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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss.240.14a-12
JAYARK CORPORATION
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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)(1) and O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:1
4) Proposed maximum aggregate value of transaction:
5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
1
NOTICE
OF
ANNUAL MEETING
OF
STOCKHOLDERS
To Be Held
November ___, 2000
To the Stockholders:
The annual meeting of the stockholders of Jayark Corporation (the
"Company") will be held at 300 Plaza Drive, Vestal, New York 13580, on November
___, 2000, at 9:00 a.m. Local time, for the following purposes:
1. To elect five (5) additional directors to serve until the expiration
of their three-year terms and until their successors are duly elected and
qualified;
2. To ratify the appointment by the Board of Directors of KPMG as the
independent accountants of the Company for the fiscal year ending April 30,
2001.
3. To approve the Company's 2000 Stock Option Plan.
4. To transact such other business as may properly be brought before
the meeting or any adjournments thereof.
Only stockholders of record at the close of business on September ___,
2000, are entitled to notice of and to vote at the annual meeting or
adjournment(s) thereof.
Your attention is called to the proxy statement on the following pages.
We hope that you will attend the annual meeting. If you do not plan to attend,
kindly sign, date, and mail the enclosed proxy in the envelope, which requires
no postage if mailed in the United States. Your vote is important regardless of
the number of shares you own.
BY ORDER OF THE BOARD OF DIRECTORS
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October ___, 2000
2
JAYARK CORPORATION
PROXY STATEMENT
Mailed to Stockholders on October ___, 2000
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of Jayark Corporation (the "Company") of proxies in
the enclosed form for use at the annual meeting of stockholders (the "Annual
Meeting") to be held at 9:00 a.m. Local time at 300 Plaza Drive, Vestal, New
York 13580, on November __, 2000, and at any adjournment(s) thereof.
A copy of the Company's Annual Report on Form 10-K for the year ended
April 30, 2000, is enclosed.
The solicitation of proxies in the accompanying form will be made at
the Company's expense, primarily by mail and through brokerage and banking
institutions. Those institutions will be requested to forward soliciting
materials to the beneficial owners of the stock held of record by them and will
be reimbursed for their reasonable forwarding expenses.
Any proxy given pursuant to such solicitation and received in time for
the meeting will be voted in accordance with the instructions, if any, given in
that proxy. If no instructions are specified, proxies will be voted FOR the
election of the nominees named in Proposal Number 1 of this Proxy Statement and
in favor of the additional proposals set forth herein. At the date of this Proxy
Statement, the management of the Company does not know of any business to be
presented at the Annual Meeting other than those matters that are set forth in
the Notice accompanying this Proxy Statement. If any other business should
properly come before the Annual Meeting, it is intended that the shares
represented by proxies will be voted with respect to such business in accordance
with the judgement of the persons named in the proxy. Any proxies may be revoked
by written notice received by the Secretary of the Company at any time prior to
the voting thereof.
Only stockholders of record at the close of business on September 29,
2000, are entitled to notice of and to vote at the Annual Meeting or
adjournments thereof. At that date, the Company had outstanding 2,766,396 shares
of common stock, $.01 par value (the "Common Stock"). Each share of Common Stock
entitles the record holder thereof to one vote. Abstentions and broker non-votes
will be included in the determination of the number of shares represented at the
Annual Meeting. Abstentions will have the same effect as a vote against a
proposal; broker non-votes, however, are not included in the tally of votes cast
and will not affect the outcome of a proposal.
Principal Stockholders And Security Ownership of Management
The following sets forth as of April 30, 2000, the holdings of the
Company's Common Stock by those persons owning of record, or known by the
Company to own beneficially, more than 5% of the Common Stock, the holdings by
each director or nominee, the holdings by certain executive officers and by all
of the executive officers and directors of the Company as a group.
3
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PRINCIPAL STOCKHOLDERS
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Amount and Nature of Note (1) % of
Name and Address of Beneficial Owner Beneficial Ownership Class
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David L. Koffman
300 Plaza Drive, Vestal, NY 13850 1,283,033 46.4%
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Vulcan Properties, Inc.
