-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Utm28yKQwYmr00oR+netZWLDQON/vFFhG0EJXjRplhpvLX+sdD/yMLsJyAD/jl4q IB2BwIGqPBXwIyNKL/1/Zg== 0001079974-01-000010.txt : 20010206 0001079974-01-000010.hdr.sgml : 20010206 ACCESSION NUMBER: 0001079974-01-000010 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010410 FILED AS OF DATE: 20010205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITRO DIAGNOSTICS INC CENTRAL INDEX KEY: 0000793171 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 841012042 STATE OF INCORPORATION: NV FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: SEC FILE NUMBER: 000-17378 FILM NUMBER: 1525149 BUSINESS ADDRESS: STREET 1: 8100 SOUTHPARK WAY STREET 2: BLDG B-1 CITY: LITTLETON STATE: CO ZIP: 80120 BUSINESS PHONE: 3037986882 FORMER COMPANY: FORMER CONFORMED NAME: LABTEK INC DATE OF NAME CHANGE: 19870217 FORMER COMPANY: FORMER CONFORMED NAME: IMPERIAL MANAGEMENT INC DATE OF NAME CHANGE: 19870201 PRE 14A 1 0001.txt PRELIMINARY INFORMATION STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [] Check the appropriate box: [X] Preliminary Proxy Statement [] Definitive Proxy Statement [] Definitive Additional Materials [] Soliciting Material Pursuant toss.240.14a-12 VITRO DIAGNOSTICS, INC. -------------------------------------------------- (Name of Registrant as Specified In Its Charter) ---------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No Fee required. [] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: ---------------------------------------------------------------------- 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ---------------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: ---------------------------------------------------------------------- 5) Total fee paid: ---------------------------------------------------------------------- [] Fee paid previously with preliminary materials. [] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ---------------------------------------------------------------------- 2) Form, Schedule or Registration Statement No.: ---------------------------------------------------------------------- 3) Filing Party: ---------------------------------------------------------------------- 4) Date Filed: ---------------------------------------------------------------------- VITRO DIAGNOSTICS, INC. 8100 Southpark Way, Building B-1 Littleton, Colorado 80120 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS April 10, 2001 The Annual Meeting of Shareholders of Vitro Diagnostics, Inc., a Nevada corporation (the "Company"), will be held at the _________ Denver, Colorado _____, phone (303) _____ on April 10, 2001, at 9:00 a.m., Denver Time, for the following purposes: 1. To elect five members of the Board of Directors to serve until the next annual meeting of shareholders and until their successors are elected; 2. To approve Amended and Restated Articles of Incorporation, to generally update the Articles; 3. To ratify the appointment of Cordovano and Harvey, P.C. as the Company's independent accountants for the fiscal year ending October 31, 2001; and 4. To transact such other business as may properly come before the meeting or any adjournment thereof. The Board of Directors has fixed the close of business on February 23, 2001 as the record date for the determination of the holders of the Company's common stock, par value $.001, entitled to notice of, and to vote at, the meeting. Accordingly, only shareholders of record on the books of the Company at the close of business on that date will be entitled to notice of and to vote at the Annual Meeting and any adjournment and postponement thereof. All shareholders are invited to attend the meeting in person. TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED, PRE-ADDRESSED ENVELOPE. Any shareholder attending the annual meeting may revoke his or her proxy and vote in person, even if that shareholder has returned a proxy. A Proxy Statement explaining the matters to be acted upon at the meeting follows. Please read it carefully. By Order of the Board of Directors, William J. Schmuhl, Jr., Secretary [March 1, 2001] PROXY STATEMENT VITRO DIAGNOSTICS, INC. Annual Meeting of Shareholders April 10, 2001 GENERAL INFORMATION This Proxy Statement is furnished in connection with the solicitation of Proxies by the Board of Directors of Vitro Diagnostics, Inc., a Nevada Corporation (the "Company"), for use at the Annual Meeting of Shareholders of the Company to be held at _________ Denver, Colorado _____, phone (303) _____ on April 10, 2001 at 9:00 a.m., Denver Time, and at any and all adjournments of such meeting. This Proxy Statement and the enclosed form of Proxy are first being sent to shareholders on or about [March 9, 2001]. If the enclosed Proxy is properly executed and returned in time to be voted at the meeting, the shares represented will be voted in accordance with the instructions contained therein. Executed Proxies that contain no instructions will be voted FOR the election of all nominees named herein as directors, FOR the adoption of the Amended and Restated Articles of Incorporation and FOR the ratification of the appointment of Cordovano and Harvey, P.C. as auditors. Shareholders who execute Proxies for the Annual Meeting may revoke their Proxies at any time prior to their exercise by delivering written notice of revocation to the Company, by delivering a duly executed Proxy bearing a later date, or by attending the meeting and voting in person. The cost of the meeting, including the cost of preparing and mailing this Proxy Statement and Proxy, will be borne by the Company. The Company may use the services of its directors, officers, employees and contractors to solicit Proxies, personally or by telephone, but at no additional salary or compensation. The Company will also request banks, brokers and others who hold common stock of the Company in nominee names to distribute Proxy soliciting materials to beneficial owners and will reimburse such banks and brokers for reasonable out-of-pocket expenses which they may incur in so doing. Only holders of record of the Company's common stock, par value $.001 per share, on February 23, 2001 are entitled to receive notice and to vote at the Annual Meeting. Each share of common stock is entitled to one vote. On February 23, 2001 there were a total of 8,534,835 shares of common stock outstanding. The presence in person or by proxy of not less than one-third of the outstanding common stock will constitute a quorum for the transaction of business at the Annual Meeting. Brokers who hold common stock in street name and do not receive instructions from their clients on how to vote on a particular proposal are permitted to vote on routine proposals but not on non-routine proposals. The absence of votes on non-routine proposals is "broker