SCHEDULE 14A INFORMATION
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MANNATECH, INCORPORATED
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[MANNATECH LOGO]
May 4, 2001
To Our Shareholders:
We are pleased to invite you to attend our 2001 annual shareholders meeting
of Mannatech, Incorporated to be held Tuesday, June 5, 2001, at 9:00 a.m.
Central Daylight Time, at the Grapevine Convention Center located at 1209 South
Main Street, Grapevine, Texas. We have enclosed with this letter:
. an official notice of the annual meeting;
. a proxy statement that describes the matters to be considered and acted
upon at the annual meeting;
. our 2000 Annual Report; and
. a proxy card that will instruct you on how to cast your vote.
Your vote is important to us, regardless of the number of shares that you
hold. Whether or not you plan to attend the annual meeting, we urge you to
vote, prior to the meeting, on the Internet, by telephone or by signing and
returning the enclosed proxy card in the postage-paid envelope.
Thank you for your ongoing support of, and continued interest in, Mannatech,
Incorporated. We look forward to seeing you at our annual meeting.
Sincerely,
/s/ Robert M. Henry
Robert M. Henry
Chief Executive Officer
[MANNATECH LOGO APPEARS HERE]
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2001
Notice of
Annual Shareholders Meeting
and Proxy Statement
----------------------------------------
Tuesday, June 5, 2001
At 9:00 a.m. Central Daylight Time
Grapevine Convention Center
1209 South Main Street
Grapevine, Texas
TABLE OF CONTENTS
Page
----
Notice of our Annual Shareholders Meeting................................. 1
Proxy Statement........................................................... 2
Proposal 1--Election of Five Directors.................................. 4
Proposal 2--Ratification of Independent Accountants..................... 5
Fees Paid to Independent Accountants.................................... 5
Directors and Executive Officers.......................................... 6
Class of our Board of Directors......................................... 9
Committees of our Board of Directors.................................... 9
Directors Compensation.................................................. 10
Section 16(a) Beneficial Ownership Reporting Compliance................. 10
Executive Compensation.................................................... 11
Summary Compensation Table.............................................. 11
Stock Options Grants in the Last Fiscal Year............................ 12
Stock Options Exercised in the Last Fiscal Year......................... 12
Executive Employment Agreements......................................... 13
Management Bonus Plan................................................... 13
Compensation Committee Interlocks and Insider Participation............. 13
Compensation Committee Report to our Board of Directors................. 13
2000 Chief Executive Officers Compensation.............................. 14
Stock Option Plans...................................................... 15
401(k) Plan............................................................. 16
Performance Graph....................................................... 17
Audit Committee Report to our Board of Directors........................ 18
Security Ownership of Certain Beneficial Owners and Management............ 19
Certain Relationships and Related Transactions............................ 20
Loans to Agritech Labs, Inc............................................. 20
Commission Agreement and Receivables from Related Parties............... 20
Consulting Agreement with Mr. Samuel L. Caster.......................... 20
Receivable and Lock-up Agreement with Mr. Charles E. Fioretti........... 20
Separation Agreement with Mr. Anthony E. Canale......................... 21
Cancellation of Incentive Agreements and Certain Transactions with Mr.
Marlin Ray Robbins..................................................... 21
Forward-Looking Statements................................................ 22
Appendix:
Appendix A--Audit Committee of the Board of Directors Charter........... A-1
MANNATECH, INCORPORATED
NOTICE OF ANNUAL SHAREHOLDERS MEETING
TO BE HELD JUNE 5, 2001
To Our Shareholders:
The 2001 annual shareholders meeting of Mannatech, Incorporated will be held
at the Grapevine Convention Center located at 1209 South Main Street,
Grapevine, Texas on Tuesday, June 5, 2001, at 9:00 a.m. Central Daylight Time,
for the following purposes:
.Proposal 1--To elect Directors: Messrs. Roger E. Beutner and Marlin Ray
Robbins and to re-elect Directors: Messrs. Samuel L. Caster,
Charles E. Fioretti and Jules Zimmerman.
.Proposal 2--To ratify the reappointment of PricewaterhouseCoopers LLP as
Mannatech's independent accountants for the fiscal year ending
December 31, 2001.
.To act upon such other matters as may properly come before the annual
meeting.
Only shareholders of record at the close of business on April 9, 2001 will
be entitled to vote by proxy or at the meeting on the basis of one vote for
each share held.
By order of our Board of Directors
/s/ Terry L. Persinger
Terry L. Persinger
Corporate Secretary
May 4, 2001
IMPORTANT
Whether or not you expect to attend in person, we urge you to vote
on the Internet, by telephone or by proxy card at your earliest
convenience to help ensure the presence of a quorum for our meeting and
to save Mannatech the expense and extra work of additional
solicitation. To vote by proxy card, simply complete the proxy card,
sign, date and return the proxy card in the pre-addressed envelope for
which no postage is required, if mailed in the United States. To vote
your shares electronically you must use the control number printed in
the box, just below the perforation on your proxy card. The control
number is your personal code to access the systems.
1. To vote on the Internet, log onto the Internet and go to the web
site http:www.eproxyvote.com/mtex and follow the instructions.
2. To vote over the telephone, on a touch-tone telephone call 1-877-
prx-vote (1-877-779-8683) 24-hours a day, 7 days a week and
follow the instructions.
Your electronic vote authorizes the persons named in the proxy in
the same manner as if you marked, signed, dated and returned your proxy
card; however, you should not mail back your proxy card. Voting by
proxy prior to the meeting will not prevent you from attending the
meeting or voting your stock at the meeting if you desire to do so, as
your proxy is revocable at your option.
1
MANNATECH, INCORPORATED
600 South Royal Lane, Suite 200
Coppell, Texas 75019
PROXY STATEMENT FOR OUR ANNUAL SHAREHOLDERS MEETING
TO BE HELD ON JUNE 5, 2001
General information
Your proxy statement is furnished to you in connection with the solicitation
of proxies by our Board of Directors. On April 9, 2001, we had 24,709,510
outstanding shares of our common stock, $0.0001 par value per share, which is
our only class of voting securities. On April 9, 2001, we had approximately
5,011 shareholders of record who hold our common stock directly and
approximately 133 brokerage firms and banks who hold approximately 37.1% of our
common stock on behalf of approximately 9,000 shareholders. This proxy
statement and accompanying proxy card are being mailed or given to shareholders
of record on or about May 4, 2001.
Voting by proxy
Properly executed proxies received prior to the meeting will be voted at our
annual shareholders meeting on June 5, 2001 and at any adjournment or
adjournments thereof. If a shareholder specifies how the proxy is to be voted
on any business to come before the meeting, it will be voted in accordance with
such specifications. If no specification is made, your proxy will be voted in
accordance with the recommendations of our Board of Directors, which are FOR
both proposals. Attendance at the 2001 annual meeting will not automatically
revoke your proxy, as a shareholder in attendance may request a ballot and vote
in person, thereby revoking any and all prior granted proxies.
Shares registered in the name of a brokerage firm or bank
If your brokerage firm or bank holds your actual stock certificates, you
will be receiving our proxy information from them or their solicitor. Each
brokerage firm or bank will have their own voting options and instructions that
may differ from the program provided by our solicitor. Check the information
provided to you by your brokerage firm or bank or call them directly to see
which options are available to you or if you have any questions regarding how
to vote your shares through your brokerage firm or bank. Mannatech does not
have any control over your brokerage firm or bank's proxy voting instructions.
Votes required
The presence, in person or by proxy, of the holders of at least a majority
of our common stock outstanding on the record date is necessary to have a
quorum for our annual meeting. Abstentions and broker "no-votes" are counted as
present for purposes of determining a quorum. A broker "no-vote" occurs when a
nominee holding shares of our common stock for a beneficial owner does not vote
on a particular proposal because the nominee does not have discretionary voting
power with respect to that item and or has not received instructions from the
beneficial owner.
A majority vote of shares entitled to vote for the election of our Directors
is necessary for the election or re-election of a Director. For purposes of
this election of Directors, abstentions and broker no-votes will not be counted
as votes cast or as votes entitled to be cast and will have no effect on the
results of the vote.
The affirmative vote of a majority of shares present in-person or
represented by proxy at the meeting and entitled to vote is required for
approval of the independent accountants. For purposes of the vote for the
independent accountants, abstentions and broker no-votes will not be counted as
votes cast or as votes entitled to be cast and will have no effect on the
result of the vote.
2
We do not expect any matters to be presented for a vote at our annual
meeting other than the election of the directors and the ratification of our
independent accountants. If you grant a proxy, the persons named in the proxy
will have the discretion to vote your share on any additional matters properly
presented for a vote at the meeting. If any other matters are submitted at the
meeting, an affirmative vote of the majority of the shares present in-person or
represented by proxy is necessary for approval.
Solicitation of proxies
Mannatech may solicit proxy votes through the mail, in person and by
telecommunications. Mannatech will bear all the expenses in preparing, printing
and mailing the proxy materials to its shareholders and has hired Corporate
Investor Communications, Inc. to assist in the solicitation of proxies at a
cost of approximately $6,000 plus out-of-pocket expenses.
Admission to the annual meeting
Attendance at the meeting will be limited to shareholders of record on April
9, 2001, beneficial owners having evidence of ownership on that date and
invited guests of Mannatech. If you are not a registered shareholder, please
bring evidence of your ownership to the meeting. Shareholders will be admitted
upon verification of stock ownership at the meeting. No cameras or recording
equipment will be permitted in the meeting rooms.
