<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
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 Rule 14a-12
MULTIPLE ZONES INTERNATIONAL, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
MULTIPLE ZONES INTERNATIONAL, INC.
707 SOUTH GRADY WAY
RENTON, WASHINGTON 98055-3233
March 31, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of Multiple Zones International, Inc. on Thursday, April 27, 2000, at
3:00 p.m., local time, at the Company's corporate headquarters, which are
located at 707 South Grady Way, Renton, Washington 98055. You will find a map
showing directions to the meeting on the outside back cover of this booklet.
At the Annual Meeting, you will be asked to elect five directors to the
Company's Board of Directors and consider and vote on the ratification of the
appointment of PriceWaterhouseCoopers LLP as independent accountants for the
Company for 2000. The Notice of the 2000 Annual Meeting of Shareholders and the
Proxy Statement on the following pages describe the matters to be presented at
the Annual Meeting.
Your Board of Directors unanimously recommends that you vote FOR the
election of the nominated directors and FOR each of the proposals presented in
the Proxy Statement.
Whether or not you plan to attend, we hope you will have your stock
represented at the Annual Meeting. In order to do so, please mark, sign, date
and return your proxy card in the enclosed, postage-prepaid envelope as soon as
possible. Your stock will be voted in accordance with any instructions you have
given in your proxy card. You may, of course, attend the Annual Meeting and vote
in person even if you have previously returned your proxy card.
Sincerely yours,
/s/ Firoz H. Lalji
Firoz H. Lalji
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
MULTIPLE ZONES INTERNATIONAL, INC.
707 SOUTH GRADY WAY
RENTON, WASHINGTON 98055-3233
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2000
---------------------
To the Shareholders of Multiple Zones International, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Multiple
Zones International, Inc., a Washington corporation (the "Company"), will be
held on Thursday, April 27, 2000, at 3:00 p.m. local time, at the Company's
corporate headquarters, which are located at 707 South Grady Way, Renton,
Washington 98055, for the following purposes:
1. To elect five members of the Board of Directors to hold office until the
next Annual Meeting or until their respective successors are elected and
qualified.
2. To vote upon a proposal to ratify the appointment of
PriceWaterhouseCoopers LLP as the Company's independent public
accountants for the year ending December 31, 2000.
3. To transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on Friday, March 17,
2000, as the record date for determining shareholders entitled to notice of and
to vote at the Annual Meeting. Accordingly, only shareholders of record on that
date will be entitled to vote at the Annual Meeting, and any adjournments or
postponements thereof. For ten days prior to the Annual Meeting, a complete list
of the shareholders entitled to vote at the meeting will be available for
examination by any shareholder for any purpose relating to the meeting during
ordinary business hours at the Company's principal office.
By Order of the Board of Directors
/s/ James H. Bromley
JAMES H. BROMLEY
SENIOR VICE PRESIDENT--FINANCE AND
CHIEF FINANCIAL OFFICER AND SECRETARY
Renton, Washington
March 31, 2000
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, WHETHER
OR NOT YOU PLAN TO ATTEND. PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. PROXIES ARE REVOCABLE AND
YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON AT THE ANNUAL MEETING.
<PAGE>
[LOGO]
MULTIPLE ZONES INTERNATIONAL, INC.
707 SOUTH GRADY WAY
RENTON, WASHINGTON 98055-3233
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2000
---------------------
GENERAL
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors (the
"Board") of Multiple Zones International, Inc. (the "Company"), for use at the
2000 Annual Meeting of Shareholders (the "Annual Meeting") to be held on
April 27, 2000, or at any adjournments or postponements thereof. The Annual
Meeting will be held at 3:00 p.m. local time, at the Company's corporate
headquarters, which are located at 707 South Grady Way, Renton, Washington
98055, for the purposes set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement and the accompanying form of proxy are being mailed to
the shareholders of the Company on or about March 31, 2000.