nonvotes." Abstentions and broker nonvotes will be counted as present for purposes of establishing a 1 quorum, but will have no effect on the election of directors, the ratification of the appointment of auditors, the adoption of amended and restated Articles of Incorporation or any other matter voted on at the meeting because they will not be counted as votes for or against any matter. YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED PROXY CARD PROMPTLY SO YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE MEETING IN PERSON. ELECTION OF DIRECTORS (Proposal 1 on Proxy Card) Directors and Executive Officers - -------------------------------- The Board of Directors currently consists of five members, each of whom is nominated to serve until the next Annual Meeting of Shareholders and until his successor is elected and qualified. The following table reflects the directors and executive officers of the Company as of the date of this Proxy Statement. All of the current directors are nominees for reelection at the Annual Meeting. Name Age Position - -------------------------- --- ---------------------------------- Ronald L. Goode, Ph.D(1) 57 Chairman of the Board of Directors James R. Musick, Ph.D 55 President, Chief Executive Officer and Director Erik D. Van Horn 33 Vice President and Director Henry C. Schmerler(1) 60 Treasurer, Chief Financial Officer and Director William J. Schmuhl, Jr.(1) 57 Secretary and Director - ------------------------- (1) Members of the Audit and Compensation Committees. - ------------------------- The following information summarizes the business experience for the last five years of the officers and directors of the Company, as well as, where relevant, the educational background of such individuals: James R. Musick, Ph.D. was appointed President and Chief Executive Officer of the Company on August 7, 2000. From September 1, 1989 until August 7, 2000, Dr. Musick served as Vice President, Secretary and Chief Operating Officer of the Company. He has also served as a director of the Company since September 1, 1989. Dr. Musick received a Bachelor of Arts in Biological Sciences in 1968 and a doctorate in Biological Sciences in 1975 from Northwestern University in Evanston, Illinois. 2 Erik D. Van Horn was appointed Vice President of the Company on August 7, 2000. He has also been Production Manager and a director of the Company since March of 1993. He received his Bachelor of Science in Chemical Engineering from the University of Colorado in 1990. Ronald L. Goode, Ph.D., a former executive in the pharmaceutical industry, has served as a director of the Company since August 7, 2000 and was elected Chairman of the Board on September 14, 2000. He currently is president and sole shareholder of Pharma-Links, Inc., a consulting business focusing on strategic alliances and other collaborative relationships within the pharmaceutical industry, a position he has held since 1999. Dr. Goode's Ph.D. was earned in microbial genetics at the University of Georgia. From 1997 to 1999, Dr. Goode was president and chief executive officer of Unimed Pharmaceuticals, a Delaware corporation with securities traded on the Nasdaq National Market System. Prior to that, Dr. Goode held a variety of executive positions with two major pharmaceutical firms (G.D. Searle and Company and Pfizer Pharmaceuticals), including senior vice president of licensing and business development of G.D. Searle from 1995 to 1997 and president of Searle International from 1991 to 1995. In addition, Dr. Goode was Vice-President of Clinical and Scientific Affairs for Pfizer Pharmaceuticals from 1985 to 1986. Henry C. Schmerler has served as a director of the Company since August 7, 2000 and was elected Treasurer on September 14, 2000. He also served as Secretary from September 14, 2000 to December 1, 2000. Mr. Schmerler has acted as a financial consultant since 1994. Prior to that, he was an executive with Dun and Bradstreet Corporation, where he held various positions over the course of thirty years including Vice President of Business Development (1991 - 1994), Vice President of Customer Relations (1989 - 1991), President of the Credit Clearing House (1986 - 1989) and President of the National Credit Office (1983 - 1986). Mr. Schmerler received a Bachelor's degree in Economics from Hobart College, Geneva, New York in 1962. William J. Schmuhl, Jr. has served as a director and Secretary of the Company since December 1, 2000. He serves as president and chief executive officer of Heywood Williams, Inc., a $600 million multi-division manufacturer and distributor of building products. He has held that position since 1996. He has been employed with Heywood Williams or one of its predecessors since 1978, and served as president and chief executive officer of Bristol Corporation, a $160 million subsidiary between 1990 and 1996. Prior to that, Mr. Schmuhl acted as a business consultant with Cromwell Management Corporation. He also taught accounting and business law and acted as department chair of the Department of Business Administration and Economics at Saint Mary's College, Notre Dame, Indiana. Prior to that, Mr. Schmuhl practiced as an accountant and as an attorney. He received his Bachelor's degree in Business Administration in 1965 and Juris Doctorate in 1967 from the University of Notre Dame, and an MBA from the University of Chicago in 1972. Each director will serve until the next annual meeting of shareholders and until his successor is duly elected and qualified, or until his resignation or removal. Officers of the Company serve at the pleasure of the Board of Directors. There is no family relationship between any of the Company's directors or executive officers. 3 If a quorum is present, directors are elected by a plurality of votes (i.e. the five candidates receiving the highest number of votes will be elected to the Board of Directors). The Board of Directors unanimously recommends a vote FOR the nominees listed above. Board of Directors' Meetings and Committees - ------------------------------------------- During the fiscal year ended October 31, 2000 (hereinafter "last fiscal year"), the Company's Board of Directors held ____ meetings and took action ______ times by unanimous written consent. Messrs. Musick and Van Horn were directors during the entire last fiscal year and participated in each decision made by the Board. Messrs. Goode and Schmerler were directors from August 7, 2000 through the end of the last fiscal year and participated in each decision made by the Board during that time period. (See "Changes in Control") The Board of Directors of the Company maintains a standing Audit and Compensation Committee. The Audit Committee is responsible for reviewing and evaluating the Company's financial controls and financial reporting