<PAGE>
ON-SITE SOURCING, INC.
NOTICE OF 1997
ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN, AND RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE.
<PAGE>
ON-SITE SOURCING, INC.
May 9, 1997
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend the Annual Meeting of Stockholders of On-Site Sourcing, Inc.
on June 18, 1997, in Arlington. Information about the meeting is
presented on the following pages.
In addition to the formal items of business to be brought before
the meeting, members of management will report on the Company's
operations and answer stockholder questions.
Your vote is very important. Please ensure that your shares will be
represented at the meeting by completing, signing, and returning your
proxy card in the envelope provided, even if you plan to attend the
meeting. Sending us your proxy will not prevent you from voting in
person at the meeting should you wish to do so.
Sincerely,
/s/ Christopher J. Weiler
Christopher J. Weiler
Chief Executive Officer
<PAGE>
ON-SITE SOURCING, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 9, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders
of On-Site Sourcing, Inc. (the "Company") will be held at the Company's
offices located at 1111 North 19th Street, Sixth Floor, Arlington, VA
22209, on June 18, 1997, at 2:00 P.M. local time, for the following
purposes:
1. To elect the Directors of the Company to serve for the ensuing year;
2. To adopt the 1996 Stock Option Plan;
3. To adopt the 1997 Stock Option Plan;
4. To approve Reznick Fedder & Silverman, PC as independent auditors;
and
5. To transact such other and further business as may properly come
before the meeting.
The accompanying Proxy Statement contains further information with
respect to these matters.
The Board of Directors has fixed the close of business on May 6, 1997,
as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting. A list of such stockholders
showing the address and number of shares registered in the name of
each Stockholder will be available during regular business hours at
the Company's office, 1111 North 19th Street, 6th Floor, Arlington,
VA 22209, on or after May 7, 1997, for inspection by any stockholder
for any purpose germane to the meeting. The list will also be
available at the meeting.
By Order of The Board of Directors,
/s/ John S. Stoppelman
John S. Stoppelman
Secretary
<PAGE>
ON-SITE SOURCING, INC.
PROXY STATEMENT
GENERAL INFORMATION
Proxy Solicitation
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of On-Site Sourcing, Inc.
(the "Company") for use at the annual meeting of stockholders of the
Company to be held at the time and place and for the purposes set forth in
the foregoing Notice of Annual Meeting of Stockholders. The address of the
Company's principal executive office is 1111 North 19th Street, 6th Floor,
Arlington, VA 22209. This Proxy Statement and the form of proxy are being
mailed to stockholders on or about May 9, 1997.
A copy of the Company's Annual Report, including financial statements for
the fiscal year ended December 31, 1996 is being mailed with this Proxy
Statement.
Revocability and Voting of Proxy
A proxy given by a stockholder may be revoked at any time before it is
exercised by giving another proxy bearing a later date, by notifying the
Secretary of the Company in writing of such revocation at any time before
the proxy is exercised, or by attending the meeting in person and casting
a ballot. Any proxy returned to the Company will be voted in accordance
with the instructions indicated thereon. If no instructions are indicated
on the proxy, the proxy will be voted FOR the election of the nominees for
Directors named herein and in favor of Items 2, 3 and 4 in the Notice of
Annual Meeting. The Company knows of no reason why any of the nominees
named herein would be unable to serve. In the event, however, that any
nominee named should, prior to the election, become unable to serve as a
Director, the proxy will be voted in accordance with the best judgment of
the Proxy Committee named therein. The Board of Directors knows of no
matters, other than as described herein, that are to be presented at the
meeting, but if matters other than those herein mentioned properly come
before the meeting, the proxy will be voted by that Committee in a manner
that the members of the Committee (in their judgment) consider to be in the
best interests of the Company.
Record Date and Voting Rights
Only stockholders of record at the close of business on May 6, 1997, are
entitled to vote at the meeting. On such record date the Company had
outstanding and entitled to vote 4,794,021 shares of Common Stock. Each
stockholder entitled to vote shall have one vote for each share of Common
Stock registered in such stockholder's name on the books of the Company as
of the record date.
