SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securites and Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
| | Preliminary Proxy Statement
| | Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e) (2))
|X| Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12
INTEGRATED BIOPHARMA, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i) (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:
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| | Fee paid previously with preliminary materials:
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| | 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.:
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4) Date Filed:
________________________________________________________________________________
INTEGRATED BIOPHARMA, INC.
225 Long Avenue
Hillside, New Jersey 07205
October 28, 2005
To Our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you
to attend the 2005 Annual Meeting of Stockholders of Integrated BioPharma, Inc.
(the "Company"), which will be held at 9:00 a.m. local time, on November 23,
2005 at the Company's Executive Offices, 225 Long Avenue, Hillside, New Jersey
07205.
At the Annual Meeting, you will be asked to elect three Class II
directors for a three year term; to amend the Company's Stock Option Plan and to
ratify the appointment of independent auditors of the Company for the 2006
fiscal year. These matters are described in detail in the accompanying Notice of
Annual Meeting of Stockholders and Proxy Statement. A proxy is included along
with the Proxy Statement. These materials are being sent to stockholders on or
about October 28, 2005.
It is important that your shares be represented at the Annual Meeting,
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy promptly. If you later decide to attend the Annual
Meeting, you may revoke your proxy and vote your shares in person.
Sincerely,
/s/ E. Gerald Kay
E. Gerald Kay
Chief Executive Officer
INTEGRATED BIOPHARMA, INC.
225 Long Avenue
Hillside, New Jersey 07205
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 23, 2005
TO THE STOCKHOLDERS OF
INTEGRATED BIOPHARMA, INC.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (the
"Meeting") of Integrated BioPharma, Inc., a Delaware corporation ("INB" or the
"Company"), will be held on November 23, 2005, at 9:00 a.m., local time, at the
Company's Executive Offices, 225 Long Avenue, Hillside, New Jersey 07205, for
the purpose of considering and acting upon the following proposals:
1. To elect three Class II directors for a three year term to
serve until the 2008 Annual Meeting of Stockholders;
2. To amend the Company's Stock Option Plan to increase the number
of shares of Common Stock reserved for issuance from 9,000,000
to 11,000,000;
3. To ratify the appointment of Amper, Politziner & Mattia, P.C.
as INB's independent accountants for the fiscal year ending
June 30, 2006; and
4. The transaction of such other business as may properly come
before the Meeting or any adjournment thereof.
Only holders of record of the Company's common stock, par value $.002
per share ("Common Stock"), at the close of business on October 21, 2005 (the
"Record Date"), are entitled to vote on the matters to be presented at the
Annual Meeting. The number of shares of Common Stock outstanding on such date
and entitled to vote was 12,685,790.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" PROPOSALS NO. 1, NO. 2 and NO. 3, TO BE PRESENTED TO
INB STOCKHOLDERS AT THE ANNUAL MEETING.
By order of the Board of Directors.
/s/ Eleanor DiMartino
Eleanor DiMartino
Secretary
Hillside, New Jersey
October 28, 2005
It is important that your shares be represented at this meeting in
order that a quorum may be assured. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, YOU ARE URGED TO DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED CARD IN THE
POSTAGE PREPAID ENVELOPE PROVIDED AND TO DO SO IN ADEQUATE TIME FOR YOUR
DIRECTIONS TO BE RECEIVED AND TABULATED PRIOR TO THE SCHEDULED MEETING.
2
INTEGRATED BIOPHARMA, INC.
225 Long Avenue
Hillside, New Jersey 07205
PROXY STATEMENT
2005 ANNUAL MEETING OF STOCKHOLDERS
To be held on November 23, 2005
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Integrated BioPharma, Inc.
("INB" or the "Company"), a Delaware corporation, to be voted at the 2005 Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the
Company's Executive Offices, 225 Long Avenue, Hillside, New Jersey 07205 on
November 23, 2005, at 9:00 a.m. local time, or at any postponement or
adjournment thereof. This Proxy Statement, the Notice of Annual Meeting and the
accompanying form of proxy are first being mailed to stockholders on or about
October 28, 2005.
Only holders of record of the Company's common stock, par value $.002
per share ("Common Stock"), at the close of business on October 21, 2005 (the
"Record Date"), are entitled to vote on the matters to be presented at the
Annual Meeting. The number of shares of Common Stock outstanding on such date
and entitled to vote was 12,685,790.
