SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the
|X| Definitive Proxy Statement Commission Only (as permitted
|_| Definitive Additional Materials by Rule 14a-6(e)(2))
|_| Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
GLOBAL CAPITAL PARTNERS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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Check box if any part of the fee is offset as provided by Exchange
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or the form or schedule and the date of its filing.
(1) Amount previously paid:
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GLOBAL CAPITAL PARTNERS INC.
Notice of Annual Meeting of Stockholders
to be held on September 21, 2000
and Proxy Statement
August 25, 2000
GLOBAL CAPITAL PARTNERS INC.
6000 FAIRVIEW ROAD
SUITE 1410
CHARLOTTE, NORTH CAROLINA 28210
August 25, 2000
Dear Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Global Capital Partners Inc. (formerly Eastbrokers International
Incorporated). The meeting will be held on Wednesday, September 21, 2000, at
10:00 a.m., at 6000 Fairview Road, Suite 1410, Charlotte, North Carolina 28210.
In the following pages, you will find the formal notice of our annual
meeting and our proxy statement. After reading the proxy statement, please mark,
sign and promptly return the enclosed proxy card to ensure that your shares are
represented at the meeting.
Our Annual Report filed with the Securities and Exchange Commission for
the fiscal year ended March 31, 2000 which includes our financial statements is
also included herewith. Unless specifically incorporated by reference herein,
our Annual Report does not form any part of the material for the solicitation of
proxies.
We hope that many of you will be able to attend our annual meeting in
person. It is important that your shares be represented and voted at the annual
meeting regardless of the size of your holdings. If your shares are registered
in your name and you plan to attend the annual meeting, please mark the
appropriate box on the enclosed proxy card and you will be registered for the
meeting. We urge that you attend the meeting, but if you cannot you may instead
vote by proxy.
We appreciate the continuing interest of our stockholders in our
business, and we look forward to seeing you at the meeting.
Sincerely,
Martin A. Sumichrast
Chairman of the Board, President and
Chief Executive Officer
GLOBAL CAPITAL PARTNERS INC.
6000 FAIRVIEW ROAD
SUITE 1410
CHARLOTTE, NORTH CAROLINA 28210
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 21, 2000
The annual meeting of stockholders of Global Capital Partners Inc.
(formerly Eastbrokers International Incorporated) for the year 2000 will be held
at 10:00 a.m. on Wednesday, September 21, 2000, at 6000 Fairview Road, Suite
1410, Charlotte, North Carolina 28210, for the following purposes:
1. To elect two Class II Directors to serve for a three-year term until
the 2003 Annual Meeting of Stockholders, or until their successors are
elected and qualified;
2. To approve an amendment to our 1996 Stock Option Plan to increase the
number of shares authorized for issuance under the 1996 Stock Option
Plan from 1,200,000 to 1,500,000;
3. To ratify the appointment of Spicer, Jeffries & Co. as our independent
public accountants for the fiscal year ended March 31, 2001; and
4. To transact such other business as may properly come before the
meeting.
To ensure that your shares are represented at the meeting in the event
that you do not attend, please mark and sign the enclosed proxy card and return
it in the enclosed envelope.
By Order of the Board of Directors,
Kevin D. McNeil
Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
Date: August 25, 2000
GLOBAL CAPITAL PARTNERS INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS FOR 2000
TABLE OF CONTENTS
Page
General Information for Stockholders................................................................. 1
Purpose of Proxy............................................................................ 1
How to Vote................................................................................. 1
Matters to be Submitted to a Vote........................................................... 1
Revoking Proxies............................................................................ 1
Naming Other Proxies........................................................................ 1
Who May Vote................................................................................ 1
Item 1. Election of Directors........................................................................ 1
General Information Regarding the Board.............................................................. 2
Nominees for Election for a Three-Year Term Expiring at the
2003 Annual Meeting.................................................................... 2
Family Relationships..................................................................... 3
Class III Directors Continuing in Office Until the 2001 Annual Meeting...................... 3
Class I Director Continuing in Office Until the 2002 Annual Meeting......................... 3
Meetings of the Board....................................................................... 3
Committees of the Board..................................................................... 4
Director Compensation....................................................................... 4
Executive Officer Compensation....................................................................... 4
Employment Agreements................................................................... 5
Option/SAR Grants....................................................................... 6
Option/SAR Exercises.................................................................... 6
1996 Stock Option Plan.................................................................. 6
Security Ownership of Certain Beneficial Owners and Management....................................... 7
Section 16(a) Beneficial Ownership Reporting Compliance.............................................. 8
Certain Relationships and Related Transactions....................................................... 8
Item 2. Approval of Amendment to the 1996 Stock Option Plan to Increase the
Number of Shares Authorized Under the Plan......................................... 11
Administration.......................................................................... 11
Eligibility............................................................................. 11
Types of Awards......................................................................... 12
Number of Shares........................................................................ 12
Change of Control....................................................................... 12
New Plan Benefits....................................................................... 12
Summary of Certain Federal Income Tax Consequences of the
1996 Stock Option Plan.............................................................. 12
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Item 3. Ratification of Independent Public Accountants.............................................. 14
Stockholder Proposals for the Annual Meeting of Stockholders for 2001................................ 15
Other Information.................................................................................... 15
Required Vote........................................................................... 15
Solicitation of Proxies Generally....................................................... 16
Costs................................................................................... 16
List of Stockholders Entitled to Vote................................................... 16
ii
GENERAL INFORMATION FOR STOCKHOLDERS
PURPOSE OF PROXY. This proxy statement and the enclosed proxy card
relate to the 2000 annual meeting of stockholders (the "Annual Meeting") of
Global Capital Partners Inc., a Delaware corporation ("GCAP," "we," "us," or
"our"). Our board of directors (the "Board") is soliciting proxies from
stockholders in order to provide every stockholder an opportunity to vote on all
matters submitted to a vote of stockholders at the Annual Meeting, whether or
not he or she attends in person. This proxy statement and the enclosed proxy
card are being mailed to our stockholders beginning on or about August 25, 2000.
HOW TO VOTE. You may vote on each matter to be submitted to a vote of
stockholders at the Annual Meeting by marking the appropriate box on the
enclosed proxy card, signing it and returning it in the enclosed envelope. When
the proxy card is properly signed and returned by you, your shares will be voted
at the Annual Meeting by the proxyholders named on the proxy card in accordance
with your directions. If you return the proxy card without marking a box for a
specified matter, your shares will be voted on that matter as recommended by the
Board.
MATTERS TO BE SUBMITTED TO A VOTE. The only matters known to management
to be submitted to a vote of stockholders at the meeting are (1) the election of
two Class II Directors to our Board, (2) a proposal to amend our 1996 Stock
Option Plan to increase the number of shares authorized for issuance from
1,200,000 to 1,500,000 and (3) the ratification of Spicer, Jeffries & Co. as our
independent public accountants for the fiscal year ending March 31, 2001. Your
signed, returned proxy card gives the proxyholders named on the proxy card the
discretionary authority to vote your shares in accordance with their best
judgment on any other business that may be presented at the Annual Meeting.
