TABLE OF CONTENTS
Page No.
DEFN14A 1
Notice of Special Shareholder Meeting 2
Proxy Statement 3
Proxy 15
Commission File No. 0-26057
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GREATBIO TECHNOLOGIES, INC.
(Name of Registrant as Specified in its Charter)
GREATBIO TECHNOLOGIES, INC.
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies: n/a
(2) Aggregate number of securities to which transaction
applies: n/a
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: n/a.
(4) Proposed maximum aggregate value of transaction: n/a
(5) Total fee paid: -0-
[ ] 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:
2001
ANNUAL MEETING OF SHAREHOLDERS
-of-
GREATBIO TECHNOLOGIES, INC
150 Lucius Gordon Drive, Suite 201
West Henrietta, NY 14586
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2001 Annual Meeting of Shareholders of GreatBio Technologies, Inc.
(the "Company") will be held at the offices of the Company on Thursday,
July 19, 2001 at 10:00 a.m. local time, for the following purposes:
1. To elect five (5) directors for a term of one (1) year or until their
successors have been elected and qualified.
2. To consider and act upon a proposal to amend the Company's Certificate of
Incorporation to change the name of the Company to Biophan Technologies,
Inc.
3. To consider and act upon a proposal to approve the Company's 2001 Stock
Option Plan.
4. To consider and act upon a proposal to appoint Goldstein Golub & Kessler,
LLP as the Company's independent public accountants for the year ending
February 28, 2002.
5. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
Information concerning matters to be acted upon at the Annual Meeting is
set forth in the accompanying Proxy Statement.
Shareholders of record at 5:00 p.m. Eastern Daylight Time, on July 2,
2001, are entitled to notice of and to vote at, the meeting. Each
shareholder, even though he or she now plans to attend the meeting, is
requested to execute the enclosed proxy card and return it without delay in
the enclosed postage-paid envelope. Any shareholder present at the meeting
may withdraw his or her proxy in writing and vote personally on each matter
brought before the meeting.
By Order of the Board of Directors
/s/David A. Miller
Secretary
July 2, 2001
2001
ANNUAL MEETING OF SHAREHOLDERS
-of-
GREATBIO TECHNOLOGIES, INC
150 Lucius Gordon Drive, Suite 201
West Henrietta, NY 14586
PROXY STATEMENT
This Proxy Statement (the "Proxy Statement") is furnished to
shareholders of GreatBio Technologies, Inc., a Nevada corporation having its
principal executive offices at 150 Lucius Gordon Drive, Suite 201, Rochester,
West Henrietta, NY 14586 (the "Company") in connection with the solicitation
of proxies by the Board of Directors of the Company relating to the 2001
Annual Meeting of shareholders (the "Annual Meeting") which will be held at
the offices of the Corporation on Thursday, July 19, 2001, at 10:00 a.m.,
local time, and at any and all adjournments of the Annual Meeting.
This Proxy Statement, together with the accompanying form of proxy, was
mailed to shareholders on or about July 2, 2001.
Voting Securities
As of July 2, 2001, the record date for the Annual Meeting, there were
25,565,532 of the Company's common shares, par value $.005 per share (the
"Common Shares"), issued and outstanding. Only shareholders of record on the
books of the Company at the close of business on July 2, 2001 are entitled to
notice of, and to vote at, the Annual Meeting and at any and all adjournments
of the Annual Meeting. Each such shareholder is entitled to one vote for each
Common Share registered in the name of the shareholder. A majority of the
outstanding Common Shares represented in person or by proxy at the Annual
Meeting will constitute a quorum for the transaction of business.
The enclosed proxy, when properly executed and received by the Secretary
of the Company prior to the Annual Meeting, will be voted as therein specified
unless revoked by filing with the Secretary prior to any vote at the Annual
Meeting, a written revocation or a duly executed proxy bearing a later date.
Unless authority to vote for one or more of the director nominees is
specifically withheld according to the instructions, a signed proxy will be
voted FOR the election of the five director nominees named herein. Unless a
proxy is designated as being voted against, or unless a shareholder designates
that the shareholder abstains, a signed proxy will be voted FOR each proposal
described herein. The Board knows of no other matters to be presented at the
Annual Meeting. If any other matter should be presented at the Annual Meeting
upon which a vote properly may be taken, shares represented by all proxies
received by the Board will be voted with respect thereto in accordance with
the judgment of the persons named in the proxies.
