SECURTIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by 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 ss.240.14a-11(c) or ss.240.14a-12
EXIGENT INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
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:
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2) Aggregate number of securities to which transaction applies:
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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 iling 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>
May 8, 2000
Dear Stockholder:
I am pleased to invite you to attend Exigent International, Inc.'s (the
"Company") 2000 Annual Meeting of Stockholders (the "Annual Meeting") on Friday,
June 23, 2000. The meeting will begin promptly at 9:00 a.m. EDT at the Melbourne
Beach Hilton, 3003 N. Highway A1A, Indialantic, FL 32903.
The purpose of this Annual Meeting is to consider and vote upon: (i)
the election of three (3) directors to serve until the 2003 annual meeting or
until their respective successors have been duly elected and qualified; (ii) the
ratification of the reappointment of Ernst & Young LLP as independent auditors
of the Company; and (iii) the transaction of such other business as may properly
come before the Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 21,
2000 as the record date for the determination of the stockholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournments thereof.
Your vote is important. Whether or not you plan to attend the Annual
Meeting, please take the time to vote. Proxy cards have been sent to all
stockholders of record. As explained in the attached proxy statement, you may
revoke your proxy at any time before it is actually voted at this Annual
Meeting.
If you plan to attend this Annual Meeting, please remember to bring a
form of personal identification with you and, if you are acting as a proxy for
another stockholder, please bring written confirmation in the form of a proxy
signed by the record owner indicating that you are acting as a proxy. Detailed
information about the meeting is included in the attached proxy statement.
Respectfully,
/s/ Patricia A. Frank
Patricia A. Frank
Secretary
<PAGE>
May 8, 2000
Dear Fellow Stockholders:
I would like to thank you for your continued support of Exigent International
throughout 1999.
The first major item on the agenda will be the election of directors to our
classified (i.e., "staggered") Board of Directors. Pursuant to our certificate
of incorporation, you will only be electing Class I directors whose term will
expire at the 2003 Annual Meeting. The Board of Directors is very pleased to
have three outstanding candidates to present for shareholder approval. First,
Gordon Comerford brings a wealth of financial experience to the Board of
Directors and is currently the Chairman of our Audit Committee. With the
acquisition of GEC North America Corporation in December 1999, and establishment
of the Exigent Solutions Group ("ESG"), a majority of our directors believe that
we need leadership with knowledge, industry contacts and expertise in the
Information Technology and Internet arenas. I am delighted to present two highly
qualified, outstanding candidates. The Board of Directors believes that these
candidates will provide the company with the requisite insight to move forward
with the information technology portion of our business (ESG). Dr. Steve Wolff
is a pioneer in the development of the Internet. He was a member of the original
development team that created the ARPa Net which grew into NSF net where he was
recently a director, and Dr. Wolff now works for CISCO, a world leader in
providing Internet software and hardware products. Dr. Joe Kraemer is a
recognized expert in the Internet arena and provides consulting services in this
area. Please see proposal one (1) for a more detailed description of the
candidates.
The second important item on the agenda for your consideration is the
ratification of our independent auditors Ernst & Young, LLP.
A majority of the Board of Directors recommends a vote for all the proposed
candidates and ratification of E&Y as our auditors.
We appreciate your continued support and wish you the best for 2000.
Sincerely,
/s/ B.R. "Bernie" Smedley
B.R. "Bernie" Smedley
Chairman and Chief Executive Officer
<PAGE>
2000 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.......................................4
FREQUENTLY ASKED QUESTIONS CONCERNING THIS PROXY STATEMENT.....................5
Q: Why am I receiving these materials?...................................5
Q: What information is contained in these materials?.....................5
Q: What proposals will be voted on at the meeting?.......................5
Q: What are the voting recommendations of the Board of Directors?........5
Q: Who is entitled to vote?..............................................5
Q: What is the difference between holding shares as a stockholder
of record and as a beneficial owner?.................................5
Q: What class of shares are entitled to be voted?........................5
Q: What does it mean if I receive more than one proxy card?..............6
Q: How do I vote?........................................................6
Q: What constitutes a quorum?............................................6
Q: How do I sign the proxy?..............................................6
Q: Who will count the votes?.............................................6
Q: How many votes are needed for approval of each proposal?..............6
Q: Who can attend the Annual Meeting?....................................7
Q: What percentage of stock do the directors and officers own?...........7
Q: Who are the largest principal stockholders?...........................7
Q: When are stockholder proposals and nominations for the Board
of Directors for the 2001 Annual Meeting due?........................7
Q: Where can I find the voting results of the meeting?...................7
Q: Who will bear the cost of soliciting votes for the meeting?...........7
BOARD STRUCTURE AND COMMITTEES.................................................9
COMPENSATION OF DIRECTORS.....................................................10
PROPOSAL 1....................................................................11
PROPOSAL 2....................................................................13
PRINCIPAL STOCKHOLDERS........................................................14
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................16
EXECUTIVE OFFICERS............................................................17
COMPENSATION OF EXECUTIVE OFFICERS............................................18
Summary Compensation Table..............................................18
EMPLOYMENT CONTRACTS....................................................20
OPTION GRANTS IN FISCAL YEAR ENDING DECEMBER 31, 1999...................19
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES...........................................19
REPORT OF THE COMPENSATION COMMITTEE....................................22
Exhibit A - Audit Committee Charter...........................................25
<PAGE>
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
OF
EXIGENT INTERNATIONAL, INC.
