<PAGE>
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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ON-SITE SOURCING, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
ON-SITE SOURCING, INC.
1111 NORTH 19TH STREET
SIXTH FLOOR
ARLINGTON, VIRGINIA 22209
(703) 276-1123
August 5, 1999
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend the 1999 Annual Meeting of Stockholders of On-Site Sourcing, Inc. We will
hold the Annual Meeting on September 3, 1999 at 8 a.m. eastern time in our
principal executive office, which is located at 1111 North 19th Street, Sixth
Floor, Arlington, Virginia.
Enclosed with this letter is a Notice of Annual Meeting, a Proxy Statement,
a proxy card and a return envelope. Both the Notice of Annual Meeting and the
Proxy Statement provide details of the business that will be conducted at the
Annual Meeting and other information about On-Site Sourcing.
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 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
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD BEFORE THE ANNUAL MEETING
<PAGE>
ON-SITE SOURCING, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------------------------------------------------
DATE: FRIDAY, SEPTEMBER 3, 1999
TIME: 8:00 A.M.
PLACE: ON-SITE SOURCING
1111 NORTH 19(TH) STREET
SIXTH FLOOR
ARLINGTON, VA 22209
---------------------------------------------------
At the 1999 Annual Meeting we will ask you to:
1. Elect six directors;
2. Amend the 1998 Stock Option Plan;
3. Ratify the selection of Reznick Fedder & Silverman, PC as the
independent auditors for the fiscal year ending December 31, 1999; and
4. Transact any other business that is properly presented at the meeting.
The accompanying Proxy Statement contains further information with respect
to these matters.
You will be able to vote your shares at the 1999 Annual Meeting if you were
a stockholder of record at the close of business on July 23, 1999.
By Order of the Board of Directors,
/s/ Alfred T. Duncan
---------------------
Alfred T. Duncan
Secretary
August 5, 1999
YOUR VOTE AT THE ANNUAL MEETING IS IMPORTANT.
PLEASE INDICATE YOUR VOTE ON THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE AS SOON AS POSSIBLE, EVEN IF YOU PLAN TO ATTEND THE
MEETING. IF YOU ATTEND THE MEETING, YOU WILL BE ABLE TO
REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
-----------
<S> <C>
GENERAL INFORMATION..................................................................................... 1
PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING......................................................... 2
PROPOSAL 1: ELECTION OF DIRECTORS..................................................................... 2
PROPOSAL 2: AMENDMENT TO 1998 STOCK OPTION PLAN....................................................... 3
PROPOSAL 3: RATIFICATION OF INDEPENDENT ACCOUNTANTS................................................... 6
STOCK OWNERSHIP......................................................................................... 7
THE BOARD OF DIRECTORS.................................................................................. 8
EXECUTIVE OFFICERS AND COMPENSATION..................................................................... 11
OTHER INFORMATION....................................................................................... 14
</TABLE>
<PAGE>
ON-SITE SOURCING, INC.
1111 NORTH 19TH STREET
SIXTH FLOOR
ARLINGTON, VIRGINIA 22209
(703) 276-1123
------------------------
PROXY STATEMENT FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 3, 1999
------------------------
GENERAL INFORMATION
This Proxy Statement provides important information that you should read
before you vote on the proposals that will be presented to you at the 1999
Annual Meeting of the stockholders of On-Site Sourcing, Inc. The Annual Meeting
will be held on Friday, September 3, 1999 at 8:00 a.m. eastern time at the
Company's principal executive office, 1111 North 19th Street, Sixth Floor,
Arlington, Virginia.
This Proxy Statement provides detailed information about the Annual Meeting,
the proposals on which you will be asked to vote at the Annual Meeting, and
other relevant information.
On August 5, 1999, we began mailing information to people who, according to
our records, owned shares of On-Site Sourcing's common stock at the close of
business on July 23, 1999.
On-Site Sourcing is paying the cost of requesting these proxies. On-Site
Sourcing's directors, officers and employees may request proxies in person or by
telephone, mail, telecopy or letter. On-Site Sourcing will reimburse brokers and
other nominees their reasonable out-of-pocket expenses for forwarding proxy
materials to beneficial owners of On-Site Sourcing's common stock.
A copy of our Annual Report, including financial statements for the fiscal
year ended December 31, 1998, is being mailed with this Proxy Statement. The
Annual Report does not constitute a part of the proxy solicitation material. The
Annual Report tells you how to get additional information about On-Site
Sourcing.
VOTING YOUR SHARES
You have one vote for each share of On-Site Sourcing common stock that you
owned of record at the close of business on July 23, 1999. The number of shares
you own (and may vote at the Annual Meeting) is listed on the enclosed proxy
card.
You may vote your shares at the Annual Meeting either in person or by proxy.
To vote in person, you must attend the Annual Meeting and obtain and submit a
ballot. Ballots for voting in person will be available at the Annual Meeting. To
vote by proxy, you must complete and return the enclosed proxy card. By
completing and returning the proxy card, you will be directing the persons
designated on the proxy card to vote your shares at the Annual Meeting in
accordance with the instructions you give on the proxy card.
If you decide to vote by proxy, your proxy card will be valid only if you
sign, date and return it before the Annual Meeting. IF YOU COMPLETE THE PROXY
CARD EXCEPT FOR THE VOTING INSTRUCTIONS, THEN YOUR SHARES WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES FOR DIRECTORS, FOR THE PROPOSED AMENDMENT TO THE
ON-SITE SOURCING 1998 STOCK OPTION PLAN AND FOR THE RATIFICATION OF THE
SELECTION OF REZNICK FEDDER & SILVERMAN, PC AS OUR INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1999.