Proxy Solicitation
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by use of the mails, officers and regular employees
of the Company, without extra compensation, may solicit proxies personally, by
telephone or telegraph. The Company has requested persons holding Common
Shares in their names for others or in the names of nominees to forward
soliciting material to the beneficial owners of such Common Shares and the
Company will, if requested, reimburse such persons for their reasonable
expenses in so doing.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of June 15, 2001, the name and address
of each director, nominee for director and executive officer who owns shares
of Common Stock and each other person known by the Company to own beneficially
more than 5% of the Company's outstanding shares of Common Stock and the
number of shares owned by all directors and executive officers of the Company,
as a group, together with the respective percentage holdings of each such
person.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership (1)(2) Class (1)(2)
Michael L. Weiner (3)* 6,853,573 26.7%
150 Lucius Gordon Drive
Suite 201
West Henrietta, NY 14586
Edward F. Cowle 5,783,100 22.6%
6 East 45th Street
Suite 1000
New York, NY 10017
Steven Katz* 50,000 0.2%
440 South Main Street
Milltown, NJ 08850
Wilson Greatbatch (4)* 5,479,550 21.3%
5935 Davison Road
Akron, NY 14001
Robert S. Bramson* 0 0
Bramson & Pressman
1100 East Hector Street
Suite 410
Consohoken, PA 19248
Ross B. Kenzie (5)* 0 0
369 Franklin Street
Buffalo, NY 14202
Geoffery Williams 4,564,701 17.9%
56 West 400 South
Suite 220
Salt Lake City, UT 84101
Robert J. Wood 0 0
150 Lucius Gordon Drive
Suite 201
West Henrietta, NY 14586
Stuart G. MacDonald 0 0
150 Lucius Gordon Drive
Suite 201
West Henrietta, NY 14586
Patrick R. Connelly (6) 288,978 1.1%
150 Lucius Gordon Drive
Suite 201
West Henrietta, NY 14586
H. DeWorth Williams 2,058,500 8.1%
56 West 400 South
Suite 220
Salt Lake City, UT 84101
David A. Miller 90,500 0.4%
4004 Sunnyside Road
Sandpoint, ID 83864
Biophan, LLC (7) 6,628,573 25.9%
150 Lucius Gordon Drive
Suite 201
West Henrietta, NY 14586
All Officers and Directors 12,762,601 49.5%
as a group (9 Persons)
* Member of the Board of Directors
(1) The persons named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them.
(2) Applicable percentage of ownership is based on 25,565,532 shares
outstanding as of June 15, 2001 together with applicable options, if any,
for such shareholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission, and includes
voting and investment power with respect to shares. Shares subject to
options currently exercisable or exercisable within 60 days after June
15, 2001 are deemed outstanding for purposes of computing the percentage
ownership of the person holding such options, but are not deemed
outstanding for computing the percentage of any other shareholder.
(3) Michael L. Weiner is a member and the manager of Technology Innovations,
LLC, which is the majority owner of Biophan, LLC. Mr. Weiner is also the
manager of Biophan, LLC. Mr. Weiner's calculation includes 6,228,573
shares owned beneficially and of record by Biophan, but excludes
5,379,550 shares owned of record by Biophan but beneficially by Wilson
Greatbatch or Greatbatch Gen-Aid, Ltd., and excludes 268,978 shares owned
of record by Biophan but beneficially by Patrick R. Connelly. Also
includes 100,000 shares issuable upon exercise of stock options granted
to Mr. Weiner, which shares Mr. Weiner has the right to acquire within
60 days.
(4) Includes 5,379,550 shares owned of record by Biophan but beneficially by
Wilson Greatbatch or by Greatbatch Gen-Aid, Ltd., an entity owned by
Wilson Greatbatch. Also includes 100,000 shares issuable upon exercise
of stock options granted to Mr. Greatbatch, which shares Mr. Greatbatch
has the right to acquire within 60 days.
(5) Does not include shares owned beneficially or of record by Biophan, LLC.
Ross B. Kenzie is the manager and an equity member of Biophan Ventures,
LLC which is the 43% equity member in Biophan, LLC. Mr. Kenzie, along
with Michael L. Weiner, comprise the Board of Members of Biophan, LLC.
(6) Includes 268,978 shares owned of record by Biophan but beneficially by
Patrick R. Connelly. Also includes 20,000 shares issuable upon exercise
of stock options granted to Mr. Connelly, which shares Mr. Connelly has
the right to acquire within 60 days.
(7) Excludes 5,379,550 shares owned beneficially by Wilson Greatbatch or
Greatbatch Gen-Aid, Ltd. and 268,978 shares owned beneficially by
Patrick R. Connelly.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
As of July 2, 2001 the directors and executive officers of the Company
were as follows:
Name Age Position
Michael L. Weiner 53 Chairman of the Board, President, Chief
Executive Officer and Director
Robert J. Wood 62 Vice-President, Treasurer, Chief
Financial Officer
David A. Miller 46 Secretary
Stuart G. MacDonald 52 Vice-President of Research and
Development
Patrick R. Connelly 34 Director of Biomedical Engineering
Wilson Greatbatch 81 Director
Steven Katz 53 Director
Ross B. Kenzie 68 Director
Robert S. Bramson 62 Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected
and qualified. Vacancies in the existing Board of Directors are filled by
majority vote of the remaining Directors. Officers of the Company serve at
the will of the Board of Directors.
Messrs. Weiner, Greatbatch, Katz, Kenzie, and Bramson are each nominees
for the position of the Director of the Company, to be voted upon at the 2001
Annual Meeting. For a brief description of their respective business
experience during the past five years please refer to that portion of this
Proxy Statement entitled "Election of Directors". A brief description of the
business experience of Messrs. Wood, Miller, MacDonald, and Connelly are
presented here.
