SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/X/ 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 Section 240.14a-12
CRYO-CELL INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of CRYO-CELL International, Inc.
Notice is hereby given that the Annual Meeting of the Shareholders
of CRYO-CELL International, Inc. will be held on June 20, 2000, at 10:00
A.M. local time at the corporate headquarters of CRYO-CELL located at 3165
McMullen Booth Road, Building B, Clearwater, Florida 33761. The meeting is
called for the following purpose:
1. To amend the Certificate of Incorporation for reclassification of
the terms of the Board of Directors,
2. To elect a board of five directors,
3. To adopt the Stock Incentive Plan,
4. To approve an amendment to the Certification of Incorporation to
increase the authorized shares of common stock,
5. To approve the ratification of Weinick Sanders Leventhal & Co.,
LLP as the Company's independent auditors,
6. To consider and take action upon such other matters as may
properly come before the meeting or any other adjournment or
adjournments thereof.
The close of business on May 1, 2000 has been fixed as the record date for
the determination of Shareholders entitled to notice of, and to vote at, the
meeting. The stock transfer books of the Company will not be closed.
All Shareholders are cordially invited to attend the meeting. PLEASE NOTE
THAT IF YOU ARE NOT ABLE TO ATTEND THE MEETING PLEASE RETURN THE ENCLOSED
PROXY CARD.
By Order of the Board of Directors
Jill M. Taymans
Chief Financial Officer
Dated: May 22, 2000
CRYO-CELL INTERNATIONAL, INC.
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PROXY STATEMENT
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This Proxy Statement is furnished to the shareholders of CRYO-CELL
International, Inc. (the "Company") in connection with the 2000 Annual
Meeting of Shareholders (the "Annual Meeting") and any adjournment thereof.
The Annual Meeting will be held at the CRYO-CELL International, Inc.
headquarters located at 3165 McMullen Booth Road, Building B, Clearwater,
Florida 33761 on June 20, 2000 at 10:00 A.M. local time.
The Annual Meeting is being held for the purpose set forth in the
accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement
and the Notice of Annual Meeting are being provided to shareholders beginning
on or about May 22, 2000. The Company, a Delaware Corporation, has its
principal executive offices at 3165 McMullen Booth Road, Building B,
Clearwater, Florida 33761.
SOLICITATION OF PROXIES
The Company is soliciting proxies. The cost of distributing the
Proxy Statement and Annual Meeting Notice will be borne by the Company.
Brokerage houses and nominees will be requested to supply lists of or forward
the information material to the beneficial owners. The Company, upon request,
will reimburse such brokerage houses and nominees for their reasonable
expenses in forwarding information materials to their beneficial owners.
Proxies will be voted as indicated and if no proxy or designation is made a
vote by management will be for the proposal.
VOTING SECURITIES
The Company presently has one class of voting capital stock
outstanding: Common Stock, par value $.01 per share.
As of May 1, 2000, there were issued and outstanding 10,017,049
shares of Class A Common Stock.
PROPOSALS TO BE VOTED ON
PROPOSAL NO. 1
AMENDMENT TO CERTIFICATE OF INCORPORATION FOR RECLASSIFICATION OF
THE TERMS OF ITS DIRECTORS
GENERAL
On May 1, 2000, the Board of Directors approved an amendment to the
Company's Certificate of Incorporation to provide for the classification of
the Board of Directors into three classes (the "Classified Board Amendment").
Under Delaware law, the adoption of an amendment to the Certificate of
Incorporation is subject to the approval of the Company's stockholders. The
Board recommends that the stockholders amend and restate the Company's
Certificate of Incorporation to approve the Classified Board Amendment.
Currently, the Company's Board of Directors is comprised of a single
class of four directors, all of whom are elected at the annual meeting of
stockholders. The Company has the authority to expand the Board to nine
directors. The Classified Board Amendment would provide for the
classification of the Board of Directors into three separate classes as
nearly equal in number as possible, with one class being elected each year to
serve a staggered three-year term. The full text of the proposed Amended and
Restated Certificate of Incorporation, including the provisions relating to
the Classified Board Amendment, is attached hereto as Appendix A.
EFFECT OF THE CLASSIFIED BOARD AMENDMENT
The classification of directors will have the effect of making it
more time-consuming to change majority control of the Company's Board of
Directors. Generally at least two stockholder meetings, instead of one, would
be required to effect a change in the majority control of the Company's Board
of Directors. It should also be noted that the classification provision will
apply to every election of directors, rather than only an election occurring
after a change in control, and will apply whether or not a majority of the
stockholders believes a change in the Company Board would be beneficial to
the Company and its stockholders and whether or not a majority of the
Company's stockholders believes that such a change would be desirable.
Pursuant to the Delaware General Corporation Law and the current
Bylaws of the Company, members of the Board of Directors may be removed, with
or without cause, at any time during their term of office by the holders of a
majority of the shares of common stock then entitled to vote at an election
of directors. The Delaware General Corporation Law, however, also provides
that the directors serving on a classified board of directors may be removed
prior to the expiration of their terms by the holders of a majority of the
shares of a company's voting stock only for cause, unless otherwise provided
by the Certificate of Incorporation. Accordingly, in the absence of a change
to the Company's Certificate of Incorporation, the directors serving on the
Company's classified Board of Directors could be removed only for cause.
