INTEGRATED BIOPHARMA, INC.
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securites and Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant | |
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| | Preliminary Proxy Statement
| | Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e) (2))
|X| Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12
INTEGRATED BIOPHARMA, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
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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):
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| | Fee paid previously with preliminary materials:
| | Check box if any part of the fee is offset as provided by Exchange Act 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:
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4) Date Filed:
INTEGRATED BIOPHARMA, INC.
225 Long Avenue
Hillside, New Jersey 07205
November 6, 2006
To Our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you
to attend the 2006 Annual Meeting of Stockholders of Integrated BioPharma, Inc.
(the "Company"), which will be held at 9:00 a.m. local time, on November 22,
2006 at the Company's Executive Offices, 225 Long Avenue, Hillside, New Jersey
07205.
At the Annual Meeting, you will be asked to elect three Class I
directors for a three year term and to ratify the appointment of independent
auditors of the Company for the 2007 fiscal year. These matters are described in
detail in the accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement. A proxy is included along with the Proxy Statement. These materials
are being sent to stockholders on or about November 6, 2006.
It is important that your shares be represented at the Annual Meeting,
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy promptly. If you later decide to attend the Annual
Meeting, you may revoke your proxy and vote your shares in person.
Sincerely,
/s/ E. Gerald Kay
E. Gerald Kay
Chief Executive Officer
INTEGRATED BIOPHARMA, INC.
225 Long Avenue
Hillside, New Jersey 07205
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 22, 2006
TO THE STOCKHOLDERS OF
INTEGRATED BIOPHARMA, INC.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (the
"Meeting") of Integrated BioPharma, Inc., a Delaware corporation ("INB" or the
"Company"), will be held on November 22, 2006, at 9:00 a.m. local time, at the
Company's Executive Offices, 225 Long Avenue, Hillside, New Jersey 07205, for
the purpose of considering and acting upon the following proposals:
1. To elect three Class I directors for a three year term to serve until the
2009 Annual Meeting of Stockholders;
2. To ratify the appointment of Amper, Politziner & Mattia, P.C. as INB's
independent accountants for the fiscal year ending June 30, 2007; and
3. The transaction of such other business as may properly come before the
Meeting or any adjournment thereof.
Only holders of record of the Company's common stock, par value $.002
per share ("Common Stock"), at the close of business on October 30, 2006 (the
"Record Date"), are entitled to vote on the matters to be presented at the
Annual Meeting. The number of shares of Common Stock outstanding on such date
and entitled to vote was 13,537,419.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" PROPOSALS NO. 1 and NO. 2, TO BE PRESENTED TO
INB STOCKHOLDERS AT THE ANNUAL MEETING.
By order of the Board of Directors.
/s/ Dina L. Masi
Dina L. Masi
Secretary
Hillside, New Jersey
November 6, 2006
It is important that your shares be represented at this meeting in
order that a quorum may be assured. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, YOU ARE URGED TO DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED CARD IN THE
POSTAGE PREPAID ENVELOPE PROVIDED AND TO DO SO IN ADEQUATE TIME FOR YOUR
DIRECTIONS TO BE RECEIVED AND TABULATED PRIOR TO THE SCHEDULED MEETING.
INTEGRATED BIOPHARMA, INC.
225 Long Avenue
Hillside, New Jersey 07205
PROXY STATEMENT
2006 ANNUAL MEETING OF STOCKHOLDERS
To be held on November 22, 2006
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Integrated BioPharma, Inc.
("INB" or the "Company"), a Delaware corporation, to be voted at the 2006 Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the
Company's Executive Offices, 225 Long Avenue, Hillside, New Jersey 07205 on
November 22, 2006, at 9:00 a.m. local time, or at any postponement or
adjournment thereof. This Proxy Statement, the Notice of Annual Meeting and the
accompanying form of proxy are first being mailed to stockholders on or about
November 6, 2006.