1830 Penn Street
Melbourne, Florida 32901
321-952-7550
TIME: 9:00 a.m. EDT on Friday, June 23, 2000
PLACE: Melbourne Beachside Hilton
3003 N. Highway A1A
Indialantic, FL 32903
ITEMS OF BUSINESS: 1. To elect directors, whose terms are described in the
Proxy Statement
2. To ratify the appointment of independent accountants
3. The transaction of such other business as may properly
come before the Annual Meeting or any adjournments
thereof
RECORD DATE: You are entitled to vote if you were a stockholder at the
close of business on April 21, 2000. A list of those
stockholders will be available for examination by any
stockholder of the Company, during ordinary business hours,
for ten days prior to this Annual Meeting at the principal
offices of the Company at 1830 Penn Street, Melbourne,Florida
32901.
MEETING ADMISSION: ALL STOCKHOLDERS OF THE COMPANY ARE CORDIALLY INVITED TO
ATTEND THIS ANNUAL MEETING IN PERSON. TO ENSURE YOUR
ATTENDANCE AT THIS ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY MAIL THE ACCOMPANYING PROXY CARD AS
PROMPTLY AS POSSIBLE IN THE POSTAGE PAID ENVELOPE PROVIDED.
THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THIS
ANNUAL MEETING SHOULD YOU SO DESIRE. AS EXPLAINED IN THE
PROXY STATEMENT, YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE
IT IS ACTUALLY VOTED AT THE MEETING.
Beneficial owners of stock held by banks, brokers or
investment plans (in "street name") will need proof of
ownership to be admitted to this Annual Meeting. A recent
brokerage statement or letter from your broker or bank are
examples of proof of ownership.
This proxy statement, proxy card, Form 10-K for the Company's fiscal year ending
on December 31, 1999 and a copy of the Company's Annual Report are enclosed and
are being distributed on or about May 8, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Patricia A. Frank
Patricia A. Frank, Secretary
<PAGE>
FREQUENTLY ASKED QUESTIONS CONCERNING THIS PROXY STATEMENT
Q: Why am I receiving these materials?
A: The Board of Directors is providing these proxy materials for you in
connection with the Company's Annual Meeting of stockholders which will
take place on June 23, 2000. You are invited to attend the meeting and are
requested to vote on the proposals described in this proxy statement.
Q: What information is contained in these materials?
A: The information included in this proxy statement relates to the proposals
to be voted on at the Annual Meeting, the voting process, the compensation
of directors and our most highly paid officers, and certain other required
information. Our 1999 Annual Report is also enclosed.
Q: What proposals will be voted on at the meeting?
A: There are two proposals scheduled to be voted on at the meeting:
1. Election of Class I directors: Gordon J.Comerford, Stephen S. Wolff and
Joseph S. Kraemer for terms expiring in the Year 2003;
2. Ratification of Ernst & Young LLP as the Company's independent auditors.
Q: What are the voting recommendations of the Board of Directors?
A: A majority of the members of the Board of Directors recommend that you vote
your shares "FOR" each of the nominees to the Board of Directors and the
Board of Directors unanimously recommends that you vote your shares "FOR"
the ratification of Ernst & Young LLP as the Company's independent
auditors.
Q: Who is entitled to vote?
A: Stockholders as of the close of business on April 21, 2000 (the "Record
Date") are entitled to vote at the Annual Meeting.
Q: What is the difference between holding shares as a stockholder of record
and as a beneficial owner?
A: Most Exigent stockholders hold their shares through a stockbroker, bank or
other nominee rather than directly in their own name. As summarized below,
there are some distinctions between shares held of record and those owned
beneficially.
<PAGE>
Stockholder of Record
If your shares are registered directly in your name with Exigent's Transfer
Agent, Registrar and Transfer Company, you are considered, with respect to
those shares, the stockholder of record and these proxy materials are being
sent directly to you by Exigent. As the stockholder of record, you have the
right to grant your voting proxy directly to Exigent or to vote in person
at the meeting. Exigent has enclosed a proxy card for you to use.
Beneficial Owner
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in street
name and these proxy materials are being forwarded to you by your broker or
nominee who is considered, with respect to those shares, the stockholder of
record. As the beneficial owner, you have the right to direct your broker
on how to vote and are also invited to attend the meeting. However, since
you are not the stockholder of record, you may not vote these shares in
person at the meeting. Your broker or nominee has enclosed a voting
instruction card for you to use.
Q: What class of shares are entitled to be voted?
A: Each share of Common Stock and each share of Class A Preferred Stock
outstanding as of the close of business on the Record Date, is entitled to
one vote on each proposal at the Annual Meeting. As of April 1, 2000, there
were approximately 5,927,990 shares of Common Stock issued and outstanding
and 15,132 shares of Class A Preferred Stock issued and outstanding.
Q: What does it mean if I receive more than one proxy card?
A: It means that you hold shares registered in more than one account. Sign and
return all proxies to ensure that all your shares are voted.
Q: How do I vote?
A: Sign and date each proxy card you receive (many stockholders receive
multiple proxies) and return it in the postage prepaid envelope. If you
return your signed proxy but fail to indicate your voting preferences, the
Company will vote on your behalf "FOR" the election of the three director
nominees as directors, and the ratification of the selection of the
independent auditors. You have the right to revoke your proxy at any time
before the meeting by (1) notifying the Company's Secretary, or (2)
returning a later-dated proxy. You may also revoke your proxy by voting in
person at the meeting.
Even if you plan to attend the Annual Meeting, we recommend that you also
submit your proxy as described below so that your vote will be counted if
you later decide not to attend the meeting.
The holders of all classes of shares of the Company will vote together, as
a single class, on all matters properly brought forth at the Annual
Meeting. Stockholders do not have the right to cumulate their votes in the
election of directors of the Company.