Procedures for shareholder proposals and nominations
Under our bylaws, nominations for a Director may be made by our Board of
Directors, or by a shareholder entitled to vote who has delivered a written
notice to Mannatech's General Counsel no less than 30, nor more than 60 days
before our annual meeting. Any written notices will be forwarded to our
Nominating Committee for their approval.
Our bylaws also provide that no business may be brought before our annual
meeting except as specified in the notice of the meeting which includes
shareholder proposals that Mannatech is required to set forth in its proxy
statement under Rule 14a-8 of the Securities Exchange Act of 1934, or as
otherwise brought before the meeting by or at the direction of our Board of
Directors or by a shareholder entitled to vote who has delivered notice to
Mannatech within the time limits described above for a nomination for the
election of a Director. These requirements are separate and apart from, and in
addition to, the Securities and Exchange Commission's requirements that a
shareholder must comply with in order to have a shareholder proposal included
in Mannatech's proxy statement under Rule 14a-8 of the Securities Exchange Act
of 1934.
A copy of our bylaws may be obtained upon written request to our General
Counsel at our corporate offices, located at 600 S. Royal Lane, Suite 200,
Coppell, TX 75019.
Shareholder proposals for the 2002 annual meeting
Shareholder proposals for inclusion in our proxy materials for our 2002
annual meeting must be received by Mannatech's General Counsel at our principal
executive offices on or before January 4, 2002. Shareholders who intend to
present a proposal at the 2002 annual meeting without inclusion of such
proposal in the proxy materials are required to provide notice of such proposal
to Mannatech's General Counsel, no later than March 20, 2002. Mannatech
reserves the right to reject, rule out-of-order or take other appropriate
action with respect to any proposal that does not comply with these and other
applicable requirements. In addition, our bylaws provide that any shareholder
wishing to make a nomination for Director at our 2002 annual meeting must give
written notice, to our General Counsel of Mannatech, subject to certain
exceptions, and that such notice must meet certain requirements set forth in
our bylaws.
3
PROPOSAL 1--ELECTION OF FIVE DIRECTORS
The term of office of our current class II Directors will expire on June 5,
2001, the day of our annual meeting. The class II Directors will be elected at
this annual meeting and will serve until the day of our 2004 annual meeting,
which is when their term expires or until the earlier of disqualification,
resignation, death or removal. In addition, our Board of Directors has
nominated two additional class I Directors for a grand total of nine Board
members. The class I Directors elected at this annual meeting will serve until
the day of our 2003 annual meeting, which is when their respective term expires
or until the earlier of disqualification, resignation, death or removal.
Nominees:
Messrs. Samuel L. Caster, Charles E. Fioretti and Jules Zimmerman currently
serve as class II Directors and Mr. Roger E. Beutner currently serves as a
class I Director. While our Board of Directors has no reason to believe that
the nominees will not be available as candidates, should such a situation
arise, proxies may be voted for the election of such other persons as the
holders of the proxies may, in their discretion, determine. The shares
represented by the enclosed proxy card will be voted in favor of all of the
persons nominated, unless specified differently on the proxy card, by the
shareholder. To specify differently on the proxy card, the shareholder of
record must check either the box "FOR ALL EXCEPT" or "WITHHOLD." If you mark
the "FOR ALL EXCEPT" box you should then list in the space provided the
nominee(s) you wish to vote against and/or add any additional candidates, which
have been approved for nomination by our Board of Directors. If you mark the
"WITHHOLD" box then your vote will be considered a vote against all of the
nominee(s) and you can write in any additional candidates, which have been
approved by our Board of Directors. Our Board of Directors unanimously
recommends that shareholders vote FOR all five of the nominees below.
Class I Directors
Roger E. Beutner, age 70, was appointed to serve as one of our
independent Directors on November 17, 2000. Mr. Beutner worked at Amway
Corporation, a network-marketing multinational distributor, from 1970 until
retiring in 1995. Mr. Beutner held several management positions at Amway,
including Senior Vice President of Operations. Since 1995, Mr. Beutner has
worked as a consultant for various companies. Mr. Beutner received a B.S.
degree in Mechanical Engineering at Stevens Institute of Technology and a
B.S. degree in Industrial Engineering at New York University. Mr. Beutner
also holds a M.B.A. degree in Management from Georgia State University and
is a licensed Professional Engineer in the State of Missouri. He currently
serves as Chairman of the Michigan Information Technology Network, a non-
profit organization.
Marlin Ray Robbins, age 55, has over 25 years experience in sales and
direct selling. Mr. Robbins is currently a sixteen-star platinum
presidential Associate of Mannatech owning several Associate positions
within our global downline network marketing system. Mr. Robbins has been
an Associate since our inception in 1993, and has also been a consultant to
Mannatech, as a Director of Marketing. Mr. Robbins currently owns
approximately 5.1% of our common stock and was an original shareholder.
Mr. Robbins received a B.S. degree in Biology and Chemistry from Southwest
Texas State University.
Class II Directors
Samuel L. Caster, age 50, is one of our founders and served as our
President and as a Director on our Board of Directors from November 1993 to
March 31, 2000, when he resigned as President and Director. On June 1,
2000, Mr. Caster became a consultant to Mannatech to provide consulting
services, as a Global Vision Architect. Mr. Caster's main responsibility is
to focus on our Associates' needs and to increase our Associate base. Mr.
Caster was appointed as a Director to our Board of Directors on August 2,
2000. In 1999, Mr. Caster co-founded Manna-Relief, a non-profit
international ministry formed to help supply food supplements to at-risk
children by working with other ministries, non-profit organizations and
missionaries throughout the world.
4
Charles E. Fioretti, age 54, is one of our founders and served as our
Chairman of the Board and Chief Executive Officer from May 1997 to March
31, 2000. On March 31, 2000, Mr. Fioretti resigned as our Chief Executive
Officer but continued to serve as our Chairman of our Board of Directors.
Mr. Fioretti has served on our Board of Directors since November 1993. His
current term as Director expires on June 5, 2001. Mr. Fioretti also served
as our Chief Operating Officer from November 1993 to July 1996. In July
1996, Mr. Fioretti resigned as our Chief Operating Officer. From June 1990
to April 1995, Mr. Fioretti was an owner and operator of several Outback
Steakhouse, Inc. restaurants located in Arizona, Indiana and Kentucky.
Jules Zimmerman, age 66, has served as one of our independent directors
since June 2000. Mr. Zimmerman served as President and Chief Executive
Officer of Hickok Associates Inc., a financial consulting firm from 1991
until he retired in December 1996. From 1976 to 1988, Mr. Zimmerman served
as a senior officer at Avon Products Inc., a multinational manufacturer and
distributor of cosmetics, toiletries, jewelry, chemicals and clothing and
served as their Chief Financial Officer from 1985 to 1988. Mr. Zimmerman
received a B.B.A. degree in Accounting from Hofstra University and is a
Certified Public Accountant. In addition, Mr. Zimmerman is a Director for
the Associated Blind.
PROPOSAL 2--RATIFICATION OF INDEPENDENT ACCOUNTANTS
The appointment of our independent accountants is made annually by our Board
of Directors. The decision is based on the recommendation from our Audit
Committee, which reviews both the audit scope and estimated audit fees. Our
Board of Directors has selected PricewaterhouseCoopers LLP to serve as our
independent accountants for the fiscal year ending December 31, 2001.
PricewaterhouseCoopers LLP has served as our independent accountants and audits
our consolidated financial statements and provides certain tax and consulting
services beginning since the fiscal year ended December 31, 1997 through the
fiscal year ended December 31, 2000. Representatives of PricewaterhouseCoopers
LLP are expected to attend our annual meeting and will have the opportunity to
make a statement if they desire to do so and to respond to any appropriate
questions by our shareholders.
Our Board of Directors recommends a vote FOR the ratification of the
reappointment of PricewaterhouseCoopers LLP as Mannatech's independent
accountants for the fiscal year ending December 31, 2001.
Fees paid to the Independent Accountants
Audit fees
The estimated aggregate fees billed to us and to be billed by
PricewaterhouseCoopers LLP for professional services rendered in connection
with the audit of our annual consolidated financial statements for the year
ended December 31, 2000 and for the reviews of the consolidated financial
statements included in our quarterly reports on Form 10-Q for fiscal year 2000
were $112,000.
Financial information systems design and Implementation fees
Our independent accountants did not render any professional services to us
in fiscal year 2000 with respect to any financial information systems design
and implementation.
All other fees
The aggregate fees billed by PricewaterhouseCoopers LLP for services
rendered to Mannatech in fiscal year 2000, other than the services described
above under "Audit fees" totaled $494,000. These fees related primarily to
services in connection with corporate tax consulting of $236,000, setting up
overseas operations of $238,000 and other consulting services of $20,000.
5
DIRECTORS AND EXECUTIVE OFFICERS
Our Executive Officers and Directors and their ages as of April 9, 2001 are
as follows:
Name Age Position
---- --- --------
Charles E. Fioretti....... 54 Chairman of the Board
Robert M. Henry........... 54 Chief Executive Officer and Director
Terry L. Persinger........ 56 President, Chief Operating Officer, Corporate
Secretary and Director
Stephen D. Fenstermacher.. 48 Senior Vice President of Accounting and Chief
Financial Officer
Deanne Varner............. 48 Senior Vice President of Compliance and General
Counsel
Bill H. McAnalley, Ph.D... 56 Senior Vice President of Research and Product
Development and Chief Scientific Officer
Patrick D. Cobb........... 48 Executive Vice President of International
Finance
Brad G. Wayment........... 35 Senior Vice President of Marketing
Cynthia L. Tysinger....... 43 Vice President and Chief Information Officer
C. Armando Contreras...... 45 President of International Operations
Steven A. Barker, Ph.D.... 51 Director
Roger E. Beutner.......... 70 Director
Anthony E. Canale*........ 48 Director
Samuel L. Caster.......... 50 Director
James M. Doyle, Jr........ 56 Director
Jules Zimmerman........... 66 Director
- --------
* On April 11, 2001, Mr. Canale informed Mannatech of his intent to resign
from our Board of Directors effective as of June 4, 2001.