obligations. The Compensation Committee is responsible for reviewing and evaluating the duties and performance of the Company's officers and key employees and making recommendations concerning their compensation. The Compensation Committee also oversees the Company's stock option plan. The members of the Audit and Compensation Committees are Messrs. Goode, Schmerler and Schmuhl. There were no meetings of the Audit and Compensation Committees during the last fiscal year, as the committees were only recently appointed. Management Remuneration - ----------------------- The following table summarizes the total compensation of the chief executive officer; any person who served as the chief executive officer during the last fiscal year, and any other executive officers whose compensation from the Company exceeded $100,000 during that period (the "Named Officers"): SUMMARY COMPENSATION Long Term Compensation Annual Securities Year Ended Compensation Underlying Name October 31, Salary Options - -------------------------- ----------- ------------ --------------- James R. Musick, President 2000 $ 57,708 0 and Chief Executive Officer Roger Hurst* 2000 43,281 0 1999 55,876 31,848 1998 53,920 100,000 4 * Mr. Hurst, former President and Chief Executive Officer, resigned from the Company effective August 7, 2000 and the compensation reflected is through that date. See "Changes in Control" and "Certain Transactions - Disposition of Assets" for additional transactions between Mr. Hurst and the Company. Option Grants For 2000 - ---------------------- No stock options were granted to any of the Named Officers during the last fiscal year. Year End Option Values - ---------------------- The following table sets forth the value of unexercised options held by the Named Officers at October 31, 2000 and the value of common stock acquired by Mr. Hurst during the last fiscal year. The last sales price of the Company's common stock on October 31, 2000 was $1.00. Value of Number of unexercised Shares Unexercised in-the-money Acquired Value Options at options at Name on Exercise Realized($) fiscal year end fiscal year end - -------------------------------------------------------------------------------- Roger D. Hurst 600,000 $1,340,000 31,848 $ 11,943(1) James R. Musick 0 0 31,848 $ 11,943(1) - ------------------------- (1) Based upon the difference between the exercise price of $.625 and the last reported sale price of the Company's common stock of $1.00 per share on October 31, 2000. - ------------------------- Stock Option Plan - ----------------- The Company adopted a new Equity Incentive Plan on October 9, 2000 (the "New Plan") for the benefit of key personnel and others providing significant services to the Company. An aggregate of 1,000,000 shares of common stock have been reserved for issuance under the New Plan. The New Plan will replace the 1992 Equity Incentive Plan (the "1992 Plan"). The 1992 Plan will remain effective only so long as options remain outstanding under the 1992 Plan. No new options will be granted under the 1992 Plan, and the only shares that will be issued under the 1992 Plan are those shares underlying currently outstanding options. During the last fiscal year, the Company issued 62,248 shares of common stock through the cashless exercise of 82,656 options issued under the 1992 Plan. An additional 17,500 shares were sold for $1,400 through the exercise of 17,500 options at $.08 per share. At the fiscal year end, 1,194,844 options remained outstanding under the 1992 Plan. Subsequently, on or about December 1, 2000, the Company issued 275,088 shares of common stock through the cashless exercise of 357,480 options, and 323,500 options expired. Currently, [481,364] options remain outstanding under the 1992 Plan, with exercise prices ranging from $.07 to $1.50 per share. 5 The New Plan authorizes total stock awards of up to 1,000,000 shares of the Company's common stock. Awards may take the form of incentive stock options, non-qualified stock options, restricted stock awards, stock bonuses and other stock grants. If a stock award made under the New Plan expires, terminates, is canceled or settled in cash without the issuance of all shares of common stock covered by the award, those shares will be available for future awards under the New Plan. Awards may not be transferred except by will or the laws of descent and distribution. No awards may be granted under the Proposed Plan after September 30, 2010. The New Plan is administered by the Company's Board of Directors, which may delegate its authority to a committee of the Board of Directors. The Board of Directors has the authority to select individuals to receive awards, to determine the time and type of awards, the number of shares covered by the awards, and the terms and conditions of such awards in accordance with the terms of the Plan. In making such determinations, the Board of Directors may take into account the recipient's current and potential contributions and any other factors the Board of Directors considers relevant. The recipient of an award has no choice regarding the form of a stock award. The Board of Directors is authorized to establish rules and regulations and make all other determinations that may be necessary or advisable for the administration of the New Plan. All options granted pursuant to the New Plan shall be exercisable at a price not less than the fair market value of the common stock on the date of grant. Unless otherwise specified, the options expire ten years from the date of grant. As of the date of this Proxy Statement, 46,000 options have been issued under the New Plan at exercise prices ranging from $____ to $1.19, all of which are still outstanding. Compensation of Directors - ------------------------- Each member of the Board of Directors who is not an employee of the Company received options to purchase 10,000 shares of common stock upon appointment to the Board and is entitled to receive an additional 10,000 options upon reelection for each additional term. However, as each existing member of the Board received options in December, no further annual grants will be made until the Company's annual meeting for the 2001 fiscal year. Additionally, non-employee Board members receive options for 2000 shares of common stock for each meeting attended in person and 500 shares of common stock for each meeting attended by telephone. The Chairman of the Board received options to purchase 5,000 shares upon his appointment and chairmen of each standing committee of the Board receive options for 2,500 shares upon their appointment. Upon election or reelection as Chairman of the Board or chairman of a standing committee, the member is entitled to receive options for an additional 5,000 shares or 2,500 shares, respectively. All of these options are exercisable at a price equal to the closing bid price of the Company's common stock on the date of grant and for a period of ten years thereafter. During the last fiscal year, a total of [35,000] options were granted to Directors. Each director is also entitled to be reimbursed for reasonable and necessary expenses incurred on behalf of the Company. 