Holders of Common Stock are entitled to one vote on each matter to be
voted upon by the stockholders at the Annual Meeting for each share held.
At the Annual Meeting, stockholders will be asked to consider and vote
upon proposals: (1) to elect three Class II directors for a three year term to
serve until the 2008 Annual Meeting of Stockholders (the "Director Proposal");
(2) to amend the Company's Stock Option Plan to increase the number of shares of
Common Stock reserved for issuance from 9,000,000 to 11,000,000 (the "Stock
Option Plan Proposal"); and (3) to ratify the appointment of Amper, Politziner,
& Mattia, P.C., as INB's independent auditors for the fiscal year ending June
30, 2006 (the "Independent Auditors Proposal"). At the Annual Meeting,
stockholders may also be asked to consider and take action with respect to such
other matters as may properly come before the Annual Meeting.
QUORUM AND VOTE REQUIREMENTS
The presence, in person or by proxy, of holders of record of a majority
of the shares of Common Stock issued and outstanding and entitled to vote is
required for a quorum to transact business at the Annual Meeting, but if a
quorum should not be present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained. Directors are elected by a plurality of votes
cast. The Directors Proposal, the Stock Option Plan Proposal and the Independent
Auditors Proposal and all other matters to properly come before the Annual
Meeting will be determined by the affirmative vote of the holders of a majority
of the shares of Common Stock present, in person or by proxy, and entitled to
vote at the Annual Meeting. Broker "non-votes" (i.e. proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares as to a matter with
respect to which the brokers or nominees do not have discretionary power to
vote) and shares for which duly executed proxies have been received but with
respect to which holders of shares have abstained from voting will be treated as
present for purposes of determining the presence of a quorum at the Annual
Meeting. Abstentions and broker non-votes have no impact on the election of
directors except to reduce the number of votes for the nominees. With respect to
all other proposals, broker non-votes are not counted as votes and, therefore,
will not be included in vote totals and abstentions will have the effect of a
negative vote against such other proposals.
SOLICITATION AND REVOCATION
PROXIES IN THE FORM ENCLOSED ARE BEING SOLICITED BY, AND ON BEHALF OF,
THE BOARD OF DIRECTORS. THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY HAVE
BEEN DESIGNATED AS PROXIES BY THE BOARD OF DIRECTORS.
All Common Stock represented by properly executed proxies which are
returned and not revoked prior to the time of the Annual Meeting will be voted
in accordance with the instructions, if any, given thereon. If no instructions
are provided in an executed proxy, it will be voted (1) FOR the Director
Proposal; (2) FOR the Stock Option Plan Proposal; (3) FOR the Independent
Auditors Proposal, and in accordance with the proxy holder's discretion as to
any other business raised at the Annual Meeting. Any stockholder who executes a
proxy may revoke it at any time before it is voted by delivering to the Company
a written statement revoking such proxy, by executing and delivering a later
dated proxy, or by voting in person at the Annual Meeting. Attendance at the
Annual Meeting by a stockholder who has executed and delivered a proxy to the
Company shall not in and of itself constitute a revocation of such proxy.
The Company will bear its own cost for the solicitation of proxies.
Proxies will be solicited initially by mail. Further solicitation may be made by
directors, officers, and employees of the Company personally, by telephone, or
otherwise, but any such person will not be specifically compensated for such
services. The Company also intends to make, through banks, brokers or other
persons, a solicitation of proxies of beneficial holders of the Common Stock.
Upon request, the Company will reimburse brokers, dealers, banks and similar
entities acting as nominees for reasonable expenses incurred in forwarding
copies of the proxy materials relating to the Annual Meeting to the beneficial
owners of Common Stock which such persons hold of record.
PROPOSAL NO. 1 ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of nine (9)
directors divided into three classes of directors serving staggered 3-year
terms.
The members of Class I, whose terms of office expire in 2006, are
Mr. E. Gerald Kay, Ms. Riva Kay Sheppard and Mr. Carl DeSantis.
The members of Class II, whose terms of office expire in 2005, are Ms.
Christina Kay, Mr. Robert Canarick and Mr. Robert B. Kay.
The members of Class III, whose terms of office expire in 2007,
are Mr. Seymour Flug, Mr. Glenn Chang and Mr. Zarko Kraljevic
The stockholders will consider and vote upon the election of Ms.
Christina Kay, Mr. Robert Canarick and Mr. Robert B. Kay to serve their
respective terms.
