SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
GENEREX BIOTECHNOLOGY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
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GENEREX BIOTECHNOLOGY CORPORATION
33 Harbour Square
Suite 202
Toronto, Ontario, Canada M5J 2G2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Generex Biotechnology Corporation ("Generex") that will be held on Monday, April
23, 2001, at 10:00 a.m. (local time), at St. Lawrence Hall, 157 King Street
East, Toronto, Ontario, Canada M5E 1C4, for the following purposes, as set forth
in the accompanying proxy statement:
1. To elect six directors;
2. To ratify the appointment of Deloitte & Touche, L.L.P. as independent
public accountants for Generex for the fiscal year ending July 31,
2001;
3. To ratify the adoption and approval by the Board of Directors of
Generex's 2000 Stock Option Plan; and
4. To transact such other business as may properly come before the meeting
and any adjournments or postponements thereof.
The Board of Directors has established the close of business on March 5,
2001 as the record date for the determination of stockholders entitled to
receive notice of, and to vote at, the annual meeting and any adjournment or
postponement thereof.
YOU ARE URGED TO REVIEW CAREFULLY THE ACCOMPANYING PROXY STATEMENT AND TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
You may revoke your proxy at any time before it has been voted. You are
cordially invited to attend the annual meeting in person if it is convenient for
you to do so.
By order of the Board of Directors,
/s/ Rose C. Perri
Rose C. Perri
Secretary
March 23, 2001
GENEREX BIOTECHNOLOGY CORPORATION
PROXY STATEMENT
General Information
This proxy statement is provided to the stockholders of Generex
Biotechnology Corporation ("Generex") in connection with the solicitation by the
Board of Directors of Generex of proxies for use at the annual meeting of
stockholders of Generex to be held on Monday, April 23, 2001, at 10:00 a.m.
(local time), at St. Lawrence Hall, 157 King Street East, Toronto, Ontario,
Canada M5E 1C4, and any adjournments or postponements thereof. A form of proxy
is enclosed for use at the annual meeting. Proxies properly executed and
returned in a timely manner will be voted at the annual meeting in accordance
with the directions specified therein. If no direction is indicated, they will
be voted for the election of the nominees named herein as directors, for the
appointment of Deloitte & Touche L.L.P. as Generex's independent public
accountants, for the approval and adoption of the 2000 Stock Option Plan, and on
other matters presented for a vote, in accordance with the judgment of the
persons acting under the proxies. The persons named as proxies were selected by
the Board of Directors and are present members of the executive management of
Generex.
Stockholders voting by proxy may revoke that proxy at any time before it is
voted at the annual meeting by delivering written notice to the Secretary of
Generex, by delivering a proxy bearing a later date or by attending the annual
meeting in person and casting a ballot.
Generex's principal executive offices are located at 33 Harbour Square,
Suite 202, Toronto, Ontario, Canada M5J 2G2, and its telephone number is (416)
364-2551. Proxy materials are first being mailed to stockholders beginning on or
about March 23, 2001.
Shares Outstanding, Voting Rights and Vote Required
Only stockholders of record at the close of business on March 5, 2001 are
entitled to vote at the annual meeting. The only voting stock of Generex
outstanding and entitled to vote at the annual meeting is its Common Stock,
$.001 par value per share (the "Common Stock"), of which 19,232,018 shares were
outstanding as of the close of business on March 5, 2001. Each share of Common
Stock issued and outstanding is entitled to one vote on matters properly
submitted at the annual meeting. Cumulative voting is not permitted under
Generex's Restated Certificate of Incorporation.
The presence, in person or by proxy, of the holders of a majority of the
total issued and outstanding shares of Common Stock entitled to vote at the
annual meeting is necessary to constitute a quorum for the transaction of
business at the annual meeting. Abstentions and broker non-votes will be counted
for purposes of determining the presence or absence of a quorum. A broker
non-vote occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received instructions from
the beneficial owner. Abstentions will be counted in tabulating votes cast on
the proposals presented to stockholders and will have the same effect as
negative votes. Broker non-votes will not be counted in tabulating votes cast on
the proposals presented to stockholders. Votes cast in person or by proxy at the
annual meeting will be tabulated by the election inspectors appointed for the
meeting.
Directors will be elected by a plurality of the votes of the shares present
or represented by proxy at the annual meeting and entitled to vote on the
election of directors. The proposals to ratify the appointment of Deloitte &
Touche L.L.P. as Generex's independent public accountants and the approval and
adoption of the 2000 Stock Option Plan require the affirmative vote of a
majority of the votes of the shares present or represented by proxy at the
annual meeting and cast on such proposals. The Board of Directors recommends
voting (1) FOR the election of the nominees named herein for directors, (2) FOR
the appointment of Deloitte & Touche L.L.P. as Generex's independent public
accountants for fiscal year 2001, and (3) FOR the approval and adoption of the
2000 Stock Option Plan.
ELECTION OF DIRECTORS
(Proposal 1)
Six directors are to be elected at the annual meeting of stockholders. All
directors will be elected to hold office until the next annual meeting of
stockholders following election and until their successors are duly elected and
qualified.
The persons named below have been designated by the Board of Directors as
nominees for election as directors. All nominees currently serve as directors of
Generex. The individuals named in the enclosed proxy intend to vote all proxies
received by them for the nominees listed below unless otherwise instructed. If
you do not wish your shares to be voted for any of the nominees, you may so
indicate on the proxy. If, for any reason, any of the nominees shall become
unavailable for election, the individuals named in the enclosed proxy may
exercise their discretion to vote for any substitutes proposed by the Board of
Directors. At this time, the Board of Directors knows of no reason why any of
the nominees might be unavailable to serve.
Name Age Position Held with Generex
---- --- --------------------------
Anna E. Gluskin 49 President, Chief Executive Officer and Director
William M. Hawke, M.D. 59 Director
Pankaj Modi, Ph.D. 46 Vice President, Research & Development and Director
E. Mark Perri 39 Chairman, Chief Financial Officer and Director
Rose C. Perri 33 Chief Operating Officer, Treasurer, Secretary and Director
Jan Michael Rosen 49 Director
Anna E. Gluskin - Director since September 1997. Ms. Gluskin has served
as the President and Chief Executive Officer of Generex since October 1997. She
held comparable positions with Generex Pharmaceuticals, Inc. from its formation
in 1995 until its acquisition by Generex in October 1997.