Robert J. Wood is a Certified Public Accountant with extensive
experience in public accounting and business consulting, having been an
owner/partner of Wood & Company, CPAs, P.C., Mengel, Metzger, Barr & Co., LLP,
and Metzger, Wood & Sokolski, CPAs, all in Rochester, New York, from 1973
through 2000. He began his career at Price Waterhouse & Co. in 1962 after
graduating from St. John Fisher College with a B.B.A. in Accounting. He is a
member of the New York State Society of Certified Public Accountants
(NYSSCPA).
David A. Miller was in charge of the administrative duties of GreatBio
Technologies, Inc., formerly Idaho Technical, Inc., from 1996 until December
1, 2000 (the date of the Exchange Agreement). He is a former member of the
Board of Directors and has held the offices of Vice-President, Secretary and
Treasurer.
Stuart G. MacDonald is an experienced Research and Development leader
with a broad engineering and science background, emphasizing a systems
approach to developing complex technology. MacDonald was previously employed
at Ortho-Clinical Diagnostics (J&J) in Rochester, New York since1995, most
recently as Vice-president, Clinical Lab Instrumentation R & D. Prior to this
he worked at Eastman Kodak Company from 1971 to 1995, rising to the position
of Assistant Director, Clinical Diagnostic Research Labs. MacDonald has a
B.S. in Mechanical Engineering and Masters of Engineering degree from Cornell
University; he is also licensed as a professional engineer by the State of New
York.
Patrick R. Connelly is a co-inventor of the MRI-compatible pacemaker and
is working on the design of the system with Wilson Greatbatch. Connelly is
currently a graduate student pursuing a PhD in Biomedical Engineering at the
University of Rochester, his specialty being MRI technologies. Connelly holds
a Masters degree in Molecular Biology from Thomas Jefferson University in
Philadelphia and a B.S. degree in Electrical Engineering from Northeastern
University, Boston. Connelly was an assistant scientist and manager at NYU
Medical Center, New York and a research and design RADAR engineer for the US
Army. In addition, he has written several articles for a medical publication
ranging from vascular development to prefabrication of human cartilage.
ELECTION OF DIRECTORS
(Proposal 1)
The Company proposes that a Board of Directors consisting of five (5)
directors be elected by the shareholders at the Annual Meeting, each director
to hold office until the next Annual Meeting of shareholders or until the
successor of the director is duly elected and qualified.
The Board of Directors recommends the election of the five (5) nominees
named below. The Board of Directors does not contemplate that any of the
nominees will be unable to serve as a director, but should any such nominee so
notify the Company of the nominee's unavailability prior to the voting of the
proxies, the persons named in the enclosed proxy reserve the right to vote for
such substitute nominee or nominees as they, in their sole discretion, shall
determine.
Unless authority to vote for one or more of the director nominees is
specifically withheld according to the instructions, proxies which are
executed and returned to the Company prior to the Annual Meeting in the
enclosed form will be voted FOR the election of each of the five (5)
nominees named below. The proxy solicited by the Board of Directors will be
so voted unless shareholders specify a contrary choice therein. Directors are
elected by a plurality of votes cast. What follows is certain information
relating to each of the nominees for director:
Michael L. Weiner is an entrepreneur who has started six companies. Mr.
Weiner has extensive experience in licensing, having negotiated over 200
licenses producing tens of millions of dollars in licensing revenue from
products with gross sales of several hundred million dollars. Mr. Weiner began
his career at Xerox Corp., where he served in a variety of capacities in sales
and marketing, including manager of software market expansion and manager of
sales compensation planning. In 1985, after a ten year career at Xerox, Mr.
Weiner founded Microlytics, a Xerox spin-off company which developed
technology from the Xerox Palo Alto Research Center (PARC) into a suite of
products with licenses to companies including Microsoft, Symantec, Casio,
Canon, Sharp, Seiko, Smith Corona, SEC, Apple, WordPerfect, and Fuji Xerox.
Microlytics merged with Selectronics, a public company, in 1990. Weiner is
also co-founder and former CEO of Manning & Napier Information Services
(MNIS), Rochester -based information and consulting service with over 100
employees. TextWise, a company Weiner co-founded in 1994, with Dr. Elizabeth
D. Liddy, a professor at Syracuse University, has received over $12 million in
government research grants from DARPA, ORD, NIMA, USAF, and DoD. Weiner holds
three issued patents and has numerous patents pending, including as co-
inventor with Wilson Greatbatch and Patrick R. Connelly pertaining to the MRI-
compatible pacemaker.
Wilson Greatbatch began working in medical research after earning a B.S.