The following biographical information about our Directors and Officers is
in alphabetical order:
Steven A. Barker Ph.D. has served as one of our independent Directors since
January 1998. His current term as Director expires in 2002. Dr. Barker has been
a full professor of Physiology, Pharmacology and Toxicology at Louisiana State
University since April 1990. Dr. Barker received a B.S. degree and a M.S.
degree in Chemistry and his Ph.D. in Chemistry/Neurochemistry from the
University of Alabama-Birmingham.
Roger E. Beutner was appointed to serve as one of our independent Directors
in November 2000. His term as Director expires on June 5, 2001. Mr. Beutner
worked at Amway Corporation, a network-marketing multinational distributor,
from 1970 until retiring in 1995. Mr. Beutner held several management positions
at Amway, including Senior Vice President of Operations. Since 1995, Mr.
Beutner has worked as a consultant for various companies. Mr. Beutner received
a B.S. degree in Mechanical Engineering at Stevens Institute of Technology and
a B.S. degree in Industrial Engineering at New York University. Mr. Beutner
also holds a M.B.A. degree in Management from Georgia State University and is a
licensed Professional Engineer in the State of Missouri. He currently serves as
Chairman of the Michigan Information Technology Network, a non-profit
organization.
Anthony E. Canale joined Mannatech in January 1997 and until October 1999,
served as our Chief Operating Officer. From October 1999 to February 28, 2001,
Mr. Canale served as our Chief Operating Officer of International Operations.
On February 28, 2001, Mr. Canale resigned as our Chief Operating Officer of
International Operations but continued to serve on our Board of Directors. Mr.
Canale has served as a Director since October 1999. His term as Director
expires in 2003; however, on April 11, 2001, Mr. Canale notified our Board of
Directors of his intent to resign from our Board of Directors effective, June
4, 2001. From February 1993 to October 1996, Mr. Canale served as President of
Canale and Associates, an Outback Steakhouse, Inc. joint venture partnership.
Mr. Canale received a B.S. degree in Management from the American International
College in Springfield, Massachusetts.
6
Samuel L. Caster is one of our founders and served as our President and as a
Director on our Board of Directors from November 1993 to March 31, 2000, when
he resigned as President and Director. On June 1, 2000, Mr. Caster became a
consultant to Mannatech to provide consulting services, as a Global Vision
Architect. Mr. Caster's main responsibility is to focus on our Associates'
needs and to increase our Associate base. Mr. Caster was appointed as a
Director to our Board of Directors on August 2, 2000. His term as Director
expires on June 5, 2001. In 1999, Mr. Caster co-founded Manna-Relief, a non-
profit international ministry formed to help supply food supplements to at-risk
children by working with other ministries, non-profit organizations and
missionaries throughout the world.
Patrick D. Cobb joined Mannatech in August 1994 and served as our Chief
Financial Officer and Executive Vice President until October 1999. In October
1999, Mr. Cobb resigned as our Chief Financial Officer and began to serve as
our Executive Vice President of International Finance. Mr. Cobb served as a
Director on our Board of Directors from November 1997 to November 1999. Mr.
Cobb also served as our Corporate Secretary from February 1997 to November
1999. Mr. Cobb received a B.S. degree in Finance from the University of
Oklahoma and is a Certified Public Accountant.
C. Armando Contreras joined Mannatech in February 2001 to serve as our
President of International Operations. From July 1998 to February 2001, Mr.
Contreras served as the Vice President, International of Unicity Network,
formerly Enrich International, a network marketing company that sells
nutritional supplements and personal care products. From April 1997 to June
1998, Mr. Contreras served as General Manager of Shaklee Argentina and as the
Director of Market Development International for Shaklee Corporation--Latin
America, Asia and South Pacific regions. Shaklee Corporation is a manufacturer
of vitamins, nutritional food supplements, herbal remedies, personal care,
cosmetics and household products. From July 1992 to March 1997, Mr. Contreras
served as the General Manager of Nature's Sunshine Products of Columbia,
Venezuela, the United Kingdom and Ireland and from January 1997 to March 1997
served as their Director International Products. Nature's Sunshine Products,
Inc. is a manufacturer of nutritional, herb-based natural food and personal
care products. Mr. Contreras received a B.S. degree in Economics and a M.B.A.
degree with emphasis in International Marketing and Finance from Brigham Young
University.
James M. Doyle, Jr. has served as one of our independent Directors since
October 1999. His current term as Director expires in 2002. In 1975, Mr. Doyle
joined Matthews & Branscomb, P.C., a law firm, located in San Antonio, Texas
where he is currently a shareholder. Mr. Doyle practices in the area of
business transactions, mergers and acquisitions, and corporate law. Mr. Doyle
is a Fellow of the Texas Bar Foundation and a Director of the San Antonio
Sports Foundation and the San Antonio Bowl Association. Mr. Doyle received a
B.A. degree in History from the University of the South in Sewanee, Tennessee
and a J.D. from Vanderbilt University.
Stephen D. Fenstermacher joined Mannatech in November 1998 to serve as our
Vice President of Accounting and Controller. In October 1999, Mr. Fenstermacher
was promoted to Senior Vice President and Chief Financial Officer. From January
1998 to October 1998, Mr. Fenstermacher was a consultant for Kibel, Green,
Issa, Inc., a crisis management firm specializing in turnaround strategy and
execution consulting. From April 1995 to October 1997, Mr. Fenstermacher served
as Executive Vice President and Chief Financial Officer for The Johnny Rockets
Group, Inc. From May 1994 to April 1995, Mr. Fenstermacher served as Vice
President for Brinker International, Inc., an international restaurant chain.
Mr. Fenstermacher received a B.A. degree in Government with minors in Life
Sciences and Classical Music from the University of Notre Dame and a M.B.A.
degree in Finance and Accounting from the University of Pittsburgh.
Charles E. Fioretti is one of our founders and served as our Chairman of the
Board and Chief Executive Officer from May 1997 to March 31, 2000. On March 31,
2000, Mr. Fioretti resigned as our Chief Executive Officer but continued to
serve as our Chairman of our Board of Directors. Mr. Fioretti has served on our
Board of Directors since November 1993. His current term as Director expires on
June 5, 2001. Mr. Fioretti also served as our Chief Operating Officer from
November 1993 to July 1996. In July 1996, Mr. Fioretti resigned as our Chief
Operating Officer. From June 1990 to April 1995, Mr. Fioretti was an owner and
operator of several Outback Steakhouse, Inc. restaurants located in Arizona,
Indiana and Kentucky.
7
Robert M. Henry joined Mannatech in April 2000 to serve as our Chief
Executive Officer. Mr. Henry was appointed to our Board of Directors in May
2000. His current term as Director expires in 2003. From 1995 to August 1998,
Mr. Henry served as the Chief Operating Officer and Vice President of
Operations and Systems for the Hosiery Corp. of America, which is a
manufacturer and distributor of pantyhose and other women's intimate apparel.
From 1990 to 1995, Mr. Henry served as Chief Operating Officer, Chief Financial
Officer and Vice Chairman for McCaffrey and McCall Partners, which is a full-
service advertising agency. Mr. Henry received a B.S. degree in Accounting from
Hunter College in New York and a J.D. from Brooklyn Law School. Mr. Henry has
been a member of the New York State Bar since 1975. Mr. Henry serves as a
Director of Purity Products Inc.
Bill H. McAnalley, Ph.D. joined Mannatech in July 1996 to serve as our
Senior Vice President of Research and Product Development. In December 1997, he
began to serve as our Chief Scientific Officer. From March 1995 to July 1996,
he was a consultant to Mannatech. From March 1987 to February 1995, Dr.
McAnalley served as Vice President of Research and Product Development at
Carrington Laboratories, Inc., a pharmaceutical research, development and
manufacturing company. Dr. McAnalley received a B.S. degree in Math from Angelo
State University, a Master of Science degree in Chemistry and Biology from New
Mexico Highlands University and his Ph.D. in Pharmacology and Toxicology from
the University of Texas Health Science Center in Dallas, Texas.
Terry L. Persinger joined Mannatech in November 1999 to serve as our
Executive Vice President, Chief Operating Officer and Corporate Secretary. Mr.
Persinger has served as a Director on our Board of Directors since November
1999. In May 2000, Mr. Persinger began serving as our President. His current
term as Director expires in 2002. From 1968 to August 1999, Mr. Persinger
worked at Goodyear Tire & Rubber Company, an international manufacturer of
tires and rubber products and from January 1995 to August 1999 served as their
Vice President and General Manager of Engineered Products. Mr. Persinger
received a B.S. degree in Chemical Engineering from the University of
Cincinnati and is a graduate of the PMD management program at Harvard
University.
Cynthia L. Tysinger joined Mannatech in November 2000 to serve as our Vice
President and Chief Information Officer. From May 1997 to October 2000, Ms.
Tysinger served as the Director of Engineering Services for Technology Concepts
& Design, Inc., a design, development, database management and engineering
company. While employed by Technology Concepts & Design, Inc., Ms. Tysinger was
a consultant to Mannatech and one of the lead system designers for our website,
www.GlycoScience.com. From July 1992 to May 1997, Ms. Tysinger serve as the
Program Control Manger for GTE Information Systems Division. As a result of
becoming an executive officer, Ms. Tysinger transferred her Associate position
held in our Global downline systems, to her father.