If the accompanying form of proxy is properly signed, dated and returned,
the shares represented by the proxy will be voted in accordance with
instructions specified on the proxy card. In the absence of instructions to the
contrary, such shares will be voted for election to the Board of all of the
nominees listed in this Proxy Statement and named in the form of proxy and for
the ratification of the appointment of PriceWaterhouseCoopers LLP as independent
accountants for the Company for 2000. Any shareholder executing a proxy has the
power to revoke it at any time before it is voted by (i) delivering written
notice of revocation to the Secretary of the Company, (ii) executing and
delivering to the Company another proxy dated as of a later date, or
(iii) voting in person at the Annual Meeting.
OUTSTANDING SECURITIES AND VOTING RIGHTS
Only holders of record of the Company's common stock, $.001 par value per
share (the "Common Stock"), at the close of business on March 17, 2000 are
entitled to notice of, and to vote at, the Annual Meeting. On that date, the
Company had 13,368,252 shares of Common Stock outstanding. Each share of Common
Stock outstanding on the record date is entitled to one vote. The presence in
person or by proxy of holders of record of a majority of the outstanding shares
of Common Stock is required to constitute a quorum for the transaction of
business at the Annual Meeting. Shares of Common Stock underlying abstentions
and broker non-votes will be considered present for the purpose of calculating a
quorum. Holders of Common Stock are not entitled to cumulate votes in the
election of directors.
Under Washington law and the Company's charter documents, if a quorum is
present, the five nominees for election to the Board who receive the greatest
number of affirmative votes cast at the Annual Meeting will be elected
directors. The affirmative vote of a majority of shares cast in person or by
proxy at the Annual Meeting is required for approval of any other matters
submitted to a vote of shareholders. Abstentions will have no effect on the
election of directors, since no votes will be cast in favor of any
1
<PAGE>
nominee. There can be no broker non-votes in the election of directors, since
brokers have discretionary authority to vote with respect to this matter.
PROXY VOTING AND REVOCATION
Shares for which proxies are properly executed and returned will be voted at
the Annual Meeting in accordance with the directions noted on the proxy or, in
the absence of directions to the contrary, such shares will be voted "FOR" the
election of the nominees to the Board and "FOR" the ratification of the
appointment of PriceWaterhouseCoopers LLP as independent accountants for the
Company for 2000. It is not expected that matters other than those referred to
in this Proxy Statement will be brought before the Annual Meeting. If other
matters are properly presented, however, the persons named as proxies will vote
in accordance with their discretion with respect to such matters.
Any shareholder giving a proxy may revoke it at any time before it is voted
by delivering to the Company's Secretary a written notice of revocation or a
duly executed proxy card bearing a later date, or by attending the Annual
Meeting and electing to vote in person.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN OTHER HOLDERS
The following table sets forth, to the extent known by the Company, the
beneficial ownership of the Common Stock as of March 9, 2000, by (i) each
shareholder known by the Company to be the beneficial owner of more than 5% of
the outstanding Common Stock ("Holder"), (ii) each director (including all
nominees for director), (iii) each executive officer named in the Summary
Compensation Table in this Proxy Statement, and (iv) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NO. OF SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIALLY OWNED OWNED
- ---------------------------------------- ------------------ --------
<S> <C> <C>
Firoz H. Lalji (2)(3)....................................... 3,811,250 28.4%
Najma Lalji
Sadrudin J. Kabani (4)(5)................................... 3,424,020 25.6%
Almas S. Kabani
Dimensional Fund Advisors, Inc. (6)......................... 838,400 6.3%
James H. Bromley (7)........................................ 0 *
John T. Carleton (8)........................................ 12,500 *
Lorne G. Rubis (9).......................................... 102,176 *
Guio G. Barela (10)......................................... 23,000 *
John H. Bauer (11).......................................... 14,125 *
Kathleen S. Pushor (12)..................................... 14,750 *
Lawrence V. Grella (13)..................................... 0 *
Richard E. Carter (14)...................................... 3,750 *
All directors and executive officers as a group (9 persons) 3,981,551 29.8%
(15)......................................................
</TABLE>
- ------------------------
* Less than 1%
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission and includes shares over which the
indicated beneficial owner exercises voting and/or investment power. Shares
of Common Stock subject to options currently exercisable, or exercisable
within 60 days, are deemed outstanding for computing the percentage
ownership of the person holding the options but are not deemed outstanding
for computing the percentage ownership of any other person.