With respect to the election of directors, you may (1) vote for all of the
director nominees as a group, (2) withhold your vote for all of the
director nominees as a group, or (3) vote for all director nominees as a
group except those nominees you identify. If you sign, date and mail your
proxy card without indicating how you want to vote, your vote will be
counted as a vote in favor of the director nominees.
With respect to the other proposals, you may (1) vote for the proposal, (2)
withhold your vote for a proposal, or (3) abstain. If you sign, date and
mail your proxy card without indicating how you want to vote, your vote
will be counted as a vote in favor of each of such proposals.
If you sign, date, and mail your proxy card in time to be cast at the
Annual Meeting indicating how you want to vote, it will be voted in
accordance with your instructions. The persons named as proxy holders in
the proxies are officers of the Company. We encourage you to vote and to
vote promptly. Voting promptly may save the Company the expense of a second
mailing.
We encourage you to complete, sign, date, and return the enclosed proxy
card before the date of the Annual Meeting to make sure that a quorum is
present at the Annual Meeting. If a quorum is not present at the Annual
Meeting, the designated proxy holder in the applicable proxy card will vote
the returned proxy cards to adjourn the Annual Meeting to a time and place
to be announced.
<PAGE>
Q: What constitutes a quorum?
A: The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of the issued and
outstanding shares, present or represented by proxy, of the Company as of
the Record Date.
Q: How do I sign the proxy?
A: Sign your name exactly as it appears on the proxy. If you are signing in a
representative capacity (for example, as an attorney, executor,
administrator, guardian, trustee, or the officer or agent of a company),
you should indicate your name and title or capacity. If the stock is held
in custody for a minor (for example, under the Uniform Transfers to Minors
Act), the custodian should sign, not the minor. If the stock is held in
joint ownership, each owner must sign.
Q: Who will count the votes?
A: Registrar and Transfer Company, Transfer Agent for the Company, will
tabulate the votes and John Kancilia from the law firm of O'Brien
Riemenschneider Kancilia & Lemonidis PA will act as the inspector of
election.
Q: How many votes are needed for approval of each proposal?
A: There are differing vote requirements for the various proposals. Directors
will be elected by a plurality of the votes cast at the Annual Meeting. On
this basis, the three nominees receiving the most votes will be elected
directors. Abstentions, broker non-votes (as described below), and
instructions on the accompanying proxy to withhold authority to vote for
one or more of the nominees will result in those nominees receiving fewer
votes. However, such action will not reduce the number of votes otherwise
received by the nominees. The proposal to ratify the selection of the
auditors will be approved if the votes cast for the proposal exceed those
cast against the proposal. Abstentions and broker non-votes will not be
counted either for or against the proposal.
Shares that are voted "FOR", "AGAINST" or "ABSTAIN" with respect to any
proposal brought at the Annual Meeting are treated as being present at the
Annual Meeting for purposes of establishing a quorum. With regard to the
election of directors, votes that are withheld for any nominee will be
excluded entirely from the vote and will have no effect. Abstentions may be
specified on all proposals other than the election of directors and will
have the same effect as voting against a proposal. Common Stock of the
Company represented by proxies which contain one or more broker "non-votes"
are counted as present for purposes of determining whether a quorum is
present for the Annual Meeting but are not considered to have voted for a
proposal. Accordingly, a broker non-vote will not affect the outcome of the
voting on a proposal. A "non-vote" occurs when a broker or other nominee
holding shares of the Company for a beneficial owner votes on one proposal
but does not vote on another proposal because such broker or other nominee
does not have discretionary voting power and has not received instructions
from the beneficial owner.
<PAGE>
Q: Who can attend the Annual Meeting?
A: All stockholders as of the Record Date can attend. If your shares are held
in the name of a broker or other nominee, please bring proof of share
ownership, such as a broker's statement, to the Annual Meeting to receive
admittance.
Q: What percentage of stock do the directors and officers own?
A: Together, our directors and officers own approximately 51.6% of the Common
Stock as of March 31, 2000. (See page 14 for details.)
Q: Who are the largest principal stockholders?
A: The Exigent International, Inc. Employee 401(k)/Profit Sharing and Employee
Stock Ownership Plan ("ESOP"), Daniel J. Stark, Bernard R. Smedley, and
Kern Capital Management, LLC (See page 14 for details.)
Q: When are stockholder proposals and nominations for the Board of Directors
for the 2001 annual meeting due?
A: Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2001 annual meeting, and nominations
of candidates for election to the Board of Directors at the 2001 annual
meeting, must be submitted in writing by December 31, 2000 to the Corporate
Secretary, 1830 Penn Street, Melbourne, Florida 32901. Such proposals and
nominations must be in compliance with applicable laws and regulations, as
well as the Company's currently enacted Certificate of Incorporation and
ByLaws, in order to be considered for inclusion in the proxy statement and
form of proxy for that meeting.
Copies of ByLaws Provisions: You may contact Exigent's Corporate Secretary
at our headquarters for a copy of the relevant ByLaw provisions regarding
the requirements for making stockholder proposals and nominating director
candidates.
Q: Where can I find the voting results of the meeting?
A. We will announce preliminary voting results at the meeting and publish
final results in our quarterly report on Form 10-Q for the 2nd quarter of
fiscal year 2000.
Q: Who will bear the cost of soliciting votes for the meeting?
