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SCHEDULE 14A
(RULE 14a)
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:
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
CVF CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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CVF CORPORATION
916 CENTER STREET
LEWISTON, NEW YORK 14092
NOTICE OF
1998 ANNUAL STOCKHOLDERS' MEETING
To the Stockholders:
Notice is hereby given that the 1998 Annual Meeting of Stockholders (the
"Meeting"), of CVF Corporation (the "Company"), will be held at the Buffalo
Marriott Hotel, 1340 Millersport Highway, Amherst, New York (immediately north
of Route I-290), at 2:00 p.m., New York time, on September 17, 1998 for the
following purposes:
1. To elect four directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To consider and take action on a proposal to amend the Company's
Articles of Incorporation to change the Company's name from CVF
Corporation to CVF Technologies Corporation;
3. To consider and take action on a proposal to approve the adoption of the
Company's 1998 Stock Option Plan; and
4. To consider and take action upon such other matters as may properly come
before the Meeting or any adjournment thereof.
Only stockholders of record at the close of business on August 3, 1998 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Robert Nally
Treasurer and Secretary
Date: August , 1998
STOCKHOLDERS ARE URGED TO VOTE BY SIGNING, DATING AND RETURNING THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
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AUGUST , 1998
CVF CORPORATION
916 CENTER STREET
LEWISTON, NEW YORK 14092
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 17, 1998
The following information is furnished in connection with the Annual
Meeting of Stockholders (the "Meeting"), of CVF Corporation (the "Company"), to
be held on September 17, 1998 at 2:00 p.m., New York time, at the Buffalo
Marriott Hotel, 1340 Millersport Highway, Amherst, New York (immediately north
of Route I-290). A copy of the Company's Annual Report to Stockholders for the
fiscal period ended December 31, 1997 has been previously sent to stockholders.
Additional copies of the Annual Report, Notice, Proxy Statement and Form of
Proxy may be obtained from the Company's Secretary, 916 Center Street, Lewiston,
New York 14092. This Proxy Statement and Form of Proxy will first be sent to
stockholders on or about August , 1998.
SOLICITATION AND REVOCABILITY OF PROXIES
THE ENCLOSED PROXY FOR THE MEETING IS BEING SOLICITED BY THE DIRECTORS OF
THE COMPANY. The proxy may be revoked by a stockholder at any time prior to the
exercise thereof by filing with the Secretary of the Company a written
revocation or duly executed proxy bearing a later date. The proxy may also be
revoked by a stockholder attending the Meeting, withdrawing such proxy and
voting in person. The cost of soliciting the proxies on the enclosed form will
be paid by the Company. In addition to the use of the mails, proxies may be
solicited by the directors and Company employees (who will receive no additional
compensation therefor) by means of personal interview, telephone or facsimile,
and it is anticipated that banks, brokerage houses and other institutions,
nominees or fiduciaries will be requested to forward the soliciting material to
their principals and to obtain authorization for the execution of proxies. The
Company may, upon request, reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for their expenses in forwarding proxy
material to their principals.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining shares of common stock, $0.001 par value
per share, of the Company ("Shares"), entitled to vote at the Meeting has been
fixed at the close of business on August 3, 1998. On such date there were
6,756,328 Shares outstanding, entitled to one vote each.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the Shares beneficially owned, as of July
30, 1998, by each director and executive officer of the Company, and all
executive officers and directors of the Company as a group. Unless otherwise
stated, each person has sole voting and investment power with respect to the
Shares set forth in the table. Additionally, to the best of the Company's
knowledge, no person or group (as those terms are used in Section 13(d)(3) of
the Exchange Act), beneficially owned, as of July 30, 1998, more than five
percent of the Shares outstanding except as set forth in the following table.
NAME AND ADDRESS AMOUNT PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
Jeffrey Dreben....................................... 408,524(2)(3) 6.05%
916 Center Street
Lewiston, New York 14092
Robert Glazier....................................... 0 --
916 Center Street
Lewiston, New York 14092
George Khouri........................................ 0 --
421 Field Point Road
Greenwich, Connecticut 06830
Robert Nally......................................... 408,524(2) 6.05
189 Mary Street
Waterloo, Ontario N2J 1S1
Robert Seyler........................................ 0 --
916 Center Street
Lewiston, New York 14092
Brant Investments Limited............................ 1,235,731 18.29
Global Bank Plaza
Toronto, Ontario M5J 2J5
CDS & Co............................................. 992,800 14.69
25 The Esplanade
Toronto, Ontario M5E 1W5
The Canada Trust Company............................. 610,750 9.04
c/o Prudential Insurance Co. of America
320 Bay Street, 3rd Floor
Toronto, Ontario M5H 2P6
The Depository Trust Co.............................. 1,841,264 27.25
P.O. Box 222
New York, New York 10274
Malcolm Gissing...................................... 413,782(4) 6.12
1487 Lakeshore Road East
Oakville, Ontario L6J 1L9
Mutual Life Assurance Company........................ 359,200 5.32
227 King Street South
Waterloo, Ontario N2J 4C5
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NAME AND ADDRESS AMOUNT PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
Westinghouse Canada Pension Master Trust............. 359,200 5.32%
c/o Royal Trust Company Pension Department
Royal Trust Tower, 7th Floor
77 King Street West
Toronto, Ontario M5W 1P9
Directors and Officers as a Group (2)(3)............. 817,048 12.09
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(1) Based on the number of Shares issued and outstanding on July 30, 1998 which
was 6,756,328 Shares.
(2) A warrant (the "Warrant") for a total of 952,784 Shares is held and is
exercisable by Canadian Venture Founders Management Limited ("CVF
Management"). A portion (approximately 21.8%) of the Shares (i.e., 207,880
Shares) underlying the Warrant are attributed to each of Messrs. Dreben and
Nally because Mr. Dreben's wife and Mr. Nally's wife each owns approximately
21.8% of the beneficial interest in CVF Management. Each of Messrs. Dreben
and Nally expressly disclaims beneficial ownership in the Shares issuable
upon exercise of the Warrant.
