UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
þ
Filed by a Party other than the Registrant [ ]
o
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 Rule 14a-11(c) or Rule
14a-12
Cryomedical
Sciences, Inc.
(Name
o | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
þ | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Under Rule 14a-12 |
BIOLIFE SOLUTIONS, INC.
(Name of Registrant as Specified inIn Its Charter)
(Name
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as
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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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(4) Date Filed:
CRYOMEDICAL SCIENCES, INC.
1300 Piccard Drive, Suite 102
Rockville, Maryland 20850
_______________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on December 16, 1998
To the Stockholders of
CRYOMEDICAL SCIENCES, INC.
þ | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
o | Fee paid previously with preliminary materials: |
o | 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: |
April 30, 2013
Dear Stockholder:
You are hereby notified that a Specialcordially invited to attend BioLife Solutions, Inc.’s 2013 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on June 20, 2013. The Annual Meeting will be at the Company’s principal executive offices, located at 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021 at 9:00 a.m. The formal meeting notice and proxy statement for the Annual Meeting are attached.
Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. Even if you plan to attend the meeting, we urge you to vote your shares either by Internet, telephone or mail as promptly as possible so your shares will be represented at the Annual Meeting. Instructions on voting your shares are on the Notice of Cryomedical Sciences,Internet Availability of Proxy Materials you received for the annual meeting. If you received paper copies of our proxy materials, instructions on the two ways to vote your shares can be found on the enclosed proxy form. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time on June 19, 2013. If you attend the meeting in person, you may at that time revoke any proxy previously given and vote in person, if desired.
Sincerely, | | | | |
| | | | |
/s/ Michael Rice | | | | |
| | | | |
President, Chief Executive Officer and Chairman | | | | |
Bothell, Washington | | | | |
April 30, 2013 | | | | |
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING WHETHER OR NOT YOU ATTEND, PLEASE CAST YOUR VOTE AS INSTRUCTED IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS AS PROMPTLY AS POSSIBLE.
IF YOU HAVE CHOSEN TO RECEIVE PAPER COPIES OF YOUR PROXY MATERIALS, INCLUDING THE PROXY CARD, PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE RETURN ENVELOPE PROVIDED.
ANY STOCKHOLDER ATTENDING THE MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE HAS RETURNED A PROXY. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE, YOU MUST FIRST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
BIOLIFE SOLUTIONS, INC.
3303 Monte Villa Parkway, Suite 310
Bothell, Washington 98021
(425) 402-1400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 2013
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 2013 Annual Meeting of Stockholders (the “Annual Meeting”) of BioLife Solutions, Inc., a Delaware corporation (the "Company"“Company”), will be held on Thursday, June 20, 2013 at 9:00 a.m. at the Company’s principal executive offices, located at 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021. The Annual Meeting will be held for the following purposes, as more fully described in the proxy statement accompanying this notice:
| 1. | ELECTION OF DIRECTORS. To elect the six (6) directors named in the attached proxy statement to serve until his successor is duly elected and qualified, unless he resigns, is removed or otherwise is disqualified from serving as a director of the Company; |
| 2. | APPROVAL OF THE COMPENSATION OF NAMED EXECUTIVE OFFICERS. To approve on a non-binding, advisory basis the compensation of our named executive officers; |
| | |
| 3. | SELECTION OF THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION. To select on a non-binding advisory basis the frequency of conducting future stockholder advisory votes on named executive officer compensation; |
| | |
| 4. | APPROVAL OF THE 2013 PERFORMANCE INCENTIVE PLAN. To approve the 2013 Performance Incentive Plan; |
| | |
| 5. | RATIFICATION OF AUDITORS. To ratify the appointment of Peterson Sullivan LLP as our independent registered public accounting firm for 2013; and |
| | |
| 6. | ANY OTHER BUSINESS that may properly come before the Annual Meeting or any adjournments or postponements thereof. |
We recommend that stockholders vote FOR the matters listed above. Only stockholders of record at the close of business on April 26, 2013 are entitled to receive notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. Our stock transfer books will remain open between the record date and the date of the Company, 1300 Piccard Drive, Suite 102, Rockville, Maryland
20850, on December 16, 1998,meeting. A list of stockholders entitled to vote at 10:00 a.m., Maryland time,the Annual Meeting will be available for inspection at our principal executive offices and at the Annual Meeting.
Pursuant to (i) ratify and approve each of the matters contained in a Plan of
Recapitalization and Financing (the "Plan")rules adopted and approved by the Company'sSecurities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials via the Internet. Accordingly, we have sent our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 2013 proxy statement and our annual report on Form 10-K for 2012 online. Stockholders who have received the Notice will not be sent a printed copy of our proxy materials in the mail unless they request to receive a printed copy.
You may revoke your proxy at any time prior to the Annual Meeting. If you attend the Annual Meeting and vote by ballot, your proxy will be revoked automatically and only your vote at the Annual Meeting will be counted. If your shares are held in the name of a bank, broker, or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record in order to be able to vote in person at the Annual Meeting.
Please note: If you hold your shares in the name of a broker, bank or other nominee, your nominee may determine to vote your shares at its own discretion, absent instructions from you. However, due to voting rules that may prevent your bank or broker from voting your uninstructed shares on a discretionary basis in the election of directors and other non-routine matters, it is important that you cast your vote. Accordingly, please provide appropriate voting instructions to your broker or bank to ensure your vote will count.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on June 20, 2013: This notice of annual meeting of stockholders, the proxy statement, and our annual report on Form 10-K for 2012 are available at www.proxyvote.com. You will need to use the control number appearing on our proxy card to vote via the Internet.
Sincerely, | | | | |
| | | | |
/s/ Michael Rice | | | | |
| | | | |
President, Chief Executive Officer and Chairman | | | | |
Bothell, Washington | | | | |
April 30, 2013 | | | | |
BIOLIFE SOLUTIONS, INC.
3303 Monte Villa Parkway, Suite 310
Bothell, Washington 98021
(425) 402-1400
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on June 20, 2013: This notice of annual meeting of stockholders, the proxy statement, and our annual report on Form 10-K for 2012 are available at www.proxyvote.com.
The enclosed proxy is solicited on behalf of BioLife Solutions, Inc., a Delaware corporation, by its Board of Directors pursuant(the “Board”) for use at its 2013 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at 9:00 a.m. local time on June 20, 2013, or at any adjournments or postponements thereof, for the purposes set forth in this proxy statement and in the accompanying notice. The Annual Meeting will be held on Thursday, June 20, 2013 at 9:00 a.m. at the Company’s principal executive offices, located at 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021.
In accordance with rules adopted by the Securities and Exchange Commission (the “SEC”), we may furnish proxy materials, including this proxy statement and our annual report on Form 10-K for 2012, to our stockholders by providing access to such documents on the Internet instead of mailing printed copies. Most stockholders will not receive printed copies of the proxy materials unless they request them. Instead, the Notice of Internet Availability of Proxy Materials (the “Notice”), which was mailed to most of our stockholders, will instruct you as to how you may access and review all of the proxy materials on the Internet. The Notice also instructs you as to how you may submit your proxy on the Internet. By accessing and reviewing the proxy materials on the Internet, you will save us the cost of printing and mailing these materials to you and reduce the impact of such printing and mailing on the environment. If you would like to receive a paper copy of our proxy materials, you should follow the instructions for requesting such materials provided in the Notice.
These proxy solicitation materials were first sent or given on or about April 30, 2013 to all stockholders entitled to vote at the Annual Meeting. Stockholders who owned BioLife Solutions Common Stock at the close of business on April 26, 2013 (the “Record Date”) are entitled to receive notice of, attend and vote at the Annual Meeting. On the Record Date, there were 70,035,710 shares of Common Stock outstanding and approximately 2,000 holders of record according to information provided by our transfer agent.
We will provide, without charge, a copy of our annual report on Form 10-K to each stockholder of record as of the Record Date that requests a copy in writing. Any exhibits listed in the annual report on Form 10-K report also will be furnished upon request at the actual expense we incur in furnishing such exhibit. Any such requests should be directed to our Corporate Secretary at our executive offices set forth above.
References to the terms“Company,” “BioLife Solutions,” “our,” “us” or “we” mean BioLife Solutions, Inc.
| | Page | |
VOTING AND RELATED MATTERS | | | 2 | |
| | | | |
EXECUTIVE OFFICERS AND DIRECTORS | | | 5 | |
| | | | |
BOARD OF DIRECTORS | | | 7 | |
| | | | |
EXECUTIVE COMPENSATION | | | 10 | |
| | | | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | | | 13 | |
| | | | |
CERTAIN TRANSACTIONS | | | 15 | |
| | | | |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | | | 16 | |
| | | | |
PRINCIPAL ACCOUNTANTS | | | 16 | |
| | | | |
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | | | 17 | |
| | | | |
PROPOSAL NO. 1 – ELECTION OF DIRECTORS | | | 18 | |
| | | | |
PROPOSAL NO. 2 – APPROVAL OF THE COMPENSATION OF NAMED EXECUTIVE OFFICERS | | | 19 | |
| | | | |
PROPOSAL NO. 3 – APPROVAL OF THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION | | | 20 | |
| | | | |
PROPOSAL NO. 4 – APPROVAL OF THE 2013 PerFORMANCE INCENTIVE PLAN | | | 21 | |
| | | | |
PROPOSAL NO. 5 – RATIFICATION OF APPOINTMENT OF PETERSON SULLIVAN LLP | | | 26 | |
| | | | |
OTHER BUSINESS | | | 27 | |
| | | | |
ANNUAL REPORT ON FORM 10-K | | | 27 | |
| | | | |
STOCKHOLDERV PROPOSALS | | | 27 | |
VOTING AND RELATED MATTERS
Voting Procedures
As a stockholder of BioLife Solutions, you have a right to vote on certain business matters affecting us. The proposals that will be presented at the Annual Meeting and conditionsupon which you are being asked to vote are discussed below in the “Proposals” section. Each share of BioLife Solutions common stock you owned as of the Record Date entitles you to one vote on each proposal presented at the Annual Meeting.
Methods of Voting
You may vote over the Internet, by telephone, by mail or in person at the Annual Meeting. Please be aware that if you vote over the Internet, you may incur costs such as Internet access charges for which you will be responsible.
Voting over the Internet.You can vote via the Internet. The website address for Internet voting is provided on the Notice of Internet Availability of Proxy Materials and on the proxy card. You will need to use the control number appearing on our proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until 11:59 p.m. Eastern Daylight Time on June 19, 2013. Internet voting is available 24 hours a Stock Purchase Agreement with ValorInvest, Ltd.day. If you vote via the Internet, you do not need to return a proxy card.Voting by Telephone. You can vote using any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time June 19, 2013. You will need to use the control number appearing on our proxy card to vote via telephone. Telephone voting is available 24 hours a day. If you vote via telephone, you do not need to return a proxy card.
Voting by Mail. If you received a printed proxy card, you can vote by marking, dating and required bysigning it, and returning it in the terms thereofpostage-paid envelope provided. Please promptly mail your proxy card to be submittedensure that it is received prior to the Company's stockholders for their approval,closing of the polls at the Annual Meeting.
Voting in Person at the Meeting. If you attend the Annual Meeting and (ii) transact suchplan to vote in person, we will provide you with a ballot at the Annual Meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the Annual Meeting. If your shares are held in the name of your broker or other nominee, you are considered the beneficial owner of shares held in street name. As a beneficial owner, if you wish to vote at the Annual Meeting, you will need to bring to the Annual Meeting a legal proxy from your broker or other nominee authorizing you to vote those shares.
Revoking Your Proxy
You may revoke your proxy at any time before it is voted at the Annual Meeting. To do this, you must:
| · | enter a new vote over the Internet, or by signing and returning a replacement proxy card; |
| · | provide written notice of the revocation to our Corporate Secretary at our principal executive office, 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021; or |
| · | attend the Annual Meeting and vote in person. |
Quorum and Voting Requirements
Stockholders of record at the close of business as may properly come beforeon April 26, 2013, are entitled to receive notice and vote at the meeting. On the Record Date, there were 70,035,710 issued and outstanding shares of our Common Stock. Each holder of Common Stock voting at the meeting, and any
andeither in person or by proxy, may cast one vote per share of Common Stock held on the Record Date on all adjournments thereof.
The Plan is comprised of each of the matters to be voted on at the Meeting, and provides that the Company (i) amend its
Certificate of Incorporation to (a) effect a (1) one-for-five, (2) one
for six, (3) one for seven, (4) one for eight, (5) one for nine, (6)
one for ten, (7) one for eleven, (8) one for twelve, (9) one for
thirteen, (10) one for fourteen, (11) one for fifteen, or (12) one for
sixteen reverse stock split of the issued and outstanding shares of
common stock of the Company, par value $.001 per share
("Common Stock"), each of such alternatives to be approved by
the stockholders of the Company and one of such approved
alternatives to be chosen by the Board of Directors of the
Company, (b) reduce the number of authorized shares of Common
Stock from 50,000,000 shares to 25,000,000 shares, and (c) reduce
the authorized number of shares of Preferred Stock, par value
$.001 per share, from 9,378,800 shares to 1,000,000 shares, (ii)
adopt a 1998 Stock Option Plan, (iii) grant stock options/warrants
for approximately 19,780,000 shares (pre-reverse stock split) (of
which stock options/warrants for 19,155,000 shares (pre-reverse
stock split) have been granted, subject to stockholder approval),
exercisable at $.25 per share (pre-reverse stock split) to
management, others who have provided services to the Company,
and directors, to appropriately incentivize and compensate them,
and (iv) prepare and file a registration statement with the Securities
and Exchange Commission for the sale of securities by the
Company. Each mattermeeting. Stockholders may not cumulate votes in the Plan will be voted on separately
and, if approved, may be effectuated by the Company. However,
for the Plan to be approved, each matter in the Plan must be
approved. THE FAILURE TO APPROVE EACH MATTER IN
THE PLAN, AND THEREFORE THE PLAN, COULD HAVE
A MATERIAL ADVERSE EFFECT ON THE BUSINESS AND
FINANCIAL CONDITION OF THE COMPANY. SEE
"PROXY STATEMENT - BACKGROUND." Approvalelection of a
matter requires a "FOR" vote on the accompanying proxy. If no
choice is specified in the accompanying Proxy, the Proxy will be
voted "FOR" the matter. A vote to "ABSTAIN" with respect to
a matter will have the same effect as a vote "AGAINST" the
matter.
directors.
The
foregoing items of business are more fully described
in the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on
October 23, 1998 as the record date for the determination of
stockholders entitled to notice of and to vote at the Special Meeting
or any adjournments thereof.
ALL STOCKHOLDERS ARE CORDIALLY INVITED
TO ATTEND THE SPECIAL MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED
TO COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY
VOTE YOUR SHARES IN PERSON IF YOU WISH TO DO SO,
EVEN IF YOU HAVE SIGNED AND RETURNED YOUR
PROXY CARD.
By Order of the Board of Directors,
Richard J. Reinhart, Ph.D., President and Chief
Executive Officer
Rockville, Maryland
November 6, 1998
IT IS IMPORTANT THAT THE ENCLOSED PROXY
FORM
BE COMPLETED AND RETURNED PROMPTLY
CRYOMEDICAL SCIENCES, INC.
1300 Piccard Drive, Suite 102
Rockville, Maryland 20850
_______________
PROXY STATEMENT
_______________
SPECIAL MEETING OF STOCKHOLDERS
December 16, 1998
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Cryomedical Sciences,
Inc., a Delaware corporation (the "Company"), of proxies to be
voted at a Special Meeting of Stockholders of the Company to be
held on December 16, 1998 (the "Meeting"), at 10:00 a.m.,
Maryland time, at the offices of the Company, 1300 Piccard
Drive, Suite 102, Rockville, Maryland 20850, and at any
adjournments thereof.
The close of business on October 23, 1998 has been
fixed as the record date for the determination of stockholders
entitled to notice of and to vote at the Meeting. On that date
there were 33,454,302 shares of the Company's common stock,
par value $.001 per share ("Common Stock"), issued and
outstanding, each of which has one vote on each matter to be
presented at the Meeting (the "Proposals"), and 128 shares of the
Company's Series E Convertible Preferred Stock, par value
$.001 per share ("Preferred Stock"), issued and outstanding,
each of which has 10,000 votes on each Proposal. The holders
of Common Stock and the holders of Preferred Stock will vote
together on the Proposals as if they held one class of stock. The
holders of stock representing a majority of the votes entitled to
be cast at the Meeting, presentpresence, in person or by proxy, will
constituteof the holders of a majority of the outstanding shares of Common Stock entitled to vote constitutes a quorum for the transaction of business at the Meeting
and any adjournments thereof. Approval of the Proposals to
amend the Company's Certificate of Incorporation (the
"Charter") to (i) effectmeeting. Assuming that a one-for-five, one-for-six, one-for-seven,
one-for-eight, one-for-nine, one-for-ten, one-for-eleven, one-for-
twelve, one-for-thirteen, one-for-fourteen, one-for-fifteen,quorum is present:
| (1) | a plurality of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors will be required to elect Board nominees; |
| (2) | the compensation of our named executive officers will be approved on a non-binding, advisory basis, if a majority of the votes are properly cast on this proposal; |
| (3) | a plurality of the votes cast on the proposal is required to select, by non-binding, advisory vote, the frequency of conducting future stockholder advisory votes on named executive officer compensation; |
| (4) | the 2013 Performance Incentive Plan will be approved if approved by a majority of the votes properly cast at the meeting on this proposal; and |
| (5) | the ratification of the appointment of Peterson Sullivan LLP as our independent registered public accounting firm for 2013 will be approved if approved by a majority of the votes cast at the meeting on this proposal. |
Votes cast by proxy or one-for-sixteen reverse stock split of the issued and outstanding
Common Stock, with one of such approved alternatives to be
chosen by the Board of Directors of the Company (the "Reverse
Stock Split"), (ii) reduce the number of authorized shares of
Common Stock from 50,000,000 shares to 25,000,000 shares
(the "Common Stock Reduction"), and (iii) reduce the number
of authorized shares of Preferred Stock from 9,378,800 shares
to 1,000,000 shares (the Preferred Stock Reduction"), requires
the affirmative vote of the holders of stock representing a
majority of the votes entitled to be castin person at the Meeting. Approval
of the Proposals to (i) ratify and approve the Company's 1998
Stock Option Plan (the "1998 Stock Option Plan"), (ii) ratify and
approve the grant of stock options/warrants to purchase
19,155,000 shares (pre-Reverse Stock Split) of Common Stock,
exercisable at $.25 per share (pre-Reverse Stock Split) to
management, others who have performed services for the
Company, and directors, to appropriately incentivize and/or
compensate them for the services provided to the Company (the
"Stock Option/Warrant Grant"), and (iii) approve the preparation
and filing of a registration statement with the Securities and
Exchange Commission for the sale of securities by the Company
(the "SEC Filing"), requires the affirmative vote of the holders
of stock representing a majority of shares present in person or
represented by proxy at the Meeting and entitled to vote thereon.
All votesmeeting will be tabulated by the inspector(s) of election inspectors appointed for the Meeting,meeting and who will separately tabulate
affirmative and negative votes,determine whether a quorum is present. The election inspectors will treat abstentions and broker non-votes.
Abstentionsnon-votes (i.e., shares held by a broker or nominee that are represented at the Annual Meeting, but with respect to which such broker or nominee is not instructed to vote on a particular proposal and does not have discretionary voting power) as shares that are present for purposes of determining the presence of a quorum. With regard to Proposal One, broker non-votes and votes marked “withheld” will not be counted towards the tabulations of votes cast on such proposal presented to the stockholders, will not have the effect of negative votes and will not affect the outcome of the election of the directors. With regard to Proposals Two, Three, Four and Five, abstentions will be counted towards the tabulationtabulations of votes cast on such proposal presented to the Proposalsstockholders and will have the same effect as negative votes.
Brokervotes, whereas broker non-votes are counted towards a quorum, but arewill not be counted for any purpose inpurposes of determining whether a Proposalsuch proposal has been approved.
A formapproved and will not have the effect of proxy is enclosed for use at the Meeting. The
proxy may be revokednegative votes.
If your shares are held by a stockholder at any time beforebank or broker in street name, it is votedimportant that you cast your vote if you want it to count in the election of directors and other non-routine matters as determined by executionthe New York Stock Exchange (the “NYSE”). The ability of a proxy bearing a later date orbrokers to vote your shares for you without instructions from you is governed by written
notice to the SecretaryRule 452 of the Company beforeNew York Stock Exchange, which regulates the Meeting,behavior of brokers who are “member organizations” of the NYSE (without regard to what exchange the shares are traded on). Voting rules may prevent your bank or broker from voting your uninstructed shares on a discretionary basis in the election of directors and any stockholder present at the Meeting may revoke hisother non-routine matters. Accordingly, if your shares are held by a bank or her
proxy thereatbroker in street name and you do not instruct your bank or broker how to vote in person if hethe election of directors or she desires. any other non-routine matters, no votes will be cast on your behalf.
