFERENCE, AND
SHALL NOT OTHERWISE BE DEEMED FILED BY THE COMPANY UNDER SUCH ACTS. MOREOVER,
THE COMPARISONS IN THE STOCK PERFORMANCE GRAPH ARE REQUIRED BY REGULATIONS OF
THE SECURITIES AND EXCHANGE COMMISSION AND ARE NOT INTENDED TO FORECAST OR TO BE
INDICATIVE OF THE POSSIBLE FUTURE PERFORMANCE OF THE COMMON STOCK.
The following graph compares the cumulative total stockholder return on the
Company's Common Stock for the period indicated below with the cumulative total
return on the Nasdaq Stock Market (U.S.) Index and the S&P Healthcare Composite
Index. The comparison assumes $100 was invested on June 20, 1994, at the initial
public offering price in the Company's Common Stock and in each of the indices
and assumes reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
FOR THE PERIOD JUNE 20, 1994 TO DECEMBER 31, 1998 BETWEEN BIO-PLEXUS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE S&P HEALTHCARE COMPOSITE INDEX.
S&P HEALTHCARE COMPOSITE
BIO-PLEXUS, INC. NASDAQ STOCK INDEX INDEX
---------------- ------------------ ------------------------
6/20/94 100.000 100.000 100.000
112.500 98.290 99.150
117.500 100.310 100.100
145.000 106.710 111.910
159.380 106.440 114.230
187.500 108.530 115.680
115.000 104.930 116.800
12/31/94 127.500 105.220 117.880
145.000 105.820 125.590
142.500 111.420 127.370
147.500 114.720 131.130
145.000 118.330 134.670
110.000 121.390 138.160
120.000 131.220 144.010
118.750 140.870 150.890
120.000 143.730 150.640
122.500 147.030 163.790
117.500 146.180 168.400
100.000 149.610 176.770
12/31/95 102.500 148.820 186.080
108.750 149.550 196.650
112.500 155.240 193.480
97.500 155.750 191.970
121.250 168.670 188.280
115.000 176.420 196.010
100.000 168.460 199.630
90.000 153.440 189.820
76.250 162.040 196.900
76.250 174.430 213.030
85.000 172.500 215.080
60.000 183.170 233.150
12/31/96 90.000 183.000 223.120
75.630 196.010 247.510
62.500 185.170 251.120
46.250 173.080 233.870
56.250 178.490 253.020
45.000 198.710 268.500
32.500 204.800 294.250
27.500 226.420 299.980
56.250 226.070 275.690
56.250 239.430 291.650
58.750 227.040 294.690
53.750 228.170 307.190
12/31/97 47.500 224.510 320.660
41.250 231.600 343.020
36.880 253.340 362.220
41.250 262.700 374.880
33.130 267.160 383.740
30.000 252.490 376.340
28.750 270.450 403.870
26.250 267.450 406.010
23.750 215.010 360.430
17.500 244.410 403.220
28.750 254.710 417.810
26.250 279.401 443.320
12/31/98 23.750 315.610 462.430
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2. AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
INTRODUCTION
The Shareholders are being asked to approve an amendment to the Company's
Certificate of Incorporation to increase to Twenty-Five million (25,000,000) the
number of shares of Common Stock that the Company is authorized to issue in
order to provide shares for issuance in future financings.
CURRENT CAPITALIZATION
At the close of business on June 7, 1999, there were (i) 13,509,081 shares
of Common Stock issued and outstanding, (ii) 1,561,158 shares of Common Stock
subject to outstanding warrants, (iii) 811,000 shares of Common Stock reserved
for issuance under the Incentive Plan and Directors' Plan, which are either
subject to outstanding options or reserved for future grants, and (iv)
18,000,000 shares of Common Stock currently authorized, leaving approximately
2,118,761 shares available for future corporate purposes.
REASONS FOR THE AMENDMENT
The Board of Directors has authorized the amendment to provide additional
shares of Common Stock for issuance to satisfy the Company's contractual
obligations with respect to a private placement of Convertible Debentures in the
amount of $2,500,000 in April 1999. Additionally, the shares of Common Stock are
needed so that the Company may take part in future financings in order to fund
future operations and to expand its product lines.
PREEMPTIVE RIGHTS
The holders of shares of Common Stock of the Company do not have preemptive
rights to purchase any shares of authorized stock of the Company.
POSSIBLE ANTI-TAKEOVER EFFECTS
Once the additional shares of Common Stock are authorized by the
shareholders, the Board of Directors of the Company can, in many cases, issue
such shares of Common Stock without further shareholder action. The effect of
issuing shares of Common Stock may be to deter or thwart the accomplishment of a
business combination involving a merger or other change in control of the
Company that may at the time be advantageous to some shareholders, and possibly
to render more secure the position of incumbent management. While the Board is
presently unaware that any such attempt at assumption of control of the Company
may be made, and presently does not intend to authorize the issuance of shares
of Common Stock of the Company to frustrate or block any such effort,
shareholders should be aware when voting on the proposal to increase the
authorized number of Common Stock that such an action may be viewed by some as a
potential anti-takeover measure by the Company.