(3) Includes 200,644 Shares owned by Mr. Dreben's wife as to all of which Mr.
Dreben disclaims beneficial ownership.
(4) Attributed to Mr. Gissing in the table are 213,138 of the Shares issuable
upon exercise of the Warrant, because of Mr. Gissing's ownership of
approximately 22.37% of the beneficial interest in CVF Management, holder of
the Warrant.
OPTIONS, WARRANTS AND RIGHTS
The following table sets forth, as of August 3, 1998, the outstanding
options and warrants issued by the Company:
TITLE AND EXERCISE
NAME OF HOLDER AMOUNT OF SECURITIES PRICE DATE OF EXERCISE
-------------- -------------------- -------- ----------------
CVF Management (1) Warrant to acquire $3.05 Exercisable upon the
952,784 Shares (2) occurrence of certain
conditions until
September 20, 2000
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(1) CVFLP's general partner. The Company acquired all of the assets of CVFLP
pursuant to an Asset Purchase Agreement dated August 20, 1995.
(2) 14.10% of the Shares outstanding as of July 30, 1998.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
In accordance with the Bylaws of the Company, the Board of Directors has by
resolution fixed the number of directors to be elected at the Meeting at four.
All four positions on the Board are to be filled by the affirmative vote of a
majority of the stockholders at the Meeting. Each person so elected shall serve
until the next Annual Meeting of Stockholders and until his successor is elected
and qualified.
The directors of the Company recommend a vote FOR the nominees listed
below. All nominees are currently serving as directors of the Company and,
except for Mr. Glazier who was appointed a director in January 1998, were
elected directors at the 1997 Annual Meeting of Stockholders.
UNLESS INSTRUCTED OTHERWISE, PROXIES WILL BE VOTED FOR THE NOMINEES LISTED
BELOW. Although the directors do not contemplate that any of the nominees will
be unable to serve prior to the Meeting, if such a situation arises, the
enclosed proxy will be voted in accordance with the best judgment of the person
or persons voting the proxy.
The table below sets forth certain information regarding the nominees for
election to the Company's Board of Directors.
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS(1)
----------------------- --- ---------------------------------
Jeffrey Dreben 53 Director, President and Chief Executive Officer of the
Director, President and Chief Company since 1995; Director, Vice President and
Executive Officer since 1995 Treasurer of CVF Management from 1989 to 1995.
Robert Glazier Director since 50 Director of the Company since 1998; President and Chief
1998 Executive Officer of Donatech Corporation (computer
software consulting company) since 1986.
Robert Nally Director and 50 Director and Consultant of the Company since 1995 and
Consultant since 1995, Treasurer and Secretary of the Company since 1997;
Treasurer and Secretary since Chairman of RDM Corporation (technologies for check
1997 processing and electronic commerce solutions) since
1995; Vice President and Secretary of CVF Management
from 1989 to 1995.
George Khouri Director and 51 Director and Special Consultant of the Company since
Special Consultant since 1997 1997; Managing Director -- Capital Markets for Nomura
Securities International Inc. from 1995 to 1997; Vice
President of Trigon Group (an investment banking
boutique) from 1992 to 1995.
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(1) Unless otherwise stated, each nominee has held the position indicated for at
least the past five years.
OTHER DIRECTORSHIPS AND TRUSTEESHIPS
No members of the Board of Directors, except Mr. Nally, serve on the Boards
of Directors or the Boards of Trustees of any other publicly-held companies. Mr.
Nally serves on the Boards of Directors of Virtek Vision International Inc. and
RDM Corporation, both of which are publicly-held Canadian corporations.
COMMITTEES AND MEETING DATA
During the year ended December 31, 1997, the full Board of Directors met on
two occasions. Each director attended all of the meetings of the Board. The
Company did not have any committees during 1997. In January 1998, the Company
formed an audit committee whose members are Messrs. Dreben and Glazier.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that directors, officers and
more than 10 percent stockholders of the Company file reports with the
Securities and Exchange Commission within the first 10 days of the month
following any purchase or sale of Shares. During 1997, Messrs. Dreben and Nally
each failed to timely file a Form 4 with respect to the exercise of certain
options and Mr. Khouri failed to timely file Form 4's with respect to two
transactions involving the grant of options. In addition, in 1997 Messrs. Dreben
and Nally filed Form 3's but not within the requisite time period. Filings
pursuant to Section 16(a) are currently being updated.
EXECUTIVE OFFICERS
The following is a list of the Company's executive officers.
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS
----------------------- --- ---------------------------------
Jeffrey Dreben 53 See table under "Nominees."
President and Chief Executive Officer
since 1995
Robert Nally 50 See table under "Nominees."
Treasurer and Secretary since 1997
Robert J. Seyler 50 Chief Financial Officer of the
Chief Financial Officer since 1998 Company since 1998; Controller of
Root, Neal & Company from 1997 to
1998; Treasurer and Chief Accounting
Officer of C.H. Heist Corp. from 1973
to 1995.
EXECUTIVE COMPENSATION
The following table summarizes, for the fiscal years ended December 31,
1997, 1996 and 1995, the amount of the compensation paid by the Company to its
Chief Executive Officer and all other executive officers whose cash compensation
during the year ended December 31, 1997 exceeded $100,000 (the "Named
Officers").
ANNUAL COMPENSATION
NAME AND PRINCIPAL ------------------------ OTHER
POSITION YEAR SALARY BONUS COMPENSATION
------------------ ---- -------- -------- ------------
Jeffrey Dreben(1) 1997 $200,000 $500,000(2) $638,863(2)
President and Chief 1996 102,765 -- --
Executive Officer 1995 26,273(3) -- --
Robert Nally(4) 1997 $140,000 $500,000(2) $622,952(2)
Treasurer and Secretary 1996 80,543 -- --
1995(5) -- -- --
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(1) Mr. Dreben became an executive officer of the Company in 1995.
(2) Other compensation and bonuses relate primarily to stock options exercised
by Messrs. Dreben and Nally. During 1997, the Company re-purchased 601,932
of its own Shares for an aggregate consideration of $10 from a corporation
owned by officers of the Company. The Company simultaneously issued to these
officers options to purchase an equal number of Shares for $0.05 per Share.