When sucha proxy is properly executed and returned, the shares of
Common Stock or Preferred Stock it represents will be voted at the Meeting in accordance with any instructions noted thereon.meeting as directed. If no directionspecification is indicated, allthe shares of Common Stock and
Preferred Stock represented by valid proxies received pursuant
to this solicitation (and not revoked prior to exercise) will be voted (i) FOR the proposed amendment to the Charter to effect
the Reverse Stock Split, (ii) FOR the proposed amendment to the
Charter to effect the Common Stock Reduction, (iii) FOR the
proposed amendment to the Charter to effect the Preferred Stock
Reduction, (iv) FOR the ratification and approval of the 1998
Stock Option Plan, (v) FOR the ratification and approval of the
Stock Option/Warrant Grant, and (vi) FOR the approval of the
SEC Filing.
The cost for soliciting proxies on behalf of the Board of
Directorsvoted:
| (1) | “for” the election of each Board nominee set forth in this proxy statement unless the authority to vote for such directors is withheld; |
| (2) | “for” the approval of the compensation of our named executive officers as disclosed in this proxy statement; |
| (3) | “for” conducting future stockholder advisory votes on the compensation of named executive officers every three years; |
| (4) | “for” the approval of 2013 Performance Incentive Plan; |
| (5) | “for” the ratification of the Audit Committee's appointment of Peterson Sullivan LLP as our independent registered public accounting firm for 2013; and |
| (6) | at the discretion of your proxies on any other matter that may be properly brought before the meeting. |
Voting results will be
borne byannounced at the
Company. In addition to
solicitation by mail, proxies may be solicited in person or by
telephone, telefax, or cable by personnel of the Company who
will not receive any additional compensation for such
solicitation. The Company may reimburse brokers or other
persons holding stock in their names or the names of their
nominees for the expenses of forwarding soliciting material to
their principalsAnnual Meeting and
obtaining their proxies. The approximate
date of mailing of this Proxy Statement and accompanying form
of proxy is November 6, 1998.
BACKGROUND
The Company has beenpublished in a precarious financial position
and has been seeking the raise capital for more than the past
year. In connection with the Company's efforts to raise capital,
the Company entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement") with ValorInvest, Ltd.
("ValorInvest"), a Geneva Switzerland based investment bank
unrelated to the Company, pursuant to which, among other
things, ValorInvest (i) purchased from the Company, 128 Series
E Units at a price of $1,562.50 per Unit (an aggregate of
$200,000), and (ii) agreed to purchase,Current Report on or before December
28,1998, an additional 256 Series E Units at a price of
$1,562.50 per Unit (an aggregate of $400,000). Each Unit
consists of one share of Series E Convertible Preferred Stock
("Series E Preferred Stock"), convertible into 10,000 shares of
Common Stock, and a warrant ("Series E Warrant") to purchase
5,000 shares of Common Stock at $.25 per share, the exercise
of which is subject to the consummation of a public offering of
(a), in the event the Common Stock is trading at a price of $.50
or more (pre-Reverse Stock Split), 16,000,000 shares (pre-
Reverse Stock Split) of Common Stock at not less than $.50 per
share (pre-Reverse Stock Split), or (b), in the event the Common
Stock is trading at a price of less than $.50 per share (pre-
Reverse Stock Split), 16,000 Series F Units at $500 per Series
F Unit. Each Series F Unit shall consist of one share of Series
F Convertible Preferred Stock (toForm 8-K that will be authorized at such time),
convertible into 1,000 shares (pre-Reverse Stock Split) of
Common Stock, entitled to one vote for each share of Common
Stock into which it is convertible, and automatically convertible
into Common Stock if the closing or bid price of the Common
Stock on any day is $.50 or more (pre-Reverse Stock Split), and
a warrant to purchase 250 shares (pre-Reverse Stock Split) of
Common Stock at $.75 per share (pre-Reverse Stock Split).
The Stock Purchase Agreement requires the Board of
Directors of the Company to adopt a Plan of Recapitalization and
Financing (the "Plan") and to submit the Plan to the Company's
stockholders for their approval. The Plan is comprised of each
of the matters to be voted on at the Meeting, and provides in its
entirety that the Company (i) amend its Certificate of
Incorporation to (a) effect a reverse stock split of the issued and
outstanding shares of Common Stock, (b) reduce the number of
authorized shares of Common Stock from 50,000,000 shares to
25,000,000 shares, and (c) reduce the authorized number of
shares of Preferred Stock, par value $.001 per share, from
9,378,800 shares to 1,000,000 shares, (ii) adopt a 1998 Stock
Option Plan, (iii) grant stock options/warrants for approximately
19,780,000 shares (pre-reverse stock split) (of which stock
options/warrants for 19,155,000 shares (pre-reverse stock split)
have been granted, subject to stockholder approval), exercisable
at $.25 per share (pre-reverse stock split), and (iv) prepare and
file a registration statement with the Securities and Exchange
Commission for the sale of securities by the Company. The
objectives of the Plan are to simplify the capitalization of the
Company and increase the price of the Common Stock, to
provide a means to appropriately incentivize and compensate
management, others who have provided services to the
Company, and directors, and to provide a means to obtain
adequate financing for the Company to carry out its objectives
and to keep and maintain its listing on the NASDAQ Stock
Market. There can be no assurance that all of these objectives
can be met. The issuance of a significant number of shares on
a public offering and upon the exercise of options and warrants
could have the effect of decreasing the market price of the
Common Stock, earnings per share, if any, and book value per
share.
Subject to the adoption by the Company and its
stockholders of the Plan, ValorInvest has agreed to use its best
efforts to arrange for a public offering ("Public Offering")
(contemplated to be in Europe) of the Company's securities
through an underwriter (the "Underwriter") to be designated or
approved by ValorInvest. Through ValorInvest, the Company
has obtained a letter of interest for a Public Offering from a
German Underwriter. The letter does not contain any
commitment for a Public Offering, and any Public Offering by
such Underwriter, at the very least, would be subject to the
completion of due diligence by such Underwriter and market
conditions. The terms of a Public Offering, if any, would be as
negotiated between the Company and the Underwriter. There
can be no assurance that the Public Offering, if consummated,
would be on the terms set forth above, or that a Public Offering
would be consummated at all. The Company has covenanted to
include the shares of Common Stock issuable upon conversion
of the Series E Preferred Stock in any registration statement filed with the Securities and Exchange Commission covering securitieswithin four business days after the Annual Meeting. Householding of Proxy Materials Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy materials and annual reports. This means that only one copy of the proxy materials may have been sent to multiple stockholders in your household. This practice is designed to reduce our printing and postage costs. However, if you are residing at such an address and wish to receive a separate annual report on Form 10-K or proxy statement in the future, you may telephone our Secretary at (425) 402-1400 or write to her at BioLife Solutions, Inc., 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021. If you are receiving multiple copies of our annual report on Form 10-K and proxy statement, you may request householding by contacting our Secretary in the same manner.
Proxy Solicitation
We will bear the cost of this solicitation. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for reasonable expenses incurred in forwarding solicitation materials to such beneficial owners. Proxies also may be solicited by our directors, officers or employees, personally, by telephone, facsimile, Internet or other means, without additional compensation. We may retain a proxy solicitor to assist in the distribution of proxies and proxy solicitation materials, and in the solicitation of proxies. Generally, the fee for such services is approximately $15,000 plus expenses. If we do elect to retain a proxy solicitor, we will pay the proxy solicitor reasonable and customary fees. Except as described above, we do not presently intend to solicit proxies other than by mail.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be issuedheld on June 20, 2013: The notice of annual meeting of stockholders, this proxy statement, and our annual report on Form 10-K for 2012 are available at www.proxyvote.com.
EXECUTIVE OFFICERS AND DIRECTORS
Our executive officers and directors and their ages as of March 31, 2013, are as follows:
Name | | Age | | Position(s) |
Joe Annicchiarico | | 38 | | Vice President, Manufacturing |
Aby J. Mathew, Ph.D | | 41 | | Chief Technology Officer and Senior Vice President |
Michael Rice | | 50 | | Chief Executive Officer, President, and Director |
Mark Sandifer | | 55 | | Chief Quality Officer |
Daphne Taylor | | 46 | | Chief Financial Officer and Vice President, Finance and Administration |
Raymond Cohen | | 54 | | Director |
Thomas Girschweiler | | 55 | | Director |
Roderick deGreef | | 52 | | Director |
Andrew Hinson | | 49 | | Director |
Rick Stewart | | 60 | | Director |
Joe Annicchiarico has served as Vice President, Manufacturing since September 2012 and as Director of Manufacturing from December 2011 through August 2012. Prior to joining the Company, Mr. Annicchiarico served in connection withvarious roles at Mediquest Therapeudics, Inc., from May 2005 through September 2011, including Scientist, Formulation Manager, and most recently, as Director of Manufacturing and Clinical Supplies. From January 2004 through September 2005, Mr. Annicchiarico worked in specialty chemical sales at Drummond American and prior to that, he spent four years as a formulation development Chemist.
Dr. Aby J. Mathew, Ph.D., has been Senior Vice President and Chief Technology Officer since February 2011. From January 2007 through February 2011, Dr. Mathew served as Senior Scientist, Director of Strategic Relations, and Senior Director of Strategic Relations. From June 2003 through January 2007, Dr. Mathew served as Director of Manufacturing. From September 2000 through June 2003, Dr. Mathew served as Clinical Accounts Manager and Director of Hypothermic Preservation for Cryomedical Sciences/BioLife Solutions.Dr. Mathew has been working on low temperature biopreservation since 1994, and his studies contributed to the Public Offeringdevelopment of the Company’s current commercial HypoThermosol® and CryoStor® product platforms and intellectual property foundation. Beginning in 1994 to 2000, Dr. Mathew performed research at the Company's cost and expense, andState University of New York at Binghamton (now Binghamton University) related to keep such registration
statement effective until such timeresearch grants (including as such shares of Common
Stock may be sold pursuant to an exemption from registration
pursuant to the Securities Act of 1933, as amended.
In the event the Plan is not approveda consultant) co-supervised by the Vice President of Research and Development of Cryomedical Sciences, Inc., the former parent of BioLife Solutions.
Michael Rice has been President and Chief Executive Officer and a Director of the Company since August 2006, and its stockholders, there would be no requirement onChairman of the partBoard of ValorInvestDirectors since August 2007. From October 2004 to use its best efforts to arrangeAugust 2006, Mr. Rice served as Sr. Business Development Manager for the Public
Offering. In addition, if the Plan is not approved by the
Company's stockholders by January 27, 1999, then,Medical & Wireless Products Group at the
requestAMI Semiconductor, Inc. Prior thereto, from October 2000 to October 2004, he served as Director of ValorInvest,Marketing & Business Development, Western Region Sales Manager, and Director, Commercial Sales at Cardiac Science, Inc.; from May 1998 to October 2000 as Vice President, Sales and Marketing at TEGRIS Corporation; and from May 1986 to May 1998 in several sales and marketing roles at Physio Control Corporation.
Mark Sandifer has served as Chief Quality Officer since September 2012. From February 2011 through September of 2012, he served as Vice President of Quality and from August 2008 through February 2011 as Director of Quality. From July 2008 through August 2008 Mr. Sandifer served as Quality Assurance Manager. Prior to joining the Company, must redeemMr. Sandifer was Senior Quality Analyst for Nastech Pharmaceutical, where he worked from January 2006 through August 2008. From March 1997 through June of 2005, Mr. Sandifer worked as Research Assistant, Medical Program Coordinator, and Senior Administrative Coordinator at Georgetown University Hospital.
Daphne Taylor has been Vice President, Finance & Administration, and Chief Financial Officer since August 2011, and Secretary since January 30, 2013 and from March 2011 through July 2011 she served as Corporate Controller. Prior to joining the Series E
Units atCompany, Ms. Taylor served as Vice President, Corporate Controller and Chief Accounting Officer of Cardiac Science Corporation from November 2005 through January 2009. From April 2002 through November 2005, she held various positions, including Vice President and Corporate Controller for LookSmart, Inc.
Raymond W. Cohen joined the Board in May 2006. Mr. Cohen is an Accredited Public Company Director and currently serves as the Executive Chairman of JenaValve Technology Inc., a per Unit price equal toprivately-held manufacturer and marketer of transcatheter aortic valve systems. Previously, Mr. Cohen served as the price paid therefor plus an
additional amount determined by multiplying the price paid
therefor by a fraction, the denominatorChief Executive Officer and member of which is the number
"120" and the numerator of which is the number of months
(rounded to a higher whole number) elapsed between September
30, 1998 and the redemption date. Any such request by
ValorInvest would have a material adverse effect on the
business and financial condition of the Company.
The Plan is comprised of each of the matters to be
voted on, including the Reverse Stock Split, the Common
Stock Reduction, the Preferred Stock Reduction, the 1998
Stock Option Plan, the Stock Option/Warrant Grant and the
SEC Filing. Each matter in the Plan will be voted on separately
and, if approved, may be effectuated by the Company.
However, for the Plan to be approved, each matter in the Plan
must be approved. THE FAILURE TO APPROVE EACH
MATTER CONTAINED IN THE PLAN, AND THEREFORE
THE PLAN, COULD HAVE A MATERIAL ADVERSE
EFFECT ON THE BUSINESS AND FINANCIAL
CONDITION OF THE COMPANY.
On August 31, 1998, the Board of Directors of Vessix Vascular, Inc., a developer of a novel RF balloon catheter technology for treatment of hypertension from 2010 was acquired by Boston Scientific Corp. in November 2013. Previously, from 1997 to 2006, Mr. Cohen served as Chairman and Chief Executive Officer of publicly-traded Cardiac Science, Inc., which in 2004 was ranked as the 4th fastest growing technology company in North America on Deloitte & Touche’s Fast 500 listing. Mr. Cohen has also currently serves as the Chairman of the Board of Directors of Syncroness, Inc., a private engineering and product development firm since 2006. In addition, Mr. Cohen is a member of the Board of Directors of LoneStar Heart, Inc. (formerly CardioPolymers, Inc.) a privately-held developer of novel biotherapeutics for the treatment of congestive heart failure and also serves an advisor to Fjord Ventures, LLC., a life science incubator. In 2008, Mr. Cohen was named by AeA as the Private Company Life Science CEO of the Year. Mr. Cohen was named Entrepreneur of the Year in 2002 by the Orange County Business Journal and was a finalist for Ernst & Young’s Entrepreneur of the Year in the medical company category in 2004. Mr. Cohen holds a B.S. in Business Management from Binghamton University.
Thomas Girschweiler joined the Board in 2003. Mr. Girschweiler has been engaged in corporate financing activities on his own behalf since 1996. From 1981 to 1996 he was an investment banker with Union Bank of Switzerland. Mr. Girschweiler is a graduate of the Swiss Banking School.
Roderick de Greef has been a director of the Company unanimously approved the Plan. The Plan is now
being submitted for approvalsince June 2000, and from July 2007 through August 2011, was retained by the Company's stockholders.
APPROVAL OF A MATTER REQUIRES A "FOR"
VOTE ON THE ACCOMPANYING PROXY. IF NO
CHOICE IS SPECIFIED IN THE ACCOMPANYING
PROXY, THE PROXY WILL BE VOTED "FOR" THE
MATTER. A VOTE TO "ABSTAIN" WITH RESPECT TO
A MATTER WILL HAVE THE SAME EFFECT AS A
VOTE "AGAINST" THE MATTER.
PROPOSAL TO AMEND THE CERTIFICATE OF
INCORPORATION
TO EFFECT THE REVERSE STOCK SPLIT
Reason for SubmissionCompany to Stockholders
This Proposal is being submittedprovide strategic and financial consulting services. Mr. de Greef provides corporate advisory services to stockholders to
comply with the termsseveral other companies, including Cambridge Heart, Inc., where he has been employed as Chairman of the Stock Purchase Agreementboard of directors since November 2008. From October 2005 to July 2007, Mr. de Greef was Chief Financial Officer of Cambridge Heart, and Vice President of Finance and Administration from June 2006 to satisfyJuly 2007. From February 2001 to September 2005, Mr. de Greef was Executive Vice President and Chief Financial Officer of Cardiac Science, Inc., which merged with Quinton Cardiology, Inc. From 1995 to 2001, Mr. de Greef provided independent corporate finance advisory services to a number of early-stage companies, including BioLife Solutions and Cardiac Science. From 1986 to 1995, Mr. de Greef served as Vice President of Finance and Chief Financial Officer of several publicly held, development stage medical technology companies. Mr. de Greef has a B.A. in Economics and International Relations from California State University at San Francisco and earned his M.B.A. from the requirementsUniversity of Oregon. Andrew Hinson joined the Board in February 2007. He is currently the Vice President of Clinical and Regulatory Affairs for LoneStar Heart, Inc., a global developer of medical devices, small molecule, and cellular-based therapies for cardiovascular disease. Mr. Hinson joined CardioPolymers, now a wholly-owned subsidiary of LoneStar Heart, in November 2004. From 2001 to 2004, Mr. Hinson served as the Senior Director of research and clinical development at AnGes MG, Inc. (TSE: 4563) a biotechnology firm engaged in the development and commercialization of novel gene and cell therapies for the treatment of cardiovascular disease. Prior to that Mr. Hinson had a long career with Procter & Gamble Pharmaceutical (NYSE:PG) holding multiple technical and management positions in research, clinical development and medical affairs. Mr. Hinson has diverse experience in the cell and gene therapy markets and extensive experience with regulatory affairs and clinical development of new therapies for cardiac, neurologic, and gastrointestinal diseases.
Rick Stewart joined the Board in February 2013. Mr. Stewart has served as President and Chief Executive Officer, and a member of the Delaware GeneralBoard of Directors of Cardiac Dimensions since 2001. From 1998 to 2001 he was President and Chief Executive Officer of Tegris Corporation, Law. The Proposal is onea leading IT infrastructure and enterprise applications provider for vertical markets. Prior to that Mr. Stewart had a long career within Eli Lilly in its Medical Device and Diagnostics Unit, holding multiple executive positions in general and technical management, sales, marketing and business development. Mr. Stewart was a member of the matters containedsenior team that led a buyout of the Physio-Control subsidiary from Eli-Lilly in 1994 which shortly thereafter was taken public. He received an MBA from the PlanUniversity of RecapitalizationWashington.
Except as otherwise provided by law, each director shall hold office until either their successor is elected and Financing (the "Plan") which, pursuant
toqualified, or until he or she sooner dies, resigns, is removed or becomes disqualified. Officers serve at the Stock Purchase Agreement,discretion of the Board.
There are no family relationships between any of our director nominees or executive officers and any other of our director nominees or executive officers.
BOARD OF DIRECTORS
Overview
Our Bylaws provide that the size of our Board is to be adopteddetermined from time to time by resolution of the Board but shall consist of at least three members. Our Board has fixed the exact number of directors at six. Our Board currently consists of six members, four of whom – Messrs. de Greef, Cohen, Hinson and Stewart – our Board has determined to be independent under the rules of the NASDAQ Stock Market, after taking into consideration, among other things, those transactions described under “Certain Transaction”. Mr. Rice serves as Chairman of the Board. The Board does not have a lead director; however, recognizing that the Board is composed almost entirely of outside directors, in addition to the Board’s strong committee system (as described more fully below), we believe this leadership structure is appropriate for the Company and submittedallows the Board to maintain effective oversight of management.
At each annual meeting of stockholders, members of our Board are elected to serve until the Company's stockholdersnext annual meeting and until their successors are duly elected and qualified. If the nominees named in this proxy statement are elected, the Board will consist of six persons.
The Board has nominated Michael Rice, Roderick de Greef, Thomas Girschweiler, Raymond Cohen, Andrew Hinson and Rick Stewart for their
approval. The failure ofelection at the Company's stockholders to
approve this Proposal would constitute a failure to approve
the Plan and could have a material adverse effectannual meeting based on the businessrecommendation of our Nominating and financial condition of the Company. See
"Background."
Reasons for the Reverse Stock SplitCorporate Governance Committee. The principal reasonsnominees have agreed to effectuate the Reverse Stock
Split areserve if elected, and management has no reason to increase the number of authorized but unissued
shares of Common Stock, to reduce the number of shares of
Common Stock that are outstanding, and to increase the price per
share of the Common Stock.
The Company currently is authorized to issue 50,000,000
shares of Common Stock, of which 33,454,302 shares of
Common Stock are issued and outstanding. There also are
outstanding 128 shares of Series E Preferred Stock and 128
Series E Warrants which are convertible/exercisable into
1,280,000 shares of Common Stock and 640,000 shares of
Common Stock, respectively, and other options and warrants to
purchase 2,096,400 shares of Common Stock. In addition, in
accordance with the Stock Purchase Agreement, the Company (i)
is required to issue to ValorInvest an additional 256 shares of
Series E Preferred Stock, convertible into 2,560,000 shares of
Common Stock, and Series E Warrants to purchase 1,280,000
shares of Common Stock, and (ii) has granted to management,
others who have provided services to the Company, and
directors an aggregate of 19,155,000 stock options/warrants (pre-
Reverse Stock Split) to appropriately incentivize and/or
compensate them, in each case subject to the approval of the
Plan by the Company's stockholders. Thus, the Company may
be required to issue a number of shares of Common Stock,
which, together with the Company's issued and outstanding
shares of Common Stock, would exceed its current authorized
capital of 50,000,000 shares of Common Stock. Lastly, there
currently is an insufficient number of authorized but unissued
shares of Common Stock available to allow the Company to
complete the contemplated Public Offering.