In order to remove any potential conflict with the Company's Bylaws,
the Board of Directors presently intends to amend the Company's Bylaws to,
among other things, clarify that directors can only be removed for cause. It
is anticipated that, at such time, the Board of Directors shall also amend
the Company's Bylaws to, among other things, confirm that the number of
directors of the Company shall be up to nine, establish that board members
shall be entitled to participate in Company stock incentive plans and confirm
that a shareholder quorum consists of one third of the total number of issued
an outstanding shares entitled to vote.
If the classified Board of Directors proposal is adopted, a director
appointed to fill a vacancy that occurs during the year shall serve until the
end of the term of the position filled or until his successor is elected and
qualified or his earlier death, resignation or removal.
REASONS FOR AND ADVANTAGES OF A CLASSIFIED BOARD OF DIRECTORS
This proposal is not prompted by any specific efforts of which the
Company is aware to accumulate the Company's securities or to obtain control
of the Company. The Board of Directors is making this proposal at this time
because management believes that in the future the Company might receive
proposals that the directors feel would not be in the best interests of the
Company's stockholders. The Board of Directors believes the adoption of a
classified Board will decrease the probability that the Company will be
caused to enter into a transaction that is not in the best interests of the
Company's stockholders.
The Company's Board of Directors is asking the Company's
stockholders to adopt and approve the Classified Board Amendment in order to
discourage certain types of transactions, which involve an actual or
unsolicited change of control of the Company. The classified board is
designed to make it more difficult and time-consuming to change majority
control of the Company's Board of Directors and thus to reduce the
vulnerability of the Company to an unsolicited offer to acquire the Company.
The Company's Board believes that, as a general rule, such unsolicited offers
would not be in the best interests of the Company and its stockholders.
In addition, the longer time required to elect a majority of a
classified board will also help to preserve continuity and stability of the
Company's management and policies by increasing the likelihood a majority of
the directors at any given time will have at least one year of prior
experience as directors of the Company. In the past, the Company has not
experienced problems with continuity in its Board or with proxy contests
relating to the election of directors.
CERTAIN DISADVANTAGES OF A CLASSIFIED BOARD OF DIRECTORS
The Company's Certificate of Incorporation does not currently permit
cumulative voting in the election of Company directors and the proposal
relating to the classified board will not permit cumulative voting.
Accordingly, the holders of a majority of the shares voting at a meeting for
the election of directors can currently elect all of the directors then being
elected at any annual or special meeting of the Company's stockholders. The
adoption and approval of the Classified Board Amendment would make more
difficult or discourage (i) a proxy contest for control of the Company by a
holder of a substantial block of the Company's capital stock or (ii) the
removal of the incumbent Board of Directors and, therefore, could have the
effect of entrenching incumbent management. At least two annual meetings
would be needed to change a majority of the Company's Board of Directors.
VOTE REQUIRED FOR APPROVAL
The Board of Directors is asking the stockholders to consider and
adopt the Classified Board Amendment to encourage any person intending to
attempt a takeover or restructuring to try first to negotiate with the Board
and management. In this way, the Board of Directors believes that it and
management would be better able to protect the interests of all stockholders
by ensuring that the best price is obtained in any transaction involving the
Company. Under Delaware corporation law, the affirmative vote of the holders
of a majority of all of the Company's outstanding shares of Common Stock
entitled to vote is required to adopt the amendment to the Certificate of
Incorporation concerning classification of the Board. As required by Delaware
corporation law, the amendment has already been approved by a resolution of
the Board of Directors and, upon requisite stockholder approval, will become
effective upon the filing of a certificate of amendment with the Delaware
Secretary of State.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE
"FOR" THIS PROPOSAL TO AMEND AND RESTATE THE CERTIFICATE OF INCORPORATION OF
THE COMPANY TO PROVIDE FOR THE CLASSIFICATION OF THE BOARD OF DIRECTORS.
PROPOSAL NO. 2
ELECTION OF DIRECTORS
The Board of Directors currently consists of four directors, and
five directors of the Company are to be elected at the meeting. As set forth
above, the Board of Directors is also proposing to stagger the terms of
directors of the Company by classifying the Board into three separate
classes. If Proposal No. 1 is approved, the Board of Directors will divide
the Board into three separate classes, as nearly equal in number as possible,
with terms expiring in 2001 for Class I, 2002 for Class II and 2003 for Class
III. If Proposal I is not approved, each of the
five directors will hold office until the next Annual Meeting of Stockholders
and until his/her successor is elected and qualified, or as otherwise
provided by the Company's Bylaws or by Delaware law.
The Board of Directors has nominated the five persons named below
for election as directors. Four out of the five nominees are presently
serving as directors. All current members of the Board have been previously
elected as directors by the Company's stockholders. It is intended that the
shares represented by the enclosed proxy will be voted for the election of
these five nominees (unless such authority is withheld by a stockholder) as
described herein. In the event that any of the nominees should become unable
or unwilling to serve as a director (which is not anticipated), it is
intended that the proxy will be voted for the election of such person or
persons, if any, who shall be designated by the Board of Directors.
The nominees for election as Directors are as follows:
CLASS I DIRECTORS FOR A TERM EXPIRING IN 2001
GERALD F. MAASS, 46, EXECUTIVE VICE PRESIDENT AND GENERAL MANAGER. Mr. Maass
joined the Company from Critikon, a subsidiary of Johnson & Johnson, where
his most recent position was International Director of Marketing for the
Patient Monitoring business. Mr. Maass' ten-year tenure with Johnson and
Johnson included several marketing and business development roles; he also
served on the Critikon management committee. Prior to Johnson & Johnson, Mr.