The Company recorded no expense effect on this exchange. During 1997, the
options were exercised at a time when the quoted market price of the
Company's Shares was $3.00 per Share. On this sequence of transactions the
Company recorded a $727,163 tax benefit as an increase in additional paid in
capital. The above bonuses were provided to these officers as compensation
for the related personal tax liabilities. (The total net, after tax cash
disbursement cost to the Company for these bonuses was approximately
$250,000.) These bonuses and other compensation of this nature are not
expected to re-occur in the future.
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(3) Paid in Canadian currency but translated in the table to U.S. currency based
on the exchange rate of Canadian $1.00 = U.S. $.7298 on July 11, 1997.
(4) Mr. Nally's salary was paid by Canadian Venture Founders Leasing Corp., a
wholly-owned subsidiary of the Company.
(5) Mr. Nally was not a paid employee of the Company in 1995.
Option Grants and Exercises. The following table gives information with
respect to the Named Officers during the year ended December 31, 1997. The
options set forth in the table were granted by the Company in exchange for the
repurchase of Shares for a nominal amount.
INDIVIDUAL GRANTS
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(A) (B) (C) (D) (E)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR MARKET PRICE
OPTIONS/SARS EMPLOYEES BASE PRICE ON DATE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) OF GRANT DATE
- ----------------------------- ------- ---- ----- ------ --------
Jeffrey Dreben 200,644(1) 45.2% $0.05 $6.625 2/5/2007
Robert Nally 200,644(1) 45.2 $0.05 $6.625 2/5/2007
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(1) Pursuant to a stock purchase agreement dated February 5, 1997, the Company
repurchased 601,932 Shares from CVF, Inc. for an aggregate purchase price of
$10.00. The shareholders of CVF, Inc. at that time included Messrs. Dreben
and Nally, current directors and nominees for directors of the Company, and
Mr. Gissing, a former director of the Company. Also on February 5, 1997, the
Company issued options to purchase an aggregate of 601,932 Shares for $.05
per Share to Messrs. Dreben, Nally and Gissing. The transactions of February
5, 1997 were structured to be a like-kind exchange with no effect on
earnings. On May 30, 1997, these options were exercised.
Option Exercises and Year End Values. The following table shows the value
realized by Messrs. Dreben and Nally upon the exercise of options. The options
set forth in the table were granted by the Company in exchange for the
repurchase of Shares for a nominal amount. No options were outstanding following
the exercise of such options.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED
---- ----------- --------
Jeffrey Dreben 200,644 $591,900
President and Chief
Executive Officer
Robert Nally 200,644 $591,900
Treasurer and Secretary
Directors' Fees. The Company does not currently pay any additional fees to
the directors who are also officers of or consultants to the Company.
For the two-month period in 1997 when George Khouri was rendering
consulting services under his first consulting agreement with the Company, he
received, in addition to consulting fees of $750 per day, director fees of
$1,000 per month. Mr. Khouri became a full-time consultant to the Company in
June 1997 and is paid $10,500 per month in director and consulting fees. See
"Certain Transactions and Relationships."
Robert Glazier, appointed a director in January 1998, is entitled to
receive $750 per Board of Directors meeting attended in person and $375 per
telephonic board meeting in which he participates.
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CERTAIN TRANSACTIONS AND RELATIONSHIPS
Transactions with CVF, Inc. Pursuant to a stock purchase agreement dated
February 5, 1997, the Company repurchased 601,932 Shares from CVF, Inc. for an
aggregate purchase price of $10.00. The shareholders of CVF, Inc. at that time
included Messrs. Dreben and Nally, current directors and nominees for directors
of the Company, and Mr. Gissing, a former director of the Company. Also on
February 5, 1997, the Company issued options to purchase an aggregate of 601,932
Shares for $.05 per Share to Messrs. Dreben, Nally and Gissing. The transactions
of February 5, 1997 were structured to be a like-kind exchange with no effect on
earnings. On May 30, 1997, these options were exercised.
Service Agreement with D and N Consulting Corporation. The Company entered
into a Service Agreement dated February 10, 1997 with D and N Consulting
Corporation ("D and N"), identical to its agreement the Company formerly had
with CVF, Inc., the predecessor to D and N, pursuant to which D and N would
provide a variety of administrative, managerial and clerical services to the
Company. Under the Service Agreement, D and N would be responsible for all
administrative requirements of the Company, including, but not limited to,
maintaining the books of the Company, preparing periodic reports to the Board of
Directors of the Company and providing office facilities and travel expenses. In
return for the above services, D and N is to be paid a service fee based on an
annual budget prepared by D and N and approved by the Board of Directors of the
Company. Messrs. Dreben and Nally are each officers and 50% shareholders of D
and N. D and N and the Company have mutually agreed to defer operation of the
Service Agreement. Instead, the services continue to be provided by officers,
employees and consultants of the Company, and the Company has neither paid nor
accrued service fees under the Service Agreement.
Consulting Arrangement with Mr. Khouri. Pursuant to an Independent
Consultant Agreement, for the months of April and May 1997, Mr. Khouri, a
director of the Company, provided the Company with consulting services, as well
as services as a director, in exchange for which Mr. Khouri received consulting
fees of $750 per day and director fees of $1,000 per month. Effective June 1,
1997 the Company reached a new agreement with Mr. Khouri pursuant to which Mr.
Khouri provides the Company with consulting services and reports directly to the
President of the Company in exchange for which Mr. Khouri receives $10,500 per
month and no additional fees as a director for a one-year term which is
renewable if mutually agreed to by the parties. This consulting agreement may be
terminated by either party upon 90 days notice of the intent to so terminate.
Upon termination, Mr. Khouri will resign as a director. Periodically, the
President of the Company will review Mr. Khouri's performance and determine
whether to continue Mr. Khouri's consulting arrangement. Through the first year,
Mr. Khouri automatically received options to purchase 45,000 Shares, one quarter
of which (options to purchase 11,250 Shares) vested every three-month period
effective June 1, 1997 and all of such options have an exercise price of $5.00
per Share.