Unless a shareholder WITHHOLDS AUTHORITY, a properly signed and dated
proxy will be voted FOR the election of the nominees, unless the proxy contains
contrary instructions. The Board of Directors knows of no reason why any of its
nominees will be unable or will refuse to accept election. If any nominee
becomes unable or refuses to accept election, the Board of Directors will either
reduce the number of directors to be elected or select a substitute nominee. If
a substitute nominee is selected, proxies will be voted in favor of such
nominee.
2
The following table sets forth certain information with respect to the
members of INB's Board of Directors during the fiscal year ended June 30, 2005.
Age Class of Director Directors Since
--- ----------------- ----------------
E. Gerald Kay 69 Class I 1980
Served as Chairman of the Board and President
of the Company, and its predecessor since 1980,
and was president until May 1999. On May 9,
2003 he became Chief Executive Officer.
Riva Kay Sheppard 38 Class I 1991
Served as Vice President and director of the Company
since May 1991. Mrs. Sheppard is the daughter of
E. Gerald Kay and the sister of Christina Kay.
Carl DeSantis 66 Class I 2003
Served as director of the Company since 2003.
Mr. DeSantis has served as Chairman of CDS International
Holdings, Inc. since June of 2001. Prior to that he was
Chairman of Rexall Sundown, Inc.
Christina Kay 35 Class II 1994
Served as Vice President and director of the Company
since December 1994. Ms. Kay is the daughter of
E. Gerald Kay and the sister of Riva Kay Sheppard.
Robert Canarick 55 Class II 1994
Served as a director of the Company since December
1994. From January 1998 until August of 2001
he has served as general counsel of NIA
Group, LLC, an all lines independent insurance agency.
From August 2001 he has served as President of Links
Insurance Services, LLC. Mr. Canarick is a Certified
Public Accountant and Attorney.
Seymour Flug 70 Class III 2000
Served as President of the Company from May 1999 until
May 9, 2003. Prior to 1999, he was Chairman of the Board
of Diners Club International.
Robert B. Kay 65 Class II 2003
Served as a director of the Company since 2003.
Since 2002 he has served as Chairman of Paxis
Pharmaceuticals, Inc. Prior to that he was a founding -
partner of the New York based law firm of Kay, Collyer &
Boose LLP. Mr. Kay is the brother of E. Gerald Kay.
Glenn Chang 57 Class III 2003
Served as a director of the Company since 2003.
Since 1999 he has been Director, Executive Vice President
and Chief Financial Officer of the First American
International Bank, Brooklyn, N.Y. Prior to the founding
of the Bank he spent almost 20 years at Citibank as Vice
President. Mr. Chang is a Certified Public Accountant.
Zarko Kraljevic 85 Class III 2003
Served as a director of the Company since 2003. Since
1972 has served as President and CEO of Diners Club of
Eastern Europe.
3
Recommendation and Vote
Approval of the election of these nominees for directors requires the
affirmative vote of a majority of the shares of Common Stock present, in person
or by proxy, at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES FOR
DIRECTORS LISTED ABOVE.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's common stock to file reports of
ownership and changes in ownership of common stock with the Securities and
Exchange Commission. During the fiscal year ended June 30, 2005, all such
persons filed on a timely basis all reports required by Section 16(a) of the
Exchange Act.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the number of
shares of common stock of Integrated BioPharma beneficially owned on October 1,
2005, by:
* each person who is known by Integrated BioPharma to beneficially
own five percent (5%) or more of the common stock of Integrated
BioPharma;
* each of the directors and executive officers of Integrated
BioPharma; and
* all of Integrated BioPharma's directors and executive officers,
as a group.
The address of each of the persons listed below is c/o Integrated
BioPharma, Inc., 225 Long Avenue, Hillside, New Jersey 07205.
4
Number of Shares Percent of Shares
Name of Beneficial Owner Beneficially Owned (1) Beneficially Owned (2)
------------------------ ---------------------- ----------------------
E. Gerald Kay 6,208,384 (3) 43.6%
Carl DeSantis 2,135,417 (4) 16.8%
Riva Kay Sheppard 1,336,164 (5) 10.0%
Christina Kay 1,336,164 (5) 10.0%
Seymour Flug 1,266,033 (6) 9.3%
Robert B. Kay 1,219,629 (7) 9.3%
Eric Friedman 754,066 (8) 5.6%
Robert Canarick 178,533 (9) 1.4%
Directors and executive
officers as a group
(8 persons) 14,434,390 (10) 80.8%
------------------
(1) Unless otherwise indicated, includes shares owned by a spouse, minor
children, by relatives sharing the same home, and entities owned or
controlled by the named person. Also includes shares if the named
person has the right to acquire such shares within 60 days after
October 1, 2005, by the exercise of warrant, stock option or other
right. Unless otherwise noted, shares are owned of record and
beneficially by the named person.