Unless you specify otherwise, your shares will be voted on any other business as
recommended by the Board.
REVOKING PROXIES. If you sign and return a proxy card, you may revoke
it or submit a revised proxy card at any time before the vote to which the proxy
card relates. You may also vote by ballot at the Annual Meeting. If you vote by
ballot, you will thereby cancel any proxy which you previously returned as to
any matter on which you vote by ballot.
NAMING OTHER PROXIES. You may designate as your proxy someone other
than those named on the enclosed proxy card by crossing out those names and
inserting the name(s) of the person(s) you wish to have act as proxy for you. No
more than three (3) persons should be so designated. In such a case, you must
deliver the proxy card to the person(s) you designated and they must be present
and vote at the meeting. Proxy cards on which other proxyholders have been
designated should not be mailed or delivered to us.
WHO MAY VOTE. The Board has set the "Record Date" for the Annual
Meeting as Friday, August 18, 2000. Stockholders as of the close of business on
the Record Date are entitled to notice of and to vote at the Annual Meeting.
Each share of common stock is entitled to one vote. As of the Record Date,
10,460,839 shares of common stock were outstanding. Those shares were held by 70
stockholders of record.
ITEM 1. ELECTION OF DIRECTORS
Our by-laws provide for not less than one director and not more than
nine directors. The Board has established that the number of directors which
currently constitute the entire Board shall be five. Our Certificate of
1
Incorporation, as amended, provides that the Board is divided into three classes
of directors, with the number of directors in each class to be as nearly equal
as possible. The directors are elected for staggered three-year terms. Each
year, the term of office of one class of directors expires, and the term of each
of the three classes expires every three years.
Two Class II directors are to be elected at the Annual Meeting. Unless
otherwise instructed, the proxyholders will vote the proxies received by them,
for the two nominees named below, all of whom are presently our directors. If
either nominee is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for the nominee designated by the
Board to fill the vacancy. It is not expected that any nominee will be unable or
will decline to serve as a director. The term of the office of each person
elected as a director at the Annual Meeting will continue until the 2003 Annual
Meeting of Stockholders, or until his successor is elected and qualified.
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
POSITION WITH
NAME AGE COMPANY SINCE NEW TERM
- --------------------------------------------------------------------------------
Michael Sumichrast, Ph.D. 79 Director 1993 3 years
Paul F. McCurdy 39 Director 2000 3 years
GENERAL INFORMATION REGARDING THE BOARD
Biographical information, including the age, position held with GCAP,
term of office as director, employment during the past five years and certain
other directorships of each nominee and each director not up for election, is
set forth below.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2003 ANNUAL MEETING
The Board has unanimously nominated Michael Sumichrast, Ph.D. and Paul
F. McCurdy for election at the Annual Meeting as Class II Directors. Upon
election, each nominee will serve as a director of GCAP until the 2003 Annual
Meeting of Stockholders or until his earlier removal or resignation.
MICHAEL SUMICHRAST, Ph.D., a director of GCAP since 1993, served as our
Chairman of the Board since our inception in 1993 until March 1997. From 1990 to
1994, Dr. Sumichrast served as Chairman of the Board of Sumichrast Publications,
Inc., a real estate publisher located in Rockville, Maryland. During this time,
he also served as an economic adviser and representative of various
international American companies. From 1963 to 1990, Dr. Sumichrast was the
senior vice president and chief economist of the National Association of Home
Builders, a home builders professional association.
PAUL F. MCCURDY has served as a director of GCAP since July 2000. Mr.
McCurdy is a partner at the law firm of Kelley Drye & Warren LLP in Stamford,
Connecticut. Mr. McCurdy joined Kelley Drye & Warren in 1987 and concentrates
his legal practice in broker-dealer regulation, securities law, business
organizations and arbitration.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE.
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CURRENT BOARD OF DIRECTORS
POSITION WITH
NAME AGE COMPANY CLASS SINCE TERM ENDING
- ------------------------------------------------------------------------------------------------------------------------
Martin A. Sumichrast 33 Chairman of the Board, Chief III 1993 3 years 2001
Executive Officer and
President
Frank Devine 56 Director III 2000 2 years 2001
Dr. Lawrence Chimerine 60 Director I 1999 3 years 2002
Michael Sumichrast, Ph.D. 79 Director II 1993 3 years 2000
Paul F. McCurdy 39 Director II 2000 1 year 2000
FAMILY RELATIONSHIPS. There are no family relationships among any
officers and directors of GCAP, except that Michael Sumichrast, Ph.D., and
Martin Sumichrast are father and son, respectively.
CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING
MARTIN A. SUMICHRAST, a director of GCAP since its inception in 1993,
has served as GCAP's Chairman of the Board, Chief Executive Officer and
President since December 1998 and served as its Vice Chairman from March 1997 to
March 1998. Mr. Sumichrast is a founder of GCAP and formerly served as its
Secretary, Executive Vice President and Chief Financial Officer. Mr. Sumichrast
is also a director of EBI Securities Corporation, a wholly-owned subsidiary of
GCAP, and Chairman of MoneyZone.com, an affiliate of GCAP. Mr. Sumichrast is
also a director of A1 Internet.com Inc.
FRANK DEVINE has served as a director of GCAP since July 2000. Mr.
Devine also serves as a business consultant for various entities. Mr. Devine
founded Bachmann-Devine, Incorporated, a venture capital firm, and co-founded
Shapiro, Devine & Craparo, Inc., a manufacturers' agency servicing the retail
industry, and is a director of both companies. Since December 1994, Mr. Devine
has served as a member of the board of directors of Salton, Inc., a corporation
that markets and sells electrical appliances to the retail trade under various
brand names, and of SAFLINK Corporation, a software security company.
CLASS I DIRECTOR CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING
DR. LAWRENCE CHIMERINE, a director of GCAP since February 1999, is a
Managing Director and Chief Economist at the Economic Strategy Institute, a
position he has held since 1993. Since 1991, he has also served as President of
Radnor International Consulting, Inc., an international consulting firm. Dr.
Chimerine is also a director of Bank United Corp., Outsource International, Inc.
and Sanchez Computer Associates, Inc.
MEETINGS OF THE BOARD. During our fiscal year ended March 31, 2000, the
Board met seven times in person or by telephonic conference meeting or by
written consent. Each director listed above who was then serving attended at
least six of the meetings of the Board.
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COMMITTEES OF THE BOARD. The Board's only standing committee, the Audit
Committee, held one meeting during the fiscal year ended March 31, 2000. Dr.
Sumichrast, Dr. Chimerine and Mr. McCurdy are current members of the Audit
Committee. No GCAP employee may be a member of the Audit Committee.
On May 20, 2000, the Board unanimously approved the adoption of a
written Audit Committee Charter, a copy of which is attached to this proxy
statement as Exhibit A, in accordance with SEC regulations and Nasdaq
Marketplace Rules.