RESOLUTION
The resolution to approve the amendment is as follows:
RESOLVED, that the Certificate of Incorporation of the Corporation be and
hereby is amended as follows:
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FIRST: Article III Capitalization, is amended to increase the number of
authorized shares of Common Stock. Article III shall read as follows:
ARTICLE III
CAPITALIZATION
The aggregate number of shares which the Corporation shall have authority
to issue is Twenty-Eight Million (28,000,000), which are divided into two
classes: (i) Three Million (3,000,000) shares of Preferred Stock, without par
value (the "PREFERRED STOCK"); and (ii) Twenty-Five Million (25,000,000) shares
of Common Stock, without par value (the "COMMON STOCK").
REQUIRED VOTE OF STOCKHOLDERS
Holders of a majority of the issued and outstanding shares of Common Stock
entitled to vote on the proposed amendment, present in person or represented by
proxy at the Meeting when a quorum is present, is required to approve the
amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION.
3. RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed Mahoney Sabol &
Company, LLP, of Hartford, Connecticut, its independent accountants to examine
the accounts and books of the Company for the current fiscal year and to report
on the Company's financial statements for that period. Effective January 5,
1998, the Company dismissed its former independent accountants,
PricewaterhouseCoopers LLP of Hartford, Connecticut and engaged Mahoney Sabol &
Company, LLP as its independent accountants.
During the two most recent audited fiscal years of the Company and through
January 5, 1998, there were no disagreements with PricewaterhouseCoopers LLP on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements if not resolved to the
satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The report of the former independent accountants on the financial
statements of the Company for fiscal year ended December 31, 1996 contained no
adverse opinion or disclaimer of opinion, nor was qualified as to uncertainty,
audit scope, or accounting principles, except that the opinion dated April 11,
1997, contained an explanatory paragraph relating to the Company's ability to
continue as a going concern. See the Company's Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 9, 1998 and incorporated
by reference herein.
The decision to change accountants was approved by the Board of Directors
of the Company.
Representatives of Mahoney Sabol & Company, LLP will be present at the
meeting to make a statement, if they desire to do so, and to respond to
appropriate questions.
The ratification of the selection of independent auditors requires the
affirmative vote of a majority of the shares entitled to vote thereon, present
in person or represented by proxy at the Meeting when a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE PROPOSAL
TO RATIFY THE SELECTION OF MAHONEY SABOL & COMPANY, LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR.
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SHAREHOLDERS' PROPOSALS
Shareholder proposals intended to be presented at the Company's 2000 Annual
Meeting must meet the requirements of Rule 14a-8 promulgated by the Securities
and Exchange Commission and must be received by the Secretary of the Company,
Nancy S. Lautenbach, no later than February 19, 2000 in order to be eligible for
inclusion in the proxy statement and form of proxy related to that meeting.
Also, if notice of a matter intended to be presented at the 2000 Annual
Meeting but not included in the Company's proxy statement and proxy is received
by the Company after May 4, 2000, then management named in the Company's proxy
form for the 2000 Annual Meeting will have discretionary authority to vote
shares represented by such proxies on such matters, if presented at the meeting,
without including information about the matters in the Company's proxy
materials.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission, including the financial statements and the
financial statements schedules, is included with the Company's Annual Report to
Shareholders which accompanies this Proxy Statement. The 1999 Annual Report is
not to be considered part of the proxy soliciting material. Copies of any
exhibit to Form 10-K can be obtained for a nominal fee by written request to the
Secretary of the Company, Nancy S. Lautenbach, at the address appearing on the
front page of this Proxy Statement.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented
for consideration at the Meeting. If other matters are properly brought before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote the shares represented thereby on such matters in accordance with their
best judgment.
By Order of the Board of Directors,
NANCY S. LAUTENBACH
Secretary
Vernon, Connecticut
June 18, 1999
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DETACH HERE
BIO-PLEXUS, INC.
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P R O X Y
The undersigned hereby severally appoints Richard L. Higgins
and Carl R. Sahi as agents, each with the power of substitution, and
hereby authorizes each of them to vote all shares of common stock of the
undersigned at the 1999 Annual Meeting of Shareholders of the Company to
be held at Rensselaer Polytechnic Institute At Hartford, 275 Windsor
Street, Hartford, Connecticut 06120 on Monday July 19, 1999, at 1:30 p.m.,
local time, and at any adjournments or postponements thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" THE
PROPOSALS SET FORTH ON THE REVERSE SIDE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SEE REVERSE
SIDE SIDE
18
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
1. Election of Directors:
NOMINEES: C. Sahi, R. Ribakove, D. Himick, R. Higgins and H. Gross
FOR WITHHELD
[ ] [ ]
[ ] ---------------------------------------
For all nominees except as noted above
2. Approval of the amendment to the FOR AGAINST ABSTAIN
Company's certificate of incor- [ ] [ ] [ ]
poration to increase the number
of shares of Common Stock that
the Company is authorized to issue.
3. Ratification of the Selection of FOR AGAINST ABSTAIN
Independent Public Accountants. [ ] [ ] [ ]
4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting or any
adjournments or postponements thereof.
MARK HERE [ ] MARK HERE [ ]
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, or guardian, please give
full title as such.
Signature:__________________ Date:_____ Signature:__________________ Date:_____