(2) Based upon 12,685,790 shares of common stock outstanding on
October 1, 2005.
(3) Includes (i) 819,629 shares of common stock held by EGK LLC, of which
Mr. Kay is the manager, and (ii) 1,557,026 shares of common stock
issuable upon exercise of presently exercisable stock options. Shares
dispositive power with Christina Kay with respect to 169,358 shares of
common stock and with Riva Sheppard Kay with respect to 169,358 shares
of common stock.
(4) Includes 819,629 shares owned by CDS Group Holdings, LLC, of which
Mr. DeSantis is the manager.
(5) Includes 716,666 shares of common stock issuable upon exercise of
presently exercisable stock options. Shares dispositive power with E.
Gerald Kay with respect to 169,358 shares of common stock.
(6) Includes 950,000 shares of common stock issuable upon exercise of
presently exercisable stock options.
(7) Includes (i) 819,629 shares of common stock held by EVJ LLC, of which
Mr. Kay is the manager, and (ii) 400,000 shares of common stock
issuable upon exercise of presently exercisable stock options.
(8) Includes 681,666 shares of common stock issuable upon exercise of
presently exercisable stock options. (9) Includes 150,000 shares of
common stock issuable upon exercise of presently exercisable stock
options. (10) Includes 5,172,024 shares of common stock issuable upon
exercise of presently exercisable stock options.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table includes information as of June 30, 2005 relating
to the Company's stock option plans, which comprise all of the Company's equity
compensation plans. The table provides the number of securities to be issued
upon the exercise of outstanding options under such plans, the weighted-average
exercise price of such outstanding options and the number of securities
remaining available for future issuance under such plans.
5
EQUITY COMPENSATION PLAN INFORMATION
Number of securities
to be issued upon Weighted-average Number of securities remaining
exercise of exercise price of available for future issuance under
outstanding options, outstanding options, equity compensation plans (excluding
warrants and rights warrants and rights securities reflected in column (a))
(a) (b) (c)
-------------------- --------------------- ------------------------------------
Equity compensation plans
approved by security holders 6,407,928 $3.13 830,072
Equity compensation plans
not approved
by security holders -- -- --
-------------------- --------------------- ------------------------------------
Total 6,407,928 $3.13 830,072
==================== ===================== ====================================
DIRECTORS
The Board of Directors did not have any formal meetings during the
fiscal year ended June 30, 2005, but acted on numerous occasions by unanimous
written consent. No compensation was paid to any director for his or her
services to the Board of Directors or any committee. The only standing committee
of the Board of Directors is the Audit Committee, whose members are Messrs.
Canarick and Chang. The Audit Committee periodically consults with the Company's
management and independent public accountants of financial matters, including
the Company's internal financial controls and procedures. The Audit Committee
met five times in the fiscal year ended June 30, 2005, and all members attended
the meetings.
The Company does not have a standing nominating committee or
compensation committee. With respect to nominating and compensation matters, the
entire Board performs these functions. At such time, if any, as the Board
composition changes or the Board otherwise deems appropriate, the Company may
establish a separate nominating and or compensation committee. As a result, the
entire Board participates in the consideration of Board nominees and nominated
the candidates for election named in this Proxy Statement.
The Company has determined that due to the beneficial ownership by E.
Gerald Kay and certain of his family members of greater than 50% of the Common
Stock of the Company outstanding as of October 1, 2005, the Company is a
"controlled company" as defined in the American Stock Exchange listing
standards. As such, the Company is exempt from certain requirements of the
American Stock Exchange listing standards, including the requirement to maintain
a majority of independent directors on the Company's Board of Directors and the
requirements regarding the determination of compensation of executive officers
and the nomination of directors by independent directors.