503 Eighth Avenue, Suite 300, NY, NY 10018 292,189 10.6%
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Burton I. Koffman
300 Plaza Drive, Vestal, NY 13850 185,819 (2),(3) 6.7%
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Ruthanne Koffman
300 Plaza Drive, Vestal, NY 13850 183,065 6.6%
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Jeffrey P. Koffman
150 East 52nd Street, New York, NY 10022 146,102 5.3%
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Frank Rabinovitz
6116 Skyline Drive, Houston, TX 77057 68,426 2.5%
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Robert C. Nolt
300 Plaza Drive, Vestal, NY 13850 10,000 0.4%
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All Directors & Executive Officers as a Group 1,507,561 54.5%
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(1) All shares are owned directly by the individual named, except as set forth
herein. Includes actual shares beneficially owned and Employee and Director
Stock Options exercisable within 60 days. David L. Koffman and Jeffrey P.
Koffman are sons of Burton I. Koffman. Ruthanne Koffman is the wife of Burton I.
Koffman.
(2) Excludes 3,700 shares owned by a charitable foundation of which Burton I.
Koffman is President and Trustee.
(3) Includes 53,700 shares owned as tenants in common by brothers Richard E.
Koffman and Burton I. Koffman.
PROPOSAL NUMBER 1
Election of Directors
Five (5) directors are to be elected by the stockholders, to the
Company's classified Board of Directors, to hold office for a three-year period
and until their successors are duly elected and qualified or until their earlier
death, resignation or removal.
The Company's nominees for election as directors are listed below. The
affirmative a vote of a plurality of the votes of the cast by stockholders
present in person or represented by proxy at the meeting and entitled to vote is
required for the election of each of five directors. While the Board of
Directors has no reason to believe that any of those named will not be available
as a candidate,
4
should such a situation arise, the proxy will be voted for the election of
substitute nominees selected by the Board.
Nominees For Director
Name Age Term Positions & Offices Director Since
Expires Presently Held
David Koffman 41 2000 Chairman, President, 1983
Chief Executive Officer
and Director
Frank Rabinovitz 57 2000 N/A 1989
Richard Ryder 55 N/A Director N/A
Stephen Fisher 55 N/A N/A N/A
Paul Garfinkle 59 N/A N/A N/A
Dr. Ryder is a practicing physician in the Binghamton, New York area
for the past 23 years. He is board certified in cardiology and internal
medicine. Dr Ryder is a graduate of Wake Forest University Medical School and
pursued his cardiology training at Georgetown University.
Mr. Fisher is the President of Fisher Medical Corporation, the wholly
owned subsidiary of Jayark Corporation. Prior to joining the Company, he was the
principal and co-founder of Fisher Medical LLC. He was CEO and Chairman of Vivax
Medical Corporation from 1996 until he resigned in 1998 to start Fisher Medical.
From 1991 to 1996 he was President of Aztech Corporation, a firm specializing in
business development, mergers and acquisitions and technology licensing. Prior
thereto, he was President of Materials Systems, Ltd., an engineering and
management consulting firm. He was an INCRA Fellow at Carnegie-Mellon University
and an Assistant Professor of engineering and conducted research at West
Virginia Institute of Technology and Virginia Polytechnic Institute.
Mr. Garfinkle is currently a business consultant, having retired in
2000 from BDO Seidman, LLP, where he had been employed for 36 years and was an
audit partner for 26 years.
The following table is a listing of current Directors of the Company:
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CURRENT DIRECTORS
TERM DIRECTOR
NAME AGE EXPIRES POSITION PRESENTLY HELD SINCE
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David Koffman 41 2000 Chairman, President, Chief Executive Officer and Director 1983
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Frank Rabinovitz 57 2000 Executive Vice President, Chief Operating Officer, Director and 1989
President of AVES
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5
Robert C. Nolt 52 2001 Chief Financial Officer and Director 1998
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Arthur G. Cohen 71 2002 Director 1990
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Jeffrey P. Koffman 34 2002 Director 1999
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David L. Koffman was elected President and Chief Executive Officer of
the Company in December of 1988. Prior to that time, he served as Director and
Vice President of the Company for over five years.
Frank Rabinovitz was elected Executive Vice President, Chief Operating
Officer and Director of the Company in 1989. In addition he is the President of
the Company's Audio Visual subsidiary and has served in this capacity for more
than five years, as well as in various other executive and management capacities
since 1980.