The Audit Committee's responsibilities include, but are not limited to,
the following: (1) setting policies, procedures and other matters relating to
accounting, internal financial controls and financial reporting, including the
engagement of independent auditors, the planning, scope, timing and cost of any
audit and any other services the independent auditors may be asked to perform;
(2) reviewing with the independent auditors their report on the financial
statements following completion of each such audit; (3) setting policies,
procedures and other matters relating to business integrity, ethics, conflicts
of interest, antitrust and insider trading; (4) reviewing financial objectives
and financial condition; (5) reviewing stock and debt issues and credit
facilities; (6) reviewing dividend and stock repurchase policies, foreign
exchange operations, hedging and derivatives operations, and compliance with
covenants under debt issues and credit facilities; and (7) reviewing and
reassessing the adequacy of the Audit Committee Charter on an annual basis and
publishing every three years a report of the Audit Committee in accordance with
SEC regulations.
DIRECTOR COMPENSATION. In April 1999, the Board adopted a policy that
eliminated all cash payments for services on the Board and attendance at Board
meetings. Instead, each of our non-officer directors is awarded 7,500 shares of
restricted stock at the time he or she joins the Board and an annual award of
5,000 options pursuant to our 1996 Stock Option Plan. We granted 7,500 shares of
restricted stock and an option to purchase up to 5,000 shares of our Common
Stock to each of Dr. Chimerine, Dr. Sumichrast and Mr. Schifferli at the time
the policy was adopted in April 1999.
During the fiscal year ended March 31, 2000, no fees were paid to
directors. Each of our current directors waived any fees due for the fiscal year
ended March 31, 2000.
EXECUTIVE OFFICER COMPENSATION
The following Summary Compensation Table sets forth the compensation
for GCAP's named executive officers for the fiscal years ended March 31, 2000,
1999 and 1998. No other executive officer had total annual salary and bonus
during any such period equal to or greater than $100,000.
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SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Other Annual Restricted Underlying LTIP All Other
Name and Principal Year Salary Bonus Compensation Stock Awards($) Options/SARs(#) Payouts Compensation
- ------------------- ---- ------ ----- ------------ -------------- --------------- ------- ------------
Position
- --------
Martin A. Sumichrast(1) 2000 $ 240,000 $120,000 -- -- -- -- --
Chairman, President 1999 $ 175,000 $ -- -- -- 75,000 -- --
and Chief Executive 1998 $ 120,000 $ 20,000 -- -- -- -- --
Officer
Kevin D. McNeil(2) 2000 $ 120,000 $ 5,000 -- -- -- -- --
Chief Financial 1999 $ 75,000 $ 25,000 -- -- 50,000 -- --
Officer, Executive 1998 $ 57,500 $ 17,250 -- -- -- -- --
Vice President of
Finance, Treasurer, and
Secretary
Ralph O. Olson (3) 2000 $ 74,998 -- $ 225,000 -- -- -- --
Vice President, EBI
Securities Corporation
- ------------------
(1) Mr. Sumichrast became Chairman of the Board, President and Chief
Executive Officer of GCAP in December 1998, and was Vice Chairman of
the Board since March 1997.
(2) Kevin D. McNeil became Executive Vice President and Secretary of GCAP
in December 1998. He continues to serve as Chief Financial Officer and
Treasurer.
(3) Mr. Olson has been a non-officer employee since January 10, 2000. Mr.
Olson is a Vice President of EBI Securities Corporation. On January 26,
2000, Mr. Olson received 44,500 shares of our Common Stock as
compensation for investment banking services provided to GCAP.
EMPLOYMENT AGREEMENTS
Effective as of January 1, 1999, we entered into an employment
agreement with Martin A. Sumichrast which will expire on December 31, 2004, and
will renew for a period of five years following the expiration date, unless
notice to the contrary is given by either party. We also entered into an
employment agreement, effective as of January 1, 1999, with Mr. McNeil, which
will expire on December 31, 2002, unless notice to the contrary is given by
either party. The annual salaries for Mr. Sumichrast and Mr. McNeil were
initially fixed at $240,000 and $120,000, respectively, with any increases in
salary during the term of their respective agreements to be determined by our
Board. Messrs. Sumichrast and McNeil are each eligible to receive a quarterly
performance bonus of up to 1 percent and 1/4 of 1 percent, respectively, of
total revenue of GCAP in excess of $6,000,000 per quarter. As an inducement for
entering into each of their respective employment agreements, we agreed to sell
200,000 shares and 50,000 shares at $3.50 and $3.00 per share of our Common
Stock, respectively, to Mr. Sumichrast and Mr. McNeil, in exchange for each of
Messrs. Sumichrast and McNeil issuing to GCAP a promissory note in the amount of
$700,000 and $150,000, respectively, each bearing interest at an annual rate of
7 percent, and expiring on January 1, 2004 and January 1, 2002, respectively.
Each employment agreement provides, among other things, for participation in an
equitable manner in any profit-sharing or retirement plan for employees or
executives and for participation in employee benefits applicable to our
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employees and executives, as well as for the use of an automobile and other
fringe benefits commensurate with their duties and responsibilities and for
benefits in the event of disability. Pursuant to each such employment agreement,
employment may be terminated by us with cause or by the executive with or
without good reason. Termination by us without cause or by the executive for
good reason would subject us to liability for liquidated damages in an amount
equal to the current salary of the terminated executive as of the date of
termination and a pro rata portion of his prior year's bonus for the remaining
term of the agreement, payable in equal monthly installments, without any
set-off for compensation received from any new employment. In addition, the
terminated executive would be entitled to continue to participate in and accrue
benefits under all employee benefit plans and to receive supplemental retirement
benefits to replace benefits under any qualified plan for the remaining term of
the agreement to the extent permitted by law. Under the employment agreements,
we are obligated to purchase insurance policies on the lives of Messrs.
Sumichrast and McNeil. We will pay the premiums on these policies and would,
upon the death of the employee, receive an amount equal to the premiums paid
under the policy and the remaining proceeds would be paid to the employee's
designated beneficiary. Additionally, we have a $l million key-person life
insurance policy on Mr. Sumichrast and a $500,000 key-person life insurance
policy on Mr. McNeil, in each case with GCAP as the beneficiary.
OPTION/SAR GRANTS
During the fiscal year ended March 31, 2000, there were no grants to
any of the named executive officers of directors of options, stock appreciation
rights or similar instruments.
OPTION/SAR EXERCISES
The following table provides information on stock options owned by
named executive officers during the fiscal year ended March 31, 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Value of Unexercised
Number of Securities In-The-Money
Underlying Unexercised Options/SARs at
Options/SARs at FY-End FY-End($) Exercisable/
Shares Acquired Value (#) Exercisable/ Unexercisable
on Exercise (#) Realized Unexercisable (e)
Name (b) ($) (d)
(a) (c)
- ------------------------------------------------------------------------------------------------------------------
Martin A. Sumichrast - - 0/75,000 -
Kevin D. McNeil - - 0/50,000 -
Ralph O. Olson - - - -
1996 STOCK OPTION PLAN
At our annual meeting of stockholders held on December 10, 1996, the
stockholders approved our 1996 Stock Option Plan, pursuant to which our
officers, employees and directors and certain of our affiliates are eligible to
be granted awards of stock options, stock appreciation rights and/or restricted
stock. Pursuant to its terms, the plan shall be administered by a stock award
committee, or, in the absence of such a committee, by the entire Board having
the plenary authority to grant awards in any combination permitted under the
plan, and to determine the terms and conditions of the awards.