Consulting Arrangement with Mr. Nally. The Company has an oral
understanding with Mr. Nally, a director, nominee for director and an officer of
the Company, pursuant to which Mr. Nally provides the Company with certain
consulting services, particularly with respect to technology management, in
exchange for which Mr. Nally receives compensation as determined by the Board of
Directors. The parties intend to execute a written agreement to the same effect.
In 1997, Mr. Nally received $140,000 for his services as a consultant to the
Company.
Transaction with RDM Corporation. In December 1997, the Company purchased
1,428,572 special warrants in RDM Corporation for a total purchase price of
$1,000,000 (CN) ($659,400 (US) based on the conversion price on August 5, 1998
of $1.00 (US) to $1.52 (CN)). The special warrants were exercised in June 1998
and were exchanged for 1,428,572 common shares (approximately 16% of the
outstanding shares) of RDM Corporation. RDM Corporation is a Canadian
corporation which develops and supplies technologies for check processing and
electronic commerce solutions. Mr. Nally, an officer, director and nominee of
the Company, has been Chairman of RDM Corporation since 1995 and beneficially
owns 1,735,874 common shares (approximately 19.5% of the outstanding shares) of
RDM Corporation.
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PROPOSAL NO. 2
AMENDMENT TO THE ARTICLES OF INCORPORATION
TO CHANGE THE COMPANY'S NAME
At the Meeting, stockholders of the Company will be asked to consider and
take action on a proposal to amend the Company's Articles of Incorporation to
change the name of the Company from CVF Corporation to CVF Technologies
Corporation. The affirmative vote of at least a majority of Shares outstanding
and entitled to vote is required to approve and adopt the amendment to the
Articles of Incorporation. The management of the Company believes the name
change is desirable (i) to better describe the business of the Company and (ii)
to avoid confusion and errors resulting from the assumption of some persons as
to the Company's trading symbol on the American Stock Exchange ("AMEX"). The
Company's Shares are currently listed for trading on AMEX under the symbol
"CNV." The Board of Directors recommends a vote FOR approval of the amendment.
UNLESS OTHERWISE INSTRUCTED, PROXIES WILL BE VOTED FOR APPROVAL OF THE AMENDMENT
TO CHANGE THE COMPANY'S NAME TO CVF TECHNOLOGIES CORPORATION.
If the name change is approved, stockholders may retain their existing
stock certificates, as there is no need to exchange them for new certificates.
PROPOSAL NO. 3
1998 STOCK OPTION PLAN
At the Meeting, stockholders of the Company will be asked to vote on a
proposal to adopt the Company's 1998 Stock Option Plan. The affirmative vote of
at least a majority of Shares outstanding and entitled to vote is required to
approve and adopt the 1998 Stock Option Plan. As described below, the 1998 Stock
Option Plan provides for awards of Shares to employees, directors and advisors
of the Company and stockholder ratification is sought for the purpose of
complying with Rule 16b-3 under the Securities Exchange Act of 1934, as amended,
and the rules of AMEX, the exchange on which the Shares are listed for trading.
The directors recommend a vote FOR the 1998 Stock Option Plan. UNLESS OTHERWISE
INSTRUCTED, PROXIES WILL BE VOTED FOR THE 1998 STOCK OPTION PLAN. The
description of the 1998 Stock Option Plan set forth herein is qualified in its
entirety by the text of the 1998 Stock Option Plan, which is attached as
Appendix A hereto.
The purpose of the proposed plan is to attract and retain qualified
employees, directors, and advisors, to align their interests with those of
stockholders, and to promote the long-term growth of the Company.
Under the proposed plan, there will be reserved for issue upon the exercise
of options 675,000 Shares of the Company.
Authority to administer the plan rests with a committee of two or more
members of the Board of Directors who are appointed by the Board.
Options may be granted under the plan to employees of the Company and its
subsidiaries, to directors of the Company, and to non-employee advisors of the
Company. The plan's administrative committee will select the employees,
directors, and advisors to whom options will be granted and will determine the
number of Shares to be covered by options, provided that the maximum number of
Shares that may be issued to any person pursuant to options granted under the
plan is 175,000.
Options granted to employees may be either incentive stock options ("ISOs")
that satisfy the requirements of section 422 of the Internal Revenue Code, or
options that are not intended to satisfy those requirements ("nonstatutory
options"). All options granted to non-employee directors and non-employee
advisors will be nonstatutory options.
The exercise price for an option that is an ISO may not be less than the
fair market value of a Share on the date of grant. The exercise price for a
nonstatutory option may not be less than 90 percent of the fair market value of
a Share on the date of grant. The exercise price of a replacement option may not
be less than the exercise price of the option being replaced.
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An option will be exercisable only at such times, during such period, for
such number of Shares, and under such conditions as are provided by the plan's
administrative committee in the option agreement. Unless the administrative
committee provides otherwise in the option agreement, if the optionee engages in
activity that is inimical, contrary or harmful to the interests of the Company,
the optionee will forfeit the entire option. No option may be exercised more
than ten years after the date of grant. The exercise price for an option is
payable in cash or by the surrender directly or by attestation of ownership of
Shares of the Company (held for at least six months if acquired from the
Company), or by delivering an exercise notice together with irrevocable
instructions to a broker to deliver to the Company the amount of sales or loan
proceeds with respect to stock underlying the option.
ISOs are not transferrable except by will or the laws of descent and
distribution. The administrative committee may provide that nonstatutory options
are transferable to members of an optionee's family or to a trust, partnership,
or limited liability company benefiting members of the optionee's family.
Outstanding options are subject to adjustment in the event of a stock
dividend, stock split, merger, consolidation, or other change in the Company's
capital structure. Upon a change in control of the Company (as defined in the
plan), all options will become immediately exercisable and the administrative
committee, in its discretion, may provide for the cash out of options (at an
amount equal to the consideration paid in the change in control transaction over
the option price), for other adjustment of options, for the assumption of
options, or for the substitute of new options for outstanding options. The plan
is subject to amendment by the Board of Directors, except that no amendment that
would by law require stockholder approval will be effective without such
approval. The administrative committee may amend outstanding options, except
that no amendment may reduce the exercise price of an outstanding option. The
administrative committee may provide special option terms for optionees who are
not U.S. citizens or residents or who are employed outside the United States.