The Company contemplatesbelieve that the Reverse Stock Splitnominees will be unavailable for service. If any nominee is unable or declines to serve as a minimum of one-for-ten (with the final determination
to be based upon the price of the Common Stockdirector at the time of the Reverse Stock Split and negotiations withAnnual Meeting or any adjournment or postponement thereof, the Underwriter,
if any). After a one-for-ten Reverse Stock Split, there would be
outstanding approximately 3,345,430 shares of Common Stock,
Series E Preferred Stock convertible into 128,000 shares of
Common Stock, Series E Warrants to purchase 64,000 shares of
Common Stock, other options and warrants to purchase
2,125,140 shares of Common Stock (assuming ratification and
approval of the Stock Option/Warrant Grant), and a contractual
commitment to issue to ValorInvest additional Series E Preferred
Stock and Series E Warrants convertible/exercisable into an
aggregate of 384,000 shares of Common Stock, for an aggregate
of approximately 6,046,570 shares of Common Stock issued and
outstanding or required to be reserved for issuance. Therefore,
the Reverse Stock Split will enable the Company to issue shares
of Common Stock pursuant to the conversion of outstanding and
contracted for shares of Series E Convertible Preferred Stock and
the exercise of outstanding warrants and options, and to
consummate a Public Offering.
The Company also believes that the higher share price
which may result from the Reverse Stock Split will help to
generate interest in the Company among investors, thereby
facilitating future financings. In addition, the Company
anticipates, but there can be no assurance, that the Reverse Stock
Split will enable the Common Stock to maintain its listing on the
NASDAQ Stock Market, for which a minimum $1.00 bid price
is required. There can be no assurance, however, that a higher
share price will have such effect or that any financingsproxies will be consummated in the future.
Fractional Shares
No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock willvoted for such other nominees as may be issued
in connection with the Reverse Stock Split. In lieu of issuing
fractional shares, each fractional share will be rounded up to the
next highest whole share of Common Stock.
Effects of the Reverse Stock Split
Upon the effectiveness of the Reverse Stock Split, the
number of shares owned by each holder of Common Stock shall
be reduceddesignated by the ratiopresent Board.
Committees of a minimum of 5 to 1 and a maximum
of 16 to 1, so that each such stockholder will thereafter own one
share of Common Stock for every 5 or 6 or 7 or 8 or 9 or 10 or
11 or 12 or 13 or 14 or 15 or 16 shares of Common Stock he or
she owned immediately prior to the Reverse Stock Split.
It is contemplated that the Reverse Stock Split will be a
minimum of one-for-10 (with the final determination to be based
upon the price of the Common Stock at the time of the Reverse
Stock Split and negotiations with the Underwriter, if any).
Assuming a one-for-10 Reverse Stock Split, the principal effect
of the Reverse Stock Split will be that (i) the number of shares
of Common Stock issued and outstanding will be reduced from
33,454,302 shares to approximately 3,345,430 shares, (ii) all
outstanding shares of Series E Preferred Stock entitling holders
thereof to receive, upon conversion, shares of Common Stock
will enable such holders to receive, upon conversion thereof,
1/10th of the number of shares of Common Stock which such
holders would have received upon conversion thereof
immediately preceding the Reverse Stock Split, (iii) all
outstanding options and warrants entitling the holders thereof to
purchase shares of Common Stock will enable such holders to
purchase, upon exercise of their options and warrants, 1/10 of
the number of shares of Common Stock which such holders
would have been able to purchase upon exercise of their options
or warrants immediately preceding the Reverse Stock Split at the
same aggregate price required to be paid therefor upon exercise
thereof immediately preceding the Reverse Stock Split, and (iv)
the number of shares included in the Company's 1998 Stock
Option Plan will be reduced to 1/10th of the number of shares
currently included in such Stock Option Plan. The Reverse
Stock Split will not alter the percentage ownership interest in the
Company of any stockholder, except to the extent that the
Reverse Stock Split results in a stockholder of the Company
owning a fractional share (see "Reverse Stock Split - Fractional
Shares"). Voting and other rights accompanying the Common
Stock will not be altered.
Pursuant to the Reverse Stock Split, the par value of the
Common Stock will remain $0.001 per share. As a result, on
the effective date of the Reverse Stock Split, the stated capital on
the Company's balance sheet attributable to the Common Stock
will be reduced to 1/10th of its present amount (assuming a one-
for-ten Reverse Stock Split), and the additional paid-in capital
account shall be credited with the amount by which the stated
capital is reduced.
Exchange of Shares
The Reverse Stock Split will be effective at the close of
business on the date of filing of the appropriate certificate of
amendment to the Charter with the Secretary of State of the State
of Delaware, unless the Company specifies otherwise. The
record date for the Reverse Stock Split will be the effective date
of the amendment to the Charter (the "Record Date"). On or
about the Record Date, notice of the Reverse Stock Split (the
"Split Notice") will be mailed to each stockholder of record at
the most recent address of such stockholder appearing on the
Company's records. The Split Notice shall be accompanied by
a Letter of Transmittal and shall request that each stockholder
surrender his or her existing stock certificate(s) (the "Old
Certificate") evidencing ownership of the pre-Reverse Stock Split
Common Stock (the "Old Common Stock"), together with the
Letter of Transmittal, to American Stock Transfer and Trust
Company to be exchanged for a new stock certificate(s)
evidencing ownership of the number of shares of Common Stock
resulting from the Reverse Stock Split (the "New Common
Stock"). From and after the Record Date, all Old Certificates
will be deemed to represent only that number of shares of New
Common Stock resulting from the Reverse Stock Split.
Federal Income Tax Consequences
The Company believes that the federal income tax
consequences of the Reverse Stock Split will be as follows:
(i) Except as explained in (v) below, no
income gain or loss will be recognized
by stockholders on the surrender of their
Old Common Stock or the receipt of
their New Common Stock.
(ii) Except as explained in (v) below, the
tax basis of the New Common Stock
will equal the tax basis of the Old
Common Stock exchanged therefor.
(iii) Except as explained in (v) below, the holding
period of the New Common Stock will include
the holding period of the Old Common Stock if
such shares were held as capital assets.
(iv) The conversion of the Old Common Stock into
the New Common Stock will produce no taxable
income or gain or loss to the Company.
(v) The federal income tax treatment of the
receipt of the additional fractional
interest by a stockholder is not clear and
may result in tax liability not material in
amount in view of the low value of such
fractional interest.
The foregoing summary represents the Company's
opinion only and is based on the existing provisions of the
Internal Revenue Code of 1986, as amended, and existing
administrative interpretations thereof, any of which may be
revised retroactively. The Company's opinion is not binding
upon the Internal Revenue Service or the courts, and there can
be no assurance that the Internal Revenue Service or the courts
would accept the positions expressed above.
The state and local tax consequences of the Reverse
Stock Split may vary significantly as to each stockholder,
depending upon the state in which he/she resides. Stockholders
are urged to consult their own tax advisors with respect to the
federal, state, and local tax consequences of the Reverse Stock
Split.
No Right of Appraisal
Under the Delaware General Corporation Law,
dissenting stockholders are not entitled to appraisal rights with
respect to the Company's proposed amendment to the Charter to
effect the Reverse Stock Split, and the Company will not provide
stockholders with any such right.
Voting Requirement
Approval of the Proposal for the Reverse Stock Split
requires the affirmative vote of the holders of stock representing
a majority of the votes entitled to be cast at the Meeting.
The Board of Directors recommends that the
stockholders vote FOR the proposed amendment to the
Charter to effect the Reverse Stock Split.
PROPOSAL TO AMEND THE CERTIFICATE OF
INCORPORATION
TO EFFECT THE COMMON STOCK REDUCTION
Reason for Submission to Stockholders
This Proposal is being submitted to stockholders to
comply with the terms of the Stock Purchase Agreement and to
satisfy the requirements of the Delaware General Corporation
Law. The Proposal is one of the matters contained in the Plan
of Recapitalization and Financing (the "Plan") which, pursuant
to the Stock Purchase Agreement, is to be adopted by the
Company and submitted to the Company's stockholders for their
approval. The failure of the Company's stockholders to
approve this Proposal would constitute a failure to approve
the Plan and could have a material adverse effect on the
business and financial condition of the Company. See
"Background."
Reasons for Reducing the Number of Authorized Shares of
Common Stock
Presently, the Charter authorizes the issuance of
50,000,000 shares of Common Stock, of which 33,454,302
shares of Common Stock are issued and outstanding. There also
are outstanding Series E Preferred Stock and Series E Warrants
convertible/exercisable into 1,280,000 shares of Common Stock
and 640,000 shares of Common Stock, respectively, and other
options and warrants to purchase 2,096,400 shares of Common
Stock. In addition, in accordance with the Stock Purchase
Agreement, the Company (i) is required to issue to ValorInvest
an additional 256 shares of Series E Preferred Stock, convertible
into 2,560,000 shares of Common Stock, and Series E Warrants
to purchase 1,280,000 shares of Common Stock, and (ii) has
granted to management, others who have provided services to the
Company, and directors an aggregate of 19,155,000 stock
options/warrants (pre-Reverse Stock Split) to appropriately
incentivize and/or compensate them, in each case subject to the
approval of the Plan by the Company's stockholders. Assuming
a minimum one-for-ten Reverse Stock Split, there would be
outstanding a maximum of approximately 3,345,430 shares of
Common Stock, Series E Preferred Stock convertible into
128,000 shares of Common Stock, Series E Warrants to
purchase 64,000 shares of Common Stock, other options and
warrants to purchase 2,125,140 shares of Common Stock
(assuming ratification and approval of the Stock Option/Warrant
Grant), and a contractual commitment to issue to ValorInvest
additional Series E Preferred Stock and Series E Warrants
convertible/exercisable into an aggregate of 384,000 shares of
Common Stock, for an aggregate of approximately 6,046,570
shares of Common Stock issued and outstanding or required to
be reserved for issuance. In such case, an authorized capital of
50,000,000 shares of Common Stock would be unnecessary.
Rather, the Board of Directors believes
The Board has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Each committee operates pursuant to a written charter that an authorized capitalmay be viewed on our website at www.biolifesolutions.com. The inclusion of 25,000,000 shares of Common Stock would be sufficient to
ensure thatour web site address in this proxy statement does not include or incorporate by reference the Company has enough shares of Common Stock
available to meet its outstanding commitments as well as to
provideinformation on our web site into this proxy statement.
The following table sets forth the Company with flexibility in connection with various
corporate purposes, including the Public Offering, if any, and
possible future financings and acquisitions requiring the issuance
of Common Stock.
Effectcurrent composition of the Reductionthree standing committees of our Board:
Name | | Board | | | Audit | | | Compensation | | | Nominating and Corporate Governance | |
| | | | | | | | | | | | |
Mr. Rice | | Chair | | | | | | | | | | |
Mr. de Greef (financial expert) | | X | | | X | | | Chair | | | X | |
Mr. Cohen | | X | | | Chair | | | X | | | X | |
Mr. Girschweiler | | X | | | X | | | | | | | |
Mr. Hinson | | X | | | | | | X | | | Chair | |
Mr. Stewart | | X | | | X | | | X | | | | |
Audit Committee. Our Audit Committee’s role includes the oversight of our financial, accounting and reporting processes; our system of internal accounting and financial controls; and our compliance with related legal, regulatory and ethical requirements. The reductionAudit Committee oversees the appointment, compensation, engagement, retention, termination and services of authorized sharesour independent registered public accounting firm, including conducting a review of Common Stock
will not alterits independence; reviewing and approving the par valueplanned scope of our annual audit; overseeing our independent registered public accounting firm’s audit work; reviewing and pre-approving any audit and non-audit services that may be performed by our independent registered public accounting firm; reviewing with management and our independent registered public accounting firm the Common Stock or the rightsadequacy of stockholders.
No Right of Appraisal
Under the Delaware General Corporation Law,
dissenting stockholders are not entitled to appraisal rights with
respect to the Company's proposed amendment to the Charter to
effect the Common Stock Reduction,our internal financial and disclosure controls; reviewing our critical accounting policies and the Company will not
provide stockholdersapplication of accounting principles; and monitoring the rotation of partners of our independent registered public accounting firm on our audit engagement team as required by regulation.
In addition, the Audit Committee’s role includes meeting to review our annual audited financial statements and quarterly financial statements with any such right.
Voting Requirement
In accordance withmanagement and our independent registered public accounting firm. The Audit Committee has the Charter, approval of the Proposal
for the Common Stock Reduction requires the affirmative vote
of the holders of stock representing a majority of the votes
entitledauthority to be castobtain independent advice and assistance from internal or external legal, accounting and other advisors, at the Meeting.
Company’s expense.
The Board has determined that all members of Directors recommends thatour Audit Committee except for Mr. Girschweiler are independent under the stockholders vote FOR the proposed amendment to the
Charter to effect the Common Stock Reduction.
PROPOSAL TO AMEND THE CERTIFICATE OF
INCORPORATION
TO EFFECT THE PREFERRED STOCK REDUCTION
Reason for Submission to Stockholders
This Proposal is being submitted to stockholders to
comply with the terms of the Stock Purchase Agreement and to
satisfy the requirements of the Delaware General Corporation
Law. The Proposal is one of the matters contained in the Plan
of Recapitalization and Financing (the "Plan") which, pursuant
to the Stock Purchase Agreement, is to be adopted by the
Company and submitted to the Company's stockholders for their
approval. The failure of the Company's stockholders to
approve this Proposal would constitute a failure to approve
the Plan and could have a material adverse effect on the
business and financial condition of the Company. See
"Background."
Reasons for Reducing the Number of Authorized Shares of
Preferred Stock
Presently the Charter authorizes the issuance of
9,378,800 shares of Preferred Stock, of which 128 shares,
designated as Series E Convertible Preferred Stock, are issued
and outstanding. Under such circumstances, authorized capital
of 9,378,800 shares of Preferred Stock is unnecessary. Rather,
the Board of Directors believes that an authorized capital of
1,000,000 shares of Preferred Stock would be sufficient to
ensure that the Company has enough shares of Preferred Stock
available to meet its outstanding commitments as well as to
provide the Company with flexibility in connection with various
corporate purposes, including the Public Offering, if any, and
possible future financings and acquisitions requiring the issuance
of Preferred Stock.
Effect of the Reduction
The reduction of authorized shares of Preferred Stock
will not alter the par value of the Preferred Stock or the rights
of stockholders.
No Right of Appraisal
Under the Delaware General Corporation Law,
dissenting stockholders are not entitle to appraisal rights with
respect to the Company's proposed amendment to the Charter to
effect the Preferred Stock Reduction, and the Company will not
provide stockholders with any such right.
Voting Requirement
In accordance with the Charter, approval of the Proposal
for the Preferred Stock Reduction requires the affirmative vote
of the holders of stock representing a majority of the votes
entitled to be cast at the Meeting.
The Board of Directors recommends that the
stockholders vote FOR the proposed amendment to the
Charter to effect the Preferred Stock Reduction.
Method of Effecting the Charter Amendments
The Reverse Stock Split, the Common Stock Reduction
and the Preferred Stock Reduction shall become effective,
automatically and without further action by the stockholders,
upon the filing with the Delaware Secretary of State of an
appropriate certificate of amendment to the Charter (the "Charter
Filing"). The complete text of such amendment is set forth in
Exhibit A hereto. At any time prior to the effectiveness of the
Charter Filing (or, if no Charter Filing has been made, prior to
the Charter Filing), the Board of Directors may abandon the
Charter Amendments without further action by the stockholders.
PROPOSAL TO APPROVE AND RATIFY THE 1998
STOCK OPTION PLAN
Reason for Submission to Stockholder
This Proposal is being submitted to stockholders to
comply with the terms of the Stock Purchase Agreement, to
satisfy requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), and to satisfy the requirementslisting standards of the NASDAQ Stock Market. The Proposal is one of the matters
contained in the Plan of Recapitalization and Financing (the
"Plan") which, pursuant to the Stock Purchase Agreement, is to
be adopted by the Company and submitted to the Company's
stockholders for their approval. The failure of the Company's
stockholders to approve this Proposal would constitute a
failure to approve the Plan and could have a material adverse
effect on the business and financial condition of the
Company. See "Background."
Description of the 1998 Stock Option Plan
On August 31, 1998, the Board of Directors subjecthas determined that Mr. de Greef is an “audit committee financial expert” as defined by the rules of the Securities and Exchange Commission.
Compensation Committee. Our Compensation Committee sets and administers the policies governing all compensation of our executive officers, including cash and non-cash compensation and equity compensation programs, and is responsible for making recommendations to the Board concerning Board and committee compensation. Also, the Compensation Committee reviews and approves equity-based compensation grants to our non-executive officer employees. In addition, the Compensation Committee is responsible for oversight of our overall compensation plans and benefit programs, as well as the approval of all employment, severance and change of control agreements and plans applicable to our executive officers. Furthermore, the Compensation Committee has the authority to obtain independent advice and assistance from internal or external legal, accounting and other advisors, at the Company’s expense.
The members of the Compensation Committee are independent directors within the meaning of listing standards of the NASDAQ Stock Market.
Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee’s primary purpose is to evaluate candidates for membership on our Board and make recommendations to our Board regarding candidates; make recommendations with respect to the composition of our Board and its committees; review and make recommendations regarding the functioning of our Board as an entity; recommend corporate governance principles applicable to the Company; manage periodic review, discussion and evaluation of the performance of our Board, its committees and its members; assess the independence of our directors; review the board memberships of other entities held by members of the Board and review and approve such memberships for our executive officers. Also, the Nominating and Corporate Governance Committee assists our Board in reviewing and assessing succession planning for our executive officers. The Nominating and Corporate Governance Committee has the authority to obtain independent advice and assistance from internal or external legal, accounting and other advisors, at the Company’s expense.
All members of our Nominating and Corporate Governance Committee are independent under the listing standards of the NASDAQ Stock Market.
The Nominating and Corporate Governance Committee will consider candidates recommended by stockholders. Pursuant to the Nominating and Corporate Governance Committee Charter, there is no difference in the manner in which a nominee recommended by a stockholder approval, adoptedor otherwise is evaluated. To recommend director candidates, stockholders should submit their suggestions in writing to the 1998 Stock Option PlanSecretary, providing the proposed nominee’s name, biographical data and other information about the proposed nominee and the nominating stockholder(s) as required by our Bylaws, together with a consent from the proposed nominee to serve on the Board if nominated and elected. In addition, the stockholder giving such notice must provide their name, address, and the class and number of shares of capital stock of the corporation beneficially owned by such stockholder.
In carrying out its function to nominate candidates for election to our Board, the Nominating and Corporate Governance Committee considers the Board’s mix of skills, experience, character, commitment and diversity—diversity being broadly construed to mean a variety of opinions, perspectives and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics, all in the context of the requirements and needs of our Board at that point in time. In reviewing potential candidates, the Committee will also consider all relationships between any proposed nominee and any of our stockholders, competitors, customers, suppliers or other persons with a relationship to the Company. The Nominating and Corporate Governance Committee believes that each candidate should be an individual who has demonstrated integrity and ethics in such candidate’s personal and professional life, has an understanding of elements relevant to the success of a publicly traded company and has established a record of professional accomplishment in such candidate’s chosen field.
The Nominating and Corporate Governance Committee’s methods for identifying candidates for election to our Board include the solicitation of ideas for possible candidates from a number of sources, including from members of our Board, our executive officers, individuals who our executive officers or Board members believe would be aware of candidates who would add value to our Board and through other research. The Nominating and Corporate Governance Committee may, from time to time, retain, for a fee, one or more third-party search firms to identify suitable candidates. The Nominating and Corporate Governance Committee will consider all candidates identified through the processes described above, and will evaluate each candidate, including incumbents, based on the same criteria.
The Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating and Corporate Governance Committee believe that it is essential that the Board members represent diverse viewpoints.
The Nominating and Corporate Governance Committee has the following policy with regard to the consideration of any director candidates recommended by security holders for the 2014 annual meeting of stockholders (subject to legal rights, if any, of third parties to nominate or appoint directors):
| · | A stockholder wishing to nominate a candidate for election to the Board at the next annual meeting is required to give written notice addressed to BioLife Solutions, Inc., 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021, Attn: Corporate Secretary, of his or her intention to make such a nomination. The notice of nomination must be received by the Corporate Secretary at this address not less than 45 days nor earlier than 90 days prior to the date of the next annual meeting, in accordance with our Bylaws, in order to be considered for nomination at the next annual meeting; provided, however, that in the event that less than 55 days’ notice or prior public disclosure of the date of the next annual meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the date on which such notice of the date of the next annual meeting is mailed or such public disclosure is made. |
| · | The notice of nomination must include the nominee’s name, age, business address, residence address, principal occupation or employment, and any other information required by Section 3.3 of our Bylaws or by applicable laws or regulations. A nomination that does not comply with these requirements will not be considered. |
Number of Meetings
The Board held a total of four meetings during 2012. Our Audit Committee and Compensation Committee held four and three meetings, respectively, during 2012. Our Nominating and Corporate Governance Committee did not meet during 2012. Each incumbent director attended 75% or more of the aggregate of (i) the total number Board meetings (during the period that he served) and (ii) the total number of Board committee meetings (during the periods that he served).
