10-K/A 1 f711970.txt AMENDMENT TO FORM 10K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-21013 XYBERNAUT CORPORATION -------------------------------------------------------------------------------- (Name of small business issuer in its charter) Delaware 54-1799851 -------------------------------- --------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 12701 Fair Lakes Circle 22033 Fairfax, VA ---------------------------------------- --------------------------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: 703-631-6925 Securities registered under Section 12(b) of the Exchange Act: COMMON STOCK, $.01 PAR VALUE Securities registered under Section 12(g) of the Exchange Act: _______ Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value at April 25, 2001 of the Common Stock of the issuer, its only class of voting stock, was $106,605,384, of which $97,268,294 was held by non-affiliates, calculated on the basis of the closing price of such stock on the National Association of Securities Dealers Automated Quotation System Small Cap Market on that date. Such market value of non-affiliates excludes shares owned by all executive officers and directors (but includes shares owned by their spouses); this should not be construed as indicating that all such persons are affiliates. The number of shares outstanding of the issuer's Common Stock at April 25, 2001 was 47,170,524. DOCUMENTS INCORPORATED BY REFERENCE None PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Company's directors and executive officers are:
YEAR FIRST ELECTED OR NAME AGE CLASS APPOINTED POSITION ----------------------------------- ------------ ---------- ------------------- ---------------------------- Edward G. Newman 58 III 1990 President, Chief Executive Officer and Chairman of the Board of Directors Steven A. Newman, M.D. 55 III 1995 Executive Vice President and (1)(2)(3) Vice Chairman of the Board of Directors John F. Moynahan 43 - - Senior Vice President, Chief Financial Officer and Treasurer Dr. Edwin Vogt 68 II 1998 Senior Vice President and Director Kazuyuki Toyosato 55 I 1998 Executive Vice President and Director Eugene J. Amobi 57 II 1996 Vice President and Director Martin Eric Weisberg, Esq. (1)(3) 50 II 1997 Secretary and Director Keith P. Hicks, Esq. (2) 78 I 1994 Director Phillip E. Pearce (2)(3) 72 II 1995 Director James J. Ralabate, Esq 73 III 1995 Director Lt. Gen. Harry E. Soyster (Ret.) 66 II 1995 Director (1)(3)
------------------------- (1) Member of the Compensation Committee. (2) Member of the Audit Committee. (3) Member of the Nominating Committee. Officers are appointed by and serve at the discretion of the Board of Directors. The Company's Board of Directors is divided into three different classes. At each annual meeting of stockholders, one class of directors will be elected for a term of three years to succeed those directors in the class whose terms then expire. All directors hold office until the third annual meeting of shareholders following their election or until their successors are elected and qualified. CLASS I DIRECTORS Keith P. Hicks, Esq. has been a director since July 1994 and is currently a principal in C&H Properties and the owner of Hicks Bonding Co., Hicks Auctioneering Co. and Hicks Cattle Company. Mr. Hicks is a graduate of the University of Denver (B.A. 1954) and LaSalle University School of Law (L.L.B. 1969). Kazuyuki Toyosato joined the Company in 1996 as Executive Vice President of Asian Operations. Mr. Toyosato is responsible for overseeing the Company's operations in Asia, including Japan. Prior to joining the Company, Mr. Toyosato spent 27 years with Sony Corporation in Japan where his last position was the Vice President of Sony USA. He previously helped manage the Sony Walkman product line and Lithium battery business, and managed Sony's 8mm video camcorder and its peripherals product line. Martin Eric Weisberg, Esq. who currently serves as Secretary of the Company, is a partner of the law firm, Jenkens & Gilchrist Parker Chapin LLP, which serves as general counsel to the Company. Mr. Weisberg specializes in the areas of securities, mergers and acquisitions, financing and international transactions and has been in the private practice of law for 25 years. Mr. Weisberg is a summa cum laude graduate of Union College (B.A. 1972) and received his law degree from The Northwestern University School of Law (1975), where he graduated summa cum laude, was Articles Editor of the Law Review and was elected to the Order of the Coif. Mr. Weisberg also attended The London School of Economics and Political Science. CLASS II DIRECTORS Eugene J. Amobi has been a Vice President of the Company since January 2000 and a director of the Company since January 1996. Since 1983, Mr. Amobi has been President, a director and a principal stockholder of Tech International, Inc. ("Tech International"), which provides engineering, technical support and consulting services to government and domestic and international commercial clients. Mr. Amobi has been president and director of Tech International of Virginia Inc. ("Tech Virginia"), our wholly-owned subsidiary, since its spin-off from Tech International. Mr. Amobi also has been president of Tech Consultants Inc. since 1988. Prior to 1983, Mr. Amobi was a Senior Engineer with E.I. DuPont de Nemours and a Managing Director of Stanley Consultants, an international engineering consulting firm. Mr. Amobi is a graduate of The Technion, Israel Institute of Technology (B.S. 1969), Princeton University (M.S. 1970) and Syracuse University (M.B.A. 1973). Phillip E. Pearce has been a director of the Company since October 1995. Mr. Pearce has been an independent business consultant with Phil E. Pearce & Associates, Chairman and Director of Financial Express Corporation since 1990 and since 1988 has been a principal of Pearce-Henry Capital Corp. Prior to 1988, Mr. Pearce was Senior Vice President and a director of E.F. Hutton, Chairman of the Board of Governors of the National Association of Securities Dealers, a Governor of the New York Stock Exchange and a member of the Advisory Council to the United States Securities and Exchange Commission on the Institutional Study of the Stock Markets. Mr. Pearce also is a director of StarBase Corporation, a software development company, and of Bravo International. Mr. Pearce is a graduate of the University of South Carolina (B.A. 1953) and attended the Wharton School of Investment Banking at the University of Pennsylvania. -3- Lt. Gen. Harry E. Soyster (Ret.) has been a director of the Company since January 1995. He is currently Director of Washington Operations and Vice President of International Operations of Military Professional Resources, Incorporated. From 1988 until his retirement in 1991, Lieutenant General Soyster (Ret.) was the Director of the United States Defense Intelligence Agency. Prior to that time, he was Commander of the United States Army Intelligence and Security Command and a Deputy Assistant Chief