<PAGE>
PRINCIPAL SECURITY HOLDERS
The following table sets forth information as of March 31, 1997 based on
information obtained from the persons named below, with respect to the
beneficial ownership of shares of Common Stock by (i) each person or a group
known by the Company to be the owner of more than 5% of the outstanding
shares of Common Stock, (ii) each director, (iii) each executive officer
(as defined below) of the Company individually, and (iv) all officers and
directors as a group. The Company believes that each of the beneficial
owners of the Common Stock listed in the table, based on information
furnished by such owner, has sole investment and voting power with respect
to such shares.
Name Number of Shares Approximate
Beneficially Owned (1) of Class (2)
John S. Stoppelman (3) 641,100 13.4%
The Stoppelman Law Firm
1749 Old Meadow Road
Suite 610
McLean, VA 22102
Christopher J. Weiler 360,000 7.5%
c/o the Company
Allen C. Outlaw (4) 207,000 4.3%
c/o the Company
Anthony A. Kopsidas (5) 126,000 2.6%
c/o the Company
Joseph Sciacca (6) 32,065 *
c/o the Company
Jorge R. Forgues (7) 10,000 *
Network Imaging Corporation
500 Huntmar Park Drive
Herndon, VA 20170
Charles B. Millar (7) 10,000 *
Johnston Lemon & Co., Inc.
1101 Vermont Ave., NW
Washington DC 20005
Arnold J. Wasserman (7) 10,000 *
Arnold J. Wasserman Companies
1 Brookwood Drive
West Caldwell, NJ 07006
All Officers and Directors as a
group 1,396,165 30%
- ----------
* Less than 1%
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities Exchange Commission and generally includes any person who
directly or indirectly, through any contract, arrangement, understanding
or otherwise, has or shares voting or investment power with respect to
securities. Shares of Common stock issuable upon the exercise of options
and warrants currently exercisable or exercisable within 60 days are deemed
outstanding for computing the percentage ownership of the person holding
such options or warrants but are not deemed outstanding for computing the
percentage ownership of any other person.
(2) Based on 4,794,021 shares of Common Stock outstanding as of March 31, 1997.
(3) Assumes exercise of 3,700 Warrants to purchase Common Stock at $6.00 per
share.
(4) 162,000 Shares are held by escrow agent pursuant to a Promissory Note and
Escrow Agreement.
(5) Assumes exercise of vested stock option to purchase 126,000 shares of
common stock at $1.11 per share.
(6) Assumes exercise of stock options that are currently vested or will vest
within 60 days of the March 31, 1997 to purchase 9,374 Shares of Common
Stock at $2.125 per share.
(7) Assumes Exercise of stock option that are currently vested or will vest
within 60 days of March 31, 1997 to purchase 10,000 shares of Common Stock
at $2.50 per share.
Legal Proceedings
The Company is not aware of any material proceeding to which any director,
officer or 5% shareholder of the Company is a party to the Company or has
a material interest adverse to the small business issuer.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Seven directors are to be elected at the Annual Meeting to hold office
until the next annual meeting of stockholders and until their respective
successors shall have been elected and qualified. Except as herein stated,
the proxies solicited hereby will be voted FOR the election of the seven
nominees listed below, unless otherwise directed. Each nominee elected is
expected to serve until the next annual meeting and until his successor
shall be duly elected and qualified.
The Board has been informed that all persons listed below are willing to
serve as directors, but in case any one or more of the nominees is unable
or unwilling to stand for election or serve if elected, the named proxies
will vote for such person or persons as they in their discretion may
choose to replace any such nominees. The Board has no reason to believe
that any nominees will be unable or unwilling to stand for election or
serve if elected.
<PAGE>
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE IN
FAVOR OF THE ELECTION OF THE BELOW LISTED
NOMINEES AS DIRECTORS
The name, age, principal occupation for the last five years, selected
biographical information, and period of previous service as a director of
the Company with respect to each such nominee are set forth below. The
principal occupations listed refer to positions with the Company unless
otherwise indicated.
Director
Name Age Position Since
John S. Stoppelman 53 Chairman of the Board 1992
and Secretary
Christopher J. Weiler 34 Chief Executive Officer 1992
and President
Allen C. Outlaw 31 Vice President - Sales 1994
Anthony A. Kopsidas 26 Vice President - Operation 1994
Charles B. Millar 36 Director 1996
Jorge R. Forgues 41 Director 1996
Arnold J. Wasserman 59 Director 1996
All Directors hold office until the annual meeting of stockholders of
the Company and until their successors have been elected and qualified.
