SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
Labtec 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:
<PAGE>
(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:
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LABTEC INC.
1499 S.E. TECH CENTER PLACE
SUITE 350
VANCOUVER, WASHINGTON 98683
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 15, 1999
To the Stockholders of Labtec Inc.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of
Stockholders (the "Meeting") of Labtec Inc. (the "Company") will be held at the
Hyatt Regency, 5 Embarcadero Center, San Francisco, California 94111, on
Wednesday, September 15, 1999 at 9:00 A.M., local time, to consider and act upon
the following matters:
(1) To approve the amendment of the Restated Articles of Organization, as
amended (the "Restated Articles of Organization"), to eliminate the
Company's three classes of directors in favor of one class of directors
to be elected annually;
(2) To elect five (5) Class I directors, each to hold office for a term of
three (3) years and until their successors are chosen and qualified;
provided, however, that if Proposal 1 is approved, the same five
nominees shall each hold office for a term to expire at the 2000 Annual
Meeting of Stockholders and until their respective successors are
chosen and qualified; and
(3) The transaction of such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
Information regarding the matters to be acted upon at the
Meeting is contained in the accompanying Proxy Statement.
The close of business on July 26, 1999 has been fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors,
RODGER R. KROUSE
Clerk
Vancouver, Washington
August 2, 1999
- --------------------------------------------------------------------------------
It is important that your shares be represented at the Meeting. Each stockholder
is urged to sign, date and return the enclosed proxy card which is being
solicited on behalf of the Board of Directors. An envelope addressed to the
Company's transfer agent is enclosed for that purpose and needs no postage if
mailed in the United States.
- --------------------------------------------------------------------------------
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<PAGE>
LABTEC INC.
1499 S.E. TECH CENTER PLACE
SUITE 350
VANCOUVER, WASHINGTON 98683
PROXY STATEMENT
This Proxy Statement is furnished to the holders of Common
Stock, par value $.01 per share ("Common Stock"), of Labtec Inc. (the "Company")
in connection with the solicitation by and on behalf of its Board of Directors
of proxies ("Proxy" or "Proxies") for use at the 1999 Annual Meeting of
Stockholders (the "Meeting") to be held on Wednesday, September 15, 1999, at
9:00 A.M., local time, at the Hyatt Regency, 5 Embarcadero Center, San
Francisco, California 94111, and at any adjournment or postponement thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The cost of preparing, assembling and mailing the Notice of Annual
Meeting of Stockholders, this Proxy Statement and Proxies is to be borne by the
Company. The Company will also reimburse brokers who are holders of record of
Common Stock for their expenses in forwarding Proxies and Proxy soliciting
material to the beneficial owners of such shares. In addition to the use of the
mails, Proxies may be solicited without extra compensation by directors,
officers and employees of the Company by telephone, telecopy, telegraph or
personal interview. The approximate mailing date of this Proxy Statement is
August 13, 1999.
Unless otherwise specified, all Proxies, in proper form,
received by the time of the Meeting will be voted for the election of all
nominees named herein to serve as directors and in favor of each of the
proposals set forth in the accompanying Notice of Annual Meeting of Stockholders
and described below.
A Proxy may be revoked by a stockholder at any time before its
exercise by filing with the Clerk of the Company, at the address set forth
above, an instrument of revocation or a duly executed proxy bearing a later
date, or by attendance at the Meeting and electing to vote in person. Attendance
at the Meeting will not, in and of itself, constitute revocation of a Proxy.
The close of business on July 26, 1999 has been fixed by the
Board of Directors as the record date ("Record Date") for the determination of
stockholders entitled to notice of, and to vote at, the Meeting and any
adjournment thereof. As of the Record Date, there were 6,908,030 shares of
Common Stock outstanding. Each share of Common Stock outstanding on the Record
Date will be entitled to one vote on all matters to come before the Meeting.
A majority in interest of the outstanding Common Stock
represented at the Meeting in person or by proxy is required to constitute a
quorum for the transaction of business. Shares represented by Proxies which
contain one or more abstentions or broker "non-votes" are counted as present or
represented for purposes of determining the presence or absence of a quorum for
the Meeting. A "non- vote" occurs when a broker or other nominee holding shares
for a beneficial owner votes on one proposal, but does not vote on another
proposal because, with respect to such other proposal, the broker does not have
discretionary voting power and has not received instructions from the beneficial
owner. A plurality of the votes cast is required to elect each nominee for
director.
<PAGE>
PROPOSAL 1
TO APPROVE THE AMENDMENT OF THE
RESTATED ARTICLES OF ORGANIZATION
TO ELIMINATE THE COMPANY'S THREE CLASSES OF
DIRECTORS IN FAVOR OF ONE CLASS ELECTED ANNUALLY
The Company's Restated Articles of Organization currently
provide that the directors of the Company shall be divided into three classes,
as nearly equal in number as possible, with the term of office of one class
expiring each year at the annual meeting of stockholders. Each director is
elected to hold office for a term of three consecutive years and until a
successor has been chosen and qualified, subject to prior death, resignation,
retirement or removal. One effect of this classified board structure is to
render it more difficult for stockholders to change the composition of the board
of directors because only one-third of the directors may be voted upon in any
year. The classified board structure also renders it more difficult for a
purchaser of a significant percentage of the Company's stock to effect a change
in management. This tends to discourage potential acquirors of the Company who
do not have the support of the directors.
The Board of Directors has determined that the classified
board structure is unnecessary and does not serve the interests of the Company's
stockholders. The Company believes that the election by stockholders of the
entire Board each year will enhance the responsiveness of the Board to
stockholder concerns. Accordingly, the Board of Directors has proposed that
Article VI of the Company's Restated Articles of Organization be amended to
provide that the entire Board of Directors be elected each year for a one-year
term to expire at the next annual meeting of stockholders or until their
respective successors are chosen and qualified.