2
<PAGE>
Except as indicated, and subject to community property laws where
applicable, the persons named in the table above have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.
(2) The address for each of these shareholders is 707 South Grady Way, Renton,
Washington 98055-3233.
(3) Includes 11,250 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 6,250 shares subject to options not exercisable
within such period. Also excludes 6,000 shares held in trust for
Mr. Lalji's children.
(4) Mr. Kabani's address is 84 Cascade Key, Bellevue, Washington 98006.
(5) Includes 50,000 shares held of record by the Almas and Sadru Kabani
Foundation.
(6) The address for this shareholder is 1299 Ocean Avenue, 11(th)Floor, Santa
Monica, California 90401. The information in this table regarding this
shareholder is based on a report on Schedule 13G filed with the Securities
and Exchange Commission on February 3, 2000. Dimensional Fund Advisors Inc.
("Dimensional"), an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice to four
investment companies registered under the Investment Company Act of 1940,
and serves as investment manager to certain other commingled group trusts
and separate accounts. These investment companies, trusts and accounts are
the "Funds". In its role as investment advisor or manager, Dimensional
possesses voting and/or investment power over the shares of the Company that
are owned by the Funds. Dimensional disclaims beneficial ownership of such
shares.
(7) Excludes 100,000 shares subject to options not exercisable within 60 days
after March 9, 2000.
(8) Includes 12,500 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 10,000 shares subject to options not exercisable
within such period.
(9) Includes 96,176 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 75,000 shares subject to options not exercisable
within such period.
(10) Includes 23,000 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 102,000 shares subject to options not exercisable
within such period.
(11) Includes 14,125 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 8,375 shares subject to options not exercisable
within such period.
(12) Includes 2,750 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 9,750 shares subject to options not exercisable
within such period.
(13) Excludes 50,000 shares subject to options not exercisable within 60 days
after March 9, 2000.
(14) Includes 3,750 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 11,250 shares subject to options not exercisable
within such period.
(15) Includes 163,551 shares subject to options exercisable within 60 days after
March 9, 2000. Excludes 372,625 shares subject to options not exercisable
within such period.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
In accordance with the Company's Bylaws, the Board has fixed the number of
directors constituting the Board at five. Under this proposal, a Board
consisting of five directors will be elected at the Annual Meeting to hold
office until the next Annual Meeting of Shareholders or until their respective
successors are elected and qualified.
The Board has unanimously approved the nominees named below, all of whom are
members of the current Board. Unless otherwise instructed, it is the intention
of the persons named in the accompanying
3
<PAGE>
form of proxy to vote shares represented by properly executed proxies for the
five nominees of the Board named below. Although the Board anticipates that all
of the nominees will be available to serve as directors, should any one or more
of them not accept the nomination, or otherwise be unwilling or unable to serve,
it is intended that the proxies will be voted for the election of a substitute
nominee or nominees designated by the Board.
THE BOARD RECOMMENDS A VOTE FOR ALL NOMINEES UNDER PROPOSAL NO. 1.
NOMINEES FOR DIRECTOR
Biographical information regarding each of the nominees for director is set
forth below.
FIROZ H. LALJI, age 53, has served as a director of the Company since 1988.
He has served as the Company's President and Chief Executive Officer since
May 1998 and as Chairman of the Board since March 1999. From 1985 to 1998,
Mr. Lalji was President and Chief Executive Officer of Fana Group of Companies
and continues to be a principal of Fana Capital Corp., an investment holding
company. Fana Group of Companies owns real estate and hotels in the United
States and Canada. From 1981 to 1997, he was also President and Chief Executive
Officer of Kits Cameras, Inc., which he founded and which operates over 145
camera specialty stores in eight western states. Mr. Lalji also serves as a
director of RWI Interactive Information Services, Inc., an Internet based world
access network of directories.
JOHN H. BAUER, age 59, has served as a director of the Company since
March 1997. Since 1994, Mr. Bauer has been Executive Vice President of Nintendo
of America, Inc., a manufacturer and distributor of video games and products.