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The total number of shares of Common Stock reserved and available to be
awarded under the plan was initially 400,000. The plan was since amended in
December 1997, April 1999 and November 1999 increasing the total number of
shares of Common Stock available under the plan to 600,000, 850,000 and
1,200,000, respectively. Currently, the total number of shares of Common Stock
available under the plan is 1,200,000.
During the fiscal year ended March 31, 2000, options to purchase
295,000 shares of our Common Stock were granted under the 1996 Stock Option
Plan, as amended.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information about shares of our Common
Stock owned as of the Record Date by
o each person known by us to own beneficially more than five percent of GCAP's
Common Stock, o each of GCAP's officers and directors and the nominees named on
pages 2-3 of this proxy statement, and o all of GCAP's officers and directors as
a group.
Except as otherwise noted, the persons named in the table below do not
own any other shares of our capital stock and have sole voting and investment
power with respect to all shares beneficially owned by them. As of the Record
Date, 10,460,839 shares of voting stock were outstanding, consisting solely of
shares of our Common Stock.
Percentage of
Number of Outstanding
Name and Address (1) Position Held Shares Owned Shares
-------------------------------- ------------------------------------- ---------------------- ----------------
Martin A. Sumichrast (2) Chairman of the Board, President,
Chief Executive Officer and Director 1,205,000 11.28%
Kevin D. McNeil (3) Executive Vice President,
Secretary, Treasurer and Chief
Financial Officer 160,078 1.51%
Ralph O. Olson Vice President, EBI Securities 69,000 *
Corporation
Dr. Lawrence Chimerine (4) Director 12,500 *
Michael Sumichrast, Ph.D.(4) Director 12,500 *
Paul F. McCurdy Director 0 *
Frank Devine Director 0 *
Belle Holdings, Inc. Stockholder 740,000 6.81%
Reid Breitman (5) Stockholder 1,967,500 18.81%
Corona Corp. Stockholder 1,960,000 18.74%
General Partners Beteiligungs
AG Stockholder 1,128,500 10.79%
All Officers and Directors as 1,654,078 15.04%
a group (7 persons)
- --------------------
* Less than 1 percent
(1) Except as otherwise noted, c/o Global Capital Partners Inc.,
6000 Fairview Road, Suite 1410, Charlotte, North Carolina
28210.
(2) Includes (A) 740,000 shares of Common Stock owned by Belle
Holdings, Inc., a Nevada corporation of which Mr. Sumichrast
is sole officer, director and stockholder, (B) 240,000 shares
of Common Stock owned by Mr. Sumichrast directly, (C) 75,000
shares of Common Stock issuable upon the exercise of options
to purchase Common Stock and (D) 150,000 shares of Common
Stock issuable upon the exercise of Class C Warrants to
purchase Common Stock.
(3) Includes (A) 50,000 shares of Common Stock issuable upon the
exercise of options to purchase Common Stock and (B) 57,583
shares issuable upon exercise of Class C Warrants to purchase
Common Stock.
(4) Includes 7,500 shares of restricted Common Stock and 5,000
options to acquire shares of Common Stock.
(5) Includes 1,960,000 shares indirectly owned through Corona
Corp., a corporation of which Mr. Breitman is sole
stockholder, director and officer.
7
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires GCAP's officers and directors, and persons who own more than 10% of a
registered class of GCAP's equity securities, to file certain reports regarding
ownership of, and transactions in, GCAP's securities with the Securities and
Exchange Commission. Such officers, directors and 10% stockholders are also
required by the rules of the Securities and Exchange Commission to furnish GCAP
with copies of all Section 16(a) forms that they file.
Based solely on a review of the copies of Forms 3, 4 and 5 and
amendments thereto furnished by such persons to us, or written representations
that they have filed on a timely basis all reports required by Section 16(a) and
the rules promulgated thereunder, and without researching or making any inquiry
regarding delinquent Section 16(a) filings, we note that four reports were filed
subsequent to filing due dates in respect of twenty-five transactions effected
by Martin A. Sumichrast, four reports were filed subsequent to filing due dates
in respect of twenty-two transactions effected by Belle Holdings, Inc., four
reports were filed subsequent to filing due dates in respect of sixteen
transactions effected by Corona Corp., four reports were filed subsequent to
filing due dates in respect of sixteen transactions effected by Reid Breitman,
two reports were filed subsequent to filing due dates in respect of two
transactions effected by Kevin D. McNeil, one report was filed subsequent to the
filing due date in respect of two transactions effected by Michael Sumichrast,
Ph.D., two reports were filed subsequent to filing due dates in respect of two
transactions effected by Dr. Chimerine and two reports were filed subsequent to
filing due dates in respect of eight transactions effected by General Partners
Beteiligungs AG. We also note that as of the date hereof and to our knowledge,
no report has been filed in respect of certain dispositions by each of Michael
Sumichrast, Ph.D. and General Partners Beteiligungs AG.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Executive Officer Compensation--Employment Agreements" on page 5
of this proxy statement, and see "Executive Officer Compensation-Option/SAR
Grants" on page 6 for information concerning stock option grants to related
persons.
Prior to the sale of our European operations, we leased office space
from General Partners Immobielenz (formerly Residenz Realbesitz AG) for our
Vienna operations pursuant to a month-to-month lease. Under the terms of the
lease, we incurred occupancy costs of approximately 1,200,000 Austrian
Schillings (approximately $95,000 USD) in the fiscal year ended March 31, 2000.
This property was sold in early 1999 and has thereafter not been owned by a
related party. The terms of this lease were negotiated such that we were subject
to occupancy expenses no greater than the current market rates. General Partners
Immobielenz is a subsidiary of General Partners Beteiligungs, AG, an Austrian
holding company and the beneficial owner of 1,462,920 shares of our Common
Stock.
During our two most recent fiscal years, we have conducted various
business transactions with General Partners Beteiligungs, AG. As of the December
31, 1998, GCAP was owed $3,787,339 relating to these transactions, which
receivable was transferred in connection with the sale of our European
operations to the purchaser thereof.
8
At December 31, 1998, we had a receivable related to securities
transactions from Z.E. Beteiligungs AG, a subsidiary of General Partners
Beteiligungs AG, in the amount of 7,745,600 Austrian Schillings (approximately
$661,000 USD), which receivable was transferred in connection with the sale of
our European operations to the purchaser thereof.
As of December 31, 1998, Z.E. Beteiligungs AG, an approximately 25
percent-owned subsidiary of General Partners Beteiligungs AG, owned
approximately 25 percent of UCP Beteiligungs AG, an Austrian holding company.