If the proposed amendment of the Restated Articles of
Organization is approved by the Company's stockholders at the Meeting, then
pursuant to Proposal 2, management's proposed slate of five nominees, consisting
of J. Grant Jagelman, Julian Rubinstein, Jonathan Stearns, Joseph Pretlow and
Robert G. Wick, will be nominated for a term commencing upon the filing of an
appropriate article of amendment to the Restated Articles of Organization with
the Massachusetts Secretary of the Commonwealth and expiring at the 2000 Annual
Meeting of Stockholders or until their respective successors are chosen and
qualified. If the proposal to amend the Restated Articles of Organization is not
approved by the stockholders at the Meeting, the current three-class structure
will remain. In such event, J. Grant Jagelman, Julian Rubinstein, Jonathan
Stearns, Joseph Pretlow and Robert G. Wick will be nominated to serve as Class I
directors for a three-year term to expire at the 2002 Annual Meeting of
Stockholders or until their respective successors are chosen and qualified. See
"Proposal 2 - Election of Directors."
If Proposal 1 is approved, the Restated Articles of
Organization will be amended and the provisions of Article VI, Section A,
Paragraphs 1 and 2 of the Restated Articles of Organization would read as set
forth in Appendix A hereto.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE APPROVAL OF THE PROPOSED AMENDMENT OF THE RESTATED ARTICLES OF
ORGANIZATION. The affirmative vote of a majority of the outstanding shares of
Common Stock present in person or by proxy at the Meeting is necessary for
approval. Unless a contrary choice is specified, all proxies solicited by the
Board will be voted FOR approval of the proposed amendment.
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<PAGE>
PROPOSAL 2
ELECTION OF DIRECTORS
At the Meeting, five (5) Class I directors are to be elected,
each to hold office for a term of three years and until their successors are
chosen and qualified; provided, however, that if Proposal 1 is approved, and
subject to the filing of an appropriate article of amendment to the Restated
Articles of Organization, the same five directors shall each hold office for a
term to expire at the 2000 Annual Meeting of Stockholders and until their
respective successors are chosen and qualified. The directors whose terms do not
expire at the Meeting shall serve out the remaining years of their respective
terms, so that, if Proposal 1 is approved, commencing at the 2001 Annual Meeting
of Stockholders all directors will be elected to terms to expire at the next
subsequent annual meeting of stockholders and until their respective successors
are chosen and qualified. The five nominees are J. Grant Jagelman, Julian
Rubinstein, Jonathan Stearns, Joseph Pretlow and Robert G. Wick.
If Proposal 1 is not approved the current three-class
structure will remain. In such event, J. Grant Jagelman, Julian Rubinstein,
Jonathan Stearns, Joseph Pretlow and Robert G. Wick will be nominated to serve
as Class I directors for a three-year term to expire at the 2002 Annual Meeting
of Stockholders or until their respective successors are chosen and qualified.
Each of the aforementioned individuals has advised the Company
of his or her willingness to serve as a director of the Company. Shares
represented by valid proxies in the accompanying form will be voted for the
election of the five nominees named below, unless a contrary direction is
indicated. Should any nominee named below become unavailable for election to the
Board of Directors for any reason, the person named in the proxies has
discretionary authority to vote the proxies for one or more alternative nominees
who will be designated by the Board of Directors. Directors whose terms of
office do not expire at the Meeting are also listed below.
NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
The nominees, directors and executive officers of the Company,
their ages and present positions with the Company are as follows:
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
NOMINEES:
J. Grant Jagelman 57 Director
Julian Rubinstein 37 Director
Jonathan Stearns 40 Director
Joseph Pretlow 31 Director
Robert G. Wick 36 President and Director
DIRECTORS -- ONE YEAR REMAINING TERM
Dennis Gain 56 Director
Geoffrey Rehnert 41 Director
Patrick J. Sullivan 44 Director
Marc Wolpow 40 Director
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<PAGE>
DIRECTORS -- TWO YEAR REMAINING TERM
Rodger R. Krouse 37 Co-Chairman, Clerk and
Director
Marc J. Leder 37 Co-Chairman, Senior Vice
President, Finance, Chief
Financial Officer, Treasurer and
Director
George R. Rea 61 Director
Bradley A. Krouse 33 Director
EXECUTIVE OFFICERS
Robert G. Wick See above
Marc J. Leder See above
Rodger R. Krouse See above
Gregory Jones 40 Senior Vice President, North
American Retail Sales
INFORMATION ABOUT NOMINEES AND DIRECTORS
The following is a brief summary of the background of each
nominee and director:
J. Grant Jagelman has been a director of the Company since its
incorporation in April 1991. Mr. Jagelman was the Chairman of Spatial Systems
Ltd. ("SSL"), an Australian public company, from 1986 to July 1997, when SSL was
merged into the Company.
Julian Rubinstein was appointed as a director of the Company
in July 1999. Mr. Rubinstein was President and CEO of American Shower & Bath
Corp., the world's largest manufacturer of Shower Stall Kits, Tubsurrounds and
Laundry Sinks, which he founded and later sold to Masco Corporation. Mr.
Rubinstein is also President of American Asset Management and a director of
Nailite International, Inc. and The Atlas Companies, Inc.
Jonathan Stearns was appointed as a director of the Company in
July 1999. Mr. Stearns is a founding member and Managing Director of Equinox
Investment Partners, LLC, which was established in January 1996. Prior thereto,
Mr. Stearns spent seven years employed by Kleinwort Benson Ltd. as a vice
president engaged in investment management and investment banking. Mr. Stearns
is a director of Pet's Choice, Inc., Manco Products, Inc. and Prime Matrix, Inc.