Only holders of record of the Company's common stock, par value $.002
per share ("Common Stock"), at the close of business on October 30, 2006 (the
"Record Date"), are entitled to vote on the matters to be presented at the
Annual Meeting. The number of shares of Common Stock outstanding on such date
and entitled to vote was 13,537,419.
Holders of Common Stock are entitled to one vote on each matter to be
voted upon by the stockholders at the Annual Meeting for each share held.
At the Annual Meeting, stockholders will be asked to consider and vote
upon proposals: (1) to elect three Class I directors for a three year term to
serve until the 2009 Annual Meeting of Stockholders (the "Director Proposal")
and (2) to ratify the appointment of Amper, Politziner, & Mattia, P.C., as INB's
independent auditors for the fiscal year ending June 30, 2007 (the "Independent
Auditors Proposal"). At the Annual Meeting, stockholders may also be asked to
consider and take action with respect to such other matters as may properly come
before the Annual Meeting.
QUORUM AND VOTE REQUIREMENTS
The presence, in person or by proxy, of holders of record of a majority
of the shares of Common Stock issued and outstanding and entitled to vote is
required for a quorum to transact business at the Annual Meeting, but if a
quorum should not be present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained. Directors are elected by a plurality of votes
cast. The Director Proposal and the Independent Auditors Proposal and all other
matters to properly come before the Annual Meeting will be determined by the
affirmative vote of the holders of a majority of the shares of Common Stock
present, in person or by proxy, and entitled to vote at the Annual Meeting.
Broker "non-votes" (i.e. proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owner or other
persons entitled to vote shares as to a matter with respect to which the brokers
or nominees do not have discretionary power to vote) and shares for which duly
executed proxies have been received but with respect to which holders of shares
have abstained from voting will be treated as present for purposes of
determining the presence of a quorum at the Annual Meeting. Abstentions and
broker non-votes have no impact on the election of directors except to reduce
the number of votes for the nominees. With respect to all other proposals,
broker non-votes are not counted as votes and, therefore, will not be included
in vote totals and abstentions will have the effect of a negative vote against
such other proposals.
SOLICITATION AND REVOCATION
PROXIES IN THE FORM ENCLOSED ARE BEING SOLICITED BY, AND ON BEHALF OF,
THE BOARD OF DIRECTORS. THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY HAVE
BEEN DESIGNATED AS PROXIES BY THE BOARD OF DIRECTORS.
All Common Stock represented by properly executed proxies which are
returned and not revoked prior to the time of the Annual Meeting will be voted
in accordance with the instructions, if any, given thereon. If no instructions
are provided in an executed proxy, it will be voted (1) FOR the Director
Proposal; (2) FOR the Independent Auditors Proposal, and in accordance with the
proxy holder's discretion as to any other business raised at the Annual Meeting.
Any stockholder who executes a proxy may revoke it at any time before it is
voted by delivering to the Company a written statement revoking such proxy, by
executing and delivering a later dated proxy, or by voting in person at the
Annual Meeting. Attendance at the Annual Meeting by a stockholder who has
executed and delivered a proxy to the Company shall not in and of itself
constitute a revocation of such proxy.
The Company will bear its own cost for the solicitation of proxies.
Proxies will be solicited initially by mail. Further solicitation may be made by
directors, officers, and employees of the Company personally, by telephone, or
otherwise, but any such person will not be specifically compensated for such
services. The Company also intends to make, through banks, brokers or other
persons, a solicitation of proxies of beneficial holders of the Common Stock.
Upon request, the Company will reimburse brokers, dealers, banks and similar
entities acting as nominees for reasonable expenses incurred in forwarding
copies of the proxy materials relating to the Annual Meeting to the beneficial
owners of Common Stock which such persons hold of record.
PROPOSAL NO. 1 ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of ten (10) directors
divided into three classes of directors serving staggered 3-year terms.
The members of Class I, whose terms of office expire in 2009, are Mr. E. Gerald
Kay, Ms. Riva Sheppard and Mr. Carl DeSantis.