From 1979 to 1994, he served as Managing Partner of the Northwest Group and the
Seattle office of Coopers & Lybrand L.L.P., a public accounting and consulting
firm.
JOHN T. CARLETON, age 55, has served as a director of the Company since
November 1995. From October 1995 to the present, he has held the position of
Senior Vice President of Benaroya Capital Company, L.L.C., a private investment
company. From 1993 to 1995, he served as Senior Vice President of GE Capital
Equity Capital Group, Inc. Mr. Carleton also serves as a director of Redhook Ale
Brewery, Incorporated.
KATHLEEN S. PUSHOR, age 42, has served as a director of the Company since
December 1998. Since 1999, Ms. Pushor has served as a principal of Pushor &
Associates, a management and consulting firm specializing in e-commerce strategy
and implementation. From 1998 to 1999, Ms. Pushor served as Executive Vice
President and Chief Marketing Officer of MicroAge, Inc., a distributor and
integrator of computer hardware and software products. Between 1989 and 1997,
Ms. Pushor served in a number of positions for MicroAge, Inc., including,
President of MicroAge, Inc.'s Channel Services Division and President of
ECadvantage, Inc., a wholly-owned subsidiary of MicroAge, Inc.
RICHARD E. CARTER, age 57, has served as a director of the Company since
March 1999. He serves as a principal of Richwil Associates, a management and
consulting firm located in New Jersey. Since November 1999, he has served as
President, Chief Operating Officer and as a director of Photoamerica Inc., an
online digital photo processing company. From January 1993 until his retirement
in early 1999, Mr. Carter held the dual posts of President and Chief Operating
Officer of Konica USA Inc. and Konica Canada Inc. He also served as Chairman of
the Board of Konica Canada Inc. from 1996 to 1999.
No family relationships exist between any of the Company's directors or
executive officers.
DIRECTOR COMPENSATION
All directors are reimbursed for out-of-pocket expenses incurred in
connection with attendance at meetings of the Board. Directors who are employees
of the Company do not receive any fee for their services as directors. Outside
directors receive a quarterly retainer fee of $2,500, in addition to fees of
4
<PAGE>
$1,000 and $500, respectively, for each Board or committee meeting attended.
Each committee chairperson also receives a $250 fee for each committee meeting
that they preside over.
In 1999, all directors were granted 5,000 options to purchase shares of the
Company's Common Stock at $12.00 per share. Additionally, upon his appointment
to the Board, Mr. Carter was granted 10,000 options to purchase shares of the
Company's Common Stock at $10.63 per share. Each of these options has a ten-year
term and will vest in equal installments over a four-year period.
The Company has entered into agreements with all directors under which the
Company will indemnify them against claims and liabilities arising out of their
service as directors, in addition to advancing expenses to defend claims subject
to indemnification.
BOARD AND COMMITTEE MEETINGS
The Board met five times during 1999, and all directors attended at least
75 percent of all such meetings. The Board has a standing Audit Committee and
Compensation Committee. Each of these committees is responsible to the full
Board. The functions performed by, and composition of, these committees are
summarized below.
The Audit Committee, which is comprised of Mr. Bauer and Ms. Pushor, reviews
the Company's internal accounting procedures and consults with and reviews the
services provided by the Company's independent accountants. The Audit Committee
met twice during 1999, and each of its members attended all meetings.
The Compensation Committee, which is comprised of Messrs. Carleton and
Carter, reviews and makes recommendations to the full Board with respect to the
compensation and benefits to be provided to the Company's officers and
directors, in addition to general policy matters relating to employee
compensation and benefits. The Compensation Committee met four times during
1999, and each of its members attended at least 75 percent of these meetings.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission
("SEC"). All such persons who are subject to Section 16(a) reporting are
required by SEC regulation to furnish the Company with copies of all such
reports that they file.