Joseph Pretlow has been a director of the Company since
February 1999. Mr. Pretlow joined Bain Capital in 1992 and has been a principal
since 1996. Prior to joining Bain Capital, Mr. Pretlow spent two years at Lehman
Brothers in investment banking, where he specialized in mergers and acquisitions
and corporate finance transactions for retail companies. Previously, he worked
as a consultant at Sibson & Company. Mr. Pretlow is a director of Artisan
Entertainment and Bentley's Luggage.
Robert G. Wick has been President and a director of the
Company since February 1999. Prior thereto, Mr. Wick had been employed by Labtec
Corporation, the Company's wholly-owned subsidiary ("Labtec"), since November
1998, and became Labtec's President in January 1999. Prior thereto, Mr. Wick
spent four years as Vice President of Finance and Logistics at Weiser Lock, a
division
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<PAGE>
of Masco Corporation. From 1991 to 1994 Mr. Wick served as Controller of Weiser
Lock.
Dennis T. Gain was the founder of the Company and has served
as a director from its incorporation in April 1991. In addition, Mr. Gain was
Chairman of the Board and served as President and Chief Executive Officer of the
Company from its incorporation in April 1991 until February 1998. Mr. Gain has
served as Chairman and Chief Executive Officer of 3D OpenMotion, L.L.C. since
June 1998. Mr. Gain is a director of Miacomet, Inc.
Geoffrey Rehnert has been a director of the Company since
February 1999. He is a founder and the Co-CEO of the AUDAX Group, L.P. He is
also a Special Limited Partner of Bain Capital, Inc. Mr. Rehnert helped to found
Bain Capital at its inception in 1984, and was a General Partner and a Managing
Director from 1986 through July 1999. Mr. Rehnert is a director of Artisan
Entertainment, Inc., FTD Holdings, Inc., First Communications, Inc.,
Nutraceutical Corp., Miltex, Inc., Kollmorgen Corporation and The Atlas
Companies, Inc.
Patrick J. Sullivan has been a director of the Company since
February 1997. Mr. Sullivan has extensive consumer electronics and computer
industry experience, having served as Vice President of the Merchandising Group
of Digital Equipment Corporation, a computer manufacturer, since 1993.
Marc Wolpow has been a director of the Company since February
1999. Mr. Wolpow is a founder and the Co-CEO of the AUDAX Group, L.P. He is also
a Special Limited Partner of Bain Capital, Inc. Mr. Wolpow was a Principal of
Bain Capital, Inc. from April 1990 through 1992 and a Managing Director from
1993 through July 1999. Mr. Wolpow was a Managing Director of Sankaty Advisors,
Inc. (an affiliate of Bain Capital, Inc.) from December 1997 through July 1999.
He is a director of Miltex Holdings, Inc., PSI, Inc., Physicians Quality Care,
Inc., PiRod Holdings, Inc. and The Atlas Companies, Inc.
Rodger R. Krouse has been Co-Chairman, Clerk and a director of
the Company since February 1999. Mr. Krouse has been a Managing Director of Sun
Capital Partners, Inc. since May 1995, prior to which he was employed by Lehman
Brothers, Inc. since 1984, most recently as a Senior Vice President. Mr. Krouse
is a director of Nailite International, Inc., The Atlas Companies, Inc. and
World Airways, Inc.
Marc J. Leder has been Co-Chairman, Senior Vice President,
Finance, Chief Financial Officer, Treasurer and a director of the Company since
February 1999. Mr. Leder has been a Managing Director of Sun Capital Partners,
Inc. since May 1995, prior to which he was employed by Lehman Brothers, Inc.
since 1987, most recently as a Senior Vice President. Mr. Leder is a director of
Nailite International, Inc. and The Atlas Companies, Inc.
George R. Rea has been a director of the Company since
September 1997. Mr. Rea had been the Acting Chief Executive Officer of the
Company from July 1998 to February 1999. Mr. Rea was a consultant and investor
in the Company since 1997. Prior thereto, Mr. Rea was Executive Vice President
of Conner Peripherals Inc. from 1992 until his retirement in 1994. In addition,
Mr. Rea is a director of Imaging Technologies International LLC.
Bradley A. Krouse has been a director of the Company since
February 1999. Mr. Krouse has been an attorney at Klehr, Harrison, Harvey,
Branzburg & Ellers LLP in Philadelphia since 1995, and
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<PAGE>
a partner since 1997. Mr. Krouse was an associate at Ballard Spahr Andrews &
Ingersoll in Philadelphia from 1990 to 1994. Mr. Krouse is the brother of Rodger
Krouse.
INFORMATION ABOUT NON-DIRECTOR EXECUTIVE OFFICERS
The following is a brief summary of the background of each
executive officer of the Company who is not also a director of the Company:
Gregory Jones joined Labtec as Senior Vice President in
February 1998. Prior to joining Labtec, Mr. Jones spent three years at Hewlett
Packard, where he was the Marketing Manager responsible for Hewlett Packard's
entry into the consumer PC area, with the Pavilion line. Prior thereto, Mr.
Jones was employed for two years by Sigma Designs as a Senior Vice President for
Marketing. Prior to that time, Mr. Jones held a variety of increasingly
responsible sales and marketing positions with Acer Corporation, Compaq Computer
and Adaptec, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
ELECTION OF EACH NOMINEE NAMED ABOVE TO A TERM OF OFFICE OF THREE YEARS AND
UNTIL THEIR RESPECTIVE SUCCESSORS ARE CHOSEN AND QUALIFIED; PROVIDED, HOWEVER,
THAT IF PROPOSAL 1 IS APPROVED, AND SUBJECT TO THE FILING OF AN APPROPRIATE
ARTICLE OF AMENDMENT TO THE RESTATED ARTICLES OF ORGANIZATION, THE SAME FIVE
DIRECTORS SHALL EACH HOLD OFFICE FOR A TERM TO EXPIRE AT THE 2000 ANNUAL MEETING
OF STOCKHOLDERS AND UNTIL THEIR RESPECTIVE SUCCESSORS ARE CHOSEN AND QUALIFIED.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than ten percent of the Company's Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company during the fiscal year ended March 31, 1999,
there were no late or delinquent filings, except for certain reports to be filed
by Messrs. C. Raymond Boelig, Morton E. Goulder, A. Lorne Grant, John A. Hilton,
Jerry H. Loyd, Neil M. Rossen, Ms. Joyce A. Ouellete, former directors and named
executive officers of the Company, and Sun Multimedia Partners, L.P.