UCP Beteiligungs AG, in turn, owns 27.7 percent of a Russian chemical company,
UCP AOOT. Shares of UCP AOOT are listed over-the-counter on the Vienna Stock
Exchange. WMP Bank AG is a market maker in the shares of UCP AOOT on the Vienna
Stock Exchange. As of the close of the sale of our European operations, our
relationship with Z.E. Beteiligungs AG ceased to exist.
On January 1, 1999, Martin A. Sumichrast and Kevin D. McNeil purchased
70,000 and 32,583 Class C Warrants, respectively, from Eastbrokers North
America, Inc., a subsidiary of GCAP, in each case for an amount equal to $0.25
per warrant. The warrants entitle Mr. Sumichrast and Mr. McNeil to each purchase
one share of GCAP Common Stock at a price of $7.00 per share. Payment for the
warrants was in the form of unsecured promissory notes, with one-year terms and
interest accruing at 8 percent. We have extended the terms of the notes for an
additional year.
Effective January 1999, Jay R. Schifferli, a former partner at the law
firm of Kelley Drye & Warren LLP, became a director of GCAP, and effective July
2000, Paul F. McCurdy, also a partner at Kelley Drye & Warren LLP, became a
director of GCAP to fill the vacancy created upon Mr. Schifferli's resignation.
GCAP paid legal fees in the amount of $268,562.71 to Kelley Drye & Warren LLP
during the fiscal year ended March 31, 2000.
In February 1999, Martin A. Sumichrast paid in full a note due in
aggregate principal amount of $300,000 payable to GCAP in connection with his
acquisition in September 1997 of 50,000 shares of GCAP Common Stock.
On April 19, 1999, Mr. Sumichrast and Mr. McNeil purchased 80,000 and
25,000 Class C Warrants, respectively, from Eastbrokers North America, Inc., in
each case for an amount equal to $0.25 per warrant. Each warrant entitles Mr.
Sumichrast and Mr. McNeil to each purchase one share of GCAP Common Stock at a
price of $7.00 per share. Payment for the warrants was in the form of unsecured
promissory notes, with one-year terms and interest accruing at 8 percent. We
have extended the terms of such notes for an additional year.
In order to partially fund our acquisition of Global Capital Markets,
LLC (formerly The JB Sutton Group, LLC) on November 8, 1999, Belle Holdings,
Inc., a Nevada corporation of which Mr. Sumichrast is the sole director, officer
and stockholder, entered into an agreement with GCAP pursuant to which it
purchased 1,000,000 shares of our 10% Convertible Preferred Stock, Series A for
$2.00 per share and a warrant to purchase up to 700,000 shares of GCAP Common
Stock. In connection with these purchases, Mr. Sumichrast received an option to
purchase up to an additional 1,000,000 shares of preferred stock. The preferred
stock was convertible from time to time into shares of GCAP Common Stock on a
1:1 basis. On the same date, Belle Holdings, Inc. entered into an agreement with
Corona Corp., a Nevada corporation, pursuant to which Belle Holdings, Inc. sold
to Corona Corp. a $1 million note convertible at any time and from time to time
into shares of preferred stock owned by Belle Holdings, Inc. on a .35:1 basis
and a warrant to purchase up to 490,000 shares of our Common Stock. In
9
connection with this sale, Belle Holdings, Inc. gave Corona Corp. the option to
purchase additional notes on the same terms as the initial $1 million note up to
an aggregate principal amount of $1 million.
On January 10, 2000, Belle Holdings, Inc. partially exercised its
option and purchased 100,000 additional shares of preferred stock and,
simultaneously, Corona Corp. partially exercised its option and purchased an
additional note in the principal amount of $200,000.
As of the date of the purchase agreement between Belle Holdings, Inc.
and GCAP, each share of preferred stock subject to such agreement was entitled
to one (1) vote on all matters submitted to our stockholders for their approval.
As a further inducement to Belle Holdings, Inc. to invest in GCAP, we agreed to
seek stockholder approval to increase the voting power of the preferred stock
from one vote per share to four votes per share in order that the preferred
stock holders would obtain control of approximately 39% of the voting power of
our capital stock entitled to vote on all matters submitted to stockholders for
approval, rather than the approximately 14% of the voting power they would have
had without such approval. These terms were negotiated by Corona Corp., whose
purchase price of the convertible notes was used by Belle Holdings, Inc. to
purchase the preferred stock and warrants under the agreement, as a condition
precedent to the investments by Corona Corp., having contemplated that Mr.
Sumichrast would participate in Belle Holdings, Inc. in order to more fully
align the interests of our management with those of our stockholders. Subsequent
to stockholder approval of the increase in voting power of the preferred stock,
NASDAQ informed us that their listing guidelines prohibit designating any class
of security with a higher voting right than any other class. Additionally,
NASDAQ informed us that pursuant to certain other listing requirements, the
initial $2.00 price per share of our preferred stock had to be increased to
$2.0625 per share, the closing price on November 8, 1999. Accordingly, on
January 31, 2000, we modified our agreement with the holders of, and negotiated
the acceleration of the conversion of all shares of, our preferred stock and the
exercise of all warrants held by Belle Holdings. Inc. In consideration for these
changes, on January 31, 2000 we sold to Belle Holdings, Inc., in exchange for a
$375,000 note due July 1, 2001 and bearing interest at a rate of 8% per annum, a
Class D Warrant to purchase up to 1,500,000 shares of GCAP Common Stock at a
price of $5.50 per share, exercisable as of July 1, 2001 and expiring December
31, 2005. Holders of these warrants have certain anti-dilution protections and
are entitled to piggyback registration rights after July 1, 2001. On the same
date, Belle Holdings, Inc. sold to each of Corona Corp. and a third-party Class
D Warrants to purchase up to 900,000 and 200,000 shares of GCAP Common Stock,
respectively. In further consideration of these changes, on March 31, 2000,
Belle Holdings, Inc. transferred 70,000 shares of Common Stock to Corona Corp.
On March 31, 2000, Corona Corp. exercised the remaining portion of its
option and purchased an additional note in principal amount of $1.8 million. On
this date, Corona Corp. also converted all notes it had purchased from Belle
Holdings, Inc. in aggregate principal amount of $4 million, thereby receiving
1,400,000 shares of preferred stock, converted the 1,400,000 shares of preferred
stock, receiving thereby 1,400,000 shares of Common Stock, and exercised its
warrant, receiving thereby 490,000 shares of Common Stock. Simultaneously, Belle
Holdings, Inc. exercised the remaining portion of its option and purchased from
GCAP 900,000 shares of preferred stock. On the same date, Belle Holdings, Inc.
converted 600,000 of these shares, receiving thereby 600,000 shares of Common
Stock, transferred the remaining 1,400,000 shares of the preferred stock to
Corona Corp. upon conversion of the $3 million in notes and exercised its
warrant, thereby receiving an additional 210,000 shares of GCAP Common Stock.