degree from Cornell University, an M.S.E.E. degree from the University of
Buffalo, and serving in the Navy during World War II. While experimenting
with oscillation, the recording of heart sounds and resulting electrical
pulses, he discovered way to regulate the human heart. After two years of
refinements, he handcrafted the world's first successful implantable
pacemaker. Greatbatch licensed the implantable pacemaker technology to
Medtronic Incorporated in 1961 and joined their board of directors. Medtronic
is the world's largest manufacturer of pacemakers. Mr. Greatbatch also
invented a corrosion-free lithium battery to power pacemakers. He then
founded what is today Wilson Greatbatch Technologies, Inc., the leading
developer and manufacturer of batteries, power sources and other components
used in implantable medical devices. In excess of 90% of the pacemakers and
implantable cardioverter defibrillators manufactured worldwide use power
sources manufactured or produced under license using technology owned by
Wilson Greatbatch Technologies, Inc. Mr. Greatbatch recently retired from
Wilson Greatbatch Technologies, Inc. In recognition of his inventions, and
numerous contributions to medical science and other disciplines, as evidenced
by a portfolio of more than 230 patents, Mr. Greatbatch was chosen as the
recipient of the Lifetime Achievement Award for 1996 by the Lemelson-MIT Prize
Program and currently serves as one of its invention ambassadors. In 1990 he
was awarded the National Medal of Technology for his contribution to medicine
by then President George Bush. Greatbatch was also inducted into the National
Inventors Hall of Fame and is a member of nine professional organizations
including the IEEE, the National Academy of Engineering, and the American
College of Cardiologists. On February 20, 2001, in further recognition of his
accomplishments, Mr. Greatbatch was honored by the National Academy of
Engineering for his invention of the implantable pacemaker with the award of
the Fritz J. and Dolores H. Russ Prize, the engineering profession's highest
honor for 2001. Greatbatch shares the award with Mr. Earl Bakken, a co-
founder of Medtronic.
Steven Katz is President of Steven Katz & Associates, Inc., a
technology-based management consulting firm specializing in strategic
planning, corporate development, new product planning, technology licensing,
and structuring and securing various forms of financing since 1982. Since
January 2000, Mr. Katz has also been President and Chief Operating Officer of
Senesco Technologies, Inc., a public company engaged in the development of
proprietary genes with application to agro-biotechnology. From 1983 to 1984
he was the co-founder and Executive Vice President of S.K.Y. Polymers, Inc., a
bio-materials company. Prior to S.K.Y. Polymers, Inc., Mr. Katz was Vice
President and General Manager of a non-banking division of Citicorp. From
1976 to 1980 he held various senior management positions at National Patent
Development Corporation, including President of three subsidiaries. Prior
positions were with Revlon, Inc. (1975) and Price Waterhouse & Co. (1969 to
1974). Mr. Katz received a Bachelors of Business Administration degree in
Accounting from the City College of New York in 1969. He is presently a
member of the Board of Directors of Senesco Technologies, Inc. and USA
Technologies, Inc., both publicly-held corporations, and several other private
companies.
Ross B. Kenzie is a former Chairman and Chief Executive Officer of
Goldome Bank, from which he retired in June 1989. He is a former Director of
the Federal Home Loan Bank of New York and served on the boards of the
National Council of Savings Institutions, the Federal Reserve Bank of New
York, Buffalo Branch, and the Savings Banks Association of New York State.
Mr. Kenzie is a Director of Millard Fillmore Hospitals and Past Chairman
Emeritus. He serves on the Board of the Kaleida Health, Education and
Research Foundation and its Investment Committee. He is a Director of the
Health Systems Agency of Western New York, and is a member of the Western New
York Commission on Health Care Reform. Mr. Kenzie is a member of the College
Council of the State University College at Buffalo and has served as Chairman.
He is a Director of the College's Foundation and a member of its Finance
Committee and its Investment Committee. He serves on the Council of the
Burchfield-Penney Art Center, and on its Executive Committee. He is also a
member of the Board, and the Chairman of the Investment Committee of the State
University at Buffalo Foundation. Mr. Kenzie currently serves on the boards
of several companies including many entrepreneurial ventures that are
privately held.
Robert S. Bramson is an engineer and patent attorney and is presently a
partner in Bramson & Pressman, a law firm that focuses on patent and
technology licensing matters, and is President of VAI Management Corp., a
consulting firm that specializes in patent and technology licensing; former
head of the Computer and Technology law group of Schnader, Harrison, Segal &
Lewis, a major law firm; former Vice President and General Patent and
Technology Counsel for Unisys; founder and former CEO of InterDigital Patents
Corporation, a patent licensing company; former Licensing Counsel for Abbott
Laboratories; and Adjunct Professor of Patent Law, Computer Law and
(presently) Licensing Law at Temple Law School, Rutgers Law School and
Villanova Law School at different times for over twenty years.
Except as disclosed above, none of the Company's directors is a director
of any company with a class of securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended, or of any company registered
under the Investment Company Act of 1940, as amended. There is no family
relationship among any members of the Board of Directors or the executive
officers or significant employees of the Company.
At the present time the Company has no Nominating Committee. The Board
has a Compensation Committee whose members are Messrs. Katz, Kenzie, and
Bramson, and an Audit Committee whose members are Messrs. Katz, Kenzie, and
Bramson. The Audit Committee was recently constituted as of June 22, 2001,
and did not undertake any role with respect to the fiscal year ended February
28, 2001. The Audit Committee has the responsibility for recommending the
appointment of the Company's outside auditors, reviewing the scope and results
of audits, and reviewing internal accounting controls and systems. The
Compensation Committee establishes the compensation of the Chief Executive
Officer of the Company, reviews the recommendations of management regarding
the compensation of other executive officers and administers the Company's
Stock Option Plans. All directors and executive officers are elected to serve
as directors and executive officers until the next annual meeting of
shareholders of the Company or until their successors have been elected and
qualified.
There are no arrangements or understandings between any director or
executive officer and any other persons pursuant to which any such directors
or executive officers was or is to be selected as a director or nominee for
director.