A: The Company will bear all expenses for soliciting the proxies. Proxies may
be solicited by mail, telephone, or telegraph by the Company and its
management and employees but they will not receive any additional
compensation for these services. We have hired Georgeson Shareholder
Communications, Inc., to assist in the solicitation of proxies, at an
estimated cost of $5,000, plus reimbursement of reasonable out-of-pocket
expenses. The Company will request brokers, nominees and other fiduciaries
and custodians who hold shares of stock of the Company in their names to
provide a copy of this Proxy Statement and any accompanying materials to
the beneficial owners of such shares. The Company will reimburse such
persons, if requested, for their reasonable fees and expenses incurred in
completing the mailing of such material to the beneficial owners.
<PAGE>
BOARD STRUCTURE AND COMMITTEES
Our Board of Directors consists of eight (8) members and has the
following five committees: (1) Audit, (2) Compensation, (3) Nominating, (4)
Intellectual Property Rights ("IPR"), and (5) Investment. The Board of Directors
met 11 times during the fiscal year ended December 31, 1999, including
telephonic meetings. All of our directors attended 75% or more of the meetings
held in 1999 by the Board of Directors and committees of which they are members.
- ------------------------ --------- -------------- ------------ ----- -----------
Name of Director Audit Compensation Nominating IPR Investment
- ------------------------ --------- -------------- ------------ ----- -----------
Non-Employee Directors:
- ------------------------ --------- -------------- ------------ ----- -----------
Gordon J. Comerford (1) X* X
- ------------------------ --------- -------------- ------------ ----- -----------
Robert M. Janowiak X X X*
- ------------------------ --------- -------------- ------------ ----- -----------
Arthur H. Collier X** X* X
- ------------------------ --------- -------------- ------------ ----- -----------
Scott B. Helm X X X
- ------------------------ --------- -------------- ------------ ----- -----------
William R. Usher X** X X* X
- ------------------------ --------- -------------- ------------ ----- -----------
Daniel J. Stark X
- ------------------------ --------- -------------- ------------ ----- -----------
Don F. Riordan, Jr. X
- ------------------------ --------- -------------- ------------ ----- -----------
Employee Directors:
- ------------------------ --------- -------------- ------------ ----- -----------
Bernard R. Smedley X X X
- ------------------------ --------- -------------- ------------ --------- -------
X = Committee member
* = Chair, ** = Co-Chair
(1) Mr. Comerford joined the Board of Directors on December 7, 1999. At the
December 7, 1999 Board of Directors meeting, the Board of Directors
increased the number of directors from 7 to 9.
The Audit Committee
The Audit Committee's principal functions include reviews of: the audit plans,
scope of audit and audit findings of the independent auditors, significant tax
and legal matters, and internal controls. Further, it is the responsibility of
the Audit Committee to recommend to the Board of Directors the annual
appointment of the independent auditors, to review the findings of independent
auditors, financial controller and external regulatory agencies and to review
the accounting policies used in preparing the financial statements of the
Company. The current members include Mr. Comerford (Chairman), Mr. Helm, Mr.
Janowiak and Mr. Riordan. The Audit Committee met 4 times in the fiscal year
ended December 31, 1999.
Pursuant to the recently enacted Nasdaq Marketplace rules governing audit
committee function and composition, our Audit Committee has adopted the "Audit
Committee Charter" attached as Exhibit A.
The Compensation Committee
The Compensation Committee's principal function and responsibility is to make
recommendations to the Board of Directors as to the Company's compensation plans
and programs. The current members are Mr. Collier (Co-Chair), Mr. Usher
(Co-Chair), Mr. Janowiak, Mr. Helm, Mr. Comerford, and Mr. Smedley. Mr. Smedley
participates in recommendations to the Board of Directors for compensation
matters relating to all employees other than himself. The Compensation Committee
makes recommendations to the full Board of Directors with respect to
compensation matters for Mr. Smedley. The Compensation Committee met 5 times,
during the fiscal year ended December 31, 1999.
The Nominating Committee
The Nominating Committee has the power to nominate such persons, as it may
determine, to stand for election to the Board of Directors. The current members
are Mr. Collier (Chairman), Mr. Usher, and Mr. Smedley. The Nominating Committee
met twice during the fiscal year ended December 31, 1999.
<PAGE>
Intellectual Property Rights Committee
The Intellectual Property Rights Committee's principal functions include
establishing the criteria necessary from time to time for the Company's internal
patent disclosure selection process, overseeing the Company's IPR Incentive
Program, reporting to the Board of Directors on the status of patents and
fostering an atmosphere in the Company to stimulate the creation and
presentation of intellectual property. The current members are Mr. Usher
(Chairman), Mr. Collier, Mr. Stark and Mr. Smedley. Stuart P. Dawley, Executive
Vice President and General Counsel is invited to attend Intellectual Property
Rights Committee meetings, but does not have the right to vote because he is not
a director. The Intellectual Property Rights Committee met once during the
fiscal year ended December 31, 1999.
The Investment Committee
The Investment Committee's principal functions include making recommendations to
the Board of Directors, in concert with the Company's management, as to the
strategic alignment of the Company, financial advisability of any potential
acquisition or merger, and approval and selection of investment bankers to
represent the Company. The current members are Mr. Janowiak (Chairman), Mr.
Usher, and Mr. Smedley. The Investment Committee met 5 times during the fiscal
year ended December 31, 1999.
COMPENSATION OF DIRECTORS
The Company's current policy is to pay each outside director who is
neither an employee, officer or directly or indirectly a paid consultant to the
Company a fee of $1,500 for each regular or special Board of Directors meeting
attended, as well as stock options upon his/her election or admission to the
Board of Directors. The directors currently eligible to receive such
compensation are Messrs. Collier, Comerford, Helm, Janowiak, Usher and Stark.