Wiliam M. Hawke, M.D. - Director since March 2000. Dr. Hawke presently
is a Professor in the Departments of Otolaryngology and Pathology at the
University of Toronto, and is on the staff of the Departments of Otolaryngology
at St. Joseph's Health Center, The Toronto Hospital and Mount Sinai Hospital,
all located in Toronto. He has held these positions for more than the previous
five years. Dr. Hawke has approximately thirty years experience as a medical
researcher, educator and practitioner.
Pankaj Modi, Ph.D. - Director since September 1997. Dr. Modi has served
as Vice President, Research and Development, since October 1997. Prior to that
time, Dr. Modi was Director of Insulin Research for Generex Pharmaceuticals,
Inc., a position he assumed in October 1996. Prior to joining Generex
Pharmaceuticals Inc., Dr. Modi was engaged in independent research and was
employed as a senior research assistant at McMaster University in Hamilton,
Ontario from February 1994 through October 1996.
E. Mark Perri - Director since September 1997. Mr. Perri has served as
the Chairman and Chief Financial Officer of Generex since October 1997. He held
comparable positions with Generex Pharmaceuticals, Inc. from its formation in
1995 until its acquisition by Generex in October 1997.
Rose C. Perri - Director since September 1997. Ms. Perri has served as
Treasurer and Secretary of Generex since October 1997, and as Chief Operating
Officer since August 1998. She was an officer of Generex Pharmaceuticals, Inc.
from its formation in 1995 until its acquisition by Generex in October 1997.
Jan Michael Rosen - Director since August 2000. Mr. Rosen has been a
principal in a number of related travel management and hotel marketing
businesses since 1978. The principal companies in this group, all of which are
headquartered in Ontario, are Uniworld Travel & Tours, Inc., Nevada Vacations,
Inc., Casino Vacations, Inc. and Casino Tours, Inc. Mr. Rosen presently serves
as the President or a Vice President, and the Chief Financial Officer, of each
of these companies. Mr. Rosen is an accountant by training, and was engaged in
the private practice of accounting prior to 1978.
Mark Perri and Rose Perri are siblings. There are no other family
relationships among our officers and directors.
The Board of Directors Recommends a Vote FOR
the Election of the Above Named Nominees
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PROPOSAL TO RATIFY THE APPOINTMENT OF
DELOITTE & TOUCHE L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal 2)
The Board of Directors of Generex has selected Deloitte & Touche L.L.P.
("Deloitte Touche") to serve as the independent public accountants to audit the
financial statements of Generex and its subsidiaries for the fiscal year ending
July 31, 2001. WithumSmith+Brown has been employed to perform this function for
Generex since September 1998. Representatives of WithumSmith+Brown and Deloitte
Touche are expected to be present at the annual meeting for the purpose of
making a statement, should they so desire, and to respond to appropriate
questions.
The decision to appoint Deloitte Touche as independent public
accountants replacing WithumSmith+Brown was approved by the Audit Committee of
the Board of Directors. WithumSmith+Brown did not decline to stand for
re-election and WithumSmith+Brown's reports on financial statements for the last
two fiscal years did not contain an adverse opinion, disclaimer of opinion or
qualification as to uncertainty, audit scope or accounting principles. There
have been no disagreements with WithumSmith+Brown in the last two fiscal years
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
During the last two fiscal years, WithumSmith+Brown did NOT advise Generex that:
o The internal controls necessary for us to develop reliable financial
statements did not exist;
o Information had come to their attention that led them to believe that they
could no longer rely on management's representations or that made them
unwilling to be associated with the financial statements prepared by
management;
o They needed to expand the scope of their audit or that information existed,
that had come to their attention during the last two fiscal years, that if
further investigated may (i) materially impact the fairness or reliability
of either a previously issued audit report or the underlying financial
statements, or the financial statements issued or to be issued covering the
fiscal period(s) subsequent to the date of the most recent financial
statements covered by an audit report (including information that may
prevent them from rendering any unqualified audit report on those financial
statements) or (ii) cause them to be unwilling to rely on management's
representations or be associated with our financial statements; and that
due to their replacement or for any other reason, they did not so expand
the scope of their audit or conduct further investigation; or
o Information has come to their attention that they have concluded materially
impacts the fairness or reliability of either (i) a previously issued audit
report or the underlying financial statements, or (ii) the financial
statements issued or to be issued covering the fiscal period(s) subsequent
to the date of the most recent financial statements covered by an audit
report (including information that, unless resolved to their satisfaction,
would prevent them from rendering an unqualified audit report on those
financial statements); and due to their replacement, or for any other
reason, the issue has not been resolved to their satisfaction prior to
their replacement.
If the stockholders do not ratify the appointment of Deloitte Touche as
independent public accountants, the Audit Committee of the Board of Directors
will investigate the reasons for rejection by the stockholders and the Board of
Directors will reconsider the appointment.
The Board of Directors Recommends a Vote FOR
the Appointment of Deloitte Touche as Generex's
Independent Public Accountants for the Fiscal Year Ending July 31, 2001
3
PROPOSAL TO APPROVE THE
GENEREX BIOTECHNOLOGY CORPORATION
2000 STOCK OPTION PLAN
(Proposal 3)
The Board of Directors has adopted, subject to stockholder approval,
the Generex Biotechnology Corporation 2000 Stock Option Plan (the "2000 Plan").
The Board of Directors believes that the 2000 Plan will provide an additional
incentive to key employees, consultants, advisors and directors to enter into
and remain in the service or employ of Generex by providing such individuals
with an opportunity to acquire or increase their proprietary interest in
Generex.
A copy of the 2000 Plan will be provided to stockholders without charge
upon written request to the Secretary of Generex, 33 Harbour Square, Suite 202,
Toronto, Ontario, Canada M5J 2G2. A summary of the principal features of the
2000 Plan follows.
Summary Description of the 2000 Plan
The 2000 Plan provides opportunities for participants to acquire shares
of Generex Common Stock upon the exercise of stock options granted under the
2000 Plan. A total of 2,000,000 shares of Common Stock are available for
issuance under the 2000 Plan. As of July 31, 2000, such shares would have had a
market value of $15,125,000, based on the $7.5625 closing price of the Common
Stock. If a stock option granted under the 2000 Plan expires, lapses or is
terminated for any reason, the forfeited stock again becomes available for
issuance under the 2000 Plan.