Board Member Attendance at Annual Stockholder Meetings
Although we do not have a formal policy regarding director attendance at annual stockholder meetings, directors are encouraged to attend these annual meetings absent extenuating circumstances. We did not hold an annual meeting of stockholders in 2012.
Director Compensation
Non-employee directors were compensated with a quarterly retainer fee of $1,500. The Audit Committee Chairman was compensated an additional quarterly retainer fee of $2,000. All non-employee directors receive $1,000 per meeting for attending board meetings in person and $500 per meeting for attending board meetings telephonically. Non-employee Directors who attend audit committee and the compensation committee meetings in person or telephonically receive $500 per meeting. A total of $50,000 in director compensation was recorded during the year ended December 31, 2012.
The following table summarizes the compensation of our directors who served during 2012 and who are not listed as named executive officers.
Name | | Fees Earned Or Paid In Cash ($) | | | Option Awards ($) (2) | | | All Other Compensation ($) | | | Total ($) | |
| | | | | | | | | | | | |
Howard Breslow(1) | | | 6,500 | | | | 10,072 | (3) | | | -- | | | | 16,572 | |
Thomas Girschweiler | | | 11,000 | | | | 10,072 | (4) | | | -- | | | | 21,072 | |
Roderick de Greef | | | 7,500 | | | | 10,072 | (5) | | | -- | | | | 17,572 | |
Raymond Cohen | | | 17,000 | | | | 10,072 | (6) | | | -- | | | | 27,072 | |
Andrew Hinson | | | 8,000 | | | | 10,072 | (7) | | | -- | | | | 18,072 | |
_______________________
(1) | Mr. Breslow served as a director until February 4, 2013. |
(2) | See Note 1 to Notes to Financial Statements for a description on the valuation methodology of stock option awards. |
(3) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest on 5/10/2013. |
(4) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest on 5/10/2013. |
(5) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest on 5/10/2013. |
(6) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest on 5/10/2013. |
(7) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest on 5/10/2013. |
Codes of Business Conduct and Ethics
We believe in sound corporate governance practices and have always encouraged our employees, including officers and directors of, and consultants
and advisors to the Company or any subsidiary corporation
(aggregating approximately 27 persons as of October 1, 1998).
A summary of the 1998 Stock Option Plan (the "Stock Option
Plan") is set forth below. The summary is qualified in its
entirety by reference to the full text of the Stock Option Plan, a
copy of which is attached hereto as Exhibit B.
The Stock Option Plan covers 20,000,000 shares of
Common Stock (subject to adjustment to cover stock splits, stock
dividends, recapitalizations and other capital adjustments,
including the Reverse Stock Split). The options granted under
the Stock Option Plan will be designated as incentive stock
options or non-incentive stock options by the Board of Directors
or a committee thereof, which also will have discretion as to the
persons to be granted options, the number of shares subject to
the options, and the terms of the option agreements. Only
employees (including officers) of the Company may be granted
incentive stock options. The options to be granted under the
Stock Option Plan and designated as incentive stock options are
intended to receive incentive stock option tax treatment pursuant
to Section 422 of the Code.
The Stock Option Plan provides that all options
thereunder shall be exercisable during a period of no more than
ten years from the date of grant (five years for options granted
to holders who own more than 10% of the total combined voting
power of all classes of stock of the Company), depending upon
the specific stock option agreement, and that the option exercise
price for incentive stock options shall be at least equal to 100%
of the fair market value of the Common Stock at the time of
grant (110% for options granted to holders who own more than
10% of the total combined voting power of all classes of stock
of the Company). In addition, the aggregate fair market value
(determined on the date of grant) of the Common Stock with
respect to which incentive stock options are exercisable for the
first time by an employee during any calendar year shall not
exceed $100,000.
The Stock Option Plan permits optionees whose
employment is terminated without cause and other than by reason
of death, disability or retirement at age 65, to exercise their
options prior to the expiration thereof or within three months of
termination, whichever is earlier, but only to the extent the
holder had the right to exercise such options on the date of
termination. If the employment of an optionee is terminated for
cause and other than by reason of death, disability or retirement
at age 65, any options granted to the optionee will terminate
automatically. If employment is terminated by reason of
disability or retirement at age 65, the optionee may exercise his
options at any time prior to the expiration thereof or within one
year from the date of termination (three months from the date of
termination in the event of termination by reason of retirement
at age 65), whichever is earlier, but only to the extent the holder
had the right to exercise such options on the date of termination.
If employment is terminated by death, the person or persons to
whom the optionee's rights under the option are transferred by
will or the laws of descent and distribution have similar rights of
exercise within three months after such death (but not after the
expiration of the option). Options are not transferable otherwise
than by will or the laws of descent and distribution, or pursuant
to a qualified domestic relations order as defined under the Code
or Title I of the Employee Retirement Income Security Act or
the rules thereunder, and are exercisable during the optionee's
lifetime only by the optionee. Shares subject to options which
expire or terminate may be the subject of future options. The
Stock Option Plan terminates on August 30, 2008.
If shares are issued to the holder of a non-incentive
option under the Stock Option Plan (a) no income will be
recognized by the holder at the time of grant of the option; (b)
except as stated below, upon exercise of the option, the holder
will recognize taxable ordinary incomeconduct business in an amount equal to the
excess of the fair market value of the shares over the option
price; (c) if the holder exercising the option is restricted from
selling the shares so acquired because the holder is an officer or
director of the Companyhonest and would be subject to liability under
Section 16(b) of the Exchange Act, then, unless the holder makes
an election to be taxed under the rule of clause (b) above, the
holder will recognize taxable ordinary income, at the time such
Section 16(b) restriction terminates, equal to the excess of the
fair market value of the shares at that time over the option price,
and any dividends he or she receives on the shares before that
time will be taxable to him or her as income; (d) the Company
will be entitled to a deduction at the same time and in the same
amount as the holderethical manner. Additionally, it has income under clause (b) or (c); and (e)
upon a sale of shares so acquired, the holder may have additional
short-term or long-term capital gain or loss.
If shares are issued to the holder of an incentive stock
option under the Stock Option Plan, (a) no income will be
recognized by such holder at the time of the grant of the option
or the transfer of shares to the holder pursuant to his or her
exercise of the option; (b) the difference between the option
price and the fair market value of the shares at the time of
exercise will be treated as an item of tax preference to the
holder; (c) no deduction will be allowed to the Company for
federal income tax purposes in connection with the grant or
exercise of the option; and (d) upon a sale or exchange of the
shares after the later of (i) one year from the date of transfer of
the shares to the original holder, or (ii) two years from the date
of grant of the option, any amount realized by the holder in
excess of the option price will be taxed to the holder as a long-
term capital gain, and any loss sustained by the holder will be a
long-term capital loss. If the shares are disposed of before the
holding period requirements described in the preceding sentence
are satisfied, (aa) the holder will recognize taxable ordinary
income in the year of disposition in an amount determined under
the rules of the Code; (bb) the Company will be entitled to a
deduction for such year in the amount of the ordinary income so
recognized; (cc) the holder may have additional long-term or
short-term capital gain or loss; and (dd) the tax preference
provision might not be applicable.
The Stock Option Plan provides for the cashless payment
of the exercise price of options granted under the Stock Option
Plan by (a) delivery to the Company of shares of Common Stock
having a fair market value equal to such purchase price, (b)
irrevocable instructions to a broker to sell shares of Common
Stock to be issued upon exercise of the option, followed by
delivery to the Company of the amount of sale proceeds
necessary to pay such purchase price, and delivery of the
remaining cash proceeds less commissions and brokerage fees to
the optionee or delivery of the remaining shares of Common
Stock to the optionee, or (c) by any combination of the methods
of payment described in (a) and (b) above.
Voting Requirement
Approval of the proposal to ratify and approve the Stock
Option Plan requires affirmative vote of the holders of stock
representing a majority of the shares present in person or
represented by proxy at the Meeting and entitled to vote thereon.
The Board of Directors recommends that the
stockholders vote FOR ratification and approval of the Plan.
PROPOSAL TO APPROVE THE STOCK
OPTION/WARRANT GRANT
Reason for Submission to Stockholders
This Proposal is being submitted to stockholdersalways been our policy to comply with the terms of the Stock Purchase Agreementall applicable laws and to
satisfy the requirements of the NASDAQ Stock Market. The
Proposal is one of the matters contained in a Plan of
Recapitalizationprovide accurate and Financing (the "Plan") which, pursuant to
the Stock Purchase Agreement, is to be adopted by the
Company's Board of Directors and submitted to the Company's
stockholders for their approval. The failure of the Company's
stockholders to approve this Proposal would constitute a
failure to approve the Plan and could have a material adverse
effect on the business and financial condition of the
Company. See "Background."
Reason for the Stock Option/Warrant Grant
In connection with the adoption and approval of the Plan
bytimely disclosure.
Accordingly, the Board has adopted a formal written code of Directors, and pursuant to the terms thereof, theethics for all employees. The Board has adopted an additional corporate code of Directors granted, on a pre-Reverse Stock Split basis:
(i) under the 1998 Stock Option Plan, stock options to purchase
an aggregate of 13,300,000 shares of Common Stock, at $.25
per share, to: Richard J. Reinhart, Ph.D., President,ethics for its Chief Executive Officer, Chief Financial Officer and Director - 7,200,000; John Baust, Ph.D.,
Senior Vice President and Chief Scientific Officer - 2,160,000;
Alan F. Rich, Vice President - Sales and Marketing - 1,100,000;
an aggregate of 14 employees - 775,000,; Howard S. Breslow,
Director - 720,000 and J. Donald Hill, Director - 720,000, (ii)
warrants to purchase 2,880,000 shares of Common Stock, at
$.25 per share, to Breslow & Walker, LLP, the Company's
general counsel, ofother senior financial officers, which Howard S. Breslow, a director of the
Company, is a member, and (iii) warrants to purchase 3,600,000
shares of Common Stock, at $.25 per share, to BWM
Investments, an affiliate of Breslow & Walker, LLP, of which
Howard S. Breslow, a director of the Company, is a partner, to
appropriately incentivize and/or compensate them for services
provided to the Company. The Company believes that it has
been only through the efforts of management, the Board of
Directors, and the Company's legal counsel (and its affiliates)
that the Company has maintained its viability under some very
trying and difficult circumstances.
Approval of the Stock Option/Warrant Grant requires the
affirmative vote of the holders of stock representing a majority
of shares present in person or represented by proxy at the
Meeting and entitled to vote thereon.
Voting Requirement
The Board of Directors recommends that the
stockholders vote FOR ratification and approval of the Stock
Option/Warrant Grant.
PROPOSAL TO APPROVE THE SEC FILING
Reason for Submission to Stockholders
This Proposal is being submitted to stockholders to
comply with the terms of the Stock Purchase Agreement. The
Proposal is one of the matters contained in a Plan of
Recapitalization and Financing (the "Plan") which, pursuant to
the Stock Purchase Agreement, isintended to be adopteda “code of ethics” as defined by the
Company's Boardapplicable SEC rules. The Code of DirectorsEthics is publicly available on our website at http://biolifesolutions.com/biopreservation-media/CODE-OF-ETHICS-FOR-CEO-AND-SENIOR-FINANCIAL-OFFICERS1.pdf. The code of ethics is designed to deter wrongdoing and submittedpromote honest and ethical conduct and compliance with applicable laws and regulations. These codes also incorporate what we expect from our executives so as to the Company's
stockholders for their approval. The failure of the Company's
stockholdersenable us to approve this Proposal would constitute a
failure to approve the Planprovide accurate and could have a material adverse
effect on the business and financial condition of the
Company. See "Background." The failure of the Company's
stockholders to approve this Proposal would not preclude the
Company from filing a registration statementtimely disclosure in our filings with the Securities and Exchange Commission ("SEC") forand other public communications. The Board intends to review the salecode of securities by
the Company.
Reason for the SEC Filing
Subjectethics this year to ensure compliance with applicable laws and regulations. Any amendments made to the adoptionCode of Ethics will be available on our website.
Stockholder Communications with Directors
Stockholders wishing to communicate with the Board or with a particular member or committee of the Plan byBoard should address communications to the Company andBoard, or to an individual member or committee as follows: c/o BioLife Solutions, Inc., Attention: Corporate Secretary, 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021. All communications will be relayed to that addressee. From time to time, the Board may change the process through which stockholders communicate with the Board or its stockholders, ValorInvest has agreedmembers or committees. There were no changes in this process in 2012. Please refer to use its best efforts to
arrangeour website at www.biolifesolutions.com for a public offering ("Public Offering") (contemplated
to beany future changes in Europe)this process. The Board or the particular director or committee of the Company's securities throughBoard to which a communication is addressed will, if it deems appropriate, promptly refer the matter either to management or to the full Board depending on the nature of the communication.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table sets forth certain information regarding the compensation, for services rendered in all capacities to us during 2012 and 2011, of our current principal executive officer, our two other most highly compensated executive officers at the end of 2012 (together, the “named executive officers”).
Name and Principal Positions (a) | | Year (b) | | Salary ($) (c) | | | Bonus ($) (d) | | | Stock Awards ($) (e) | | | Option Awards ($) (f) (1) | | | Compensation ($) (g) | | | Nonqualified Deferred CompensationEarnings ($) (h) | | | All Other Compensation ($) (i) | | | Total ($) (j) | |
Michael Rice | | 2012 | | | 285,002 | | | | 150,000 | | | | –– | | | | –– | | | | –– | | | | –– | | | | 24,143 | (7) | | | 459,145 | |
President, Chief | | 2011 | | | 270,000 | | | | –– | | | | –– | | | | 161,220 | (2) | | | –– | | | | –– | | | | –– | | | | 431,220 | |
Executive Officer and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Director (8/06 –present) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Daphne Taylor | | 2012 | | | 160,000 | | | | 18,000 | | | | –– | | | | 19,762 | (3) | | | –– | | | | –– | | | | –– | | | | 197,762 | |
Chief Financial Officer | | 2011 | | | 102,087 | | | | –– | | | | –– | | | | 44,192 | (4) | | | –– | | | | –– | | | | –– | | | | 146,279 | |
(3/11 – present) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Aby J. Mathew | | 2012 | | | 177,833 | | | | 20,000 | | | | –– | | | | 19,762 | (5) | | | –– | | | | –– | | | | –– | | | | 217,595 | |
Chief Technology Officer | | (6) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(9/00 – present) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
———————
| (1) | See Note 1 to Notes to Financial Statements for a description on the valuation methodology of stock option awards. |
| (2) | Amount is a result of options to purchase 400,000 shares at $0.08 per share granted to officer on 2/25/11, which options vested 100% upon grant of the awards, and options to purchase 2,247,939 shares at $0.08 per share granted to officer on 2/25/11, which options vested during the fourth quarter of 2012. |
| (3) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest to the extent of 62,500 shares on 2/15/2013 and, thereafter, in monthly increments of 5,208 shares. |
| (4) | Amount is the result of options to purchase 250,000 shares at $0.10 per share granted to officer on 3/1/2011, which options vest to the extent of 62,500 shares on 3/1/2012, 3/1/2013, 3/1/2014 and 3/1/2015, and options to purchase 500,000 shares at $0.063 per share granted to officer on August 17, 2011, which options vest to the extent of 125,000 shares on 8/17/12, and, thereafter, in monthly increments of 10,417 shares. |
| (5) | Amount is a result of options to purchase 250,000 shares at $0.10 per share granted to officer on 2/15/2012, which options vest to the extent of 62,500 shares on 2/15/2013 and, thereafter, in monthly increments of 5,208 shares. |
| (6) | Mr. Mathew was appointed an executive officer position in September of 2012. |
| (7) | Amount represents accrued vacation paid in cash. |
Outstanding Equity Awards at Fiscal Year-End 2012
The following table sets forth information concerning the outstanding equity awards as of December 31, 2012 granted to the named executive officers.
| | OPTION AWARDS | | STOCK AWARDS | |
| | | | | | | | | | | | | | | | | | | | | Equity Incentive | | | Equity Incentive Plan Awards: | |
Name (a) | | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | | | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | | | Option Exercise Price ($) (e) | | Option Expiration Date (f) | | Number of Shares or Units of Stock That Have Not Vested (#) (g) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | | | Plan Awards: Number of Unearned Shares, units or Other Rights That Have Not Vested (#) (i) | | | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | |
Michael Rice | | | 1,500,000 | | | | –– | | | | –– | | | | 0.07 | | 8/7/2016 (1) | | | –– | | | | –– | | | | –– | | | | –– | |
Michael Rice | | | 1,000,000 | | | | –– | | | | –– | | | | 0.08 | | 2/7/2017 (2) | | | –– | | | | –– | | | | –– | | | | –– | |
Michael Rice | | | 733,125 | | | | 31,875 | | | | –– | | | | 0.09 | | 2/2/2019 (3) | | | –– | | | | –– | | | | –– | | | | –– | |
Michael Rice | | | 595,439 | | | | 595,439 | | | | –– | | | | 0.10 | | 2/5/2020 (4) | | | –– | | | | –– | | | | –– | | | | –– | |
Michael Rice | | | 400,000 | | | | –– | | | | –– | | | | 0.08 | | 2/25/2021 (5) | | | –– | | | | –– | | | | –– | | | | –– | |
Michael Rice | | | 2,247,939 | | | | –– | | | | –– | | | | 0.08 | | 2/25/2021 (6) | | | –– | | | | –– | | | | –– | | | | –– | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Daphne Taylor | | | 62,500 | | | | 187,500 | | | | –– | | | | 0.10 | | 3/1/2021 (7) | | | –– | | | | –– | | | | –– | | | | –– | |
Daphne Taylor | | | 166,667 | | | | 333,333 | | | | –– | | | | 0.063 | | 8/17/2021 (8) | | | –– | | | | –– | | | | –– | | | | –– | |
Daphne Taylor | | | –– | | | | 250,000 | | | | –– | | | | 0.10 | | 2/15/2022 (9) | | | –– | | | | –– | | | | –– | | | | –– | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Aby J. Mathew | | | 30,000 | | | | –– | | | | –– | | | | 0.08 | | 9/28/15 (10) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 100,000 | | | | –– | | | | –– | | | | 0.07 | | 10/12/16 (11) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 500,000 | | | | –– | | | | –– | | | | 0.08 | | 2/7/17 (12) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 340,000 | | | | –– | | | | –– | | | | 0.10 | | 8/7/17 (13) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 100,000 | | | | –– | | | | –– | | | | 0.05 | | 2/11/18 (14) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 100,000 | | | | –– | | | | –– | | | | 0.04 | | 11/5/18 (15) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 265,766 | | | | 265,766 | | | | –– | | | | 0.10 | | 2/5/20 (16) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | 194,079 | | | | 582,237 | | | | –– | | | | 0.08 | | 2/11/21 (17) | | | –– | | | | –– | | | | –– | | | | –– | |
Aby J. Mathew | | | –– | | | | 250,000 | | | | –– | | | | 0.10 | | 2/15/22 (18) | | | –– | | | | –– | | | | –– | | | | –– | |
———————
| (1) | This award vested 500,000 shares on each of 8/7/2007, 8/7/2008, and 8/7/2009. |
| (2) | This award vested 333,333 shares on each of 2/7/2008, 2/7/2009, and 333,334 shares on 2/7/2010. |
| (3) | This award vests 191,250 shares on 2/2/2010 and, thereafter, in monthly increments of 15,938 shares. |
| (4) | This award vests 297,719 shares on each of 2/5/2012, 2/5/2013, and 297,721 shares on 2/5/2014. |
| (5) | This award vested on the date of grant. |
| (6) | This award vested at the end of the fourth quarter of 2012, when the Company achieved cash flow break even. |
| (7) | This award vests 62,500 shares on each of 3/1/2012, 3/1/2013, 3/1/2014, and 3/1/2015. |
| (8) | This award vests 125,000 shares on 8/17/12 and, thereafter, in monthly increments of 10,417 shares. |
| (9) | This award vests 62,500 shares on 2/15/2013 and, thereafter, in monthly increments of 5,208 shares. |
| (10) | This award vested 15,000 shares on each of 9/28/2006, 9/28/2007, 9/28/2008, and 9/29/2009. |
| (11) | This award vested 25,000 shares on each of 10/12/2007, 10/12/2008, 10/12/2009, and 10/12/2010. |
| (12) | This award vested 125,000 shares on each of 2/7/2008, 2/7/2009, 2/7/2010, and 2/7/2011. |
| (13) | This award vested 85,000 shares on each of 8/7/2008, 8/7/2009, 8/7/2010, and 8/7/2011. |
| (14) | This award vested 25,000 shares on each of 2/11/2009, 2/11/2010, 2/11/2011, and 2/11/2012. |
| (15) | This award vested 25,000 shares on each of 11/5/2009, 11/5/2010, 11/5/2011, and 11/5/2012. |
| (16) | This award vests 132,883 shares on each of 2/5/2011, 2/5/2012, 2/5/2013, and 2/5/2014. |
| (17) | This award vests 194,079 shares on each of 2/11/2012, 2/11/2013, 2/11/2014, and 2/11/2015. |
| (18) | This award vests 62,500 shares on 2/15/2013 and, thereafter, in monthly increments of 5,208 shares. |
Securities Authorized for Issuance Under Equity Compensation Plans at December 31, 2012
The following table sets forth information as of December 31, 2012 relating to all of our equity compensation plans:
Plan category | | Number of securities to be issued upon exercise of outstanding options and warrants (in thousands) | | | Weighted Average exercise price of outstanding options and warrants | | | Number of securities remaining available for future issuance (in thousands) | |
Equity compensation plans approved by security holders | | | 6,150 | | | $ | .08 | | | | –– | |
Equity compensation plans not approved by security holders* | | | 14,230 | | | $ | .09 | | | | –– | |
Total | | | 20,380 | | | $ | .09 | | | | –– | |
*See note 6 of Notes to Financial Statements
Employment Agreements
We have an underwriter (the "Underwriter"), to be designated or approved
by ValorInvest. Through ValorInvest,employment agreement with Michael Rice, our President and Chief Executive Officer, which automatically renews for successive one year periods in the Company has
obtained a letter of interest for a Public Offering from a German
Underwriter. The letterevent either party does not contain any commitment forsend the other a Public Offering, and any Public Offering by such Underwriter,
at the very least, would be subject to the completion of due
diligence by such Underwriter and market conditions. The terms
of a Public Offering, if any, would be as negotiated between the
Company and the Underwriter, and the Company does“termination notice” not know
what type of securities, i.e. common stock, preferred stock,
units, etc., it will issue in any Public Offering. The Company
will not solicit authorization from stockholdersless than 90 days prior to the issuanceexpiration of the initial term or any such securities,subsequent term. The agreement provided for a salary of $200,000 per year and the terms thereof, including
dividend or interest rates, conversion prices, voting rights,
redemption prices, maturity dates and similar matter that might
be applicablean incentive bonus based on certain quarterly milestones, to such securities will be determined by the Board of Directors. There can be no assuranceMr. Rice also received a ten-year incentive stock option to purchase 1,500,000 shares of common stock at $.07 per share (the fair market value on the date of grant), which vested to the extent of 500,000 shares on each of the first three anniversary dates of the date of grant. We amended this employment agreement on February 7, 2007 to provide that if, in connection with a Public Offering“change in control,” Mr. Rice’s employment is terminated without “Cause” or he resigns for “Good Reason,” he will be consummated.