Under current law the U.S. federal income tax consequences of options
granted under the plan will generally be as follows. The grant of an option will
have no tax consequences for the optionee or the Company. Upon the exercise of
an option that is not an ISO, the optionee will recognize ordinary income in an
amount equal to the excess of the fair market value of the acquired Shares on
the exercise date over the option price, and the Company will be entitled to a
deduction in the same amount. Upon the exercise of an ISO, the optionee will not
recognize any ordinary income, nor will the Company be entitled to a deduction.
However, the alternative minimum tax may apply, because the excess of the fair
market value of ISO Shares over the option price is an adjustment to the
optionee's alternative minimum taxable income. If there is no disposition of ISO
Shares before the later of two years from the date of grant and one year from
the date of exercise, then the optionee will realize a capital gain or loss upon
a sale of the ISO Shares. If the ISO Shares are sold before the later of two
years from the date of grant and one year from the date of exercise, the amount
of gain realized on the sale or, if less, the excess of the fair market value on
the exercise date over the option price, will be ordinary income for the
optionee and deductible by the Company; any balance of the gain or loss
recognized by the optionee on the sale will be a capital gain or loss. The
Company may not deduct compensation of more than $1,000,000 that is paid in one
taxable year to an individual who is, on the last day of the year, the chief
executive officer or one of its four other highest paid officers. Ordinary
compensation income taxable to an officer in connection with an option exercise
would count toward this limit.
The plan was adopted by the Board of Directors of the Company on August 11,
1998, subject to approval of the stockholders at the Meeting.
The affirmative vote of the holders of a majority of the Shares of the
Company voting on the proposal is required for approval of the plan.
The Board of Directors recommends approval of the proposed plan.
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PROPOSAL NO. 4
OTHER MATTERS
So far as management of the Company is aware, no matters other than those
outlined in this Proxy Statement will be presented at the Meeting for action on
the part of the stockholders. If any other matters are properly brought before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote thereon the Shares to which the proxy relates in accordance with their
best judgment.
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP, has audited the accounts of the Company since 1997. A
representative of Ernst & Young LLP is expected to be present at the Meeting and
will have an opportunity to make a statement, if he so desires, and will be
available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals must be received at the Company's offices no later
than March 26, 1999 in order to be considered for inclusion in the Company's
proxy materials for the 1999 Annual Meeting of Stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
Robert Nally
Treasurer and Secretary
Lewiston, New York
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APPENDIX A
CVF CORPORATION
1998 STOCK OPTION PLAN
I. PURPOSE
The purposes of the CVF Corporation 1998 Stock Option Plan are to attract
and retain qualified employees, directors, and advisors, to align their
interests with those of shareholders, and thus to promote the long-term growth
of the Corporation.
II. DEFINITIONS
When used in this Plan, the terms defined in this Article II shall have the
meanings given unless the context clearly indicates otherwise.
2.1 "Board" shall mean the Board of Directors of the Corporation.
2.2 "Change in Control" shall mean:
(a) any person (which term, for purposes of this Section 2.2, shall
include, without limitation, an individual, sole proprietorship,
partnership, unincorporated association, unincorporated syndicate,
unincorporated organization, trust, body corporate, and a trustee,
executor, administrator, or other legal representative) (a "Person") or any
group of two or more Persons acting in concert who or that becomes the
beneficial owner, directly or indirectly, of securities of the Corporation
representing, or acquires the right to control or direct, or to acquire
through the conversion of securities or the exercise of warrants or other
rights to acquire securities, 25 percent or more of the combined voting
power of the Corporation's then outstanding securities; provided that, (i)
"voting power" means the right to vote for the election of directors, and
(ii) any determination of percentage of combined voting power shall be made
on the basis that (x) all securities beneficially owned by the Person or
group or over which control or direction is exercised by the Person or
group that are convertible into securities carrying voting rights have been
converted (whether or not then convertible) and all options, warrants, or
other rights that may be exercised to acquire securities beneficially owned
by the Person or group or over which control or direction is exercised by
the Person or group have been exercised (whether or not then exercisable),
and (y) no such convertible securities have been converted by any other
Person and no such options, warrants, or other rights have been exercised
by any other Person; or
(b) at any time 33 percent or more of the directors elected or
appointed to the Board are directors whose election or appointment to the
Board or nomination for election by the Corporation's shareholders was not
approved by a vote of at least a majority of the directors then in office
who were either directors on the effective date of this Plan or whose
election or appointment or nomination for election was so approved; or
(c) a reorganization, merger, consolidation, combination, corporate
restructuring, or similar transaction (an "Event"), in each case, with
respect to which the beneficial owners of the outstanding voting securities
of the Corporation immediately before such Event do not, following such
Event, beneficially own, directly or indirectly, more than 50 percent of
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the Corporation
and any resulting parent of the Corporation in substantially the same
proportions as their ownership, immediately before such Event, of the
outstanding voting securities of the Corporation; or
(d) an Event involving the Corporation as a result of which 33 percent
or more of the members of the board of directors of the parent of the
Corporation or the Corporation are not persons who were members of the
Board immediately before the earlier of (x) the Event, (y) execution of an
agreement the consummation of which would result in the Event, or (z)
announcement by the Corporation of an intention to effect the Event.
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2.3 "Committee" means the Committee appointed to administer the Plan
pursuant to Article III.
2.4 "Corporation" means CVF Corporation.
2.5 "Fair Market Value" means the closing price per Share on the American
Stock Exchange on the day of determination as reported in the Wall Street
Journal or any other publication selected by the Committee or, if there was no
sale of Shares on that day, on the most recent preceding day on which there was
such a sale.
2.6 "Internal Revenue Code" or "Code" means the Internal Revenue Code of
1986, as it may be amended from time to time. A reference in this Plan to a
particular provision of the Code shall be construed, if appropriate, as a
reference to any successor to such provision.