Maass was with Baxter Healthcare and Control Data Corporation in marketing,
sales management, business development and business management roles. Mr.
Maass began his career with Mayo Clinic in Rochester, MN and has a degree in
Medical Technology.
Director since 1998.
JUNIOR WINOKUR, 49, SENIOR VICE PRESIDENT, CORPORATE DEVELOPMENT, LAMAZE
PUBLISHING COMPANY. Previously Ms. Winokur served for 13 years at CBS, Inc.
in various sales management positions in the Radio Division in New York,
Chicago and San Francisco and in 1983 became the first female General Sales
Manager in the AM Radio Group. In 1989, Ms. Winokur was named Director of
Sales for the Wall Street Journal Radio Network. In 1993, she was appointed
Vice President, Sales for Time, Inc., a division of Time Warner. In 1994 Ms.
Winokur joined Lamaze Publishing Company where besides her present position
she has held positions of President, Group Publisher.
CLASS II DIRECTOR FOR A TERM EXPIRING IN 2002
DANIEL D. RICHARD, 69, CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER. Mr. Richard is the founder of the company and co-inventor of the
Company's technologies. He has served as Chairman of the Board since the
Company's inception. In 1986, he was a co-founder and served as an initial
officer and director of Marrow-Tech, Inc., a publicly traded company engaged
in the field of cellular replication. Prior to that Mr. Richard was President
of Daniel Richard Consultants, Inc. During that time frame his organization
was responsible for setting up restaurant marketing programs in over forty
cities.
Director since 1989.
CLASS III DIRECTORS FOR A TERM EXPIRING IN 2003
EDWARD MODZELEWSKI, 71, DIRECTOR. Mr. Modzelewski owned and operated a
successful chain of 10 fast food restaurants and a popular Steak House in
Cleveland, Ohio which was purchased by Choc-Ful-O-Nuts, a New York Stock
Exchange Company. Mr. Modzelewski is a graduate of the University of Maryland
School of Business. While at the University of Maryland, Mr. Modzelewski was
an All-American football player and went on to play professional football for
8 years.
Director since 1996.
FREDERICK C. S. WILHELM, 69, DIRECTOR. Mr. Wilhelm was formerly Chairman of
the Board of Directors of Buffalo Scale and Supply, Inc., a distributor of
scales. He was President of that company from 1976 to 1989. Mr. Wilhelm has
served as a member of the Board of Directors since the inception of the
Company.
Director since 1989.
There are no family relationships between or among any directors or
executive officers of the Company.
VOTE REQUIRED
The five director nominees receiving the greatest number of votes of
the Common Stock represented at the meeting (in person or by proxy) will be
elected directors assuming a quorum is present at the meeting. Shares of Common
Stock represented by proxies that are marked "without authority" with respect to
the election of one or more nominees for director have no effect on the outcome
of the election.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" THE ELECTION OF ALL THE ABOVE-NAMED NOMINEES AS DIRECTORS OF THE
COMPANY
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of May 1, 2000, there was 10,017,049 Common Shares outstanding
and entitled to vote at the Annual Meeting. Each common share is entitled to
one vote on each of the matters to be voted on at the Annual Meeting. The
table listed below sets forth, as of May 1, 2000, the beneficial ownership of
all persons known by the Company to own beneficially 5% or more of the
outstanding shares of the Company's voting stock, each Director, Executive
Officer and all Executive Officers and Directors of the Company as a group as
of May 1, 2000:
NAME OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS (1)
Richard Family Living Trust 1,017,500 8.86%
Daniel D. Richard (2) * 163,025 1.42%
Marie E. Richard (3) 101,000 *
Gerald F. Maass (4)* 73,400 *
Edward Modzelewski (5) * 54,100 *
Frederick C.S. Wilhelm (6) * 78,000 *
Junior Winokur 1,500 *
All Executive Officers and
Directors As a Group (10 persons) 13.679%
* - Less than one percent (1%).
All addresses for the persons listed above are 3165 McMullen Booth
Road, Building B, Clearwater, Florida 33761.
(1) Pursuant to the rules of the Securities and Exchange Commission, the
percentage of voting stock for each stockholder is calculated by dividing
(i) the number of shares deemed to be beneficially held by such
stockholders as of May 1, 2000 by (ii) the sum of (a) the number of
shares of Common Stock outstanding as of May 1, 2000 plus (b) the number
of shares issuable upon exercise of options (which are shares that are
not voting until exercised) held by such stockholder which were
exercisable as of May 1, 2000 or will become exercisable within 60 days
after May 1, 2000.
(2) This does not include 101,000 shares owned by his wife, Marie E. Richard,
of which Mr. Richard disclaims beneficial ownership.
(3) This does not include 163,025 shares owned by her husband, Daniel D.
Richard, of which Mrs. Richard disclaims beneficial ownership.
(4) Includes 60,000 shares subject to options exercisable as of May 1, 2000.
(5) Includes 13,750 shares subject to options exercisable as of May 1, 2000.
(6) Includes 28,000 shares subject to options exercisable as of May 1, 2000.
COMPENSATION OF EXECUTIVE OFFICERS
Set forth below is a Summary Compensation table relating to the Chief
Executive Officer and its other executive officers for 1999 and 1998.