of Staff for Intelligence, Department of the Army. Lieutenant General Soyster (Ret.) is a graduate of the United States Military Academy at West Point (B.S. 1957), Penn State University (M.S. 1963), the University of Southern California (M.S. 1973) and the National War College (1977). Dr. Edwin Vogt was appointed a director of the Company on September 28, 1998 and joined the Company in December 1998 as a Senior Vice President. Prior to this date, Dr. Vogt served as a consultant to the Company since 1996. Dr. Vogt joined IBM in 1961 as Development Programmer and worked in the fields of hardware development, holding 28 patents, as well as software development. As manager he was responsible for hardware projects (IBM /360, /370, 433x) as well as various software projects (a.o. voice recognition products) before being appointed Director as manager of several Hardware and Software Product Development Laboratories. As IBM Software Group Executive, Dr. Vogt held the worldwide responsibility for the development and marketing of IBM Workflow products and Reengineering tools until retiring from IBM at the end of 1995. In early 1996 he was appointed Director for the SBS association (Softwarezentrum Boblingen / Sindelfingen e.V.) and directed the growth of this center to 39 member companies with over 200 experts, predominantly working in high-growth areas such as Internet, Workflow, Process Automation and Multimedia. Dr. Vogt is a graduate of the University of Stuttgart with a M.S. in Electrical Engineering and Mathematics and a Ph.D. in Theoretical Electrical Engineering. CLASS III DIRECTORS Edward G. Newman has been the Company's President since March 1993, Chief Executive Officer and Chairman of the Board of Directors since December 1994, and a director since 1990. Mr. Newman served as our Treasurer from 1993 to 1994. From 1984 to 1992, Mr. Newman was President of ElectroTech International Corporation, a software consulting firm. From 1973 to 1981, Mr. Newman was employed by Xerox Corporation in several management positions in office systems strategy, legal systems and international financial systems. Mr. Newman served with the Central Intelligence Agency from 1966 to 1972. Mr. Newman also has been an Executive Vice President of Tech International since 1990, and a director and Chief Executive Officer of Tech Virginia since 1994. See "Certain Relationships and Related Transactions." Mr. Newman is a graduate of the University of Maryland (B.A. 1971) and the University of New Haven (M.B.A. 1984). Mr. Newman is the brother of Steven A. Newman, M.D., an Executive Vice President and director of the Company. Steven A. Newman, M.D. has been an Executive Vice President of the Company since January 2000, a director of the Company since January 1995, and the Vice Chairman of the Board of Directors since August 1997. See "Business - Employees and Consultants." Dr. Newman was the Executive Vice President and Secretary from December 1994 through October 1995 and a consultant of the Company between January 1996 and December 1999. Dr. Newman also provides business, management and administrative consulting services to various medical and business groups. Dr. Newman was President and Chief Executive Officer of Fed American, Inc., a mortgage banking firm, from 1988 to 1991. Dr. Newman has been a director of Tech Virginia since 1994. See "Certain Relationships and Related Transactions." -4- Dr. Newman is a graduate of Brooklyn College (B.A. 1967) and the University of Rochester (M.D. 1972). Dr. Newman is the brother of Edward G. Newman, our President, Chief Executive Officer and Chairman of the Board of Directors. James J. Ralabate, Esq. has been a director of the Company since January 1995 and served as our Secretary until August 1997. Mr. Ralabate has been in the private practice of patent law since 1982. Prior to that time, Mr. Ralabate was General Patent Counsel for Xerox Corporation, responsible for worldwide patent licensing and litigation, and an Examiner in the United States Patent Office. Mr. Ralabate is our intellectual property counsel and is a graduate of Canisius College (B.S. 1950) and The American University (J.D. 1959). -------- John F. Moynahan has been the Company's Senior Vice President and Chief Financial Officer since May 1999. From June 1998 to January 1999 he was Senior Vice President and Chief Financial Officer of Precision Auto Care, Inc. and from October 1994 to June 1998 he was the Company's Senior Vice President and Chief Financial Officer. Prior to that time, he was Vice President and Treasurer of Joy Technologies, Inc. and Vice President and Chief Financial Officer of Sym-Tek Systems, Inc. Mr. Moynahan served as a director of the Company from January 1996 to May 1999. He is a graduate of Colgate University (B.A. 1979) and New York University (M.B.A. 1982). COMPENSATION OF DIRECTORS The Company currently does not pay or accrue salaries or consulting fees to outside directors for each board or committee meeting attended. While it is the Company's intention to establish such payments eventually, it does not have any current plans to do so. Any payments when implemented will be comparable to those made by companies of similar size and stage. Directors receive a grant of options for 50,000 shares of Common Stock upon election and reelection to the Board of Directors and are entitled for each full year of service (other than the year of election or reelection), commencing with those directors who were elected at the 1997 Annual Meeting, to receive a grant of options to purchase 10,000 shares of Common Stock which vests at the end of such year of service. Members of the Audit, Compensation and Nominating Committees are entitled to receive $1,000 for each Audit or Compensation Committee meeting attended by such member. The Company also has adopted the 1996 Omnibus Stock Incentive Plan, the 1997 Stock Incentive Plan, the 1999 Stock Incentive Plan and the 2000 Stock Incentive Plan in which directors are eligible to participate. See "Executive Compensation - 1996 Omnibus Stock Incentive Plan; -- 1997 Stock Incentive Plan, 1999 Stock Incentive Plan and 2000 Stock Incentive Plan." SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, and persons who own more than 10% of the Company's Common Stock, to file with the Securities and Exchange Commission (the "SEC") initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. Based solely on the Company's review of the copies of such reports by it, the Company believes that during fiscal 2000 all such filings were made. -5- ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table. The following sets forth the annual and long-term compensation for services in all capacities to the Company for the fiscal years ended December 31, 2000, 1999 and 1998 paid to the Company's Chief Executive Officer ("CEO") and the registrant's four most highly compensated executive officers other than the CEO who were serving as executive officers at the end of the last completed fiscal year.