Information about each nominee for Director is given below.
Christopher J. Weiler founded the Company with Mr. Stoppelman in December 1992
and has been President, Chief Executive Officer and a director of the Company
since that time. Mr. Weiler graduated from the United States Naval Academy in
1985 and served in the United States Navy as a surface warfare officer and as
a Navy Senate Liaison Officer on Capitol Hill, Washington, DC Joining Pitney
Bowes Management Services (PBMS) in 1991, Mr. Weiler took the reins of PBMS
Washington's most volatile account and refined it into one of the largest and
most profitable national accounts.
John S. Stoppelman founded the Company with Mr. Weiler in December 1992 and
has been Chairman of the Board of Directors since inception. Mr. Stoppelman has
also served as Secretary and Treasurer. Mr. Stoppelman has been a practicing
attorney for twenty five years. After working as an attorney at a government
agency for four years, Mr. Stoppelman entered private practice in 1976,
specializing in securities, corporate, and other investment-related law and
litigation. Mr. Stoppelman has also been the Chairman of Justin Asset
Management, Inc., a registered investment advisory firm (1985-1994). He has
served on the American Bar Association Committee on Federal Regulation of
Securities (1976-present) and as Vice-Chairman of the Subcommittee on SEC
Practice and Enforcement Matters of the ABA Federal Regulation of Securities
Committee (1979-1991). Mr. Stoppelman has published several articles relating
to the areas of his practice and has appeared at various times on national
television to comment on various securities-related issues.
Allen C. Outlaw has been Vice President of Sales and Marketing since joining
the Company in March 1994. Mr. Outlaw has also served on the Board of Directors
since March 1994. Prior to joining the Company, he held various positions in
the investment industry, including owner and Director of Marketing of Justin
Asset Management, a successful investment management firm, from January 1991
until joining the Company.
Anthony A. Kopsidas has been the Vice President of Operations since December
1994. Prior thereto, Mr. Kopsidas served as a supervisor since joining the
Company in March 1994. Mr. Kopsidas served as President of Corporate Lawn and
Landscaping, a Maryland corporation, for three years before joining the
Company. Mr. Kopsidas has also served on the Board of Directors since December
1994.
Charles B. Millar has served as a Senior Vice President of the Washington DC
investment banking firm of Johnston, Lemon & Co., Inc. since 1991. Mr. Millar
joined the Board of Directors, Compensation and Audit Committees in August
1996.
Jorge R. Forgues has the positions of Senior Vice President of Finance and
Administration, Chief Financial Officer and Treasurer of Network Imaging
Corporation since April 1996, a Herndon-based publicly traded software
developer. From October 1993 until assuming his current position, Mr. Forgues
was Vice President of Finance and Administration, Chief Financial Officer and
Treasurer of Globalink, a Fairfax-based, publicly-traded, machine translation
software company. From 1992 to 1993, Mr. Forgues was the Director of
Accounting for Spirit Cruises, a $50 million harbor cruise line with operations
in nine states. Prior thereto, from 1987 to 1992, Mr. Forgues was Vice
President of Finance at Best Programs, Inc., a computer software developer.
Mr. Forgues joined the Board of Directors, Compensation and Audit Committees
in July 1996.
Arnold J. Wasserman is a graduate electrical engineer, graduating from New York
University College of Engineering in 1962. For the past five years Mr.
Wasserman has been the President of the Wasserman Companies. Mr. Wasserman
has in excess of forty years of business experience as an Engineer, Sales/
Marketing Executive, Leasing Executive/Consultant and Consultant to High Tech
Companies in Due-Diligence, Planning, and Product Marketing. Mr. Wasserman
is also a Director and Chairman of the Audit Committee of Stratus, Inc., a high
tech public company that specializes in Rapid Prototyping technology. Mr.
Wasserman joined the Company's Board of Directors in September 1996.
<PAGE>
ADDITIONAL INFORMATION CONCERNING THE BOARD
OF DIRECTORS OF THE COMPANY
Regular meetings of the Board of Directors of the Company are normally held
bi-monthly. During 1996, the Board of Directors held five meetings. A
quorum of Directors attended each meeting of the Board of Directors and
Committees of the Board on which he served. In addition to regularly
scheduled meetings, a number of Directors were involved in several informal
meetings with management, offering valuable advice and suggestions on a
broad range of corporate matters.