NAME AND RESTRICTED OTHER
PRINCIPAL POSITION YEAR SALARY STOCK COMPENSATION
Daniel D. Richard
Chief Executive Officer 1999 $162,885 ----- (1)
1998 $140,000 ----- ----
Gerald F. Maass
Executive Vice President 1999 $108,846 10,000 ----
General Manager 1998 $ 75,000
Other Executive Salaries 1999 $196,747 4,000 ----
1998 $160,837 ----
(1) On August 12, 1999, the Board of Directors granted 1,000,000 options to
purchase shares of the Company's common stock to Daniel D. Richard in
recognition of his contributions,(e.g., patent assignments, business
development activities, etc.) subject to approval of the Stock Incentive
Plan. The 1,000,000 options were granted as follows: 250,000 options at an
exercise price of $4.50 per share, 250,000 options at an exercise price of
$5.00 per share, 100,000 options at an exercise price of $6.00 per share,
100,000 options at an exercise price of $7.00 per share, 100,000 options at
an exercise price of $8.00 per share, 100,000 options at an exercise price
of $9.00 per share, and 100,000 options at an exercise price of $10.00 per
share. On August 12, 1999 the market price of the stock was approximately
$4.00 per share.
COMPENSATION OF DIRECTORS
CONSULTING NUMBER OF SECURITIES
NAME YEAR FEES RESTRICTED STOCK UNDERLYING OPTIONS
Edward Modzelewski 1999 ----- 10,000
1998 ----- 6,000*
Frederick C.S. Wilhelm 1999 ----- 10,000
1998 ----- 6,000*
* These options are exercisable to purchase common stock at $3.00 per share
for a period of 3 years.
PROPOSAL NO. 3
ADOPTION OF STOCK INCENTIVE PLAN
The Board of Directors adopted the CRYO-CELL International, Inc.
Stock Incentive Plan (the "Stock Plan") effective as of August 12, 1999,
subject to approval by the stockholders of the Company at the 2000 Annual
Meeting of Stockholders.
The Stock Plan authorizes a committee (the "Committee") to grant
options to purchase shares of the Company's Common Stock ("Options") to
officers, key employees and directors of the Company. The purpose of the
Stock Plan is to promote the growth and profitability of the Company by
rewarding and incentivizing individuals who make valuable contributions to
the Company's success, including officers and employees of the Company and
its subsidiaries, directors and advisors of the Company.
To date, the Company has operated under the original Incentive Stock Option
Plan which expired on April 1, 2000. The new plan will have a 10-year term.
SUMMARY OF THE STOCK PLAN
THE FOLLOWING GENERAL DESCRIPTION OF CERTAIN FEATURES OF THE STOCK
OPTION PLAN IS QUALIFIED IN ITS ENTIRETY TO REFERENCE TO THE STOCK OPTION
PLAN. THE STOCK OPTION PLAN IS AVAILABLE UPON REQUEST.
SHARES AVAILABLE UNDER THE STOCK PLAN. Subject to adjustment as
provided in the Stock Incentive Plan, the number of shares of Common Stock
that may be issued or transferred and covered by outstanding awards granted
under the Stock Incentive Plan will not in the aggregate exceed 1,500,000,
which may be original issue shares, treasury shares, or a combination
thereof. As of the Proxy date, the Company has issued options to purchase
1,000,000 shares of Common Stock to the Company's Chief Executive Officer
under the Stock Plan, (see Compensation of Executive Officers Table).
ELIGIBILITY. Officers, other key salaried employees of the Company
and members of the Board of Directors may be selected by the Committee to
receive benefits under the Stock Plan. An officer that is a named executive
officer pursuant to the executive compensation disclosure rules under the
Securities Exchange Act of 1934 may be selected by the Compensation Committee
to receive benefits under the Stock Plan. It is estimated that approximately
20 individuals currently are eligible to participate in the Stock Plan.
OPTIONS. Options granted to eligible employees under the Stock Plan
may be Options that are intended to qualify as "Incentive Stock Options"
within the meaning of Section 422 of the Code or Options that are not
intended to so qualify ("Nonstatutory Options"). Options granted to
non-employee members of the Board of Directors will be Nonstatutory Options.
If the Option is designated as an Incentive Stock Option, the purchase price
of the Common Stock that is the subject of such Option may be not less than
the fair market value of the Common Stock on the date the Option is granted.
If the Option is a Nonstatutory Option, the purchase price may be equal to or
less than the fair market value of the Common Stock on the date the Option is
granted, as the Committee shall determine. Incentive Stock Options granted to
an individual who owns (or is deemed to own) at least 10% of the total
combined voting power of all classes of stock of the Company must have an
exercise price of at least 110% of the fair market value of the Common Stock
on the date of grant and a term of no more than five years. The option price
is payable at the time of exercise (i) in cash, (ii) through a broker
assisted transaction, or (iii) in such other manner as the Compensation
Committee may approve.
No Options may be exercised more than 10 years from the date of
grant. Each employee's or director's stock option agreement may specify the
period of continuous service with the Company that is necessary before the
Option will become exercisable. Except in the case of an employee who is
permanently and totally disabled, if the Option is intended to be an
Incentive Stock Option it will be exercisable only if the recipient is an
employee of either the Company or a subsidiary corporation at all times
during the period beginning on the date of the grant of the Option and ending
on a date which is no later than three months before the date of such
exercise, all as specified in the employee's or director's stock option
agreement. Successive grants may be made to the same recipient regardless of
whether Options previously granted to him or her remain unexercised.