Deanne Varner joined Mannatech in January 1996 and has served as our General
Counsel and Senior Vice President of Compliance since May 1996. From 1986 to
January 1996, Ms. Varner maintained a law practice in Dallas, Texas focusing on
business law and related transactions. Ms. Varner has over 20 years of
experience in business, corporate and transactional law. Ms. Varner received a
B.A. degree in Social Sciences and a J.D. from Southern Methodist University.
Brad G. Wayment joined Mannatech in November 1999 to serve as our Vice
President of Marketing until November 2000. In November 2000, Mr. Wayment was
promoted to Senior Vice President of Marketing. From June 1998 to October 1999,
Mr. Wayment served as Vice President of Marketing at New Vision International,
a network marketing company involved in the distribution and sales of
nutritional and personal care products. From November 1996 to June 1998, Mr.
Wayment served as Business Development/Product Marketing Manager with Novell
Inc., a network and Internet directory software and services company. From
November 1989 to November 1996, Mr. Wayment served as Product Management Team
Leader of Marketing/Product Development at Nu Skin Enterprises, Inc., a direct
selling company involved in the distribution and sales of nutritional and
personal products. Mr. Wayment received a B.A. degree in Spanish with a minor
in Organization Behavior and a M.B.A. degree in Marketing and Finance from
Brigham Young University.
8
Jules Zimmerman has served as one of our independent Directors since June
2000. His term as Director expires on June 5, 2001. Mr. Zimmerman served as
President and Chief Executive Officer of Hickok Associates Inc., a financial
consulting firm from 1991 until he retired in December 1996. From 1976 to 1988,
Mr. Zimmerman served as a senior officer at Avon Products Inc., a multinational
manufacturer and distributor of cosmetics, toiletries, jewelry, chemicals and
clothing and served as their Chief Financial Officer from 1985 to 1988. Mr.
Zimmerman received a B.B.A. degree in Accounting from Hofstra University and is
a Certified Public Accountant. In addition, Mr. Zimmerman is a Director for the
Associated Blind.
Classes of our Board of Directors
Our Board of Directors is divided into three classes that serve staggered
three-year terms expiring on the day of our annual shareholders meeting as
follows:
Class Expiration Board Members
----- ---------- -------------
Class I............................... 2003 Canale*, Henry, Beutner
Class II.............................. 2001 Fioretti, Zimmerman, Caster
Class III............................. 2002 Barker, Persinger, Doyle
*On April 11, 2001, Mr. Canale notified our Board of Directors of his intent
to resign from our Board of Directors, effective June 4, 2001.
During fiscal year 2000, our Board of Directors had seven regular meetings
and three special meetings. All of the Directors attended at least 75% of the
meetings during fiscal year 2000.
Committees of our Board of Directors
Our Board of Directors has four committees each composed solely of our four
independent Directors: Messrs. Barker, Beutner, Doyle and Zimmerman. The
committees and their function are as follows:
. The Audit Committee is responsible with reviewing our annual audit and
meeting with our independent accountants to review our internal controls
and financial management practices. The Audit Committee held one meeting
during fiscal year 2000.
. The Compensation Committee is responsible for establishing salaries,
bonuses and other compensation for our executive officers. The
Compensation Committee held one meeting during fiscal year 2000.
. The Option Committee has the authority to determine the terms and
conditions of each option to be issued under our stock option plans and
is responsible for administration of each such plan. The Option Committee
held one meeting during fiscal year 2000.
. The Nominating Committee has the responsibility to recommend nominees to
our Board of Directors and Executive Officers. The Nominating Committee
also reviews and recommends to our Board of Directors any additional
nominations to our Board of Directors, by a shareholder who has submitted
a written nomination to our General Counsel of Mannatech within 30 days
but not more than 60 days before our annual meeting. The Nominating
Committee held one meeting during fiscal year 2000.
In addition, Mannatech also maintains an Executive Operating Committee
comprised of eight of our Executive Officers. The Executive Operating Committee
has the authority to make specific recommendations and render advice to our
Board of Directors on various matters regarding operations. The eight members
include our Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer and five other Executive and Senior Vice Presidents.
9
Director compensation
All of our independent Directors: Messrs. Barker, Beutner, Doyle and
Zimmerman receive an annual fee of $30,000 for serving on our Board of
Directors. As of March 1, 2001, Mr. Canale will receive a monthly sum of
$2,500. In addition, all of our Directors are reimbursed for their reasonable
out-of-pocket expenses in connection with their travel to, and attendance at,
meetings of our Board of Directors or its committees. On August 23, 2000,
Mannatech granted stock options to purchase: 50,000 shares of our common stock
to each of Messrs. Barker, Doyle and Zimmerman, respectively, 275,000 shares to
Mr. Robert M. Henry, 250,000 shares to Mr. Terry L. Persinger, and 50,000
shares to Mr. Anthony E. Canale. All of these options are exercisable at an
exercise price of $2.63 per share, which was the approximate fair value of our
common stock on that date. Mr. Canale's options were canceled on March 28,
2001. On March 1, 2001, Mr. Canale was granted 213,333 stock warrants with
exercise prices ranging from $1.75 to $4.00 per share.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors
and Executive Officers, and persons who own more than 10% of our common stock,
to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in their ownership of common stock and other
equity securities. Such persons are required by the Securities and Exchange
Commission's regulations to furnish Mannatech with copies of all Section 16(a)
reports they file.
Based solely upon a review of the copies of such reports or written
representations that no other reports were required, Mannatech believes that
during the fiscal year ended December 31, 2000, its Executive Officers,
Directors and greater than 10% beneficial owners complied with all applicable
Section 16(a) filing requirements, except for Cindy Tysinger, the Chief
Information Officer, who did not timely file the required Form 4 as a result of
being granted stock options in November 2000.
Mannatech sends monthly reporting reminders to each of its Executive
Officers, Directors and 10% beneficial owners to remind them of their Section
16(a) reporting requirements.
10
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or earned for each
of the three years ended December 31, 2000, by each person who served as our
Chief Executive Officer during 2000 and the next four most highly compensated
Executive Officers, who were serving as Executive Officers at the end of 2000
(collectively, the "Named Executive Officers").
Summary Compensation Table
Long-term
compensation
------------
number of
Annual shares
compensation Other underlying
Name and principal ----------------- annual options
position Year Salary Bonus compensation(1) granted
------------------ ---- -------- -------- --------------- ------------
Charles E. Fioretti(2)... 2000 $588,462 $ -- $ 700(3) --
Chairman of the Board 1999 600,000 158,517 112,593(4) --
1998 433,517 750,000 9,044(5) --
Robert M. Henry(6)....... 2000 $262,500 $ -- $ 43,843(7) 275,000
Chief Executive Officer 1999 -- -- -- --
1998 -- -- -- --
Terry L. Persinger(8).... 2000 $294,231 $ ---- $ 91,268(9) 250,000
President, Chief
Operating Officer 1999 46,154 8,498 -- --
and Corporate Secretary 1998 -- -- -- --
Anthony E. Canale........ 2000 $294,231 $ -- $ 11,860(10) 50,000
Executive Vice President
and Chief 1999 300,000 64,759 1,388,131(11) --
Operating Officer of
International until 1998 287,500 326,293 11,925(12) 250,000
February 28, 2001
Patrick D. Cobb(13)...... 2000 $294,231 $ -- $ 12,887(14) 20,000
Executive Vice President
of 1999 300,000 51,990 1,166,514(15) --
International Finance 1998 245,055 250,000 2,077 100,000
Deanne Varner............ 2000 $270,136 $ -- $ 10,991(16) 50,000
Senior Vice President of 1999 261,539 58,032 1,380,550(17) --
Compliance and General
Counsel 1998 225,275 323,793 1,644 228,000
- --------
(1) Includes Mannatech's matching contribution to the 401(k) plan, paid to
Executive Officers except for Mr. Fioretti and Mr. Persinger.
(2) Mr. Fioretti served as our Chief Executive Officer from May 1, 1997 until
his resignation on March 31, 2000.
(3) Represents the difference in selling price of the stock sold by Mr.
Fioretti to an affiliate and the fair market value of the stock at the time
of sale.
(4) Represents the value of two of our vehicles transferred to Mr. Fioretti in
1999.
(5) Represents the amounts paid to Mr. Fioretti under his incentive
compensation agreement.
(6) Mr. Henry became our Chief Executive Officer on April 1, 2000.
(7) Represents $2,625 for the 401(k) Plan matching contribution, $34,929 for
temporary living expenses and $6,289 auto allowance paid to Mr. Henry.
(8) Mr. Persinger became our President on May 5, 2000.
(9) Represents $80,364 for relocation and temporary living expenses and $10,904
auto allowance paid to Mr. Persinger.
(10) Represents $2,603 for the 401(k) Plan matching contribution and $9,257
auto allowance paid to Mr. Canale.
(11) Represents $2,603 for the 401(k) Plan matching contribution, $10,840 auto
allowance paid to Mr. Canale and $1,374,680 for the noncash compensation
value for his stock options sold.
11
(12) Represents the amount paid to Mr. Canale for costs of relocation.
(13) Mr. Cobb served as Chief Financial Officer until October 1999.
(14) Represents $2,603 for the 401(k) Plan matching contribution and $10,284
auto allowance paid to Mr. Cobb.
