GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
22570 Markey Court, Dulles, Virginia20166NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 13, 1999
To the Shareholders:
Notice is hereby given that the Annual Meeting of the Shareholders of
Guardian Technologies International, Inc., a Delaware corporation (the
"Company") will be held at the offices of the Company located at 22570 Markey
Court, Dulles, Virginia20166 on Wednesday, January 13, 1999, at 8:00 a.m.
Eastern Savings Time, for the following purposes:
1. To elect five directors to serve on the Board of Directors until the
next annual meeting of shareholders or until successors are duly
elected and qualified;
2. To approve the Board of Directors' selection of Hein & Associates LLP,
as the Company's independent public accountants to audit the
consolidated financial statements of the Company for the fiscal year
ending December 31, 1998;
3. To adopt and approve the Company's 1999 Incentive Stock Option Plan;
4. To consider and act upon any other matters that properly come before
the meeting or any adjournment thereof.
The Company's Board of Directors has fixed the close of business on
December 8, 1998 as the record date for the determination of shareholders having
the right to receive notice of, and to vote at, the Annual Meeting of
Shareholders and any adjournment thereof. A list of such shareholders will be
available for examination by a shareholder for any purpose germane to the
meeting during ordinary business hours at the offices of the Company at 22570
Markey Court, Dulles, Virginia20166 during the ten days prior to the meeting.
You are requested to date, sign and return the enclosed proxy which is
solicited by the Board of Directors of the Company and will be voted as
indicated in the accompanying proxy statement and proxy. Your vote is important.
Please sign and date the enclosed proxy and return it promptly in the enclosed
return envelope whether or not you expect to attend the meeting. The giving of
your proxy as requested hereby will not affect your right to vote in person
should you decide to attend the Annual Meeting. The return envelope requires no
postage if mailed in the United States. If mailed elsewhere, sufficient postage
must be affixed. Your proxy is revocable at any time before the meeting.
By Order of the Board of Directors,
Oliver L. North, Chairman of the Board
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
22570 Markey Court, Dulles, Virginia20166PROXY STATEMENT
Annual Meeting of Shareholders
January 13, 1999
The enclosed proxy is solicited by and on behalf of the Board of Directors
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC. ("Guardian" or the "Company") for use
in voting at the Annual Meeting of Shareholders to be held at the offices of the
Company located at 22570 Markey Court, Dulles, Virginia20166 on Wednesday,
January 13, 1999, at 8:00 a.m., Eastern Time, and at any postponement or
adjournment thereof, for the purposes set forth in the attached notice.
Record Date and Share Ownership
The close of business on December 8, 1998 (the "Record Date"), has been fixed as
the record date for determining the shareholders entitled to notice of, and to
vote at, the Annual Meeting. As of the Record Date there are 1,134,201 shares of
the Company's Common Stock, par value, $.001 oer share, outstanding and entitled
to vote. Shareholders holding at least a majority of the outstanding shares of
Common Stock represented in person or by proxy, shall constitute a quorum for
the transactions of business at the Annual Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it any time before its use by delivering to the Company a written notice
of revocation or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person. An appointment of proxy is revoked upon the
death or incapacity of the shareholder if the Secretary or other officer of the
Company who is authorized to tabulate votes receives notices of such death or
incapacity before the proxy exercises his authority under the appointment. For a
description of the principal holders of such stock, see "SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENT" below.
This Proxy Statement and the enclosed Proxy are being furnished to shareholders
on or about December 8, 1998.
Voting and Solicitation
Each outstanding share of Common Stock as of the Record Date will be entitled to
one (1) vote on each submitted to a vote at the Annual Meeting. Assuming a
quorum is present, a plurality of votes cast at the meeting in person or by
proxy by the shares of Common Stock (as described above) entitled to vote in the
election of directors will by required to elect each director and to ratify the
selection of independent public accountants.
Matters to be Brought Before the Annual Meeting
The matters to be brought before the Annual Meeting include (1) To elect five
directors to serve as the Board of Directors until the next annual meeting of
shareholders or until successors are duly elected and qualified; (2) To approve
the Board of Directors' selection of Hein & Associates LLP, as the Company's
independent public accountants to audit the financial statements of the Company
for the fiscal year ending December 31, 1998; (3) To approve the Board of
Directors' recommendation of adoption and approval of the 1999 Incentive Stock
Option Plan; and (4) To consider and act upon any other matters that properly
come before the meeting or any adjournment thereof.
PROPOSAL 1 - ELECTION OF DIRECTORSThe Company's Bylaws provide that the number of directors shall be determined
from time to time by the shareholders or the Board of Directors, but that there
shall be no less than three. Presently the Company's Board of Directors consists
of six members, five of whom are nominees for election at the Annual Meeting.