Based solely on the Company's review of the copies of such reports received
by the Company, in addition to written representations by the Company's officers
and directors regarding their compliance with the applicable reporting
requirements under Section 16(a), the Company believes that its officers and
directors, and all of the persons known to it to own more than ten percent of
the Common Stock, complied with all filing requirements applicable to them under
Section 16(a) during 1999.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation earned
during the past three years by the Company's Chief Executive Officer and each of
the Company's other four most highly compensated executive officers (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION OPTIONS(#) COMPENSATION(2)
- --------------------------- -------- -------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Firoz H. Lalji (3) ................ 1999 $370,839 $ -- -- 5,000 $ --
Chairman of the Board, President 1998 203,409 -- -- 12,500 --
and Chief Executive Officer 1997 -- -- -- -- --
Lorne G. Rubis .................... 1999 225,000 28,125 -- 20,000 200
Executive Vice President and 1998 225,000 -- -- 51,176 --
Chief Operating Officer 1997 95,480 29,005 -- 100,000 25,000
James H. Bromley (4) .............. 1999 81,250 -- -- 100,000 --
Senior Vice President--Finance 1998 -- -- -- -- --
and Chief Financial Officer 1997 -- -- -- -- --
Lawrence V. Grella (5) ............ 1999 28,077 -- -- 50,000 2,844
Senior Vice President and General 1998 -- -- -- -- --
Manager of Zones.com 1997 -- -- -- -- --
Guio G. Barela (6) ................ 1999 135,000 16,875 -- 80,000 25,000
Senior Vice President of 1998 13,327 -- -- 45,000 --
Corporate Development 1997 -- -- -- -- --
</TABLE>
- ------------------------
(1) No bonuses were awarded for 1999 under the Company's Management Incentive
Plan ("MIP"), in which all full-time non-commissioned employees participate.
(2) Amounts shown represent matching contributions under the Company's 401(k)
Plan, except that the amount shown for Mr. Rubis for 1998 and the amounts
shown for Mr. Grella and Mr. Barela reflect relocation expenses paid to them
by the Company.
(3) Mr. Lalji commenced employment with the Company in May 1998, when he was
appointed as the Company's Chief Executive Officer. Accordingly, amounts
shown for 1998 are for a partial year's employment. Mr. Lalji was also
appointed as the Chairman of the Board in March 1999.
(4) Mr. Bromley commenced employment with the Company in June 1999. Accordingly,
amounts shown for 1999 are for a partial year's employment.
(5) Mr. Grella commenced employment with the Company in November 1999.
Accordingly, amounts shown for 1999 are for a partial year's employment.
(6) Mr. Barela commenced employment with the Company in November 1998.
Accordingly, amounts shown for 1998 are for a partial year's employment.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in 1999 to the
Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(3)
OPTIONS EMPLOYEES PRICE EXPIRATION -----------------------
NAME GRANTED(#)(1) IN 1999 ($/SHARE)(2) DATE 5%($) 10%($)
- ---- ------------- ---------- ------------ ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Firoz H. Lalji.................. 5,000 0.8% $12.00 4/29/2009 $ 37,734 $ 95,625
Lorne G. Rubis.................. 20,000 3.0% 12.00 4/29/2009 150,935 382,498
James H. Bromley................ 100,000 15.2% 7.75 6/1/2009 487,393 1,235,150
Lawrence V. Grella.............. 50,000 7.6% 6.50 10/26/2009 204,391 517,966
Guio G. Barela.................. 55,000 8.4% 12.00 4/29/2009 415,070 1,051,870
25,000 3.8% 6.75 10/28/2009 106,126 268,944
</TABLE>
- ------------------------
(1) All options were granted pursuant to the Company's 1993 Stock Incentive
Plan. Mr. Lalji's options vest 25% per year and will be fully vested on
April 29, 2003. Mr. Rubis' options vest 50% per year and will be fully
vested on April 29, 2001. Messrs. Bromley's and Grella's options vest 20%
per year and will be fully vested June 1, 2004 and October 26, 2004,
respectively. The options held by Mr. Barela that are exercisable at $12.00
per share vest 20% per year and will be fully vested on April 29, 2004. The
options held by Mr. Barela that are exercisable at $6.75 per share vest 20%
per year and will be fully vested on October 28, 2004. The exercise price
and federal tax withholding may be paid in cash or with shares of Company
stock already owned.