2.7 "ISO" means an Option that is intended to satisfy the requirements of
Internal Revenue Code section 422 for an incentive stock option.
2.8 "Option" means an option granted under this Plan to purchase Shares.
2.9 "Optionee" means a person to whom an Option has been granted under this
Plan.
2.10 "Plan" shall mean this CVF Corporation 1998 Stock Option Plan.
2.11 "Share" means a share of the Corporation's common stock, par value $.001
per share.
2.12 "Subsidiary" means a corporation, partnership, joint venture, or other
business entity directly or indirectly controlled by the Corporation, provided,
however, for purposes of determining whether an individual is eligible for the
grant of an Option that is an ISO, "Subsidiary" means a corporation that is a
subsidiary corporation with respect to the Corporation, within the meaning of
Internal Revenue Code section 424(f).
III. ADMINISTRATION
3.1 Committee. The Board shall appoint a Committee to administer the Plan.
The Committee shall be composed of two or more members of the Board who shall
serve at the pleasure of the Board.
3.2 Authority of Committee. The Committee shall have the authority and
discretion within the limits of the Plan:
(a) to select the employees, directors, and advisors to be granted
Options pursuant to the Plan;
(b) to grant Options under the Plan;
(c) to prescribe the terms of each Option granted under the Plan,
which need not be identical, and which shall include the number of Shares
for which the Option shall be granted, the time when the Option shall be
granted, the term of the Option, the times during the term of the Option
when it shall be exercisable, and, subject to Section 6.1(a), the exercise
price for each Share subject to an Option;
(d) to construe and interpret the Plan and Options granted under the
Plan, and to establish, amend, and revoke rules for the administration of
the Plan;
(e) to correct any defect, omission, or inconsistency in the Plan or
any Option agreement;
(f) to determine the date on which an Optionee's service with the
Corporation and its Subsidiaries has terminated and the reason for the
termination;
(g) to determine the amount, if any, of the federal, state, and local
income and employment taxes required to be withheld by the Corporation in
connection with the exercise of an Option; and
(h) to take all action the Committee finds advisable for the proper
administration of the Plan.
The Committee's actions and decisions shall be conclusive and binding upon
all person having an interest in the Plan or under any Option.
3.3 Limit on Committee Liability. No member of the Committee shall be
liable for any action taken or decision made in good faith with respect to the
Plan or any Option.
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IV. SHARES AVAILABLE
4.1 Maximum Number. The number of Shares that may be issued upon the
exercise of Options granted under the Plan shall not exceed 675,000 Shares,
subject to adjustment as provided in Section 7.1 (relating to changes in
capitalization). The Shares may be authorized and unissued shares or treasury
shares.
4.2 Effect of Expiration of Options, Etc. Shares covered by Options that
have been forfeited, cancelled, terminated, or expired unexercised shall be
available again for the purposes of the Plan.
4.3 Maximum Shares per Optionee. The aggregate number of Shares that may
be the subject of Options granted to any one Optionee under the Plan during the
term of the Plan shall not exceed 175,000 Shares, subject to adjustment as
provided in Section 7.1.
V. ELIGIBILITY
The Committee may grant Options under the Plan to any person who is an
employee of the Corporation or an employee of a Subsidiary of the Corporation, a
director of the Corporation, or an advisor to the Corporation. For the purposes
of the Plan, a person who provides bona fide services to the Corporation in a
capacity other than that of an employee or director shall be considered an
advisor to the Corporation.
VI. TERMS OF OPTIONS
6.1 General Terms. Each Option granted under the Plan shall be evidenced
by a written Option agreement signed by the Optionee and by a member of the
Committee or an officer of the Corporation on behalf of the Corporation. The
Option agreement shall set forth such terms and conditions as the Committee
shall determine and as are consistent with the terms of the Plan, including the
following:
(a) Exercise Price. The exercise price for each Share subject to an
Option shall not be less than 90 percent of the Fair Market Value of a
Share on the date of the Option grant.
(b) Exercisability of Options. Subject to Section 6.2, an Option may
be exercised at such times and during such period and for such number of
Shares as the Option agreement may specify. However, an Option shall not be
exercisable after the expiration of ten years from the date of grant.
(c) Method of Exercise; Payment of Exercise Price and Satisfaction of
Tax Withholding Obligation. An Option shall be exercised by delivery to the
Corporation of written notice of exercise accompanied by payment to the
Corporation of an amount equal to the sum of (i) the exercise price of the
Option or portion of the Option being exercised, plus (ii) the amount
required to satisfy any federal, state, and local income and employment tax
withholding obligation incurred by the Corporation in connection with the
exercise of the Option. Payment of the exercise price and the amount
required to satisfy the Corporation's tax withholding obligation may be
made in cash, or by the surrender (directly or by attestation to ownership)
of suitable Shares, or by delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to deliver promptly to
the Corporation the appropriate amount of sale or loan proceeds, or in a
combination of such methods, subject to any conditions the Committee may
impose. The Committee may establish other methods for payment of the
exercise price and the amount required to satisfy the Corporation's tax
withholding obligation.
Shares shall be suitable for use as full or partial payment of the
exercise price or the amount required to satisfy the Corporation's tax
withholding obligation only if the Shares have been owned by the Option
holder for more than six months by the date of exercise or were not
acquired from the Corporation. The Committee may retain Shares from the
total number of Shares deliverable pursuant to the exercise of an Option,
to satisfy the Corporation's tax withholding obligation.
(d) Type of Option. The Option agreement for an Optionee who is an
employee of the Corporation or a Subsidiary shall indicate whether the
Option is or is not an ISO.