SUMMARY COMPENSATION TABLE Long Term Compensation ------------ Name and Principal Position Awards ------------ Annual Compensation Common Stock -------------------------------------- Underlying Year Salary Bonus Options All Other ---- ------ ----- ------- --------- EDWARD G. NEWMAN Chief Executive Officer and Chairman of the Board of Directors 2000 $ 263,476 (1) $ 50,000 (2) 50,000 $ 76,211 (3) 1999 $ 223,294 (1) $0 441,665 $ 35,400 (3) 1998 $ 250,923 (1) $0 0 $ 47,400 (3) KAZUYUKI TOYOSATO Executive Vice President 2000 $ 277,527 $0 10,000 $ 1,471 (4) 1999 $ 251,676 $0 110,000 $ 28,385 (4) 1998 $ 172,086 $0 10,000 $ 0 DR. STEVEN A. NEWMAN Executive Vice President And Vice Chairman of the Board of Directors 2000 $ 240,351 (5) $ 150,000 (6) 50,000 $ 22,122 (7) 1999 $ 13,476 (5) $0 441,750 $ 176,550 (7) 1998 $ 13,476 (5) $0 10,000 $ 163,476 (7) DR. JOSEPH BEN-DAK Executive Vice President 2000 $ 185,000 $0 0 $ 61,019 (8) 1999 $ 138,319 (9) $0 242,679 $ 0 1998 $ 0 $0 0 $ 0 JOHN F. MOYNAHAN Senior Vice President, Chief Financial Officer and Treasurer 2000 $ 170,000 $ 25,000 (2) 0 $ 39,875 (9) 1999 $ 82,288 (8) $0 331,741 $ 16,500 (4) 1998 $ 93,507 (8) $0 0 $ 7,500 (4) ------------------
(1) Includes $13,476 paid by Tech Virginia in each of 2000, 1999 and 1998. Compensation does not include $58,400, $53,732, and $50,000 paid to Frances C. Newman, wife of Edward G. Newman in 2000, 1999 and 1998, respectively. -6- (2) Represents payment of a signing bonus as an incentive for the executive to enter into his employment agreement. (3) Includes payment of (i) non-accountable expense and transportation allowances and (ii) other miscellaneous compensation. Excludes payment of $25,057 in salary that was earned in 1999 but that was paid in 2000; this deferred compensation was accrued and reported as 1999 compensation in this and the prior year Proxy Statement. (4) Includes payment of (i) non-accountable expense and transportation allowances and (ii) other miscellaneous compensation. (5) Includes compensation related to services performed as an Executive Vice President of the Company since January 1, 2000 and $13,476 paid by Tech Virginia in each of 2000, 1999 and 1998. (6) Represents payment of a $50,000 signing bonus as an incentive for the executive to enter into his employment agreement and a $100,000 annual bonus for services performed during 2000. (7) Includes payment of (i) consulting fees related to services performed as a consultant to the Company prior to January 1, 2000, (ii) non-accountable expense and transportation allowances and (iii) other miscellaneous compensation. Excludes payment of $43,750 in compensation that was earned in 1999 but that was paid in 2000; this deferred compensation was accrued and reported as 1999 compensation in this and the prior year Proxy Statement. (8) Mr. Moynahan resigned from his positions with the Company effective June 3, 1998 and resumed these positions effective May 10, 1999. (9) Includes payment of (i) non-accountable expense and transportation allowances, (ii) other miscellaneous compensation and (iii) $10,375 in compensation that was earned in 1999 but that was paid in 2000. Excludes payment of an additional $14,080 in salary that was earned in 1999 but that was paid in 2000; this deferred compensation was accrued and reported as 1999 compensation in this and the prior year Proxy Statement. (10) Dr. Ben-Dak was hired as an executive of the Company in June 1999. -7- OPTION GRANTS TABLE. The following table sets forth information on grants of stock options during fiscal 2000 to executive officers and directors of the Company. All such options are exercisable to purchase shares of Common Stock.
Options Percent of Total Exercise or Base Price Expiration Date Granted Options Granted to ($Share) (Shares) Employees in Year Eugene J. Amobi 150,000 12.4111% $5.8750 January 3, 2010 10,000 0.8274% $4.8125 October 20, 2010 Dr. Joseph Ben-Dak 0 0.0000% n/a n/a Keith P. Hicks, Esq. 10,000 0.8274% $4.8125 October 20, 2010 John F. Moynahan 0 0.0000% n/a n/a Edward G. Newman 50,000 4.1370% $4.8125 October 20, 2010 Steven A. Newman, M.D. 50,000 4.1370% $4.8125 October 20, 2010 Phillip E. Pearce 10,000 0.8274% $4.8125 October 20, 2010 James J. Ralabate, Esq. 50,000 4.1370% $4.8125 October 20, 2010 Lt. Gen Harry E. Soyster (Ret.) 10,000 0.8274% $4.8125 October 20, 2010 Kazuyuki Toyosato 10,000 0.8274% $4.8125 October 20, 2010 Dr. Edwin Vogt 10,000 0.8274% $4.8125 October 20, 2010 Martin Eric Weisberg, Esq. 10,000 0.8274% $4.8125 October 20, 2010 Fiscal Year-End Options/Option Values Table. Number of Securities Underlying Value of Unexercised In-The-Money Unexercised Options at Fiscal Options at Fiscal Year-End ($) Year End Exercisable Unexercisable Exercisable Unexercisable --------------- -- ------------------- ---- ------------------- ------------------------ Eugene J. Amobi 200,000 190,000 $7,500 $ - Dr. Joseph Ben-Dak 70,893 130,893 $7,500 $ 15,000 Keith P. Hicks, Esq. 80,000 10,000 $1,250 $ - John F. Moynahan 160,581 160,580 $ - $ - Edward G. Newman, 402,777 63,888 $85,938 $ - Steven A. Newman, M.D. 501,167 60,583 $91,372 $ - Phillip E. Pearce 105,000 10,000 $1,250 $ - James J. Ralabate, Esq. 110,000 50,000 $8,750 $ - Lt. Gen Harry E. Soyster (Ret.) 130,000 10,000 $1,250 $ - Kazuyuki Toyosato 90,000 90,000 $1,250 $ - Dr. Edwin Vogt 96,667 98,334 $1,250 $ - Martin Eric Weisberg, Esq. 95,000 10,000 $4,375 $ -
The Company has no retirement, pension or profit sharing program for the benefit of its directors, officers or other employees, but the Board of Directors may recommend one or more such programs for adoption in the future. EMPLOYMENT AGREEMENTS Edward G. Newman is employed with the Company pursuant to a three-year employment agreement expiring on December 31, 2002. This agreement calls for an initial base salary of $250,000 with annual increases at the United States Consumer Price Index ("CPI") percentage plus three percent, subject to a ceiling of 10%; an annual bonus, payable at the discretion of the Board of Directors in cash, shares of Common Stock, options to purchase shares of Common Stock, stock appreciation rights or any combination thereof, in an amount to be determined by the Board of Directors; a $2 million life insurance policy payable to his designated beneficiaries; and an annual grant of stock options in an amount equal to the greater of (i) 1.5% of the -8- "Revenue Goal" where "Revenue Goal" is equal to 85% of the Company's revenue goal for each fiscal year during the term of employment, if the Revenue Goal is attained, and (ii) 2% of the increase, if any, in the market capitalization, based on the average of the number of shares outstanding and the closing prices of the Common Stock for the 30 days ended December 31 of the applicable year compared to the comparable 30 day period in the prior year, from January 1 to December 31 of the applicable fiscal year ("Performance Options"), with a limit on such grant of the greater of 500,000 shares or 1.5% of the then-outstanding shares of Common Stock in any given fiscal year during the term