6
EXECUTIVE OFFICERS
The following individual is an executive officer of the Company but is
not a Director or Nominee for Director:
Eric Friedman, age 57, has been the Chief Financial Officer and
Treasurer of the Company from June 1996 through April 2005 and from August 2005
through the present. From June 1978 through May 1996, he was a partner in
Shachat and Simson, a certified public accounting firm that audited the
Company's financial statements from June 1976 until June 1995. Mr. Friedman was
a director of Wire One Technologies, Inc., a publicly traded video conferencing
and communications company until his resignation in June 2001.
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended June 30, 2005,
2004 and 2003, certain compensation information as to the Chief Executive
Officer and each of the next four most highly compensated executive officers of
the Company who served as an executive officer during the fiscal year ended June
30, 2005, and whose salary and bonus exceeded $100,000 in 2005 (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------------------- ----------------------
Securities Underlying All Other
Name and Principal Position Year Salary Bonus Stock Options Compensation
--------------------------- ---- ------ ----- --------------------- ------------
E. Gerald Kay 2005 $97,875 - 100,000 $ 9,050 (1)(2)
Chairman of the Board 2004 97,500 - 100,000 14,100 (1)(2)
and Chief Executive Officer 2003 97,500 $50,000 400,000 27,817 (1)(2)(3)
Robert B. Kay 2005 24,996 - 100,000 180,000 (4)
President and Chief 2004 24,996 - 100,000 180,000 (4)
Executive Officer, Paxis 2003 5,288 - 200,000 45,000 (4)
Pharmaceuticals, Inc.
Eric Friedman 2005 200,769 - 100,000 6,000 (1)(2)
Chief Financial Officer 2004 200,000 - 100,000 7,767 (1)(2)
and Vice President 2003 174,664 8,500 75,000 5,103 (1)(2)
Riva Kay Sheppard 2005 109,980 - 100,000 7,800 (1)(2)
Vice President 2004 109,980 - 100,000 7,800 (1)(2)
2003 109,980 10,000 100,000 7,650 (1)(2)
Christina Kay 2005 108,325 - 100,000 7,800 (1)(2)
Vice President 2004 99,994 - 100,000 8,400 (1)(2)
2003 99,994 10,000 100,000 7,929 (1)(2)
--------------
(1) The disclosed amount includes the Company's matching contributions under the
Company's 401(k) plan.
(2) The Company also provides the individuals with the use of a company car.
(3) Includes the Company's portion of premiums amounting to $18,817 during the
fiscal year ended June 30, 2003 on a split dollar life insurance arrangement
on Mr. Kay's life.
(4) Represents consulting fees paid to EVJ, LLC, of which Mr. Kay is the
manager.
7
OPTION/SAR GRANTS
DURING THE FISCAL YEAR ENDED JUNE 30, 2005
The following table sets forth individual grants of stock options by
INB pursuant to the Integrated Health Technologies, Inc. 2001 Stock Option Plan
to the Named Executive Officers during the fiscal year ended June 30, 2005.
% of Total
Granted to
Securities Options Employees in Exercise Expiration
Name Granted (#)(1) Fiscal Year Price (2) Date
----------------- ------------------ ------------ ---------- ------------------
E. Gerald Kay 14,430 1.4% $6.93 September 21, 2010
E. Gerald Kay 85,570 8.1% 6.93 September 21, 2015
Eric Friedman 100,000 9.5% 6.30 September 21, 2015
Robert B. Kay 100,000 9.5% 6.30 September 21, 2015
Riva Kay Sheppard 100,000 9.5% 6.30 September 21, 2015
Christina Kay 100,000 9.5% 6.30 September 21, 2015
-----------------
(1) The date of grant for these options was September 21, 2004, which become
exercisable on September 21, 2005.
(2) The exercise price of the options is equal to the fair market value of
shares of Common Stock of the Company on the date of grant of the options
except for the 100,000 of stock options granted to Mr. Kay, which was equal
to 110% of the fair market value on the date of grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following tables sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held at the end of the fiscal year ended June 30,
2005 based on the last sale price of a share of Common Stock on June 30, 2005 of
$3.79.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Acquired on Value Options at Fiscal Year at Fiscal Year End ($)
Exercise Realized (1) End (#) Exercisable / Exercisable /
Name (#) ($) Unexercisable Unexercisable (2)
---------------------- ----------- ------------ ----------------------- ----------------------
E. Gerald Kay -- -- 1,457,026 / 100,000 4,144,479 / --
Robert B. Kay -- -- 300,000 / 100,000 588,000 / --
Eric Friedman 10,000 66,000 581,666 / 100,000 1,204,065 / --
Riva Kay Sheppard -- -- 616,666 / 100,000 1,326,164 / --
Christina Kay -- -- 616,666 / 100,000 1,326,164 / --
----------------------
(1) Represents the aggregate market value of the shares converted by the options
on the date of exercise less the aggregate exercise price paid by the
executive.