Each of Messrs. Janowiak, Collier and Helm received 40,000 non-qualified stock
options under the Company's Independent Director Stock Option Plan 5NQ ("Plan
5NQ") upon his election or admission to the Board of Directors, at an exercise
price per share equal to the fair market value of the Common Stock on the date
of grant, which was $3.3750 on November 20, 1997, $3.1250 on February 6, 1998,
and $4.0625 on May 7, 1998, respectively. These options vest at the rate of
2,500 shares per quarter for the 16 quarters following the grant date. Following
these option grants, all options available under Plan 5NQ were granted.
Upon his admission to the Board of Directors on April 6, 1999, Mr.
Usher was granted non-qualified options to purchase 7,500 shares of Common Stock
at an exercise price of $3.875 per share. All 7,500 options to purchase Common
Stock are fully vested and exercisable. On January 3, 2000, Mr. Usher was
granted an additional 10,000 options, at an exercise price of $3.6875. The
following describes Mr. Usher's vesting schedule, 2,500 vested and became
exercisable on March 31, 2000, 2,500 vest and become exercisable on June 30,
2000, 2,500 vest and become exercisable on September 30, 2000, and the remaining
2,500 will vest and become exercisable on December 31, 2000. These options were
granted pursuant to the Omnibus Stock Option and Incentive Plan.
Mr. Comerford was admitted to the Board of Directors on December 7,
1999. On January 3, 2000, he was granted non-qualified options to purchase
10,000 shares of Common Stock, at an exercise price of $3.75. The following
describes Mr. Comerford's vesting schedule, 2,500 vested and became exercisable
on March 31, 2000, 2,500 vest and will become exercisable on June 30, 2000,
2,500 vested and will become exercisable on September 30, 2000, and the
remaining 2,500 will vest and become exercisable on December 31, 2000. These
options were granted pursuant to the Omnibus Stock Option and Incentive Plan.
The Company reimburses all directors for authorized out-of-pocket
expenses. The Company does not currently pay members for attending Committee
meetings.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Number of Directors
The ByLaws authorize a maximum of ten (10) members to our Board of
Directors. Currently, our Board of Directors has fixed the number of directors
at nine (9). In accordance with the changes to the Company's charter approved at
the June 30, 1998 annual meeting, the terms of the directors have been staggered
into three classes. The terms of office for the Class I directors expire at the
2000 Annual Meeting. The following candidates were nominated by a majority of
the members of the Board of Directors: Mr. Comerford, Mr. Wolff and Mr. Kraemer,
to serve a three-year term expiring at the stockholders' annual meeting to be
held in 2003 or until their successor is elected and qualified. In the case of a
vacancy occurring during the year in any class, the Nominating Committee may
elect another director as a replacement, may leave the vacancy unfilled or may
reduce the number of directors.
The terms of the Class II directors, Messrs. Collier, Janowiak and
Smedley, expire at the 2001 annual meeting of stockholders. The terms of the
Class III directors, Messrs. Helm and Usher, expire at the 2002 annual meeting
of stockholders.
Mr. Comerford is currently a director of the Company. Each nominee has
consented to being named in this Proxy Statement and to serve as a director of
the Company if elected. The Board of Directors has no reason to believe that any
of the nominees listed below will not be available to serve but if any nominee
should be or become unable or unwilling to serve, the shares represented by the
proxies received by the Company will be voted for the election of some other
person as director, as the Board of Directors shall recommend.
Director Nominees
Set forth below is information regarding the nominees for directors for
Class I:
Class I Nominees
Gordon J. Comerford Mr. Comerford became a Director of Exigent in 1999. He
Director since 1999 recently retired from Motorola, where he served as a
Age 64 Senior Vice President since 1989. He joined Motorola's
communications sector in 1974 as a Director of Business
Management and became a Corporate Vice President in
1980. Mr. Comerford served as a Director and Chairman
of the Audit Committee of Iridium LLC from July 1993
until his resignation in October 1999. Prior to joining
Motorola, Mr. Comerford was employed by IBM. He is a
graduate of Marquette University, where he serves on
the President's Council, and holds an MBA from the
University of Michigan.
Stephen S. Wolff, Ph.D. Mr. Wolff began his career in 1962 on the faculty of
Age 68 Electrical Engineering in The Johns Hopkins
University, where he taught undergraduate and graduate
courses and performed research in system theory and
statistical communication theory. From 1972-1986, Mr.
Wolff held various positions with the U.S. Army
Ballistic Research Laboratory where he worked on
artillery system simulation and millimeter-wave radar,
and carried out research in robust statistical methods
with application to main gun aiming systems for the
Abrams tank. In this position, Mr. Wolff also
introduced UNIX to the U.S. Army labs and was an early
developer of Internet technology. From 1987-1994, Mr.
Wolff was employed by the National Science Foundation
where he served as Program Director then Division Chief
for Networking. Currently Mr. Wolff is Executive
Director, Advanced Internet Initiatives, Office of
Technology Initiatives for Cisco Systems where he
directs Cisco's involvement with Internet2 and the Next
Generation Internet in the U.S. and similar programs in
other countries; the position also includes
responsibility for Cisco's worldwide University
Research Program. Mr. Wolff received degrees of BSc in
Electrical Engineering from Swarthmore College and MA
and PhD in Electrical Engineering from Princeton
University; he subsequently held a Fellowship for
Postdoctoral study at Imperial College, where he worked
with Colin Cherry and Dennis Gabor.