(2) The exercise price of each option was based on the closing price of the
Common Stock on the date of grant, as reported by the Nasdaq Stock
Market, Inc.
(3) The actual value, if any, that a Named Executive Officer or any other
individual may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised. The figures above are
based on the market price of the Common Stock on the date of grant and
assumed appreciation over the term of the options at the respective annual
rates of stock appreciation shown and are not intended to forecast future
appreciation, if any, in the market value of the Common Stock.
7
<PAGE>
FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in 1999 by the
Named Executive Officers and the value of such officers' unexercised options at
December 31, 1999. No options were exercised by Named Executive Officers in
1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
SHARES END (#) AT FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Firoz H. Lalji.................. -- -- 6,250 11,250 $ 4,760 $ 4,760
Lorne G. Rubis.................. -- -- 75,588 95,588 204,078 204,078
James H. Bromley................ -- -- -- 100,000 -- 0
Lawrence Grella................. -- -- -- 50,000 -- 34,400
Guio Barela..................... -- -- 12,000 113,000 42,696 128,364
</TABLE>
- ------------------------
(1) Represents the aggregate fair market value of the shares of Common Stock
subject to outstanding in-the-money options, less the aggregate exercise
price of such options, based on the closing price of the Common Stock
($7.188) as reported on the Nasdaq Stock Market on December 31, 1999. A zero
opposite a Named Executive Officer's information means that, as of
December 31, 1999, such executive officer's options were not in-the-money.
EMPLOYMENT AGREEMENTS
LORNE G. RUBIS. The Company entered into an employment agreement with
Mr. Rubis effective July 14, 1997, under the terms of which he receives an
annual base salary of $225,000. Mr. Rubis will also be eligible for bonuses
under the MIP. If his employment is terminated by the Company without "cause,"
or by Mr. Rubis for "good reason" within twelve (12) months following a change
in control, the Company will continue to pay his monthly base salary for up to
twelve (12) months following such termination, and Mr. Rubis will receive two
years' of accelerated vesting on all options held. The agreement also contains
standard Company indemnification, confidentiality and non-competition
provisions.
JAMES H. BROMLEY. The Company entered into an employment agreement with
Mr. Bromley dated April 26, 1999, under the terms of which he receives an annual
base salary of $150,000. Mr. Bromley is also eligible for bonuses under the MIP
and an annual stock option grant opportunity equal to 40% of his base salary as
of January 1 of each year. In the event of separation from the Company due to a
change of control, the Company will guaranty a one year severance at
Mr. Bromley's then current salary.
GUIO BARELA. The Company entered into an employment agreement with
Mr. Barela dated October 1, 1998, under the terms of which he receives an annual
base salary of $135,000. Mr. Barela is also eligible for a bonus opportunity of
50% of his base pay, payable quarterly upon reaching certain milestones and
metrics as agreed upon at the onset of his employment.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION POLICY
The Compensation Committee ("Committee") establishes and administers the
Company's compensation programs. The goals of these programs are to enhance
shareholder value by aligning compensation with the Company's business
objectives and performance, and to enable the Company to attract and retain key
management employees who can contribute to the Company's long-term success. In
order to attract outstanding executives, the Company's philosophy has been and
continues to be to provide a total compensation package that is competitive
within the e-commerce and direct marketing channels for
8
<PAGE>
computer products, and one that bears a close relationship to individual
performance and the long-term business objectives of the Company.
The total direct compensation package for the Company's executive officers
is presently made up of three elements--an annual base salary, a short-term
incentive program in the form of a performance-based cash bonus under the
Company's Management Incentive Plan ("MIP"), and stock option grants. The
Committee believes the Company's compensation programs are appropriate for its
executive officers on the basis of industry standards, competitive practice and
Company performance.
BASE SALARIES. Individual base salaries reflect primarily historical
practice, internal position and responsibilities, and individual performance and
contribution. No specific weight is assigned to these factors. The Committee
reviews salaries for all executive officers at the Senior Vice President level
and higher, giving due consideration to the recommendations of the Chief
Executive Officer. The Committee believes that the relative salaries of senior
management should reflect individual experience, contribution and performance,
although it does not have a targeted range for base salaries or bonuses for any
position. Salaries are established by the Board based on the Committee's
recommendations.