Awards under the 2000 Plan may be in the form of incentive stock
options ("ISOs") within the meaning of section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), and options that are not incentive stock
options ("Non-ISOs") (collectively, "Options").
The 2000 Plan will be administered by the Board of Directors or by a
committee appointed by the Board of Directors and composed of at least three of
its members. To date, the Board of Directors has not appointed such a committee.
References hereafter to the "Committee" shall be deemed to refer to the Board of
Directors, or such a committee, which may be appointed in the future. The
Committee has the authority to determine: (i) the persons to whom and the time
at which Options shall be granted; (ii) the number of shares of Common Stock to
be subject to Options granted; (iii) the price and other terms and conditions of
Options granted, including whether an Option is an ISO or a Non-ISO. The
Committee also has the authority to interpret and construe the 2000 Plan.
Options may be granted under the 2000 Plan to employees, consultants, advisors
and directors of Generex and its subsidiary corporations; provided, however,
that ISOs may only be granted to employees. Approximately 26 individuals are
eligible to participate in the 2000 Plan, as of January 31, 2001.
The exercise price of ISOs granted under the 2000 Plan shall be at
least equal to the fair market value of the Common Stock on the date the ISO is
granted (110 percent of the fair market value in the case of an ISO granted to
an individual who at the time of the grant owns ten percent of the combined
voting power of Generex capital stock (a "Ten Percent Owner")). The fair market
value of the Common Stock shall be determined by the Committee. Upon exercise of
an Option, a participant shall pay the exercise price in cash, by certified
check or in such other mode of payment as the Committee may approve.
In the event a participant's employment with Generex or its subsidiary
corporations is terminated for any reason, a participant may exercise an Option
only to the extent it was exercisable on the participant's date of termination.
An Option must be exercised prior to the earlier of (i) the expiration of three
months or such shorter period as the Committee may select (one year in the case
of disability or death) after the termination date or (ii) the expiration date
of the Option, which may not exceed ten years from the date of grant (five years
in the case of an ISO granted to a Ten Percent Owner). However, in the event of
a participant's termination for cause (as defined in the 2000 Plan and
determined by the Committee), the participant's Option shall terminate
immediately and the participant automatically shall forfeit all Common Stock for
which Generex has not yet delivered share certificates, upon refund of the
exercise price.
The Committee may adjust the number of shares of Common Stock available
for issuance under the 2000 Plan or subject to Options granted under the 2000
Plan at any time to reflect any change in the capital structure of Generex
affecting outstanding shares of Common Stock, whether through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, exchange of shares or other like change in the capital
structure of Generex.
In the event of a change in control (as defined in the 2000 Plan), the
Committee may take whatever action it deems necessary with respect to
outstanding Options, including accelerating the vesting or expiration to a date
no earlier than 30 days after notice of such acceleration is provided to the
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participant; provided, however, that the Committee may accelerate the expiration
date of an Option only where the change in control entails the dissolution or
liquidation of Generex or the sale of substantially all of the assets of
Generex.
No Option may be transferred, except by will or the laws of descent and
distribution, and in the case of a Non-ISO, as expressly set forth in connection
with the award.
Federal Income Tax Consequences
The following description of federal income tax consequences is based
on current law and interpretations.
ISOs. In general, the value of an ISO is not included in the
participant's income at the time of grant, and the participant does not
recognize income on exercise of an ISO for the purpose of computing regular
federal income tax. However, when calculating income for alternative minimum tax
purposes, the excess, if any, of the fair market value of the shares acquired
over the exercise price (the "Spread") generally will be considered part of
income. At the subsequent sale of Common Stock received through the exercise of
an ISO, all gain on the sale of the Common Stock (as long as the Common Stock
has been held for one year after exercise and two years after grant) will be
characterized as capital gain or loss, and Generex will not be entitled to any
federal income tax deduction with respect to such gain. If the Common Stock has
been held for at least one year, the capital gain or loss will be taxed as
long-term capital gain or loss. If a participant disposes of ISO Common Stock
before the holding period has expired (a "Disqualifying Disposition"), the
Spread (up to the amount of the gain on disposition) will be ordinary income at
the time of such Disqualifying Disposition, and Generex will be entitled to a
federal income tax deduction. A participant must recognize as ordinary income
the gain on the disposition.
Non-ISOs. In general, the value of a Non-ISO is not included in the
participant's income at the time of grant, unless the Non-ISO Common Stock has a
"readily ascertainable fair market value" at the date of grant. It is not
anticipated that any Non-ISO will have a "readily ascertainable fair market
value" at the date of grant. On exercise, the difference between the exercise
price of a Non-ISO and the fair market value of the Common Stock received
generally will be recognized as ordinary income, subject to federal income tax
withholding, and will be allowed as a deduction to Generex. At the subsequent
sale of Common Stock received through the exercise of a Non-ISO, all gain on the
sale of the Common Stock will be characterized as capital gain or loss. If the
Common Stock has been held for at least one year, the capital gain or loss will
be taxed as long-term capital gain or loss.
Awards under the 2000 Plan
Subject to stockholder approval of the 2000 Plan, the Board of
Directors has granted options under the 2000 Plan as follows to each of the
executives named in the Summary Compensation Table set forth at page 8 of this
Proxy Statement, all executives as a group, all non-executive directors as a
group and all non-executive officer employees as a group. The exercise price of
the options ranges from $7.5625 per share to $11.625 per share.
Awards Granted in Fiscal Year 2000 Under 2000 Stock Option Plan
---------------------------------------------------------------
Name Number of Options
---- -----------------
Anna E. Gluskin ................................................ 200,000
E. Mark Perri .................................................. 150,000
Rose C. Perri .................................................. 150,000
All executives, as a group (4 persons) ......................... 650,000
Non-executive directors, as a group (2 persons) ................ 40,000
All non-executive officer employees, as a group (22 persons) ... 603,150
Pursuant to the agreement under which Dr. Modi is compensated for his
services to Generex, Generex has agreed to grant to Dr. Modi options to purchase
150,000 shares of Generex Common Stock in each of the next ten fiscal years. The
options may be granted only under option plans of Generex that have been
approved by the stockholders of Generex. If the 2000 Plan is approved and
ratified, the 2000 Plan will be used to satisfy Generex's obligations to grant
options to Dr. Modi for so long as Common Stock remains available for issuance
under the 2000 Plan. See "Director's Compensation; Other Compensation" at page
10 for more details concerning the agreement under which Dr. Modi is
compensated.