(15) Represents $2,786 auto allowance, $2,603 for the 401(k) Plan matching
contribution paid to Mr. Cobb and $1,160,125 for the noncash compensation
value for his stock options sold.
(16) Represents $1,650 for the 401(k) Plan matching contribution and $9,341
auto allowance paid to Ms. Varner.
(17) Represents $1,650 for the 401(k) Plan matching contribution, $4,212 auto
allowance paid to Ms. Varner and $1,374,688 for the noncash compensation
value for her stock options sold.
Stock options grants in the last fiscal year
The following table provides information on options granted to our Named
Executive Officers during the fiscal year ended December 31, 2000:
Potential realizable
value at assumed
Number of annual rates of stock
shares Percent of Exercise price appreciation
underlying total options or base for option term(2)
options granted to price Expiration ---------------------
Name granted(1) employees ($/Sh) date 5% 10%
---- ---------- ------------- -------- ---------- ---------- ----------
Robert M. Henry......... 275,000 16.3% $2.63 8/23/10 $1,178,098 $1,875,924
Terry L. Persinger...... 250,000 14.8% $2.63 8/23/10 $1,070,998 $1,705,386
Anthony E. Canale(3).... 50,000 3.0% $2.63 8/23/10 $ 214,200 $ 341,077
Patrick D. Cobb......... 20,000 1.1% $2.63 8/23/10 $ 85,680 $ 136,431
Deanne Varner........... 50,000 3.0% $2.63 8/23/10 $ 214,200 $ 341,077
- --------
(1) Options granted become exercisable beginning August 23, 2001, the first
anniversary of the date of grant.
(2) The 5% and 10% assumed annual compound rates of stock appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent Mannatech's estimate or projection of future prices of our common
stock. The actual value realized may be greater or less than the potential
realizable value set forth in the table.
(3) As a result of resigning from Mannatech on February 28, 2001, all of Mr.
Canale's 450,000 unexercised options expired on March 28, 2001. On March 1,
2001, Mannatech granted Mr. Canale 213,333 stock warrants, exercisable at
an exercise prices of $1.75 to $4.00 per share and expiring on March 1,
2008.
Stock options exercised in the last fiscal year
The following table sets forth certain information concerning the exercise
of stock options held by our Named Executive Officers during the fiscal year
ended December 31, 2000:
Aggregated option exercises in last fiscal year and fiscal year-end option
values
Number of shares underlying Value of unexercised
unexercised options at in-the-money options at
fiscal year-end fiscal year-end
---------------------------- -------------------------
Shares acquired Value
Name on exercise (#) realized ($) Exercisable(1) Unexercisable Exercisable Unexercisable
---- --------------- ------------ -------------- ------------- ----------- -------------
Robert M. Henry......... -- $-- -- 275,000 $-- $--
Terry L. Persinger...... -- $-- -- 250,000 $-- $--
Anthony E. Canale(2).... -- $-- 400,000 50,000 $-- $--
Patrick D. Cobb......... -- $-- 100,000 20,000 $-- $--
Deanne Varner........... -- $-- 281,926 50,000 $-- $--
- --------
(1) 250,000 shares of Mr. Canale's, 100,000 shares of Mr. Cobb's and 228,000
shares of Ms. Varner's stock options are exercisable at $8.00 per share and
were considered out-of-the-money for the above value calculation. The
remaining 150,000 shares of Mr. Canale's stock options and 53,926 shares of
12
Ms. Varner's stock options are exercisable at $1.35 per share and were also
considered out-of-the-money for the above calculation.
(2) As a result of resigning from Mannatech on February 28, 2001, all of Mr.
Canale's 450,000 unexercised options expired on March 28, 2001. On March
1, 2001, Mannatech granted Mr. Canale 213,333 stock warrants, exercisable
at exercise prices of $1.75 to $4.00 per share and expiring on March 1,
2008.
Executive employment agreements
Mannatech has employment agreements with Patrick D. Cobb, Bill H. McAnalley
and Deanne Varner. These agreements expire in September 2003 but will extend
automatically for one additional year unless both parties agree to terminate
the contract before the end of any term. In November 1999, Mannatech entered
into an employment agreement with Terry L. Persinger, which expires in October
2002. On April 1, 2000, Mannatech signed a three-year employment agreement
with Robert M. Henry. In addition, in September 2000, Mannatech signed a new
employment agreement with Charles E. Fioretti that replaced his original five-
year employment agreement. The new employment agreement changed his duties and
extended his employment from September 2003 to August 2004. All of these
employment agreements provide for a current base salary, bonus compensation
based upon the management bonus plan, the right to receive stock options and
certain confidentiality and non-compete clauses. If Mannatech terminates any
of these agreements for any reason other than reasons specified in the
agreements, the officer is entitled to receive an amount equal to the sum of
all salary and bonus that would have been paid during the remainder of their
employment agreement.
Mannatech had a five-year employment agreement with Anthony E. Canale that
was to expire in September 2003. On December 29, 2000, Mannatech terminated
his employment agreement and entered into a separation agreement with Mr.
Canale. Under the terms of the agreement, Mr. Canale agreed to continue as a
Director on our Board of Directors, but resigned as our Chief Operating
Officer of International Operations. On February 28, 2001. Mannatech agreed to
pay Mr. Canale $400,000 on March 1, 2001, $250,000 on February 28, 2002 and
$250,000 on February 28, 2003. Mannatech also agreed to pay his lease payments
for his car and for any future consulting provided to Mannatech. In connection
with his resignation, Mannatech agreed to grant Mr. Canale 213,333 stock
warrants on March 1, 2001 at exercise prices ranging from $1.75 to $4.00 per
share. The warrants are exercisable beginning on March 1, 2001 through
February 28, 2008.
Management bonus plan
Our Executive Officers and some other members of corporate management are
eligible to receive bonuses in addition to their base salaries. Our
Compensation Committee is responsible for reviewing and approving bonuses for
these officers. Our Compensation Committee approved the 2001 management bonus
plan that pays our Executive Officers a bonus for the attainment of certain
consolidated financial results, which are certified by our independent
accountants. Any earned bonuses will be paid March of the following year.
Compensation Committee interlocks and insider participation
Our Compensation Committee is responsible for decisions regarding
compensation of our Executive Officers. The Compensation Committee is composed
of our four independent directors, Messrs. Barker, Beutner, Doyle and
Zimmerman. None of the members of our Compensation Committee has ever been an
officer or employee of Mannatech.
Compensation Committee Report to our Board of Directors
The Compensation Committee Report discusses the executive compensation
policies and the basis for the compensation paid to our Executive Officers,
including our current Chief Executive Officer, Robert M. Henry, and former
Chief Executive Officer, Charles E. Fioretti, during the fiscal year ended
December 31, 2000.
13
Compensation policy. Mannatech's policy with respect to executive
compensation has been designed to:
. adequately and fairly compensate our Executive Officers in relation to
their responsibilities, capabilities and contributions to Mannatech and
in a manner that is commensurate with compensation paid by similarly-
sized company or companies within our industry; and
. reward our Executive Officers for the achievement of short-term
operating goals and for the enhancement of Mannatech's long-term value.
Components of compensation. The primary components of compensation paid to
our Executive Officers and the relationship of such components of compensation
to Mannatech's performance are discussed below:
(a) Base salary. At the beginning of each new fiscal year our Compensation
Committee will review the base salaries of our Executive Officers to
ensure the salaries are correctly based upon a number of factors. These
factors include Mannatech's performance (to the extent such performance
can fairly be attributed or related to each Executive Officer's
performance), as well as the nature of each Executive Officer's
responsibilities, capabilities, loyalties and contributions. Our
Compensation Committee believes that base salaries for our Executive
Officers have been reasonable in relation to the size and performance
in comparison with the compensation paid by similarly-sized companies
or companies within the same industry.
(b) Bonus. Mannatech's Executive Officers are eligible to participate in
the management bonus plan. The bonus plan is based upon Mannatech
achieving various audited consolidated pre-tax income levels. Bonuses
earned by our Executive Officers will be reviewed and approved by our
Compensation Committee and paid in March of the following year.
(c) Other annual compensation. Mannatech maintains certain other plans and
arrangements for the benefit of our Executive Officers and other
management, including participation in the 401(k) plan, use of a
company vehicle and health, life, automobile and long-term disability
insurance. All of our Vice Presidents are paid monthly auto allowances
of $500.00. In addition, Senior or Executive Vice Presidents and above
are either paid an auto allowance or awarded the use of a vehicle
leased by Mannatech. Mannatech believes these benefits are reasonable
in relation to the executive compensation practices of other similarly-
sized companies or companies within the same industry.
(d) Long-term compensation. Mannatech maintains stock option plans to
reward certain members of management for the attainment of certain
goals or events. The stock option grants are reviewed and approved by
our Option and Compensation Committees. Mannatech believes these long-
term compensation arrangements are reasonable in relation to the
executive compensation practices of other similarly-sized companies or
companies within the same industry.
2000 Chief Executive Officers compensation
As previously described, our Compensation Committee considered several
factors in determining our Chief Executive Officer's compensation package,
with the primary factors being our financial performance and the competitive
compensation paid to other executive officers of similarly-sized companies or
companies within the same industry. Specific actions taken by our Compensation
Committee regarding Mr. Charles Fioretti's and Mr. Henry's compensation paid
in 2000 are summarized below:
Mr. Charles E. Fioretti:
(a) Base salary. As with our Executive Officers, Mr. Charles Fioretti's
salary was based on a number of factors. These factors include the
overall performance of Mannatech and our consolidated financial
results, as well as the nature of his responsibilities, capabilities,
loyalties and contributions to Mannatech. For fiscal year 2000, Mr.