Mr. Lalji served as President and Chief Executive Officer during fiscal
1999. During 1999, Mr. Lalji received an annual base salary of $400,000. The
Committee believed this salary properly reflected his experience and
responsibilities, and was competitive with other chief executive officers in the
internet commerce and direct marketing channel with a similar level of
experience.
BONUS COMPENSATION. The MIP is designed to enable the Company to attract,
retain and motivate employees of the highest caliber. The MIP is a cash-based
award system under which all non-commissioned employees of the Company are
rewarded for the Company's success. The Committee is responsible for
establishing and communicating to all participants in the MIP specific goals for
financial performance by the Company. In addition, the Committee may, at its
discretion, establish individual performance goals for one or more participants
or provide that bonuses under the MIP will vary depending upon the Committee's
evaluation of overall individual performance by those participants. For 1999,
potential bonus payments under the MIP for the five highest paid executive
officers were to be based on overall Company performance combined with
individual performance criteria. The potential bonuses available under the MIP
for Senior Vice Presidents and above ranged from 35 percent to 50 percent of
base salary. However, based on the Company's performance in 1999, no bonuses
were paid under the MIP to any of the executive officers.
STOCK OPTIONS. The Company's 1993 Stock Incentive Plan is designed to
provide additional incentives to executive officers and other key employees to
maximize shareholder value. Because these individuals are in a position to make
a substantial contribution to the Company's long-term success, the Company
believes they should have a significant equity stake so they have a greater
incentive to manage the business as shareholders rather than merely as
employees. Options granted under the plan have been subject to substantial
vesting periods in order to encourage executive officers and key employees to
continue in the employ of the Company.
In 1999, Mr. Lalji received a stock option to acquire 5,000 shares of Common
Stock which the Committee believes was appropriate in light of his equity
position in the Company. In addition, the Committee granted additional stock
options to executive officers and other key employees and committed to grant
annual stock options based on each employee's position, responsibility and
individual performance during the year.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. The Committee has considered
the effect of Section 162(m) of the Internal Revenue Code of 1986 on the
Company's executive compensation programs. Section 162(m) disallows a deduction
in the event executive compensation exceeds one million dollars per year unless
certain conditions are satisfied. The Committee has reviewed all of the
Company's current compensation programs and believes that the deductibility of
amounts paid to executive officers under
9
<PAGE>
these programs will not be limited by Section 162(m). The Committee intends to
take such further steps as it deems advisable to allow the Company to deduct
future compensation amounts in excess of one million dollars to the extent it
may do so without compromising the Company's ability to motivate and reward
excellent performance. The Board and the Committee will retain discretion to
authorize the payment of compensation that does not qualify for income tax
deductibility under Section 162(m).
During 1999, the Committee was comprised of Mr. Carleton and Mr. Carter.
The Compensation Committee
Mr. Carleton
Mr. Carter
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total return on the
Common Stock during the period beginning on June 27, 1996 (the date of the
Company's initial public offering) and ending on December 31, 1999, with the
cumulative total return during that period on the Total Return Index for the
Nasdaq Stock Market (U.S. Companies) (the "Nasdaq Composite Index") and the
Nasdaq Retail Trade Index. The comparison assumes $100.00 was invested on
June 27, 1996 in each of the Common Stock and foregoing indices, and also
assumes reinvestment of dividends. The return on the Common Stock shown on the
graph is not necessarily indicative of future stock performance.