6.2 Effect of Misconduct. Unless the Option agreement otherwise provides
or the Committee, in its discretion, determines otherwise, an Optionee shall
forfeit all rights under any unexercised Options granted to
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the Optionee, and those Options shall automatically expire, if the Optionee has,
as determined by the Committee, engaged in any activity that is inimical,
contrary, or harmful to the interests of the Corporation or in competition with
any activity of the Corporation, including, but not limited to: (i) breach of
any contract with the Corporation or violation of any fiduciary obligation owed
to the Corporation; (ii) violation of any Corporation policy, rules, or
procedures, including, without limitation, the Corporation's insider trading
policy; (iii) conduct related to the Optionee's service with the Corporation for
which either criminal or civil penalties against the Optionee may be sought;
(iv) being convicted of or entering a guilty plea with respect to a felony or
serious crime; (v) rendering service for or committing to render service for any
organization or engaging directly or indirectly in any business, which
organization or business is or becomes competitive with the Corporation or which
service, organization, or business is or becomes otherwise prejudicial to or in
conflict with the interests of the Corporation; (vi) attempting to induce
employees or agents of the Corporation to serve elsewhere or attempting to
solicit the trade or business of any current or prospective customer or partner
of the Corporation; (vii) disclosing or misusing any confidential information or
material concerning the Corporation; or (viii) participation in a hostile
takeover. The term "Corporation" as used in this Section 6.2 shall refer to the
Corporation or any of its Subsidiaries.
6.3 Limits on Transferability.
(a) ISO. An Option that is an ISO shall not be assignable or
transferable except by will or the laws of descent and distribution.
(b) Other Options. An Option that is not an ISO shall not be
assignable or transferable except (i) by will or the laws of descent and
distribution, and, if applicable, (ii) in accordance with any provision the
Committee may, in its discretion, make in the Option agreement to permit
transfers of the Option by gift or otherwise to members of the Optionee's
immediate family, to a trust or trusts for the exclusive benefit of members
of the Optionee's immediate family, to a partnership or limited liability
company in which members of the Optionee's immediate family are the only
partners or shareholders, or to such other persons as may be specified by
the Committee in the Option agreement, provided that subsequent transfers
of an Option shall be prohibited unless in accordance with this Section
6.3(b), and provided further that all transfers shall conform to procedures
established by the Committee and be subject to the consent of the
Committee. For purposes of this Section 6.3(b), the term "immediate family"
shall mean the Optionee and the spouse, children, and grandchildren of the
Optionee.
(c) Authority to Exercise Option. Except as provided below in this
Section 6.3(c), an Option shall be exercisable during the lifetime of the
Optionee to whom it was granted only by the Optionee or, if the Optionee is
legally incapacitated, by the Optionee's guardian or legal representative
acting in a fiduciary capacity on behalf of the Optionee under state law.
In the case of a transfer of an Option that is not an ISO (if permitted by
the Option agreement in accordance with Section 6.3(b)), the Option shall
be exercisable by the transferee, but only to the extent and at the times
the Optionee to whom the Option was granted (or, after the death of the
Optionee, the Optionee's estate or legal representative) could have
exercised the Option. A transferee shall be bound by the terms of the Plan
and the Option agreement.
6.4 Restrictions Applicable to ISOs.
(a) Exercise Price. The exercise price for each Share subject to an
ISO shall not be less than the Fair Market Value of a Share on the date of
the Option grant.
(b) Limit. The aggregate Fair Market Value of Shares that are the
subject of ISOs first exercisable by an Optionee during any calendar year
shall not exceed $100,000 or such other limit set by the Internal Revenue
Code. For the purpose of this limit, the Fair Market Value of Shares taken
into account shall be their Fair Market Value as of the date of grant of
the Option to which the Shares are subject.
(c) 10 Percent Shareholder. With respect to an ISO granted to an
Optionee who, at the date of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Corporation and its Subsidiaries, the exercise price for each Share subject
to the ISO shall
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not be less than 110 percent of the fair market value of a Share on the
date of the Option grant, and the ISO shall not be exercisable after the
expiration of five years from the date of the grant.
VII. ADJUSTMENTS
7.1 Adjustments to Numbers of Shares and Options.
(a) In General. If there is any change in the number of outstanding
Shares through the declaration of stock dividends, stock splits, or the
like, then the number of Shares available for Option grants under the Plan,
the Shares subject to any outstanding Option, the maximum number of Shares
that may be the subject of Options granted to any Optionee, and the
exercise prices of Options shall be automatically adjusted. If there is any
change in the number of outstanding Shares through any change in the
capital account of the Corporation, or through a merger, consolidation,
separation (including a spin-off or other distribution of stock or
property), reorganization, or partial or complete liquidation, the
Committee shall make appropriate adjustments in the maximum number of
Shares that may be issued under the Plan and in the maximum number of
Shares that may be the subject of Options granted to any Optionee and any
adjustments or modifications to outstanding Options as the Committee, in
its discretion, finds appropriate. In the event of any other change in the
capital structure or in the common stock of the Corporation, the Committee
shall also be authorized to make such appropriate adjustments in the
maximum number of Shares that may be issued under the Plan and in the
maximum number of Shares that may be the subject of Options granted to any
Optionee and any adjustments or modifications to outstanding Options as the
Committee, in its discretion, finds appropriate.
(b) ISO Exception. Notwithstanding the provisions of Section 7.1(a),
with respect to an Option intended to be an ISO, there shall not, without
the consent of the Option holder, be any adjustment to the Option that
would prevent it from qualifying as an ISO.
7.2 Change in Control.
(a) Vesting. Upon a Change in Control of the Corporation, all terms,
conditions, restrictions, and limits in effect on outstanding Options shall
lapse as of the Change in Control, and all outstanding Options shall be
immediately exercisable.
(b) Adjustments. Upon a Change in Control, the Committee may, in its
discretion, (i) provide for the purchase of each outstanding Option for an
amount of cash equal to the excess of the Fair Market Value of the Shares
subject to the Option (which shall not be less than the amount of cash and
the fair market value of other consideration tendered for Shares in the
Change in Control transaction) over the aggregate exercise price of the
Option, (ii) make such adjustments to outstanding Options as the Committee
finds appropriate to reflect the Change in Control, or (iii) cause any
surviving corporation in the Change in Control to assume outstanding
Options or substitute new options for the outstanding Options.