Section 16(a) Beneficial Ownership Reporting Compliance
Edward F. Cowle and David A. Miller were required to file Form 4 on
December 14, 2000 (10 days after change in beneficial ownership), and were
required to file Form 5 on April 14, 2001. Biophan, LLC was required to file
Form 3 on December 14, 2000 (10 days after it became a 10% holder). These
reports were not filed. The Company has instituted internal procedures to
insure the timely filing of such reports in the future.
EXECUTIVE COMPENSATION
For the fiscal year ended February 28, 2001, certain of the Company's
officers and directors worked on a part-time basis for the Company. The
allocable time of certain officers and employees, paid by Biophan, LLC, has
been charged to and accrued by the Company. The Board of Directors is
currently considering a formal program of executive compensation, incentive
stock options and other benefits for management personnel.
No current executive of the Company was paid any compensation by the
Company during the fiscal year ended February 28, 2001. Biophan, LLC paid
certain expenses, including executive compensation, on behalf of the Company
during the year ended February 28, 2001, aggregating $137,324.19. It is
expected that the Company will reimburse Biophan for the amounts prior to its
current fiscal year end.
EMPLOYMENT AGREEMENTS
Each of Michael L. Weiner, Chairman and Chief Executive Officer;
Stuart G. MacDonald, Vice President of Research and Development; Robert J.
Wood, Vice President, Treasurer and Chief Financial Officer; and Patrick R.
Connelly, Director of Biomedical Engineering entered into Employment
Agreements with the Company effective June 18, 2001.
Mr. Weiner's Employment Agreement has an initial term of three years
with subsequent one-year renewal periods. His Employment Agreement may be
terminated by the Company for cause (as defined in the Agreements) or upon the
death or disability of the Employee. In the event of disability of Employee,
termination of the Agreement by the Company following a Change in Control or
termination of the Agreement by the Employee for Good Reason, the Employee is
entitled to receive severance equal to one year's base salary, payable in
twelve equal consecutive monthly installments. Good Reason means (i) material
change of Employee's duties, (ii) material breach by the Company, or (iii)
voluntary termination by Employee within ninety (90) days after a Change in
Control.
The Employment Agreements for each of Mr. MacDonald, Mr. Wood and Mr.
Connelly are terminable by either the employee or the Company upon two weeks
notice or by the Company for cause(as defined in the Employment Agreements) or
upon the death or disability of the Employee. However, each of the
aforementioned employees is entitled to receive severance equal to six months'
base salary, payable in six equal consecutive monthly installments in the
event that the employee is terminated by the Company within ninety (90) days
following a Change in Control.
The Employment Agreements set out the following compensation:
Base Salary Stock Options
Michael L. Weiner $175,000 250,000
Stuart G. MacDonald $100,000 100,000
Robert J. Wood $83,200 50,000
Patrick R. Connelly $47,600 50,000
For purposes of the Employment Agreements, were applicable, "Change in
Control means the occurrence of any one of the following events:
(i) (A) any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or
which contemplates that all or substantially all of the business
and/or assets of the Company, shall be controlled by another
corporation or (B) a recapitalization (including an exchange of
the Company's equity securities by the holders thereof), in either
case, in which any "Person" (as such term is used in Section 13
(d) and 14 (d) (2) of the Exchange Act), becomes the beneficial
owner (within the meaning of Rule 13d 3 promulgated under the
Exchange Act) of securities of the Company representing more than
50% of the combined power of the then outstanding securities
ordinarily having the right to vote in the election of directors;
(ii) any sale, lease, exchange or transfer (in one
transaction or series of related transactions) of all or
substantially all of the assets of the Company;
(iii) approval by the shareholders of the Company of any
Company, unless such plan or proposal is abandoned within sixty
(60) days following such approval;
(iv) any case in which any "Person" (as such term is used
in Sections 13 (d) and 14 (d) (2) of the Exchange Act), becomes
the beneficial owner of securities of the Company representing
more than 50% of the combined voting power of outstanding
securities ordinarily having the right to vote in the election of
directors;
(v) during any period of two consecutive years a majority
of the Board of Directors no longer consists of individuals who
were members of the Board of Directors at the beginning of such
period, unless the election of each director who was not a
director at the beginning of the period was approved by a vote of
at least two-thirds of the directors still in office who were
directors at the beginning of the period.
APPROVAL OF THE AMENDMENT
OF THE COMPANY'S CERTIFICATE
OF INCORPORATION
(Proposal 2)
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CHANGE ITS NAME TO BIOPHAN TECHNOLOGIES, INC.
(Proxy Item 2)
On June 25, 2001 the Board of Directors adopted a resolution approving
the amendment of the Company's Certificate of Incorporation to change the name
of the Company to Biophan Technologies, Inc. The Board believes that the
change of name will be beneficial to the Company in its business dealings and
the branding of its technologies. The Company has entered into an agreement
with Biophan, LLC, a major shareholder of the Company, to license the use of
the name and trademark, "Biophan".
Approval of the proposal to change the name of the Company requires the
affirmative vote of the holders of a majority of the outstanding Common Shares
entitled to vote at the Annual Meeting. Abstentions and broker non-votes are
not considered votes cast. In the absence of instructions to the contrary,
proxies covering the Common Shares will be voted FOR the amendment.