Robert C. Nolt is Chief Financial Officer and Director of the Company.
In addition, Mr. Nolt is Chief Financial Officer of Binghamton Industries, Inc.,
a company controlled by the principal shareholders of the Company. Prior to
joining the Company, Mr. Nolt was Vice President of Finance of RRT-Recycle
America, Inc. Mr. Nolt is a Certified Public Accountant with over 26 years of
experience in the Accounting field and has served in a number of executive
positions. Before joining RRT in 1993, Mr. Nolt was Chief Financial Officer for
the Vestal, NY based Ozalid Corporation.
Arthur G. Cohen has been a real estate developer and investor for more
than eight years. Mr. Cohen is a Director of Baldwin and Arlen, Inc. Burton I.
Koffman and Richard E. Koffman are parties to an agreement with Arthur G. Cohen
pursuant to which they have agreed to vote their shares in favor of the election
of Mr. Cohen to the Board of Directors of the Company.
Jeffrey P. Koffman was elected Director of the Company in 1999. Mr.
Koffman has served as a Director of Apparel America, Inc. since June 1995 and
Executive Vice President of Apparel America, Inc. from June 1994 to February
1996. Mr. Koffman was appointed President of Apparel America, Inc. in February
1996. Apparel America, Inc. filed for protection from its creditors under
Chapter 11 in 1998. Mr. Koffman served as a financial analyst with Security
Pacific from 1987 to 1989. In 1989, Mr. Koffman became Vice President of Pilgrim
Industries and in 1990, he became the President of that Company. From 1994 to
the present, Mr. Koffman has served in an executive capacity with Tech Aerofoam
Products.
Information Concerning Operations Of The Board of Directors
On October 26, 1999, the Board of Directors approved an amendment to
the Company's Certificate of Incorporation providing for a one for ten reverse
stock split. As of September 30, 1999, the Company had 27,663,597 shares of
common stock issued and outstanding. Each share of common stock is entitled to
one vote on any matter brought to a vote of the Company's stockholders. At the
Annual Meeting of Stockholders held on November 22, 1999, pursuant to the Notice
of Annual Meeting of the Stockholders and Proxy Statement dated October 26,
1999, a majority of the Company's stockholders representing 19,634,325 shares or
71% of the outstanding shares entitled
6
to vote, approved the amendment.
On May 22, 1998, the Board of Directors of the Company approved and
authorized an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of the Company's common stock, par
value of $.30 per share, from 10,000,000 shares to 30,000,000 shares and to
change the par value to $.01 per share. As of May 22, 1998, the Company had
9,221,199 issued and outstanding shares of Common Stock. By written consent
dated May 22, 1998, a majority of the Company's stockholders representing
4,898,245 shares, or 53% of the outstanding shares entitled to vote, approved
the amendment.
The Executive Committee of the Board of Directors consists of Mr. David
L. Koffman (Chair) and Mr. Frank Rabinovitz. The function of the Executive
Committee is to exercise the powers of the Board of Directors to the extent
permitted by Delaware law. As a rule, the Executive Committee meets to take
action with respect to matters requiring Board of Directors approval and which
cannot await a regular meeting of the Board or the calling of a special meeting.
Under Delaware law and the Company's By-laws, both the Board and Executive
Committee can act by unanimous written consent to all members.
The Stock Option Committee of the Board of Directors was created to
administer the Company's 1981 Incentive Stock Option Plan, as amended, pursuant
to resolution adopted November 24, 1981, giving it authority to exercise powers
of the Board with respect to the Plan. The Stock Option Committee consists of
Mr. Frank Rabinovitz and Mr. Robert Nolt.
The Audit Committee of the Board of Directors was created in 1991 to
administer and coordinate the activities and results of the annual audit of the
Company by independent accountants and to comply with NASDAQ listing
requirements. The Audit Committee is comprised of Mr. Frank Rabinovitz and Mr.
Robert Nolt.
The Compensation Committee of the Board of Directors was created in
1993 to administer and review compensation structure, policy and levels of the
Company. The Compensation Committee is composed of Mr. Frank Rabinovitz and Mr.
David Koffman.
Executive Officers
The following sets forth the names, ages and positions who are not
directors and who are executive officers of the Company:
See Chart under Directors for executive officers.