The consummationentitled to the continued payment of salary and bonuses and the reimbursement of medical insurance premiums for 24 months following the change in control event. On February 11, 2008, Mr. Rice’s salary was increased to $300,000 per annum, retroactive to January 1, 2008 and his quarterly bonus plan was supplanted by annual reviews of the Public Offering would require
the filing of a registration statementCompensation Committee in 2008, 2009, and 2010. Beginning on August 1, 2009, Mr. Rice’s salary was decreased 10% in conjunction with the SEC. In addition,Company’s 10% across the Company has covenantedboard pay cuts. On July 1, 2012, Mr. Rice’s salary was increased to include$300,000 per annum. On January 30, 2013, Mr. Rice was granted a bonus of $150,000 for the shares of Common
Stock issuable upon conversionyear ended December 31, 2012.
We have an employment agreement with Dr. Aby J. Mathew, Ph.D., our Senior Vice President and Chief Technology Officer, which automatically renews for successive one year periods in the event either party does not send the other a “termination notice” not less than 90 days prior to the expiration of the Series E Preferred Stock
purchased pursuantinitial term or any subsequent term. The agreement provides for a salary of $200,000 per year and an incentive bonus based on certain quarterly milestones of up to 10% of Dr. Mathew’s base salary. If, in connection with a “change in control,” Dr. Mathew’s employment is terminated without “Cause” or he resigns for “Good Reason,” he will be entitled to the Stock Purchase Agreementcontinued payment of salary and bonuses and the reimbursement of medical insurance premiums for 12 months following the change in control event. On January 30, 2013, Dr. Mathew’s salary was increased to $218,000 per annum, retroactive to January 1, 2013.
We have an employment agreement with Daphne Taylor, our Chief Financial Officer, which automatically renews for successive one year periods in the
registration statement atevent either party does not send the
Company's cost and expense, and to
keep such registration statement effective until such time as such
shares of Common Stock may be sold pursuant to an exemption
from registration pursuantother a “termination notice” not less than 90 days prior to the
Securities Act of 1933, as
amended. Accordingly, the Plan contains an undertaking by the
Company that it will prepare and file a registration statement
with the SEC for the sale of securitiesexpiration of the
Company on such
terms and conditions as may be mutually agreed to between the
Companyinitial term or any subsequent term. The agreement provides for a salary of $150,000 per year and an
underwriterincentive bonus based on certain quarterly milestones of up to
be designated10% of Ms. Taylor’s base salary. If, in connection with a “change in control,” Ms. Taylor’s employment is terminated without “Cause” or
approved by
ValorInvest.
Voting Requirement
Approval of the SEC Filing requires the affirmative vote
of the holders of stock representing a majority of shares present
in person or represented by proxy at the Meeting andshe resigns for “Good Reason,” she will be entitled to
vote thereon.
The Boardthe continued payment of
Directors recommends thatsalary and bonuses and the
stockholders vote FOR ratification and approvalreimbursement of
medical insurance premiums for 6 months following the
SEC
Filing.
PRINCIPAL STOCKHOLDERS
change in control event. On August 10, 2012, Ms. Taylor’s salary was increased to $180,000 per annum, effective September 1, 2012. On January 30, 2013, Ms. Taylor’s salary was increased to $194,000 per annum, retroactive to January 1, 2013. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of
October 1, 1998,April 19, 2013, certain information regarding the beneficial ownership of
Common Stock and Preferred Stockcommon stock by (i) each stockholder known by the Company to be the beneficial owner of more than 5% of the outstanding shares thereof; (ii) each director of the Company; (iii) each
executive officerExecutive Officer of the Company; and (iv) all of the
Company'sCompany’s current directors and executive officers as a group.
Title of ClassName and Address of
Beneficial Owner C
Amount and Nature of
Beneficial Ownership(1)Percentage of Class (1)
Common Stock
Richard R. Reinhart, Ph.D.*/**
1300 Piccard Drive, Suite 102
Rockville, MD 20850
1,000,000(2)
2.9%
Common StockJohn G. Baust, Ph.D.*
1300 Piccard Drive, Suite 102
Rockville, MD 20850
400,000(3)1.1%Common StockAlan F. Rich*
1300 Piccard Drive, Suite 102
Rockville, MD 20850
185,500(4)***Common StockHoward S. Breslow, Esq. **
c/o Breslow & Walker, LLP
767 Third Avenue
New York, NY 10017
268,000(5)***Common StockJ. Donald Hill**
1300 Piccard Drive, Suite 102
Rockville, MD 20850
75,000(6)***Preferred
Stock
ValorInvest, Ltd.
29 Quai des Berges
1201 Geneva, Switzerland
128100%Common StockAll officers and directors as
a group (five persons)
1,928,500(7)5.6%Preferred
Stock
All officers and directors as a
group (five persons)
- - 0 -- 0 -____________________
(1)
Name and Address of Beneficial Owner | | Common Stock | | | Percentage of Class | |
Directors and Executive Officers | | | | | | |
Thomas Girschweiler (Director) (1) | | | 18,256,552 | | | | 24.7 | % |
Michael Rice (Officer and Director) (2) | | | 6,806,098 | | | | 8.9 | % |
Roderick de Greef (Director) (3) | | | 6,243,757 | | | | 8.6 | % |
Aby J. Mathew (Officer) (4) | | | 2,494,034 | | | | 3.5 | % |
Raymond Cohen (Director) (5) | | | 1,395,000 | | | | 2.0 | % |
Andrew Hinson (Director) (6) | | | 850,000 | | | | 1.2 | % |
Mark Sandifer (Officer) (7) | | | 796,807 | | | | 1.1 | % |
Daphne Taylor (Officer) (8) | | | 437,500 | | | | 0.6 | % |
Joe Annicchiarico (Officer) (9) | | | 83,333 | | | | 0.1 | % |
Total shares owned by Executive Officers and Directors(10) | | | 37,363,082 | | | | 42.0 | % |
| | | | | | | | |
5% Stockholders | | | | | | | | |
Walter Villiger (11) | | | 22,240,081 | | | | 30.5 | % |
Beskivest Chart LTD Goodmans Bay Center West Bay Street & Sea View Drive Nassau, Bahamas | | | 7,255,026 | | | | 10.4 | % |
John G. Baust 175 Raish Hill Road Candor, NY 13743 | | | 3,694,722 | | | | 5.3 | % |
———————
Shares of Common Stockcommon stock subject to options and warrants currentlythat are exercisable or will be exercisable within 60 days of April 19, 2013 are deemed outstanding for computing the number of shares and
thebeneficially owned. The percentage of the outstanding shares held by a person holding such options or warrants includes those currently exercisable or exercisable within 60 days of April 19, 2013, but such options and warrants are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the Company believes that the persons named in the table have sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them. (2) Includes 1,000,000 sharesUnless otherwise indicated, the business address of Common Stockeach person listed is in care of 3303 Monte Villa Parkway, #310, Bothell, WA 98021.
| (1) | Includes options to purchase 850,000 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013 and 3,000,000 shares of common stock issuable upon the exercise of outstanding warrants, all of which are currently exercisable. |
| (2) | Includes options to purchase 6,806,098 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (3) | Includes options to purchase 1,444,594 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013 and 1,250,000 shares of common stock issuable upon the exercise of outstanding warrants, all of which are currently exercisable; includes 80,000 shares of common stock beneficially owned by Mr. de Greef in the name of deGreef & Company Inc. |
| (4) | Includes options to purchase 2,040,140 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (5) | Includes options to purchase 1,350,000 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (6) | Includes options to purchase 850,000 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (7) | Includes options to purchase 796,807 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (8) | Includes options to purchase 437,500 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (9) | Includes options to purchase 83,333 shares of common stock issuable under stock options exercisable within 60 days from April 19, 2013. |
| (10) | Includes the securities listed in footnotes 1-9. |
| (11) | Includes 3,000,000 shares of common stock issuable upon the exercise of outstanding warrants, all of which are currently exercisable. |
CERTAIN TRANSACTIONS
Since January 1, 2011, there has not been, nor has there been proposed, any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, including those involving indebtedness not in the
exerciseordinary course of
outstanding stock options.
(3) Includes 380,000 sharesbusiness, to which we or our subsidiaries were or are a party, or in which we or our subsidiaries were or are a participant, in which the amount involved exceeded or exceeds the lesser of
Common Stock issuable upon$120,000 or 1% of the
exerciseaverage of
outstanding stock options.
(4) Includes 180,000 shares of Common Stock issuable upon
the exercise of outstanding stock options.
(5) Includes 100,000 shares of Common Stock issuable upon
the exercise of outstanding stock options.
(6) Consists of 75,000 shares of Common Stock issuable upon
the exercise of outstanding stock options.
(7) Includes 1,735,000 shares of Common Stock issuable upon
the exercise of outstanding stock options.
* Executive Officer.
** Director.
***Less than 1%.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensationour total assets at year-end for the Company's 1997 fiscal year, its transitional
period and its last two completed fiscal years with respect to its
Chief Executive Officer and to eachin which any of our directors, nominees for director, executive officers, beneficial owners of more than 5% of any class of our voting securities, or any member of the Company's named
executive officers.
Long Term Compensation
Annual Compensation Awards
Payouts
Name and Principal
Position C
Fiscal
Year (1)C
Salary
($) (2)C
Bonus
($)C
Other Annual
Compensation
($) C
Restricted
Stock
Award(s)
($ )Options/
SARs
(#) (3)C
LTIP
Payouts
($) C
All Other
Compensation
($)
Richard J. Reinhart, Ph.D
Current President, Chief
Executive Officer and
Director (4)
1997
1996.5
1996
159,964
75,481
9,712
- -
- -(5)
- -
- -
- -
- -
- -
- -
- -
250,000
750,000
- -
- -
- -
- -
- -
- -
- -
John G. Baust, Ph.D.
Senior Vice President,
Research and
Development
1997
1996.5
1996
1995
115,140
57,668
108,646
104,429
- -
- -
- -
- -
46,349(7)
- -
- -
- -
- -
- -
- -
- -
50,000
- -
- -
- -
- -
- -
- -
- -
9,750(6)
6,162(6)
- -
9,243(6)
Alan F. Rich
Vice President,
Sales and Marketing
1997
1996.5
1996
1995
100,450
50,012
87,600
94,417
- -
- -
- -
- -
30,053
23,073
66,015
132,596
- -
- -
- -
- -
50,000
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
(1) On July 25, 1996, the Boardimmediate family of Directors authorized a
change in the Company's fiscal year from a period
beginning July 1 and ending June 30 to a variable period
that usually ends on the last Sundayany of the calendar year.
The six-month transition period is identifiedforegoing persons, had or will have a direct or indirect material interest, other than as Fiscal
1996.5 for purposes of this table.
(2) Salaries for fiscal year 1996 reflect a 10% salary
reductions for executive officersdescribed above under the heading “Executive Compensation” and other than the transactions described below. Each of the Company
commencing April 1, 1995. Such salary reductions were
reinstated in July 1996.
(3) Optionstransactions described below was reviewed and approved or ratified by our Audit Committee. It is anticipated that any future transactions between us and our officers, directors, principal stockholders and affiliates will be on terms no less favorable to acquire shares of Common Stock.
(4) Dr. Reinhart's employment with the Company
commenced in May 1996.
(5) Dr. Reinhart's contract containsus than could be obtained from unaffiliated third parties and that such transactions will be reviewed and approved by our Audit Committee and a potential bonus
provision based upon a "percentage of pretax profitsmajority of the Company."
(6) Consists of Company contributions made in Dr. Baust's
name to the State University of New York at
Binghamton.
(7) Includes pension payments made for John Baust, Ph.D.
COMPENSATION OF DIRECTORS
Through June 1996, the Company compensated outside
directors for their service in such capacity at an annual fee of
$5,000 plus $1,000 for each Board meeting attended. As of
January 15, 1997, it was determined that the Company would
compensate Messrs. Howard S. Breslowindependent and J. Donald Hill for
Board of Directors meetings held during the transition period and
Board of Directors meetings held during 1997 with a grant of
warrants to purchase 25,000 shares of Common Stock at an
exercise price of $0.50. These options vest immediately and
expire in ten years.
OPTION/SAR GRANTS IN YEAR ENDED DECEMBER
28, 1997
In 1997, the Company issued options to purchase shares
of Common Stock to the executive officers named in the
Executive Compensation Table, as follows:
NameNumber of Securities
Underlying Options
GrantedPercent of Total Options
Granted to Employees in
Fiscal YearExercise PriceExpiration
Date
Richard J. Reinhart, Ph.D.
250,00062.5%$.5012/31/06John G. Baust, Ph.D.
50,00012.5%$.5012/31/06Alan F. Rich50,00012.5%$.5012/31/06
The Company does not have any outstanding stock
appreciation rights.
AGGREGATED OPTION/SAR EXERCISES DURING
THE 1997 FISCAL YEAR
AND THE 1997 FISCAL YEAR OPTION/SAR VALUES
The following table provides information related to
options exercised by eachdisinterested members of the executive officers named in the
Executive Compensation Table during the 1997 Fiscal Year and
the number and value of options held at December 28, 1997.
The Company does not have any outstanding stock appreciation
rights. None of the options were in the money at period ended
December 28, 1997.
Number of Unexercised
Options at Fiscal Year End (#)C
Value of Unexercised In-the-
Money Options at Fiscal Year
End ($) (1)C
NameShares
Acquired on
Exercise (#)Value Realized
($)ExercisableUnexercisableExercisableUnexercisable
Richard J. Reinhart, Ph.D
- ---
1,000,000--
John G. Baust, Ph.D.
- --
330,00050,000--Alan F. Rich--100,00080,000--
(1) The closing price for the Company's Common Stock as
reported on the NASDAQ Stock Market on December
28, 1997 was $.25. Value is calculated on the basis of
the difference between the option exercise price and $.25
multiplied by the number of shares of Common Stock
underlying the option.
EMPLOYMENT AND RELATED AGREEMENTS
In May 1996, the Company and Richard J. Reinhart,
Ph.D. entered into an employment agreement through December
31, 1999 pursuant to which Dr. Reinhart was employed as
President, Chief Executive Officer and a director of the
Company. In accordance to his employment agreement, Dr.
Reinhart was granted options to purchase 750,000 shares of
Common Stock at an exercise price of $2.1875 per share
pursuant to the Company's 1998 Stock Option Plan. The option
vests one-fifth each year, for five years, commencing one year
from employment. In addition to his base salary, Dr. Reinhart
is entitled to a bonus based upon a percentage of "pretax profits
of the Company." Such bonus ranges from 10% for the period
ended December 31, 1996 to 3% for 2001. In the event the
term of the employment agreement is terminated for a reason
other than death, disability, or discharge for cause or
resignation, the Company is required to pay Dr. Reinhart as
follows: (a) if such termination occurs within the first six months
of the Employment Period, Dr. Reinhart shall be entitled to
receive the salary due him up to the date of termination and (b)
if termination occurs after the initial six months, Dr. Reinhart
shall be entitled to the salary due him for (i) the balance of his
Employment Period, (ii) a period of two and a half years, or (iii)
until subsequently employed, whichever is sooner; provided,
however, Dr. Reinhart shall have an affirmative obligation to
seek comparable employment and mitigate the Company's
damages.
In July 1990, the Company and John G. Baust, Ph.D.
entered into a three year employment agreement (as amended in
December 1991 and July 1993), automatically renewable for
additional one year periods (absent notice to the contrary by
either party). The agreement provides that Dr. Baust shall retain
his affiliation with the State University of New York at
Binghamton, where he is the Director of the Center for
Cryobiological Research. During the transition period ended
December 29, 1996, the Company made no payments to SUNY.
In January 1997, the Company determined it would pledge a gift
amount of $39,000, consisting of four quarterly payments of
$9,750 in the name of the Senior Vice President for calendar
1997. In accordance with Dr. Baust's employment agreement,
in July 1990, Dr. Baust was granted an option to purchase an
aggregate of 200,000 shares of Common Stock at $1.875 per
share pursuant to the Company's 1988 Stock Option Plan. The
option vested one-third each year for three years, commencing
for one year from the date of the agreement. Among other
things, the employment agreement also provided for the
Company to loan to Dr. Baust the funds required for the exercise
of the options at the time of exercise. Such loans would be for
terms of five years, accrue interest at a rate of 5% per annum
and be secured by shares obtained from the option exercise. In
accordance with the terms of the agreement, in May 1993 the
Company lent $37,500 to Dr. Baust to exercise options to
purchase 20,000 shares of Common Stock.
Alan F. Rich joined the Company in May 1992 as a
regional sales manager. On March 1, 1994, the Company and
Mr. Rich entered into a one year employment agreement,
automatically renewable for additional one year periods (absent
notice to the contrary by either party), pursuant to which Mr.
Rich is employed as Vice President, Sales and Marketing, of the
Company. Mr. Rich's base salary is to increase each year to the
extent of any cost of living increases based upon the Consumer
Price Index increase for the immediate preceding year. In
addition, Mr. Rich is entitled to commissions of up to 1% of the
sales revenue of the Company. In accordance with the
employment agreement, in March 1994, Mr. Rich was granted
options to purchase 100,000 shares of Common Stock at $3.125
per share pursuant to the Company's 1988 Stock Option Plan.
The options vest with respect to 20,000 shares after one year, an
additional 25,000 shares after two years, an additional 25,000
shares after three years, and an additional 30,000 shares after
four years.
In connection with the execution of the employment
agreements between the Company and each of its executive
officers, each officer executed a Proprietary Information and
Inventions Agreement, pursuant to which each agreed, among
other things, to keep the Company's information confidential and
assigned all inventions to the Company, except for certain
personal inventions not related to the Company's work, whether
existing or later developed.
NEW PLAN BENEFITS
The following table sets forth with respect to the 1998
Stock Option Plan the benefits or amounts that will be received
by the executive officers named in the Executive Compensation
Table, the current executive officers as a group, the current
directors who are not executive officers as a group, and all
employees who are not executive officers as a group:
1998 Stock Option Plan
Name
Dollar Value(2)
Number of Units(1)
Richard J. Reinhart, Ph.D.(3)
- -7,200,000
John G. Baust, Ph.D.(3)
- -2,160,000
Alan F. Rich(4)
- -1,100,000
Executive Group
- -10,460,000
Non-Executive Director Group (2 people)(3)
- -1,440,000
Non-Executive Officer Employee Group (14 people)(4)
- -775,000
(1) Represents pre-Reverse Stock Split shares of Common
Stock issuable upon the exercise of options.
(2) The closing price for the Company's Common Stock as
reported on the NASDAQ Stock Market on November 2,
1998 was $.125. Value is calculated on the basis of the
difference between the option exercise price of $.25 (pre-
Reverse Stock Split) and $.125, multiplied by the number
of shares of Common Stock underlying the option.
(3) These options vest immediately and expire on August 30,
2008.
(4) These options vest to the extent of 25% thereof upon
grant and 25% thereof on each of the first three
anniversary dates of their grant.
In addition to the foregoing options to be issued pursuant
to the 1998 Stock Option Plan, Breslow & Walker, LLP, the
Company's general counsel, of which Board.