The members of Class II, whose terms of office expire in 2008, are
Ms. Christina Kay, Mr. Robert Canarick and Mr. Robert Kay.
The members of Class III, whose terms of office expire in 2007, are
Mr. Seymour Flug, Mr. Glenn Chang, Mr. Zarko Kraljevic and
Dr. Vidadi Yusibov.
The stockholders will consider and vote upon the election of
Mr. E. Gerald Kay, Ms. Riva Sheppard and Mr. Carl DeSantis to serve
their respective terms.
Unless a shareholder WITHHOLDS AUTHORITY, a properly signed and dated
proxy will be voted FOR the election of the nominees, unless the proxy contains
contrary instructions. The Board of Directors knows of no reason why any of its
nominees will be unable or will refuse to accept election. If any nominee
becomes unable or refuses to accept election, the Board of Directors will either
reduce the number of directors to be elected or select a substitute nominee. If
a substitute nominee is selected, proxies will be voted in favor of such
nominee.
The following table sets forth certain information with respect to the
members of INB's Board of Directors during the fiscal year ended June 30, 2006.
Class of Director
Age Directors Since
--- --------- --------
E. Gerald Kay ................................................ 70 Class I 1980
Served as Chairman of the Board and President
of the Company, and its predecessor since 1980,
and was president until May 1999. On May 9,
2003 he became Chief Executive Officer.
Riva Sheppard ................................................ 39 Class I 1991
Served as Vice President and director of the Company
since May 1991. Ms. Sheppard is the daughter of
E. Gerald Kay and the sister of Christina Kay.
Carl DeSantis ................................................ 67 Class I 2003
Served as director of the Company since 2003.
Mr. DeSantis has served as Chairman of CDS International
Holdings, Inc. since June of 2001. Prior to that he was
Chairman of Rexall Sundown, Inc.
Christina Kay ................................................ 36 Class II 1994
Served as Vice President and director of the Company
since December 1994. Ms. Kay is the daughter of
E. Gerald Kay and the sister of Riva Sheppard.
Robert Canarick .............................................. 56 Class II 1994
Served as a director of the Company since December
1994. From January 1998 until August of 2001
he has served as general counsel of NIA
Group, LLC, an all lines independent insurance agency.
From August 2001 he has served as President of Links
Insurance Services, LLC. Mr. Canarick is a Certified
Public Accountant and Attorney.
Seymour Flug ................................................. 71 Class III 2000
Served as President of the Company from May 1999 until May 9, 2003.
Prior to 1999, he was Chairman of the Board of Diners
Club International.
Robert B. Kay ................................................ 66 Class II 2003
Served as a director of the Company since 2003.
Since 2002 served as Chairman of Paxis Pharmaceuticals,
Inc. Prior to that he was a founding partner of the New York-
based law firm of Kay, Collyer & Boose LLP. Mr. Kay is
the brother of E.Gerald Kay.
Glenn Chang .................................................. 58 Class III 2003
Served as a director of the Company since 2003.
Since 1999 he has been Director, Executive Vice President
and Chief Financial Officer of the First American
International Bank, Brooklyn, N.Y. Prior to the founding of
the Bank he spent almost 20 years at Citibank as Vice
President. Mr. Chang is a Certified Public Accountant.
Zarko Kraljevic .............................................. 78 Class III 2003
Served as a director of the Company since 2003. Since 1972 has
served as President and CEO of Diners Club of Eastern Europe.
Vidadi M. Yusibov ............................................ 48 Class III 2006
Served as a director of the Company since 2006.
Since 2001 he has served as Scientific Director and
Executive Director of Fraunhofer USA Center for
Molecular Biotechnology, Newark, Delaware. Prior to
his association with Fraunhofer he was an assistant
professor in the Department of microbiology and
immunology at Thomas Jefferson University,
Philadelphia, Pennsylvania.