1
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REVOKING YOUR PROXY
If you decide to change your vote, you may revoke your proxy at any time
before it is voted. You may revoke your proxy in any one of three ways:
- You may notify our Secretary, Alfred T. Duncan, in writing addressed to:
On-Site Sourcing, Inc., 1111 North 19th Street, Sixth Floor, Arlington,
Virginia 22209, that you wish to revoke your proxy.
- You may submit a proxy dated later than your original proxy.
- You may attend the Annual Meeting and vote. Merely attending the Annual
Meeting will not by itself revoke a proxy; you must obtain a ballot and
vote your shares to revoke the proxy.
VOTE REQUIRED FOR APPROVAL
On July 23, 1999, 4,851,669 shares of On-Site Sourcing common stock were
issued and outstanding. A "quorum" must be present at the Annual Meeting in
order to transact business. A quorum will be present if 2,425,835 shares are
represented at the Annual Meeting, either in person (by the stockholders) or by
proxy. If a quorum is not present at the Annual Meeting, a vote cannot occur.
Abstention and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum, but will not be counted as votes cast. "Broker
non-votes" are shares held by brokers or nominees which are present in person or
represented by proxy, but which are not voted on a particular matter because
instructions have not been received from the beneficial owner.
If your shares of On-Site Sourcing common stock are held by a broker and you
do not instruct the broker to vote those shares, the broker will have the
authority to vote on Proposals 1, 2 and 3.
The six nominees for director who receive the most votes cast at the Annual
Meeting will be elected to serve as the directors of On-Site Sourcing. Proposals
2 and 3 require the approval of the holders of a majority of the votes cast on
the proposal at the Annual Meeting. For this purpose, abstention and broker
non-votes will be deemed shares not voted on such matters, will not count as
votes for or against the proposals, and will not be included in calculating the
number of votes necessary for the approval of such matters.
Votes at the Annual Meeting will be tabulated by Inspectors of Election
appointed by the Company.
PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING
We will present the following proposals at the Annual Meeting. We do not
expect any other proposals. If anyone validly presents any other proposal, the
named proxies will use your proxy to vote on those proposals as they believe is
appropriate.
PROPOSAL 1: ELECTION OF DIRECTORS
You will elect six directors at the Annual Meeting to serve until the next
annual meeting of stockholders or until their successors are duly elected and
qualified or until their earlier death, resignation or removal. The nominees for
election to the Board of Directors are:
<TABLE>
<S> <C>
Christopher J. Weiler
Jorge R. Forgues
Charles B. Millar
Allen C. Outlaw
Denis Seynhaeve
Lance Waagner
</TABLE>
Each director will be elected to serve for a one-year term, or thereafter
until his replacement is elected and qualified or until his earlier resignation
or removal. Each of the six nominees is presently a
2
<PAGE>
member of the Board of Directors. We have been informed that all of the nominees
for election to the Board are willing to serve as directors. However, if any 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 the Board in its
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. More detailed information about each of the nominees is
presented in the section of this Proxy Statement titled "The Board of
Directors," which begins on page 8.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION
OF THESE NOMINEES AS DIRECTORS.
PROPOSAL 2: AMENDMENT OF 1998 STOCK OPTION PLAN
We are asking you to approve an amendment to our 1998 Stock Option Plan that
would increase the number of shares of our common stock that may be subject to
options granted under the plan. This increase will not change the total number
of shares of On-Site Sourcing common stock you have already authorized for
issuance under our stock option plans, but rather moves them from the older
stock option plans to our current stock option plan.
Currently, the 1998 Stock Option Plan authorizes us to issue stock options
to purchase up to 700,000 shares of On-Site Sourcing common stock. We are
proposing to increase this number by:
- the number of shares of common stock we may grant in the form of options
under our 1995 Stock Option Plan, 1996 Stock Option Plan and 1997 Stock
Option Plan, but have not yet granted; and
- the number of shares of common stock we may be able to grant in the future
under our 1995 Stock Option Plan, 1996 Stock Option Plan and 1997 Stock
Option Plan if any stock options we already granted under these plans
expire or are canceled or terminated because of termination of employment
or otherwise.
The following table shows the number of shares of common stock that you have
already authorized for issuance under each of these plans, the number of shares
of common stock subject to options that we have granted and are outstanding
under each of these plans, the number of shares of common stock that have been
issued upon the exercise of stock options granted under these plans, and the
number of shares of common stock that are currently available to be granted by
us under each of these plans:
<TABLE>
<CAPTION>
PLAN YEAR AUTHORIZED OUTSTANDING EXERCISED AVAILABLE
- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
1995...... 510,000 126,000 0 384,000
1996...... 242,000 99,000 37,000 106,000
1997...... 500,000 482,837 0 17,163
1998...... 700,000 690,775 0 9,225
</TABLE>
If any stock options that were granted under these plans expire or are
canceled or terminated in the future, which may happen when an employee
terminates their employment with us or we terminate an employee, we would, in
accordance with the terms of the plans, now be able to reissue them. The
amendment we are asking you to approve would increase by 507,163 shares (the sum
of the shares currently available under the 1995, 1996, 1997 and 1998 Stock
Option Plans) the number of shares that may be subject to options under the 1998
Stock Option Plan, and allow us to reissue, under the 1998 Stock Option Plan,
any shares subject to options under the 1995, 1996 and 1997 Stock Option Plans
that expire or are canceled or terminated in the future. Thus, it is possible
that the total number of shares of common stock that may be issued pursuant to
the 1998 Stock Option Plan, if you approve this proposal, would be 1,915,000
(the sum of the shares authorized under the 1995, 1996, 1997 and 1998 Stock
Option Plans, less the number of shares already issued upon exercise of stock
options granted under those plans). In addition, the amendment will provide that
no additional options will be granted under the 1995, 1996 or 1997 Stock
3
<PAGE>
Option Plans after you approve this amendment. Thus, the total number of shares
of common stock of On-Site Sourcing that may be issued pursuant to the 1995,
1996, 1997 and 1998 Stock Option Plans will not be changed by this amendment.