6 Security Ownership of Certain Beneficial Owners and Management - -------------------------------------------------------------- The following table sets forth information with respect to the ownership of the Company's common stock by all officers and directors individually, all officers and directors as a group, and all beneficial owners known to the Company to hold more than five percent (5%) of the Company's common stock. As of February 23, 2001, a total of 8,534,835 shares of common stock, the Company's only class of voting stock, were issued and outstanding. The following shareholders have sole voting and investment power with respect to the shares, unless it is indicated otherwise. Name and Address of Beneficial Owner Number of Shares % Officers and Directors - ----------------------------------------- ---------------- ---- James R. Musick (1,2) 1,342,198 15.73% 8100 Southpark Way Unit B-1 Littleton, Colorado 80120 Erik Van Horn(3) 534,016 6.26% 8100 Southpark Way Unit B-1 Littleton, Colorado 80120 Henry C. Schmerler(4) 186,500 2.19% 5095 Joewood Drive Sanibel, Florida 33957 Ronald L. Goode(5) 94,000 1.10% 1051 Melody Road Lake Forest, Illinois 60045 William J. Schmuhl, Jr.(6) 47,800 * 1421 Honan Drive Southbend, Indiana 46614 Officers and Directors as a group(1,2,3,4,5,6) 2,204,514 25.89% (5 individuals) Five Percent Shareholders - ------------------------- Roger D. Hurst 1,159,027 13.58% 8100 Southpark Way Unit B-1 Littleton, CO 80120 The James R. Musick Trust 855,209 10.02% Lloyd Hansen(7) 1,380,000 16.17% 2646 S.W. Mapp Rd STE #304 Palm City, FL 34990 World Wide Capital Investors, LLC 2,370,000 27.77% P.O. Box 8 Westcliffe, CO 81252 7 - ------------------------- * Less than 1% (1) Includes 31,848 shares of common stock underlying an option exercisable at $.625 until June 6, 2009. (2) Includes 855,209 shares held by The James R. Musick Trust, of which Mr. Musick is a trustee and beneficiary. (3) Includes 530,516 shares of common stock underlying options exercisable at prices ranging from $.07 to $.625 and expiring through 2009. (4) Includes 36,500 shares of common stock underlying options exercisable at prices ranging from $1.094 to $1.50 and expiring in 2010. Also includes 125,000 shares owned by a limited liability company in which Mr. Schmerler is a member, representing the individual's pro-rata share of common stock owned by that entity. (5) Includes 44,000 shares underlying options exercisable at prices ranging from $1.094 to $1.50 and expiring in 2010. (6) Includes 14,500 shares of common stock underlying options exercisable at $1.19 until December 01, 2010. Also includes 33,300 shares owned by a limited liability company in which Mr. Schmuhl is a member, representing the individual's pro-rata share of common stock owned by that entity. (7) Includes 40,000 shares owned by Mr. Hansen's children and 200,000 owned by the Barnabus Trust, of which Mr. Hansen is a trustee and beneficiary. - ------------------------- Changes in Control and Voting Agreement - --------------------------------------- Effective August 7, 2000, the Company entered into a number of agreements, as a result of which it experienced a change in control. Roger D. Hurst, former President, Chief Executive Officer and a director of the Company, resigned from those positions and James R. Musick succeeded Mr. Hurst as the President. Two individuals, Mssrs. Goode and Schmerler, were added to the Board of Directors, one to fill the vacancy created by the resignation of Mr. Hurst and one to fill a new position. An additional position was added to the Board and filled by William J. Schmuhl, Jr., by election of the shareholders on December 1, 2000. In addition, certain of the Company's shareholders agreed to vote common stock of the Company in favor of the election and retention of certain directors, including the foregoing individuals. Also effective August 7, 2000, the Company sold certain assets formerly used in its business to a private company controlled by Mr. Hurst. At the same time, Mr. Hurst resigned his position as President, Chief Executive Officer and 8 a director of the Company. In accordance with the terms of a shareholders' agreement executed on the same date, remaining members of the Board of Directors voted to increase the Board to four individuals. Messrs. Henry Schmerler and Ronald Goode were then elected to fill the vacancy created by the resignation of Mr. Hurst and the vacancy created by the expansion of the Board. Simultaneously, the Board elected James R. Musick, formerly the Company's Vice President and Secretary, as President on an interim basis pending further consideration by the Board. Erik Van Horn was elected Vice President and Secretary. Pursuant to the terms of the shareholders' agreement, World Wide Capital Investors, LLC ("WWC"), the owner of 2,370,000 shares of the Company's common stock, Messrs. Musick and Van Horn agreed to vote their shares for the election of Messrs. Musick, Schmerler, Goode, Van Horn and William J. Schmuhl, Jr. for a period of 3 years. Also in conjunction with the shareholders' agreement, Messrs. Hurst and Musick granted a proxy with regard to 1,400,000 shares of their common stock to Ronald Goode or Henry Schmerler to vote as determined by a majority vote of the Board of Directors. The shareholders' agreement represented a compromise between the Company's then management and WWC with regard to the efforts of WWC to nominate and elect certain individuals to the Company's Board of Directors and otherwise exercise control of the Company. The Company knows of no other arrangements, including the pledge of securities by any person, which would result in a change of control of the Company. Certain Transactions - -------------------- Disposition Of Assets Also effective August 7, 2000, pursuant to the terms of a purchase agreement, the Company sold all of the assets of its diagnostic operation to AspenBio, Inc., a private Colorado corporation ("purchaser") controlled by Mr. Hurst. This transaction was effective for accounting purposes on July 31, 2000. In exchange for the assets, the purchaser agreed to pay the Company $700,000 and assume a majority of its debts and liabilities. At closing, the Company received $250,000 cash and a promissory note in the principal amount of $450,000 payable September 7, 2000. The Note was paid in full on September 7, 2000. In addition, the purchaser assumed all of the Company's debts and liabilities except for certain excluded liabilities associated with the business and assets which it retained, which debts and liabilities were valued at $________. The purchaser has paid all material liabilities or obtained releases for the Company for the outstanding liabilities. See MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR RESULTS OF OPERATION and the Financial Statements contained in the Company's Annual Report on Form 10-KSB for a more complete description of this transaction. The assets included in this sale were all of the assets formerly used by the Company in its diagnostic operations. These assets include equipment, furniture, fixtures, inventory, accounts receivable and intangible assets associated with that business. These assets were formerly used by the Company to produce and distribute antigens primarily for diagnostic purposes. Following the sale, the Company retained patents and other intellectual property which it uses or proposes to use in connection with its therapeutic business. 