Each director elected at the Annual Meeting will hold office until a successor
is elected and qualified, or until the director resigns, is removed or becomes
disqualified. A plurality of votes cast by the shares entitled to vote in the
election of directors will be required to elect each director. Unless marked
otherwise, proxies received will be voted for the election of each of the
nominees named below. If any such person is unable or unwilling to serve as a
director at the date of the Annual Meeting or any postponement or adjournment
thereof, the proxies will be voted for a substitute nominee, designated by the
proxy holders or by the present Board of Directors to fill such vacancy, or for
the balance of those nominees named without nomination of a substitute, or the
Board may be reduced accordingly. The Board of Directors has no reason to
believe that any of such nominees will be unwilling or unable to serve if
elected as a director.
The nominees are as follows:
Oliver L. North
Joseph F. Fernandez
Travis Y. Green
Herbert M. Jacobi
Hugh G. Sawyer
All of the nominees are currently serving as directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE TO THE BOARD OF DIRECTORS
The following information is furnished with respect to the nominees. Stock
ownership information is shown under the heading "Security Ownership of CertainBeneficial Owners and Management" and is based upon information furnished by the
AS OF THE DATE OF THIS STATEMENT, THE DIRECTORS AND EXECUTIVE OFFICERS OF THE
COMPANY WERE AS FOLLOWS:
Name Age Position
Oliver L. North 55 Chairman of the Board, President
Joseph F. Fernandez 61 Director, Treasurer and
Travis Y. Green 44 Director
Herbert M. Jacobi 59 Director
Hugh G. Sawyer 46 Director
Oliver L. North
Oliver L. North has served as the Chairman of the Board, President and Secretary
from inception. He graduated from the United States Naval Academy in June 1968
and served in the United States Marine Corps for twenty-two years. His service
included a tour of duty in Vietnam where he earned a Silver Star for heroism, a
Bronze Star with a "V" for valor, and two Purple Hearts for wounds in action.
From 1981 through 1986, he served as a member of President Ronald Reagan's
National Security Council staff and became Deputy Director of Political-Military
Affairs. In this capacity, he helped plan the liberation of Grenada, the capture
of terrorists who hijacked the cruise shipAchille Lauro, and the U.S. raid on
Quaddafi's terrorist training camps in Libya. He retired from the Marine Corps
In March, 1988, Mr. North was indicted on charges arising out of the so-called
Iran- Contra affair. Four of the charges were dismissed prior to the trial. On
May 4, 1989 Mr. North was acquitted on nine counts and convicted on three in the
United States District Court in Washington, D.C. The convictions were appealed
to the United States Court of Appeals for the District of Columbia Circuit. On
July 20, 1990, the Court of Appeals vacated all the convictions, reversed one
conviction outright, and sent the case back to the district court. The
independent counsel who had brought the case then declined to continue further
prosecution and dismissed all remaining charges. There are no outstanding
criminal charges or convictions against Mr. North today.
Joseph F. Fernandez
Joseph F. Fernandez has served as Vice President, Treasurer and Director since
inception. Mr. Fernandez began his career as a Police Officer with the
Miami/Dade County Police Department and served in this position for eight years.
In 1965, he was employed by the Central Intelligence Agency. In this capacity,
he served in both foreign and domestic posts dealing with highly sensitive
National Security Issues and intelligence operations. As a Senior Operations
Offices he directly supervised Agency units of up to 35 persons in day-to-day
operational assignments and planned, distributed and accounted for budgets in
excess of $8 million.
On June 22, 1988, Mr. Fernandez was indicted on five criminal counts arising out
of the so-called Iran Contra Affair. These indictments were dismissed without
prejudice on October 13, 1988. On April 4, 1989, Mr. Fernandez was re-indicted
in a different venue on four criminal counts arising ou of the Iran-Contra
Affair. This indictment was dismissed with prejudice on November 24, 1989. The
Special Prosecutor lodged an appeal in the Court of Appeals. In September of
1990, that Court upheld the dismissal of the indictment, and on October 5, 1990,
the mandate of the Court of Appeals was issued thereby making final the
dismissal of all charges against Mr. Fernandez. There are no outstanding
criminal charges or convictions against Mr. Fernandez today.