The Board of Directors recommends that shareholders vote FOR the
proposed Amendment to the Certificate of Incorporation.
APPROVAL OF THE 2001 STOCK OPTION PLAN
(Proposal 3)
On June 25, 2001, the Board of Directors adopted, subject to shareholder
approval, the 2001 Stock Option Plan (the "Plan"). The Board believes that the
Plan provides a balanced approach to rewarding key employees, directors, and
scientific advisory board members, linked to total return to shareholders as
reflected in share price appreciation.
The following is a summary of the material features of the Plan. The
full text of the Plan is attached as Appendix A, and the following summary is
qualified in its entirety by reference to it.
Purpose. The purpose of the Plan is to advance the interests of
the Company and its shareholders by strengthening the Company's ability to
attract and retain individuals of training, experience, and ability as
officers, key employees, directors and consultants and to furnish additional
incentive to such key individuals to promote the Company's financial success
by providing them with an equity ownership in the Company commensurate with
Company performance, as reflected in increased shareholder value. It is the
intent of the Company that such individuals be encouraged to obtain and retain
an equity interest in the Company and each Participant will be specifically
apprised of said intent.
Administration. The Plan will be administered by the Compensation
Committee, composed of not less than two directors appointed by the Board.
Each member of the Compensation Committee shall, at all times during their
service as such, be a "non-employee director" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934. The Compensation Committee shall
have conclusive authority to construe and interpret the Plan and any Award
Agreement entered into thereunder, and to establish, amend and rescind
administrative policies for the administration of the Plan; and such
additional authority as the Board of Directors may from time to time determine
to be necessary or desirable.
Term. The plan shall become effective as of June 1, 2001 subject to its
approval by Company shareholders.
Eligibility. Those persons eligible to participate in the Plan shall
include officers and other key employees, directors, and consultants of the
Company and its subsidiaries..
Shares Subject to the Plan. Subject to adjustment as provided in the
Plan, the total number of Common Shares available under the Plan shall be
2,500,000 Common Shares.
Participation. The Compensation Committee shall select, from time to
time, key employees and consultants who, in the opinion of the Compensation
Committee, can further the Plan's purposes and the Compensation Committee
shall determine the type or types of awards to be made to the participant. The
terms, conditions and restrictions of each award shall be set forth in an
Award Agreement. Non-employee Directors shall automatically receive an
initial grant of options to purchase 30,000 shares, and additional grants of
10,000 shares each year for continued service on the Board after three years;
and Members of the Scientific Advisory Board shall automatically receive
grants of options to purchase 8333 shares each year for continued service on
the Scientific Advisory Board.
Stock Options. Awards may be granted in the form of non-statutory stock
options and incentive stock options.
Restricted Stock Awards. Awards may be granted in the form of
Restricted Stock Awards. Restricted Stock Awards are subject to such terms,
conditions, restrictions, or limitations as the Compensation Committee deems
appropriate.
Change in Control. In the event of a "change in control" of the
Company: stock options not otherwise exercisable shall become fully
exercisable; all restrictions previously established with respect to
Restricted Stock Awards will conclusively be deemed to have been satisfied.
Tax Matters. Section 162(m) of the Internal Revenue Code prohibits a
publicly held corporation, such as the Company, from claiming a deduction on
its federal income tax return for compensation in excess of $1 million paid
for a given fiscal year to the chief executive officer (or person acting in
that capacity) at the end of the corporation's fiscal year and the four most
highly compensated officers of the corporation, other than the chief executive
officer, at the end of the corporation's fiscal year. The $1 million
compensation deduction limitation does not apply to "performance-based"
compensation under Section 162(m) of the Code.
The final regulations promulgated by the Internal Revenue Service under
Section 162(m) (the "Final Regulations") set forth a number of requirements
which must be satisfied in order for compensation paid under the Plan to
qualify as "performance-based" for purposes of Section 162(m). The Company is
seeking shareholder approval of the Plan in order to qualify certain
compensation awarded under the Plan as "performance-based" for purposes of
Section 162(m).
Federal Income Tax Consequences
The following is a brief summary of the principal anticipated federal
income tax consequences of grants under the Plan to recipients and the
Company. This summary is not intended to be exhaustive and does not describe
all federal, state or local tax laws.
Option Grants. Options granted under the Plan may be either incentive
stock options which satisfy the requirements of Section 422 of the Internal
Revenue Code or non-statutory options which are not intended to meet such
requirements. The federal income tax treatment for the two types of options
differs as follows:
Incentive Options. No taxable income is recognized by the optionee at
the time of the option grant, and no taxable income is generally recognized at
the time the option is exercised, provided, that the optionee may incur
alternative minimum tax liability upon exercise. The optionee will, however,
recognize taxable income in the year in which the purchased shares are sold or
otherwise made the subject of a taxable disposition. For federal tax purposes,
dispositions are divided into two categories: (i) qualifying and (ii)
disqualifying. A qualifying disposition occurs if the sale or other
disposition is made after the optionee has held the shares for more than two
(2) years after the option grant date and more than one (1) year after the
exercise date. If either of these two (2) holding periods is not satisfied,
then a disqualifying disposition will result.