Recommendation and Vote
Approval of the election of these nominees for directors requires the
affirmative vote of a majority of the shares of Common Stock present, in person
or by proxy, at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES
FOR DIRECTORS LISTED ABOVE.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's common stock to file reports of
ownership and changes in ownership of common stock with the Securities and
Exchange Commission. Certain persons required to file such reports failed to do
so on a timely basis as required by Section 16(a) of the Exchange Act. Messrs.
R.Kay, Canarick, Kraljevic, and Chang filed three reportable transactions late,
Ms. Kay, Ms. Sheppard and Mr. Flug each filed two reportable transactions late,
and Dr. Yusibov filed one reportable transaction late.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the number of
shares of common stock of Integrated BioPharma beneficially owned on October 10,
2006, by:
* each person who is known by Integrated BioPharma to beneficially own five
percent (5%) or more of the common stock of Integrated BioPharma;
* each of the directors and executive officers of Integrated BioPharma; and
* all of Integrated BioPharma's directors and executive officers, as a group.
The address of each of the persons listed below is c/o Integrated
BioPharma Inc., 225 Long Avenue, Hillside, New Jersey 07205.
Number of Shares Percent of Shares
Name of Beneficial Owner Beneficially Owned (1) Beneficially Owned (2)
------------------------ ---------------------- -----------------------
E. Gerald Kay 5,779,582 (3) 38.8%
Carl DeSantis 2,360,417 (4) 17.2%
Riva Sheppard 1,319,467 (5) 9.3%
Christina Kay 1,319,467 (5) 9.3%
Seymour Flug 1,266,033 (6) 8.8%
Robert B. Kay 1,219,629 (7) 8.8%
Robert Canarick 203,533 (8) 1.5%
Zarko Kraljevic 75,000 (9) 0.6%
Glenn Chang 75,000 (9) 0.6%
Dina L. Masi 50,000 (10) 0.4%
Vidadi M. Yusibov 23,500 (11) 0.2%
Directors and executive officers
as a group (11 persons) 13,691,628 (12) 74.8%
------------------
(1) Unless otherwise indicated, includes shares owned by a spouse, minor
children, by relatives sharing the same home, and entities owned or
controlled by the named person. Also includes shares if the named person
has the right to acquire such shares within 60 days after October 10,
2006, by the exercise of warrant, stock option or other right. Unless
otherwise noted, shares are owned of record and beneficially by the named
person.
(2) Based upon 13,466,030 shares of common stock outstanding on
October 10, 2006.
(3) Includes (i) 819,629 shares of common stock held by EGK LLC, of which Mr.
Kay is the manager, and (ii) 1,336,546 shares of common stock issuable
upon exercise of presently exercisable stock options. Shares dispositive
power with Christina Kay with respect to 169,358 shares of common stock
and with Riva Kay Sheppard with respect to 169,358 shares of common
stock.
(4) Includes (i) 819,629 shares owned by CDS Group Holdings, LLC, of which
Mr. DeSantis is the manager, (ii) 25,000 shares of common stock issuable
upon exercise of presently exercisable stock options and (iii) 175,000
shares of common stock issuable upon exercise of presently exercisable
warrants.
(5) Includes 616,666 shares of common stock issuable upon exercise of
presently exercisable stock options. Shares dispositive power with E.
Gerald Kay with respect to 169,358 shares of common stock.
(6) Includes 850,000 shares of common stock issuable upon exercise of
presently exercisable stock options.
(7) Includes (i) 819,629 shares of common stock held by EVJ LLC, of which
Mr. Kay is the manager, and (ii) 300,000 shares of common stock
issuable upon exercise of presently exercisable stock options.
(8) Includes 150,000 shares of common stock issuable upon exercise of
presently exercisable stock options.
(9) Includes 50,000 shares of common stock issuable upon exercise of
presently exercisable stock options.
(10) Includes 50,000 shares of common stock issuable upon exercise of stock
options exercisable within 60 days of the date hereof.
(11) Includes 13,500 shares of common stock issuable upon exercise of
presently exercisable stock options.