<PAGE>
Joseph S. Kraemer, Ph.D. Dr. Kraemer currently serves as Senior Vice President
Age 55 at PHB Hagler Bailly, Inc., a consulting firm that
specializes in capital intensive industries undergoing
severe structural change. He is an experienced
Management consultant who works across multiple
industries, geographies, and client situations. He has
assisted numerous companies to enter a variety of
telecommunications and high technology markets. Prior
to joining PHB Hagler Bailly, Dr. Kraemer was Vice
President at EDS/A.T. Kearney where he led the
Communications and Electronics Consulting Practice of
EDS Management Consulting Services. Before joining EDS,
Dr. Kraemer was a Partner with Deloitte & Touche where
he led the Global Telecommunications and Electronic
Services Practice. Prior to joining Deloitte & Touche,
Dr. Kraemer served as an investment research advisor
for small and medium institutions with Merrill Lynch.
Dr. Kraemer also served in the U.S. Army, rose to the
rank of Captain and received an honorable discharge and
Commendation Medal for work done to locate, retrieve
and repatriate U.S. POWs captured in the Vietnam War.
Dr. Kraemer holds a BS from Georgetown University, an
MA from University of Michigan, an MBA, from George
Washington University and a Ph.D. from the University
of Michigan. Dr. Kraemer also holds the professional
titles of Certified Public Accounting (CPA) and
Certified Management Consultant (CMC).
For more information on the Committees of the Board and Director
compensation, see "Compensation of Directors", "Certain Relationships and
Related Transactions", "Board Structure and Committees" and "Compensation
Committee Interlocks and Insider Participation".
Required Vote
Assuming a quorum is present in person or by proxy at the Annual
Meeting, directors will be elected by a plurality of the votes cast by the
holders of the issued and outstanding Common Stock and Class A Preferred Stock,
voting together as a single class; the three nominees receiving the most votes
will be elected as directors.
A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS RECOMMEND THAT THE
STOCKHOLDERS VOTE "FOR" EACH OF THE NOMINEES LISTED ABOVE.
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR CURRENT YEAR
Ernst & Young LLP has been approved by the Board of Directors as the
Company's independent auditors for the Company's fiscal year ending December 31,
2000, subject to ratification of such appointment by the stockholders.
Representatives from Ernst & Young LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they so desire, and will be
available to respond to appropriate questions from stockholders.
Required Vote
Ratification of the Company's appointment of its independent auditors
is not required by the Bylaws or otherwise, but the Board of Directors has
decided to seek such ratification as a matter of good corporate practice.
Ratification of appointment of Ernst & Young LLP as the Company's independent
auditors for the Company's fiscal year ending December 31, 2000 requires the
affirmative vote of the holders of a majority of the issued and outstanding
Common Stock and Class A Preferred Stock, voting together as a single class,
represented in person or by proxy and entitled to vote at the Annual Meeting. If
the stockholders do not ratify this appointment, other certified public
accountants will be considered by the Board of Directors upon recommendations of
the Audit Committee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE COMPANY'S FISCAL YEAR ENDING DECEMBER 31, 2000.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's Common Stock as of March 31,
2000 by (i) each person who is known by the Company to own beneficially more
than 5% of the outstanding shares of Common Stock (each a "Principal
Stockholder"), (ii) each of the Company's directors as of March 31, 2000 and
each nominee for director, (iii) the Chief Executive Officer and the four other
most highly compensated executive officers of the Company (the "Named
Officers"), and (iv) all executive officers and directors of the Company as a
group. Except as otherwise indicated, all owners have sole voting power and
investment power over all shares listed.
<TABLE>
<CAPTION>
- -------------------------------------------------------------|-------------------------------------------------------
| Common Stock
- -------------------------------------------------------------|-------------------------------|-----------------------
Name and Address | Amount and Nature of | Percent of Class
of Beneficial Owner | Beneficial Ownership (1) |
- -------------------------------------------------------------|-------------------------------|-----------------------
<S> <C> <C> <C>
Don F. Riordan, Jr. (16) 452,814 (2) 7.6%
Daniel J. Stark (17) 574,886 (3) 9.7%
Bernard R. Smedley (14) 574,660 (4) 9.0%
Exigent International, Inc. Employee 401(k)/Profit Sharing 1,654,288 27.9%
and Employee Stock Ownership Plan ("ESOP") (14)
Jack D. Daily (14) 157,980 (5) 2.6%
Stuart P. Dawley (14) 67,709 (6) 1.1%
William K. Presley (14) 89,721 (7) 1.5%
Arthur H. Collier (14) 22,500 (8) *
Robert M. Janowiak (14) 15,000 (9) *
Scott B. Helm (14) 20,000 (10) *
William R. Usher (14) 10,000 (11) *
Gordon J. Comerford (14) 2,500 (12) *
Kern Capital Management, LLC (15) 502,700 (13) 8.5%
Total Number of Shares owned by Directors and Executive 2,077,977 51.6%
Officers as a Group (13 persons)
</TABLE>
*Less than 1%
- -------------------------
(1) "Beneficial ownership" is a technical term broadly defined by the
Securities and Exchange Commission to mean more than ownership in the
usual sense. A person "beneficially owns" stock not only if he holds it
directly, but also if he indirectly (through a relationship, position as
a director or officer or trustee, or a contract or understanding) has or
shares the power to vote the stock or the power to sell the stock, or has
the right to acquire it within 60 days.
(2) Includes 328,768 shares of Common Stock directly owned, 79,533 shares of
Common Stock issuable upon exercise of options held by Mr. Riordan, and
44,513 shares of Common Stock held in trust by the ESOP.
(3) Includes 539,816 shares of Common Stock directly owned, by Mr. Stark,
and 35,070 shares of Common Stock indirectly held in a managed account.