COMMITTEES
During the fiscal year ended March 31, 1999, the Company's
Board of Directors held nine meetings. Each incumbent director attended at least
75% (i) of the aggregate number of meetings of the Board of Directors that
occurred during his directorship and (ii) of meetings of all committees of the
Board of Directors on which such directors served in fiscal 1999.
The Audit Committee, of which Messrs. Bradley Krouse, Rodger
Krouse, Leder, Rea and Sullivan are currently members, is responsible for
providing the Board of Directors with an independent review of the financial
health of the Company and its financial controls and reporting. Its primary
functions are to interface with the Company's auditors. The Audit Committee did
not meet in fiscal 1999.
The Compensation Committee, of which Messrs. Bradley Krouse,
Rodger Krouse, Leder, Rea, Rubinstein and Sullivan are currently members, acts
for the Board of Directors with respect to the Company's compensation practices
and implementation thereof. The Compensation Committee's primary functions are
to set or amend the compensation of any employee of the Vice President level and
above or whose
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<PAGE>
annual compensation is equal to or exceeds $100,000. The Compensation Committee
held four meetings in fiscal 1999.
The Board of Directors does not have a standing nominating
committee.
PERFORMANCE GRAPH
The following graph shows the cumulative total stockholder
return on the Company's Common Stock over the period from December 11, 1995 (the
date of the Company's initial public offering) to March 31, 1999, as compared
with that of the Nasdaq Market Index and a peer group index consisting of
publicly traded computer peripheral equipment companies reporting under the same
Standard Industrial Classification Code (SIC 3577) as the Company. The
comparison assumes $100 was invested at the close of business on December 31,
1995 in the Common Stock and in each of the comparison groups, and assumes
reinvestment of dividends. Total stockholder return is measured by dividing
share price change plus dividends, if any, for each period by the share price at
the beginning of the respective period, and assumes reinvestment of dividends.
[GRAPHIC OMITTED]
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<PAGE>
TOTAL STOCKHOLDER RETURNS - DIVIDENDS REINVESTED
ANNUAL RETURN PERCENTAGE
Year Ended March 31,
------------------------------------------
Company\Index 1996(1) 1997 1998 1999
- -------------- ---- ---- ---- ----
Labtec Inc........... 26.53 -79.03 0.0 -44.87
NASDAQ............... 3.84 11.10 51.60 34.59
Peer Group........... -14.94 17.41 74.18 4.07
INDEXED RETURNS
Base Period Year Ended March 31,
----------- ------------------------------------
Company\Index December 11, 1995 1996 1997 1998 1999
- ------------- ----------------- ---- ---- ---- ----
Labtec Inc.......... 100 126.53 26.53 26.53 14.63
NASDAQ.............. 100 103.84 115.37 174.90 235.40
Peer Group.......... 100 85.06 99.87 173.95 181.03
- ---------------
(1) From December 11, 1995 (the date of the Company's initial public offering).
COMPENSATION COMMITTEE REPORT OF EXECUTIVE COMPENSATION
The Compensation Committee Report set forth below describes
the compensation policies applicable to executive officers of the Company.
OVERALL POLICY. The Company's executive compensation program
is designed to be closely linked to corporate performance and equity returns to
stockholders. To this end, the Company has developed an overall compensation
strategy and specific compensation plan that tie a portion of each executive's
compensation to the Company's success in meeting specified performance goals. In
addition, through the use of stock options, the Company ensures that a part of
each executive's compensation is closely tied to appreciation in the Company's
Common Stock price. The overall objectives of this strategy are to attract and
retain the best possible executive talent, to motivate these executives to
achieve goals inherent in the Company's business strategy, to link executive and
stockholder interests through equity- based plans and, finally, to provide a
compensation package that recognizes individual contributions as well as overall
business results.
The Compensation Committee determines the compensation of the
individuals named in the Summary Compensation Table. The Compensation Committee
takes into account the views of the President in reviewing the individual
performance of the executives (other than himself).
The key elements of the Company's executive compensation
consist of base salary, annual bonus and stock options. The Compensation
Committee's policies with respect to each of these elements are discussed below.
In addition, while the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full compensation
package afforded by the Company to the executive officer, including insurance
and other employee benefits.
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<PAGE>
BASE SALARIES. Base salaries for executive officers are
initially determined by evaluating the responsibilities of the position held and
the experience of the individual. In making determinations regarding base
salaries, the Compensation Committee considers generally available information
regarding salaries prevailing in the industry, but does not utilize any
particular indices or peer groups.
Annual salary adjustments are determined by evaluating the
financial performance of the Company and of each executive officer, and also
takes into account new responsibilities. The Compensation Committee, where
appropriate, also considers non-financial performance measures. These
non-financial performance measures may include such factors as efficiency gains,
improvements in product quality and improvements in relations with customers,
suppliers and employees. No particular weight is given to any of these
non-financial factors.
ANNUAL BONUS. The Company's executive officers are eligible
for an annual cash bonus, based primarily on achievement of significant
milestones by the Company and the executive. Executive officers were eligible to
receive bonuses for fiscal 1999 based upon the achievement of certain milestones
by the Company during fiscal 1999.