of the employment agreement. The Performance Options are exercisable at a price equal to the average of the closing price of the Common Stock for 30 days prior to the end of the applicable fiscal year. As an incentive to enter into this agreement, Mr. Newman received an initial payment of $50,000. In the event of a change of control or Mr. Newman terminating his employment for good cause, Mr. Newman is entitled to a severance payment of the greater of two years or the remaining term of this agreement and the Performance Options for the year of termination and the following year. This agreement provides Mr. Newman with benefits which the Company may provide to its executive officers, including health care insurance, automobile allowance and vacation. Dr. Steven A. Newman is employed with the Company pursuant to a three-year employment agreement expiring on December 31, 2002. This agreement calls for an initial base salary of $225,000 with annual increases at the CPI percentage plus three percent, subject to a ceiling of 10%; an annual bonus, payable at the discretion of the Board of Directors in cash, shares of Common Stock, options to purchase shares of Common Stock, stock appreciation rights or any combination thereof, in an amount to be determined by the Board of Directors, with a minimum bonus of $100,000 set for 2000; a $2 million life insurance policy payable to his designated beneficiaries; and an annual grant of Performance Options, if applicable, with an exercise price equal to the average of the closing price of the Common Stock for 30 days prior to the end of the applicable fiscal year, with a limit on such grant of the greater of 500,000 shares or 1.5% of the then-outstanding shares of Common Stock in any given year. As an incentive to enter into this agreement, Dr. Newman received an initial payment of $50,000. In the event of a change of control or Dr. Newman terminating his employment for good cause, Dr. Newman is entitled to a severance payment of the greater of two years or the remaining term of this agreement, and the Performance Options for the year after termination and the following year. This agreement provides Dr. Newman with benefits which the Company may provide to its executive officers, including health care insurance, automobile allowance and vacation. John F. Moynahan is employed with the Company pursuant to a three-year employment agreement expiring on December 31, 2002. This agreement calls for an initial base salary of $170,000 with annual increases at the CPI percentage plus three percent subject to a ceiling of 10%; an annual cash bonus to be determined by the Board of Directors; a $750,000 life insurance policy payable to his designated beneficiaries; and an annual grant of stock options to be determined by increases in revenues or market capitalization over the prior year, at the price in effect at the time such grant is made, with a limit on such grant of the greater of 100,000 shares or 0.33% of the then-outstanding stock in any given year. As an incentive to enter into this agreement, Mr. Moynahan received an initial payment of $25,000. In the event of a change of control or Mr. Moynahan terminating his employment for good cause, Mr. Moynahan is entitled to a severance payment of the greater of two years or the remaining term of this agreement, the Performance Options for the year after termination and the following year, and immediate vesting of options. This agreement provides Mr. Moynahan with benefits which the Company may provide to its executive officers, including health care insurance, automobile allowance and vacation. -9- Kazuyuki Toyosato has been employed with the Company pursuant to a three-year employment agreement which expired on March 3, 2000. This employment agreement provided for a minimum annual salary of $153,575. Although the employment agreement with Mr. Toyosato has terminated, Mr. Toyosato remains an employee of the Company. Dr. Edwin Vogt is employed pursuant to a five-year employment agreement expiring on December 31, 2004. Pursuant to this agreement, Dr. Vogt receives an annual base salary of $150,000, which can be adjusted annually at the discretion of management. Eugene J. Amobi is employed pursuant to a three-year employment agreement expiring on December 31, 2003. This agreement provides for an annual base salary of $140,000 and an annual discretionary bonus to be determined by the Company for each full year of employment with the Company based upon the performance of Mr. Amobi during such year as well as the Company's overall performance during such year. As an incentive to enter into this agreement, Mr. Amobi was granted the right to purchase 150,000 shares of Common Stock, which right will vest over a period of three years in increments of 50,000 shares per year on December 31 of each year beginning December 31, 2000 through December 31, 2002. Any unvested option granted to Mr. Amobi pursuant to this employment agreement will fully vest upon a change of control or upon the termination of the employment agreement by Mr. Amobi for good reason. This agreement provides Mr. Amobi with benefits which the Company may provide to its executive officers, including health care insurance, automobile allowance and vacation. COMPENSATION PLANS The following are the compensation plans of the Company currently in effect. 1996 OMNIBUS STOCK INCENTIVE PLAN The 1996 Omnibus Stock Incentive Plan (the "1996 Incentive Plan") was adopted by the Company's Board of Directors effective January 1, 1996. The 1996 Incentive Plan provides for the granting of incentive stock options ("Incentive Stock Options") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), nonqualified stock options, stock appreciation rights ("SARs") and grants of shares of Common Stock subject to certain restrictions ("Restricted Stock") up to a maximum of 650,000 shares to officers, directors, employees and others. Incentive Stock Options can be awarded only to employees of the Company at the time of the grant. No options, SARs or restricted stock ("Restricted Stock") may be granted under the 1996 Incentive Plan subsequent to December 31, 2006. The 1996 Incentive Plan is administered by the Compensation Committee of the Board of Directors (subject to the authority of the full Board of Directors), which determines the terms and conditions of the options, SARs and Restricted Stock granted under the 1996 Incentive Plan, including the exercise price, number of shares subject to the option and the exercisability thereof. Dr. Steven A. Newman, Lt. Gen. Harry E. Soyster (Ret.) and Martin Eric Weisberg, Esq. currently are the members of the Compensation Committee. The exercise price of all Incentive Stock Options granted under the 1996 Incentive Plan must equal at least the fair market value of the Common Stock on the date of grant. In the case of an optionee who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company ("Substantial Stockholders"), the exercise price of Incentive Stock Options must be at least 110% of the fair market value of the Common Stock