9 The value of the assets transferred in this sale was based on a variety of factors considered by the Board of Directors. These factors included negotiations between the parties, historical cash flow of the assets during the preceding fiscal years, estimated replacement cost of certain assets and estimates of the assets provided by third parties. The Board did not find it suitable to and did not assign relative weights to the individual factors considered in reaching a conclusion as to the estimated value of the assets. However, the Board believes that each of those factors was material to a determination of the sale price. The Board of Directors of the Company as then constituted considered the terms of that transaction no less favorable than could have been obtained from an unaffiliated third party. In connection with the purchase agreement, the Company agreed to indemnify Mr. Hurst and Mr. Hurst has indemnified the Company as to certain liabilities related to the transaction. The indemnification includes liabilities of the Company which were assumed by the purchaser. Consulting Agreement The Company executed an agreement on November 3, 2000 with Pharma-Links, Inc. (the "Agreement"), a consulting company focusing on strategic alliances and other collaborative relationships within the pharmaceutical industry. The agreement allows Pharma-Links, Inc. to investigate and negotiate, if appropriate, strategic alliances, joint ventures, partnerships, equity investments, licenses, mergers, sales of assets or other business relationships to develop the Company's products and technology. It contemplates that Pharma-Links may make introductions to potential partners, provide counsel to the Company in negotiating or structuring the relationship, make presentations and negotiate on the Company's behalf. Pharma-Links is owned and operated by Dr. Ronald Goode, a director of the Company. The Agreement provides for payment of a fee to Pharma-Links, Inc. equal to 5% of the aggregate consideration received with respect to any agreement entered into by the Company with a third-party pursuant to the terms and conditions of the Agreement, and an additional 1% for each $10 million of such aggregate consideration in excess of $30 million, subject to a maximum fee of 10% for any aggregate consideration in excess of $80 million. The Board of Directors considered the terms and conditions of this agreement no less favorable than could have been obtained from an unaffiliated third party. Other Events - ------------ In connection with the compromise with WWC and the sale of assets to the purchaser, the Company executed a settlement agreement and mutual release relating to claims pending between the parties. Parties to the settlement include the Company, purchaser, Hurst individually, WWC, Kyln Roth, a manager of WWC, Musick and Van Horn individually. This agreement releases and discharges each party from any and all claims pending between them except for claims arising out of the shareholders' agreement, purchase agreement or other documents referenced therein. 10 In conjunction with the settlement agreement, the Company and WWC executed a registration rights agreement relating to common stock owned by WWC. This agreement obligates the Company to register up to 2,370,000 shares of the Company's common stock with the Securities and Exchange Commission upon the request of WWC and to keep that registration effective for a period of up to six months. The Company agreed to pay all costs and expenses in connection with that registration except commissions payable upon sale of the common stock by the shareholder. Compliance with Section 16(a) of the Securities Exchange Act of 1934 - -------------------------------------------------------------------- The following sets forth each director, officer or beneficial owner of more than ten percent of any class of equity securities of the registrant registered pursuant to Section 12 that failed to file on a timely basis, Forms 3, 4 or 5 as required by Section 16(a) during the most recent fiscal year or prior years. The numbers of late Form 3, Form 4 and Form 5 reports, and the late Form 4 transactions reported are as follows: Name of reporting Person Late Form 3 Late Form 4 Late Form 5 Transactions - ------------------------ ----------- ----------- ----------- ------------ [Erik Van Horn 2 2 ] [Lloyd Hansen* 1 ] [World Wide Capital Investors, LLC ] * Mr. Hansen is a beneficial owner of more than ten percent, but the Company does not believe that Mr. Hansen has filed any reporting Forms in the most recent fiscal years. ADOPTION OF PROPOSED AMENDED AND RESTATED ARTICLES OF INCORPORATION (Proposal 2 on Proxy Card) The Board of Directors adopted the Amended and Restated Articles of Incorporation ("Proposed Articles") on February 5, 2001 and requests that the shareholders ratify the adoption of those Articles. The complete text of the Proposed Articles are included as Exhibit 3.1 to this proxy statement. The Board recommends that the shareholders carefully review the Proposed Articles, and recommends a vote FOR the Proposed Articles. By way of background, the Company was originally formed as Labtek, Inc., a Colorado corporation, on February 3, 1986. It merged with Imperial Management, Inc., a Nevada corporation on December 8, 1986, with Imperial Management being the surviving corporation. The new entity was, and continues to be, governed by Nevada law and by the Articles of Incorporation and Bylaws of Imperial Management. In 1987, the Company changed its name to Vitro Diagnostics, Inc. In 1988, the Company amended its Articles again to increase the number of authorized shares of common stock from 50,000,000 to 500,000,000 shares. This history of the merger and the name change has caused some confusion as to which Articles and Bylaws actually govern the Company. Furthermore, the Articles have not been substantially revised since the original merger. For this reason, the Board believes an amendment and restatement of the Articles is necessary so that one document with all of the accurate information regarding the Company, including its current name, is available to govern the Company. 