(12) Includes (1) 4,618,378 shares of common stock issuable upon exercise of
presently exercisable stock options, (ii) 175,000 shares of common stock
issuable upon exercise of presently exercisable warrants and (iii) 50,000
shares of common stock issuable upon exercise of stock options
exercisable within 60 days of the date hereof.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table includes information as of June 30, 2006 relating
to the Company's stock option plans, which comprise all of the Company's equity
compensation plans. The table provides the number of securities to be issued
upon the exercise of outstanding options under such plans, the weighted-average
exercise price of such outstanding options and the number of securities
remaining available for future issuance under such plans.
Equity Compensation Plan Information
Number of securities
Number of securities to Weighted-average remaining available for
be issued upon exercise exercise price of future issuance under
of outstanding options, outstanding options, equity compensation plans
warrants and rights warrants and rights (excluding securities)
(a) (b) reflected in column (a))
----------------------- -------------------- -------------------------
Equity compensation plans
approved by security holders 6,085,177 $ 3.37 2,952,552
Equity compensation plans
not approved by security holders - - -
----------------------- -------------------- -------------------------
Totals 6,085,177 $ 3.37 2,952,552
======================= ==================== =========================
DIRECTORS
The Board of Directors held three meetings during the fiscal year ended
June 30, 2006. All directors attended at least 67% of the meetings of the Board
and one member of the audit committee was unable to attend all such committee
meetings held during the fiscal year ended June 30, 2006 on which he or she
served.
For the fiscal year ended June 30, 2006, each independent Director who
was a Director as of the beginning of the fiscal year was granted 25,000 options
(an aggregate of 75,000 options) under the Company's 2001 Stock Option Plan,
with an exercise price of $3.99 which represents the fair market value of the
shares of common stock as of the grant date. Each option vest one year from the
date of grant and will expire in ten years from the date of grant. No
compensation was paid to any director for his or her services to the Board of
Directors or any committee who was also an officer and/or significant
shareholder. The only standing committee of the Board of Directors is the Audit
Committee, whose members are Messrs. Canarick, Chang, and Kraljevic and Dr.
Yusibov. The Audit Committee periodically consults with the Company's management
and independent public accountants on financial matters, including the Company's
internal financial controls and procedures. The Audit Committee met four times
in Fiscal 2006 and two-thirds of the members attended all the meetings. Dr.
Yusibov attended all the meetings that were held subsequent to his appointment
to the Audit Committee.
The Company does not have a standing nominating committee or
compensation committee. With respect to nominating and compensation matters, the
entire Board performs these functions. At such time, if any, as the Board
composition changes or the Board otherwise deems appropriate, the Company may
establish a separate nominating committee or compensation committee. As a
result, the entire Board participates in the consideration of Board nominees and
nominated the candidates for election named in this Proxy Statement.
The Company has determined that due to the beneficial ownership by E.
Gerald Kay and certain of his family members of greater than 50% of the Common
Stock of the Company outstanding as of October 10, 2006, the Company is a
"controlled company" as defined in the American Stock Exchange listing
standards. As such, the Company is exempt from certain requirements of the
American Stock Exchange listing standards, including the requirement to maintain
a majority of independent directors on the Company's Board of Directors and the
requirements regarding the determination of compensation of executive officers
and the nomination of directors by independent directors.
EXECUTIVE OFFICERS
The following individual is an executive officer of the Company but is
not a Director or Nominee for Director:
Dina L. Masi, age 45, is Senior Vice President, Chief Financial Officer
and Secretary of the Company. Ms. Masi joined the Company on November 17, 2005.
Previously, Ms. Masi most recently operated a financial services consulting
firm, DLM Accounting and Financial Services, LLC, providing accounting and
financial services to small business owners and SEC registrants from May 2005 to
November 2005. From June 2002 to December 2004, Ms. Masi served as the Chief
Financial Officer and Senior Vice President of Prescott Funding, LLC, a licensed
residential mortgage lender specializing in non-conforming consumer lending. Ms.