STOCK OPTIONS. Under the Company's Amended and Restated 1993
Stock Option Plan (the "1993 Plan"), which was approved by stockholders, stock
options are granted to the Company's executive officers. Stock options are
designed to align the interests of executives with those of the stockholders.
Stock options are granted with an exercise price equal to the fair market value
of the Common Stock on the date of grant and generally vest over five years.
Stock option grants are designed to encourage the creation of stockholder value
over the long term since the full benefit of the compensation package cannot be
realized unless Common Stock price appreciation is achieved, and, once achieved,
is maintained and improved upon. In determining the amount of such option
grants, the Compensation Committee evaluates the job level of the executive,
responsibilities to be assumed in the upcoming year, and responsibilities in
prior years, and also takes into account the size of the executive's awards in
the past.
Under the Company's Amended and Restated 1997 Stock Option
Plan (the "1997 Plan"), which was approved by stockholders, stock options are
granted to the Company's directors, including directors who are not employees of
the Company, and all executive officers of the Company and its subsidiaries and
other employees, consultants and advisers who, in the opinion of the Board, are
in a position to make a significant contribution to the success of the Company
and its subsidiaries. Stock options are designed to align the interests of the
option holders with those of the stockholders. Stock options are granted with an
exercise price determined by the Board on the date of grant and generally vest
over four years. In determining the amount of such option grants, the
Compensation Committee evaluates the job level of the individual,
responsibilities to be assumed in the upcoming year, and responsibilities in
prior years, and also takes into account the size of the individual's awards in
the past.
CONCLUSION. Through the programs described above, a very
significant portion of the Company's executive compensation is linked directly
to individual and corporate performance and stock appreciation. In fiscal 1999,
as in previous years, a substantial portion of the Company's targeted executive
compensation consisted of performance-based variable elements. The Compensation
Committee intends to continue the policy of linking executive compensation to
Company performance and returns to stockholders, recognizing that the ups and
downs of the business cycle from time to time may result in an imbalance for a
particular period.
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<PAGE>
By the Compensation Committee,
Bradley A. Krouse
Rodger R. Krouse
Marc J. Leder
George R. Rea
Patrick J. Sullivan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of March 31, 1999, the Compensation Committee consisted of
Bradley A. Krouse, Rodger R. Krouse, Marc J. Leder, George R. Rea and Patrick
Sullivan. Rodger R. Krouse is Co-Chairman and Clerk of the Company, and Marc J.
Leder is Co-Chairman, Senior Vice President, Finance, Chief Financial Officer
and Treasurer of the Company.
COMPENSATION OF DIRECTORS
Directors receive no compensation for their services. The
Board of Directors, in its discretion, may grant options to the Directors from
time to time under the 1997 Plan, which was approved by the stockholders.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
the ownership of the Common Stock as of July 26, 1999 by (i) persons known by
the Company to be beneficial owners of more than 5% of its common stock, (ii)
the executive officers named in the Summary Compensation Table, (iii) the
directors and nominees for election as directors, and (iv) all current executive
officers and directors of the Company as a group and the percentage of shares
represented thereby.
<TABLE>
<CAPTION>
PERCENTAGE
SHARES BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER (1) OWNED(2) OWNED
<S> <C> <C>
5% STOCKHOLDERS
Sun Multimedia Partners, L.P. ....................................... 3,575,826 51.8%
5355 Town Center Road
Suite 802
Boca Raton, FL 33486
Dennis T. Gain (3)................................................... 443,758 6.4%
30 Boren Lane
Boxford, MA 01921
Gain Family Trust (4)................................................ 349,197 5.1%
OTHER DIRECTORS AND NOMINEES FOR DIRECTOR
Rodger R. Krouse (5)................................................. 3,575,826 51.8%
Marc J. Leder (5).................................................... 3,575,826 51.8%
J. Grant Jagelman (6)................................................ 195,656 2.8%
Level 8 139 Macquarie St.
Sydney, NSW 2000 Australia
Jonathan Stearns (7)................................................. 184,769 2.7%
George R. Rea (8).................................................... 29,666 *
Patrick J. Sullivan (8).............................................. 26,665 *
Julian Rubinstein.................................................... -- --
Bradley A. Krouse.................................................... -- --
Joseph Pretlow....................................................... -- --
Geoffrey Rehnert..................................................... -- --
Robert G. Wick....................................................... -- --
Marc Wolpow.......................................................... -- --
NAMED EXECUTIVE OFFICERS
Gregory Jones (9).................................................... 37,971 *
All directors, nominees for director and executive officers as 4,494,311 63.9%
a group (13 persons) (10)............................................
- ----------------
</TABLE>
* Less than one percent.
(1) Except as otherwise indicated, the address of each individual listed
is c/o Labtec Inc., 1499 S.E. Tech Center Place, Suite 350, Vancouver,
WA 98683.
(2) Except as otherwise indicated in these footnotes, the persons and
entities named in the table have sole voting and investment power with
respect to all shares beneficially owned by them. Includes shares of
Common Stock
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<PAGE>
underlying immediately exercisable stock options. The inclusion herein
of any shares of Common Stock deemed beneficially owned does not
constitute an admission of beneficial ownership of those shares.
(3) Includes (i) 349,197 shares held by the Gain Family Trust, a trust for
the benefit of certain members of the family of Dennis T. Gain and of
which Mr. Gain is the sole trustee, (ii) 23,332 shares of Common Stock
subject to currently exercisable options held by Mr. Gain, (iii) 24,667
shares held by Mr. Gain's wife and children and (iv) 12,533 shares held
by the Gain New Zealand Trust of which Mr. Gain is a Trustee.
(4) The Gain Family Trust is a trust for the benefit of certain family
members of Dennis T. Gain, a director of the Company and the former
President and Chief Executive Officer of the Company. Mr. Gain is the
sole trustee of the Gain Family Trust and has sole voting control and
investment power over the shares held by the trust.