(4) Includes 125,100 shares of Common Stock directly owned, 5,000 shares
indirectly held in Mr. Smedley's trust, 441,665 shares of Common Stock
issuable upon exercise of options held by Mr. Smedley, and 2,895 shares
of Common Stock held in trust by the ESOP.
<PAGE>
(5) Includes 16,122 shares of Common Stock directly owned, 89,532 shares of
Common Stock issuable upon exercise of the Options held by Mr. Daily, and
52,326 shares of Common Stock held in trust by the ESOP.
(6) Includes 1,500 shares of Common Stock directly owned, 64,411 shares of
Common Stock issuable upon exercise of options held by Mr. Dawley and
1,798 shares of Common Stock held in trust by the ESOP.
(7) Includes 14,074 shares of Common Stock directly owned, 24,466 shares of
Common Stock issuable upon exercise of the Options held by Mr. Presley,
and 51,181 shares of Common Stock held in trust by the ESOP.
(8) Includes options to purchase 22,500 shares of Common Stock which are
exercisable by Mr. Collier within 60 days following March 31, 2000.
(9) Includes 10,000 shares of Common Stock directly owned, and options
to purchase 25,000 shares of Common Stock which are exercisable by Mr.
Janowiak within 60 days following March 31, 2000.
(10) Includes options to purchase 20,000 shares of Common Stock which are
exercisable by Mr. Helm within 60 days following March 31, 2000.
(11) Includes options to purchase 10,000 shares of Common Stock which are
exercisable by Mr. Usher within 60 days following March 31, 2000.
(12) Includes options to purchase 2,500 shares of Common Stock which are
exercisable by Mr. Comerford within 60 days following March 31, 2000.
(13) In accordance with Schedule 13G filed with the Securities and Exchange
Commission on December 31, 1999.
(14) The business address is in care of Exigent International, Inc., 1830 Penn
Street, Melbourne, Florida 32901.
(15) The business address is 114 West 47th Street, Suite 1926, New York, NY
10036.
(16) Mr. Riordan's address is 414 La Costa Street, Melbourne Beach, FL 32951.
(17) Mr. Stark's address is 5180 Sand Lake Road, Melbourne, FL 32934.
For more information on certain transactions between the Company and
any director, any nominee director, any executive officer or any Principal
Stockholder, see "Certain Relationships and Related Transactions".
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors, officers and persons who
beneficially own more than ten percent (10%) of the Common Stock (each a
"Reporting Person") to file reports of ownership and changes of ownership with
the Securities and Exchange Commission. Copies of all filed reports are required
to be furnished to the Company pursuant to Section 16(a) of the Exchange Act.
Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished
to the Company pursuant to Rule 16a-3(e) of the Exchange Act during fiscal year
ending December 31, 1999 and on written representations from Reporting Persons,
the Company believes that each Reporting Person complied with all applicable
filing requirements during its fiscal year ended December 31, 1999.
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company, who are elected by and serve at the
discretion of the Board of Directors, are as follows:
<TABLE>
<CAPTION>
- ------------------------------ ----------- ----------------------------------------------------- -------------------
Name of Officer Age Position Employed Since
- ------------------------------ ----------- ----------------------------------------------------- -------------------
<S> <C> <C> <C>
Bernard R. Smedley 62 Chairman of the Board of Directors, Chief Executive 1997
Officer, Chief Operating Officer and President
- ------------------------------ ----------- ----------------------------------------------------- -------------------
Jeffrey B. Weinress 52 Senior Vice President, Chief Financial Officer and 1998
Treasurer
- ------------------------------ ----------- ----------------------------------------------------- -------------------
Stuart P. Dawley 37 Executive Vice President and General Counsel 1997
- ------------------------------ ----------------------------------------------------- -------------------
Jack D. Daily 56 (Retired) Executive Vice President Government 1981
Division
- ------------------------------ ----------- ----------------------------------------------------- -------------------
William K. Presley 53 Senior Vice President and Chief Technical Officer 1983
- ------------------------------ ----------- ----------------------------------------------------- -------------------
</TABLE>
Mr. Smedley became a Director of Exigent on February 7, 1997. On June
11, 1997, he joined Exigent as the Chairman and CEO. Prior to that, Mr. Smedley
took early retirement from Motorola, Inc. to become President and Chief
Executive Officer of AirNet Communications Corp. (ANCC), an infrastructure
products company that he started in 1994 with venture capital companies. Mr.
Smedley's business plan included the creation of cellular and PCS systems. Mr.
Smedley started his career at Goodyear Aerospace in 1962, and in 1969 became
engineering manager for Xerox Data Systems. He then joined Motorola, Inc. in
1976, where he was responsible for developing the Cellular Infrastructure
business for Motorola, taking it from an engineering concept to worldwide
leadership with annual sales in the billions. Mr. Smedley has a B.A. degree in
Engineering from Washington and Jefferson College and a BSEE degree from
Carnegie-Mellon University, both of Pennsylvania. He also has attended advanced
studies in engineering and marketing at several universities.
Prior to resigning his position with the Company on March 31, 2000, Mr.
Weinress served as Senior Vice President, Chief Financial Officer and Treasurer
since December, 1998. Mr. Weinress also serves as Chairman and Director of ENV
America Incorporated. From 1997 to 1998, Mr. Weinress served as Vice President,
Chief Financial Officer and Secretary of Avanir Pharmaceuticals. From 1996 to
1997, he was Executive Vice President and in 1997 Chief Financial Officer of
Omega Environmental, Inc. (on May 2, 1997, Omega Environmental filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code.) From 1987 to 1995,
he was Chief Financial Officer of Energy America Incorporated.