Compensation of Directors
Directors currently receive no cash compensation for serving on the Board
of Directors other than reimbursement of reasonable expenses incurred in
attending meetings. Three outside directors have each received options to
purchase 20,000 shares of Common Stock vesting over a period of one year in
equal portions at the end of each quarter. The options were granted at the
market price at the time of grant.
Audit Committee
Mr. Forgues, Mr. Millar and Mr. Stoppelman were members of the Audit
Committee during 1996. The functions of the Audit Committee are to recommend
to the Board of Directors the selection, retention or termination of the
Company's independent accountants; determine through consultation with
management the appropriateness of the scope of the various professional
services provided by the independent accountants, and consider the possible
effect of the performance of such services on the independence of the
accountants; review the arrangements and the proposed overall scope of
the annual audit with management and the independent accountants; discuss
matters of concern to the Audit Committee with the independent accountants
and management relating to the annual financial statements and results of
the audit; obtain from management and the independent accountants their
separate opinions as to the adequacy of the Company's system of internal
accounting control; review with management and the independent accountants
the recommendations made by the accountants with respect to changes in
accounting procedures and internal accounting control; hold regularly
scheduled meetings, separately and jointly, with representatives of
management and independent accountants to make inquiries into and discuss
their activities; and review the overall activities of the Company's
internal auditors. The Audit Committee met one time in 1996.
Compensation Committee
Mr. Millar, Mr. Forgues and Mr. Weiler were members of the Compensation
Committee during 1996. The functions of the Compensation Committee are to
determine the compensation of the officers of the Company. The Compensation
Committee met two times in 1996.
Each of the incumbent directors attended 75% or more of the aggregate number
of meetings of the Board and committees on which he served during the year
ended December 31, 1996.
<PAGE>
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended requires
the Company's directors, executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file
initial reports of ownership and reports of changes in ownership of the
Common Stock and other equity securities of the Company with the Securities
and Exchange Commission (the "SEC"). Executive officers, directors and
beneficial owners of greater than 10% of the Common Stock are required by
SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on its review of the copies of such
forms furnished to the Company during the year ended December 31, 1996 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% owners were complied with.
The executive officers of the Company as of March 31, 1997, are as follows:
Name Age Position
Christopher J. Weiler 34 Chief Executive Officer and President
Allen C. Outlaw 31 Vice President - Sales
Anthony A. Kopsidas 26 Vice President - Operation
Joseph Sciacca 43 Chief Financial Officer
See "Election of Directors" for information regarding Christopher J. Weiler,
Allen C. Outlaw and Anthony Kopsidas.
Joseph Sciacca has served as Chief Financial Officer since October 1996.
From 1991 to 1994, Mr. Sciacca served as Vice President of Finance of Q-Star
Technology Inc. and, from 1994 until joining the Company in October 1996, Mr.
Sciacca was self-employed with a private practice that specialized in business
planning, business combinations and taxation. He has been a practicing
Certified Public Accountant for twenty-one years. He is a graduate of
Georgetown University and earned his Masters of Science in Taxation from The
American University.
<PAGE>
Summary Compensation Table
The following table sets forth, for the years ended December 31, 1996
and 1995, all the compensation awarded to, earned by or paid to Christopher
J. Weiler, the Chief Executive Officer and President, for the years then
ended.
Name and
Principal Position Year Salary ($)
Christopher J. Weiler 1996 92,000
President and Chief 1995 85,000
Executive Officer
The Company and Mr. Weiler have entered into an Employment Agreement which is
effective until December 1998. Mr. Weiler is compensated at a rate of
$100,000 per year,effective June 1, 1996, subject to annual review by the
Board of Directors and annual bonuses at the discretion of the Board of
Directors. The amount of any increases to base salary and bonuses granted by
the Board of Directors is based upon a review of Mr. Weiler's overall
performance.
Other than an employee funded 401K plan which does not receive matching funds
from the Company and the stock option plans described below, as of December
31, 1996, the Company does not have any contingent forms of remuneration,
including any pension, retirement, stock appreciation, cash or stock bonus,
or other compensation plan.