(5) Messrs. Leder and Krouse each own 50% of Sun Multimedia Advisors, Inc.,
the general partner of Sun Multimedia Partners, L.P. Mr. Leder and Mr.
Krouse disclaim beneficial ownership of the shares held by Sun
Multimedia Partners, L.P. except to the extent of their pecuniary
interests.
(6) Includes (i) 9,132 shares held by the Group Superannuation Fund, an
Australian retirement trust of which Mr. Jagelman holds a 100%
interest; (ii) 13,541 shares of Common Stock held by Mr. Jagelman's
wife, children and mother-in-law; and (iii) 22,665 shares of Common
Stock issuable upon exercise of currently exercisable options.
(7) Consists of shares held by The KB Mezzanine Fund II, L.P. ("KB").
Equinox Investment Partners, L.L.C. ("Equinox") is the general partner
of EIPCP, L.P. ("EIPCP") and EIPCP is the general partner of KB. Mr.
Stearns is a founding member and managing director of Equinox and
thereby shares control of Equinox. He disclaims beneficial ownership of
the shares held by KB, except to the extent of his pecuniary interest.
(8) Consists of shares of Common Stock issuable upon exercise of currently
exercisable options.
(9) Includes 24,252 shares of Common Stock issuable upon exercise of
currently exercisable options.
(10) Includes 48,997 shares of Common Stock issuable upon exercise of
currently exercisable options granted under the 1993 Plan, 23,331
shares of Common Stock issuable upon exercise of currently exercisable
options granted under the Amended and Restated 1995 Director Stock
Option Plan (the "Director Plan"), 44,252 shares of Common Stock
issuable upon exercise of currently exercisable options granted under
the 1997 Plan and 10,000 shares of Common Stock issuable upon exercise
of currently exercisable options granted outside the Company's stock
option plans.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides summary information concerning
the cash compensation and certain other compensation paid, awarded, or accrued
by the Company to the Company's President and four most highly compensated
executive officers who were serving as executive officers at the end of fiscal
1999 and whose salary and bonus exceeded $100,000 for the 1999 fiscal year, for
services in all capacities to the Company during the 1999, 1998 and 1997 fiscal
years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
AWARDS
OTHER SECURITIES ALL OTHER
NAME AND PRINCIPAL ANNUAL UNDERLYING COMPENSATION
POSITION(1) YEAR SALARY BONUS COMPENSATION OPTIONS # $
- -------------------- ------ ------ ----- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
ROBERT G. WICK 1999(2) $43,750 -- -- 133,000 --
President and Director
GREGORY JONES 1999 $162,116 $3,583 -- -- $57,515(3)
Senior Vice President, 1998 $7,500 -- -- 97,005(4) --
North American Retail 1997 -- -- -- -- --
Sales
</TABLE>
- ------------
(1) Except as provided in the table above, none of the Company's executive
officers who were serving as executive officers at the end of fiscal
1999 had salary and bonus exceeding $100,000 for the 1999 fiscal year.
Such executive officers served in such capacity for only part of the
fiscal year as a result of the Company's merger in February 1999 (the
"Merger").
(2) Mr. Wick became President of the Company in February 1999.
(3) Represents the difference between the market value per share of the
Common Stock at January 7, 1999 ($1.0566) and the purchase price per
share ($0.2816), multiplied by 74,248 shares purchased by Mr. Jones
pursuant to a Company stock purchase program, which allowed executive
officers to purchase shares of Common Stock at a discount from the
market price.
(4) Adjusted to reflect conversion of Labtec common stock into Company
Common Stock and a one-for-three reverse split as a result of the
Merger. Of the total, 32,335 options were granted at an exercise price
of $1.5241 per share on February 11, 1998 ("Tranche 1"); 32,335 options
were granted at an exercise price of $4.5722 per share on February 11,
1998 ("Tranche 2") and 32,335 options were granted at an exercise price
of $1.5241 per share on June 1, 1998 ("Tranche 3"). All options vest
over four years, with 25% of each tranche becoming exercisable
commencing on the first anniversary of the respective grant date. As of
March 31, 1999, 8,084 options granted under Tranche 1 were currently
exercisable and 8,084 options granted under Tranche 2 were currently
exercisable.
-13-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS GRANTED PRICE APPRECIATION FOR
UNDERLYING TO EMPLOYEES EXERCISE OR EXPIRATION OPTION TERMS
NAME OPTIONS GRANTED IN FISCAL 1999 BASE PRICE DATE 5%($) 10%($)
- ---- --------------- --------------- -------------- ----------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Robert G. Wick 133,000 (1) 47.5% $5.375 2/16/09 $449,581 $1,139,326
- --------------
</TABLE>
(1) The options are exercisable as to 33,250 shares commencing on each of
the first four anniversaries of the commencement of his employment with
the Company on November 15, 1998.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to
options to purchase Common Stock granted under the Company's 1993 Plan and 1997
Plan, including (i) the number of shares of Common Stock purchased upon exercise
of options in the fiscal year ended March 31,1999; (ii) the net value realized
upon such exercise; (iii) the number of unexercised options outstanding at March
31, 1999; and (iv) the value of such unexercised options at March 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED VALUE OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert G. Wick 0 0 0/133,000 $0/$0
Gregory Jones 0 0 16,168/80,837 $37,621/$237,376
- --------------
</TABLE>
(1) Based on the closing price of $5.375 per share of Common Stock at
March 31, 1999.
The Company has obtained directors and officers liability
insurance in the amount of $10,000,000. The annual premium for this insurance is
approximately $114,700.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement, as
amended to date, with Mr. Gregory Jones pursuant to which he is employed
full-time as the Company's Senior Vice President - North America Retail Sales.