Travis Y. Green
Travis Y. Green has been a Director since inception. He holds a Masters Degree
in International Business Studies from the University of South Carolina and he
graduated with a Bachelors Degree in Business Administration from Emory
University. Mr. Green was an Account Executive at Dresdner Bank AG, in New York
in 1978, and continued his financial career at the Wall Street firm of Brown
Brothers Harriman & Co. for 10 years from 1982 through 1992. In 1993, he
established the investment banking firm of Green, Morris & Associated in
Atlanta, Georgia, where he serves as President.
Herbert M. Jacobi
Herbert M. Jacobi has been an attorney in private practice in New York, New York
since 1967 specializing in securities law. Mr. Jacobi received a Bachelor of
Arts degree from Columbia College in 1960 and a Juris Doctorate from Columbia
Law School in 1963.
Hugh G. Sawyer
Hugh G. Sawyer has served as President of National Linen Service, a $500 million
sales subsidiary of National Service Industry, based in Atlanta, Georgia since
early 1996. He was formerly president of Wells Fargo Armored Division of Borg
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION The Company's Board of Directors took action at four duly noticed meetings of
the Board of Directors during fiscal year 1998. Each Director attended (or
otherwise participated in) at least 75% of the Company's special and regular
meetings of the Board of Directors. The Board of Directors has a Compensation
Committee which will be restaffed after the shareholders' meeting.
In addition to the previously named directors and executive officers, the
Company expects the following individuals to make significant contributions to
the Company's business in the positions indicated below:
J. Andrew Moorer Chief Operating Officer
EXECUTIVE COMPENSATIONThe Company believes that shareholders should be provided information about
director and executive compensation consistent with the rules of the Securities
and Exchange Commission (the "SEC"). As a result, this Proxy Statement contains
the following sections of information regarding executive compensation: Summary
Compensation Table and Options/SAR Grants in the Last Fiscal Year.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the annual and long-term compensation for
services in all capacities to the Company's officers. No officer received
compensation in excess of $100,000 during the relevant fiscal year.
TABLE 1 SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
Name and Other Annual Stock Options LTIP All Other
Principal Salary Bonus Compensation Awards SAR's Payouts Compensation
Position Year ($) ($) ($)(1) ($) (#) ($) ($)
Oliver L. North 1997 21,150(2) -0- -0- -0- -0- -0- -0-
President and Secretary 1996 113,740 -0- -0- -0- -0- -0- -0-
Joseph F. Fernandez 1997 77,900(3) -0- -0- -0- -0- -0- -0-
Vice President 1996 117,074 -0- -0- -0- -0- -0- -0-
(1) Except as indicated, no executive officer received perquisites and
other personal benefits which, in the aggregate, exceeded the lesser
of either $50,000 or 10% of the total of annual salary and bonus paid
during the respective fiscal years.
(2) Reflects the amount of total accrued salary. Of such amount, only the
sum of $16,014 was paid during the period.
(3) Reflects the amount of total accrued salary. Of such amount, only the
sum of $72,849 was paid during the period.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
FOR OPTION TERM/1
(a) (b) (c) (d) (e) (f) (g) (h)
Number of Percent of
Options/ Granted to Exercise of Market Price
SARs Employees in Base Price on date of
Granted Fiscal Year Per Share Grant Expiration 5% 10% 0%
(#) (%) ($/Share) ($/Share) Date ($) ($) ($)
-0- -0- -0- -0- -0- -0- -0- -0-
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") requires the Company directors and executive officers, and persons who
beneficially own more than 10% of a registered class of the Company's equity
securities, to file with the SEC initial reports of wonership and reports of
changes in ownership of the Company's Common Stock and other equity securities.
Officers, directors and greater than 10% shareholders are required by SEC
Regulations to furnish the Company with copies of all Section 16(a) reports they
Based solely upon a review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that there was compliance for the fiscal year ended December31, 1997 with all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than 10% beneficial owners.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the Company's knowledge, the following table sets forth information regarding
ownership of the Company's outstanding Common Stock on December 4, 1998 by (i)
beneficial owners of mor than 5% of the outstanding shares of Common Stock; (ii)
each director and each executive officer; and (iii) all directors and executive
officers as a group. Except as otherwise indicated below and subject to
applicable community property laws, each owner has sole voting and sole
investment powers with respect to the stock listed.