Compensation of Directors and Executive Officers
Set forth in the following table is certain information relating to the
approximate remuneration paid by the Company during the last three fiscal years
to the Chief Executive Officer and to each of the most highly compensated
executive officers whose total compensation exceeded $100,000.
7
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SUMMARY COMPENSATION TABLE (1,2,3)
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Annual Compensation
--------------------------
Year Salary Bonus
-------------------------------------
DAVID L. KOFFMAN 2000 $81,000 --
Chairman, President and Chief Executive Officer 1999 141,750 --
1998 162,000 --
FRANK RABINOVITZ 2000 $162,000 $50,000
Director, Executive Vice President, Chief Operating Officer, 1999 162,000 50,000
President of AVES 1998 162,000 50,000
==================================================================================================
(1) Does not include the value of non-cash compensation to the named
individuals, which did not exceed the lesser of $50,000 or, 10% of such
individuals' total annual salary and bonus. The Company provides a vehicle
to each of the named executives for use in connection with Company business
but does not believe the value of said vehicles and other non-cash
compensation, if any, exceeds the lesser of $50,000 or 10% of the
individual's total annual salary and bonus.
(2) The Company has entered into Split Dollar Insurance Agreements with David
L. Koffman and Frank Rabinovitz, pursuant to which the Company has obtained
insurance policies on their lives in the approximate amounts of $5,743,400
and $497,700, respectively. The premium is paid by the Company. Upon the
death of the individual, the beneficiary named by the individual is
entitled to receive the benefits under the policy. The approximate amounts
paid by the Company during the fiscal year ended April 30, 2000 for this
insurance coverage were $0 and $25,373, respectively. Such amounts are not
included in the above table.
(3) The Company has accrued Mr. Koffman's 2000, 1999 and 1998 salaries,
however, he has deferred payment until such time as the Company's working
capital position improves.
The following table sets forth certain information relating to the
value of stock options at April 30, 2000:
=============================================================================================================
Number of Unexercised Options at Fiscal Value of Unexercised In-The-Money Options
Year End at Fiscal Year End
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Name Exercisable Unexercisable Exercisable Unexercisable
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Frank Rabinovitz 10,000 0 $0 0
=============================================================================================================
o Based on the $0.81 per share closing bid price of the common stock on the
NASDAQ Stock Exchange on April 30, 2000.
Effective November 24, 1981 and approved at the annual stockholders'
meeting in 1982, the 1981 Incentive Stock Option Plan (ISOP) was adopted. An
amendment to the ISOP was adopted on December 11, 1989. This amendment increased
the number of incentive stock options that can
8
be granted from 15,000 shares to 60,000 shares. The ISOP provides for the
granting to key employees and officers of incentive stock options, as defined
under current tax laws. The stock options are exercisable at a price equal to or
greater than the market value on the date of the grant.
No stock options were granted during the fiscal year ended April 30,
2000.
Effective September 15, 1994 and approved at the annual stockholders
meeting in 1994, the 1994 Non-Employee Director Stock Option Plan (the "Director
Plan") was adopted and 20,000 shares of the Company's Common Stock reserved for
issuance under the Director Plan. The Director Plan provides for the automatic
grant of non-transferable options to purchase Common Stock to non-employee
directors of the Company; on the date immediately preceding the date of each
annual meeting of stockholders in which an election of directors is concluded,
each non-employee director then in office will receive options exercisable for
500 shares (or a pro rata share of the total number of shares still available
under the Director Plan). No option may be granted under the Director Plan after
the date of the 1998 annual meeting of stockholders.
Options issued pursuant to the Director Plan are exercisable at an
exercise price equal to not less than 100% of the fair market value (as defined
in the Director Plan) of shares of Common Stock on the day immediately preceding
the date of the grant. Options are vested and fully exercisable as of the date
of the grant. Unexercised options expire on the earlier of (i) the date that is
ten (10) years from the date on which they were granted, (ii) the date which is
three calendar months from the date of the termination of the optionee's
directorship for any reason other than death or disability (as defined in the
Director Plan), or (iii) one year from the date of the optionee's disability or
death while serving as a director.
The Director Plan became effective immediately following the 1994
Annual Meeting of Stockholders. Each non-employee director in the office on the
date immediately preceding the date of each year's annual meeting will receive
options exercisable for 500 shares of common stock.