<TABLE>
<CAPTION>
JUNE 27, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1996 1997 1998 1999
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Multiple Zones International,
Inc.............................. $100.00 $ 81.25 $ 32.29 $146.86 $ 59.89
Nasdaq Composite Index............. $100.00 $108.68 $133.17 $187.64 $339.00
Nasdaq Retail Trade Index.......... $100.00 $ 99.18 $116.53 $141.70 $137.09
</TABLE>
10
<PAGE>
PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF AUDITORS
Unless otherwise instructed, it is the intention of the persons named in the
accompanying form of proxy to vote shares represented by properly executed
proxies for the ratification of the appointment of PriceWaterhouseCoopers LLP as
independent accountants for the Company for 2000. PriceWaterhouseCoopers LLP has
audited the accounts of the Company for 1999. Representatives of
PriceWaterhouseCoopers LLP are expected to attend the Annual Meeting and will
have an opportunity to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR 2000.
EXPENSES OF SOLICITATION
The expenses of preparing and mailing this Proxy Statement and the
accompanying proxy and the cost of solicitation of proxies on behalf of the
Board will be borne by the Company. Solicitation will be by mail and may be
supplemented by personal interview, telephone and telegram by directors,
officers and other employees of the Company without special compensation.
OTHER MATTERS
The Company knows of no other matters that are likely to be brought before
the Annual Meeting. If, however, other matters that are not now known or
determined come before the Annual Meeting, the persons named in the enclosed
proxy or their substitutes will vote such proxy in accordance with their
judgment.
REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1999 is available to
shareholders, without charge, upon written request to Multiple Zones
International, Inc., 707 South Grady Way, Renton, Washington 98055-3233;
Attention: James H. Bromley.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the Company's 2001
Annual Meeting of Shareholders must be received by the Secretary of the Company
by December 1, 2000 to be eligible for inclusion in the Company's Proxy
Statement and form of proxy for the 2001 Annual Meeting.
A shareholder of record who intends to submit a proposal at the 2001 Annual
Meeting that is not eligible for inclusion in the Company's Proxy Statement, or
who intends to submit one or more nominations for directors at the meeting, must
provide prior written notice to the Company. The notice should be addressed to
the Secretary and received by the Company at its principal executive offices not
later than February 15, 2001. The notice must satisfy certain requirements
specified in the Company's Bylaws. A copy of the Bylaws will be sent to any
shareholder upon written request to the Company's Secretary.
Renton, Washington
March 31, 2000
11
<PAGE>
[MAP]
MULTIPLE ZONES INTERNATIONAL, INC.
THREE RENTON PLACE
707 SOUTH GRADY WAY
RENTON, WA 98055-3233
(425) 430 3000
<PAGE>
MULTIPLE ZONES INTERNATIONAL, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received the Notice of Annual Meeting of
Shareholders of Multiple Zones International, Inc. (the "Company"), and the
related Proxy Statement dated March 31, 2000, hereby appoints Firoz H. Lalji and
James H. Bromley, and each of them, proxies for the undersigned, with full power
of substitution, and authorizes them to attend the Annual Meeting of
Shareholders of the Company on April 27, 2000, and any adjournments thereof, and
to vote thereat all shares of Common Stock of the Company that the undersigned
would be entitled to vote if personally present, such proxies being instructed
to vote as specified on the reverse side, or, to the extent not specified, to
vote FOR the election as directors of all nominees named on the reverse side and
FOR Proposal 2 and to vote in their discretion on any other matters presented at
the meeting or any adjournments thereof.
PLEASE SIGN AND DATE THIS PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your
votes as indicated / X /
in this example
FOR all WITHHOLD AUTHORITY
nominees to vote for all nominees
ELECTION OF DIRECTORS: / / / /
1. John H. Bauer, John T. Carleton, Firoz H
Lalji, Kathleen Pushor and Richard E. Carter.
(INSTRUCTION: TO HOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
LIST ABOVE.)
FOR AGAINST ABSTAIN
2.RATIFICATION OF APPOINTMENT OF / / / / / /
AUDITORS.
This proxy, when properly executed, will be voted in the manner specified by the
undersigned. Except as otherwise specified, this proxy will be voted FOR the
election as directors of all nominees named above and FOR ratification of the
appointment of PriceWaterhouseCoopers, LLP as the Company's independent
accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES NAMED ABOVE AND
FOR PROPOSAL 2
Signature(s)_____________________________________ Dated April ____________, 2000
Please sign name exactly as it appears hereon. If shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee, or guardian, please give full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