Upon a qualifying disposition, the optionee will recognize long-term
capital gain in an amount equal to the excess of (i) the amount realized upon
the sale or other disposition of the purchased shares over (ii) the exercise
price paid for the shares. If there is a disqualifying disposition of the
shares, then the excess of (i) the fair market value of those shares on the
exercise date over (ii) the exercise price paid for the shares will be taxable
as ordinary income to the optionee. Any additional gain or loss recognized
upon the disposition will be recognized as a capital gain or loss by the
optionee.
If the optionee makes a disqualifying disposition of the purchased
shares, then the Company will be entitled to an income tax deduction, for the
taxable year in which such disposition occurs, equal to the excess of (i) the
fair market value of such shares on the option exercise date over (ii) the
exercise price paid for the shares. In no other instance will the Company be
allowed a deduction with respect to the optionee's disposition of the
purchased shares.
Non-Statutory Options. No taxable income is recognized by an optionee
upon the grant of a non-statutory option. The optionee will in general
recognize ordinary income, in the year in which the option is exercised, equal
to the excess of the fair market value of the purchased shares on the exercise
date over the exercise price paid for the shares, and the optionee will be
required to satisfy the tax withholding requirements applicable to such
income.
If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the
optionee's termination of service prior to vesting in those shares, then the
optionee will not recognize any taxable income at the time of exercise but
will have to report as ordinary income, as and when the Company's repurchase
right lapses, an amount equal to the excess of (i) the fair market value of
the shares on the date the repurchase right lapses over (ii) the exercise
price paid for the shares. The optionee may, however, elect under Section
83(b) of the Internal Revenue Code to include as ordinary income in the year
of exercise of the option an amount equal to the excess of (i) the fair market
value of the purchased shares on the exercise date over (ii) the exercise
price paid for such shares. If the Section 83(b) election is made, the
optionee will not recognize any additional income as and when the repurchase
right lapses.
The Company will be entitled to an income tax deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised non-statutory option. The deduction will in general be allowed for
the taxable year of the Company in which such ordinary income is recognized by
the optionee.
Restricted Stock. Generally, a recipient will not recognize income and
the Company will not be entitled to a deduction with respect to an award of
Restricted Stock until the first to occur of the vesting or the free
transferability of such shares. The amount to be included in the recipient's
income (and, subject to the discussion of Section 162(m) of the Code below,
which may be deductible by the Company) will equal the fair market value of
the Restricted Stock on the first day it is freely transferable or vested, not
when it is first issued to a recipient, over the amount, if any, paid for such
stock. The Company will be entitled to withhold tax from a recipient's salary
or from the shares that are no longer subject to restriction in order to
satisfy any tax withholding obligation arising from the taxability of the
Restricted Stock. A recipient receiving Restricted Stock can elect to
include the value of the Restricted Stock, over the amount, if any, paid for
such stock, in income at the time it is awarded by making a "Section 83(b)
Election" within 30 days after the Restricted Stock is transferred to the
recipient.
Section 162(m). Section 162(m) of the Code generally disallows a federal
income tax deduction to any publicly held corporation for compensation paid in
excess of $1 million in any taxable year to the chief executive officer(s) or
any of the four other most highly compensated executive officers who are
employed by the Company on the last day of the taxable year. The restrictions
on deductibility under Section 162(m) of the Code do not apply to certain
performance-based compensation. Grants under the Plan are intended to satisfy
the requirements for deductible compensation under Section 162(m) of the Code.
However, due to various factors, not all grants under the Plan may be
deductible under Section 162(m) of the Code.
Plan Benefits. Through June 15, 2001, no options have been granted under
the Plan; however, the Company has committed itself to grant a total of
961,664 options under the Plan upon approval by the shareholders.
Approval of the Plan requires the affirmative vote of a majority of
votes cast. Abstentions and broker non-votes are not considered votes cast.
In the absence of instructions to the contrary, proxies covering the Common
Shares will be voted FOR the amendment.
The Board of Directors recommends that the shareholders vote FOR the
Plan.
APPROVAL OF INDEPENDENT ACCOUNTANTS
(Proposal 4)
For the year ended February 28, 2001, Goldstein Golub & Kessler, LLP
served as the Company's independent public accountants. For the year ended
February 29, 2000, the accounting firm of LeMaster & Daniels, PLLC served as
the independent public accountants of the company for the purpose of reporting
on the audit of the company's financial statements.
On April 25, 2001, GreatBio Technologies, Inc. dismissed Arthur Andersen
LLP as its independent accountants. The Company's Board of Directors approved
the decision to change independent accountants. Arthur Andersen LLP issued no
reports on the financial statements. Arthur Andersen LLP was engaged from
January 15, 2001 through April 24, 2001 and during such period there have been
no disagreements with Arthur Andersen LLP on any matter of accounting
principles or practices, financial statement disclosure, auditing scope or
procedure, which disagreements if not resolved to the satisfaction of Arthur
Andersen LLP would have caused them to make reference thereto in their report
to be issued on the financial statements. During the period in which Arthur
Andersen LLP was engaged there have been no reportable events as defined in
Regulation S-K Item 304(a)(1)(v). The Company has requested that Arthur
Andersen LLP furnish it with a letter addressed to the SEC stating whether or
not it agrees with the above statements. A copy of such letter, dated May 4,
2001, was filed as Exhibit 16 to Form 8-K filed on May 7, 2001.