During fiscal year ended April 30, 2000, no director options were
granted to non-employee directors.
Report of the Compensation Committee of the Board of Directors
on Executive Compensation
Except pursuant to its ISOP and the Director Plan, the Company does not
have any formal annual incentive program, cash or otherwise, nor does it make
annual grants of stock options. Cash bonuses and stock options, including
bonuses and options paid to executive officers, have generally been awarded
based upon individual performance, business unit performance and corporate
performance, in terms of cash flow, growth and net income as well as meeting
budgetary, strategic and business plan goals.
The Company is committed to providing a compensation program that helps
attract and retain the best people for the business. The Company endeavors to
achieve symmetry of compensation paid to a particular employee or executive and
the compensation paid to other employees or executives both inside the Company
and at comparable companies.
9
The remuneration package of the Chief Executive Officer includes a
percentage bonus based on the Company's profitable performance.
Performance Graph
The following stock performance graph shall not be deemed incorporated
by reference by any general statement incorporating the Proxy Statement by
reference into any filing under the Securities Act of 1933, as amended, or under
the Securities Exchange Act of 1934, as amended, and shall not be deemed filed
or to constitute soliciting material under such Acts except to the extent that
the Company specifically incorporates this information by reference.
The following line graph compares the yearly change in cumulative total
return on the Company's common stock for the past five years with the cumulative
total return of (i) the NASDAQ Stock Market for US companies (MARKET INDEX), and
(ii) NASDAQ Non-Financial Stocks (PEER INDEX).
Comparison of Five-Year Cumulative Returns
04/30/95 04/30/96 04/30/97 04/30/98 04/30/99 4/30/00
Jayark Corporation 100 40.0 20.0 16.0 3.125 6.8
CRSP Index for NASDAQ 100 126.0 200.0 200.0 400.0 504.0
Stock Market (US Companies)
CRSP Index for NASDAQ 100 130.0 300.0 325.0 600.0 762.0
Non Financial Stocks
The graph assumes $100 was invested on April 30, 1995, in each of the
following: the Company's common stock, the NASDQ Stock Market Index, and the
NASDAQ sub index for Non-Financial Stocks. The Company's common stock
performance shown is not necessarily indicative
10
of future performance.
PROPOSAL NUMBER 2
Independent Accountants
BDO Seidman, LLP, the independent public accountants that were
previously engaged as the principal accountant to audit the Company's financial
statements resigned as the Company's principal accountant on November 13, 2000.
During the past five fiscal years there were no disagreements between the
Company and BDO Seidman, LLP, on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which,
if not resolved to the satisfaction of BDO Seidman, LLP, would have cause BDO
Seidman, LLP to make reference to the subject matter of the disagreement or
disagreements.
The Company has hired KPMG to perform certain accounting services for
the Company, and subject to stockholder approval, to perform an audit of the
Company's financial statements for the fiscal year ending April 30, 2001. The
hiring of KPMG was approved by the Board of Directors. During the Company's two
most recent fiscal years and subsequent interim periods prior to the engagement
of KPMG, the Company did not, nor did anyone on the Company's behalf, consult
KPMG regarding either (A) the application of accounting principles to a
specified completed or proposed transaction, or the type of audit opinion that
might be rendered on the Company's financial statements as to which a written
report or oral advice was provided to the Company that was an important factor
considered by the Company in reaching a decision as to an accounting, auditing
or financial report issue, or (B) any matter that was the subject of a
disagreement between the Company and BDO Seidman, LLP, or an event described in
paragraph 304(a)(1)(v) of the SEC's Regulation S-K. The Board of Directors has
appointed KPMG as principal accountants for the fiscal year ending April 30,
2001, subject to the ratification of the appointment by stockholders at the
annual meeting. Unless otherwise indicated, all properly executed proxies
received by the Company will be voted in favor of the appointment of KPMG. An
adverse vote will be considered as a direction to the Company to select other
independent accountants in the following year.
It is expected that a representative of KPMG will be available for the
Annual Meeting, with the opportunity to make a statement if he desires to do so,
and will be available to respond to appropriate questions. There will not be a
representative from BDO Seidman, LLP available at the Annual Meeting.