The agreement expires in June 2001 and provides for an annual base salary of
$150,000. The Company's Board of Directors also may grant, from time to time,
bonuses or increase the base salary payable to Mr. Jones. In addition to his
cash compensation, Mr. Jones receives other benefits, including those generally
provided to other employees of the Company. The agreement further provides for a
severance payment of nine months' salary upon termination of employment under
certain circumstances.
Pursuant to his employment agreement, Mr. Jones is entitled to
receive, in addition to his base salary, an annual bonus in amounts up to 70% of
his base salary for such year based upon the
-14-
<PAGE>
achievement of certain goals as set by the Company. Mr. Jones also was permitted
to purchase shares of Common Stock from the Company pursuant to his employment
agreement, under such terms as provided in his employment agreement. Mr. Jones
also received, pursuant to his employment agreement, options to purchase 525,000
shares of Labtec common stock at exercise prices ranging from $0.2816 to $0.8448
per share. To date, taking into account the conversion of Labtec common stock to
Company Common Stock as a result of the merger and the one-for-three reverse
split, Mr. Jones currently has 97,005 options at exercise prices ranging from
$1.5241 per share to $4.5722 per share. No options have been exercised. Of the
options granted, 24,252 are currently exercisable, with the remainder becoming
exercisable as follows : (i) as to 16,168 shares commencing on each of February
11, 2000 and 2001 and as to 16,166 shares commencing February 11, 2002 pursuant
to Tranches 1 and 2; and (ii) as to 8,084 shares commencing on each of June 1,
2000 and 2001 and as to 8,083 shares commencing June 1, 2002 pursuant to Tranche
3. See "Summary Compensation Table."
-15-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 11, 1997, the Compensation Committee of the Company's
Board of Directors repriced certain outstanding stock options granted to
then-current employees, including options held by Mr.
Gain.
On July 18, 1997, the Company completed a tender offer for the
outstanding shares of SSL, a stockholder of the Company. At the time of the
tender offer, Mr. Jagelman, Chairman of the Board of SSL, was a director and
stockholder of the Company. Pursuant to the tender offer, the Company exchanged
(i) two shares of the Common Stock for fifteen shares of SSL and (ii) one share
of Common Stock for every option to purchase twelve shares of SSL. Concurrent
with the completion of the tender offer, all shares of Common Stock owned by SSL
at the time of the tender offer were canceled and the license agreement between
the Company and SSL was terminated. As a result of this transaction, the number
of outstanding shares of the Company did not change.
On October 7, 1997, Labtec entered into a ten-year management
agreement with Sun Multimedia Advisors, Inc., the general partner of Sun
Multimedia Partners, L.P., which is the Company's majority stockholder. Marc J.
Leder and Rodger R. Krouse each own 50% of the outstanding capital stock of Sun
Multimedia Advisors, Inc. Pursuant to the terms of the management agreement, Sun
Multimedia Advisors, Inc. receives a management fee of $500,000 per annum and
received a transaction fee of $391,000 with respect to its participation in the
structuring and negotiation of the merger.
Dennis T. Gain, a director of the Company and former President
and Chief Executive Officer of the Company, entered into a Separation Agreement
with the Company on March 18, 1998. The Separation Agreement provided that the
Company shall pay to or on behalf of Mr. Gain: (i) severance payments in an
aggregate of $12,000 per month for the next twenty months, (ii) health insurance
premium for his then-existing health coverage for the next twenty-four months
and (iii) a $1,000 automobile allowance for the next twenty months. In addition,
all incentive stock options previously granted to Mr. Gain, other than 12,000
options of an option grant on April 29, 1994, converted into non-qualified stock
options and Mr. Gain exercised and sold 12,000 incentive stock options on May
22, 1998. Further, the Company sold an automobile purchased by it in March 1997
to Mr. Gain for $28,471, $11,929 below the fair market value of the automobile.
The Company's Board of Directors agreed, subject to its fiduciary and other
legal duties, to nominate Mr. Gain for election to the Company's Board of
Directors at the 1998 Annual Meeting of Stockholders of the Company. In
connection therewith, Mr. Gain agreed to return all proprietary information of
the Company, release all claims and causes of action relating to his employment
with the Company, and to execute a Non-competition, Non-disclosure and
Non-solicitation Agreement with the Company.
On June 5, 1998, the Company contributed its Open Motion
technology and certain assets related thereto having a net book value of
approximately $50,000 to 3D Open Motion, LLC, a Delaware limited liability
corporation (the "LLC"), established by Mr. Gain, majority owner of the LLC, in
exchange for an initial 20% non-voting interest in the LLC which has since been
reduced to 14.6% as a result of subsequent equity financing in which the Company
did not participate. In connection with the transaction, the Company received an
option, exercisable beginning January 1, 1999 through May 31, 1999 upon payment
of $250,000 to the LLC, to obtain a 50% discount from the most favorable terms
offered to any other customer on all commercial products developed by LLC. Such
option was not exercised by the Company. Simultaneously with the Company's
contribution, Mr. Gain contributed 291,667 shares of the Company's Common Stock
to the LLC. The Company repurchased the 291,667 shares on June 17, 1998 from the
LLC pursuant to its stock buyback plan at $2.40 per share, a 20% discount from
the closing price of the Company's Common Stock on the Nasdaq National Market on
June 3, 1998, the date on which the Company and the LLC agreed to the terms of
the joint venture.
-16-
<PAGE>
Effective October 20, 1998, the Company entered into a
consulting agreement with American Asset Management, a management consulting
firm wholly owned by Julian Rubinstein, a nominee for director, to assist in
reviewing and reorganizing the Company's operations. The agreement, which
terminated March 1999, provided for payment of $30,000 per month. The agreement
also contained non-disclosure provisions, assignment of inventions and
provisions regarding a twelve-month non-compete with certain competitors and a
twelve-month non-solicitation of employees.