Fioretti's salary was $600,000 per annum.
14
(b) Bonus. Our Chief Executive Officer is allowed to participate in the
management bonus plan. Mannatech's bonus plan is based upon the
attainment of certain financial levels. No bonus was paid to Mr.
Fioretti for the fiscal year 2000.
(c) Other annual compensation. Our Chief Executive Officer as well as all
of our other Executive Officers may participate in Mannatech's 401(k)
plan.
Mr. Robert M. Henry:
(a) Base salary. As with our other Executive Officers, Mr. Henry's salary
was based on a number of factors. These factors include the overall
performance of Mannatech and our consolidated financial results, as
well as the nature of his responsibilities, capabilities, loyalties and
contributions to Mannatech. For fiscal year 2000, Mr. Henry's salary
was $350,000 per annum.
(b) Bonus. Our Chief Executive Officer is allowed to participate in the
management bonus plan. Mannatech's bonus plan is based upon the
attainment of certain financial levels. No bonus was paid to Mr. Henry
for fiscal year 2000.
(c) Other annual compensation. Our Chief Executive Officer as well as all
of our other Executive Officers may participate in Mannatech's 401(k)
plan.
$1 million pay deductibility cap. Under Section 162(m) of the United States
Internal Revenue Code, public companies are precluded from receiving a tax
deduction on compensation paid to Executive Officers in excess of $1 million,
unless the compensation is excluded from the $1 million limit as a result of
being classified as performance-based. At this time, none of our Executive
Officers' cash compensation levels exceeded the $1 million pay limit and we do
not anticipate exceeding this limit in the near future. Nonetheless, our
Compensation Committee intends to periodically review our Executive Officers'
compensation in light of this regulation.
Conclusion. Our Compensation Committee believes the concepts discussed above
further the shareholders' interests and that officer compensation encourages
responsible management of Mannatech. Our Compensation Committee regularly
considers the effect of executive compensation on shareholder interests. These
factors, reports from our Executive Operating Committee and discussions with,
and information compiled by, various independent consultants retained by
Mannatech is used in determining our Executive Officers' compensation.
The Compensation Committee
Stephen A. Barker Ph. D.
Roger E. Beutner
James M. Doyle Jr.
Jules Zimmerman
Stock option plans
The 1997 Stock Option Plan was adopted by our Board of Directors and
approved by our shareholders on May 14, 1997. The 1998 Incentive Stock Option
Plan was adopted by our Board of Directors and approved by our shareholders on
April 8, 1998 and amended on September 4, 1998 to increase the number of shares
reserved for issuance from 500,000 to 1,000,000 shares. The 2000 Stock Option
Plan was adopted by our Board of Directors and approved by our shareholders on
June 19, 2000. All stock option plans are intended to encourage investment by,
our officers, employees, non-employee directors and consultants in shares of
our common stock so that they will have an increased interest in, and greater
concern for, the welfare of Mannatech.
Options granted under our 1997 and 2000 stock option plans may either be
incentive stock options or options that do not qualify for treatment as
incentive stock options under Section 422 of the United States Internal Revenue
Code of 1986. Options granted under our 1998 Incentive Stock Option Plan may
only be granted to our Directors and employees.
15
Incentive stock options may be granted under our stock option plans to any
person who is an employee (including Directors) or any parent or subsidiary
that may exist in the future. The exercise price of incentive stock options
must equal at least the fair market value of a share of our common stock on
the date of grant.
The following table sets forth information regarding our stock option plans
as of April 9, 2001:
Stock Option Plan Information
# of
# of options shares
# of granted less Weighted Vested available
shares canceled average and for
authorized options exercise price exercisable grant
---------- ------------ -------------- ----------- ---------
1997 Stock Option Plan.. 2,000,000 1,478,400 $2.07 503,852 521,600
1998 Incentive Stock
Option Plan............ 1,000,000 884,500 $7.90 538,833 115,500
2000 Stock Option Plan.. 2,000,000 1,623,000 $2.60 -- 377,000
Our Option Committee has full and final authority in its discretion,
subject to the stock option plans' provisions, to determine, among other
things:
. the individuals to whom options shall be granted;
. whether the option granted shall be an incentive stock option or a non-
qualified stock option;
. the number of shares of common stock covered by each option;
. the time or times at which options will be granted;
. the option vesting schedule;
. the exercise price of the option;
. the duration of the options granted;
. to prescribe, amend and rescind rules and regulations relating to our
stock option plans;
. accelerate or defer (with the consent of the optionee) the exercise date
of any option; and
. authorize any person to execute on Mannatech's behalf any instrument
required to effectuate the grant of an option previously granted by our
Board of Directors.
Our Option Committee, consisting of our four independent directors, Messrs.
Barker, Beutner, Doyle and Zimmerman, has the power to decide upon and make
rules that control our stock option plans and take all other actions necessary
for the proper administration of our stock option plans. Our stock option
plans may be changed or canceled by our Board of Directors at any time without
the approval of our shareholders, with a few exceptions. However, our Board of
Directors may not take action that affects options previously granted under
our stock option plans.
401(k) Plan
On May 9, 1997, Mannatech adopted a 401(k) Pre-tax Savings Plan. All
employees who have been employed by Mannatech for at least 90 days at the
beginning of a quarter and are at least 21 years of age are eligible to
participate in the Plan. Employees may contribute up to a maximum of 20.0% of
their current compensation to the 401(k) Plan, which is the statutorily
prescribed annual limit. Mannatech will make regular matching contributions to
the 401(k) Plan in the amount of $0.25 for each $1.00 contributed by a
participating employee, up to 6.0% of a participating employee's annual
compensation, including overtime. The 401(k) Plan also provides that Mannatech
can make profit-sharing contributions to the plan each year based upon its
profit. Employee contributions and our matching contributions are paid to a
corporate trustee and invested as directed by the participating employee.
Mannatech's contribution in the 401(k) Plan vests over five years or earlier
if the
16
participating employee retires at age 65, becomes disabled or dies. Payments to
participating employees may also be made in the case of a financial hardship.
Payments may be made in a lump sum. The 401(k) Plan is intended to qualify
under Section 401 of the United States Internal Revenue Code of 1986, so that
contributions made by employees or by Mannatech to the 401(k) Plan, and income
earned on these contributions, are not taxable to our employees until withdrawn
from the 401(k) Plan.
Performance Graph
The graph below depicts our common stock price as an index, assuming $100.00
was invested on February 16, 1999, the date of our initial public offering,
along with the composite prices of companies listed in the S&P Midcap Index and
our peer group. Our financial printer, R.R. Donnelley Financial Printers has
provided us with this information. The comparisons in the 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 our common
stock. The publicly-traded companies in our peer group are Twinlab Corp.,
Weider Nutrition International, Inc., Nature's Sunshine Products, Inc., Reliv
International, Inc. and Nu Skin Enterprises Inc.
[GRAPH APPEARS HERE]
* $100.00 invested on February 16, 1999 in stock or index including
reinvestment of dividends for the fiscal years ending December 31, 1999 and
2000.
Measurement period Mannatech S&P Midcap Index Peer Group Index
------------------ --------- ---------------- ----------------
February 16, 1999................ $100.00 $100.00 $100.00
December 31, 1999................ $ 23.06 $125.97 $ 48.94
December 31, 2000................ $ 5.56 $148.02 $ 26.90
17
Audit Committee Report to our Board of Directors
On February 22, 2001, our Board of Directors adopted a written charter
including a statement of responsibilities for the Audit Committee, which is
included as Appendix A to this proxy statement. Our Board of Directors believes
that all four members of the Audit Committee are independent, as required by
applicable listing standards of the Nasdaq National Stock Market.
Mannatech's management is responsible for the preparation of the
consolidated financial statements. The independent accountants are responsible
for auditing our consolidated financial statements. The activities of our Audit
Committee are in no way designed to supersede or alter those traditional
responsibilities. Our Audit Committees' role does not provide any special
assurances with regard to our consolidated financial statements, nor does it
involve a professional evaluation of the quality of the audits performed by our
independent accountants. Our Audit Committee has furnished our Board of
Directors the following report:
The Audit Committee has reviewed and discussed with management their
consolidated audited financial statements of and for the year ended
December 31, 2000. The Audit Committee has also discussed with the independent
accountants the matters required to be discussed by Statements on Auditing
Standards No. 61, "Communication with Audit Committees," as amended. The Audit
Committee has also received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard
No. 1, "Independence Discussions with Audit Committees," as amended, and has
discussed with the independent accountants, the firm's independence from
management.
Based on the review and discussions referred to above, the Audit Committee
recommends to our Board of Directors that the year-end audited consolidated
financial statements are to be included in Mannatech's Annual Report and the
Form 10-K for the year ended December 31, 2000 for filing with the Securities
and Exchange Commission.
The Audit Committee
Stephen A. Baker Ph. D.
Roger E. Beutner
James M. Doyle, Jr.
Jules Zimmerman
The preceding reports from our Compensation Committee and from our Audit
Committee and our stock performance graph are not incorporated by reference
into any of Mannatech's previous or future filings under the Securities Act of
1933 or the Securities Exchange Act of 1934 which might incorporate filings
made by Mannatech under those Acts, except to the extent that they specifically
incorporate this information by reference.
18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 9, 2001, the number of shares of
our common stock and the percentage of the outstanding shares of such class
that are beneficially owned by (A) each person who is the beneficial owner of
more than 5% of the outstanding shares of our common stock, (B) each of our
Directors and the Named Executive Officers, and (C) all of the current
Executive Officers and Directors, as a group.