PROPOSAL NUMBER 3
Approval Of The 2000 Stock Option Plan
Purpose
The purpose of the 2000 Stock Option Plan is to promote the long-term
interests of the
11
Company and its stockholders by attracting and retaining directors, officers,
employees, consultants and advisors and motivating these persons to exert their
best efforts on behalf of the Company.
In furtherance of these objectives, the Company's Board of Directors
has adopted the Stock Option Plan, subject to approval by the stockholders at
the annual meeting. A summary of the Stock Option Plan is set forth below. This
summary is, however, qualified by and subject to the more complete information
set forth in the Stock Option Plan, a copy of which is attached to this proxy
statement as Appendix A.
Administration Of The Stock Option Plan
The Stock Option Plan will be administered by the Board of Directors.
The Board may delegate its powers to a committee which shall consist of two or
more members of the Board of Directors appointed by the Board of Directors, each
of whom must be an "outside director," as defined in Section 162(m) of the
Internal Revenue Code of 1986, as amended, and a "non-employee director," as
defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The
Board will:
o select persons to receive options from among the eligible participants;
o determine the number of shares underlying options granted to participants;
o set the terms, conditions and provisions of the options consistent with the
terms of the Stock Option Plan; and
o establish rules for the administration of the Stock Option Plan.
The Board has the power to interpret the Stock Option Plan and to make
all other determinations necessary or advisable for its administration.
In granting options under the Stock Option Plan, the Board will
consider, among other factors, the value of the individual's services to the
Company, and the added responsibilities of such individual being in the service
of a public company.
Number Of Shares That May Be Awarded
Under the Stock Option Plan, the Board may grant options for an
aggregate of 250,000 shares of Company common stock. This amount represented
approximately 9 percent of the shares issued and outstanding as of April 30,
2000. The Stock Option Plan also provides that no person may be granted options
for more than 100,000 shares during any calendar year.
The 250,000 shares of Company common stock available under the Stock
Option Plan are subject to adjustment in the event of certain changes in the
Company's capitalization, such as changes resulting from stock dividends and
stock splits. As described in greater detail below, the total number of shares
reserved for issuance under the Stock Option Plan may increase over time as
12
a result of the "reload" feature contained in the Stock Option Plan. Shares
underlying options that expire or are terminated unexercised will be available
again for issuance under the Stock Option Plan.
The Stock Option Plan provides for the use of authorized but unissued
shares or treasury shares. Treasury shares are previously issued and outstanding
shares of Company common stock which are no longer outstanding as a result of
having been repurchased or otherwise reacquired by the Company.
Eligibility To Receive Awards
The Board may grant options to all employees of the Company, as well as
those other persons or entities who, in the opinion of the Board, are in a
position to contribute significantly to the success of the Company. The Board
will select persons to receive options among the eligible participants and
determine the number of shares underlying the options to be granted.
Exercise Price Of Options
Under the terms of the Stock Option Plan, the exercise price of an
option may not be less than the fair market value of the common stock on the
date the option is granted. In the case of an "incentive stock option"
(explained below) granted to a person who is the beneficial owner of more than
ten percent of the outstanding shares of Company common stock, the exercise
price must not be less than 110% of the fair market value of the common stock on
the date of grant.
Exercisability Of Options And Other Terms And Conditions
Options under the Stock Option Plan may not be exercised later than ten
years after the grant date. Subject to the limitations imposed by the Internal
Revenue Code, certain of the options granted under the Stock Option Plan may be
designated "incentive stock options." Incentive stock options may not be
exercised later than ten years after the grant date, except that an incentive
stock option granted to a person who is the beneficial owner of more than ten
percent of the outstanding shares of Company common stock may not be exercised
later than five years after the grant date. Options which are not designated as
and do not otherwise qualify as incentive stock options are referred to as
"non-qualified stock options."
The Board will determine the time or times at which a stock option may
be exercised in whole or in part and the method or methods by which, and the
form or forms in which, payment of the exercise price of the stock option may be
made. Unless otherwise determined by the Board and set forth in the written
award agreement evidencing the grant of the stock option, upon termination of
service of the participant for any reason other than for cause, all stock
options then currently exercisable by the participant will remain exercisable
for the lesser of (i) three months following such termination of service and
(ii) the period of time until the expiration of the stock option by its terms.