Masi also served as the Chief Financial Officer and Senior Vice President of
Fintek, Inc., a privately owned financial consulting services company, from July
2001 to September 2005 and as Management Information Officer from February 1998
to July 2001. Prior to that, Ms. Masi was the Chief Financial Officer and
Executive Vice-President of The Aegis Consumer Funding Group, Inc., a
publicly-traded consumer finance company that specialized in sub-prime
automobile receivables, from July 1992 to January 1998. Prior to her time at
Aegis, Ms. Masi was with BDO Seidman, LLP.
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended June 30, 2006,
2005, 2004, certain compensation information as to the Chief Executive Officer
and each of the next four most highly compensated executive officers of the
Company who served as an executive officer during the fiscal year ended June 30,
2006, and whose salary and bonus exceeded $100,000 in 2006 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------------------------ ----------------------
Securities Underlying All Other
Name and Principal Position Year Salary Bonus Stock Options Compensation
--------------------------- ---- ------ ----- ------------- ------------
E. Gerald Kay 2006 $ 127,875 $ - - $ 15,320 (1) (2)
Chairman of the Board 2005 97,875 - 100,000 9,050 (1) (2)
2004 97,500 - 100,000 14,100 (1) (2)
Eric Friedman 2006 200,769 - - 11,400 (1) (2)
Chief Financial Officer 2005 200,769 - 100,000 6,000 (1) (2)
and Vice President (3) 2004 200,000 - 100,000 7,767 (1) (2)
Robert B. Kay 2006 25,096 - - 130,000 (4)
President and Chief 2005 24,996 - 100,000 180,000 (4)
Executive Officer,
Paxis Pharmaceuticals, Inc. 2004 24,996 - 100,000 180,000 (4)
Riva Sheppard 2006 115,414 - - 7,950 (1) (2)
Executive Vice President 2005 109,980 - 100,000 7,800 (1) (2)
2004 109,980 - 100,000 7,800 (1) (2)
Christina Kay 2006 115,414 - - 7,950 (1) (2)
Executive Vice President 2005 108,325 - 100,000 7,800 (1) (2)
2004 99,994 - 100,000 7,800 (1) (2)
Dina L. Masi 2006 111,528 - 50,000 6,700 (5)
Chief Financial Officer
and Senior Vice President
-----------------------------------
(1)The disclosed amount includes the Company's matching contributions under the
Company's 401(K) plan.
(2)The Company also provides the individuals with the use of a company car.
(3)Mr. Friedman resigned as an officer of the Company on April 13, 2006.
(4)Represents consulting fees paid to EVJ, LLC, of which Mr. Kay is the manager.
(5)Represents consulting fees paid to DLM Accounting and Financial Services,
LLC, of which Ms. Masi is the sole member.
OPTION/SAR GRANTS
DURING THE FISCAL YEAR ENDED JUNE 30, 2006
The following table sets forth individual grants of stock options by
INB pursuant to the Integrated Health Technologies, Inc. 2001 Stock Option Plan
to the Named Executive Officers during the fiscal year ended June 30, 2006.
% of Total
Granted to
Securities Options Employees in Exercise
Name Granted (#)(1) Fiscal Year Price (2) Expiration Date
---- -------------- ----------- --------- ---------------
Dina L. Masi 50,000 49.0% $ 3.13 November 17, 2015
-----------------------------------
(1) The date of grant for these options was November 17, 2005, which become
exercisable on November 17, 2006.
(2) The exercise price of the options is equal to the fair market value of the
shares of common stock of the Company on the date of grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the fiscal year
ended June 30, 2006 and unexercised options held at the end of the fiscal year
ended June 30, 2006 based on the last sale price of a share of common stock on
June 30, 2006 of $8.87.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Value Options at Fiscal Year at Fiscal Year End ($)
Acquired on Realized (1) End (#) Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable (2)
---- ------------ ------------ ---------------------- ----------------------
E. Gerald Kay - - 1,436,546 / -0- 10,263,511 / -0-
Eric Friedman (3) 215,000 1,639,050 466,666 / -0- 2,097,328 / -0-
Robert B. Kay - - 400,000 / -0- 1,861,000 / -0-
Riva Kay Sheppard - - 716,666 / -0- 4,206,828 / -0-
Christina Kay - - 716,666 / -0- 4,206,828 / -0-
Dina L. Masi - - -0- / 50,000 -0- / 287,000
-----------------------------------
(1) Represents the aggregate market value of the shares converted by the
options on the date of exercise less the aggregate price paid by the
executive.