CERTAIN TRANSACTIONS
In March 1994, the Company granted options to purchase 162,000 shares of common
stock at an adjusted price of $0.56 per share to an officer and director of the
Company pursuant to his original employment agreement as an incentive to join
the Company. The options were subject to a vesting schedule based on sales
goals that were met and exceeded during 1994. At the date of grant, these
options were granted on terms no less favorable to the Company than those
available to unaffiliated parties purchasing shares of the Company's Common
Stock. The options were exercised in March 1996.
In December 1995, the Company granted options to purchase 126,000 shares of
common stock at $1.11 per share to an officer and a director of the Company.
All of the Options are currently vested. At the date of grant, these options
were granted on terms no less favorable to the Company than those available to
unaffiliated parties purchasing shares of the Company's Common Stock.
In July 1996, the Company entered into agreements with certain Selling
Securityholders named below whereby the Selling Securityholders exchanged
shares of the Company's common stock acquired in private placements for Units
issued by the Company. Manhattan Group Funding exchanged 90,000 shares for
45,000 Units; Paul Sozansky exchanged 30,000 shares for 15,000 Units, Ronnee
Medow exchanged 45,000 shares for 22,500 Units, Sagax Fund II Ltd. exchanged
23,810 shares for 11,905 Units, Sabine Devilloutreys exchanged 23,810 shares
for 11,905 Units and Leonard and Roslyn Parker exchanged 5,626 shares for
2,813 Units.
<PAGE>
In September 1996, the Company granted options to purchase 75,000 shares of the
Company's common stock at $2.125 per share to an officer of the Company. The
options vest in equal quarterly installments over a four year period. At the
date of grant, these options were granted on terms no less favorable to the
Company than those available to unaffiliated parties purchasing shares of the
Company's common stock.
In September 1996, the Company granted options to purchase 20,000 shares of the
Company's common stock at $2.50 per share to each of the Company's three
outside directors. The options vest in equal quarterly installments over a
period of one year. At the date of the grant, these options were granted on
terms no less favorable to the Company than those available to unaffiliated
parties purchasing Shares of the Company's common stock.
Loans and Guarantees
At various times in 1995 and 1996, the President of the Company, his wife, and
the Chairman of the Board of Directors of the Company personally guaranteed
term notes with a commercial bank with an aggregate principal amount of
$323,500 and interest at 2% over the prime rate per year. The term notes were
executed by the Company for business purposes and were paid in full in August
1996.
The President of the Company, his wife, and the Chairman of the Board of
Directors of the Company personally guaranteed a revolving line of credit with
a commercial bank with a principal amount of $300,000 and interest at 2% over
the prime rate per year. The line was executed by the Company for business
purposes including the financing of receivables. In January 1996, the Company
increased the line of credit to $450,000. In April 1996, the line was renewed
through April 1, 1997 and the interest rate was modified to prime rate plus
1%.
In March 1996, the Company loaned $89,900 to an officer/director. The loan
bears interest at 6% per year with a balance of $50,400 principal and interest
due April 1, 1998.
In September 1996, the Company loaned $25,000 to an officer, pursuant to an
employment agreement. The loan bears interest at the prime rate at the date
of the loan and is due September 26, 1998.
Revenues and Expenses
During 1996 and 1995, the Company billed the Chairman of the Board of Directors
approximately $8,400 and $19,000, respectively, for reprographic services and
the sale of a photocopier. These transactions occurred at the same prices
available to non-related third parties.
During 1996 and 1995, the Company was billed approximately $208,000 and
$20,000, respectively, for legal services rendered by The Stoppelman Law Firm,
P.C., of which the Chairman of the Board of Directors, is a principal. The
Company believes that the fees charged were at least as favorable as those
obtainable from an uninterested third party. In October 1996, the Company
entered into an arrangement with The Stoppelman Law Firm, PC whereby the
Company pays a retainer of $5,000 per month for legal services.
Future transactions with interested parties will continue to be handled on an
arms' length basis, upon terms no less favorable to the Company than those
available from unaffiliated third parties.
<PAGE>
APPROVAL OF 1996 STOCK OPTION PLAN
(ITEM 2 ON THE PROXY CARD)
Effective August 2, 1996 the Board of Directors of the Company adopted the
1996 Stock Option Plan (the "1996 Plan") to encourage stock ownership by
employees and directors of the Company. Under the 1996 Plan, options to
purchase an aggregate of 242,000 shares of Common Stock (subject to
adjustment in the event of certain corporate events) may be granted from
time to time to employees and directors of the Company, its divisions and
subsidiaries.