VOTING REQUIREMENTS
The affirmative vote of a majority of the stock outstanding
and entitled to vote on such matter will be required to approve the amendment of
the Articles of Incorporation (Proposal 1). Directors are elected by a plurality
of the votes cast at the Meeting (Proposal 2). Abstentions and broker nonvotes
with respect to any matter are not considered as votes cast with respect to that
matter.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY RECOMMENDED A VOTE FOR
PROPOSAL 1 AND FOR EACH DIRECTOR NAMED IN PROPOSAL 2.
MISCELLANEOUS
STOCKHOLDER PROPOSALS
The Company's By-laws require a stockholder who wishes to
bring business before or propose director nominations at an annual meeting to
give written notice to the Co-Chairmen of the Board of Directors, the President,
the Treasurer or the Clerk of the Company not less than 50 days nor more than 75
days before the meeting, unless less than 65 days' notice or prior public
disclosure of the date of the meeting is given, in which case the stockholder's
notice must be received within 15 days following the day on which such notice or
disclosure of the date of the annual meeting was mailed or public disclosure was
made. Such notice must contain specified information about the proposed business
or nominee and the stockholder making the proposal or nomination. If any
stockholder intends to present a proposal at the 2000 Annual Meeting of
Stockholders and desires that it be considered for inclusion in the proxy
statement and form of proxy, it must be received by the Company at 1499 S.E.
Tech Center Place, Suite 350, Vancouver, Washington 98683, Attention: Robert G.
Wick, no later than July 27, 2000.
OTHER MATTERS
Management does not intend to bring before the Meeting for
action any matters other than those specifically referred to above and is not
aware of any other matters which are proposed to be presented by others. If any
other matters or motions should properly come before the Meeting, the person
named in the Proxy intends to vote thereon in accordance with his judgment on
such matters or motions, including any matters or motions dealing with the
conduct of the Meeting.
PROXIES
All stockholders are urged to fill in their choices with
respect to the matters to be voted on, sign and promptly return the enclosed
form of Proxy.
By Order of the Board of Directors,
RODGER R. KROUSE
Clerk
August 2, 1999
-17-
<PAGE>
APPENDIX A
ARTICLE VI
OTHER LAWFUL PROVISIONS
A. BOARD OF DIRECTORS
1. TERM. The business and affairs of this corporation shall be managed
by or under the direction of a Board of Directors consisting of such number of
directors as provided in the By-laws of the corporation. Each director shall be
elected by the stockholders to hold office for a term ending at the annual
meeting following the annual meeting at which such director was elected. Each
director shall serve until a successor shall have been chosen and qualified,
subject to prior retirement, disqualification, resignation, death or removal
from office.
2. VACANCIES. Except as otherwise determined by the Board of Directors
in establishing a series of Preferred Stock as to directors elected by holders
of such series, any vacancies occurring in the Board of Directors for any
reason, and any newly created directorships resulting from an increase in the
number of directors, may be filled by a majority of the directors then in
office, though less than a quorum. Any directors so chosen shall hold office
until the next annual meeting of stockholders and until their successors shall
be chosen and qualified subject, however, to prior retirement, disqualification,
resignation, death or removal from office.
-18-
<PAGE>
PROXY CARD
PROXY PROXY
LABTEC INC.
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned holder of Common Stock of LABTEC INC. revoking
all proxies heretofore given, hereby constitutes and appoints RODGER R. KROUSE
Proxy, with full power of substitution, for the undersigned and in the name,
place and stead of the undersigned, to vote all of the undersigned's shares of
said stock, according to the number of votes and with all the powers the
undersigned would possess if personally present, at the 1999 Annual Meeting of
Stockholders of LABTEC INC., to be held at the Hyatt Regency, 5 Embarcadero
Center, San Francisco, California, on Wednesday, September 15, 1999 at 9:00
A.M., local time, and at any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of
Meeting and Proxy Statement relating to the meeting and hereby revokes any proxy
or proxies heretofore given.
Each properly executed proxy will be voted in accordance with
the specifications made below and in the discretion of the Proxy on any other
matter that may properly come before the meeting or any adjournment thereof.
Where no choice is specified, this proxy will be voted FOR all listed nominees
to serve as directors and FOR each of the proposals set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL LISTED NOMINEES AND FOR
PROPOSAL 1.
1. To approve the amendment of the Restated Articles of Organization to
eliminate the Company's three classes of directors in favor of one class to
be elected annually.
|_| FOR |_| AGAINST |_| ABSTAIN
2. Election of five Directors. |_| FOR all nominees listed |_| WITHHOLD
AUTHORITY (except as marked to the contrary) to vote for all listed
nominees
Nominees: J. Grant Jagelman, Julian Rubinstein, Jonathan Stearns,
Joseph Pretlow and Robert G. Wick
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, CIRCLE THAT NOMINEE'S NAME IN THE LIST PROVIDED ABOVE.)
PLEASE MARK, DATE AND SIGN THIS PROXY ON THIS AND THE REVERSE SIDE
<PAGE>
3. To transact such other business as may properly come before the Meeting and
any adjournments thereof.
The shares represented by this proxy
will be voted in the manner directed. In
the absence of any direction, the shares
will be voted FOR each nominee named in
Proposal 2 and FOR Proposal 1 and in
accordance with the discretion of the
Proxy on such other matters as may
properly come before the meeting.
Dated ____________________________ 1999
_______________________________________,
________________________________________
Signature(s)
(Signature(s) should conform to names as
registered. For jointly owned shares,
each owner should sign. When signing as
attorney, executor, administrator,
trustee, guardian or officer of a
corporation, please give full title).
PLEASE MARK AND SIGN ABOVE AND
RETURN PROMPTLY