on the date -10- of grant. The exercise price of all nonqualified stock options granted under the 1996 Incentive Plan shall be determined by the Compensation Committee. The term of any Incentive Stock Option granted under 1996 the Incentive Plan may not exceed ten years, or, for Incentive Stock Options granted to Substantial Stockholders, five years. The 1996 Incentive Plan may be amended or terminated by the Board of Directors, but no such action may impair the rights of a participant under a previously granted option. The 1996 Incentive Plan provides the Board of Directors or the Compensation Committee the discretion to determine when options granted thereunder shall become exercisable and the vesting period of such options. Upon termination of a participant's employment or relationship with the Company, all options terminate and no longer are exercisable unless termination is due to death or disability, in which case the options are exercisable within one year of termination. The Compensation Committee has granted extensions of the period before which options may be exercised for certain terminated employees. The 1996 Incentive Plan provides that upon a change in control of the Company, all previously granted options and SARs immediately shall become exercisable in full and all Restricted Stock immediately shall vest and any applicable restrictions shall lapse. The 1996 Incentive Plan defines a change of control as the consummation of a tender offer for 25% or more of the outstanding voting securities of the Company, a merger or consolidation of the Company into another corporation less than 75% of the outstanding voting securities of which are owned in aggregate by the stockholders of the Company immediately prior to the merger or consolidation, the sale of substantially all of the Company's assets other than to a wholly-owned subsidiary, or the acquisition by any person, business or entity other than by reason of inheritance of over 25% of the Company's outstanding voting securities. The change of control provisions of the 1996 Incentive Plan may operate as a material disincentive or impediment to the consummation of any transaction which could result in a change of control. The 1996 Incentive Plan provides the Board of Directors or the Compensation Committee discretion to grant SARs in connection with any grant of options. Upon the exercise of a SAR, the holder shall be entitled to receive a cash payment in an amount equal to the difference between the exercise price per share of options then exercised by him and the fair market value of the Common Stock as of the exercise date. The holder is required to exercise options covering the number of shares, which are subject to the SAR so exercised. SARs are not exercisable during the first six months after the date of grant, and may be transferred only by will or the laws of descent and distribution. The 1996 Incentive Plan also provides the Board of Directors or the Compensation Committee discretion to grant to key persons shares of Restricted Stock subject to certain limitations on transfer and substantial risks of forfeiture. 1997 STOCK INCENTIVE PLAN The 1997 Stock Incentive Plan (the "1997 Incentive Plan") was adopted by the Company's Board of Directors on April 10, 1997. The 1997 Incentive Plan provides for the granting of Incentive Stock Options within the meaning of Section 422 of the Code, nonqualified stock options, SARs and grants of shares of Common Stock subject to certain restrictions (collectively, "Awards") up to a maximum of 1,650,000 shares to officers, directors, key employees and others. Incentive Stock Options can be awarded only to employees of the Company at the time of the grant. No ISO may be granted under the 1997 Incentive Plan after April 9, 2007. -11- The 1997 Incentive Plan is administered by the Board of Directors or a Committee of the Board of Directors, which determines the terms and conditions of the Awards granted under the 1997 Incentive Plan, including the exercise price, number of shares subject to the option and the exercisability thereof. Dr. Steven A. Newman, Lt. Gen. Harry E. Soyster (Ret.) and Martin Eric Weisberg, Esq. currently are the members of the Committee. The exercise price of all Incentive Stock Options granted under the 1997 Incentive Plan must equal at least the fair market value of the Common Stock on the date of grant. In the case of Substantial Stockholders, the exercise price of Incentive Stock Options must be at least 110% of the fair market value of the Common Stock on the date of grant. The exercise price of all nonqualified stock options granted under the 1997 Incentive Plan shall be determined by the Compensation Committee. The term of any Incentive Stock Option granted under the 1997 Incentive Plan may not exceed ten years, or, for Incentive Stock Options granted to Substantial Stockholders, five years. The 1997 Incentive Plan may be amended or terminated by the Board of Directors, but no such action may impair the rights of a participant under a previously granted option. The 1997 Incentive Plan provides the Committee the discretion to determine when options granted thereunder shall become exercisable and the vesting period of such options. Upon termination of a participant's employment or relationship with the Company, options may be exercised only to the extent exercisable on the date of such termination (within three months), but not thereafter, unless termination is due to death or disability, in which case the options are exercisable within one year of termination. The 1997 Incentive Plan provides the Committee discretion to grant SARs to key employees, consultants and directors. Promptly after exercise of a SAR the holder shall be entitled to receive in cash, by check or in shares of Common Stock, an amount equal to the excess of the fair market value on the exercise date of the shares of Common Stock as to which the SAR is exercised over the base price of such shares, which shall be determined by the Committee The 1997 Incentive Plan also provides the Committee discretion to grant to key persons shares of restricted stock subject to certain contingencies and restrictions as the Committee may determine. 