The Board of Directors Recommends a Vote FOR
the Proposal to Ratify the 2000 Stock Option Plan
5
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business affairs of Generex are managed under the direction of the Board
of Directors. During the fiscal year ended July 31, 2000, Generex's Board of
Directors held 3 meetings and took action by unanimous written consent in lieu
of meetings 16 times.
The Board of Directors has established one committee, the Audit Committee.
The Audit Committee was established on March 1, 2000, and did not meet during
the fiscal year ended July 31, 2000. The Board has no standing Nominating
Committee or Compensation Committee.
The Audit Committee has the power to recommend the retention of the
independent public accountants for Generex and to consult with such independent
public accountants concerning the plan of audit, their report of audit and the
adequacy of internal controls. The Audit Committee is currently composed of
Messrs. Perri, Rosen and Dr. Hawke. The Board of Directors has adopted an Audit
Committee charter, a copy of which, as currently in effect, is attached to this
proxy statement as Exhibit A.
Generex's securities are listed on the Nasdaq National Market and are
governed by its listing standards. Dr. Hawke and Mr. Rosen meet the definition
of independence found in Rule 4200(a)(15) of the National Association of
Securities Dealers' ("NASD") listing standards. Mr. Perri is not considered
independent under these standards due to the fact that he is an executive
officer of Generex and he is the sibling of Rose Perri, who is also an executive
officer of Generex. Mr. Perri serves as the third member of the Audit Committee
ex officio.
During the fiscal year ended July 31, 2000, all of the directors attended
all of the Board of Directors meetings that were held.
Report of the Audit Committee
The Audit Committee has reviewed and discussed Generex's audited financial
statements for the fiscal year ended July 31, 2000 with management. The Audit
Committee has discussed with WithumSmith+Brown, Generex's independent public
accountants for the fiscal year ended July 31, 2000, the matters required to be
discussed by Statement on Auditing Standards No. 61. The Audit Committee has
received the written disclosures and the letter from WithumSmith+Brown required
by Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and has discussed with WithumSmith+Brown its independence.
Based on the review and discussions described above, among other things, the
Audit Committee recommended to the Board of Directors that the audited financial
statements be included in Generex's Annual Report on Form 10-K for the fiscal
year ended July 31, 2000.
Submitted by the Audit Committee
William M. Hawke, M.D.
Jan Michael Rosen
E. Mark Perri, ex officio
The foregoing Report of the Audit Committee shall not be deemed to be
soliciting material, to be filed with the Securities and Exchange Commission
(the "SEC") or to be incorporated by reference into any of Generex's previous or
future filings with the SEC, except as otherwise explicitly specified by Generex
in any such filing.
Report of the Board of Directors on Executive Compensation
The Board of Directors is responsible for overseeing the compensation
to be paid to the executive officers of Generex. Ms. Gluskin, Dr. Modi, Mr.
Perri and Ms. Perri, all of whom are both directors and executive officers of
Generex, participate in the discussions and decisions of the Board of Directors
concerning compensation to be paid to the executive officers of Generex
Compensation Philosophy. The goals of Generex's compensation program
are to (1) attract and retain executives and other employees who are committed
to the long-term success of the company and (2) align overall compensation with
the achievement of Generex's strategic objectives and the enhancement of
stockholder value over time. Generex's compensation philosophy has been to pay
employees, including executive officers, a modest cash salary reflective of its
status as a development phase company and to supplement that cash salary with
equity-based incentives (primarily grants of options), thereby
6
aligning overall compensation with the achievement of Generex's strategic
objectives and the enhancement of stockholder value. The compensation to be paid
to any individual has not been based on any particular mathematical formula.
Rather, the Board of Directors reviews objectives, accomplishments, performance
and compensation as a whole for each individual, taking into account the
recommendations of the Chief Executive Officer and the Chief Financial Officer,
and makes appropriate compensation determinations in the exercise of its
business judgment.
Chief Executive Officer Compensation. Ms. Gluskin's compensation for
the fiscal year ended July 31, 2000, was determined in accordance with the
compensation policies described above. Ms. Gluskin was paid a modest cash salary
of approximately $106,000 and was awarded options to purchase 300,000 shares of
Generex's Common Stock. This compensation package was considered fair and
reasonable in view of Ms. Gluskin's substantial contributions to the
accomplishments of the company for the fiscal year - which included being
elevated onto the Nasdaq National Market -- and was considered to give
appropriate incentives to Ms. Gluskin to continue to promote the strategic
objectives of the company and to enhance stockholder value.
Deductibility of Compensation. Section 162(m) of the Code does not
allow public companies to take a Federal income tax deduction for compensation
paid to certain executive officers, to the extent that compensation exceeds $1
million for any such officer in any fiscal year. This limitation does not apply
to compensation that qualifies as "performance-based compensation" under the
Code. However, the Board of Directors believes that at the present time it is
quite unlikely that the compensation paid to any executive officer will exceed
$1 million in any fiscal year. Therefore, the Board of Directors has not taken
any measures to date specifically to qualify any of the compensation paid to its
executive officers as "performance-based compensation" under the Code.
Submitted by the Board of Directors
Anna E. Gluskin
William M. Hawke, M.D.
Pankaj Modi, Ph.D.
E. Mark Perri
Rose C. Perri
Jan Michael Rosen
The foregoing Report of the Board of Directors on Executive
Compensation and the following Performance Graph shall not be deemed to be
soliciting material, to be filed with the SEC or to be incorporated by reference
into any of Generex's previous or future filings with the SEC, except as
otherwise explicitly specified by Generex in any such filing.
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return
on Generex's Common Stock with cumulative total returns of the Nasdaq National
Market (U.S. Companies) and the Nasdaq Biotechnology Index for the period
commencing February 5, 1998 (the date Generex's Common Stock was first listed
for trading on the Nasdaq over the counter market) and ending on December 29,
2000. The graph assumes that $100 was invested on February 5, 1998, in Generex's
Common Stock, the stocks in the Nasdaq National Market (U.S. Companies) and the
stocks comprising the Nasdaq Biotechnology Index, and that all dividends were
reinvested. Generex's Common Stock has been trading on the Nasdaq National
Market since May 5, 2000.