Legal Fees
Howard S. Breslow, a director of the Company until February 4, 2013, is a member will receive warrants,
expiring August 30, 2008, to purchase 2,880,000 shares (pre-
Reverse Stock Split) of Common Stock, at $.25 per share (pre-
Reverse Stock Split), and BWM Investments, an affiliate of Breslow & Walker, LLP, of which Howard S.and served as general counsel to the Company. Mr. Breslow is a
partner, will receive warrants, expiring August 30, 2008, to
purchase 3,600,000currently owns 53,600 shares (pre-Reverse Stock Split) of Common Stock at $.25 per share (pre-Reverse Stock Split).of the Company and holds rights to purchase an aggregate of 1,100,000 additional shares pursuant to stock options and warrants issued to him and/or affiliates. The closing
priceCompany incurred approximately $52,132 in legal fees during the year ended December 31, 2011 for the Company's Common Stock as reported on the
NASDAQ Stock Market on November 2, 2998 was $.125.services provided by Breslow & Walker, LLP,LLP. The Company incurred approximately $18,636 in legal fees during the year ended December 31, 2012 for services provided by Breslow & Walker, LLP. At December 31, 2012, the Company has continuedno amount due to provide legal servicesBreslow & Walker, LLP.
Facility Agreement
On January 11, 2008, we entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement (the “Facility Agreement”) with each of Thomas Girschweiler, a director and stockholder of the Company, and Walter Villiger, an affiliate of the Company (the “Investors”), pursuant to which each Investor extended to the Company despitea secured convertible multi-draw term loan facility of $2,500,000, which Facility (a) incorporated (i) a refinancing of then existing indebtedness of the factCompany to the Investor, and accrued interest thereon, in the aggregate amount of $1,431,563.30, (ii) a then current advance of $300,000, and (iii) a commitment to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bears interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) is evidenced by a secured convertible multi-draw term loan note (the “Multi-Draw Term Loan Note”), which was due and payable, together with accrued interest thereon, the earlier of (i) January 11, 2010, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (d) if outstanding at the time of any bona fide equity financing of the Company of at least Two Million Dollars ($2,000,000) (a “Financing”), at the option of the Investor, could be converted into that no payment has been madenumber of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of the conversion plus accrued interest thereon by 85% of the per share or per unit purchase price of the New Equity Securities, and (e) is secured by all of the Company’s assets. In 2009, the conversion feature was eliminated from the Facility.
In May and July 2008, we received $1,000,000 in total from the Investors pursuant to the Multi-Draw Term Loan Facility. On October 20, 2008, each Facility was increased by $2,000,000 to $4,500,000 (an aggregate of $9,000,000), and, on invoices rendered sinceOctober 24, 2008, we received $600,000 in total from the Investors pursuant to the amended Multi-Draw Loan Facilities. In 2009, we received an additional $2,825,000 in total from the Investors pursuant to the amended Facilities. In December 2009, the Investors extended the repayment date to January 1, 1997,11, 2011. On November 16, 2010, each Facility was increased by $250,000 to $4,750,000 (an aggregate of $9,500,000) and the Investors granted an extension of the repayment date to January 11, 2013. In 2010, we received $1,145,000 in large part,
Breslow & Walker, LLP has provided services since said date
without billing therefor. Astotal from the Investors pursuant to the amended Facilities. In 2011, we received $1,095,000 in total from the Investors pursuant to the amended Facilities. In August 2011 the Company entered into an Amendment to its Facility Agreement with each of November 3, 1998,the Investors, pursuant to which the amount of outstanding billed services totalled $81,575.43. Breslow &
Walker, LLP has agreedeach of the Investor’s Facility was increased to defer$5,250,000. The Note previously delivered to each of the paymentInvestors also was amended to reflect the changes to the Facility Agreement. In consideration of such fee untilamendments, the earlierCompany issued to each of the Investors a five-year warrant to purchase 1,000,000 shares of the Company’s Common Stock, par value $0.001 per share, at a price of $0.063 per share. On May 30, 2012, each Facility was increased to $5,750,000 (an aggregate of $11,500,000) and Investors granted an extension of the repayment date to January 11, 2016. The Note previously delivered to each of the Investors also was amended to reflect the changes to the Facility Agreement. In consideration of such amendments, the Company issued to each of the Investors a five-year warrant to purchase 1,000,000 shares of the Company’s Common Stock, par value $0.001 per share, at a price of $0.08 per share.
Consulting Agreement
From July 2007, through August 2011, Roderick de Greef, a director of the Company, was engaged by the Board with the task of overseeing the Company’s financing activities, internal accounting functions and SEC reporting, and assisting in the search for, and reviewing, strategic alternatives, on a part-time basis (up to 80 hours per month on an as needed basis). The Company incurred $56,000 in consulting fees during the year ended December 31, 19992011 for services provided by Mr. de Greef. The agreement with Mr. de Greef was terminated in August of 2011.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, certain officers and holders of 10% or more of any class of our stock to report to the receiptSEC, by a specified date, initial reports of ownership and reports of changes in ownership of our stock and other equity securities. Based solely on a review of the copies of these reports furnished to the Company and written representation from the reporting persons, the Company believes that during the 2012 fiscal year, certain directors, officers and holders of 10% or more of any class of our stock failed to file, on a timely basis, reports required by Section 16(a) of the Exchange Act: Walter Villiger, 10% stockholder of the Company, filed his Form 3 late and filed one Form 4 late relating to 17 transactions; Mr. Girschweiler filed one Form 4 late relating to 5 transactions; each of Messrs. de Greef, , Hinson and Breslow, directors of the Company, filed one Form 4 late relating to one transaction; and Beskivest Chart Ltd., a 10% stockholder of the Company, failed to file a Form 3; each of Messrs. Annicchiarico, Mathew and Sandifer, executives of the Company, filed one Form 4 late relating to stock option grants.
PRINCIPAL ACCOUNTANTS
Principal Accountant Fees and Services
Audit and Audit-Related Fees
Fees for audit and audit-related services by our accounting firm for the years ended December 31, 2012 and 2011 were as follows:
| | 2012 | | | 2011 | |
| | | | | | |
Audit fees | | $ | 69,935 | | | $ | 68,512 | |
Audit related fees | | | –– | | | | –– | |
| | | | | | | | |
Total audit and audit related fees | | $ | 69,935 | | | $ | 68,512 | |
Tax Fees; All Other Fees
We were not billed for any tax fees or for any other fees from our principal accountants in 2012 or 2011.
Audit Committee Pre-Approval Policies and Procedures
It is the policy of our Audit Committee to pre-approve all audit and permissible non-audit services to be performed by Peterson Sullivan, our independent registered public accounting firm. All audit fees provided by Peterson Sullivan during 2012 and 2011 were pre-approved by the Audit Committee.
Attendance at Annual Meeting
Representatives from Peterson Sullivan are expected to be present at the annual meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee has reviewed and discussed the audited financial statements with management. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, as well as the matters required to be discussed by Auditing Standard No. 16 as adopted by the Public Company Accounting Oversight Board. The Audit Committee also has received the written disclosures and the letter from the independent accountant required by applicable requirements of a minimum of $1,000,000 in financings overthe Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence and has discussed with the independent accountant the accountant's independence. Based on the review and discussions referred to above, the ValorInvest investmentAudit Committee recommended to the Company’s Board of Directors that the audited financial statements be included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.
| Respectfully submitted,AUDIT COMMITTEE
Raymond Cohen, Chairman Thomas Girschweiler Rick Stewart | |
PROPOSALS
PROPOSAL NO. 1 – ELECTION OF DIRECTORS
Overview
There are currently six members of our Board, all of whom have been nominated for election.
Upon the recommendation of our Nominating and Corporate Governance Committee, the Board has nominated the following individuals to serve until his successor is duly elected and qualified, unless he resigns, is removed or otherwise is disqualified from serving as a director of the Company:
Michael Rice
Roderick de Greef
Thomas Girschweiler
Raymond Cohen
Andrew Hinson
Rick Stewart
A plurality of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors will be required to elect Board nominees. The six nominees receiving the highest number of affirmative votes cast at the Annual Meeting will be the elected as our directors. Proxies cannot be voted for a greater number of persons than the number of nominees named.
The Board recommends that stockholders vote FOR the election of each of the above-listed nominees.
Unless marked otherwise, proxies received will be voted FOR the election of each of these director nominees.
PROPOSAL NO. 2 – APPROVAL OF THE COMPENSATION OF NAMED EXECUTIVE OFFICERS
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables our stockholders to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with applicable SEC rules.
Our goal for our executive compensation program is to attract, motivate and retain a talented team of executives who will provide leadership for our success, and thereby increase stockholder value. We believe that our executive compensation program satisfies this goal and is strongly aligned with the long-term interests of our stockholders. We urge stockholders to read the section titled “Executive Compensation” elsewhere in this proxy statement for additional details about our executive compensation programs, including information about the compensation of our named executive officers in 2012.
We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers described in this proxy statement. Accordingly, we will ask our stockholders to vote FOR the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders of BioLife Solutions, Inc. approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the BioLife Solutions proxy statement for the 2013 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC.”
This say-on-pay vote is advisory, and therefore, is not binding on us, our Compensation Committee or our Board. Our Board and our Compensation Committee value the opinions of our stockholders, and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we may review and consider the results of this advisory vote in future compensation deliberations.
Vote Required
The approval, on an advisory basis, of the stockholders by a majority of the votes properly cast at the meeting is being sought to approve the compensation of our named executive officers as disclosed in this proxy statement.
Recommendation
Our Board recommends that stockholders vote FOR the approval of the compensation of our named executive officers as disclosed in this proxy statement.
Unless marked otherwise, proxies received will be voted FOR the approval of the compensation of our named executive officers as disclosed in this proxy statement.
PROPOSAL NO. 3 – APPROVAL OF THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION
Under the Dodd-Frank Act, public companies are generally required to include in their proxy solicitations at least once every six years an advisory vote on whether an advisory vote on named executive officer compensation (such as the say-on-pay proposal that is included in this proxy statement) should occur every one, two or three years. It is management’s belief, and the recommendation of our Board, that this non-binding advisory vote should occur every three years.
We believe we have effective executive compensation practices. Our Board believes that providing our stockholders with an advisory vote on named executive officer compensation every three years will encourage a long-term approach to evaluating our executive compensation policies and practices. In contrast, focusing on executive compensation over an annual or biennial period would focus on short-term results rather than long-term value creation, which is inconsistent with our compensation philosophy, and could be detrimental to us, our employees and our financial results.
Moreover, our Board does not believe that a short review cycle will allow for a meaningful evaluation of our performance against our compensation practices, as any adjustment in pay practices would take time to implement and to be reflected in our financial performance and in the price of our Common Stock. As a result, an advisory vote on executive compensation more frequently than every three years would not, in our judgment, allow stockholders to compare executive compensation to our performance.
Lastly, we believe that conducting an advisory vote on executive compensation every three years would allow us adequate time to compile meaningful input from stockholders on our pay practices and respond appropriately. This would be more difficult to do on an annual or biennial basis, and we believe that both we and our stockholders would benefit from having more time for a thoughtful and constructive analysis and review of our compensation policies.
For the above reasons, our Board recommends that stockholders approve holding an advisory vote on named executive officer compensation every three years.
You may cast your vote on your preferred voting frequency by choosing the option of one year, two years or three years, or you may abstain from voting when you vote in response to the resolution set forth below.
“RESOLVED, that the option of once every year, two years, or three years, that receives the highest number of votes cast for this resolution will be determined to be the stockholders’ preferred frequency with which BioLife Solutions, Inc. is to hold a stockholder advisory vote regarding the executive compensation of its named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules.”
The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be the frequency for the advisory vote on the compensation of our named executive officers that has been selected by stockholders. However, because the vote on this Proposal is only advisory in nature and is not binding on us or our Board, our Board will review and consider the results of the vote, but may decide that it is in our best interests and the best interests of our stockholders to hold an advisory vote on the compensation of our named executive officers more or less frequently than the option approved by our stockholders.
Vote Required
The approval, on an advisory basis, of the holders of the shares of Common Stock Purchase
Agreementpresent or represented and has waived its rightentitled to any paymentvote at the meeting is being sought on the frequency of conducting stockholder advisory votes on the compensation of named executive officers. The four voting options are 1 year, 2 years, 3 years and abstain. The stockholder advisory vote will be determined by which option, 1, 2 or 3 years, garners the most votes.
Recommendation of Our Board
Our Board recommends that stockholders vote FOR conducting future stockholder advisory votes on the compensation of named executive officers EVERY THREE YEARS.
Unless marked otherwise, proxies received will be voted FOR conducting future stockholder advisory votes on the compensation of named executive officers EVERY THREE YEARS.
PROPOSAL NO. 4 – APPROVAL OF THE 2013 PERFORMANCE INCENTIVE PLAN
Overview
We are seeking stockholder approval of our 2013 Performance Incentive Plan (the “2013 Plan”). We intend for
unbilled
services performed during 1997the 2013 Plan to be our primary plan for providing equity incentive compensation to our eligible employees, directors and
1998. BWM Investmentsconsultants. If the 2013 Plan is
responsible for introducingapproved by our stockholders at the
Company to ValorInvest andAnnual Meeting, we will not
receivemake any
cash fee for such introduction nor with
respect toadditional awards under any
Public Offering consummated through the
Underwriter. (See "Background.")
INTEREST OF CERTAIN PERSONS
The Stock Purchase Agreement with ValorInvest requiresof our other equity compensation plans. On April 25, 2013, the Board of Directors adopted the 2013 Plan, subject to stockholder approval.
Description of the 2013 Plan
The following is a summary of the principal features of the 2013 Plan. This summary is qualified in its entirety by reference to the full text of the 2013 Plan, which is attached as Appendix A to this Proxy Statement.
Purposes of the 2013 Plan. The purposes of the 2013 Plan are to enhance the ability of the Company and any parent or subsidiary corporation of the Company whether now existing or hereafter created or acquired (an “Affiliated Company”) to adopt a Planattract and retain the services of Recapitalizationofficers, qualified employees, directors and Financing (the "Plan")outside consultants and service providers to the Company, upon whose judgment, initiative and efforts the successful conduct and development of the Company’s businesses largely depends, and to submitprovide additional incentives to such persons to devote their utmost effort and skill to the Planadvancement and betterment of the Company, by providing them an opportunity to stockholders for their approval. In connectionparticipate in the ownership of the Company and thereby have an interest in the success and increased value of the Company that coincides with the adoptionfinancial interests of the Company’s stockholders.
Shares Reserved for Issuance. Stockholder approval of the 2013 Plan will authorize us to issue up to an aggregate of 2,000,000 shares of common stock pursuant to options or restricted share awards granted under the 2013 Plan. In addition, the 2013 Plan provides that if an option granted under any of our other equity compensation plans is outstanding on the date of stockholder approval of the 2013 Plan and approvalsuch option subsequently terminates or expires in accordance with its terms, the shares underlying such option which remain unexercised and unissued at the time of termination or expiration will become available for grant or issuance under the 2013 Plan; provided that not more than 450,000 shares of common stock may be issued pursuant to options that are designated “incentive stock options.”
In the event that all or any portion of any shares issued upon exercise of an option granted or offered under the 2013 Plan can no longer under any circumstances be exercised or purchased due to the forfeiture or cancellation of all or any portion of such option, the shares of common stock allocable to the unexercised portion of such option, will become available for grant or issuance under the 2013 Plan.
In the event that restricted shares offered under the 2013 Plan are reacquired by the Company, for any reason, the shares so reacquired will become available for grant or issuance under the 2013 Plan.
In the event that all or any portion of any shares issued upon exercise of an option granted or offered under the 2013 Plan are reacquired by the Company for any reason other than the cancellation or forfeiture of all or any portion of such option, the shares of common stock allocable to the reacquired portion of such option, will not become available for grant or issuance under the 2013 Plan.
Additionally, the number of shares available for issuance under the 2013 Plan will be subject to adjustment in the event of a recapitalization, stock split, combination of shares, reclassification, stock dividend, or other similar change in the capital structure of the Company.
Administration. The 2013 Plan is to be administered by an “Administrator,” which, under the 2013 Plan, shall be either the Board of Directors or a committee appointed by the Board of Directors, or the Chief Executive Officer of the Plan, and
pursuantCompany in the circumstances described below. Subject to the terms thereof,provisions of the 2013 Plan, the Administrator has full authority to implement, administer and make all determinations necessary under the 2013 Plan.
The Board of Directors or a committee appointed by the Board of Directors may delegate to the Chief Executive Officer of the Company the authority to (i) designate new employees of the Company or an Affiliated Company who are not officers of the Company to be the recipient of options or restricted share awards, and (ii) determine the number of shares of common stock to be subject to such options or restricted share awards; provided, however, that the resolutions of Board of Directors regarding such delegation of authority or an employee compensation program approved by the Board of Directors or committee appointed by the Board of Directors shall specify the maximum number of shares of common stock that may be subject to any option or restricted share award granted by the Chief Executive Officer depending upon the employee group of such new employee. The Chief Executive Officer, however, may not grant options to himself, or any other officer of the Company.
Subject to applicable law, the Board of Directors may from time to time alter, amend, suspend or terminate the 2013 Plan in such respects as the Board of Directors may deem advisable; provided, however, that no such alteration, amendment, suspension or termination shall be made that would substantially affect or impair the rights of any person under any outstanding option or restricted share award without his or her consent. Unless previously terminated by the Board of Directors, the 2013 Plan will terminate on a pre-Reverse Stock Split basis: (i)April 25, 2023.
Eligibility. The 2013 Plan provides that awards may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or an Affiliated Company, as may be determined by the Administrator. In no event may any individual be granted options under the 1998 Stock Option2013 Plan stock options to purchase an aggregate of 13,300,000for more than 450,000 shares of Common Stock, at $.25 per share, including grantsour common stock in any one calendar year. However, in connection with his or her initial service to the following executiveCompany, an individual may be eligible to be granted options for up to 450,000 shares of our common stock during the calendar year which includes such individual’s initial service to the Company.
The actual number of individuals who will receive awards under the 2013 Plan cannot be determined in advance because the Administrator has discretion to select the participants. Nevertheless, as of April 30, 2013, 12 officers and directors of the Company:
Richard J. Reinhart, Ph.D., President, Chief Executive OfficerCompany and Director - 7,200,000; John G. Baust, Ph.D.,Senior Vice
President and Chief Scientific Officer - 2,160,000; Alan F. Rich,
Vice President-Sales and Marketing - 1,100,000; Howard S.
Breslow, Director - 720,000; and J. Donald Hill, Director -
720,000, (ii) warrants to purchase 2,880,000 shares of Common
Stock, at $.25 per share, to Breslow & Walker, LLP, the
Company's general counsel, of which Howard S. Breslow, a
directorapproximately 20 other employees of the Company would be eligible to participate in the 2013 Plan.