(2) Based upon the fair market value of the shares of Common Stock on
June 30, 2005 ($3.79), less the exercise price per share.
8
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Warehouse and office facilities are leased from Vitamin Realty
Associates, L.L.C., a limited liability company, which is 90% owned by E. Gerald
Kay, Riva Kay Sheppard and Christina Kay (all stockholders and directors of the
Company) and 10% owned by Eric Friedman, the Company's Chief Financial Officer.
The lease was effective on January 10, 1997 and provides for minimum annual
rentals of $346,000 through January 10, 2002, plus increases in real estate
taxes and building operating expenses. At its option, the Company has the right
to renew the lease for an additional five-year period. On April 28, 2000 the
lease was amended reducing the square footage and extending the lease to May 31,
2015.
PROPOSAL NO. 2 APPROVAL OF AMENDMENT OF STOCK OPTION PLAN
At the Annual Meeting, stockholders will be asked to approve an
amendment to the Integrated Health Technologies, Inc. 2001 Stock Option Plan
(the "Option Plan") to increase by 2,000,000 the number of shares of Common
Stock reserved for issuance under the Option Plan to an aggregate of 11,000,000
shares. The Board of Directors approved the amendment on October 1, 2005. The
amendments and the Option Plan are summarized below. A copy of the Option Plan
is available upon a stockholder's written request to the Company, 225 Long Ave.,
Hillside, New Jersey, 07205, Attention: Secretary.
Description of the Amendment
The amendment increases by 2,000,000 the number of shares of Common
Stock reserved for issuance under the Option Plan to an aggregate of 11,000,000
shares. If approved by the stockholders, the amendment shall be effective
immediately.
Reasons for the Amendment
The Board of Directors believes that stock options are an important
incentive for attracting, retaining and motivating employees and officers
through the opportunity of equity participation. In the view of the Board of
Directors, stock options uniquely focus the attention of the officers and
employees on the Company's goal of increasing shareholder value, since the
options only provide a reward to the extent that the stock price increases. The
Board of Directors further believes that stock option grants have been a key
element in the Company's growth. The amendment to increase the number of shares
of Common Stock under the Option Plan is intended to enable the Company to
continue to have an adequate number of shares of Common Stock available for
stock options.
As of September 30, 2005, 805,072 shares of Common Stock remained
available for the grant of stock options under the Option Plan. Based on the
number of shares remaining under the Option Plan, and the shares anticipated to
be needed for the granting of options to attract and retain key employees,
sufficient shares are not expected to be available for the grant of stock
options without increasing the number of shares available under the Option Plan.
9
Description of the Option Plan
The Option Plan was adopted by the Board of Directors on October 1,
2001. The Option Plan provides for the granting of either "incentive stock
options" or "non-qualified stock options" to acquire Common Stock (collectively,
"Options") to employees, officers, directors, and consultants of the Company.
The Option Plan also provides for the granting of restricted stock to eligible
participants in addition to or in lieu of, stock options. An aggregate of
11,000,000 shares of Common Stock have been reserved for issuance under the
Option Plan, subject to stockholder approval of the amendment. In the event that
any outstanding options expire or are terminated or forfeited, the shares
allocable to such expired, terminated or forfeited Options shall again become
available for the granting of Options.
Our Board of Directors approved the Option Plan on October 1, 2001 to
provide for the granting of either "incentive stock options" or "non-qualified
stock options." The Option Plan does not pose a limit or restriction on the
number of shares, which our Board of Directors may grant as either incentive or
non-qualified stock options. Under present law, however, incentive stock options
may only be granted to employees. The granting of incentive stock options allows
the Company to reward key employees for their contribution to the growth of the
Company and to the appreciation in stockholder value. In not restricting the
number of available shares for either incentive or non-qualified stock options,
our Board of Directors will have greater flexibility in determining the type of
options that may be granted.