February 5, 1998 July 31, 1998 July 30, 1999 July 31, 2000 December 29, 2000
---------------- ------------- ------------- ------------- -----------------
Generex Biotechnology
Corporation ................. $100 130.208 106.25 126.042 189.583
The Nasdaq
National Market ............. $100 111.282 159.059 226.496 147.667
Nasdaq Biotechnology
Index ....................... $100 110.294 218.947 435.363 436.967
7
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that
Generex's directors and executive officers, and any persons who own more than
ten percent of Generex's Common Stock, file with the SEC initial reports of
ownership and reports of changes in ownership of the Common Stock and other
equity securities of Generex. Such persons are required by SEC regulations to
furnish Generex with copies of all such reports that they file. To the knowledge
of Generex, based upon its review of these reports, all Section 16 reports
required to be filed by our directors and executive officers during the fiscal
year ended July 31, 2000 were filed on a timely basis.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation of Executive Officers
The following table sets forth compensation to Anna Gluskin, Mark Perri
and Rose Perri in the last three fiscal years. Except as set forth in the table,
none of our officers received combined salary and bonus payments exceeding
$100,000 in those years.
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards
------
Name and Year Salary Bonus Other
Principal Ended ($) ($) Annual
Position July 31 (2) Compen- Options
sation (#)
Anna E. Gluskin (1), 2000 105,385 -0- * 300,000
Chief Executive 1999 136,483 -0- * -0-
Officer 1998 92,488 -0- * -0-
E. Mark Perri (1), 2000 103,249 -0- * 250,000
Chief Financial 1999 120,777 -0- * -0-
Officer 1998 92,488 -0- * -0-
Rose C. Perri (1), 2000 97,147 -0- * 250,000
Chief Operating 1999 120,777 -0- * -0-
Officer 1998 92,488 -0- * -0-
-----------------------
* Less than $50,000
(1) Portions of the salaries paid to Ms. Gluskin, Mr. Perri and Ms. Perri are
attributable to amounts paid indirectly through a management services agreement
with a corporation of which Ms. Gluskin, Mr. Perri and Ms. Perri are the owners.
(2) Salaries are stated in the table in U.S. dollars and are based on the
weighted average Canadian/U.S. dollar exchange rate for the years ended July 31,
2000, 1999 and 1998, respectively.
8
Stock Options
The following tables set forth certain information relating to stock
options granted to the officers named in the preceding Summary Compensation
table:
Percent of
Number of total options Potential realizable value at
Securities granted assumed annual rates of stock
Underlying to employees Exercise appreciation for option term
options in fiscal price Expiration ------------------------------
Name granted (#) year (%)(1) ($/Sh) date 5% ($) 10%($)
---- ----------- ------------- -------- ---------- ------ -----
Anna E. Gluskin 100,000 3.5 5.00 01/03/2005 138,000 305,255
200,000 7.0 7.5625 07/31/2005 325,953 923,396
E. Mark Perri 100,000 3.5 5.00 01/03/2005 138,000 305,255
150,000 5.3 7.5625 07/31/2005 244,465 692,547
Rose C. Perri 100,000 3.5 5.00 01/03/2005 138,000 305,255
150,000 5.3 7.5625 07/31/2005 244,465 692,547
------------------------
(1) Includes options granted to consultants and advisors.
Number of securities
underlying exercised Value of unexercised
options at in-the-money options
July 31, 2000 at July 31, 2000
Shares acquired Value (#) ($)
Name on exercise (#) realized ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
Anna E. Gluskin -0- -0- 100,000/200,000 (2) 256,250/0
E. Mark Perri -0- -0- 100,000/150,000 (2) 256,250/0
Rose C. Perri -0- -0- 100,000/150,000 (2) 256,250/0
-----------------------------------------------------------------------------------------------------------------------
(1) Based on the closing price of our Common Stock ($7.5625) at July 31, 2000.
(2) The unexercisable options will be exercisable immediately upon approval by
the stockholders of the 2000 Stock Option Plan.
Other Benefit Plans
We have no long term incentive plans or defined benefit or actuarial
pension plans, and have not repriced any options previously granted to the above
named officers.
9
Directors' Compensation; Other Compensation
None of our directors receive any cash compensation for their services
as directors. Dr. Hawke received options under the 1998 Plan to purchase 50,000
shares in January 2000 in consideration for consulting and advisory services
provided by Dr. Hawke prior to his becoming a director. Dr. Hawke was awarded
options under the 2000 Plan to purchase 20,000 shares of Common Stock in July
2000 in recognition of his service as a director. Mr. Rosen was awarded options
under the 2000 Plan to purchase 20,000 shares of Common Stock in August 2000
in recognition of his service as a director.
Dr. Modi is compensated through a consulting agreement, that was
originally entered into as of October 1, 1996, that was amended and supplemented
as of January 7, 1998, and that was further amended and supplemented as of
December 31, 2000. The parties to the agreement are Dr. Modi, Generex and
Generex Pharmaceuticals, Inc., a wholly-owned subsidiary of Generex. All
references to the consulting agreement in the following discussion relate to the
agreement, as amended and supplemented.
Pursuant to the terms of the consulting agreement, Dr. Modi holds the
position of Vice President, Research and Development, of Generex and Generex
Pharmaceuticals, Inc., and both Generex and Generex Pharmaceuticals, Inc. are
jointly and severally responsible for the payment to Dr. Modi of all amounts due
under the agreement. The agreement provides for Dr. Modi's term of service to
extend through July 31, 2010, subject to termination without cause by Dr. Modi
or Generex at any time after January 1, 2003, upon 12 months' prior written
notice.
The consulting agreement provides for an annual base compensation of
$250,000 a year, effective as of August 1, 2000, subject to annual increases. In
addition, Dr. Modi is entitled to receive certain bonus compensation during the
term of the agreement. During the first calendar quarter of 2001, a $300,000
bonus was paid to Dr. Modi in respect of Dr. Modi's services in securing the
development and license agreement between Generex and Eli Lilly and Company
("Lilly"). Dr. Modi will also receive certain additional bonus payments based
upon the achievement of certain milestones under the Lilly agreement or any
similar agreements entered into by Generex for rights granted to third parties
to develop, manufacture and/or market products based upon ideas, improvements,
designs or discoveries made or conceived by Dr. Modi.
The consulting agreement provides for Dr. Modi to be granted options to
purchase 150,000 shares of Generex Common Stock in each of the next ten fiscal
years, starting with the fiscal year ending July 31, 2001. The options may be
granted only under option plans of Generex that have been approved by the
stockholders.