Beneficial Ownership(1)
------------------------------------
Number of Warrants
shares and
Name of Directors and excluding stock % of class
Executive Officers options options(2) Total outstanding(3)
--------------------- ---------- ---------- ---------- --------------
Samuel L. Caster........... 5,713,549 -- 5,713,549 23.1%
P.O. Box 1167
Cedar Hill, Texas 75106
Charles E. Fioretti........ 4,664,066 -- 4,664,066 18.9
c/o Mannatech,
Incorporated
600 S. Royal Lane, Suite
200
Coppell, Texas 75019
William C. Fioretti(4)..... 1,396,205 -- 1,396,205 5.6
c/o Agritech Labs, Inc.
6333 N. St. Highway 161,
Suite 350
Irving, Texas 75063
Marlin Ray Robbins......... 1,266,204 -- 1,266,204 5.1
2201 Ingleside
Grand Prairie, Texas 75050
Patrick D. Cobb(5)......... 238,313 100,000 338,313 1.4
Deanne Varner.............. 74,074 281,926 356,000 1.4
Anthony E. Canale.......... -- 213,333 213,333 *
Stephen A. Barker, Ph. D... -- 16,667 16,667 *
Robert M. Henry............ 70,000 -- 70,000 *
Terry L. Persinger......... 1,000 -- 1,000 *
All 16 Executive Officers
and Directors
as a group................ 11,099,664 902,851 11,933,515 46.8%
- --------
* Less than 1%
(1) The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as defined in Rule 13d-3 under
the Exchange Act. All information with respect to the beneficial ownership
of any shareholder has been furnished by such shareholder and, except as
otherwise indicated or pursuant to community property laws, each
shareholder has sole voting and investment power with respect to shares
listed as beneficially owned by such shareholder.
(2) The Directors and Executive Officers have the right to acquire shares of
our common stock shown in this column within 60 days through the exercise
of stock options or warrants.
(3) Shares of our common stock which are not outstanding but the beneficial
ownership of which can be acquired by a person upon exercise of an option
or warrant within 60 days as of April 9, 2001 are deemed outstanding for
the purpose of computing the percentage of outstanding shares beneficially
owned by such person and by the group of Executive Officers and Directors.
However, such shares are not deemed to be outstanding for the purpose of
computing the percentage of outstanding shares beneficially owned by any
other person.
19
(4) Includes 1,341,770 shares of our common stock held by the Fioretti Family
Partnership, Ltd. of which William C. Fioretti is the general partner and
his wife and trusts, for the benefit of their children, are the limited
partners.
(5) Includes 10,000 shares held by trusts established for the benefit of Mr.
Cobb's children and stepchildren.
Mannatech is not aware of any arrangements, including any pledge of its
common stock, the operation of which may at a subsequent date result in a
change of control of Mannatech.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Loans to Agritech Labs, Inc.
During 1996 and 1997, Mannatech made cash advances to Agritech Labs, Inc.
and Agritech Technology, Ltd. totaling approximately $918,000. The Agritech
companies were owned by individual partners of which over 90% of the Agritech
companies were owned by Messrs. Charles E. Fioretti and Patrick D. Cobb, who
are shareholders and Executive Officers of Mannatech and Messrs. Samuel L.
Caster and William C. Fioretti, who are shareholders and former Executive
Officers of Mannatech. In addition, Messrs. Charles Fioretti and Caster are
Directors of Mannatech. Because Mannatech was concerned about the ability of
these Agritech companies to repay the loans, each of Messrs. William C.
Fioretti, Charles E. Fioretti, Samuel L. Caster and Patrick D. Cobb agreed to
pay the obligations that these Agritech companies owed Mannatech. Each of these
individuals gave promissory notes to Mannatech totaling approximately $918,000.
On December 31, 1998, Mannatech renewed the notes with an extended due date of
December 31, 1999. On February 17, 1999, Mannatech signed new notes with each
of these shareholders. The new notes bear interest at 6.0% per year, with the
first payment due on February 17, 2001 and the remainder to be paid in annual
installments through February 17, 2004. As of December 31, 2000, the amounts
outstanding under these notes made by each of Messrs. William C. Fioretti,
Charles E. Fioretti and Samuel L. Caster was approximately $173,000,
respectively and the amount outstanding under the note made by Mr. Patrick D.
Cobb was approximately $28,000.
Commission agreement and receivables from related parties
In 1999 and 2000, Mannatech accrued commission for Mr. William C. Fioretti
of approximately $453,000 and $181,000, of which $37,000 and $27,000 remained
unpaid at December 31, 1999 and 2000, respectively. The commission was paid
pursuant to an agreement with Mannatech. Mr. William Fioretti is one of
Mannatech's founders, a major shareholder, former Executive Officer and the
cousin of Charles E. Fioretti, our Chairman of the Board.
Consulting agreement with Mr. Samuel L. Caster
On May 5, 2000, Mr. Samuel L. Caster resigned as our President. On June 1,
2000, Mannatech entered into a two-year consulting agreement with Mr. Caster.
Under the terms of this agreement, Mannatech agreed to pay Mr. Caster $50,000
each month plus, the right to use a leased car, auto-insurance and various
other expenses. The agreement is cancelable by either party with 90 days
notice. This agreement may be automatically renewed annually unless either
party gives written notice 90 days prior to the anniversary date of this
agreement. During 2000, Mr. Caster earned approximately $312,000 relating to
this agreement of which $50,000 was unpaid at December 31, 2000.
Receivable and lock-up agreement with Mr. Charles E. Fioretti
On August 8, 2000, Mannatech loaned Mr. Charles E. Fioretti $500,000. The
note receivable was collateralized by 174,570 shares of Mr. Charles Fioretti's
common stock and was repaid with six successive monthly installments of
26,455 shares of his common stock, beginning on September 3, 2000 and
continuing through February 3, 2001. Mr. Charles Fioretti exchanged a total of
158,730 shares of his common stock to Mannatech to repay the loan in full. As
of December 31, 2000, the balance of the note receivable was $167,000.
20
On August 8, 2000, Mannatech also entered into a lock-up and repurchase
agreement with Mr. Charles Fioretti. Under the terms of the agreement,
Mannatech agreed to buy $1.0 million worth of Mr. Charles Fioretti's common
stock by way of monthly repurchases, beginning on March 3, 2001 and continuing
through February 3, 2002, in the amount of $83,333.33 worth of his common
stock, valued at 90% of the fair market value price of our common stock on the
close of that business day. In exchange for this agreement, Mr. Charles
Fioretti is prohibited from selling any of his shares until after March 2,
2002, unless approved by our Board of Directors. Under this agreement,
Mannatech will have the option, beginning March 3, 2002, but not the obligation
to repurchase on a monthly basis, at least $100,000 worth of his common stock,
valued at the greater of 90% of the fair market value or $2.00 per share, and,
as long as Mannatech exercises this option, Mr. Charles Fioretti will continue
to be prohibited from selling any of his shares of our common stock.
Separation agreement with Mr. Anthony E. Canale
On December 29, 2000, our Board of Directors entered into a separation
agreement with Mr. Canale. Under the terms of the agreement, Mr. Canale may
remain a Director but resigned on February 28, 2001 as our Chief Operating
Officer of International Operations. Mannatech will pay Mr. Canale $400,000 on
March 1, 2001, $250,000 on February 28, 2002 and $250,000 on February 28, 2003.
Mannatech will also continue to pay his lease payments for his car and pay him
for any future consulting to Mannatech. On March 1, 2001, Mr. Canale will begin
to receive $2,500 a month, which is an amount set by our Board of Directors for
his service to our Board plus reimbursement for any expenses. Mannatech also
agreed to grant Mr. Canale a total of 213,333 stock warrants on March 1, 2001
at exercise prices ranging from $1.75 to $4.00 per share, which are exercisable
beginning on March 1, 2001 through February 28, 2008. As of December 31, 2000,
Mannatech accrued $950,000 relating to Mr. Canale and also accrued compensation
of approximately $140,000 related to the termination of various other officers.
On April 11, 2001, Mr. Canale informed Mannatech of his intent to resign, as a
Director, effective June 4, 2001.
Cancellation of incentive agreements and certain transactions with Mr. Marlin
Ray Robbins
In April 1994, Mannatech entered into two incentive compensation agreements
with Mr. Robbins, who is currently an Associate of Mannatech, a 5.1%
shareholder, a special advisor to our Board of Directors and has been nominated
to our Board of Directors. The incentive agreements and their subsequent
amendments required Mannatech to pay compensation to him based on a specified
monthly sales volume and the admittance of new independent Associates. One of
these agreements was subsequently canceled in 1997. In June 1999, the other
incentive agreement with Mr. Robbins was canceled by paying Mr. Robbins
$750,000. Of this amount, $500,000 was paid at the time the agreement was
canceled and the remaining $250,000 is payable in monthly installments of
$10,000 over two years. These installments are non-interest bearing. In 2000,
Mannatech agreed to pay Mr. Robbins an additional $300,000 related to the
cancellation of this incentive agreement. The $300,000 included $100,000 for
the grandfathering of some of his Associate positions to a platinum
presidential level. During 1999 and 2000, Mannatech paid Mr. Robbins
approximately $120,000, $618,000 and $320,000, respectively related to all of
these incentive agreements and their subsequent cancellation.
Mr. Robbins also is paid commissions, as a sixteen star platinum
presidential Associate of Mannatech who owns multiple positions in our global
downline network-marketing system. Commissions are generally paid to our
Associates for product sales and downline growth. During 1999 and 2000,
Mannatech paid commissions to Mr. Robbins totaling $1.6 million and $1.7
million, respectively. In addition, Mannatech paid commissions to Mr. Kevin
Robbins and his wife Dawn Robbins, who are the son and daughter-in-law of Mr.