VIII. MISCELLANEOUS
8.1 Term of Plan. The Plan shall take effect, subject to the approval of
the shareholders of the Corporation, on August 11, 1998. If shareholder approval
is not obtained within twelve months of August 11, 1998, all Options granted
under the Plan shall automatically be cancelled. The Plan shall expire on August
10, 2008.
8.2 Amendment of Options. The Committee may at any time unilaterally amend
any outstanding Option to the extent the Committee determines necessary or
desirable, provided, however, that an amendment that would be adverse to the
interests of the holder of the Option or, with respect to an Option that is an
ISO, that would prevent the Option from qualifying as an ISO, shall not be
effective without the Option holder's consent.
8.3 Amendment of Plan. The Board may, in its discretion, amend the Plan or
terminate the Plan, provided, however, that an amendment for which the approval
of the Corporation's shareholders is required by
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law shall not be effective without the shareholders' approval, and that an
amendment that would be adverse to the interests of the holder of an outstanding
Option or, with respect to an Option that is an ISO, that would prevent the
Option from qualifying as an ISO, shall not be effective with respect to that
Option without the Option holder's consent.
8.4 Restrictions on Amendments and Grants. Notwithstanding any
contradictory provisions of the Plan, and except as provided in Section or as
approved by the Corporation's shareholders, an Option may not be amended to
reduce the exercise price or cancelled and replaced with another Option having a
lower exercise price.
8.5 Foreign Optionees. With respect to the granting of an Option to an
Optionee who is not a United States citizen or resident or who is employed
outside the United States, the Committee, to fulfill the purposes of the Plan,
may provide for such special terms as the Committee finds necessary or
appropriate to accommodate differences in local law, tax policy, or custom.
8.6 No Tax Guaranties. Neither the Corporation, any Subsidiary, the Board
of Directors, the Committee, nor any other person connected with the Plan
represents or guarantees that any tax treatment, including, but not limited to,
federal, state, and local income, gift, and estate tax treatment, will be
applicable with respect to the grant of Options, exercise of Options, issuance
of Shares, or any other transaction that occurs under or in connection with the
Plan or an Option granted under the Plan.
8.7 Construction. The Plan shall be construed in accordance with the laws
of the State of Nevada. With respect to an Option intended to qualify as an ISO,
the terms of the Plan and of the ISO shall be construed to give effect to such
intent, subject to the Committee's authority to amend the Option pursuant to
Section 8.2. References in the Plan to either gender shall be construed to
include the other gender.
8.8 No Right to Employment, Etc. Nothing in the Plan or in an Option
agreement shall confer upon an Optionee the right to be retained by the
Corporation or a Subsidiary as an employee or director or in any other capacity,
nor limit the Corporation's or Subsidiary's right to terminate the Optionee's
employment, service-providing, or other relationship with the Corporation and
its Subsidiaries.
8.9 Conditions on Issuance of Shares.
(a) General. Shares issued under the Plan may be issued subject to
any conditions, in addition to those specifically provided in the Plan, as
the Committee may impose.
(b) Regulatory Approvals and Listings. If the Corporation shall
determine, in its sole discretion, that the listing, registration, or
qualification of the Shares subject to an Option upon any securities
exchange or under any state or federal law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition
to or in connection with the issue or purchase of Shares under the Option,
then, notwithstanding any contrary provisions of this Plan, the Corporation
shall have no obligation to issue or deliver Shares pursuant to the
exercise of the Option unless and until such listing, registration,
qualification, consent, or approval shall have been effected or obtained
free of any conditions not acceptable to the Corporation.
(c) Restrictions. The certificates representing Shares issued by the
Corporation pursuant to the exercise of an Option may bear a legend
describing the restrictions on resale of such Shares under applicable
securities laws and stop transfer orders with respect to such certificates
may be entered in the Corporation's stock transfer records.
8.10 Rights as a Shareholder. The holder of an Option shall have no rights
as a shareholder with respect to any Shares covered by the Option until the date
of issuance of a stock certificate for Shares pursuant to the Option. Except as
provided in Section 7.1, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such Share certificate is
issued.
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CVF CORPORATION PROXY
916 Center Street
Lewiston, New York 14092
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey Dreben and Robert Nally, and each or
either of them, Proxies for the undersigned, with full power of substitution, to
vote all shares of common stock, $0.001 par value per share ("Shares") of CVF
Corporation (the "Company") which the undersigned would be entitled to vote at
the ANNUAL MEETING OF STOCKHOLDERS (THE "MEETING") TO BE HELD AT THE BUFFALO
MARRIOTT HOTEL, 1340 MILLERSPORT HIGHWAY, AMHERST, NEW YORK ON SEPTEMBER 17,
1998, AT 2:00 P.M., NEW YORK TIME, and directs that the Shares represented by
this Proxy shall be voted as indicated below:
1. ELECTION OF DIRECTORS
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through his name in the list
below:
Jeffrey Dreben; Robert Glazier; Robert Nally; and George Khouri.
2. AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE THE COMPANY'S NAME
To consider and take action on a proposal to amend the Company's Articles of
Incorporation to change the Company's name from CVF Corporation to CVF
Technologies Corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 1998 STOCK OPTION PLAN
To consider and take action on a proposal to approve the adoption of the
Company's 1998 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. THE BOARD OF DIRECTORS FAVORS A VOTE FOR PROPOSALS 1, 2 AND 3. IF
NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 ABOVE AND
WILL BE VOTED IN THE DISCRETION OF THE PROXIES NAMED HEREIN WITH RESPECT TO ANY
MATTER REFERRED TO IN 4 ABOVE. YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY
MARKING THE APPROPRIATE BOXES, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
Dated: , 1998
PLEASE SIGN EXACTLY AS NAME(S) APPEAR
ON STOCK CERTIFICATE(S). A corporation
is requested to sign its name by its
President or other authorized officer,
with the office held so designated. A
partnership should sign in the
partnership name by an authorized
person. Executors, administrators,
trustees, guardians and corporate
officers are requested to indicate the
capacity in which they are signing.
JOINT TENANTS SHOULD BOTH SIGN.
--------------------------------------
--------------------------------------
(Signature of Stockholder(s))
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.