In connection with amending and supplementing the consulting agreement
in January 1998, Generex issued 1,000 shares of Special Voting Rights Preferred
Stock ("Special Preferred Stock") to Dr. Modi, comprising all of the outstanding
shares of Special Preferred Stock. Special Preferred Stock does not generally
carry the right to vote, but does have the following special voting rights:
o the holders of Special Preferred Stock have the right to elect a
majority of Generex's Board of Directors if a change of control
occurs; and
o the holders of Special Preferred Stock have the right to approve
any transaction that would result in a change of control.
A "change of control" is deemed to occur if Generex's current management group
(namely, Ms. Gluskin, Dr. Modi, Mr. Perri and Ms. Perri) or persons approved by
a majority of the current management group should cease to constitute at least
60% of the Company's directors, or if any person becomes either Chairman of the
Board of Directors or Chief Executive Officer of Generex without the prior
approval of the current management group and those directors approved by the
current management group.
10
Compensation Committee Interlocks and Insider Participation
Ms. Gluskin, Dr. Modi, Mr. Perri and Ms. Perri, all of whom are both
directors and executive officers of Generex, participated during the fiscal year
ended July 31, 2000, in the discussions and decisions of the Board of Directors
concerning compensation to be paid to the executive officers of Generex.
No executive officer of Generex has served on the board of directors or
compensation committee of any other entity that has or has had one or more
executive officers serving as a director of Generex (excluding entities that are
wholly owned by one or more of the executive officers).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table on the following page sets forth information regarding the beneficial
ownership of our Common Stock by:
o Our directors and executive officers;
o All directors and executive officers as a group; and
o Each person known to us to beneficially own more than five percent
(5%) of our outstanding shares of Common Stock.
The information contained in this table is as of March 5, 2001. At that
date, we had 19,232,018 shares of Common Stock outstanding. In addition to our
Common Stock, we have outstanding 1,000 shares of our Special Voting Rights
Preferred Stock. All of the shares of Special Voting Rights Preferred Stock are
owned by Dr. Modi.
A person is deemed to be a beneficial owner of shares if he has the
power to vote or dispose of the shares. This power can be exclusive or shared,
direct or indirect. In addition, a person is considered by SEC rules to
beneficially own shares underlying options or warrants that are presently
exercisable or that will become exercisable within sixty (60) days.
Name of
Beneficial Owner Beneficial Ownership
---------------- --------------------
Number of Percent of Class
Shares ----------------
(i) Directors and Executive Officers
Anna E. Gluskin ................................. 1,288,127(1) 6.7%
William M. Hawke, M.D. .......................... 51,000(2) *
Pankaj Modi, Ph.D. .............................. 1,250,200(3) 6.5%
E. Mark Perri ................................... 4,247,196(4) 22.1%
Rose C. Perri ................................... 1,288,026(1) 6.7%
Jan Michael Rosen ............................... 72,587(5) *
Officers and directors as a group (6 persons).... 5,821,136(6) 30.3%
(ii) Other Beneficial Owners (and their addresses)
EBI, Inc. In Trust
c/o Miller & Simons
First Floor, Butterfield Square
P.O. Box 260 .................................... 1,295,900(7) 6.7%
Providencials
Turks and Cacaos Islands
British West Indies
11
GHI, Inc. In Trust
c/o Miller & Simons
First Floor, Butterfield Square
P.O. Box 260 .................................... 2,500,050(8) 13.0%
Providencials
Turks and Cacaos Islands
British West Indies
Smallcap World Fund, Inc.
c/o Capital Research and ........................ 1,240,850(9) 6.5%
Management Company
333 South Hope Street
Los Angeles, CA 90071
-------------------
* Less than one percent.
(1) Includes, for each of Ms. Gluskin and Ms. Perri, 1,188,000 shares owned of
record by GHI, Inc. and 100,000 shares issuable upon the exercise of an option
granted under Generex's 1998 Stock Option Plan (the "1998 Plan") which are
presently exercisable. Does not include 200,000 shares issuable to Ms. Gluskin
or 150,000 shares issuable to Ms. Perri upon the exercise of options granted
under Generex's 2000 Stock Option Plan (the "2000 Plan") which are not presently
exercisable but will become exercisable if approved by the stockholders.
(2) Includes 50,000 shares issuable upon the exercise of an option granted under
the 1998 Plan which is presently exercisable, but does not include 20,000 shares
issuable upon the exercise of an option granted under the 2000 Plan which is not
presently exercisable, but will become exercisable if approved by the
stockholders.
(3) Includes 150,000 shares issuable upon the exercise of an option granted
under the 1998 Plan which is presently exercisable, but does not include 150,000
shares issuable upon the exercise of an option granted under the 2000 Plan which
is not presently exercisable but will become exercisable if approved by the
stockholders. Dr. Modi also owns all the outstanding shares of Generex's Special
Voting Rights Preferred Stock. This stock is not convertible into Common Stock.
(4) Includes 45,914 shares owned of record by Mr. Perri, and a total of
1,529,382 shares beneficially owned by Mr. Perri but owned of record by EBI,
Inc. (1,100,000 shares), GHI, Inc. (124,050 shares) and Rampart Securities, Inc.
(305,332 shares). Also includes: (a) 100,000 shares issuable upon the exercise
of an option granted under the 1998 Plan which is presently exercisable, (b)
2,376,000 shares owned of record by GHI, Inc., which Mr. Perri may be deemed to
beneficially own because of his power to vote the shares but which are
beneficially owned by Ms. Gluskin or Ms. Perri; and (c) 195,900 shares owned of
record by EBI, Inc., which Mr. Perri may be deemed to beneficially own because
of his power to vote the shares but which are beneficially owned by other
shareholders because they are entitled to the economic benefits of the shares.
Does not include 150,000 shares issuable upon the exercise of an option granted
under the 2000 Plan which is not presently exercisable but will become
exercisable if approved by the stockholders.
(5) Includes 1,800 shares owned of record by Uniworld Travel and Tours, Inc.,
but does not include 20,000 shares issuable upon the exercise of an option
granted under our 2000 Plan which is not presently exercisable but will become
exercisable if approved by the stockholders.
(6) Includes 450,000 shares issuable upon presenting exercisable options granted
under the 1998 Plan, but does not include 690,000 shares issuable upon the
exercise of options granted under the 2000 Plan that are not presently
exercisable but will become exercisable if approved by the stockholders.