Terms of Options. As discussed above, the Administrator determines many of the terms and conditions of awards granted under the 2013 Plan, including whether an option will be an “incentive stock option” (ISO) or a “non-qualified stock option” (NQSO). Each option is evidenced by an agreement in such form as the Administrator approves and is subject to the following conditions (as described in further detail in the 2013 Plan):
· | Vesting and Exercisability: Options become vested and exercisable within such periods and subject to such conditions as determined by the Administrator and as set forth in the related stock option agreement, provided that options must expire no later than ten years from the date of grant (five years with respect to an ISO granted to an optionee who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliated Company (a “10% Stockholder”)). |
· | Exercise Price: The exercise price of options shall not be less than the fair market value of a share of common stock at the time the option is granted. The exercise price of any ISO granted to a 10% Stockholder shall not be less than 110% of the fair market value of a share of common stock at the time of grant, subject to limited exception. |
· | Method of Exercise: Payment of the exercise price may be made, in the discretion of the Administrator and subject to any legal restrictions, in cash, by check, by delivery of shares of our common stock, by waiver of compensation due or accrued to the optionee for services rendered, or any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by the Administrator and applicable law. |
· | Termination of Service: Options cease vesting on the date of termination of service or the death or disability of the optionee, unless specified as otherwise in individual employment agreements. Options granted under the 2013 Plan generally expire three months after the termination of the optionee’s service, except in the case of death or disability, in which case the awards generally may be exercised up to 12 months following the date of death or termination of service due to disability. However, if the optionee is terminated for cause (e.g., for committing an alleged criminal act or intentional tort against the Company), the Administrator may cause the optionee’s options to expire upon termination. In addition, if a blackout applies to the optionee on the last trading day during the three-month post-termination exercise period, the option will generally be exercisable until the tenth day following the expiration of the blackout. |
· | Cancellation and Rescission: Any unexpired, unpaid or deferred options may be cancelled, rescinded, suspended, withheld or otherwise limited or restricted by the Administrator at any time, unless otherwise specified in the related stock option agreement, if the optionee is not in compliance with all applicable provisions of the related stock option agreement and the 2013 Plan, or if the optionee engages in any: (i) unauthorized disclosure to anyone outside the Company, or unauthorized use in other than the Company’s business, of any confidential information or material relating to the Company’s business, acquired by the optionee either during or after employment with the Company; (ii) failure or refusal to promptly disclose and assign to the Company all right, title and interest in any invention or idea made or conceived by the optionee during employment with the Company that relates in any manner to the actual or anticipated business, research or development work of the Company; or (iii) activity that results in termination of the optionee’s employment for cause. |
· | Change in Control: In the event of a change in control of the Company (as defined in the 2013 Plan), vesting of options will accelerate automatically unless the options are to be assumed by the acquiring or successor entity (or parent thereof) or replaced by such entity with new options or other incentives with such terms and provisions as the Administrator in its discretion may consider equitable. In addition, the Administrator may at its discretion provide for other vesting arrangements in option agreements, including arrangements which provide for full acceleration of vesting upon a change in control whether or not the acquiring entity agrees to assume or substitute for existing options in such change in control. |
· | Additional Restrictions. No ISOs may be granted to an optionee under the 2013 Plan if the aggregate fair market value (determined at the time of grant) of the common stock, with respect to which ISOs first become exercisable by such optionee in any calendar year under any equity compensation plan of the Company or an Affiliated Company, exceeds $100,000. Options are nontransferable, other than by will or the laws of descent and distribution or in any manner permitted by the Administrator that is not prohibited by applicable law; provided, however, that no option shall be assignable or transferable in exchange for consideration. |
Terms of Restricted Stock Awards. Each restricted share award is evidenced by a restricted stock purchase agreement in such form as the Administrator approves and is subject to the following conditions (as described in further detail in the 2013 Plan):
· | Vesting. Shares subject to a restricted share award may become vested over time or upon completion of performance goals set out in advance. |
· | Purchase Price. Each restricted stock purchase agreement states the purchase price, which may not be less than the minimum lawful amount under applicable state law. Payment of the purchase price, if any, may be made, in the discretion of the Administrator and subject to any legal restrictions, in cash, by check, by delivery of shares of our common stock, by waiver of compensation due or accrued to the participant for services rendered, or any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by the Administrator and applicable corporate law. Without limiting the generality of the foregoing, the Administrator may determine to issue restricted shares as consideration for continued employment or the achievement of specified performance goals or objectives. |
· | Termination of Service. Restricted share awards shall cease to vest immediately if a participant is terminated for any reason, unless otherwise provided in the applicable restricted stock purchase agreement or unless otherwise determined by the Administrator, and we will generally have the right to repurchase any unvested shares subject thereto for the original purchase price paid by the participant. |
· | Change of Control. In the event of a change in control of the Company (as defined in the 2013 Plan), restricted share awards will generally be treated in the same manner as options under the 2013 Plan, as described under “Terms of Options”, “Change in Control” above. |
· | Additional Restrictions. Restricted shares are nontransferable except as specifically provided in the restricted stock purchase agreement and in certain limited circumstances provided in the 2013 Plan. |
New Plan Benefits
Future awards to our executive officers and other employees are discretionary. At this time, therefore, the benefits that may be received by our executive officers and other employees if our stockholders approve the 2013 Plan cannot be determined. Because the value of common stock issuable to our non-executive directors under the 2013 Plan will depend on the fair market value of our common stock at future dates, it is not possible to determine exactly the benefits that might be received by our non-executive directors under the 2013 Plan.
Summary of Federal Income Tax Consequences of the 2013 Plan
The following is a member,brief summary of certain federal income tax consequences of participation in the 2013 Plan. The summary should not be relied upon as being a complete statement of all possible federal income tax consequences. Federal tax laws are complex and (iii) warrantssubject to purchase 3,600,000change. Participation in the 2013 Plan may also have consequences under state and local tax laws which vary from the federal tax consequences described below. For such reasons, we recommend that each participant consult his or her personal tax advisor to determine the specific tax consequences applicable to him or her.
Incentive Stock Options. No taxable income will be recognized by an optionee under the 2013 Plan upon either the grant or the exercise of an ISO. Instead, a taxable event will occur upon the sale or other disposition of the shares acquired upon exercise of an ISO, and the tax treatment of the gain or loss realized will depend upon how long the shares were held before their sale or disposition. If a sale or other disposition of the shares received upon the exercise of an ISO occurs more than (i) one year after the date of exercise of the option and (ii) two years after the date of grant of the option, the holder will recognize long-term capital gain or loss at the time of sale equal to the full amount of the difference between the proceeds realized and the exercise price paid. However, a sale, exchange, gift or other transfer of legal title of such stock (other than certain transfers upon the optionee’s death) before the expiration of either of the one-year or two-year periods described above will constitute a “disqualifying disposition.” A disqualifying disposition involving a sale or exchange will result in ordinary income to the optionee in an amount equal to the lesser of (i) the fair market value of the stock on the date of exercise minus the exercise price or (ii) the amount realized on disposition minus the exercise price. If the amount realized in a disqualifying disposition exceeds the fair market value of the stock on the date of exercise, the gain realized in excess of the amount taxed as ordinary income as indicated above will be taxed as capital gain. A disqualifying disposition as a result of a gift will result in ordinary income to the optionee in an amount equal to the difference between the exercise price and the fair market value of the stock on the date of exercise. Any loss realized upon a disqualifying disposition will be treated as a capital loss. Capital gains and losses resulting from disqualifying dispositions will be treated as long-term or short-term depending upon whether the shares were held for more or less than the applicable statutory holding period (which currently is more than one year for long-term capital gains). We will be entitled to a tax deduction in an amount equal to the ordinary income recognized by the optionee as a result of a disposition of the shares received upon exercise of an ISO.
The exercise of an ISO may result in an “adjustment” for purposes of the “alternative minimum tax.” Alternative minimum tax is imposed on an individual’s income only if the amount of the alternative minimum tax exceeds the individual’s regular tax for the year. For purposes of computing alternative minimum tax, the excess of the fair market value on the date of exercise of the shares received on exercise of an ISO over the exercise price paid is included in alternative minimum taxable income in the year the option is exercised. An optionee who is subject to alternative minimum tax in the year of exercise of an ISO may claim as a credit against the optionee’s regular tax liability in future years the amount of alternative minimum tax paid which is attributable to the exercise of the ISO. This credit is available in the first year following the year of exercise in which the optionee has regular tax liability.
Non-qualified Stock Options. No taxable income is recognized by an optionee upon the grant of a NQSO. Upon exercise, however, the optionee will recognize ordinary income in the amount by which the fair market value of the shares purchased, on the date of exercise, exceeds the exercise price paid for such shares. The income recognized by the optionee who is an employee will be subject to income tax withholding by the Company out of the optionee’s current compensation. If such compensation is insufficient to pay the taxes due, the optionee will be required to make a direct payment to us for the balance of the tax withholding obligation. We will be entitled to a tax deduction equal to the amount of ordinary income recognized by the optionee, provided that certain reporting requirements are satisfied. If the exercise price of a NQSO is paid by the optionee in cash, the tax basis of the shares acquired will be equal to the cash paid plus the amount of income recognized by the optionee as a result of such exercise. If the exercise price is paid by delivering shares of Common Stock, at $.25 per share,our common stock already owned by the optionee or by a combination of cash and already-owned shares, there will be no current taxable gain or loss recognized by the optionee on the already-owned shares exchanged (however, the optionee will nevertheless recognize ordinary income to BWM Investments, an affiliate of Breslow & Walker, LLP,
of which Howard S. Breslow, a directorthe extent that the fair market value of the Company, is a
partner, to appropriately incentivize and/or compensate them for
services providedshares purchased on the date of exercise exceeds the price paid, as described above). The new shares received by the optionee, up to the number of the old shares exchanged, will have the same tax basis and holding period as the optionee’s basis and holding period in the old shares. The balance of the new shares received will have a tax basis equal to any cash paid by the optionee plus the amount of income recognized by the optionee as a result of such exercise, and will have a holding period commencing with the date of exercise. Upon the sale or disposition of shares acquired pursuant to the exercise of a NQSO, the difference between the proceeds realized and the optionee’s basis in the shares will be a capital gain or loss and will be treated as long-term capital gain or loss if the shares have been held for more than the applicable statutory holding period (which is currently more than one year for long-term capital gains).
Restricted Shares. If no Section 83(b) election is made and repurchase rights are retained by the Company, a taxable event will occur on each date the participant’s ownership rights vest (e.g., when our repurchase rights expire) as to the number of shares that vest on that date, and the holding period for capital gain purposes will not commence until the date the shares vest. The participant will recognize ordinary income on each date shares vest in each casean amount equal to the excess of the fair market value of such shares on that date over the amount paid for such shares. Any income recognized by a participant who is an employee will be subject to income tax withholding by us out of the participant’s current compensation. If such compensation is insufficient to cover the amount to be withheld, the participant will be required to make a direct payment to us for the balance of the tax withholding obligation. We are entitled to a tax deduction in an amount equal to the ordinary income recognized by the participant. The participant’s basis in the shares will be equal to the purchase price, if any, increased by the amount of ordinary income recognized.
If a Section 83(b) election is made within 30 days after the date of transfer, or if no repurchase rights are retained by us, then the participant will recognize ordinary income on the date of purchase in an amount equal to the excess of the fair market value of such shares on the date of purchase over the purchase price paid for such shares.
Tax Withholding. Under the 2013 Plan, we have the power to withhold, or require a participant to remit to us, an amount sufficient to satisfy federal, state, local or foreign withholding tax requirements with respect to any options exercised or restricted shares granted under the 2013 Plan. To the extent permissible under applicable tax, securities, and other laws, the Administrator may, in its sole discretion, permit a participant to satisfy an obligation to pay any tax to any governmental entity in respect of any option or restricted shares up to an amount determined on the basis of the lowest marginal tax rate applicable to such participant, in whole or in part, by (i) directing us to apply shares of common stock to which the participant is entitled as a result of the exercise of an option or as a result of the lapse of restrictions on restricted shares, or (ii) delivering to us shares of common stock owned by the participant.
Vote Required
Approval of the 2013 Plan will require the affirmative vote of a majority of the votes properly cast upon the proposal at the Annual Meeting.
Recommendation
The Board recommends that stockholders vote FOR approval of the Plan2013 Plan.
Unless marked otherwise, proxies received will be voted FOR Proposal No. 4.
PROPOSAL NO. 5 – RATIFICATION OF APPOINTMENT OF PETERSON SULLIVAN LLP
Overview
The Audit Committee has engaged the independent registered public accounting firm of Peterson Sullivan LLP as our independent registered public accounting firm to audit our financial statements for the year ending December 31, 2013. Peterson Sullivan LLP audited our financial statements for the years ended December 31, 2012 and December 31, 2011. Please refer to “Principal Accountants” above for information about fees and services paid to Peterson Sullivan LLP in 2012 and 2011, and our Audit Committee’s pre-approval policies. Stockholder ratification of such selection is not required by our Bylaws or other applicable legal requirement. However, our Board is submitting the selection of Peterson Sullivan LLP to stockholders for ratification as a matter of good corporate practice. In the event that stockholders fail to ratify the selection, our Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, our Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if our Audit Committee believes that such a change would be in our and our stockholders’ best interests.
Representatives of Peterson Sullivan LLP are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
The proposal to ratify the appointment of Peterson Sullivan LLP as our independent registered public accounting firm to audit our financial statements for the year ending December 31, 2013 will be approved if approved by a majority of the votes properly cast on this proposal.
Recommendation
The Board recommends that stockholders vote “FOR” the proposal to ratify the appointment of Peterson Sullivan LLP as our independent registered public accounting firm to audit our financial statements for the year ending December 31, 2013.
Unless marked otherwise, proxies received will be voted FOR Proposal No. 5.
OTHER BUSINESS
We know of no other matters to be submitted to the stockholders of the Company.
OTHER MATTERS
The Board of Directors of the Company does not know
of any other matters that are to be presented for action at the Annual Meeting. ShouldIf any other matters properly come before the stockholders at the Annual Meeting, or any adjournments thereof, the persons named inon the enclosed proxy card intend to vote the shares they represent as the Board may recommend.
ANNUAL REPORT ON FORM 10-K
On March 29, 2013, we filed our annual report on Form 10-K for the year ended December 31, 2012. We have sent to our stockholders the Notice of Internet Availability of Proxy Materials containing instructions on how to access via the Internet our 2013 proxy statement and annual report on Form 10-K for 2012. Stockholders who received a paper copy of our 2013 proxy statement were also sent a copy of our annual report on Form 10-K for 2012. Stockholders who wish to obtain additional copies of our annual report on Form 10-K may do so without charge by contacting us through one of the following methods:
| Email: | proxy@biolifesolutions.com |
| Telephone: | (425) 402-1400 |
| Facsimile: | (425) 402-1433 |
| Mail: | Corporate Secretary, BioLife Solutions, Inc. 3303 Monte Villa Parkway, Suite 310 Bothell, Washington 98021 |
STOCKHOLDER PROPOSALS
Stockholders may present proposals for action at a future meeting if they comply with SEC rules, state law and our Bylaws.
Pursuant to Rule 14a-8 under the Exchange Act, some stockholder proposals may be eligible for inclusion in the proxy statement for our 2014 Annual Meeting of Stockholders (the “2014 Annual Meeting”). These stockholder proposals, along with proof of ownership of our stock in accordance with Rule 14a-8(b)(2), must be received by us not later than January 6, 2014, which is 120 calendar days prior to the anniversary date of the mailing of this proxy statement. Stockholders are also advised to review our Bylaws which contain additional advance notice requirements, including requirements with respect to advance notice of stockholder proposals (other than non-binding proposals presented under Rule 14a-8) and director nominations. The proxies to be solicited by us through our Board for our 2014 Annual Meeting will confer discretionary authority on the proxy holders to vote on any stockholder proposal presented at that meeting, unless we receive notice of such stockholder’s proposal not later than March 22, 2014, which is 45 calendar days prior to the anniversary date of the mailing of this proxy statement.
Stockholder proposals must be in writing and should be addressed to c/o BioLife Solutions, Inc., Attention: Corporate Secretary, 3303 Monte Villa Parkway, Suite 310, Bothell, Washington 98021. It is recommended that stockholders submitting proposals direct them to our corporate secretary and utilize certified mail, return receipt requested in order to provide proof of timely receipt. The Chairman of the Annual Meeting reserves the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements, including conditions set forth in our Bylaws and conditions established by the SEC.
We have
not been notified by any stockholder of his or her intent to present a stockholder proposal from the
floor at this year’s Annual Meeting. The enclosed proxy grants the proxy holders discretionary authority to vote
all
proxies received with respect to such matters in accordance with
their judgment.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT
THE
COMPANY'S NEXT ANNUAL MEETING OF
STOCKHOLDERS
Stockholder proposals intended to be presented at the next
Annual Meeting of Stockholders of the Company must be
received by the Company, at its principal executive offices,
within a reasonable time prior to the solicitation of proxies in
connection with such meeting in order for such proposals to be
included in the Proxy Statement and Proxy relating to such
meeting.
This Proxy Statement is sent by order of the Board of
Directors of the Company.
/s/ Richard J. Reinhart
Richard J. Reinhart, Ph.D., President
and Chief Executive Officer
Rockville, Maryland
November 6, 1998
STOCKHOLDERS ARE URGED TO SPECIFY
THEIR CHOICES AND DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. A
PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
CRYOMEDICAL SCIENCES, INC.
(Pursuant to Section 242 of the General Corporation Law of
the State of Delaware)
Cryomedical Sciences, Inc. (the "Corporation"), a corpo-
ration organized and existing under the General Corporation Law
of the State of Delaware (the "GCL"), certifies as follows:
1. The name of the Corporation is Cryomedical
Sciences, Inc.
2. The date of filing of the Corporation's certificate
of incorporation (the "Certificate of Incorporation") with the
Secretary of State of the State of Delaware was November 5,
1987.
3. Subdivision (a) of Article Fourth of the
Certificate of Incorporation is hereby amended so that it shall
now read as follows:
"FOURTH: (a) The total number of
shares of stock which the Corporation
shall have the authority to issue is
25,000,000 shares of common stock,
each having a par value of $.001 (the
"Common Stock"), and 1,000,000
shares of preferred stock, each having
a par value of $.001 (the "Preferred
Stock").
The Board of Directors is
expressly authorized to provide for the
issuance of all or any shares of
Preferred Stock in one or more classes
or series, and to fix for each such class
or series such voting powers, full or
limited, or non-voting powers, and
such distinctive designations,
preferences, and relative, participating,
optional, or other special rights, and
such qualifications, limitations, or
restrictions thereof, as shall be stated
and expressed in the resolution or
resolutions adopted by the Board of
Directors providing for the issuance of
such class or series and as may be
permitted by the GCL, including,
without limitation, the authority to
provide that any such class or series
may be (i) subject to redemption at
such time or times and at such price or
prices; (ii) entitled to receive dividends
(which may be cumulative or non-
cumulative) at such rates, on such
conditions, and at such times, and
payable in preference to, or in such
relation to, the dividends payable on any other class or classes or any other
series; (iii) entitled to such rights upon
the dissolution of, or upon any
distribution of the assets of, the
Corporation; or (iv) convertible into,
or exchangeable for, shares of any
other classes of stock of the
Corporation at such price or prices or
at such rates of exchange and with
such adjustments; all as may be stated
in such resolution or resolutions."
4. Upon the filing in the Office of the Secretary of
State of the State of Delaware of a Certificate of Amendment to
the Certificate of Incorporation of the Corporation wherebymatter properly brought before this Article Fourth is amended to read as set forth herein (the
"Filing"), each ___________ shares of Common Stock issued
and outstanding and held of record by each stockholder of the
Corporation immediately prior to the Filing shall, automatically
and without the need for any further action on the part of any
stockholder, be combined into one (1) validly issued, fully paid,
and non-assessable share of Common Stock, par value $.001 per
share. No scrip or fractional shares will be issued by reason of
this amendment, but, in lieu thereof, one whole share will be
issued to those stockholders who would otherwise be entitled to
receive fractional shares.
5. This Certificate of Amendment to the Certificate
of Incorporation was authorized by the affirmative vote of the
holders of a majority of the outstanding shares entitled to vote
thereon at a meeting of stockholders pursuant to Sections 222
and 242 of the GCL.
IN WITNESS WHEREOF, I hereunto sign my name and
affirm that the statements made herein are true under penalties
of perjury this ____ day of _________________, 1998.
CRYOMEDICAL SCIENCES, INC.
By
Richard J. Reinhart, Ph.D., President and
Chief Executive Officer
EXHIBIT B
CRYOMEDICAL SCIENCES, INC.
1998 STOCK OPTION PLAN
1. Purpose of Plan. The purpose of this 1998 Stock
Option Plan (the "Plan") is to further the growth and
development of Cryomedical Sciences, Inc. (the
"Company") by encouraging and enabling employees,
officers, and directors of, and consultants and advisors to,
the Company to obtain a proprietary interest in the
Company through the ownership of stock (thereby
providing such persons with an added incentive to continue
in the employ or service of the Company and to stimulate
their efforts in promoting the growth, efficiency, and
profitability of the Company), and affording the Company
a means of attracting to its service persons of outstanding
quality.
2. Shares of Stock Subject to the Plan. Subject to the
provisions of Section 12 hereof, an aggregate of
20,000,000 shares of the common stock, par value $.001
per share, of the Company ("Common Stock") shall be
reserved for issuance upon the exercise of options which
may be granted from time to time in accordance with the
Plan. As the Board of Directors of the Company ("Board
of Directors") shall from time to time determine, such
shares may be, in whole or in part, authorized but unissued
shares or issued shares which have been reacquired by the
Company. If, for any reason, an option shall lapse, expire,
or terminate without having been exercised in full, the
unpurchased shares underlying such option shall (unless the
Plan shall have been terminated) again be available for
issuance pursuant to the Plan.
3. Administration.
(a) The Board of Directors shall administer the
Plan and, subject to the provisions of the Plan, shall have
authority to determine and designate from time to time
those persons eligible for a grant of options under the Plan,
those persons to whom options are to be granted, the
purchase price of the shares covered by each option, the
time or times at which options shall be granted, and the
manner in which said options are exercisable. In making
such determination, the Board of Directors may take into
account the nature of the services rendered by the
respective persons, their present and potential contributions
to the Company's success, and such other factors as the
Board of Directors in its sole discretion shall deem rele-
vant. Subject to the express provisions of the Plan, the
Board of Directors also shall have authority to interpret the
Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to determine the terms and
provisions of the instruments by which options shall be
evidenced (which shall not be inconsistent with the terms
of the Plan), and to make all other determinations
necessary or advisable for the administration of the Plan,
all of which determinations shall be final, binding, and
conclusive.
(b) The Board of Directors may, at its
discretion, in accordance with the provisions of the
Company's By-Laws, appoint from among its members a
Stock Option or Compensation Committee (the
"Committee"). The Committee shall be composed of two
or more directors and shall have and may exercise any and
all of the powers relating to the administration of the Plan
and the grant of options hereunder as are set forth above in
Section 3(a), as the Board of Directors shall confer and
delegate. The Board of Directors shall have the power at
any time to fill vacancies in, to change the membership of,
or to discharge, the Committee. The Committee shall
select one of its members as its Chairman and shall hold its
meetings at such time and at such places as it shall deem
advisable. A majority of the Committee shall constitute a
quorum and such majority shall determine its action. The
Committee shall keep minutes of its proceedings and shall
report the same to the Board of Directors at the meeting
next succeeding. No director or member of the Committee
shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted
thereunder.