Summary of the Plan
The 1996 Plan is designed to attract and retain qualified personnel in key
positions, provide officers, directors and key employees with a proprietary
interest in the Company as an incentive to contribute to the success of the
Company and to reward key employees for outstanding performance and the
attainment of targeted goals. The Plan provides for the grant of incentive
stock options within the meaning of Section 422 of the Internal Revenue
Code as well as nonqualified stock options. The total number of options to
purchase the Company's common stock granted under the 1996 Plan are not to
exceed 242,000 shares. The number of shares which may be issued under the
Plan may be adjusted to reflect any changes in the number of shares of the
Company's Common Stock due to the declaration of stock dividends,
recapitalization resulting in stock splits or combinations or exchanges of
shares.
The 1996 Plan authorizes the Board of Directors to administer the 1996 Plan.
The Board's authority includes the authority to grant Options to purchase
Common Stock, determine which Options shall constitute Incentive Stock
Options and which shall constitute Nonqualified Stock Options and to
determine the exercise price of the options granted. Options may be granted
to employees, officers and directors as well as employees of present or
future divisions and subsidiary corporations. Options granted as Incentive
Stock Options are subject to three limitations. The first is that the
aggregate Fair Market Value of the shares of Common Stock underlying the
Options becoming exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. The second limitation is that the
Option Price for Shareholders holding 10% or more of the outstanding shares
shall not be less than 110% of the Fair Market Value of the Common Stock.
The third limitation is that the option price shall not be less than 100% of
the Fair Market Value of the shares of Common Stock of the Company on the
date of grant of the Option. All Options granted under the Plans may only
be exercised while the Optionee is then in the employ of the Company and
has remained continuously so employed since the date of the grant of the
Option. If the employment of the Optionee terminates, other than by reason
of death, disability or retirement, all Options may be exercised within
three months after such termination, with the exception that all options
shall terminate upon dismissal for cause. Options granted under the Plans
are not transferable other than by will, the laws of descent and distribution
or to a revocable inter vivos trust for the primary benefit of the Optionee
and his or her spouse.
<PAGE>
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan; provided, however, that any amendment that would
materially increase the aggregate number of shares of Common Stock as to
which Options may be granted under the Plan or materially increase the
benefits accruing to participants under the Plan or materially modify the
requirements as to eligibility for participation in the Plan shall be
subject to the approval of the holders of a majority of the Common Stock
issued and outstanding, except that any such increase or modification that
may result from adjustments in the event of certain corporate events shall
not require such approval. No suspension, termination, modification or
amendment of the Plan may adversely affect any Option previously granted,
unless the written consent of the Optionee is obtained.
New Plan Benefits
Grants under the 1996 Plan are made at the discretion of the Board of
Directors and are therefore not determinable with respect to dollar value or
amount. The following table sets forth the total number of options granted
under the 1996 Plan during the year ended December 31, 1996 and the dollar
value of the outstanding options granted under the 1996 Plan as of March 31,
1997 based on the closing bid price of the Common Stock on such date. (1)
Name and Position Dollar Value ($) Number of Options Granted
in the year ended
December 31, 1996
Christopher Weiler - -
President and CEO
Executive Group 154,688 75,000
Non-Executive Director Group 123,750 60,000
Employee Group 136,125 66,000
(1) Does not includes options to purchase 86,000 shares of common stock issued
under the 1996 Plan and subsequently canceled.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE 1996 STOCK OPTION PLAN.
<PAGE>
APPROVAL OF 1997 STOCK OPTION PLAN
(ITEM 3 ON THE PROXY CARD)
Effective January 13, 1997 the Board of Directors of the Company adopted the
1997 Stock Option Plan (the "1997 Plan") to encourage stock ownership by
employees and directors of the Company. Under the 1997 Plan, options to
purchase an aggregate of 500,000 shares of Common Stock (subject to
adjustment in the event of certain corporate events) may be granted from
time to time to employees and directors of the Company, its divisions and
subsidiaries.