Title of Name and Address Amount and Nature Percent
Class of Beneficial Owner of Beneficial Ownership of Class
Common Oliver L. North(1) 212,990 17.9%
Stock Rt. 1, Box 560
Common Joseph F. Fernandez(2) 134,355 11.4%
Stock 9542 Whitecedar Court
Common Travis Y. Green(3) 20,000 1.7%
Stock Lenox Towers, Suite 625
3400 Peachtree Road, NE
Common Herbert M. Jacobi(3) 40,000 3.4%
Stock 8 West 38th Street
New York, NY10018
Common Hugh G. Sawyer(3) 41,000 3.5%
Stock 3800 Falls Landing Drive
Common J. Andrew Moorer(4) 50,000 4.2%
All Officers and Directors
as a Group (6 persons) 498,345 36.1%
(1) Represents 66,356 shares owned of record by the Oliver North Irrevocable
Trust, 72,675 owned by the Oliver North Guarantor Annuity Trust, 1,580
shares owned by the Elizabeth North General Partnership, 15,799 shares
owned by the Elizabeth North Limited Partnership and 1,580 shares owned by
the Oliver North General Partnership (hereafter the "Trusts" and
"Partnership", respectively). Although Mr. North is not a beneficiary of
any of the Trusts, he continues to maintain voting control over all shares
owned beneficially by the Trusts. Also includes incentive stock options
exercisable to purchase, in the aggregate, 55,000 shares of the Company's
common stock at an exercise price of $2.50 per share granted to Mr. North
under the Company's 1997 Incentive Stock Option Plan (the "Plan").
(2) Represents 94,355 shares owned by Charles Anthony Gidden Fernandez
(13,334), Dale Gidden Fernandez (1,017), John David Gidden Fernandez
(13,334), Joseph Culver Gidden Fernandez (13,334), Michael Louis Gidden
Fernandez (13,334), Dale Gidden Fernandez C/F Andrew Francis Gidden
Fernandez (13,334), Catherine Marie Gidden Fernandez Gros (13,334) and
Elizabeth Anne Gidden Fernandez (13,334). Notwithstanding the foregoing,
Mr. Fernandez continues to retain voting control over all shares owned by
Mr. Fernandez' children. Also includes incentive stock options exercisable
to purchase, in the aggregate, 40,000 shares of the Company's common stock
at an exercise price of $2.50 per share granted under the Plan.
(3) Includes stock options exercisable to purchase shares of the Company's
common stock at an exercise price of $2.50 per share granted under the
Company's stock option plan in the following amounts, respectively: Green -
20,000; Jacobi - 40,000; and Sawyer - 40,000.
(4) Consists exclusively of incentive stock options exercisable to purchase, in
the aggregate, 50,000 shares of the Company's common stock at an exercise
price of $2.50 per share granted to Mr. Moorer under the Company's 1997
Incentive Stock Option Plan (the "Plan").
PROPOSAL 2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected, Hein & Associates LLP, as
the independent public accountants for the Company to audit its consolidated
financial statements for the fiscal year ending December 31, 1998.
At the Annual Meeting, shareholders will be asked to ratify the selection by the
Board of Directors of Hein & Associates LLP as the Company's independent public
accountants. The vote of the shares entitled to vote at the Annual Meeting will
ratify this selection.
THE BOARD RECOMMENDS RATIFICATION OF THIS PROPOSALPROPOSAL 3 - APPROVAL AND ADOPTION OF COMPANY'S 1999 INCENTIVESTOCK OPTION PLAN
On November 30, 1998, the Board of Directors adopted a resolution to seek
shareholder approval of the Company's 1999 Incentive Stock Option Plan, pursuant
to which 300,000 shares of Common Stock will be reserved for issuance to all
persons in the service of the Company or a subsidiary of the Company and the
members of the Board of Directors of the Company who are not otherwise employees
(the "1999 Incentive Stock Option Plan"). The options are to be granted at
exercise prices not less than 100% of the fair market value of the Common Stock
at the date of the grant. Any options granted must be exercised within 36 months
thereof by the recipient or such options will expire. The number of shares
granted, terms of exercise, and expiration dates are to be decided at the date
of grant of each option by the Company's stock option committee consisting of
members of the Board of Directors (the "Stock Option Committee"). A copy of the
proposed 1999 Incentive Stock Option Plan is and will be available at the
Company's offices 10 days prior to the date of the meeting.
THE BOARD RECOMMENDS A VOTE "FOR" ADOPTION AND APPROVAL OF THE 1999 INCENTIVE STOCK OPTION PLAN OTHER MATTERS
Management knows of no other matters to be submitted to the Annual Meeting. If
any other matters properly come before the Annual Meeting, it is intended that
the person named in the enclosed from of Proxy will vote such Proxy in
accordance with his judgment.
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, as filed with the SEC, may be obtained by shareholders
without charge by written request to Guardian Technologies International, Inc.,
22570 Markey Court, Dulles, Virginia20166.
By Order of the Board of Directors
Oliver L. North, Chairman of the Board
Dated: December 8, 1998
Dates Referenced Herein and Documents Incorporated By Reference