TRANSFERABILITY. No Incentive Stock Option, may be transferred other
than by will or the laws of descent and distribution unless the Compensation
Committee's prior written consent is obtained (which consent may be obtained
at the time an Option is granted) and the transaction does not violate the
requirements of Rule l6b-3 promulgated under the Exchange Act, no
Nonqualified Stock Option. Each Option may be exercisable during the
participant's lifetime only by the participant, in the event of the
participant's incapacity, by participant's guardian or legal representative
acting in a fiduciary capacity on behalf of the participant under state law
and court supervision, or in the case of a Nonqualified Stock Option that has
been transferred with the Compensation Committee's prior written consent,
only by the transferee consented to by the Compensation Committee. Unless the
Compensation Committee's prior written consent is obtained (which consent may
be obtained at the time an Option is granted) and the transaction does not
violate the requirements of Rule 16b-3 promulgated under the Exchange Act, no
shares of Common Stock acquired by an officer, as that term is defined under
Rule 16b-3, of the Company or Director pursuant to the exercise of an Option
may be transferred prior to the expiration of the six-month period following
the date on which the Option was granted.
ADJUSTMENTS. The maximum number of shares that may be issued or
transferred under the Stock Plan and the number of shares covered by
outstanding Options and the option prices per share applicable thereto are
subject to adjustment in the event of stock dividends, stock splits,
combinations, exchanges of shares, recapitalizations, mergers,
consolidations, liquidation of the Company, and similar transactions or
events.
ADMINISTRATION AND AMENDMENTS. The Stock Plan will be administered
by the Board of Directors, or if the Board of Directors determines it is
desirable to delegate its authority to administer the Stock Plan, by the
Committee appointed by the Board of Directors. In connection with its
administration of the Stock Plan, the Board of Directors or the Committee is
authorized to interpret the Stock Plan and related agreements and other
documents.
The Stock Plan may be amended from time to time by the Board of
Directors in such respects as it deems advisable. Further approval by the
stockholders of the Company will be required for any amendment that would (i)
increase the aggregate number of shares of Common Stock that may be issued
under the Stock Plan, (ii) materially change the classes of persons eligible
to participate in the Stock Plan, or (iii) otherwise cause Rule 16b-3 under
the Exchange Act to cease to be applicable to the Stock Plan. No amendment
may change the Stock Plan so as to cause any Option intended to be an
Incentive Stock Option to fail to meet the Internal Revenue Code requirements
for an incentive stock option. No amendment may change any rights an optionee
may have under any outstanding Option without the written consent of the
Optionee. The Board may at any time terminate or discontinue the Stock Plan.
Unless terminated sooner, the Stock Plan will continue in effect until all
Options granted thereunder have expired or been exercised, provided that no
Options may be granted after 10 years from the date the Board of Directors
adopted the Stock Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the federal income
tax consequences of certain transactions under the Stock Plan based on
federal income tax laws in effect on January 1, 1999. This summary is not
intended to be exhaustive and does not describe state or local tax
consequences.
NONSTATUTORY OPTIONS. In general, (i) an employee or director will
not recognize taxable income at the time he or she is granted Nonstatutory
Options; (ii) at the time of exercise of a Nonstatutory Option, ordinary
income will be recognized by the employee in an amount equal to the
difference between the option price paid for the shares and the fair market
value of the shares; and (iii) at the time of sale of shares acquired
pursuant to the exercise of a Nonstatutory Option, any appreciation (or
depreciation) in the value of the shares after the date of exercise will be
treated as either short-term or long-term capital gain (or loss) depending on
how long the shares have been held.
INCENTIVE STOCK OPTIONS. No income generally will be recognized by
an employee upon either the grant or the exercise of an Incentive Stock
Option. If the shares of Common Stock issued to an employee pursuant to the
exercise of an Incentive Stock Option and the shares are not sold or
otherwise transferred by the employee within two years after the date of
grant or within one year after the transfer of the shares to the employee,
then upon the sale of the shares any amount realized in excess of the option
price will be taxed to the employee as long-term capital gain and any loss
sustained will be a long-term capital loss. Although an employee will not
realize ordinary income upon the exercise of an Incentive Stock Option, if
the shares are sold or transferred after the expiration of the one-year or
two-year holding periods described above, the excess of the fair market value
of the Common Stock acquired at the time of exercise over the option price
may constitute an adjustment in computing alternative minimum taxable income
under Section 56 of the Code and, thus, may result in the imposition of the
"alternative minimum tax" pursuant to Section 55 of the Code on the employee.
If shares of Common Stock acquired upon the exercise of an Incentive
Stock Option are disposed of before the expiration of one-year or two-year
holding periods described above, including where the employee pays the option
price through a so-called cashless exercise, the employee generally will
recognize ordinary income in the year of disposition in an amount equal to
any excess of the fair market value of the shares at the time of exercise
(or, if less, the amount realized on the disposition of the shares in a sale
or exchange) over the option price paid for the shares. Any further gain (or
loss) realized by the employee generally will be taxed as short-term or
long-term capital gain (or loss) depending on the holding period.