The purpose of this amendment is to consolidate future option grants under
the 1998 Stock Option Plan, rather than continuing to make option grants under
any one of our four stock option plans. This will reduce the administrative
costs of maintaining four separate stock option plans. We have not made any
grants of options under the 1998 Stock Option Plan that are contingent upon
receiving your approval for this proposal. Any grants of stock options under the
plan will be made at the discretion of the Board of Directors or the
Compensation Committee.
The following is a summary of the 1998 Stock Option Plan assuming the
proposed amendment is approved by you. This summary description is a fair and
complete summary of the 1998 Stock Option Plan, including the proposed
amendment; however, it is qualified in its entirety by reference to the full
text of the 1998 Stock Option Plan, which was attached as Exhibit A to our 1998
Proxy Statement. The proposed amendment to the 1998 Stock Option Plan is
attached to this Proxy Statement as Exhibit A.
SUMMARY OF THE PLAN
The 1998 Stock Option Plan is designed to attract and retain qualified
personnel in key positions, to provide officers, directors who are employees and
other employees with a proprietary interest in On-Site Sourcing as an incentive
to contribute to our success, and to reward key employees for outstanding
performance and the attainment of targeted goals. The 1998 Stock Option Plan
provides for the grant of incentive stock options ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as
well as nonqualified stock options, both with respect to On-Site Sourcing common
stock. Options to purchase no more than 1,207,163 shares of common stock may be
granted under the 1998 Stock Option Plan, all of which may be in the form of
either ISOs or nonqualified stock options. However, the maximum number of shares
of common stock we may grant in the form of stock options under this plan will
automatically increase so that we can reissue, under the 1998 Stock Option Plan,
any shares of common stock available under any option granted under our 1995
Stock Option Plan, 1996 Stock Option Plan and 1997 Stock Option Plan that
expires, is canceled or terminates for any other reason after the date of the
First Amendment to the 1998 Stock Option Plan. Under the 1998 Stock Option Plan,
the Board may grant options for up to 350,000 shares in a calendar year to any
individual. The number of shares that may be issued under the 1998 Stock Option
Plan may be adjusted to reflect any changes in the number of shares of On-Site
Sourcing common stock due to the declaration of stock dividends,
recapitalization resulting in stock splits or combinations or exchanges of
shares.
The 1998 Stock Option Plan authorizes the Board of Directors to administer
the plan, but the Board may delegate its functions to the Compensation
Committee. The Board's authority includes the authority to grant options to
purchase common stock, determine which options constitute ISOs and which
constitute nonqualified stock options and to determine the exercise price of the
options granted, as well as broad discretion to set or amend other terms. In
setting the exercise price for ISOs, the Board is limited by the rule described
in the next paragraph relating to fair market value but may choose another
method of setting the price for nonqualified stock options. (As of July 23,
1999, the fair market value as defined in the 1998 Stock Option Plan was $1.31
per share, based on the preceding day's closing price.) Options may be granted
to employees, officers and employee directors as well as employees of present or
future divisions and subsidiary corporations, a total of approximately 600
persons as of July 23, 1999. (We will refer to employees, officers or directors
who are granted options under the 1998 Stock Option Plan as "optionees.")
On-Site Sourcing does not receive separate consideration for the granting of
options, other than the provision of services.
Options granted as ISOs are subject to three limitations. The first is that
ISO treatment is limited based on when the options first become
exercisable--only the first $100,000 in common stock (valued as of the date of
grant) that becomes exercisable under an individual's ISOs in a given year will
receive ISO tax
4
<PAGE>
treatment. The second limitation is that the option price must at least equal
100% of the fair market value of the shares of common stock on the date of grant
of the option. The third limitation is that the option price for stockholders
holding 10% or more of the outstanding shares of common stock of On-Site
Sourcing must at least equal 110% of the fair market value of the common stock.
Options granted under the 1998 Stock Option Plan may only be exercised while
the optionee is then in the employ of On-Site Sourcing and has remained
continuously so employed since the date of the grant of the option or within 90
days after such employment ends. If an optionee is terminated for cause, all of
his or her options terminate upon such termination. If an optionee is terminated
by reason of death, disability or retirement, all of his or her options, to the
extent already exercisable, may be exercised for 12 months after such date.
Options granted under the 1998 Stock Option Plan 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.
Options will terminate no later than 10 years after their date of grant.
However, options intended to be ISOs under the 1998 Stock Option Plan will
expire no later than five years after the date of grant if the option is granted
to an employee who owns (or is deemed to own) more than 10% of the outstanding
common stock. No Options may be granted after 10 years after the earlier of the
Board's approval of the 1998 Stock Option Plan or the stockholders' approval.
The Board may at any time and from time to time suspend, terminate, modify
or amend the 1998 Stock Option Plan. However, any such action will be contingent
upon stockholder approval if required to comply with the requirements of law or
of any stock exchange or market on which the common stock trades. No suspension,
termination, modification or amendment of the 1998 Stock Option Plan may
adversely affect any option previously granted, unless the written consent of
the optionee is obtained.
TAX CONSEQUENCES
ISOS. ISOs under the 1998 Stock Option Plan are intended to be eligible for
the favorable federal income tax treatment accorded "incentive stock options"
under the Code.