Our Board of Directors approved the Option Plan to also provide for the
granting of restricted stock to eligible participants in addition to, or in lieu
of, stock options. The Board of Directors believes that it is prudent to have
the flexibility to grant a variety of stock-based awards to eligible grantees,
in order to accomplish our goal of giving the necessary incentive to our
employees, officers, directors and consultants.
Under the Option Plan, our Board of Directors has the authority to
determine when options will vest and when options may be exercised, subject to
applicable law. This provides our Board of Directors the flexibility necessary
to determine the terms and conditions of options that are to be granted. By
giving the Board of Directors the discretion to decide the vesting and exercise
periods, our Board of Directors may tailor option grants to individual grantees,
taking into account the performance of the Company and the particular
contributions made by the grantee.
Optionees receive the right to purchase a specified number of shares of
Common Stock at a specified option price and subject to such other terms and
conditions as are specified in connection with the option grant. We may grant
options at an exercise price less than, equal to or greater than the fair market
value of our Common Stock on the date of grant. Under present law, incentive
stock options and options intended to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code may not be granted at an
exercise price less than the fair market value of the common stock on the date
of grant or less than 110% of the fair market value in the case of incentive
stock options granted to optionees holding more than 10% of the voting power of
the Company. The Option Plan permits our Board of Directors to determine how
optionees may pay the exercise price of their options, including by cash or
check, or in connection with a "cashless exercise" through a broker, by
surrender to the Company of shares of Common Stock, by delivery to the Company
of a promissory note, or by any combination of the permitted forms of payment.
Our Board of Directors administers the Option Plan. Our Board of
Directors has the authority to adopt, amend and repeal the rules, guidelines and
practices of the Option Plan and to interpret its provisions. It may delegate
authority under the Option Plan to one or more committees of the Board of
Directors and, subject to certain limitations to a member of our Board of
Directors or, to one or more of our executive officers. Subject to any
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applicable limitations contained in the Option Plan, our Board of Directors or
any committee, member of the Board of Directors or executive officer to whom our
Board of Directors delegates authority, as the case may be, selects the
recipients of awards and determines:
* The number of shares of Common Stock covered by options and the dates
upon which such options become exercisable;
* The exercise price of options;
* The duration of options; and
* The number of shares of Common Stock subject to any restricted
stock or other stock-based awards and the terms and conditions of
such awards, including the conditions for repurchase, issue price
and repurchase price.
Future grants of options under the Option Plan are in the discretion of
the Board and, thus the amount of such grants, if any, are not presently
determinable.
The market value of the Common Stock as of the close of business on
September 30, 2005 as reflected by the closing price of the Common Stock on the
American Stock Exchange, was $2.06 per share.
Recommendation and Vote
Approval of the amendment to the Company's Option Plan requires the affirmative
vote of a majority of the shares of Common Stock present, in person or by proxy,
at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND
THE COMPANY'S OPTION PLAN.
PROPOSAL NO. 3 RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of INB has appointed the firm of Amper,
Politziner & Mattia, P.C., independent auditors, to audit the consolidated
financial statements of Integrated BioPharma, Inc. and its subsidiaries for the
fiscal year ending June 30, 2006, subject to ratification by the INB
Stockholders.
A member of Amper, Politziner & Mattia, P.C. is expected to be present
at the Annual Meeting and to be provided with the opportunity to make a
statement if such member desires to do so and to be available to respond to
appropriate questions from shareholders.
Representatives of Amper, Politziner & Mattia, P.C. normally attend
most meetings of the Audit Committee. The Audit Committee's policy is to
pre-approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is generally provided
for up to one fiscal quarter and any pre-approval is detailed as to the
particular service or category of services. The independent auditor and
management are required to periodically report to the Audit Committee regarding
the extent of services provided by the independent auditor in accordance with
this pre-approval.
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The Audit Committee, on an annual basis, reviews the services performed
by Amper,Politziner & Miattia, P.C., and reviews and approves the fees charged
by Amper, Politziner & Mattia, P.C.
Audit Fees
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the fiscal year ended
June 30, 2005 and 2004 and for the reviews of the financial statements included
in the Company's Quarterly Reports on Form 10-QSB for those fiscal years, were
$172,500 and $140,000, respectively, all of which are attributable to Amper,
Politziner & Mattia, P.C.