Includes 1,441,496 shares owned of record by EBI, Inc. but beneficially owned or
deemed to be beneficially owned by Mr. Perri. Includes 2,500,050 shares owned of
record by GHI, Inc. but beneficially owned by Ms. Gluskin, Mr. Perri or Ms.
Perri.
12
(7) All these shares also are deemed to be beneficially owned by Mr. Perri
because he has the sole power to vote the shares. With respect to the 1,100,000
of the shares owned of record by EBI, Inc. Mr. Perri also has investment power
and otherwise is entitled to the economic benefits of ownership.
(8) These shares also are deemed to be beneficially owned by Mr. Perri because
he has the sole power to vote the shares. Mr. Perri also has investment power
and is otherwise entitled to the economic benefits of ownership of 124,050 of
the shares owned of record by GHI, Inc. Ms. Gluskin and Ms. Perri each own
beneficially 1,188,000 of the shares owned of record by GHI, Inc. by reason of
their ownership of investment power and other economic benefits of the ownership
of such shares.
(9) Includes warrants to purchase 161,850 shares.
Certain Relationships and Related Transactions.
Generex acquired Generex Pharmaceuticals, Inc. in October 1997. Prior
to Generex's acquisition of Generex Pharmaceuticals, Inc., it was a private
Canadian corporation majority-owned and controlled by Mr. Perri, Ms. Perri and
Ms. Gluskin. Unless otherwise indicated, the transactions described below
occurred prior to the acquisition of Generex Pharmaceuticals, Inc. or pursuant
to contractual arrangements entered into prior to that time. Generex presently
has a policy requiring approval by stockholders or by a majority of
disinterested directors and independent directors of transactions in which one
of our directors has a material interest apart from such director's interest in
Generex.
Real Estate Financing Transactions. In May 1997, EBI, Inc., a company
controlled by Mr. Perri, acquired shares of Common Stock of Generex
Pharmaceuticals, Inc. for $3 million (CAD) which, based on the exchange rate
then in effect, represented approximately $2.1 million (US). The use of those
funds by Generex Pharmaceuticals, Inc. was restricted to acquiring an insulin
research facility. Subsequently this restriction was eased to permit use of the
funds to acquire properties used for manufacturing Generex's oral insulin
product and other proprietary drug delivery products, and related testing,
laboratory and administrative services. Under the terms of the investment,
Generex Pharmaceuticals, Inc. was required to lend these funds back to EBI until
they were needed for the purposes specified. The entire amount was loaned back
to EBI and was outstanding at July 31, 1997. During the period ended July 31,
1998, a total of $2,491,835 (CAD) was repaid by EBI. There were no repayments
made in the years ended July 31, 2000 and 1999. The balance due from EBI at July
31, 2000, was $508,165 (CAD) (approximately $343,773 (US) based on the exchange
rate then in effect). These funds are due on demand by Generex Pharmaceuticals,
Inc. provided they are used for the purchase and/or construction or equipping of
oral insulin manufacturing and testing facilities. The amounts repaid by EBI
were used primarily to purchase and improve certain of the real estate and
buildings owned by Generex.
Loans To and From Stockholders. Between November 1995 and July 31,
1998, companies owned and controlled by Mr. Perri, Ms. Perri and Ms. Gluskin
incurred a net indebtedness of $629,234 to Generex Pharmaceuticals, Inc.
excluding the indebtedness of EBI described in the preceding paragraph. This
indebtedness arose from cash advances and the payment by Generex
Pharmaceuticals, Inc. of expenses incurred by these companies, net of repayments
and payment of expenses on behalf of Generex Pharmaceuticals, Inc. At July 31,
1999, these companies' net indebtedness to Generex Pharmaceuticals, Inc.
exclusive of the EBI indebtedness described above, was $284,315. At July 31,
2000, this balance had been reduced to zero. The transactions between Generex
Pharmaceuticals, Inc. and entities owned and controlled by Mr. Perri, Ms. Perri
and Ms. Gluskin were not negotiated at arms-length, and were not on normal
commercial terms. No interest was charged on any of the advances, and the
transactions were of far greater financial benefit and convenience to Mr. Perri,
Ms. Perri and Ms. Gluskin than to Generex Pharmaceuticals, Inc. These
transactions and financing arrangements were mostly initiated prior to the
transaction in which Generex acquired Generex Pharmaceuticals, Inc., and no such
transactions have taken place since January 1, 1999. Generex presently has a
policy requiring the approval of the Board of Directors, including a majority of
disinterested directors and independent directors, for any transactions in which
a director has a material interest apart from such director's interest in
Generex.
OTHER INFORMATION
Director Nominees
Any stockholder entitled to vote for the election of directors may give
notice of the stockholder's intention to nominate persons for election to the
Board of Directors at the annual meeting. Generally such notice must be
submitted in writing to the Secretary of Generex at Generex's principal offices
not less than 60 nor more than 90 days prior to the annual meeting provided,
however, that in the event that less than 70 days notice or prior disclosure of
the date of the meeting is given or made to stockholders, notice of nomination
by a stockholder to be timely must be so received not later than the close of
business on the 10th day
13
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. The stockholder's notice of nomination must
provide information as required by Generex's Amended and Restated Bylaws. A copy
of these Bylaw requirements will be provided upon request in writing to the
Secretary at the principal offices of Generex.
Annual Report
Generex has enclosed its Annual Report for the year ended July 31, 2000,
with this proxy statement, which includes Generex's Annual Report to the
Securities and Exchange Commission on Form 10-K for the fiscal year ended July
31, 2000, without exhibits. Stockholders are referred to the report for
financial and other information about Generex, but such report is not
incorporated in this proxy statement and is not a part of the proxy soliciting
material.
Stockholder Proposals for the 2001 Annual Meeting
Any proposals of stockholders intended to be presented at the Annual
Meeting of Stockholders for the fiscal year ended July 31, 2001, must be
received by Generex at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada
M5J 2G2, no later than September 1, 2001 in order to be included in the proxy
materials for such meeting. It is suggested that a proponent submit any proposal
by an internationally recognized overnight delivery service to the Secretary of
Generex. Such proposals must meet the requirements set forth in the rules and
regulations of the Securities and Exchange Commission in order to be eligible
for inclusion in Generex's fiscal year 2001 proxy materials.
If there should be any change in the foregoing submission deadlines, Generex
intends to publicly disseminate information concerning the change.