There generally are no federal income tax consequences to the optionee or
On-Site Sourcing by reason of the grant or exercise of an ISO. However, the
exercise of an ISO may increase the optionee's alternative minimum tax
liability, if any.
If an optionee holds stock acquired through exercise of an ISO for more than
two years from the date on which the option is granted and more than one year
from the date on which the shares are transferred to the optionee upon exercise
of the option, any gain or loss on a disposition of such stock will be long-term
capital gain or loss. Generally, if the optionee disposes of the stock before
the expiration of either of these holding periods (a "disqualifying
disposition"), at the time of disposition, the optionee will realize taxable
ordinary income equal to the lesser of (a) the excess of the stock's fair market
value on the date of exercise over the exercise price, or (b) the optionee's
actual gain, if any, on the purchase and sale. The optionee's additional gain or
any loss upon the disqualifying disposition will be a capital gain or loss that
will be long-term or short-term depending on whether the stock was held for more
than one year. Capital gains currently are generally subject to lower tax rates
than ordinary income. Slightly different rules may apply to optionees who
acquire stock subject to certain repurchase options or who are subject to
Section 16(b) of the Exchange Act.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, On-Site Sourcing will generally be entitled (subject
to the requirement of reasonableness, the provisions of Section 162(m) of the
Code and perhaps, in the future, the satisfaction of a withholding obligation)
to a corresponding business expense deduction in the tax year in which the
disqualifying disposition occurs.
NONSTATUTORY STOCK OPTIONS. Nonstatutory stock options granted under the
1998 Stock Option Plan generally have the following federal income tax
consequences:
5
<PAGE>
There are no tax consequences to the optionee or On-Site Sourcing by reason
of the grant of a nonstatutory stock option. Upon exercise of a nonstatutory
stock option, the optionee normally will recognize taxable ordinary income equal
to the excess of the stock's fair market value on the date of exercise over the
option exercise price. Generally, with respect to employees, On-Site Sourcing is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness, the provisions of Section 162(m) of the Code and the
satisfaction of any withholding obligation, On-Site Sourcing will generally be
entitled to a business expense deduction equal to the taxable ordinary income
realized by the optionee. Upon disposition of the stock, the optionee will
recognize a capital gain or loss equal to the difference between the selling
price and the sum of the amount paid for such stock plus any amount recognized
as ordinary income upon exercise of the option. Such gain or loss will be long
or short-term depending on whether the stock was held for more than one year.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
POTENTIAL LIMITATION ON DEDUCTIONS. Code Section 162(m) denies a deduction
to any publicly held corporation for compensation paid to certain employees in a
taxable year to the extent that compensation exceeds $1 million for a covered
employee. It is possible that compensation attributable to stock options, when
combined with all other types of compensation received by a covered employee,
may cause this limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Code Section 162(m),
compensation attributable to stock options will qualify as performance-based
compensation, provided that: (i) the option plan contains a per-employee
limitation on the number of shares for which options may be granted during a
specified period; (ii) the per-employee limitation is approved by the
shareholders; (iii) the option is granted by a compensation committee with
voting members comprised solely of "outside directors"; and (iv) either the
exercise price of the option is no less than the fair market value of the stock
on the date of grant, or the option is granted (or exercisable) only upon the
achievement (as certified by the compensation committee) of an objective
performance goal established by the compensation committee while the outcome is
substantially uncertain.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
AMENDMENT TO THE 1998 STOCK OPTION PLAN.
PROPOSAL 3: RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, with the concurrence of the Audit Committee, has
selected Reznick Fedder & Silverman, P.C. of Bethesda, Maryland as our
independent accountants for the fiscal year ending December 31, 1999. Reznick
Fedder & Silverman will serve as the principal accountant to audit the financial
statements of On-Site Sourcing. Reznick Fedder & Silverman has served as our
independent accountants for the years ended December 31, 1996, 1997 and 1998. If
the stockholders do not ratify the appointment of Reznick Fedder & Silverman,
the engagement of independent accountants will be reevaluated by the Board of
Directors. Even if the appointment is ratified, the Board of Directors in its
discretion may nevertheless appoint another firm of independent accountants at
any time during the year if the Board of Directors determines that such change
would be in the best interests of the stockholders and On-Site Sourcing.
Representatives of Reznick Fedder & Silverman 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL
TO RATIFY THE ENGAGEMENT OF REZNICK FEDDER & SILVERMAN AS ON-SITE SOURCING'S
INDEPENDENT ACCOUNTANTS.
6
<PAGE>
STOCK OWNERSHIP
There were a total of 4,851,669 shares of common stock of On-Site Sourcing
outstanding on July 23, 1999. The following table sets forth how many shares
were owned on that date by (1) each person or group who beneficially owns more
than five percent (5%) of the outstanding shares of On-Site Sourcing common
stock; (2) each Director and Named Executive Officer, individually, and (3) the
Directors and executive officers as a group.
In preparing the following table, we relied upon statements filed with the
SEC by beneficial owners of more than five percent (5%) of the outstanding
shares of On-Site Sourcing common stock pursuant to Section 13(d) or 13(g) of
the Securities Act of 1934, unless we knew or had reason to believe that the
information contained in such statements was not complete or accurate, in which
case we relied upon information which we considered to be accurate and complete.
Unless otherwise noted, the business address of each of the following is 1111
North 19th Street, Sixth Floor, Arlington, Virginia 22209.