(2) Based on the fair market value of the shares of Common Stock on June 30,
2006 ($8.87), less the exercise price.
(3) These shares were acquired subsequent to Mr. Friedman resigning as an
officer of the Company on April 13, 2006.
TOTAL SHAREHOLDER RETURN GRAPH
6/01 6/02 6/03 6/04 6/05 6/06
------ ------ -------- -------- -------- --------
Integrated BioPharma, Inc. 100.00 200.00 3,561.90 3,885.71 1,804.76 4,223.81
S&P 500 100.00 81.72 80.46 94.19 98.36 104.87
Russell 3000 100.00 83.04 82.16 97.30 103.32 111.22
-----------------------------------
*$100.00 invested on June 30, 2001 in stock or index. Fiscal year ended June 30.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Warehouse and office facilities are leased from Vitamin Realty
Associates, L.L.C., a limited liability company, which is 90% owned by E. Gerald
Kay, Riva Sheppard and Christina Kay (all stockholders and directors of the
Company) and 10% owned by Eric Friedman, the Company's former Chief Financial
Officer. The lease was effective on January 10, 1997 and provides for minimum
annual rentals of $346,000 through January 10, 2002, plus increases in real
estate taxes and building operating expenses. At its option, the Company has the
right to renew the lease for an additional five-year period. On April 28, 2000
the lease was amended reducing the square footage and extending the lease to May
31, 2015.
PROPOSAL NO. 2 RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of INB has appointed the firm of Amper,
Politziner & Mattia, P.C., independent auditors, to audit the consolidated
financial statements of Integrated BioPharma, Inc. and its subsidiaries for the
fiscal year ending June 30, 2007, subject to ratification by the INB
Stockholders.
A member of Amper, Politziner & Mattia, P.C. is expected to be present
at the Annual Meeting and to be provided with the opportunity to make a
statement if such member desires to do so and to be available to respond to
appropriate questions from shareholders.
Representatives of Amper, Politziner & Mattia, P.C. normally attend
most meetings of the Audit Committee. The Audit Committee's policy is to
pre-approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is generally provided
for up to one fiscal quarter and any pre-approval is detailed as to the
particular service or category of services. The independent auditor and
management are required to periodically report to the Audit Committee regarding
the extent of services provided by the independent auditor in accordance with
this pre-approval.
The Audit Committee, on an annual basis, reviews the services performed
by Amper, Politziner & Mattia, P.C., and reviews and approves the fees charged
by Amper, Politziner & Mattia, P.C.
Audit Fees
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the fiscal year ended
June 30, 2006 and 2005 and for the reviews of the financial statements included
in the Company's Quarterly Reports on Form 10-Q in the fiscal year ended June
30, 2006 and 10-QSB in the fiscal year ended June 30, 2005 were $186,625 and
$172,500, respectively, all of which are attributable to Amper, Politziner &
Mattia, P.C.
Financial Information Systems Design and Implementation Fees
Amper, Politziner & Mattia, P.C. did not render professional
services relating to financial information systems design and implementation
for the fiscal years ended June 30, 2006 and 2005.
Tax Fees and All Other Fees
Amper, Politziner & Mattia, P.C. did not receive any fees for tax
services nor for other services for the fiscal years ended June 30, 2006
and 2005.