Upon termination of service for cause, all stock options not previously
exercised will immediately be forfeited.
13
Effect Of Change In Control
Under the Stock Option Plan, in the event of a change in control of the
Company, unless the Board has provided otherwise in the award agreement
evidencing the grant of the option, all outstanding options granted under the
Stock Option Plan which are not fully vested will vest in full. A "change in
control" of the Company will be deemed to occur if any of the following events
arise: (1) any person or group becomes the beneficial owner of 50 percent or
more of the outstanding shares of Company common stock; (2) as a result of or in
connection with any cash tender offer, merger, sale of assets or contested
election, there is a change in a majority of the Company's Board of Directors;
or (3) the Company's stockholders approve an agreement providing either for a
transaction in which the Company will no longer be an independent publicly-owned
company or for a sale of all or nearly all of the Company's assets.
Transferability Of Options
Each option awarded under the Stock Option Plan may be transferred only
upon the death of the holder to whom it has been granted, by will or the laws of
inheritance, and shall be exercisable during the lifetime of the person to whom
the option is granted by only such person.
Effect Of Merger On Option Or Right
Upon a consolidation or merger or other business combination of the
Company in which it is not the surviving corporation, the acquisition of all or
substantially all the Company's outstanding Stock by a single person or entity
or by a group of persons and/or entities acting in concert, or the sale or
transfer of substantially all the Company's assets, all outstanding options
shall thereupon terminate, provided that at least 20 days prior to the effective
date of any such merger, consolidation, acquisition of stock or sale of assets,
the Board may either (i) accelerate the exercisability, prior to the effective
date of such merger, consolidation, acquisition of stock or sale of assets, of
all outstanding options granted under this Plan, (ii) arrange, if there is a
surviving or acquiring corporation, subject to consummation of the merger,
consolidation or sale of assets, to have that corporation or an affiliate of
that corporation grant to employees and other optionholders replacement options
(with substantially similar or, if not adverse to the optionees, different
provisions with respect to exercisability) which, however, in the case of
Incentive Options satisfy, in the determination of the Board, the requirements
of Section 424(a) of the Code, (iii) cancel all outstanding options in exchange
for consideration in cash in an amount equal to the value of the shares, as
determined by the Board in good faith, the optionee would have received had the
option been exercised (to the extent then exercisable or to a greater extent,
including in full, as the Board may determine) less the option price therefor,
(iv) permit the purchaser of the Company's stock to deliver to the optionee the
same kind of consideration that is delivered to the stockholders of the Company
in cancellation of such options in an amount equal to the value of the shares,
as determined by the Board in good faith, the optionee would have received had
the option been exercised (to the extent then exercisable or to a greater
extent, including in full, as the Board may determine), less the option price
therefor, or (v) any combination of the above.
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Amendment And Termination
The Stock Option Plan will remain in effect for a term of ten years,
after which no options may be granted. The Board of Directors may at any time
amend, suspend or terminate the Stock Option Plan or any portion of the Stock
Option Plan, except to the extent stockholder approval is necessary under any
applicable federal or state law or regulation or the rules of any stock exchange
or automated quotation system on which the Company's common stock may then be
listed or quoted. No amendment, suspension or termination of the plan, however,
may impair the rights of any participant, without his or her consent, in any
option grant made pursuant to the Stock Option Plan.
Federal Income Tax Consequences
Under current federal tax law, a non-qualified stock option granted
under the Stock Option Plan will not result in any taxable income to the
optionee at the time of grant or any tax deduction to the Company. Upon the
exercise of the non-qualified stock option, the excess of the market value of
the shares acquired over their cost (i.e., the exercise price) is taxable to the
optionee as ordinary income and is generally deductible by the Company. The
optionee's tax basis for the shares is the market value of the shares at the
time of exercise. Upon the sale of the shares, any appreciation in value of the
shares from the time of exercise will be recognized by the optionee as a capital
gain; this capital gain will be a short-term capital gain (and taxed at ordinary
income rates) if the shares are sold within one year after the exercise and a
long-term capital gain if the shares are sold more than one year after exercise.