TAX CONSEQUENCES TO THE COMPANY. To the extent that the recipient of
an Option recognizes ordinary income in the circumstances described above,
the Company generally will be entitled to a corresponding federal income tax
deduction, provided that, among other things, (i) the income meets the test
of reasonableness, and is an ordinary and necessary business expense; (ii)
the benefits do not constitute an "excess parachute payment" within the
meaning of Section 280G of the Code; and (iii) the deduction is not
disallowed because the compensation paid to the employee during the period
exceeds the $1 million limitation on executive compensation of named
executive officers.
The affirmative vote of a majority of the shares of Common Stock of
the Company cast at the Meeting is necessary for approval of the Stock Plan.
The Board believes that the approval of the Stock Plan is in the best
interests of the Company and the stockholders
because the Stock Plan will enable the Company to provide competitive equity
incentives to officers and key salaried employees to enhance the
profitability of the Company and increase stockholder value. The Stock Plan
further will serve to align the interests of such persons and members of the
Board of Directors with the interests of stockholders by giving them a
personal interest in the value of the Company's Common Stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE STOCK
INCENTIVE PLAN.
PROPOSAL NO. 4
AMENDMENT OF CERTIFICATE OF INCORPORATION TO INCREASE
AUTHORIZED SHARES OF COMMON STOCK
On May 1, 2000, the Board of Directors approved an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock of the Company to 20,000,000 shares from 15,000,000
shares (the "Increase in Authorized Stock Amendment"). Under Delaware law,
the adoption of an amendment to the Certificate of Incorporation is subject
to the approval of the Company's stockholders. The Board recommends that the
stockholders amend and restate the Company's Certificate of Incorporation to
approve the Increase in Authorized Stock Amendment. The full text of the
proposed Amended and Restated Certificate of Incorporation, including the
provisions relating to the Increase in Authorized Stock Amendment, is
attached hereto as Appendix A. If the stockholders approve the Increase in
Authorized Stock Amendment, the Board currently intends to file the Amended
and Restated Certificate of Incorporation with the Secretary of State of the
State of Delaware as soon as practicable following such stockholder approval.
The Company currently has 15,000,000 authorized shares of Common
Stock, of which approximately 10,017,049 were outstanding as of May 1, 2000.
In addition, the Company has reserved up to approximately 1,500,000 shares of
Common Stock for issuance in connection with the Company's Stock Plan.
The Board of Directors believes that it is prudent to increase the
authorized number of shares of Common Stock to the proposed level in order to
provide a reserve of shares available for issuance to meet business needs as
they arise. Such business needs may include, without limitation, financings,
establishing strategic relationships with corporate partners, providing
equity incentives to employees, officers or directors, or effecting stock
splits. The additional shares of Common Stock may also be used to acquire or
invest in complementary businesses or products or to obtain the right to use
complementary technologies.
The Company has no current plans to issue any portion of the
additional authorized shares that would result from the Certificate of
Amendment, if approved.
POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
If the stockholders approve the Certificate of Amendment, the Board
of Directors will have the right to authorize the issuance of additional
shares of Common Stock without further vote of the stockholders of the
Company, except as provided under Delaware corporate law or under the rules
of any securities exchange on which shares of Common Stock of the Company are
then listed. Current holders of Common Stock have no preemptive or similar
rights, which means that such holders do not have a prior right to purchase
any new issue of Common Stock of the Company in order to maintain their
percentage ownership of the Company. The issuance of additional shares of
Common Stock would decrease the proportionate equity interest of the
Company's current stockholders and, depending upon the price paid for such
additional shares, could result in dilution to the Company's current
stockholders.
VOTE REQUIRED FOR APPROVAL
Under Delaware corporation law, the affirmative vote of the holders
of a majority of all of the Company's outstanding shares of Common Stock
entitled to vote is required to adopt the amendment to the Certificate of
Incorporation concerning the increase in the number of authorized shares. As
required by Delaware corporation law, the amendment has already been approved
by a resolution of the Board of Directors and, upon requisite stockholder
approval, will become effective upon the filing of a certificate of amendment
with the Delaware Secretary of State.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" THE CERTIFICATE OF AMENDMENT TO INCREASE THE AUTHORIZED SHARES OF
COMMON STOCK TO 20,000,000.
PROPOSAL NO. 5
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Weinick Sanders Leventhal &
Co., LLP (successor to Mirsky, Furst & Associates, PA) to perform the audit
of the Company's financial statements for the year ending November 30, 2000,
subject to ratification by the Company's stockholders at the Meeting. Weinick
Sanders Leventhal & Co., LLP have been the Company's auditors since its
inception.
If the selection of Weinick Sanders Leventhal & Co., LLP is not
ratified at or prior to the next annual meeting of stockholders, such firm
shall decline to act, or otherwise become incapable of acting, as the
Company's independent auditors and the Board of Directors will appoint other
independent certified public accountants whose engagement for any period
subsequent to the next annual meeting will be subject to stockholder approval
at such meeting.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY STOCKHOLDERS VOTE
"FOR" RATIFICATION OF THE INDEPENDENT AUDITORS.
OTHER BUSINESS
Management does not know of any other business to be acted upon at
the meeting, and, as far as is known to management, no matters are to be
brought before the meeting except as specified in the notice of the meeting.
However, if any other business properly should come before the meeting, it is
intended that Shareholders will vote in their discussions on any such matters
in accordance with the judgment of the persons voting such proxies.