Ray Robbins and who are Associates, an aggregate of approximately $241,000 in
1999 and $160,000 in 2000. Mannatech also paid commissions, to various other
members of Mr. Ray Robbin's immediately family, who are Associates and hold
various positions in our global downline network-marketing systems totaling
approximately $13,000 in 1999 and $2,000 in 2000. All commissions paid to
Mr. Robbins' immediate family members were paid in accordance with our global
compensation plans.
Mr. Robbins also provides various consulting services to Mannatech and
travels extensively speaking at various functions to promote Mannatech.
Mannatech reimburses Mr. Robbins for his expenses related to his consulting and
traveling.
21
FORWARD-LOOKING STATEMENTS
This proxy statement may include "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Exchange Act of 1934. Opinions, forecasts, projections, guidance or
other statements other than statements of historical fact are considered
forward-looking statements. These statements are based upon assumptions that
are subject to change and other risks. Although Mannatech believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Certain risks and uncertainties inherent in Mannatech's business are set forth
in the filings of Mannatech with the Securities and Exchange Commission.
Estimates of future financial or operating performance, provided by the
Company, are based on existing marketing conditions and information available
at this time. Actual financial and operating performance may be higher or
lower. Future performance is dependent upon many factors, including the success
of our international expansion, our ability to attract and retain associates,
changes in laws and governmental regulations and changes in market conditions.
All subsequent written and oral forward-looking statements attributable to
Mannatech or to individuals acting on Mannatech's behalf are expressly
qualified in their entirety by this paragraph.
By order of our Board of Directors
/s/ Terry L. Persinger
Terry L. Persinger
Corporate Secretary
Dated: May 4, 2001
22
APPENDIX A
MANNATECH, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. Audit Committee Purpose.
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
. Make recommendations to the full Board of Directors with respect to the
Company's independent auditors;
. Meet periodically with our independent auditors to review the general
scope of audit coverage;
. Monitor the Company's policies and procedures designed to avoid improper
conflicts of interests;
. Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance;
. Monitor the independence and performance of the Company's independent
auditors and, as appropriate, internal auditing department; and
. Provide an avenue of communication among the independent auditors,
management, the internal auditing department and, as appropriate, the
Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it shall at all times have
direct access to the independent auditors as well as anyone in the Company. The
Audit Committee has the ability to retain, at the Company's expense, special
legal, accounting, or other consultants or experts it deems necessary in the
performance of its duties.
II. Audit Committee Composition and Meetings.
The Audit Committee and its members shall meet the requirements of the rules
of the National Association of Securities Dealers, Inc. and The Nasdaq Stock
Market, Inc. On or prior to June 14, 2001, the Audit Committee shall be
comprised of three or more directors as determined by the Board, each of whom
shall be independent, non-executive directors, free from any relationship that
would interfere with the exercise of his or her independent judgment. All
members of the Committee shall have a basic understanding of finance and
accounting and be able to read and understand fundamental financial statements,
and at least one member of the Committee shall have accounting or related
financial management expertise.
Audit Committee members shall be appointed by the Board of Directors. If an
Audit Committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the Committee membership.
The Audit Committee shall meet at least three times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall prepare
and/or approve an agenda in advance of each meeting. The Committee should meet
privately at least annually with management, the director of the internal
auditing department, the independent auditors, and as a committee to discuss
any matters that the Committee or each of these groups believe should be
discussed. In addition, the Committee, or at least its Chair, should
communicate with management and the independent auditors quarterly to review
the Company's financial statements and significant findings based upon the
auditors' limited review procedures.
A-1
III. Audit Committee Responsibilities and Duties.
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually. Submit
the Charter to the Board of Directors for approval and have the document
published at least every three years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements prior to filing or
distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting principles,
practices, and judgments.
3. In consultation with management, the independent auditors, and the internal
auditors, consider the integrity of the Company's financial reporting
processes and controls. Discuss significant financial risk exposures and the
steps management has taken to monitor, control, and report such exposures.
Review significant findings prepared by the independent auditors and the
internal auditing department together with management's responses.
4. Review with financial management and the independent auditors the Company's
quarterly and annual financial results prior to the release of earnings
and/or prior to filing or distribution of the Company's financial
statements. Discuss any significant changes to the Company's accounting
principles and any items required to be communicated by the independent
auditors in accordance with SAS 61 (see Item 9). The Chair of the Committee
may represent the entire Audit Committee for purposes of this review.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors. The Audit Committee shall review the
independence and performance of the auditors and annually recommend to the
Board of Directors the appointment of the independent auditors or approve
any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
8. Review the independent auditors' audit plan and discuss scope, staffing,
locations, reliance upon management, and internal audit and general audit
approach.
9. Prior to releasing the year-end earnings, discuss the results of the audit
with the independent auditors. Discuss certain matters required to be
communicated to audit committees in accordance with AICPA SAS 61.
10. Consider management's and the independent auditors' judgments about the
quality and appropriateness of the Company's accounting principles as
applied in its financial reporting.
11. Obtain from the independent auditor assurance that Section 10A of the
Securities Exchange Act of 1934 has not been implicated.
Management and Legal Compliance
12. On at least an annual basis, review with the Company's counsels, any legal
matters that could have a significant impact on the organization's
financial statements, the Company's compliance with applicable laws and
regulations, and inquiries received from regulators or governmental
agencies.
Other Audit Committee Responsibilities
13. Annually prepare a report to shareholders as required by the Securities and
Exchange Commission. The report should be included in the Company's annual
proxy statement.
A-2
14. Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems necessary
or appropriate.
15. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
These are the responsibilities of management and the independent auditor. Nor
is it the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations.
Date Adopted:November 19, 1999--Audit Committee
February 22, 2001--Board of Directors
A-3
- --------------------------------------------------------------------------------
MANNATECH, INCORPORATED
2001 COMMON STOCK PROXY
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR OUR
ANNUAL SHAREHOLDERS' MEETING TO BE HELD ON JUNE 5, 2001, AT 9:00 a.m.
R CENTRAL DAYLIGHT TIME, AT THE GRAPEVINE CONVENTION CENTER, 1209 SOUTH
MAIN STREET, GRAPEVINE, TEXAS.
O
JULES ZIMMERMAN and JAMES M. DOYLE JR., or any of them, with power of
X substitution are hereby appointed proxies to vote, as specified, all
shares of common stock, which the shareholder(s) named on the reverse
Y side is entitled to vote at the above Annual Meeting or at any
adjournment thereof, and in their discretion to vote upon all other
matters as may properly be brought before the meeting.
Please mark, sign and date on the reverse side of this proxy card, and
mail promptly in the enclosed postage-paid envelope or follow the
instructions on the reverse side to vote electronically. If you vote
electronically you do not have to mail in this proxy card.
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
--FOLD AND DETACH HERE--
MANNATECH INCORPORATED /TM/
Annual Shareholders Meeting
June 5, 2001
9:00 a.m.
Grapevine Convention Center
1209 South Main Street
Grapevine, Texas
Your Vote is Important.
Thank you for Voting.
- --------------------------------------------------------------------------------
[ X ] Please mark your votes
as in this example.
This proxy when properly executed will be voted in the manner directed
herein. If no box is marked or no direction is made, this proxy will be voted
FOR the election of all of the directors and FOR proposal 2.
- --------------------------------------------------------------------------------
The Board of Directors Recommends a vote FOR proposals 1 and 2.
- --------------------------------------------------------------------------------
1. Election of Directors: WITHHOLD FOR ALL
01. Roger E. Beutner, FOR ALL EXCEPT
02. Marlin Ray Robbins,
03. Charles E. Fioretti, [ ] [ ] [ ]
04 Jules Zimmerman,
05. Samuel L. Caster
2. Ratification of FOR AGAINST ABSTAIN
Independent
Accountants [ ] [ ] [ ]
Instructions: To withhold your vote for an individual nominee(s), write the
name(s) in the space provided below. For all except, the following nominee(s)
________________________________________
-----------------------------------
SPECIAL ACTION
-----------------------------------
Comments [ ]
Discontinue Annual Report
Mailing for this Account [ ]
Will Attend Annual Meeting [ ]
SIGNATURE(S) _________________________________________________ DATE ____________
NOTE: Please sign exactly as name appears hereon. Joint owners should both sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE ONLY IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL
ONLY
MANNATECH INCORPORATED/TM/
Dear Shareholder:
Mannatech encourages you to take advantage of the new and convenient ways by
which you can vote your shares. You can vote your shares by mail or
electronically, through the Internet or by telephone. If voting electronically
you do not need to return this proxy card.
To mail in your vote, mark, sign and date this proxy card and mail the
perforated portion in the pre-paid mailing envelope.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
this box above is also your personal code to access the system.
1. To vote over the Internet:
. Log onto the Internet and go to the web site
http://www.eproxyvote.com/mtex
2. To vote by telephone:
. On a touch-tone telephone call 1-877-PRX-VOTE (1-877-779-8683) 24
hours a day, 7 days a week.
After completing one of the steps above, follow the applicable instructions to
complete your vote electronically. Your electronic vote authorizes the named
proxies in the same manner as if you marked, signed, dated and returned the
proxy card. If you choose to vote your shares electronically, you do not need to
mail back your proxy card. If you vote your proxy either by mail or
electronically you may still attend the annual meeting and/or change your vote
up to and at the meeting.
Your vote is important. Thank you for voting.