Neither the grant nor the exercise of an incentive stock option granted
under the Stock Option Plan will result in any federal tax consequences to
either the optionee or the Company. Except as described below, at the time the
optionee sells shares acquired pursuant to the exercise of an incentive stock
option, the excess of the sale price over the exercise price will qualify as a
long-term capital gain. If the optionee disposes of the shares within two years
of the date of grant or within one year of the date of exercise, an amount equal
to the difference between the fair market value of the shares on the date of
exercise and the exercise price will be taxed as ordinary income and the Company
will be entitled to a deduction in the same amount. The excess, if any, of the
sale price over the fair market value at the time of exercise will qualify as
long-term capital gain if the shares are sold more than one year after the
option is exercised. If the optionee exercises an incentive stock option more
than three months after his or her termination of employment, he or she
generally is deemed to have exercised a non-qualified stock option. The time
frame within an incentive stock option may be exercised following termination of
employment is extended to one year if the termination results from the death or
disability of the optionee.
Vote Required For Approval
The affirmative vote of a majority of the votes cast by the holders of
shares present at the annual meeting in person or by proxy and entitled to vote
is required to approve the Stock Option Plan.
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Other Matters
The Board of Directors is not aware of any other matters that are to be
presented to stockholders for formal action at the meeting. However, if any
other matter properly comes before the meeting or any adjournments thereof, it
is the intention of the persons named in the enclosed form of proxy to vote
those proxies in accordance with their judgment on the matter.
Stockholders Proposals to the 2001 Annual Meeting
Proposals of stockholders to be included in the Company's proxy
materials for the 2001 annual meeting must be received in writing by the Company
at its executive offices not later than May 15, 2001, in order to be included in
the Company's proxy materials relating to that meeting.
Report on Form 10-K
The Annual Report on Form 10-K, a separate report filed with the
Securities and Exchange Commission, provides more detailed information on the
Company. A copy may be obtained, without charge, by a written request directed
to Jayark Corporation, 300 Plaza Drive, Vestal, New York 13580. The Company will
also furnish any exhibits described in the list accompanying the Form 10-K, upon
written request and payment of reasonable fees relating to the Company's
furnishing such exhibits.
Inquiries
Stockholder inquiries regarding changes of address, transfer of
certificates and lost certificates should be directed to the Company's transfer
agent: American Stock Transfer & Trust Company, 40 Wall Street, 46th Floor, New
York, New York 10005.
BY ORDER OF THE BOARD OF DIRECTORS
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JAYARK CORPORATION
2000 ANNUAL MEETING OF STOCKHOLDERS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON
NOVEMBER ____, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE COMPANY
OCTOBER ___, 2000
The undersigned stockholder of Jayark Corporation, a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy statement, each dated October __, 2000, and hereby
appoints __________________ and __________________, and each of them, proxies
and attorneys-in-fact, with full power to each of substitution and
resubstitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 2000 Annual Meeting of Stockholders of the Company, to be
held on November ___, 2000, at 9:00 a.m., local time, at 300 Plaza Drive,
Vestal, New York 13580, and at any adjournments thereof, and to vote all shares
of Common Stock which the undersigned would be entitled to vote if then and
there personally present, on the matters set forth below:
1. Election of Directors.
Nominees: David L. Koffman [ ] FOR [ ] WITHHELD
Frank Rabinovitz [ ] FOR [ ] WITHHELD
Richard Ryder [ ] FOR [ ] WITHHELD
Stephen Fisher [ ] FOR [ ] WITHHELD
Paul Garfinkle [ ] FOR [ ] WITHHELD
2. To ratify the appointment of KPMG as independent accountants for the fiscal
year ending April 30, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the Company's 2000 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, upon any and all such other matters as may properly
come before the meeting or any adjournment thereof.
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MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR CHANGE OF ADDRESS AND NOTE AT LEFT [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF DAVID L. KOFFMAN,
FRANK RABINOVITZ, RICHARD RYDER, STEPHEN FISHER AND PAUL GARFINKLE, FOR THE
RATIFICATION OF KPMG, FOR THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION AND
AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
This proxy must be signed exactly as your
name appears hereon. Executors,
administrators, trustees, etc. should give
full title as such. If the stockholder is a
corporation, a duly authorized officer should
sign on behalf of the corporation and should
indicate his or her title.
DATE: _________________________
-----------------------------
Signature
DATE: _________________________
-----------------------------
Signature
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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