<TABLE>
<CAPTION>
NUMBER APPROXIMATE
OF SHARES PERCENTAGE OF
BENEFICIALLY BENEFICIAL
NAME OWNED OWNERSHIP
- ----------------------------------------------------------------------- ----------------- ---------------------
<S> <C> <C>
Denis A. Seynhaeve..................................................... 537,000 11.1%
220 Wardour Drive
Annapolis, MD 21401
Christopher J. Weiler (1).............................................. 366,225 7.5%
Allen C. Outlaw (2).................................................... 248,133 5.1%
Alfred T. Duncan (3)................................................... 62,225 1.3%
Lance Waagner(4)....................................................... 36,666 *
Jorge R. Forgues (5)................................................... 51,084 1.0%
500 Huntmar Park Drive
Herndon, VA 20170
Charles B. Millar (6).................................................. 56,584 1.1%
1101 Vermont Ave., N.W.
Washington, D.C. 20005
Edward G. Hook (7)..................................................... 51,795 1.0%
</TABLE>
<TABLE>
<S> <C> <C>
John Sabanosh (8)........................................ 43,575 *
All executive officers and Directors as a group.......... 1,453,287 28.1%
</TABLE>
- ------------------------
* Less than 1%
(1) Includes 4,225 shares subject to options that are exercisable currently or
exercisable within 60 days.
(2) Includes 41,133 shares subject to options that are exercisable currently or
exercisable within 60 days.
(3) Includes 62,225 shares subject to options that are exercisable currently or
exercisable within 60 days.
(4) Includes 36,666 shares subject to options that are exercisable currently or
exercisable within 60 days.
(5) Includes 51,084 shares subject to options that are exercisable currently or
exercisable within 60 days.
(6) Includes 51,084 shares subject to options that are exercisable currently or
exercisable within 60 days.
(7) Includes 27,395 shares subject to options that are exercisable currently or
exercisable within 60 days.
(8) Includes 43,575 shares subject to options that are exercisable currently or
exercisable within 60 days.
7
<PAGE>
THE BOARD OF DIRECTORS
MEMBERSHIP
We have set forth below certain information for each of the members of the
Board of Directors of On-Site Sourcing. Each of the following directors has been
nominated for re-election to the Board at the Annual Meeting:
- --------------------------------------------------------------------------------
CHRISTOPHER J. WEILER
AGE: 37
DIRECTOR SINCE: December 1992
PRINCIPAL OCCUPATION: Chairman of the Board, Chief Executive Officer and
President
RECENT BUSINESS EXPERIENCE: Mr. Weiler founded On-Site Sourcing with John
Stoppelman in December 1992 and has been President, Chief Executive Officer and
a director 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, D.C.,
and has worked for Pitney Bowes Management Services.
- --------------------------------------------------------------------------------
JORGE R. FORGUES
AGE: 44
DIRECTOR SINCE: July 1996
PRINCIPAL OCCUPATION: Chief Financial Officer of Treev Corporation
RECENT BUSINESS EXPERIENCE: Mr. Forgues has served as Senior Vice President
of Finance and Administration, Chief Financial Officer and Treasurer of Treev
Corporation (formerly Network Imaging Corporation), a Herndon, Virginia-based
publicly traded software developer, since April 1996. From October 1993 until
April 1996, Mr. Forgues was Vice President of Finance and Administration, Chief
Financial Officer and Treasurer of Globalink, a Fairfax, Virginia-based,
publicly-traded software company.
- --------------------------------------------------------------------------------
CHARLES B. MILLAR
AGE: 38
DIRECTOR SINCE: August 1996
PRINCIPAL OCCUPATION: Senior Vice President of Johnston, Lemon & Co., Inc.
RECENT BUSINESS EXPERIENCE: Mr. Millar has been a Senior Vice President of
the Washington, D.C. investment banking firm of Johnston, Lemon & Co., Inc.
since 1991.
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
ALLEN C. OUTLAW
AGE: 33
DIRECTOR SINCE: March 1994
PRINCIPAL OCCUPATION: Executive Vice President--Marketing
RECENT BUSINESS EXPERIENCE: Mr. Outlaw has been Vice President of Marketing
since September 1997. From March 1994 until September 1997, Mr. Outlaw served as
Vice President of Sales and Marketing. From January 1991 until September 1997,
Mr. Outlaw was owner and Director of Marketing of Justin Asset Management, an
investment management firm.
- --------------------------------------------------------------------------------
DENIS SEYNHAEVE
AGE: 43
DIRECTOR SINCE: July 1999
PRINCIPAL OCCUPATION: President of Delmag Ventures, Inc.
RECENT BUSINESS EXPERIENCE: Mr. Seynhaeve has served as President of Delmag
Ventures, Inc. since its inception. Since 1993, Mr. Seynhaeve has invested in a
number of businesses located in the Mid-Atlantic region. Mr. Seynhaeve serves on
the boards of directors of several private companies. From 1985 to 1992, Mr.
Seynhaeve managed the US subsidiary of Delsay Luggage, Inc.
- --------------------------------------------------------------------------------
LANCE WAAGNER
AGE: 34
DIRECTOR SINCE: March 1998
PRINCIPAL OCCUPATION: Executive Vice President--Information Technology
RECENT BUSINESS EXPERIENCE: Mr. Waagner has served as the Executive Vice
President, Information Technology, since March 1998. From February 1991 until
March 1998, Mr. Waagner established and directed the information technology
department at Kilpatrick & Stockton LLP, a law firm, where he oversaw the firm's
technology needs as the firm expanded in size from 525 persons to more than
1,000.
- --------------------------------------------------------------------------------
9
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
Regular meetings of the Board of Directors are normally held every two
months. During 1998, the Board of Directors held six meetings. Each director
attended at least 75% of the total number of meetings of the Board of Directors
and all committees of the Board of Directors on which he served.