11 The Proposed Articles are intended to update the current Articles of Incorporation to be consistent with the current law and to cure certain inconsistencies within the Articles themselves and between the Articles and the Bylaws. The material changes made by the Proposed Articles are summarized as follows: o The current Articles call for only one-third of the shares outstanding to be represented in order to constitute a quorum for a vote of shareholders. Management believes that it is appropriate for a majority of the outstanding shares to be present in person or by proxy in order to have a quorum. The Proposed Articles do not reflect a quorum requirement, thereby allowing the bylaws or state law (which reflects the majority standard) to designate the required quorum. o The current Articles state in one section that a majority of the quorum may take shareholder action, and elsewhere that a majority of the holders of outstanding shares entitled to vote shall be required to take action. Management believes that the appropriate standard, consistent with that dictated by current law, is that a vote of the majority of the shares represented at a meeting should be necessary to take shareholder action. Again, the Proposed Articles will be silent, permitting either the Bylaws or state law to dictate the appropriate standard. o Currently, the Articles contain a provision restricting the number of shareholders if there are less than three directors, and require a related restrictive legend on the share certificates. These restrictive provisions reflect the law at the time the Articles were originally drafted, and such restrictions are no longer legally required, nor does the Board believe such restrictions offer any benefit to the Company. These restrictions are not contained in the Proposed Articles. Because of the extensive amendments proposed to the Articles, the Board has determined that it is appropriate to restate the Articles in full, rather than to file the various changes as amendments to the 1986 Articles, as already amended. If the Proposed Articles are adopted, they will become effective upon filing with the Nevada Secretary of State. The affirmative vote of a majority of the votes entitled to vote at the annual meeting is required for the adoption of the proposed Amended and Restated Articles of Incorporation. The Board of Directors recommends a vote FOR the adoption of the proposed amended and restated Articles of Incorporation, and proxies solicited by the Board of Directors will be so voted in the absence of instructions to the contrary. APPOINTMENT OF AUDITORS (Proposal 3 on Proxy Card) On February 5, 2001, the Board of Directors approved the appointment of Cordovano and Harvey, P.C. as the principal accountant and independent auditors for the fiscal year ending October 31, 2001, and solicits the ratification of this appointment by the shareholders. Cordovano and Harvey, P.C. has acted as the principal accountant and independent auditor since October 9, 2000. Neither such firm, any of its members nor any of their associates, has or has had during the past four years, any financial interest in the business or affairs, direct or indirect, or any relationship with the Company other than in connection with their duties as auditors and accountants. Prior to October 9, 2000, Larry O'Donnell, CPA, P.C. acted as the principal accountant and independent auditors for the Company. During the Company's two most recent fiscal years and the interim period up to October 9, 2000, there were no disagreements with Larry O'Donnell, CPA, P.C. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope and procedure which, if not resolved to the satisfaction of Larry O'Donnell, CPA, P.C., would have caused Larry O'Donnell, CPA, P.C. to make reference to the matter in its report. Further, there were no reportable events as that term is described in Item 304(a)(1)(iv)(B) of Regulation S-K. 12 Representatives of Cordovano and Harvey, P.C. are expected to be present at the annual meeting to respond to shareholders' questions and to make any statements they consider appropriate. The affirmative vote of a majority of the votes entitled to vote at the annual meeting is required for the adoption of the proposed appointment of the independent auditors. The Board of Directors recommends a vote FOR the ratification of appointment of the independent auditors, and proxies solicited by the Board of Directors will be so voted in the absence of instructions to the contrary. SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING Shareholders who wish to submit a proposal for action at the 2001 Annual Meeting of Shareholders must do so in accordance with the regulations of the Securities and Exchange Commission. In order to be eligible to submit a proposal, a shareholder must own and have owned, for one year prior to the date of the annual meeting, at least 1% or $1,000 in market value of securities entitled to be voted on the proposal, and must continue to hold such securities through the date of the meeting. For proposals to be considered for inclusion in the Proxy Statement for the 2001 annual meeting, they must be received by the Company no later than December 10, 2001. It is anticipated that the next annual meeting will be held in April of 2002. Such proposals should be directed to Vitro Diagnostics, Inc., 8100 Southpark Way, Building B-1, Littleton, Colorado 80120, Attention: William J. Schmuhl, Jr., Secretary. ANNUAL REPORT TO SHAREHOLDERS The Company's Annual Report on Form 10-KSB for the last fiscal year, including financial statements and schedules, is included with this Proxy Statement. The Company will provide a copy of any exhibits to the Form 10-KSB without charge to any shareholder upon request. OTHER BUSINESS The Board of Directors is not aware of any business to come before the meeting other than those matters described above in this Proxy Statement. If, however, any other matters should properly come before the meeting, it is intended that holders of the Proxies will act in accordance with their judgment on such matters. BY ORDER OF THE BOARD OF DIRECTORS: William J. Schmuhl, Jr., Secretary 13 PROXY VITRO DIAGNOSTICS, INC. ANNUAL MEETING OF STOCKHOLDERS April 10, 2001 9:00 A.M. The undersigned hereby appoints Ronald L. Goode and James R. Musick, or either of them, with full power of substitution, to act as Proxy for the undersigned, and to vote all shares of common stock of the Company that the