Financial Information Systems Design and Implementation Fees
Amper, Politziner & Mattia, P.C. did not render professional services
relating to financial information systems design and implementation for the
fiscal year ended June 30, 2005
All Other Fees
Amper, Politziner & Mattia, P.C. received $15,700 in fees for other
services for the fiscal year ended June 30, 2004. These fees relate to services
provided for acquisition, tax and research advice.
Recommendation and Vote
Approval of the Independent Auditors Proposal requires the affirmative vote of a
majority of the shares of Common Stock present, in person or by proxy, at the
Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THE APPROVAL OF THE INDEPENDENT AUDITORS PROPOSAL.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company (the
"Audit Committee") is composed of two (2) directors. Each of the two members of
the committee are independent. The Board of Directors has adopted an Audit
Committee Charter. Management is responsible for the Company's internal control
and financial reporting process. The Company's independent public accountants
are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with generally accepted auditing
standards and to issue a report thereon. The Audit Committee's responsibility is
to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with
Management and the Company's independent public accountants. Management
represented to the Audit Committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated
financial statements with Management and the Company's independent public
accountants. The Audit Committee discussed with the independent public
accountants matters required to be discussed by Statement of Auditing Standards
Numbers 90 and 61 (communication with Audit Committees). The Company's
independent public accountants also provided to the Audit Committee the written
disclosures required by Independence Standard No. 1 (independence discussions
with Audit Committee), and the Audit Committee discussed with the independent
public accountants that firm's independence. The Audit Committee has also
considered whether the independent auditors' provision of information technology
and other non-audit services to the Company is compatible with the auditor's
independence.
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Based upon the Audit Committee's discussions with Management and the
independent public accountants and the Audit Committee's review of the
representation of management and the report of the independent public
accountants, the Audit Committee recommended that the Board of Directors include
the audited consolidated financial statements in the Company's Annual Report on
Form 10-KSB for the year ended June 30, 2005 filed with the Securities and
Exchange Commission.
The foregoing has been approved by all members of the Audit Committee.
Glenn Chang
Robert Canarick
STOCKHOLDER PROPOSALS AND COMMUNICATIONS
Stockholder proposals to be included in the Company's proxy statement
with respect to the 2006 Annual Meeting of Stockholders must be received by the
Company at its Executive Offices located at 225 Long Avenue, Hillside, New
Jersey 07205 no later than July 5, 2006. All such proposals are subject to the
applicable rules and requirements of the Securities and Exchange Commission.
The Board of Directors does not have a formal process for stockholders
to send communications (including director nominations) to the Board. Due to the
infrequency of stockholder communications to the Board, the Board does not
believe that a formal process is necessary. Written communications to the Board
may be sent to the Board at the Company's chief executive offices at Integrated
BioPharma, Inc., 225 Long Avenue, New Jersey 07205, and the Company will
promptly circulate such communications to all members of the Board (or to those
particular directors to whom such communication is specifically addressed). A
shareholder who intends to nominate an individual for election to the Board of
Directors (other than a candidate proposed by the Board of Directors) must do so
in accordance with the foregoing procedures.
DISCRETIONARY AUTHORITY
A duly executed proxy given in connection with the Company's 2005
Annual Meeting of Stockholders will confer discretionary authority on the
proxies named therein, or any of them, to vote at such meeting on any matter of
which the Company does not have written notice on or before September 14, 2005,
which is forty-five (45) days prior to the date on which the Company is first
mailing its proxy materials for its 2005 Annual Meeting of Stockholders, without
advice in the Company 2005 Proxy Statement as to the nature of such matter.
OTHER BUSINESS OF THE MEETING
The Company is not aware of any matters to come before the Annual
Meeting other than those stated in this Proxy Statement. However, in as much as
matters of which management of the Company is not now aware may come before the
Annual Meeting or any adjournment, the proxies confer discretionary authority
with respect to acting thereon, and the persons named in such proxies intend to
vote, act and consent in accordance with their discretion with respect thereto.
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ADDITIONAL INFORMATION
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
JUNE 30, 2005 MAY BE OBTAINED WITHOUT CHARGE BY ANY STOCKHOLDER TO WHOM THIS
PROXY STATEMENT IS SENT, UPON WRITTEN REQUEST TO THE CHIEF FINANCIAL OFFICER,
INTEGRATED BIOPHARMA, INC., 225 LONG AVENUE, HILLSIDE, NEW JERSEY 07205.
By order of the Board of Directors
/s/ E. Gerald Kay
E. Gerald Kay
Chief Executive Officer
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October 28, 2005