2001 ANNUAL MEETING SHAREHOLDER PROPOSALS
Proposals intended to be presented at the Company's next Annual
Meeting of Shareholders must be received at the Company's executive offices
no later than December 1, 2000 for inclusion in the statement related to that
meeting.
ADDITIONAL INFORMATION
The Company will provide without charge to each person, on written
request of such person, a copy of the Annual Report of the Company on Form
10-KSB for the year ended November 30, 1999 (as filed with the Securities and
Exchange Commission) including the financial statements and the schedules
thereto. All such requests should be directed to the Secretary, CRYO-CELL
International, Inc., 3165 McMullen Booth Road, Building B, Clearwater,
Florida 33761.
CRYO-CELL INTERNATIONAL, INC.
Clearwater, Florida
May 19, 2000
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CRYO-CELL INTERNATIONAL, INC.
It is hereby certified that:
1. The name of the corporation (the "Corporation") is
CRYO-CELL INTERNATIONAL, INC., which is the name under which the Corporation
was originally incorporated; the date of filing of the original Certificate
of Incorporation of the Corporation with the Secretary of State of the State
of Delaware is September 7, 1989; and the Certificate of Incorporation was
amended by the filing of a Certificate of Amendment on October 9, 1994.
2. The Certificate of Incorporation of the Corporation is
hereby amended by (i) in Paragraph Fourth, increasing the number of shares of
Common Stock which the Corporation shall have authority to issue from
15,000,000 shares to 20,000,000 shares, (ii) in Paragraph Fifth, providing
for the classification of the Board of Directors into three classes, with one
class being elected each year to serve a staggered three-year term.
3. The provisions of the Certificate of Incorporation of
the Corporation as herein amended are hereby restated and integrated into the
single instrument which is hereinafter set forth, and which is entitled
Amended and Restated Certificate of Incorporation of Cryo-Cell International,
Inc.
4. The amendments and the amended restatement of the
Certificate of Incorporation hereinafter certified have been duly adopted by
the Board of Directors and the stockholders of the Corporation in accordance
with the provisions of Sections 228, 242 and 245 of the General Corporation
Law of the State of Delaware.
5. The Amended and Restated Certificate of Incorporation of
the Corporation, as amended and restated herein, reads as follows:
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CRYO-CELL INTERNATIONAL, INC.
PARAGRAPH FIRST: The name of the corporation is
CRYO-CELL INTERNATIONAL, INC.
PARAGRAPH SECOND: The address of the registered office of
this corporation in this state is c/o TAQ, Inc., 15 East North Street, in the
City of Dover, County of Kent, State of Delaware 19901 and the name of the
registered agent at said address if TAQ, INC.
PARAGRAPH THIRD: The purpose of the corporation is to
engage in any lawful act or activity for which corporation may be organized
under the corporation laws of the State of Delaware.
PARAGRAPH FOURTH: The Corporation shall be authorized to
issue the following shares:
CLASS NUMBER OF SHARES PAR VALUE
----- ---------------- ---------
Preferred 500,000 $.01
Common 20,000,000 $.01
The preferred shares may be issued from time to time in one
or more series. The Board of Directors is hereby authorized to fix or alter
the designations, preferences, and relative, participating, optional, or
other special rights, and qualifications, limitations, or restrictions, of
such preferred shares including without limitation of the generality of the
foregoing, dividend rights, dividend rates, conversion rights, the rights of
convertibility into common shares, voting rights, and rights, price (s) and
terms of redemption. The Board of Directors shall have the authority to set
the terms and conditions of convertibility, issuance of dividends, and
priority claim of preferred shareholders on corporate assets.
PARAGRAPH FIFTH: The number of directors which shall
constitute the entire Board of Directors shall be fixed by, or in the manner
provided in, the by-laws of the Corporation. The Board of Directors shall be
divided into three classes, with the number of directors in each class as
nearly equal as possible. The classes shall be designated as Class I, Class
II and Class III, and the directors elected to each class generally shall
serve a term of three
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years; provided, however, that the Board of Directors may designate the first
Class I, Class II and Class III directors to serve initial class terms of
one, two and three years, respectively, and until their earlier resignation,
removal or otherwise. Each class of directors elected subsequent to the
respective first Class I, Class II and Class III, shall serve a term of three
years, until their respective successors are elected and have qualified or
until their earlier resignation, removal or otherwise. A director elected to
fill a vacancy shall hold office for the remaining term of the predecessor
director and until his or her successor is elected and has qualified, or
until his or her earlier resignation, removal or otherwise.
PARAGRAPH SIXTH: The following provisions are inserted for
the management of the business and for the conduct of the affairs of the
corporation, and for further definition, limitation and regulation of the
powers of the corporation and of its directors and stockholders:
(1) The number of directors of the corporation shall be
such as from time to time shall be fixed by, or in the
manner provided in the by-laws. Election of directors
need not be by ballot unless the by-laws provide.
(2) The Board of Directors shall have power without the
assent or vote of the stockholders:
(a) To make, alter, amend, change, add to or repeal the
by-laws of the corporation; to fix and vary the
amount to be reserved for any proper purpose; to
authorize and cause to be executed mortgages and
liens upon all or any part of the property of the
corporation; to determine the use and disposition
of any surplus or net profits; and to fix the times
for the declaration and payment of dividends.