10
On January 26, 2000, Ralph O. Olson, a non-employee officer of GCAP and
a Vice President of its wholly-owned subsidiary EBI Securities Corporation,
received 44,500 shares of Common Stock granted under the 1996 Stock Option Plan,
as amended, as compensation for investment banking services provided to GCAP.
ITEM 2. APPROVAL OF AMENDMENT TO THE 1996 STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES AUTHORIZED UNDER THE PLAN.
On December 10, 1996, the 1996 Stock Option Plan (as amended, the
"Plan") was approved by our stockholders. The purpose of the Plan is to advance
the interests of GCAP by enabling officers, employees and directors of GCAP and
its affiliates, as such term is defined by the Plan, to participate in GCAP's
future and to enable us to attract and retain such persons by offering them
proprietary interests in GCAP. The Board has approved an amendment to the Plan,
subject to stockholder approval, in order to increase the number of shares of
Common Stock authorized for issuance under the Plan by 300,000 shares.
The number of shares currently authorized for issuance under the Plan
is 1,200,000. As of August 18, 2000, Common Stock and options relating to
813,652 shares have been granted under the Plan, of which a total of 197,250
shares of Common Stock have been sold or options to acquire shares of Common
Stock have fully vested (out of which 107,750 options have been exercised).
Accordingly, in order to maximize the incentive effect of enabling officers,
employees and directors of GCAP to participate in the Plan, the Board has deemed
it prudent to increase the number of shares available for grant under the Plan
so as to allow future grants of stock options, stock appreciation rights or
restricted stock under the Plan.
ADMINISTRATION
The Plan is currently administered by the entire Board in lieu of a
Stock Award Committee; however, pursuant to the Plan, the Board may appoint a
Stock Award Committee (the "Committee"), which would be composed of not less
than two directors of GCAP all of whom must be Non-Employee Directors, as that
term is defined in the Plan.
The Committee, or the Board acting in place of the Committee, has the
authority to adopt, alter and repeal administrative rules, guidelines and
practices governing the Plan as it, from time to time, deems advisable to
supervise the administration of the Plan. However, no amendment to the Plan
shall be made without the approval of our stockholders to the extent such
approval is required by law or agreement, except that the GCAP Board shall have
the authority to amend the Plan to take into account changes in law and tax and
accounting rules, as well as other developments, and to grant awards which
qualify for beneficial treatment under such rules without shareholder approval.
The Committee, or the full Board acting in place of the Committee, may act only
by a majority of its members then in office.
ELIGIBILITY
GCAP officers, employees, directors and our affiliates who are
responsible for or contribute to the management growth and profitability of
management, the business of GCAP and its affiliates, are eligible to be granted
awards under the Plan. We estimate the approximate number of GCAP officers and
directors, employees and affiliates eligible to participate in the Plan to be
six, two hundred and fifty, and five, respectively.
11
TYPES OF AWARDS
The Committee, or the Board acting in place of the Committee, has the
authority to grant awards to our officers, employees, directors and affiliates.
Awards granted to participants of the Plan include Stock Options, Stock
Appreciation Rights, Restricted Stock, or any combination of the foregoing, as
these terms are defined and regulated under the Plan. The Committee, or the
Board acting in place of the Committee, has the authority to grant either
Incentive Stock Options or Non-Qualified Stock Options under the Plan; however,
the former may be granted only to employees of GCAP and its subsidiaries. The
awards are subject to such terms and conditions as determined by the Committee
and may differ from Award to Award. The prices, expiration dates and other
material conditions upon which the Stock Options and Stock Appreciation Rights
may be exercised and the consideration received or to be received by us or our
affiliates for the granting or extension of the awards are to be determined by
the Committee, or the Board acting in place of the Committee.
NUMBER OF SHARES
The total number of shares of Common Stock reserved and available for
distribution relating to options granted under the Plan, as amended by the Board
subject to stockholder approval, is 1,500,000 shares of our Common Stock,
subject to the approval of stockholders being requested in this proxy statement.
As of August 18, 2000, Common Stock and options relating to 813,562 shares have
been granted under the Plan.
CHANGE OF CONTROL
The Plan provides that, subject to such additional conditions and
restrictions as the Committee, or the Board acting in place of the Committee,
may determine at the time of the grant of an Award, options granted under the
Plan shall become immediately exercisable and restrictions on restricted stock
granted under the Plan shall lapse in the event of a change of control. Under
the Plan, a change of control will occur in the event that a person acquires 20%
or more of GCAP's voting securities, GCAP's stockholders have approved a merger
or a sale of all or substantially all of GCAP's assets, or there occurs a
significant change in the composition of the Board.
NEW PLAN BENEFITS
Since any award granted under the Plan is made by the Board or the
Committee in its sole discretion at the time of the grant, awards to be received
by individual participants are not determinable. In addition, the awards under
the Plan are dependent upon a number of factors, including the fair market value
of GCAP's Common Stock on future dates and the exercise decisions made by the
participants in the Plan. Consequently, it is not possible to determine the
benefits that might be received by participants receiving discretionary grants
under the Plan.
SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1996 STOCK
OPTION PLAN
This summary of certain federal income tax consequences of the Plan is
provided as general information, but does not purport to be a complete and
detailed description of all possible tax consequences to the recipient of an
option and GCAP. It describes the federal tax consequences in effect as of the
date set forth in the notice. Each holder of an option is advised to consult his
12
tax advisor because tax consequences may vary depending upon the individual
circumstances of the holder.
Incentive Stock Options ("ISO"). ISOs are designed to qualify as
incentive stock options under Section 422 of the Internal Revenue code of 1986,
as amended (the "Code"). In the case of ISOs, no taxable gain will be realized
by a recipient upon grant or exercise of the option, and GCAP will not be
entitled to a tax deduction at the time any such option is granted or exercised.
However, the excess of the fair market value of any stock received over the
option price will constitute an adjustment in computing alternative minimum
taxable income at the time of the transfer of stock pursuant to the exercise of
the option, or if later, at the earlier of the time that the stock is
transferable or is not subject to a substantial risk of forfeiture. Alternative
minimum taxable income is the base for calculating an individual taxpayer's
liability for the alternative minimum tax, a tax which is payable if it exceeds
the amount of the individual's tax liability calculated under the regular
method. Additionally, the basis of the stock for alternative minimum tax
purposes would be increased by this adjustment.
If a recipient of an ISO does not dispose of stock acquired by him upon
the exercise of the option within one year after the date of transfer of such
stock or within two years after the date of grant of such an option, any gain
realized by him on a subsequent sale of such stock will be capital gain, which
will be long term capital gain if the stock was held for the appropriate holding
period (currently more than one year). In determining the amount of taxable gain
or loss on a subsequent sale or other disposition of stock obtained by exercise
of an ISO, the tax basis of such stock (for regular tax purposes) will be an
amount equal to the option price paid therefor.