Other Matters
The Board does not intend to present, and does not have any reason to
believe that others will present, any item of business at the annual meeting
other than those specifically set forth in the notice of the meeting. However,
if other matters are properly brought before the meeting, the persons named on
the enclosed proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
Solicitation of Proxies
All costs and expenses of this solicitation, including the cost of preparing
and mailing this proxy statement will be borne by Generex. In addition to the
use of the mails, certain directors, officers and regular employees of Generex
may solicit proxies personally, or by mail, telephone or otherwise, but such
persons will not be compensated for such services. Arrangements will be made
with brokerage firms, banks, fiduciaries, voting trustees or other nominees to
forward the soliciting materials to each beneficial owner of stock held of
record by them, and Generex will reimburse them for their expenses in doing so.
By order of the Board of Directors
/s/ Rose C. Perri
Rose C. Perri
Secretary
March 23, 2001
14
EXHIBIT A
GENEREX BIOTECHNOLOGY
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity of the Company's financial statements and reports
and (2) the independence and performance of the Company's auditors.
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise it, and request any officer or
employee of the Company or the Company's outside counsel or auditor to attend a
meeting of the Committee or to meet with any members of, or consultants to, the
Committee.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter from time to time
and recommend any proposed changes to the Board for approval.
2. Review the Company's annual audited financial statements with
management, including major issues regarding accounting and
auditing principles and practices and the adequacy of internal
controls.
3. Review with management and the Company's independent auditor any
significant financial reporting issues and judgments observed by
or brought to the attention of the Committee relative to the
preparation of the Company's financial statements.
4. Review the Company's quarterly financial statements prior to the
filing of its Form 10Q, beginning with the fiscal quarter ending
April 30, 2000.
5. Review any proposed major changes to the Company's auditing and
accounting principles prior to their adoption.
6. Receive periodic reports from the Company's independent auditor
regarding the auditor's independence, discuss such reports with
the auditor, and to recommend any board action deemed necessary
and appropriate by the Committee to assure the independence of the
auditor.
7. Discuss with the independent auditor the matters required to be
discussed with the Committee by the independent auditor under
Statement on Auditing Standards No. 61 relating to the conduct of
the audit of the Company's financial statements.
8. Review with the Company's independent auditor any problems or
difficulties the auditor may have encountered, as well as any
management letter provided by the auditor and the Company's
response to that letter.
9. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement.
10. Review with the Company's attorneys such legal matters as the
Committee determines may have a material impact on the Company's
financial statements.
11. Evaluate together with the Board the performance of the Company's
independent auditor.
12. Review the appointment and any replacements of the Company's
principal accounting officer.
13. No later than June 14, 2001, be comprised solely of independent
directors, each of whom shall have the ability to read and
understand financial statements, including the Company's balance
sheet, income statement and cash flow statement, or become able to
do so within a reasonable period of time after appointment to the
Committee. Committee Members shall be nominated and elected by the
full Board annually, and the full Board shall promptly fill
vacancies that may occur on the Committee.
14. At least one member of the Committee shall have past employment
experience in finance or accounting, or comparable experience or
background (including, for example, being or having been a chief
executive officer, chief financial officer or other senior
corporate officer with financial oversight responsibilities) which
results in such member having financial sophistication. The
qualifications of Audit Committee members shall be determined by
the full Board of Directors.
Meetings of the Committee may be called from time to time by the
Chairman or any two members of the Committee upon not less than seventy-two (72)
hours prior notice (which may but need not state the business intended to be
conducted at the meeting), provided that a meeting may be held without such
notice if all members are present or, if absent, waive notice of the meeting. A
majority of the members of the Committee shall constitute a quorum for the
purpose of taking any action upon any matter that may come before it, and the
Committee may take any action which it is authorized to take as a Committee
without the necessity of a meeting if all members of the Committee consent in
writing in accordance with Section 141(f) of the Delaware General Corporation
Law. The Chair of the Audit Committee shall promulgate such other rules or
procedures as he or she deems necessary or appropriate for the proper and
efficient conduct of the business of the Committee.
While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Company's financial statement are complete and accurate
and in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure the Company's
compliance with laws and regulations relating to financial disclosure or any
other area.
GENEREX BIOTECHNOLOGY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
APRIL 23, 2001
The undersigned shareholder of Generex Biotechnology Corporation (the "Company")
hereby appoints Anna E. Gluskin, E. Mark Perri and Rose C. Perri, and each of
them with full power of substitution, the true and lawful attorneys, agents and
proxy holders of the undersigned, and hereby authorizes them to represent and
vote, as specified herein, all of the shares of Common Stock of the Company held
of record by the undersigned on March 5, 2001, at the Annual Meeting of
Shareholders of the Company to be held on April 23, 2001 (the "Annual Meeting")
at 10:00 a.m. at St. Lawrence Hall, 157 King Street East, Toronto Ontario and
any adjournments or postponements thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED.
IN THE ABSENCE OF DIRECTION, THE SHARES WILL BE VOTED FOR THE PROPOSALS.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS RELATING TO THE ANNUAL MEETING.
Item 1. To elect as directors, to hold office until the next meeting of
shareholders and until their successors are elected, the six (6)
nominees listed below:
NOMINEES: Anna E. Gluskin, William M. Hawke, M.D., Pankaj Modi, Ph.D.,
E. Mark Perri, Rose C. Perri and Jan Michael Rosen.
o FOR ALL NOMINEES o WITHHOLD ALL NOMINEES o
--------------------
For all nominees
except as noted
above
Item 2. To approve the Company's 2000 Stock Option Plan.
o FOR o AGAINST o ABSTAIN
Item 3. To ratify the appointment of Deloitte Touche as independent public
accountants of the Company for the fiscal year ending July 31, 2001.
o FOR o AGAINST o ABSTAIN
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
Trustees and others acting in a representative capacity should indicate the
capacity in which they sign and give their full title. If a corporation, please
indicate the full corporate name and have an authorized officer sign, stating
title. If a partnership, please sign in partnership name by an authorized
person.
Signature:
------------------------------------
Signature:
------------------------------------
Date:
------------------------------------
PLEASE MARK, SIGN AND DATE THIS PROXY
AND RETURN IT PROMPTLY WHETHER YOU
PLAN TO ATTEND THE MEETING OR NOT. IF
YOU DO ATTEND, YOU MAY VOTE IN PERSON
IF YOU DESIRE.