AUDIT COMMITTEE
The Audit Committee reviews our financial statements to confirm that they
reflect fairly our financial condition and to appraise the soundness, adequacy
and application of accounting and operating controls. The Audit Committee also
recommends independent accountants to the Board of Directors, reviews the scope
of the audit function of the independent accountants and reviews audit reports
rendered by the independent accountants. The Audit Committee met one time in
1998. The members of the Audit Committee are:
Jorge R. Forgues (Chairman)
Charles B. Millar
COMPENSATION COMMITTEE
The Compensation Committee determines the compensation of the officers of
On-Site Sourcing. The Compensation Committee met four times in 1998. The members
of the Compensation Committee are:
Charles B. Millar (Chairman)
Jorge R. Forgues
Christopher J. Weiler
DIRECTOR COMPENSATION
Directors currently receive no cash compensation for serving on the Board of
Directors other than reimbursement of reasonable expenses incurred in attending
meetings. John Stoppelman (who was a director at the time) was granted options
to purchase 60,000 shares of On-Site Sourcing common stock and Messrs. Forgues,
Millar and Wasserman were each granted options to purchase 40,000 shares of
On-Site Sourcing common stock. The options granted to Messrs. Stoppelman and
Wasserman terminated in 1998. The options granted to Messrs. Forgues and Millar
vest over a period of three years in equal portions at the end of each quarter
and have an exercise price equal to the market price of On-Site Sourcing common
stock at the time of grant. Directors who also serve as officers do not receive
separate compensation, cash or otherwise, for their service as directors.
10
<PAGE>
EXECUTIVE OFFICERS AND COMPENSATION
EXECUTIVE OFFICERS
We set forth below certain information about the executive officers of
On-Site Sourcing, except for Messrs. Weiler, Outlaw and Waagner, whose
information is found on pages 8-9.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALFRED T. DUNCAN EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
<S> <C>
AGE: 55
OFFICER SINCE: July 1998
POSITION(S) HELD AT Executive Vice President, Chief Financial Officer and
COMPANY: Secretary
</TABLE>
PREVIOUS BUSINESS EXPERIENCE: From June 1997 until July 1998, Mr. Duncan
served as Vice President and Chief Financial Officer of Meadowlanders, Inc.,
owners of the New Jersey Devils, a National Hockey League team. From 1992 until
June 1997, Mr. Duncan was an independent management consultant to the computer,
software and consumer electronics industries. Mr. Duncan holds a BSCE from Duke
University and an MBA from Harvard University.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EDWARD HOOK EXECUTIVE VICE PRESIDENT, REPROGRAPHICS SERVICES
<S> <C>
AGE: 45
OFFICER SINCE: July 1998
POSITION(S) HELD AT Executive Vice President, Reprographics Services
COMPANY:
</TABLE>
PREVIOUS BUSINESS EXPERIENCE: Mr. Hook joined On-Site Sourcing as Executive
Vice President, Reprographics Services in July 1998, having served the Company
as a consultant since April 1998. From February 1997 until April 1998, Mr. Hook
served as an independent consultant for ASE Associates, involving strategic
planning and corporate development. From 1984 to February 1997, Mr. Hook served
as Senior Vice President of Shields Business Solutions, a company engaged in the
sale and service of office products to the financial and legal industries.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JOHN SABANOSH EXECUTIVE VICE PRESIDENT
<S> <C>
AGE: 48
OFFICER SINCE: June 1998
POSITION(S) HELD AT Executive Vice President
COMPANY:
</TABLE>
PREVIOUS BUSINESS EXPERIENCE: From 1995 until 1998 Mr. Sabanosh was Vice
President of Phoenix International, LLC, an international trade and investment
company. From 1991 until 1995, he was General Manager of FedComp, Inc., where he
restored the software firm to profitability. He has a B.S. in Business from
Virginia Polytechnic Institute and State University.
- --------------------------------------------------------------------------------
11
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation of the Chief Executive Officer and the other executive officers
whose annual compensation (salary and bonus) for services rendered in all
capacities exceeded $100,000 for the year ended December 31, 1998.
<TABLE>
<CAPTION>
OTHER
ANNUAL COMPENSATION ANNUAL
-------------------------- COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS($) SATION ($)
- ----------------------------------------------------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Christopher Weiler................................... 1998 125,145 20,000 --
President and CEO 1997 118,917 -- --
1996 92,000 --
Allen Outlaw......................................... 1998 299,708 5,000 --
Executive Vice President, Marketing 1997 99,028 -- --
1996 75,734
Lance Waagner........................................ 1998 148,754
Executive Vice President, Information Technology
<CAPTION>
LONG TERM
COMPENSATION
-----------------------
ALL
OTHER
OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION SAR'S (#) SATION ($)
- ----------------------------------------------------- ----------- -----------
<S> <C> <C>
Christopher Weiler................................... 4,225 --
President and CEO -- --
-- --
Allen Outlaw......................................... 107,800 --
Executive Vice President, Marketing -- --
Lance Waagner........................................ --
Executive Vice President, Information Technology 77,500
</TABLE>
Other than an employee funded 401k plan which does not receive matching
funds from On-Site Sourcing and the 1995,1996,1997 and 1998 Stock Option Plans,
as of December 31, 1998, we did not have any contingent forms of remuneration,
including any pension, retirement, stock appreciation, cash or stock bonus, or
other compensation plan.