Recommendation and Vote
Approval of the Independent Auditors Proposal requires the affirmative vote of a
majority of the shares of Common Stock present, in person or by proxy, at the
Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL
OF THE INDEPENDENT AUDITORS PROPOSAL.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company (the
"Audit Committee") is composed of four (4) directors. Each of the four members
of the committee are independent. The Board of Directors has adopted an Audit
Committee Charter. Management is responsible for the Company's internal control
and financial reporting process. The Company's independent public accountants
are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with generally accepted auditing
standards and to issue a report thereon. The Audit Committee's responsibility is
to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with
Management and the Company's independent public accountants. Management
represented to the Audit Committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated
financial statements with Management and the Company's independent public
accountants. The Audit Committee discussed with the independent public
accountants matters required to be discussed by Statement of Auditing Standards
Numbers 90 and 61 (communication with Audit Committees). The Company's
independent public accountants also provided to the Audit Committee the written
disclosures required by Independence Standard No. 1 (independence discussions
with Audit Committee), and the Audit Committee discussed with the independent
public accountants that firm's independence. The Audit Committee has also
considered whether the independent auditors' provision of information technology
and other non-audit services to the Company is compatible with the auditor's
independence.
Based upon the Audit Committee's discussions with Management and the
independent public accountants and the Audit Committee's review of the
representation of management and the report of the independent public
accountants, the Audit Committee recommended that the Board of Directors include
the audited consolidated financial statements in the Company's Annual Report on
Form 10-K for the year ended June 30, 2006 filed with the Securities and
Exchange Commission.
The foregoing has been approved by all members of the Audit Committee.
Glenn Chang
Robert Canarick
Zarkof Kraljevic
Dr. Vidadi M. Yusibov
STOCKHOLDER PROPOSALS AND COMMUNICATIONS
Stockholder proposals to be included in the Company's proxy statement
with respect to the 2007 Annual Meeting of Stockholders must be received by the
Company at its Executive Offices located at 225 Long Avenue, Hillside, New
Jersey 07205 no later than July 5, 2007. All such proposals are subject to the
applicable rules and requirements of the Securities and Exchange Commission.
The Board of Directors does not have a formal process for stockholders
to send communications (including director nominations) to the Board. Due to the
infrequency of stockholder communications to the Board, the Board does not
believe that a formal process is necessary. Written communications to the Board
may be sent to the Board at the Company's chief executive offices at Integrated
BioPharma, Inc., 225 Long Avenue, New Jersey 07205, and the Company will
promptly circulate such communications to all members of the Board (or to those
particular directors to whom such communication is specifically addressed). A
shareholder who intends to nominate an individual for election to the Board of
Directors (other than a candidate proposed by the Board of Directors) must do so
in accordance with the foregoing procedures.
DISCRETIONARY AUTHORITY
A duly executed proxy given in connection with the Company's 2006
Annual Meeting of Stockholders will confer discretionary authority on the
proxies named therein, or any of them, to vote at such meeting on any matter of
which the Company does not have written notice on or before September 12, 2006,
which is forty-five (45) days prior to the date on which the Company is first
mailing its proxy materials for its 2006 Annual Meeting of Stockholders, without
advice in the Company 2006 Proxy Statement as to the nature of such matter.
OTHER BUSINESS OF THE MEETING
The Company is not aware of any matters to come before the Annual
Meeting other than those stated in this Proxy Statement. However, in as much as
matters of which management of the Company is not now aware may come before the
Annual Meeting or any adjournment, the proxies confer discretionary authority
with respect to acting thereon, and the persons named in such proxies intend to
vote, act and consent in accordance with their discretion with respect thereto.
ADDITIONAL INFORMATION
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
JUNE 30, 2006 MAY BE OBTAINED WITHOUT CHARGE BY ANY STOCKHOLDER TO WHOM THIS
PROXY STATEMENT IS SENT, UPON WRITTEN REQUEST TO THE SECRETARY, INTEGRATED
BIOPHARMA, INC., 225 LONG AVENUE, HILLSIDE, NEW JERSEY 07205.
By order of the Board of Directors
/s/ E. Gerald Kay
E. Gerald Kay
Chief Executive Officer
November 6, 2006