4. Persons To Whom Shares May Be Granted.
(a)Options may be granted to persons who are,
at the time of the grant, employees (including part-time
employees), officers, and directors of, or consultants or
advisors to, the Company or any subsidiary corporation (as
defined in Section 425 of the Internal Revenue Code of
1986, as amended (the "Code"), a "Subsidiary") as the
Board of Directors (or Committee) shall select from time
to time from among those nominated by the Board of
Directors (or Committee). For the purposes of the Plan,
options only may be granted to those consultants and
advisors who shall render bona fide services to the
Company and such services must not be in connection with
the offer or sale of securities in a capital raising
transaction. Subject to the provisions hereinafter set forth,
options granted under the Plan shall be designated either (i)
"Incentive Stock Options" (which term, as used herein,
shall mean options intended to be "incentive stock options"
within the meaning of Section 422 of the Code) or (ii)
"Non-Incentive Stock Options" (which term, as used
herein, shall mean options not intended to be incentive
stock options" within the meaning of Section 422 of the
Code). Each option granted to a person who is solely a
director of, or consultant or advisor to, the Company or a
Subsidiary on the date of the grant shall be designated a
Non-Incentive Stock Option.
(b) The Board of Directors (or Committee) may
grant, at any time, new options to a person who has
previously received options, whether such prior options are
still outstanding, have previously been exercised in whole
or in part, have expired, or are canceled in connection with
the issuance of new options. The purchase price of the
new options may be established by the Board of Directors
(or Committee) without regard to the existing option price.
5. Option Price.
(a) The purchase price of the Common Stock
underlying each option shall be determined by the Board of
Directors (or Committee), which determination shall be
final, binding, and conclusive; provided, however, in no
event shall the purchase price of Incentive Stock Options be
less than 100% (110% in the case of optionees who own
more than 10% of the total combined voting power of all
classes of stock of the Company) of the fair market value
of the Common Stock on the date the option is granted. In
determining such fair market value, the Board of Directors
(or Committee) shall consider (i) the last sale price of the
Common Stock on the date on which the option is granted
or, if no such reported sale takes place on such day, the
last reported bid price on such day, on NASDAQ or on the
principal national securities exchange on which the
Common Stock is admitted to trading or listed, or (ii) if not
listed or admitted to trading on NASDAQ or a national
securities exchange, the closing bid price as quoted by the
National Quotation Bureau or a recognized dealer in the
Common Stock on the date of grant. If the Common Stock
is not publicly traded at the time an option is granted, the
Board of Directors (or Committee) shall deem fair market
value to be the fair value of the Common Stock after taking
into account appropriate factors which may be relevant
under applicable federal tax laws and Internal Revenue
rules and regulations. For purposes of the Plan, the date
of grant of an option shall be the date specified by the
Board of Directors (or Committee) at the time it grants
such option; provided, however, such date shall not be
prior to the date on which the Board of Directors (or
Committee) acts to approve the grant.
(b) The aggregate fair market value (determined
at the time the Incentive Stock Options are granted) of the
Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an employee
during any calendar year shall not exceed $100,000.
Non-Incentive Stock Options shall not be subject to the
limitations of this paragraph 5(b).
6. Exercise of Options.
(a) The number of shares which are issued
pursuant to the exercise of an option shall be charged
against the maximum limitations on shares set forth in
Section 2 hereof.
(b) The exercise of an option shall be made
contingent upon receipt by the Company from the holder
thereof of (i) if deemed necessary by the Company, a
written representation and acknowledgement that (1) at the
time of such exercise it is the holder's then present
intention to acquire the option shares for investment and
not with a view to distribution or resale thereof, (2) the
holder knows that the Company is not obligated to register
the option shares and that the option shares may have to be
held indefinitely unless an exemption from the registration
requirements of the Securities Act of 1933, as amended
(the "Act"), is available or the Company has registered the
shares underlying the options, and (3) the Company may
place a legend on the certificate(s) evidencing the option
shares reflecting the fact that they were acquired for
investment and cannot be sold or transferred unless
registered under the Act, and (ii) payment in full of the
purchase price of the shares being purchased. Payment
may be made in cash; by certified check payable to the
order of the Company in the amount of such purchase
price; by delivery to the Company of shares of Common
Stock having a fair market value equal to such purchase
price; by irrevocable instructions to a broker to sell shares
of Common Stock to be issued upon exercise of the option
and to deliver to the Company the amount of sale proceeds
necessary to pay such purchase price and to deliver the
remaining cash proceeds, less commissions and brokerage
fees, to the optionee; or by any combination of such
methods of payment.
7. Term of Options. The period during which each
option granted hereunder shall be exercisable shall be
determined by the Board of Directors (or Committee);
provided, however, no option shall be exercisable for a
period exceeding ten (10) years from the date such option
is granted.
8. Non-Transferability of Options. No option granted
pursuant to the Plan shall be subject to anticipation, sale,
assignment, pledge, encumbrance, or charge, or shall be
otherwise transferable except by will or the laws of descent
and distribution or pursuant to a qualified domestic
relations order (as defined by the Code or Title I of the
Employee Retirement Income Security Act or the rules
thereunder), and an option shall be exercisable during the
lifetime of the holder thereof only by such holder.
9. Termination of Services. If an employee, officer, or
director to whom an option has been granted under the Plan
shall cease to be an employee, officer, or director of the
Company or a Subsidiary by reason of a termination of
such relationship without cause and other than by reason of
death or disability, such holder may exercise such option at
any time prior to the expiration date of the option or within
three months after the date of termination, whichever is
earlier, but only to the extent the holder had the right to
exercise such option on the date of termination. If an
employee, officer, or director to whom an option has been
granted under the Plan shall cease to be an employee,
officer, or director of the Company or a Subsidiary by
reason of a termination of such relationship for cause and
other than by reason of death or disability, such options
shall terminate, lapse, and expire forthwith and
automatically. So long as the holder of an option shall
continue to be in the employ, or continue to be a director,
of the Company or one or more of its Subsidiaries, such
holder's option shall not be affected by any change of
duties or position. Absence on leave approved by the
employing corporation shall not be considered an
interruption of employment for any purpose under the Plan.
The granting of an option in any one year shall not give the
holder of the option any rights to similar grants in future
years or any right to be retained in the employ or service
of the Company or any of its Subsidiaries or interfere in
any way with the right of the Company or any such
Subsidiary to terminate such holder's employment or
services at any time. Notwithstanding the foregoing, no
option may be exercised after ten years from the date of its
grant.
10. Disability of Holder of Option. If any employee,
officer, or director to whom an option has been granted
under the Plan shall cease to be an employee, officer, or
director of the Company or a Subsidiary by reason of
disability, such holder may exercise such option at any time
prior to the expiration date of the option or within one year
after the date of termination for such reason, whichever is
earlier, but only to the extent the holder had the right to
exercise such option on the date of termination.
Notwithstanding the foregoing, no option may be exercised
after ten years from the date of its grant. For the purposes
of the Plan, "disability" shall mean "permanent and total
disability" as defined in Section 22(e)(3) of the Code.
11. Death of Holder of Option. If any employee,
officer, or director to whom an option has been granted
under the Plan shall cease to be an employee, officer, or
director of the Company or a Subsidiary by reason of
death, or such holder of an option shall die within three
months after termination, or in the case of the death of an
advisor or consultant to whom an option has been granted
under the Plan, the option may be exercised by the person
or persons to whom the optionee's rights under the option
are transferred by will or by the laws of descent and
distribution at any time prior to the expiration date of the
option or, in the case of an employee, officer, or director,
within three months from the date of death, whichever is
earlier, but only to the extent the holder of the option had
the right to exercise such option on the date of such
termination. Notwithstanding the foregoing, no option may
be exercised after ten years from the date of its grant.
12. Adjustments Upon Changes in Capitalization.
(a) If the shares of Common Stock outstanding
are changed in number, kind, or class by reason of a stock
split, combination, merger, consolidation, reorganization,
reclassification, exchange, or any capital adjustment,
including a stock dividend, or if any distribution is made to
stockholders other than a cash dividend and the Board of
Directors (or Committee) deems it appropriate to make an
adjustment, then (i) the aggregate number and class of
shares that may be issued or transferred pursuant to Section
2, (ii) the number and class of shares which are issuable
under outstanding options, and (iii) the purchase price to be
paid per share under outstanding options, shall be adjusted
as hereinafter provided.
(b) Adjustments under this Section 12 shall be
made in a proportionate and equitable manner by the Board
of Directors (or Committee), whose determination as to
what adjustments shall be made, and the extent thereof,
shall be final, binding, and conclusive. In the event that a
fraction of a share results from the foregoing adjustment,
said fraction shall be eliminated and the price per share of
the remaining shares subject to the option adjusted
accordingly.
(c) In the event of a liquidation of the Company,
or a merger, reorganization, or consolidation of the
Company with any other corporation in which the
Company is not the surviving corporation or the Company
becomes a wholly-owned subsidiary of another corporation,
any unexercised options theretofore granted under the Plan
shall be deemed canceled unless the surviving corporation
in any such merger, reorganization, or consolidation elects
to assume the options under the Plan or to issue substitute
options in place thereof; provided, however, if such options
would otherwise be canceled in accordance with the
foregoing, the optionee shall have the right, exercisable
during a ten-day period immediately prior to such liquid-
ation, merger, or consolidation, to exercise the option, in
whole or in part. The granting of an option pursuant to the
Plan shall not affect in any way the right or power of the
Company to make adjustments, reorganizations,
reclassifications, or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, or
sell or transfer all or any part of its business or assets.
13. Vesting of Rights Under Options. Nothing contained
in the Plan or in any resolution adopted or to be adopted by
the Board of Directors (or Committee) or the stockholders
of the Company shall constitute the vesting of any rights
under any option. The vesting of such rights shall take
place only when a written agreement shall be duly executed
and delivered by and on behalf of the Company to the
person to whom the option shall be granted.
14. Rights as a Stockholder. A holder of an option shall
have no rights of a stockholder with respect to any shares
covered by such holder's option until the date of issuance
of a stock certificate to such holder for such shares.
15. Termination and Amendment. The Plan was adopted
by the Board of Directors on August 31, 1998, subject,
with respect to the validation of Incentive Stock Options
granted under the Plan, to approval of the Plan by the
stockholders of the Company at the next Meeting of
Stockholders or, in lieu thereof, by written consent. If the
approval of stockholders is not obtained prior to August 30,
1999, any grants of Incentive Stock Options under the Plan
made prior to that date will be rescinded. The Plan shall
expire at the end of the day on August 30, 2008 (except as
to options outstanding on that date). Options may be
granted under the Plan prior to the date of stockholder
approval of the Plan. The Board of Directors (or
Committee) may terminate or amend the Plan in any
respect at any time, except that, without the approval of the
stockholders obtained within 12 months before or after the
Board of Directors (or Committee) adopts a resolution
authorizing any of the following actions, (a) the total
number of shares that may be issued under the Plan may
not be increased (except by adjustment pursuant to
paragraph 12); (b) the provisions regarding eligibility for
grants of Incentive Stock Options may not be modified; (c)
the provisions regarding the exercise price at which shares
may be offered pursuant to Incentive Stock Options may
not be modified (except by adjustment pursuant to
paragraph 12), and (d) the expiration date of the Plan may
not be extended. Except as otherwise provided in this
paragraph 15, in no event may action of the Board of
Directors (or Committee) or stockholders alter or impair
the rights of an optionee, without such optionee's consent,
under any option previously granted to such optionee.
16. Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the limita-
tions of the Plan, the Board of Directors (or Committee)
may modify, extend, or renew outstanding options granted
under the Plan, or accept the surrender of outstanding
options (to the extent not theretofore exercised) and
authorize the granting of new options in substitution
therefor. Notwithstanding the foregoing, no modification of
an option shall, without the consent of the holder thereof,
alter or impair any rights or obligations under any option
theretofore granted under the Plan.
17. Conversion of Incentive Stock Options into Non-
Qualified Options. Without the prior written consent of the
holder of an Incentive Stock Option, the Board of Directors
(or Committee) shall not alter the terms of such Incentive
Stock Option (including the means of exercising such
Incentive Stock Option) if such alteration would constitute
a modification within the meaning of Section 424(h)(3) of
the Code. The Board of Directors (or Committee), at the
written request or with the written consent of any optionee,
may in its discretion take such actions as may be necessary
to convert such optionee's Incentive Stock Options (or any
installments or portions of installments thereof) that have
not been exercised on the date of conversion into Non-
Incentive Stock Options at any time prior to the expiration
of such Incentive Stock Options, regardless of whether the
optionee is an employee of the Company at the time of
such conversion. Such actions may include, but shall not
be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such
Incentive Stock Options. At the time of such conversion,
the Board of Directors (or Committee) (with the consent of
the optionee) may impose such conditions on the exercise
of the resulting Non-Incentive Stock Options as the Board
of Directors (or Committee) in its discretion may
determine, provided that such conditions shall not be
inconsistent with the Plan. Nothing in the Plan shall be
deemed to give any optionee the right to have such
optionee's Incentive Stock Options converted into Non-
Incentive Stock Options, and no such conversion shall
occur until and unless the Board of Directors (or
Committee) takes appropriate action.
18. Withholding of Additional Income Taxes. Upon the
exercise of a Non-Incentive Stock Option, the transfer of a
Non-Incentive Stock Option pursuant to an arm's length
transaction, the making of a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and
regulations thereunder), the vesting of transfer of restricted
stock or securities acquired on the exercise of an option
hereunder, or the making of a distribution or other payment
with respect to such stock or securities, the Company may
withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Board of
Directors (or Committee) in its discretion may condition
the exercise of an option, the transfer of a Non-Incentive
Stock Option, or the vesting or transferability of restricted
stock or securities acquired by exercising an option on the
optionee's making satisfactory arrangement for such
withholding. Such arrangement may include payment by
the optionee in cash or by check of the amount of the
withholding taxes or, at the discretion of the Board of
Directors (or Committee), by the optionee's delivery of
previously held shares of Common Stock or the
withholding from the shares of Common Stock otherwise
deliverable upon exercise of option shares having an
aggregate fair market value equal to the amount of such
withholding taxes.
19. Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board
of Directors (or Committee), the members of the Board of
Directors (or Committee) administering the Plan shall be
indemnified by the Company against reasonable expenses,
including attorneys' fees, actually and necessarily incurred
in connection with the defense of any action, suit, or
proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with
the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of
a judgment in any action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such
action, suit, or proceeding that such member is liable for
negligence or misconduct in the performance of his duties,
and provided that within 60 days after institution of any
such action, suit, or proceeding, the member shall in
writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
20. Governing Law. The validity and construction of the
Plan and the instruments evidencing options shall be
governed by the laws of Delaware, or the laws of any
jurisdiction in which the Company or its successors in
interest may be organized.
PROXY
CRYOMEDICAL SCIENCES, INC.
1300 Piccard Drive, Suite 102
Rockville, Maryland 20850
This Proxy is solicited on behalf of the Board of Directors
The undersigned, acknowledging receipt of the proxy
statement dated November 6, 1998 of Cryomedical Sciences, Inc.,
hereby constitutes and appoints Richard J. Reinhart and J. Donald Hill,
and each or any of them, attorney, agent, and proxy of the
undersigned, with full power of substitution to each of them, for and
in the name, place, and stead of the undersigned, to appear and vote all
the shares of stock of Cryomedical Sciences, Inc., standing in the name
of the undersigned on the books of said corporation on October 23,
1998 at the Special Meeting of Stockholders of Cryomedical Sciences,
Inc., to be held at the offices of the Company, 1300 Piccard Drive,
Suite 102, Rockville, Maryland 20850, on December 16, 1998 at 10:00
a.m., Maryland time, and any and all adjournments thereof.
When properly executed, this proxy will be voted as
designated by the undersigned.
If no choice is specified, this proxy will be voted (i) FOR
approval of the proposed Amendment to the Company's Certificate
of Incorporation ("Charter") to effect a one-for-five, one for six,
one for seven, one for eight, one for nine, one for ten, one for
eleven, one for twelve, one for thirteen, one for fourteen, one for
fifteen, or one for sixteen reverse stock split of the issued and
outstanding shares of Common Stock, with one of such approved
alternatives to be chosen by the Board of Directors of the Company
(the "Reverse Stock Split"), (ii) FOR the approval of the proposed
amendment to the Charter to reduce the number of authorized
shares of Common Stock from 50,000,000 shares to 25,000,000
shares (the "Common Stock Reduction"), (iii) FOR the approval of
the proposed amendment to the Charter to reduce the number of
authorized shares of Preferred Stock of the Company, par value
$.001 per share ("Preferred Stock"), from 9,378,800 shares to
1,000,000 shares (the "Preferred Stock Reduction"), (iv) FOR
ratification and approval of the Company's 1998 Stock Option Plan
(the "1998 Stock Option Plan"), (v) FOR ratification and approval
of the grant of stock options/warrants for 19,780,000 shares (pre-
Reverse Stock Split), exercisable at $.25 per share (pre-Reverse
Stock Split) to management, others who have performed services
for the Company, and directors, to appropriately incentivize and
compensate them (the Stock Option/Warrant Grant"), and (vi)
FOR approval of the preparation and filing of a registration
statement with the Securities and Exchange Commission for the sale
of securities by the Company (the "SEC Filing"). AS DISCLOSED
IN THE ACCOMPANYING PROXY STATEMENT, THE
FAILURE TO APPROVE EACH OF THE PROPOSALS
CONTAINED HEREIN COULD HAVE A MATERIAL ADVERSE
EFFECT ON THE BUSINESS AND FINANCIAL CONDITION OF
THE COMPANY. SEE "PROXY STATEMENT -
BACKGROUND." The approval of a matter requires a "FOR"
vote. A vote to ABSTAIN with respect to a matter will have the
same effect as a vote AGAINST the matter.
1. PROPOSAL TO AMEND THE
CHARTER TO EFFECT THE REVERSE STOCK SPLIT.
( ) FOR ( ) AGAINST ( ) ABSTAIN
2. PROPOSAL TO AMEND
CHARTER TO EFFECT THE COMMON STOCK REDUCTION.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. PROPOSAL TO AMEND
CHARTER TO EFFECT THE PREFERRED STOCK REDUCTION.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. PROPOSAL TO RATIFY AND
APPROVE THE 1998 STOCK OPTION PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
5. PROPOSAL TO APPROVE THE
STOCK OPTION/WARRANT GRANT.
( ) FOR ( ) AGAINST ( ) ABSTAIN
6. PROPOSAL TO APPROVE THE
SEC FILING.
( ) FOR ( ) AGAINST ( ) ABSTAIN
7. FOR SUCH OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE
MEETING AND ANY
ADJOURNMENTS THEREOF.
Date
Print Name
Signature
Signature, if held jointly
When shares are held by joint tenants, both should
sign. When signing as attorney, administrator,
trustee, or guardian, please give full title as such. If
a corporation, please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
Dear Shareholder:
Since the announcement of the Company's Plan of
Recapitalization and Financing (the "Plan"), I have been
inundated with calls from stockholders with questions about
the Plan. The Plan was adopted by the Board of Directors
of the Company in accordance with the terms and
conditions of a Stock Purchase Agreement (the
"Agreement") with ValorInvest, Ltd. ("ValorInvest"). The
Agreement requires that the Plan be submitted to the
Company's stockholders for their approval.
The enclosed proxy material contains a great deal
of information regarding the Plan. We hope that this
material will answer any questions you may have.
However, if you still have questions regarding the Plan
after you have reviewed the proxy material, please give me
a call at the Company at (301) 417-7070 extension 222.
This is an important enough issue that I am going to make
myself available over the next several weeks to answer any
questions you may have. If I am unable to take your call
immediately, please leave a message containing your name,
telephone number and a time that I can get back to you.
Due to the fact that the Company is unable to
contact its many shareholders on a one on one basis I am
taking this opportunity to make you aware of the primary
consideration that the Company has in regard to the
approval of the Plan. It is most important that you realize
the following:
1. The Plan consists of six individual matters.
2. Each matter is individually itemized on the
proxy voting card.
3. In order for the Plan to be "approved",
all six of these matters must be approved.
4. If you elect to abstain or vote against any
one of these matters your overall vote will
be considered to be "against" the Plan.
It is important that you understand that if the Plan
is not approved by the Company's stockholders, then, at
the request of ValorInvest, the Company must redeem the
Series E Units purchased by ValorInvest pursuant to the
Agreement at the price paid therefor plus a penalty. ANY
SUCH REQUEST BY VALORINVEST WOULD HAVE A
MATERIAL ADVERSE EFFECT ON THE BUSINESS
AND FINANCIAL CONDITION OF THE COMPANY.
Your management team, together with the Board of
Directors and the Company's counsel, have worked very
hard to maintain the viability of the Company over the past
year. It is imperative that we get stockholder approval
of the Plan. We look forward to your support.
Sincerely,
Richard J. Reinhart, Ph.D.
President and CEOyear’s Annual Meeting. | BY ORDER OF THE BOARD OF DIRECTORS | |
| | |
| | |
| Michael Rice | |
| President, Chief Executive Officer and Chairman | |
| | |
| April 30, 2013 | |
| Bothell, Washington | |
27