1999 STOCK INCENTIVE PLAN The 1999 Stock Incentive Plan (the "1999 Incentive Plan") was adopted by the Company's Board of Directors on November 12, 1999. The 1999 Incentive Plan provides for the granting of Incentive Stock Options within the meaning of Section 422 of the Code, nonqualified stock options, SARs and grants of shares of Common Stock subject to certain restrictions (collectively, "Awards") up to a maximum of 3,000,000 shares to officers, directors, key employees and others. Incentive Stock Options can be awarded only to employees of the Company at the time of the grant. No ISO may be granted under the 1999 Incentive Plan after November 12, 2009. The 1999 Incentive Plan is administered by the Board of Directors or a Committee of the Board of Directors, which determines the terms and conditions of the Awards granted under the 1999 Incentive Plan, including the exercise price, number of shares subject to the option and the exercisability thereof. Dr. Steven A. Newman, Lt. Gen. Harry E. Soyster (Ret.) and Martin Eric Weisberg, Esq. currently are the members of the Committee. -12- The exercise price of all Incentive Stock Options granted under the 1999 Incentive Plan must equal at least the fair market value of the Common Stock on the date of grant. In the case of Substantial Stockholders, the exercise price of Incentive Stock Options must be at least 110% of the fair market value of the Common Stock on the date of grant. The exercise price of all nonqualified stock options granted under the 1999 Incentive Plan shall be determined by the Compensation Committee. The term of any Incentive Stock Option granted under the 1999 Incentive Plan may not exceed ten years, or, for Incentive Stock Options granted to Substantial Stockholders, five years. The 1999 Incentive Plan may be amended or terminated by the Board of Directors, but no such action may impair the rights of a participant under a previously granted option. The 1999 Incentive Plan provides the Committee the discretion to determine when options granted thereunder shall become exercisable and the vesting period of such options. Upon termination of a participant's employment or relationship with the Company, options may be exercised only to the extent exercisable on the date of such termination (within three months), but not thereafter, unless termination is due to death or disability, in which case the options are exercisable within one year of termination. The 1999 Incentive Plan provides the Committee discretion to grant SARs to key employees, consultants and directors. Promptly after exercise of a SAR the holder shall be entitled to receive in cash, by check or in shares of Common Stock, an amount equal to the excess of the fair market value on the exercise date of the shares of Common Stock as to which the SAR is exercised over the base price of such shares, which shall be determined by the Committee The 1999 Incentive Plan also provides the Committee discretion to grant to key persons shares of restricted stock subject to certain contingencies and restrictions as the Committee may determine. 2000 STOCK INCENTIVE PLAN The 2000 Stock Incentive Plan (the "2000 Incentive Plan") was adopted by the Company's Board of Directors on September 13, 2000. The 2000 Incentive Plan provides for the granting of Incentive Stock Options within the meaning of Section 422 of the Code, nonqualified stock options, SARs and grants of shares of Common Stock subject to certain restrictions (collectively, "Awards") up to a maximum of 3,000,000 shares to officers, directors, key employees and others. Incentive Stock Options can be awarded only to employees of the Company at the time of the grant. No ISO may be granted under the 2000 Incentive Plan after September 13, 2010. The 2000 Incentive Plan is administered by the Board of Directors or a Committee of the Board of Directors, which determines the terms and conditions of the Awards granted under the 2000 Incentive Plan, including the exercise price, number of shares subject to the option and the exercisability thereof. Dr. Steven A. Newman, Lt. Gen. Harry E. Soyster (Ret.) and Martin Eric Weisberg, Esq. currently are the members of the Committee. The exercise price of all Incentive Stock Options granted under the 2000 Incentive Plan must equal at least the fair market value of the Common Stock on the date of grant. In the case of Substantial Stockholders, the exercise price of Incentive Stock Options must be at least 110% of the fair market value of the Common Stock on the date of grant. The exercise price of all nonqualified stock options granted under the 2000 Incentive Plan shall be determined by the -13- Compensation Committee. The term of any Incentive Stock Option granted under the 2000 Incentive Plan may not exceed ten years, or, for Incentive Stock Options granted to Substantial Stockholders, five years. The 2000 Incentive Plan may be amended or terminated by the Board of Directors, but no such action may impair the rights of a participant under a previously granted option. The 2000 Incentive Plan provides the Committee the discretion to determine when options granted thereunder shall become exercisable and the vesting period of such options. Upon termination of a participant's employment or relationship with the Company, options may be exercised only to the extent exercisable on the date of such termination (within three months), but not thereafter, unless termination is due to death or disability, in which case the options are exercisable within one year of termination. The 2000 Incentive Plan provides the Committee discretion to grant SARs to key employees, consultants and directors. Promptly after exercise of a SAR the holder shall be entitled to receive in cash, by check or in shares of Common Stock, an amount equal to the excess of the fair market value on the exercise date of the shares of Common Stock as to which the SAR is exercised over the base price of such shares, which shall be determined by the Committee. The 2000 Incentive Plan also provides the Committee discretion to grant to key persons shares of restricted stock subject to certain contingencies and restrictions as the Committee may determine. As of December 31, 2000 a total of 4,850,752 options had been issued and were outstanding pursuant to the Company's stock incentive plans. Each of the outstanding options has an exercise price at least equal to the fair market value of the Common Stock on the date of grant. As of December 31, 2000, there were no SARs outstanding and there have been three grants of Restricted Stock of 50,000 shares of Common Stock to three officers of the Company. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Compensation Committee participate in all deliberations concerning executive compensation. The Compensation Committee consists of Lt. Gen. Harry E. Soyster (Ret.), Dr. Steven A. Newman and Martin Eric Weisberg, Esq. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity which has one or more executive officers serving as a member of the Company's Board of Directors. REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION OVERVIEW AND PHILOSOPHY The Compensation Committee of the Board of Directors is responsible for developing and making recommendations to the Board of Directors with respect to the Company's executive compensation policies. In addition, the Compensation Committee, pursuant to authority delegated by the Board of Directors, determines the compensation to be paid to the Chief Executive Officer and each of the other executive officers of the Company. The objectives of the Company's executive compensation program are to: -14- o Support the achievement of desired Company performance o Provide compensation that will attract and retain superior talent and reward performance The executive compensation program provides an overall level of compensation opportunity that is competitive within the technology and software industries, as well as with a broader group of companies of comparable size and complexity. EXECUTIVE OFFICER COMPENSATION PROGRAM The Company's executive officer compensation program is comprised of base salary, long-term incentive compensation in the form of stock options, specific performance-based bonuses and various benefits, including medical and pension plans generally available to employees of the Company. BASE SALARY Base salary levels for the Company's executive officers are competitively set relative to companies in the technology industry. In determining salaries, the Committee also takes into account individual experience and performance and specific issues particular to the Company. STOCK OPTION PROGRAM The stock option program is the Company's long-term incentive plan for providing an incentive to officers, directors, employees and others. The 1996 Incentive Plan, the 1997 Incentive Plan, 1999 Stock Incentive Plan and the 2000 Incentive Plan authorize the Compensation Committee to award officers, directors, employees and others stock options. Options granted under such Plans may be granted containing terms determined by the Committee, including exercise period and price; provided, however, that each Plan requires that exercise price may not be less than the fair market value of the Common Stock on the date of the grant and the exercise period may not exceed ten years, subject to further limitations. BENEFITS The Company provides to executive officers, medical and pension benefits that generally are available to Company employees. BONUS The Company provides to certain executive officers bonuses based on performance and/or a change of control of the Company. CHIEF EXECUTIVE OFFICER COMPENSATION In the case of Edward G. Newman, the Company's Chief Executive Officer, the Compensation Committee evaluates the performance of the Company, the improvement of the Company's financial position and the Chief Executive Officer's contributions to the Company -15- and its growth as well as the considerations impacting the compensation of executive officers generally described above. Mr. Newman is employed with the Company pursuant to a three-year employment agreement expiring on December 31, 2002. See "Employment Agreements". Based on Mr. Newman's leadership efforts and commitment to the Company, the Company's 2000 operating performance and the criteria described above, in addition to a base salary of $263,476, payment of non-accountable expense and transportation allowances and other miscellaneous compensation of $76,211, a bonus of $50,000, and options to purchase 50,000 shares of the Company's Common Stock, were granted to Mr. Newman by the Compensation Committee for the fiscal year ending December 31, 2000. Steven A. Newman Lt. Gen. Harry E. Soyster (Ret.) Martin Eric Weisberg, Esq. Members of the Compensation Committee PERFORMANCE GRAPH Set forth below is a graph comparing the yearly change in the cumulative stockholder return on the Company's Common Stock with the Russell 2000 Index, the NASDAQ Composite Index and the Nasdaq Computer Manufacturing Index. The graph assumes that $100 was invested in the Company at its Initial Public Offering in the Common Stock and in each index, and that all dividends were reinvested. No cash dividends have been declared on the Common Stock. The stockholder returns shown on the graph below are not necessarily indicative of future performance. [PERFORMANCE GRAPH APPEARS HERE] -16- ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following table sets forth as of April 25, 2001, certain estimated information regarding the ownership of voting securities of the Company by each stockholder known to the management of the Company to be (i) the beneficial owner of more than 5% of the Company's outstanding Common Stock, (ii) the directors during the last fiscal year and nominees for director of the Company, (iii) the executive officers named in the Summary Compensation Table herein under "Executive Compensation" and (iv) all executive officers and directors as a group. The Company believes that the beneficial owners of the Common Stock listed below, based on information furnished by such owners, have sole investment and voting power with respect to such shares. Amount of Shares Percentage Name Beneficially Owned Owned ---- ------------------ ----- EUGENE J. AMOBI 500,000 (1) 1.2% 12701 Fair Lakes Circle Fairfax, Virginia 22033 DR. JOSEPH BEN-DAK 70,893 (2) * 12701 Fair Lakes Circle Fairfax, Virginia 22033 KEITH P. HICKS, ESQ. 399,597 (3) * 4121 Roberts Road Fairfax, Virginia 22032 JOHN F. MOYNAHAN 210,583 (4) * 12701 Fair Lakes Circle Fairfax, Virginia 22033 EDWARD G. NEWMAN 2,788,565 (5) 5.9% 12701 Fair Lakes Circle Fairfax, Virginia 22033 STEVEN A. NEWMAN, M.D. 1,492,147 (6) 3.1% 12701 Fair Lakes Circle Fairfax, Virginia 22033 -18- PHILLIP E. PEARCE 12701 Fair Lakes Circle Fairfax, Virginia 22033 JAMES J. RALABATE, ESQ 168,726 (8) * 5792 Main Street Williamsville, New York 14221 LT. GEN. HARRY E. SOYSTER (RET.) 149,364 (9) * 12701 Fair Lakes Circle Fairfax, Virginia 22033 KAZUYUKI TOYOSATO 90,000 (10) * Urban Square Yokohama Bldg. 10F 1-1 Sakae-cho Yokohoma-shi Kanagawa 221-0052 Japan DR. EDWIN VOGT 116,667 (10) * 12701 Fair Lakes Circle Fairfax, Virginia 22033 MARTIN ERIC WEISBERG, ESQ. 132,000 (12) * 405 Lexington Avenue New York, New York 10174 All Officers and directors as a group 6,223,542 (13) 12.6% (12 persons) ---------- * Less than 1% (1) Includes 200,000 shares of Common Stock issuable upon exercise of currently exercisable options. (2) Includes 70,893 shares of Common Stock issuable upon exercise of currently exercisable options. (3) Includes 80,000 shares of Common Stock issuable upon exercise of currently exercisable options. (4) Includes 160,583 shares of Common Stock issuable upon exercise of currently exercisable options, and 50,000 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of April 25, 2001. (5) Includes (a) 402,777 shares of Common Stock issuable upon exercise of currently exercisable options, (b) 200,000 shares of Common Stock beneficially owned by an irrevocable trust established by Mr. Newman for the benefit of his children, (c) 218,000 shares registered under the name of Bear Stearns pursuant to a pledge agreement between Mr. Newman and Bear Stearns, (d) 1,765 shares beneficially owned by Mr. Newman and his wife, Frances C. Newman, as joint tenants and (e) 9,000 shares owned by an irrevocable trust established by Dr. Steven A. Newman for which Mr. Newman is trustee. Does not include (a) 761,950 shares of Common Stock -19- beneficially owned by Mr. Newman's wife, Frances C. Newman; (b) 28,900 shares of Common Stock beneficially owned by an irrevocable trust established by Mr. Newman for the benefit of his sister; and (c) 28,900 shares of Common Stock beneficially owned by an irrevocable trust established by Mr. Newman for the benefit of his mother. Mr. Newman disclaims beneficial ownership of all such shares. (6) Includes (a) 501,166 shares of Common Stock issuable upon exercise of currently exercisable