INFORMATION REGARDING OPTION GRANTS TO AND HELD BY THE NAMED EXECUTIVE OFFICERS
We have set forth below certain information concerning the grant and
exercise of options to purchase On-Site Sourcing's common stock during the last
completed fiscal year to each of the named executive officers.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE DATE
- ------------------------------------------- ----------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Christopher Weiler......................... 4,225(1) 0.4% 1.13 9/15/2003
Allen Outlaw............................... 100,000(2) 9.8% 1.63 8/28/2003
7,800(1) 0.8% 1.13 9/15/2003
Lance Waagner.............................. 70,000(3) 6.9% 3.44 3/09/2003
7,500(1) 0.7% 1.13 9/15/2003
</TABLE>
- ------------------------
(1) The options granted are incentive stock options, which are exercisable as of
the date of grant at or above the market price on the date of grant and
expire five years from the date of grant.
(2) The options granted are non-qualified stock options, which are exercisable
in cumulative quarterly amounts of 8.3% of the shares over a three-year
period at or above the market price on the date of grant, and expire five
years from the date of grant.
(3) The options granted are incentive stock options, which are exercisable in
cumulative quarterly amounts of 8.3% of the shares over a three-year period
at or above the market price on the date of grant, and expire five years
from the date of grant.
12
<PAGE>
OPTION EXERCISES IN FISCAL 1998 AND VALUE OF OPTIONS AT DECEMBER 31, 1998
We set forth below information about options exercised during the last
completed fiscal year for the named executive officers and about options they
held at the end of the fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS HELD
SHARES AT FISCAL YEAR-END (#)
ACQUIRED ON VALUE --------------------------
NAME EXERCISE (#)(1) REALIZED ($)(2) EXERCISABLE UNEXERCISABLEE
- ----------------------------------- --------------------- ------------------- ----------- -------------
<S> <C> <C> <C> <C>
Christopher Weiler................. 0 0 4,225 0
Allen Outlaw....................... 0 0 16,133 91,667
Lance Waagner...................... 0 0 25,000 52,500
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
(3) OPTIONS
AT FISCAL
YEAR-END
($) (4)
--------------------------
NAME EXERCISABLE UNEXERCISABLE
- ----------------------------------- ---------- --------------
<S> <C> <C>
Christopher Weiler................. $1,690 0
Allen Outlaw....................... $3,120 0
Lance Waagner...................... $3,000 0
</TABLE>
- ------------------------
(1) Represents the number of shares with respect to which options were
exercised.
(2) The value of exercised options represents the difference between the
exercise price of such options and the closing market price of On-Site
Sourcing's common stock on the date of exercise.
(3) Options are "in-the-money" if the closing market price of On-Site Sourcing's
common stock exceeds the exercise price of the options.
(4) The value of unexercised options represents the difference between the
exercise price of such options and $1.53, the market price of On-Site
Sourcing's common stock on December 31, 1998.
EMPLOYMENT AGREEMENTS
On-Site Sourcing and Mr. Weiler entered into an employment agreement dated
as of January 1998, which is effective until January 2001. Mr. Weiler is
compensated at a rate of $160,000 per year, and is eligible to receive bonuses
in cash or stock at the discretion of the Board of Directors based on quarterly
reviews of Mr. Weiler's and On-Site Sourcing's performance. The Board of
Directors may terminate Mr. Weiler's employment agreement at any time with or
without cause. If Mr. Weiler is terminated without cause, he will be entitled to
receive a severance payment equal to twelve months base salary plus the value of
his other employment benefits accrued at the time of termination. The employment
agreement contains a covenant that restricts Mr. Weiler from competing with
On-Site Sourcing for the term of the agreement and for a period of one year
thereafter. In the event of a change in control of On-Site Sourcing, Mr. Weiler
has the right to exercise any of his options to acquire On-Site Sourcing common
stock, including options that have not, by their terms, vested prior to the date
of the change in control.
On July 1, 1998, On-Site Sourcing and Mr. Outlaw entered into an employment
agreement which was effective until June 30, 1999. The agreement is subject to
renewal by the Board. Mr. Outlaw is compensated at the rate of $240,000 per year
and is eligible for a bonus relating to growth in revenues from our
reprographics operations The Board of Directors may terminate Mr. Outlaw's
employment agreement at any time with or without cause. If Mr. Outlaw is
terminated without cause, he will be entitled to receive a severance payment
equal to three months base salary plus the value of his other employment
benefits accrued at the time of termination. The employment agreement contains a
covenant that restricts Mr. Outlaw from competing with On-Site Sourcing for the
term of the agreement and for a period of one year thereafter. In the event of a
change in control of On-Site Sourcing, Mr. Outlaw has the right to exercise any
of his options to acquire On-Site Sourcing's common stock, including options
that have not, by their terms, vested prior to the date of the change in
control.
13
<PAGE>
OTHER INFORMATION
CERTAIN TRANSACTIONS
In March 1996, On-Site Sourcing loaned $89,900 to Mr. Outlaw. The loan bears
interest at an annual rate equal to 6%. At December 31, 1998 the outstanding
balance under this loan was $53,400, with principal and interest due April 1,
2000.
During 1997, On-Site Sourcing paid approximately $88,000 to The Stoppelman
Law Firm, P.C., of which Mr. Stoppelman (the former Chairman of the Board and
Secretary) was a principal. Pursuant to a retainer agreement, On-Site Sourcing
paid The Stoppelman Law Firm $7,000 per month from July 1997 to July 1998. We
believe that the fees charged and retainer arrangement were no less favorable
than those obtainable from an unaffiliated third party. This arrangement with
The Stopppelman Law Firm terminated on July 15, 1998 when Mr. Stoppelman died.
AVAILABILITY OF FORM 10-KSB
We have mailed a copy of our Annual Report to each stockholder entitled to
vote at the Annual Meeting. Copies of our Form 10-KSB for the year ended
December 31, 1998 and Forms 10-QSB for the three-month periods ended March 31,
1999 and June 30, 1999 are available at no charge to all stockholders upon
request to us and will also be available at the Annual Meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on our review of forms provided to On-Site Sourcing and
representations from our directors, executive officers and 10% stockholders, we
are not aware of any failure to timely file reports requested by Section 16 of
the Securities Act of 1934, as amended.