On the other hand, if the recipient sells or otherwise disposes of the
stock obtained by exercise of an ISO before the expiration of the relevant
holding periods discussed above (other than certain permitted dispositions), he
will at that time recognize ordinary income to the extent that the fair market
value of the stock on the date that the option was exercised or the amount
realized on sale or disposition, whichever is less, exceeds the option price. If
the amount realized on sale or disposition is greater than the fair market value
of the stock on the date the option was exercised, such excess will be treated
as capital gain, which will be a long-term capital gain if the stock was held
for the appropriate holding period (currently more than one year).
In general, in any year in which a recipient recognizes ordinary income
because of the disposition of his shares within one year from the date of
exercise or two years from the date of grant of an ISO, GCAP will receive a
corresponding deduction for federal income tax purposes. No deduction will be
allowed to GCAP if the stock acquired upon exercise of an ISO is held for more
than one year after the date of transfer of such stock and more than two years
from the date of grant of the ISO.
13
Non-Qualified Stock Options ("Non-Qualified Options"). Non-Qualified
Stock Options generally are options to which Section 421 of the Code does not
apply, sometimes referred to as non-statutory options. The treatment of
Non-Qualified Options for federal income tax purposes depends on whether the
option has a readily ascertainable fair market value at the time it is granted.
If a Non-Qualified Option has a readily ascertainable fair market value at the
time of grant, the excess of the fair market value of Non-Qualified Options
received by a recipient over the amount, if any, paid for the options must be
included in the recipient's gross income at the time the option is granted, or
if later, at the earlier of the time that the option is transferable or is not
subject to a substantial risk of forfeiture. If an option with a readily
ascertainable fair market value is not taxable at the time the option is granted
because the option is nontransferable and subject to a substantial risk of
forfeiture, the recipient may nevertheless elect to include such amount in gross
income in the year of grant of the option. Because the Non-Qualified Options are
not actively traded on an established market and because it is likely that the
Non-Qualified Options will be nontransferable by the recipient or will not be
immediately exercisable, it is not expected that the Non-Qualified Options will
have a readily ascertainable fair market value. If a Non-Qualified Option does
not have a readily ascertainable fair market value at the time of grant, there
is no taxable event at grant; rather, the excess of (i) the value of the stock
on the date it is acquired pursuant to exercise of the option over (ii) the
exercise price plus the amount, if any, paid for the option must be included in
the recipient's gross income at the time of the receipt of the stock pursuant to
the exercise of the option, or, if later, at the earlier of the time that the
stock is transferable or is not subject to a substantial risk of forfeiture. If
stock received pursuant to the exercise of a Non-Qualified Option is not taxable
at receipt because the stock is nontransferable and subject to a substantial
risk of forfeiture, the recipient may elect to include such amount in gross
income in the year the stock is received pursuant to exercise of the option.
The receipt of taxable income upon exercise of a Non-Qualified Option
may be ameliorated if the underlying stock is registered because the recipient
may sell a portion of his stock to pay the income tax liability; such is not the
case with the receipt of income upon grant of a Non-Qualified Option. The grant
or exercise of a Non-Qualified Option will not result in any adjustment for
alternative minimum tax purposes. In general, with respect to Non-Qualified
Options, a corresponding deduction is allowed to GCAP for the amount and at the
time that the recipient recognizes income, and such income is subject to
withholding and employment taxes, if applicable.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
APPROVAL OF THE AMENDMENT TO THE 1996 STOCK OPTION PLAN.
ITEM 3. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Spicer, Jeffries & Co. has been recommended by the Audit Committee and
selected by the Board to audit our books and accounts for the fiscal year ended
March 31, 2001.
Representatives of Spicer, Jeffries & Co. are expected to be present at
the meeting, will be given the opportunity to make a statement if they desire to
do so and will respond to appropriate questions from stockholders.
Spicer, Jeffries & Co. has advised us that neither it nor any of its
members has any direct financial interest in GCAP as a promoter, underwriter,
voting trustee, director, officer or employee.
14
Effective February 17, 1999, we changed our accountants from Deloitte &
Touche LLP to Spicer, Jeffries & Co. This change was reported in our Current
Reports on Form 8-K, dated February 22, 1999 and March 9, 1999. The decision to
change to Spicer, Jeffries & Co. was approved by our Board. The report of
Deloitte & Touche LLP on our financial statements for the fiscal year ended
March 31, 1998 contained no adverse opinion or disclaimer of opinion and was not
modified as to uncertainty, audit scope or accounting principles. We have had no
disagreements with Deloitte & Touche 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 Deloitte & Touche LLP, would have
caused it to make reference thereto in their report on our financial statements.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
TO RATIFY SPICER, JEFFRIES & CO. AS INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING 2001.
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING OF STOCKHOLDERS FOR 2001
Proposals which stockholders wish to have considered for inclusion in
the proxy statement for the 2001 Annual Meeting of Stockholders must be sent by
certified mail, return receipt requested and received at GCAP's principal
executive office, Global Capital Partners Inc., 6000 Fairview Road, Suite 1410,
Charlotte, North Carolina 28210, on or before April 27, 2001. All proposals must
conform to the rules and regulations of the SEC.
OTHER INFORMATION
The presence, in person or by proxy, of stockholders holding a majority
of the outstanding shares of Common Stock entitled to vote at the meeting is
necessary to constitute a quorum for the transaction of business.
REQUIRED VOTE. Each nominee for election as a director receiving a
plurality of the votes cast shall be elected as a director. In case any nominee
should become unavailable for election for any reason not presently known or
contemplated, the persons named on the proxy shall have the discretionary
authority to vote pursuant to the proxy for a substitute. The affirmative vote
of the holders of a majority of the outstanding shares of Common Stock at the
meeting in person or by proxy is required for the approval of the amendment to
the Plan. The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock at the meeting in person or by proxy is required for
ratification of the appointment of Spicer, Jeffries & Co.
Only those votes cast for or against a proposal are used in determining
the results of a vote.
Abstentions and broker nonvotes are each included for purposes of
determining the presence or absence of a sufficient number of shares to
constitute a quorum. With respect to the approval of any particular proposal,
abstentions are considered present at the meeting, but since they are not
affirmative votes for the proposal they will have the same effect as votes
against the proposal. Broker nonvotes, on the other hand, are not considered
present at the meeting for the particular proposal for which the broker withheld
authority to vote.
15
SOLICITATION OF PROXIES GENERALLY. In addition to the solicitation of
proxies by mail, officers or other employees without extra remuneration may
solicit proxies by telephone or personal contact. We will request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
beneficial owners of shares of Common Stock and will pay such persons for
forwarding such material.
COSTS. All costs for the solicitation of proxies by the Board,
anticipated to be approximately $10,000, will be borne by us.
LIST OF STOCKHOLDERS ENTITLED TO VOTE. A list of stockholders entitled
to vote at the meeting will be available for examination by stockholders during
ordinary business hours 10 days prior to the meeting at GCAP's principal
executive office at 6000 Fairview Road, Suite 1410, Charlotte, North Carolina
28210.
16
GLOBAL CAPITAL PARTNERS INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION OTHERWISE,
THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3.