undersigned is entitled to vote at the annual meeting of the Company's stockholders to be held at [the Hotel Teatro, located at 1100 14th Street, Denver, Colorado 80202, phone (303) 228-1100]. The annual meeting will begin at 9:00 a.m. Denver time, on April 10, 2001. The phone number of the Company is (303) 794-2000. This proxy is revocable and will be voted as directed, but if you do not provide instructions, this proxy will be voted FOR the nominees for director set forth below and FOR each of the proposals listed. If any other business is presented at the annual meeting, including whether or not to adjourn the meeting, this proxy will be voted by the Proxy in accordance with his judgment of the best interests of the Company and its stockholders. So that your vote may be represented at the annual meeting, please complete and sign this proxy as soon as possible. You may return this proxy in the enclosed postage-paid envelope or you may fax it to the Company at (303) 798-8332. - -------------------------------------------------------------------------------- The Board of Directors recommends a vote FOR each of the nominees for director set forth below, FOR the adoption of the Amended and Restated Articles of Incorporation and FOR the ratification of the appointment of Cordovano and Harvey, P.C. as auditors. - -------------------------------------------------------------------------------- [X] Please indicate your votes by placing and "X" in the corresponding box. ELECTION OF DIRECTORS (Proposal 1) Indicate your vote with respect to the nomination of James R. Musick, Erik D. Van Horn, Ronald L. Goode, Henry Schmerler and William J. Schmuhl, Jr. as directors: [ ] FOR all nominees [ ] FOR all nominees EXCEPT the nominees written on the line below: ------------------------------------------------------------------ [ ] WITHHOLD VOTE with respect to all the nominees 14 ADOPTION OF PROPOSED AMENDED AND RESTATED ARTICLES OF INCORPORATION (Proposal 2) Indicate your vote with respect to adoption of the proposed Amended and Restated Articles of Incorporation. [ ] FOR the proposed Amended and Restated Articles of Incorporation [ ] AGAINST the proposed Amended and Restated Articles of Incorporation [ ] ABSTAIN with respect to the proposed Amended and Restated Articles of Incorporation APPROVAL OF AUDITORS (Proposal 3) Indicate your vote with respect to Proposal 3 which ratifies the appointment of Cordovano and Harvey, P.C. as the Company's independent accountants for the fiscal year ending October 31, 2000. [ ] FOR approval of the auditors [ ] AGAINST approval of the auditors [ ] ABSTAIN with respect to the approval of the auditors The undersigned acknowledges receipt from the Company of (1) the Notice of Annual Meeting of Stockholders dated March __, 2001, (2) the Proxy Statement dated March ___, 2001 and (3) the Annual Report of the Company for the 2000 fiscal year prior to the execution of this proxy. - ----------------------------------------------- Signature of Stockholder or Authorized Person: - ----------------------------------------------- Title (if applicable): Date: ------------------------------------------ INSTRUCTIONS: If you are signing as an individual, please sign exactly as your name appears herein. If you are signing as an attorney, executor, administrator, trustee, guardian, corporate officer or other authorized person, please give your full title. If shares are held jointly, either stockholder may sign but only one signature is required. 15 EX-3.1 2 0002.txt AMENDED AND RESTATED ARTICLES OF INCOPORATION AMENDED AND RESTATED ARTICLES OF INCORPORATION OF VITRO DIAGNOSTICS, INC. -------------------------- Pursuant to the provisions of Chapter 78 of the Nevada Revised Statutes, the undersigned Corporation adopts the following Amended and Restated Articles of Incorporation. These articles correctly set forth the provisions of the Articles of Incorporation, as amended, and supersede the original Articles of Incorporation and all amendments thereto. ARTICLE I. Name. ---- The Name of the Corporation is VITRO DIAGNOSTICS, INC. ARTICLE II. Duration. -------- The Corporation shall have perpetual duration. ARTICLE III. Principal Office. ---------------- The principal office of the Corporation is located in the State of Colorado and shall be located at 8100 Southpark Way, Unit B-1, Littleton, Colorado 80120, and after that at such location as the Board of Directors may determine. ARTICLE IV. Purposes. -------- The nature of the business of the Corporation and the objects, purposes and business thereof proposed to be transacted, promoted or carried on are to engage in any lawful act or activity for which corporations may be organized under the laws of Nevada. ARTICLE V. Authorized Capital. ------------------- The total number of shares of all classes which the Corporation shall have authority to issue is 500,000,000, of which no shares shall be preferred stock and 500,000,000 shares shall be common stock, $.001 par value per share. ARTICLE VI. Board of Directors. ------------------ The business and affairs of the Corporation shall be managed by the Board of Directors. The number of Directors constituting the Board of Directors shall be fixed in the manner provided in the Bylaws of the Corporation. In accordance with the Bylaws of the Corporation, the Board of Directors may thereupon be divided into classes, each class to be as nearly equal in number as possible, with the term of office of directors of the first class to expire at the first annual meeting of shareholders after their election, and the terms of the successive classes expiring at successive annual meetings of shareholders thereafter. At each annual meeting following such classification and division of the members of the Board of Directors, a number of directors equal to the number of directorships in the class whose term expires at the time of such meeting shall be elected to hold office for a term of years equal to the number of classes, and such term shall expire at the annual meeting held during the final year of the term. ARTICLE VII. Voting by Shareholders. ---------------------- Section 1. Cumulative Voting. ----------------- Cumulative voting shall not be allowed in the election of directors of the Corporation and every shareholder entitled to vote at such election shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected, and for whose election he has a right to vote. Section 2. Denial of Preemptive Rights. --------------------------- No shareholder of the Corporation shall by reasons of his holding shares of any class or series have any preemptive or preferential rights to purchase or subscribe to any shares of any class or series of the Corporation now or hereafter to be authorized, or any notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of any