Summary of the Plan
The 1997 Plan is designed to attract and retain qualified personnel in key
positions, provide officers, directors and key employees with a proprietary
interest in the Company as an incentive to contribute to the success of the
Company and to reward key employees for outstanding performance and the
attainment of targeted goals. The Plan provides for the grant of incentive
stock options within the meaning of Section 422 of the Internal Revenue Code
as well as nonqualified stock options. The total number of options to
purchase the Company's common stock granted under the 1997 Plan are not to
exceed 500,000 shares. The number of shares which may be issued under the
Plan may be adjusted to reflect any changes in the number of shares of the
Company's Common Stock due to the declaration of stock dividends,
recapitalization resulting in stock splits or combinations or exchanges of
shares.
The 1997 Plan authorizes the Board of Directors to administer the 1997 Plan.
The Board's authority includes the authority to grant Options to purchase
Common Stock, determine which Options shall constitute Incentive Stock
Options and which shall constitute Nonqualified Stock Options and to
determine the exercise price of the options granted. Options may be granted
to employees, officers and directors as well as employees of present or
future divisions and subsidiary corporations. Options granted as Incentive
Stock Options are subject to three limitations. The first is that the
aggregate Fair Market Value of the shares of Common Stock underlying the
Options becoming exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. The second limitation is that the
Option Price for Shareholders holding 10% or more of the outstanding shares
shall not be less than 110% of the Fair Market Value of the Common Stock.
The third limitation is that the option price shall not be less than 100%
of the Fair Market Value of the shares of Common Stock of the Company on
the date of grant of the Option. All Options granted under the Plans may
only be exercised while the Optionee is then in the employ of the Company
and has remained continuously so employed since the date of the grant of
the Option. If the employment of the Optionee terminates, other than by
reason of death, disability or retirement, all Options may be exercised
within three months after such termination, with the exception that all
options shall terminate upon dismissal for cause. Options granted under the
Plans are not transferable other than by will, the laws of descent and
distribution or to a revocable inter vivos trust for the primary benefit of
the Optionee and his or her spouse.
<PAGE>
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan; provided, however, that any amendment that would
materially increase the aggregate number of shares of Common Stock as to
which Options may be granted under the Plan or materially increase the
benefits accruing to participants under the Plan or materially modify the
requirements as to eligibility for participation in the Plan shall be
subject to the approval of the holders of a majority of the Common Stock
issued and outstanding, except that any such increase or modification that
may result from adjustments in the event of certain corporate events shall
not require such approval. No suspension, termination, modification or
amendment of the Plan may adversely affect any Option previously granted,
unless the written consent of the Optionee is obtained.
New Plan Benefits
Grants under the 1997 Plan are made at the discretion of the Board of
Directors and are therefore not determinable with respect to dollar value
or amount. The following table sets forth the total number of options
granted under the 1997 Plan during the year ended December 31, 1997 and
the dollar value of the outstanding options granted under the 1997 Plan
as of March 31, 1997 based on the closing bid price of the Common Stock
on such date. (1)
Name and Position Dollar Value ($) Number of Options Granted
as of March 31, 1997
Christopher J. Weiler - -
President and CEO
Executive Group - -
Non-Executive Director Group - -
Employee Group 492,560 238,817
1) Does not includes options to purchase 1,192 shares of common stock issued
under the 1997 Plan and subsequently canceled.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL
TO APPROVE THE 1997 STOCK OPTION PLAN.
<PAGE>
APPROVAL OF INDEPENDENT ACCOUNTANTS
(ITEM 4 ON THE PROXY CARD)
Action will be taken with respect to the approval of independent
accountants for the Company for the year 1996 and 1997. The Audit Committee
and Board of Directors have, subject to such approval, selected Reznick
Fedder& Silverman, P.C. ("Reznick Fedder") of Bethesda, Maryland to serve
in this capacity. Reznick Fedder will serve as the Company's principal
accountant to audit the Company's financial statements.
Representatives of Reznick Fedder are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do
so, and are expected to be available to respond to appropriate questions.
Change in Accountants
The former independent auditor for the Company, Grant Thornton, LLP ("Grant
Thornton") was dismissed on November 21, 1996. Grant Thornton's reports on
the financial statements for the past two years did not contain an adverse
opinion or disclaimer of opinion, and were not modified as to
uncertainty, audit scope, or accounting principles. During the Company's
two most recent fiscal years and the subsequent interim period preceding
the dismissal there were no disagreements with Grant Thornton on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to Grant Thornton's
satisfaction, would have caused Grant Thornton to make reference to the
subject matter of the disagreement in connection with its report. Grant
Thornton communicated certain internal control matters to the Company
which meet the definition of reportable events. For the fiscal year ended
December 31, 1995, such reportable events involved recommendations that
the Company develop and maintain stricter internal control policies for
the following areas: accounts receivable, purchases and disbursements,
cash receipts, fixed asset capitalization, inventory, payroll and
computer processing. The Company has implemented systems of internal
control which the Company feels address the issues raised by Grant
Thornton.