STOCKHOLDER PROPOSALS FOR 2000
If you want to include a proposal in the proxy statement for On-Site
Sourcing's 2000 Annual Meeting, send the proposal to On-Site Sourcing, Inc.,
Attn: Alfred T. Duncan, Chief Financial Officer and Secretary, at 1111 North
19th Street, Sixth Floor, Arlington, Virginia 22209. Proposals must be received
on or before May 6, 2000 to be included in next year's proxy statement. Please
note that proposals must comply with all of the requirements of Rule 14a-8 under
the Securities Exchange Act of 1934, as well as the requirements of On-Site
Sourcing's certificate of incorporation and bylaws. On-Site Sourcing will be
able to use proxies given to it for next year's meeting to vote for or against
any proposal at On-Site Sourcing's discretion unless the proposal is submitted
to On-Site Sourcing on or before June 20, 2000.
By Order of the Board of Directors
Alfred T. Duncan
Secretary
Arlington, Virginia
August 5, 1999
14
<PAGE>
EXHIBIT A
ON-SITE SOURCING, INC.
FIRST AMENDMENT TO 1998 STOCK OPTION PLAN
Section 4 of the On-Site Sourcing 1998 Stock Option Plan is amended as
follows (deleted text is shown as strike-through, added text is shown in bold
double underline):
"The shares subject to Options hereunder shall be shares of the Company's
Common Stock (the "Common Stock"). Such shares may, in whole or in part, be
authorized but unissued shares or shares that shall have been or that may be
reacquired by the Company. The aggregate number of shares of Common Stock as to
which Options may be granted from time to time under the Plan shall not exceed
<#>700,000</#> 1,207,163, all of which may be in the form of either Incentive
Stock Options or Nonqualified Stock Options; PROVIDED, THAT, SUCH NUMBER SHALL
AUTOMATICALLY INCREASE BY THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE UNDER
ANY OPTION GRANTED UNDER THE COMPANY'S 1995 STOCK OPTION PLAN, 1996 STOCK OPTION
PLAN AND 1997 STOCK OPTION PLAN (THE "PRIOR PLANS") THAT EXPIRES, IS CANCELED OR
TERMINATES FOR ANY OTHER REASON AFTER THE DATE OF THE FIRST AMENDMENT TO THIS
PLAN; AND PROVIDED FURTHER, THAT, NO OPTIONS TO PURCHASE SHARES OF COMMON STOCK
MAY BE GRANTED UNDER THE PRIOR PLANS AS OF OR AFTER THE DATE THE STOCKHOLDERS
APPROVE THE FIRST AMENDMENT TO THIS PLAN. The aggregate number of shares of
Common Stock as to which Options may be granted under the Plan to an individual
in any calendar year shall not exceed 350,000. If any Option expires, is
canceled, or terminates for any other reason, the shares of Common Stock
available under that Option will again be available for the granting of new
options (but will be counted against that calendar year's limit for a given
individual). The limitation established by this Section shall be subject to
adjustment as provided in Section 7.9 hereof. If any outstanding Option expires
or is terminated without having been exercised in full, the shares of Common
Stock allocable to the unexercised portion of such Option shall (unless the Plan
shall have been terminated) become available for subsequent grants of Options."
<PAGE>
PROXY
ON-SITE SOURCING, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Christopher J. Weiler and Alfred T. Duncan,
and each of them severally, as their proxies with full power of substitution and
resubstitution for and in the name, place and stead of the undersigned to vote
upon and act with respect to all of the shares of Common Stock of On-Site
Sourcing, Inc. (the "Company") standing in the name of the undersigned, or with
respect to which the undersigned is entitled to vote and act, at the Annual
Meeting of Stockholders to be held on September 3, 1999, at 8:00 AM at the
Company's offices located at 1111 North 19th Street, Sixth Floor, Arlington,
Virginia 22209, or any adjournment(s) thereof. THE UNDERSIGNED ACKNOWLEDGES
RECEIPT OF THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT DATED AUGUST 5,
1999.
Proposal 1. Election of each of the following nominees to the Board of
Directors of the Company:
Christopher J. Weiler, Allen C. Outlaw, Denis Seynhaeve, Lance
Waagner, Charles B. Millar, Jorge R. Forgues
/ / FOR / / WITHHOLD
The undersigned may withhold authority to vote for any one or more of
the nominees by lining through or otherwise striking out the name of
such nominee.
Proposal 2. To approve the Amendment to the 1998 Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
Proposal 3. To ratify the selection of Reznick Fedder & Silverman, PC as
independent accountants for the Company for the fiscal year ending
December 31, 1999.
/ / FOR / / AGAINST / / ABSTAIN
PLEASE MARK YOUR VOTES IN THE CORRESPONDING BOXES ABOVE
(Continued on reverse side)
<PAGE>
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE LISTED NOMINEES FOR DIRECTOR, AND FOR PROPOSALS 2
AND 3. If more than one of the proxies named shall be present in person or by
substitution at the meeting or at any adjournment thereof, the majority of the
proxies so present and voting, either in person or by substitution, shall
exercise all of the powers hereby given.
DATE:
-------------------------------------
-------------------------------------
Signature
-------------------------------------
Signature
Please date this proxy and sign your
name exactly as it appears hereon.
When there is more than one owner,
each should sign. When signing as an
attorney, administrator, executor,
guardian or trustee, please add your
title as such. If executed by a
corporation, the proxy should be
signed by a duly authorized officer.