class or series now or hereafter to be authorized, whether or not the issuance of any such shares or notes, debentures, bonds or other securities would adversely affect the dividend or voting rights of such shareholder, other than such rights, if any, as the Board of Directors, in its discretion from time to time, may grant, and at such price as the Board of Directors, in its discretion, may fix; and the Board of Directors, if otherwise authorized by the provisions of these Amended and Restated Articles of Incorporation may issue shares of any class or series of the Corporation or any notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of any class or series, without offering any such shares of any class or series either in whole or in part to the existing shareholders of any class or series. ARTICLE VIII. Right of Directors to Contract with Corporation. ----------------------------------------------- Section 1. No contract or other transaction between the Corporation and one or more of its directors or any other corporation, firm, association or entity in which one or more of the directors of the Corporation are directors or officers or are financially interested, shall be either void or voidable solely because such directors are present at the meeting of the Board of Directors or a committee thereof which authorizes or approves such contract or transaction or solely because their votes are counted for such purpose if: A. The fact of such relationship or interest is disclosed or known to the Board of Directors or committee which authorizes, approves or ratifies the contract or transaction by a vote or consent sufficient for that purpose without counting the votes or consents of the interested directors; or B. The fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such contract or transaction by vote or written consent; or C. The contract or transaction is fair and reasonable to the Corporation. Section 2. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction. 2 ARTICLE IX. Indemnification of Officers, Directors and Others. ------------------------------------------------- The Board of Directors of the Corporation shall have the power to: Section 1. Indemnify any director, officer, employee or agent of the Corporation to the fullest extent permitted by Chapter 78 of the Nevada Revised Statutes as presently existing or as hereafter amended. Section 2. Authorize payment of expenses (including attorney's fees) incurred in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it is ultimately determined that he is entitled to be indemnified by the Corporation as authorized in this Article IX. Section 3. Purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article IX. The indemnification provided by this Article IX shall not be deemed exclusive of any other rights to which those indemnified may be entitled under these Articles of Incorporation, and Bylaws, agreement, vote of shareholders or disinterested directors or otherwise, and any procedure provided for by any of the foregoing, both as to action in his official capacity and as to action in another capacity while holding such office, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE X. Corporate Opportunity. --------------------- The officers, directors and other members of management of this Corporation shall be subject to the doctrine of "corporate opportunities" only insofar as it applies to business opportunities in which this Corporation has expressed an interest as determined from time to time by this Corporation's Board of Directors as evidenced by resolutions appearing in the Corporation's minutes. Once such areas of interest are delineated, all such business opportunities within such areas of interest which come to the attention of the officers, directors, and other members of management of this Corporation shall be disclosed promptly to this Corporation and made available to it. The Board of Directors may reject any business opportunity presented to it and thereafter any officers, directors or other member of management may avail himself of such opportunity. Until such time as this Corporation, through its Board of Directors, has designated an area of interest, the officers, directors and other members of management of this Corporation shall be free to engage in such areas of interest on their own and this doctrine shall not limit the right of any officer, director or other member of management of this Corporation to continue a business existing prior to the time that such area of interest is designated by the Corporation. This provision shall not be construed to release any employee of this Corporation (other than an officer, director or member of management) from any duties which he may have to this Corporation. 3 ARTICLE XI. Limitations on Director Liability. ------------------------------------ To the fullest extent permitted by Chapter 78 of the Nevada Revised Statutes as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, so long as such director acted in good faith. ARTICLE XII. Powers and Limitations. ----------------------- The powers and limitations of the Corporation shall be those set forth by the Chapter 78 of the Nevada Revised Statutes, under which this Corporation is formed. ARTICLE XIII. Rights to Amend, Alter, Change or Repeal. ------------------------------------------ The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Amended and Restated Articles of Incorporation in the manner now or hereinafter prescribed herein or by statute, and all rights conferred upon shareholders herein are granted subject to this reservation. These Amended and Restated Articles of Incorporation have been approved by the Board of Directors and have been duly adopted by a majority vote of the shareholders in accordance with sections 78.390 and 78.403 of the Nevada Revised Statutes and the Company's Articles and Bylaws. The number of outstanding shares of common stock of the Corporation is ____________ of which _______________ voted for the adoption of the Amended and Restated to the Articles of Incorporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal this _______ day of _________________, 2001. ----------------------------------- James R. Musick, President ----------------------------------- William J. Schmuhl, Jr., Secretary 4 State of Colorado ) ) County of ) This instrument was acknowledged before me on ___________, 2001 by James R. Musick as President of Vitro Diagnostics, Inc. ----------------------------------- Notary Public My commission expires: Seal State of Colorado ) ) County of ) This instrument was acknowledged before me on ___________, 2001 by William J. Schmuhl, Jr. as Secretary of Vitro Diagnostics, Inc. ----------------------------------- Notary Public My commission expires: Seal 5 -----END PRIVACY-ENHANCED MESSAGE-----