The undersigned hereby appoints each of Martin A. Sumichrast and Kevin
D. McNeil as Proxies, with the full power of substitution, and hereby authorizes
them to represent and vote, as designated on the reverse hereof, all shares of
Common Stock of Global Capital Partners Inc. held of record by the undersigned
as of August 18, 2000, at the Annual Meeting of Stockholders to be held on
September 21, 2000, or any adjournment thereof, upon all such matters as may
properly come before the Meeting.
|X| Please mark your votes as in If you plan to attend the |_|
this example. Annual Meeting, place an X
in this box.
1. ELECTION OF DIRECTORS NOMINEES:
FOR all nominees listed at right |_| MICHAEL SUMICHRAST, PH.D.
PAUL F. MCCURDY
WITHHOLD AUTHORITY to vote for
the nominees listed at right* |_|
(*INSTRUCTION: To withhold authority to vote for any individual
nominee, write the name of such nominee in the space provided below. To
vote for or withhold authority for all nominees, check the appropriate
box above. )
- --------------------------------------------------------------------------------
(THE PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE.)
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE 1996 STOCK OPTION PLAN to
increase the number of shares authorized under the Plan from 1,200,000
to 1,500,000.
FOR AGAINST ABSTAIN
|_| |_| |_|
3. RATIFICATION OF APPOINTMENT OF SPICER, JEFFRIES & CO. to serve as
independent public accountants for the fiscal year ending March 31,
2001.
FOR AGAINST ABSTAIN
|_| |_| |_|
4. In their discretion upon such other business as may properly come
before the Annual Meeting or any postponement or adjournment thereof.
SIGNATURE: DATE:
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SIGNATURE: DATE:
------------------------------------------------- ------------
(SIGNATURE IF HELD JOINTLY)
NOTE: Please sign exactly as name or names appear on stock
certificate as indicated hereon. Joint owners should each
sign. When signing as attorney, executor, administrator or
guardian, please give full title as such.
- --------------------------------------------------------------------------------
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF
MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
EXHIBIT A
---------
CHARTER
GLOBAL CAPITAL PARTNERS INC.
AUDIT COMMITTEE
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:
1. Support the independence of the independent auditors and their
objective review and audit of the Corporation's annual financial
statements.
2. Support independence and funding of the internal auditors to help to
assure that they have sufficient independence and resources to conduct
internal audits as appropriate or necessary, free of interference or
pressure.
3. Other functions, within the scope of the foregoing, which the Audit
Committee deems necessary or appropriate to undertake from time to
time.
4. The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct
access to the independent auditors as well as anyone in the
organization. The Audit Committee has the ability to retain, at the
Corporation'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
1. Audit Committee members shall meet the requirements of the National
Association of Securities Dealers, Inc. The Audit Committee shall be
comprised of three or more directors as determined by the Board, each
of whom shall be independent nonexecutive directors, free from any
relationship that would interfere with the exercise of his or her
independent judgment. All members of the Audit 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 Audit Committee shall have past employment experience in the
finance or accounting field.
2. Audit Committee members shall be appointed by the Board on
recommendation of the Nominating Committee. If a Audit Committee Chair
is not designated or present, the members of the Audit Committee may
designate a Chair by majority vote of the Audit Committee membership.
1
3. The Audit Committee shall meet at least four 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 Audit
Committee should meet privately in executive session at least annually
with management, the director of the internal auditing department, the
independent auditors, and as a Audit Committee to discuss any matters
that the Audit Committee or each of these groups believe should be
discussed. In addition, the Audit Committee, or at least its Chair,
should communicate with management and the independent auditors
quarterly to review the Corporation's financial statements and
significant findings based upon the auditors' limited review
procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
1. Review and reassess the adequacy of the 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 periodically the Corporation's principal policies for
accounting, internal control and financial reporting. Review with
management and the independent auditors any significant changes in the
Corporation's accounting policies. Review the effect on the
Corporation's accounting policies of important pronouncements of the
accounting profession and other regulatory bodies.
3. On an annual basis, the Audit Committee should review and discuss with
the independent auditors all significant relationships they have with
the Corporation that could impair the auditors' independence.
4. Review annually management's recommended selection to be the
independent auditors, including management's evaluation of their
independence, and recommend to the Board their appointment or discharge
5. Review annually with the independent auditors the plan, scope and
timing of their audit. Review with the independent auditors their audit
fees and approve all fees and other significant compensation to be paid
to the independent auditors.
6. After completion of the audit of the Corporation's annual financial
statements, review with management and the independent auditors the
audit report, the management letter relating to the audit report, any
significant questions (resolved or unresolved) between management and
the independent auditors that arose during the audit or in connection
with the preparation of the Corporation's annual financial statements,
and the cooperation afforded or limitations, if any, imposed by
management on the conduct of the audit.
7. Review with management and the independent auditors, before
publication, the Corporation's annual financial statements (including
footnotes and any special disclosure questions) to be included in the
annual report to stockholders and the Annual Report on Form 10-K to be
filed with the Securities and Exchange Commission.
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8. Review with financial management and the independent auditors the
company's quarterly financial statements prior to filing or
distribution. Discuss any significant changes to the Corporation's
accounting principles and any items required to be communicated to the
independent auditors in accordance with SAS 61. The Chair of the Audit
Committee may represent the entire Audit Committee for purposes of this
review.
9. Consider the independent auditors' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied
in its financial reporting.
10. Review annually or more frequently as necessary or appropriate
management's plans to engage the independent auditors to perform
management advisory services.
11. Review periodically with management and the internal auditors the
adequacy of the Corporation's internal accounting control system, the
scope and results of the internal audit program, and the cooperation
afforded or limitations, if any, imposed by management on the conduct
of the internal audit program.
12. Review the budget, plan, changes in plan, activities, organizational
structure of the internal audit department, as needed.
13. Review the appointment, performance and replacement of the senior
internal audit executive.
14. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
15. Review annually with management, the Corporation's counsel and the
internal auditors, the procedures for monitoring compliance with the
Corporation's policies on business integrity, ethics and conflicts of
interest.
16. Review with management and the independent auditors the extent to which
significant changes or improvements in important accounting and
financial control practices, recommended by management or the
independent auditors, have been implemented.
17. Review periodically the adequacy of the Corporation's accounting and
financial control resources.
18. Review reports on officers' and directors' expenses.
19. On at least an annual basis, review with the Corporation's counsel any
legal matters which may have a significant impact on the Corporation's
financial statements, the Corporation's compliance with applicable laws
and regulations, and inquiries received.
20. Review periodically the Corporation's financial planning policies and
practices and financial objectives. Monitor the Corporation's financial
condition and requirements for funds. Review periodically the
Corporation's short-term and long-term capital expenditure plans and
working capital position.
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21. Review management recommendations as to the amounts, timing, types and
terms of public and private stock and debt issues and credit
facilities.
22. Annually prepare a report to shareholders as required by the SEC. The
report should be included in the Corporation's annual proxy statement.
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