options, (b) 100,000 shares of Common Stock beneficially owned by an irrevocable trust established by Dr. Newman for the benefit of his children, for which shares Dr. Newman disclaims beneficial ownership, (c) 500,000 shares registered under the name of Bear Stearns pursuant to a pledge agreement between Dr. Newman and Bear Stearns and (d) 32,000 shares owned by an irrevocable trust established by Edward G. Newman for which Dr. Newman is trustee. (7) Includes 105,000 shares of Common Stock issuable upon exercise of currently exercisable options. (8) Includes 110,000 shares of Common Stock issuable upon exercise of currently exercisable options. (9) Includes 130,000 shares of Common Stock issuable upon exercise of currently exercisable options. (10) Includes 90,000 shares of Common Stock issuable upon exercise of currently exercisable options. (11) Includes 96,667 shares of Common Stock issuable upon exercise of currently exercisable options. (12) Includes (a) 105,000 shares of Common Stock issuable upon exercise of currently exercisable options and (b) 18,000 shares of Common Stock beneficially owned by Mr. Weisberg's children and 9,000 shares of Common Stock beneficially owned by Mr. Weisberg's wife. Mr. Weisberg disclaims beneficial ownership of all shares owned by his wife and children. (13) Includes 2,102,086 shares of Common Stock issuable to the group upon exercise of currently exercisable options. -20- ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In connection with transactions described below, the Company did not secure an independent determination of the fairness and reasonableness of such transactions and arrangements with affiliates of the Company. In each instance described below, the disinterested directors (either at or following the time of the transaction) reviewed and approved the fairness and reasonableness of the terms of the transaction. The Company believes that each transaction was fair and reasonable to the Company and on terms at least as favorable as could have been obtained from non-affiliates. Transactions between any corporation and its officers and directors are subject to inherent conflicts of interest. TECH INTERNATIONAL AND TECH VIRGINIA Since December 1992, the Company has maintained various business relationships with Tech International and since 1994, with Tech Virginia. Tech International operates a computer software and consulting business. Until December 30, 1994, Tech International's Virginia operations were conducted through its Virginia business unit. On December 30, 1994, Tech International spun-off the Virginia business unit (the "Spin-Off") as Tech Virginia. Edward G. Newman, a principal stockholder, director and the Chairman, President and Chief Executive Officer of the Company, Steven A. Newman, an Executive Vice President and Vice Chairman of the Board of Directors of the Company and Eugene J. Amobi, a director of the Company, were the stockholders, and continue as officers and directors of Tech Virginia. Eugene J. Amobi is the sole director and stockholder of Tech International MANAGEMENT PERSONNEL AGREEMENTS WITH TECH VIRGINIA Messrs. Edward G. Newman, Steven A. Newman and Eugene Amobi each had employment agreements with Tech Virginia under which each of them was entitled to a salary and each was eligible to receive certain bonuses. The agreements with Messrs. Edward G. Newman and Steven A. Newman required each of them to devote only reasonable time and attention to Tech Virginia, provided their activities for Tech Virginia did not interfere with their obligations to the Company. Upon the acquisition of Tech Virginia by the Company, such employment agreements were terminated by agreement with Messrs. Newman, Newman, and Amobi. Messrs. Newman, Newman and Amobi have continued to provide services to Tech Virginia since the acquisition without contract but under similar terms and conditions as their terminated agreements. LEGAL SERVICES The Company uses a member of its Board of Directors as its patent counsel. The Company ad expenditures of $174,468, $239,598 and $164,956 during 2000, 1999 and 1998, respectively, in legal services payable tot his Director. this Director also serves as the Company's processing agent for payments made to various other domestic and international law firms and agencies used to file and maintain patents and trademarks. The Director is paid only the amount owed by the Company to the other law firms and does not directly profit from these services. the Company made payments of $266,026, $224,377 and $148,231 during 2000, 1999 and 1998, respectively, to this Director related to his services as processing agent. The Company uses a law firm, in which an officer and member of its Board of Directors is a partner, for services related to securities, financings, litigation and other general legal matters. -21- The Company had expenditures of $446,320, $663,075 and $345,207 during 2000, 1999 and 1998, respectively, in legal services payable to this law firm. -22- ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K Exhibit Description ------- ----------- 23.1 Consent of Grant Thornton LLP -23-
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Xybernaut Corporation Dated: April 27, 2001 By: /s/ Edward G. Newman -------------------------------------------------- Edward G. Newman President, Chief Executive Officer and Chairman of the Board of Directors In accordance with the Exchange Act, this report has been signed by the following persons in the capacities and on the dates indicated: Signature Title Date /s/ Edward G. Newman President, Chief Executive Officer and Chairman of April 27, 2001 -------------------------------------------- the Board of Directors Edward G. Newman /s/ Steven A. Newman, M.D. Executive Vice President and Vice Chairman of the April 27, 2001 -------------------------------------------- Board of Directors Steven A. Newman, M.D. /s/ John F. Moynahan Senior Vice President, Chief Financial Officer and April 27, 2001 -------------------------------------------- Treasurer John F. Moynahan /s/ Eugene A. Amobi Director April 27, 2001 -------------------------------------------- Eugene A. Amobi /s/ Keith P. Hicks Director April 27, 2001 -------------------------------------------- Keith P. Hicks /s/ Phillip E. Pearce Director April 27, 2001 -------------------------------------------- Phillip E. Pearce /s/ James J. Ralabate Director April 27, 2001 -------------------------------------------- James J. Ralabate /s/ Lt. Gen. Harry E. Soyster Director April 27, 2001 -------------------------------------------- Lt. Gen. Harry E. Soyster /s/ Kazuyuki Totosato Executive Vice President and Director April 27, 2001 -------------------------------------------- Kazuyuki Toyosato /s/ Dr. Edwin Vogt Senior Vice President and Director April 27, 2001 -------------------------------------------- Dr. Edwin Vogt /s/ Martin Eric Weisberg, Esq. Secretary and Director April 27, 2001 -------------------------------------------- Martin Eric Weisberg, Esq
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