The Company engaged Goldstein Golub & Kessler, LLP as its new
independent accountants as of April 25, 2001. During the two most recent
fiscal years and through April 25, 2001, the Company has not consulted with
Goldstein Golub & Kessler, LLP regarding either (i) the application of
accounting principles to a specified transaction, either completed or
proposed; or the type of audit opinion that might be rendered on the Company's
financial statements, and neither a written report nor oral advice was
provided to the Company that was an important factor considered by the Company
in reaching a decision as to the accounting, auditing or financial reporting
issue; or (ii) any matter that was either the subject of a disagreement, as
that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K, or a reportable event, as that
term is defined in Item 304(a)(1)(v) of Regulation S-K.
AUDIT FEES
The audit fees for the audit of the Company's Financial Statements for
the year ended February 28, 2001 have not yet been billed, but the Company
anticipates that those fees will be $12,500.00.
Financial Information Systems Design and Implementation Fees:
None.
All other Fees:
None.
Approval of the auditors requires the affirmative vote of a majority of
votes cast. Abstentions and broker non-votes are not considered votes cast.
In the absence of instructions to the contrary, proxies covering the Common
Shares will be voted FOR the appointment of Goldstein Golub & Kessler, LLP as
the Company's independent public accountants for the year ending February 28,
2002. If the shareholders do not appoint Goldstein Golub & Kessler, LLP, the
selection of independent public accountants will be made by the Board of
Directors, and Goldstein Golub & Kessler, LLP may at that time be considered
for such appointment.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of
no other matters that are to be presented for consideration at the Annual
Meeting. Should any other matter come before the Annual Meeting, however, the
persons named in the enclosed proxy will have discretionary authority to vote
all proxies with respect to any such matter in accordance with their judgment.
Shareholders are requested to date, sign and return the proxy in the
enclosed envelope. If you attend the Annual Meeting, you may revoke your
proxy at that time and vote in person if you so desire; otherwise, your proxy
will be voted for you.
PROXY
GREATBIO TECHNOLOGIES, INC.
this Proxy is solicited on Behalf of the Board of Directors
The undersigned hereby appoints Michael L. Weiner, Robert J. Wood, or
either of them with full power of substitution, proxies to vote at the Annual
Meeting of Stockholders of GREATBIO TECHNOLOGIES, INC. (the "Company") to be
held on July 19, 2001 at 10:00 a.m., local time, and at any adjournment or
adjournments thereof, hereby revoking any proxies heretofore given, to vote
all shares of common stock of the Company held or owned by the undersigned as
directed on the reverse side of this proxy card, and in their discretion upon
such other matters as may come before the meeting. If no direction is made,
shares will be voted FOR the election of directors named in the proxy and FOR
Proposals 2,3, 4, and 5.
1. Election of five (5) directors (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
LIST BELOW)
FOR all nominees listed to the right [__] Michael L. Weiner
(except as marked to the contrary) Wilson Greatbatch
Steven Katz
WITHHOLD AUTHORITY to vote [__] Ross B. Kenzie
for all nominees listed to the right Robert S. Bramson
FOR AGAINST ABSTAIN
2. Proposal to amend the Company's [__] [__] [__]
Certificate of Incorporation to change
the name of the Company to Biophan
Technologies, Inc.
3. Proposal to approve the Company's 2001 Stock [__] [__] [__]
Option Plan.
4. Proposal to appoint Goldstein Golub Kessler [__] [__] [__]
LLP as the Company's independent public accountants for the year
ending February 28, 2002.
5. Transaction of such other business as may [__] [__] [__]
properly come before the meeting or any
adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Dated: _______________________ 2001
____________________________________
Signature
____________________________________
Signature
IMPORTANT: Sign the Proxy exactly as your name or names appear on your Common
Stock certificate; in the case of Common Stock held in joint tenancy, each
joint tenant must sign. Fiduciaries should indicate their full titles and
the capacity in which they sign. Please complete, sign, date, and return this
Proxy promptly in the enclosed envelope.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
In order for any shareholder proposal to be included in the Company's
Proxy Statement to be issued in connection with the 2002 Annual Meeting of
Shareholders, such proposal must be received by the Company no later than May
1, 2002.
THE FINANCIAL STATEMENTS OF THE COMPANY AS THEY APPEARED IN THE ANNUAL
REPORT OF THE COMPANY ON FORM 10-K FOR YEAR ENDED FEBRUARY 28, 2001, TOGETHER
WITH THE AUDITORS' REPORT, IS INCLUDED WITH THIS PROXY. A COMPLETE COPY OF
THE COMPANY'S FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO: GREATBIO TECHNOLOGIES, INC,
150 LUCIUS GORDON DRIVE, SUITE 201, WEST HENRIETTA, NEW YORK, 14586,
ATTENTION: CORPORATE SECRETARY.
By Order of the Board of Directors
/s/David A. Miller
Secretary
Dated: July 2, 2001
Rochester, New York