(b) To determine from time to time whether, and to what
times and places, and under what conditions the
accounts and books of the corporation (other than
the stock ledger) or any of them shall be open to
the inspection of the stockholders.
(3) The directors in their discretion may submit any
contract or act for approval or ratification at any
annual meeting of the stockholders or at any meeting of
the stockholders called for the purpose of considering
any such act or contract, and any contract or act that
shall be approved or be ratified by the vote of the
holders of a majority of the stock of the corporation
which is represented in person or by proxy at such
meeting and entitled to vote thereat (provided that a
lawful quorum of stockholders be there represented in
person or by proxy) shall be as valid and as binding
upon the corporation and upon all the
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stockholders as though it had been approved or ratified
by every stockholder of the corporation, whether or
not the contract or act would otherwise be open to
legal attack because of directors' interest, or for
any other reason.
(4) In addition to the powers and authorities hereinbefore
or by statute expressly conferred upon them, the
directors are hereby empowered to exercise all such
powers and do all such acts and things as may be
exercised or done by the corporation; subject,
nevertheless, to the provisions of the statutes of
Delaware, of this certificate, any to any by-laws from
time to time made by the stockholders; provided,
however, that no by-laws so made shall invalidate any
prior act of the directors which would have been valid
if such by-law had not been made.
PARAGRAPH SEVENTH: No director shall be liable to the
corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) liability under Section 174 of the Delaware
General Corporation Law, or (4) a transaction from which the director derived
an improper personal benefit, it being the intention of the foregoing
provision to eliminate the liability of the corporation's directors to the
corporation or its stockholders to the fullest extent permitted by Section
102(b) (7) of the Delaware General Corporation Law, as amended from time to
time. The corporation shall indemnify to the fullest extent permitted by
Sections 102 (b) (7) and 145 of the Delaware General Corporation Law, as
amended from time to time, each person that such Sections grant the
corporation the power to indemnify.
PARAGRAPH EIGHTH: Whenever a compromise or arrangement is
proposed between this corporation and its creditors or any class of them
and/or between this corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware, may, on the
application in a summary way of this corporation or any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this corporation under the provisions of Section 291 of Title 8
of the Delaware Code or on the application of trustees in dissolution or of
any receiver or receivers appointed for this corporation under the provisions
of Section 279 Title 8 of the Delaware Code order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-fourths (3/4)
in value of the creditors or class of creditors, and/or of the stockholders
or class of stockholders of this corporation, as the case may be, agree to
any compromise or arrangement and to any reorganization of this corporation
as consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all
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the creditors or class of creditors, and/or on all the stockholders or class
of stockholders, of this corporation, as the case may be, and also on this
corporation.
PARAGRAPH NINTH: The corporation reserves the right to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by law, and all
rights and powers conferred herein on stockholders, directors and officers
are subject to this reserved power.
This Amended and Restated Certificate of Incorporation of the
Corporation is hereby executed by the undersigned on behalf of the
Corporation this ____th day of ________, 2000.
CRYO-CELL INTERNATIONAL, INC.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
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PROXY CRYO-CELL INTERNATIONAL, INC.
3165 McMullen Booth Road, Building B, Clearwater, Florida 33761 - Tel
(727) 723-0333
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel D. Richard, as attorney of the
undersigned with full power of substitution, to vote all shares of stock which
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
CRYO-CELL International, Inc. to be held at 3165 McMullen Booth Road, Building
B, Clearwater, Florida, on June 20, 2000 at 10:00 a.m., local time, and at any
continuation or adjournment, thereof, with all powers which the undersigned
might have personally present at the meeting.
Voting Instructions--Mark Your Vote (For, Against, Abstain) Place "X" Only In
One Box. The Board of Directors Recommends a Vote "For" The Following:
1. To amend the Certificate of Incorporation for reclassification of the
terms of the Board of Directors.
FOR / / AGAINST / / ABSTAIN / /
2. To elect two Directors to Class I to serve a one year term expiring in
2001, to elect one Director to Class II to serve a two year term expiring
in 2002, and to elect two Directors to Class III to serve a three year
term expiring in 2003.
Nominees: Gerald F. Maass, Edward Modzelewski, Daniel D. Richard,
Frederick C.S. Wilhelm, Junior Winokur
FOR ALL / / WITHHOLD ALL / / FOR ALL EXCEPT AS LISTED ________________
3. To adopt the Stock Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
4. To approve an amendment to the Certificate of Incorporation to increase
the authorized shares of common stock.
FOR / / AGAINST / / ABSTAIN / /
5. To approve the ratification of Weinick Sanders Leventhal & Co., LLP as
independent public accountants for the fiscal year ending November 30,
2000.
FOR / / AGAINST / / ABSTAIN / /
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement, dated, May 22, 2000, and a copy of the Company's Annual
Report to Stockholders for 1999. The undersigned hereby expressly revokes any
and all proxies heretofore given or executed by the undersigned with respect to
the shares of stock represented by this Proxy and, by filing this Proxy with the
Secretary of the Company, gives notice of such revocation.
WHERE NO CONTRARY CHOICE IS INDICATED BY THE STOCKHOLDER, THIS PROXY, WHEN
RETURNED, WILL BE VOTED FOR SUCH PROPOSALS, FOR SUCH NOMINEES AND WITH
DISCRETIONARY AUTHORITY UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE TIME IT IS VOTED.
--------------------------------------
Date
--------------------------------------
Signature
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Signature if Held Jointly