The Company has requested that Grant Thornton furnish the Company with a
letter addressed to the SEC stating whether or not Grant Thornton agrees
with the above statements. A copy of such letter, dated December 4, 1996
and received by the Company on December 6, 1996 was filed as Exhibit 16.1
to the Amended Current Report on Form 8-K filed with SEC on December 9,
1996.
The Company's Board of Directors and Audit Committee determined that it
is in the Company's best interests to engage a new independent auditor.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE
THE ENGAGEMENT OF REZNICK FEDDER & SILVERMAN, PC
AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
<PAGE>
AVAILABILITY OF FORM 10-KSB
The Company has mailed a copy of its Annual Report to each
stockholder entitled to vote at this meeting. Copies of the Company's
Form 10-KSB for the year ended December 31, 1996 and Form 10-QSB for
the three months ended March 31, 1997 are available, upon request,
at no charge to all stockholders upon request to the Company and will
also be available at the Annual Meeting.
STOCKHOLDER PROPOSALS FOR 1998
Proposals of security holders intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received by the Company by
not later than January 9, 1998.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist primarily of printing, postage and handling, including the
expenses of brokerage houses, custodians, nominees, and fiduciaries in
forwarding documents to beneficial owners. Solicitation also may be
made by the Company's officers, Directors, or employees, personally or
by telephone.
By Order of the Board of Directors
John S. Stoppelman
Secretary
Arlington, Virginia
May 9, 1997
<PAGE>
ON-SITE SOURCING, INC.
1111 North 19th Street, Sixth Floor
Arlington, Virginia 22209
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Christopher J. Weiler and Joseph
Sciacca and each of them, with full power of substitution, as proxies
to vote as designated on the reverse side, all the shares of common
stock held by the undersigned at the annual meeting of shareholders
of On-Site Sourcing, Inc. to held on June 18, 1997, at 2:00 PM at
the Company's offices located at 1111 North 19th Street, Sixth Floor,
Arlington, VA 22209 or any adjournment thereof, and with discretionary
authority to vote on all other matters that may properly come before
the meeting.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
[x] Please mark your votes as in this example.
FOR AGAINST ABSTAIN
1. ELECTION OF [ ] [ ] [ ]
DIRECTORS Nominees:
John S. Stoppelman
Christopher J. Weiler
Anthony A. Kopsidas
Allen C. Outlaw
Jorge R. Forgues
Charles B. Millar
Arnold J. Wasserman
FOR AGAINST ABSTAIN
2. APPROVAL OF 1996 [ ] [ ] [ ]
STOCK OPTION PLAN
FOR AGAINST ABSTAIN
3. APPROVAL OF 1997 [ ] [ ] [ ]
STOCK OPTION PLAN
FOR AGAINST ABSTAIN
4. APPROVAL OF REZNICK [ ] [ ] [ ]
FEDDER & SILVERMAN
INDEPENDENT ACCOUNTANTS
This proxy will be voted as directed, or if no direction is indicated, will
be voted FOR all nominees listed above for election of directors, FOR
approval of 1996 Stock Option Plan, FOR approval of 1997 Stock Option Plan
and FOR approval of independent accountants, in the discretion of the
persons named as proxies with respect to any other business that may properly
come before the meeting.
If you wish to vote in accordance with the recommendations of the Board of
Directors, you may just sign and date below and mail in the postage paid
envelope provided. Specific choices may be made above.
The undersigned stockholder may revoke this proxy at any time before it is
voted by delivering to the Secretary of the Company either a written
revocation of the proxy or a duly executed proxy bearing a later date, or by
appearing at the Annual Meeting and voting the shares subject to the proxy by
written ballot.
SIGNATURE DATE
SIGNATURE, IF HELD JOINTLY DATE
NOTE: Please sign exactly as names appears hereon. Joint owners each should
sign. When signing as attorney, executor, administrator, trustee or guardian
please give full title as such.