Prior to resigning his position with the Company on April 21, 2000,
Stuart P. Dawley served as Executive Vice President and General Counsel since
July 1997, when he joined Exigent. Prior to that, Mr. Dawley joined AirNet
Communications Corporation, an infrastructure products company for Wireless
Local Loop, cellular and PCS markets in June 1995 where he served as Director of
Marketing and Strategic Alliances until November 1996 and he then served as
General Counsel until July 1997. Prior to that, from June 1988 to June 1995, Mr.
Dawley worked in Motorola, Inc.'s Infrastructure Group where he served in the
business development section.
Prior to retiring from the Company, Jack D. Daily held the position of
Executive Vice President of the Government Division since 1999. He has been
employed in management and executive positions with STI since 1981.
William K. Presley has been serving as Chief Technical Officer of
Exigent since 1997. He has been employed by STI since 1983 in management and
executive positions, including Chairman of the Board and Vice President of STI
from 1987 to 1998.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth a summary of all compensation
information earned, awarded or paid in the fiscal years ended December 31, 1999,
December 31, 1998 (1998B"), and January 31, 1998 ("1998A"), as applicable, to
those persons who were at December 31, 1999, the Named Officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
----------------------------------------------- ----------------
Name and Year Salary Bonus Other Annual Restricted Stock
Principal Position (1) ($)(1) ($)(1) Compensation (2) ($) Awards ($)
- ------------------------------- -------------- ----------- --------- --------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Bernard R. Smedley 1999 246,980 0 23,540 (3) 0
Chairman, Chief Executive 1998B 229,167 0 12,294 0
Officer, President,
Chief Operating Officer 1998A 159,626 0 3,500 0
Jeffery B. Weinress 1999 139,850 0 24,593 (4) 0
Executive Vice President, 1998B 8,615 15,000 0 0
Chief Financial Officer 1998A 0 0 0 0
Jack D. Daily 1999 145,532 0 27,719 (5) 0
Senior Vice President 1998B 122,083 12,500 0 0
Government Programs 1998A 120,405 40,000 0 0
William K. Presley 1999
Senior Vice President, 1998B 124,014 13,350 0 0
Chief Technical Officer 1998A 138,718 2,503 3,500 0
Stuart P. Dawley 1999 128,624 0 11,306 (6) 0
Executive Vice President, 1998B 110,973 11,600 0 0
General Counsel 1998A 59,333 7,500 0 0
</TABLE>
(1) Because of the change in the Company's fiscal year in 1998, salary and
bonus shown for 1998B cover an 11-month period with a fiscal year ending
December 31, 1998; 1998A and 1997 cover a 12-month period with a fiscal
year ending January 31, 1998 and January 31, 1997, respectively.
(2) All directors received $3,500 per year in director's fees until February 8,
1998, when the Board of Directors passed a resolution limiting payment of
director's fees to outside, independent directors only, and concurrently
modified compensation to $1,500 per meeting.
(3) Includes certain benefits Mr. Smedley receives under his Employment
Agreement with the Company, consisting of (a) key-man life insurance policy
premiums of $3,876, (b) medical reimbursements of $5,843, and (c) 75% of
local yacht club membership dues, or $1,021. The total also includes (d)
Red Carpet Club membership $300, and (e) recognition of compensation
related to the gain on exercise of non-qualified stock options $12,500.
(4) Includes nondeductible moving expenses.
(5) Includes compensation related to the gain on exercise of non-qualified
stock options.
(6) Includes compensation related to the gain on exercise of non-qualified
stock options.
<PAGE>
OPTION GRANTS IN FISCAL YEAR ENDING DECEMBER 31, 1999
The following table sets forth information with respect to the stock
options granted to the Named Officers during the fiscal year ended December 31,
1999:
<TABLE>
<CAPTION>
Number of
Shares Potential Realizable Value
Underlying % of Total Exercise At Assumed Annual Rates Of
Options Options Price Expiration Stock Price Appreciation
Name Granted Granted ($/share) Date (1) For Option Term (2)
- ---- ------- ------- --------- -------- ----------------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Bernard R. Smedley 1,297 (3) .2% $4.2188 6/30/09 $3,441 $8,721
48,703 (3) 6.5% $4.2188 6/30/09 $129,218 $327,463
Jack D. Daily 20,000 2.7% $4.2188 6/30/09 $53,064 $134,474
William K. Presley 10,000 1.3% $4.2188 6/30/09 $26,531 $67,237
Stuart P. Dawley 20,000 2.7% $4.2188 6/30/09 (4) $53,064 $134,474
Jeffery B. Weinress 0
</TABLE>
(1) These options could expire earlier under certain circumstances.
(2) The potential realizable value of the options granted for each of the Named
Officers was calculated by multiplying those options by the excess of the
assumed market value of Common Stock if the market value were to increase
5% or 10% in each year of the option's 3-year term over the option price
shown. This calculation does not take into account any taxes or other
expenses which might be owed. Actual values, if any, that an executive may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised, so there is no assurance that
values realized will be at or near the values indicated in the table.
(3) These options were granted on June 30, 1999, from the Omnibus Stock Option
and Incentive Plan, and 48,703 were granted as incentive stock options
with the remaining 1,297 being granted as non-qualified stock options.
(4) These options will expire 90 days after April 21, 2000, the last date of
Mr. Dawley's employment with the Company.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information for each of the
Named Officers relating to the number of options exercised by each of them in
fiscal year ending December 31, 1999 and the value of such Named Officers'
unexercised options as of December 31, 1999:
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options at In-the-Money Options
December 31, 1999 (#) at December 31, 1999($)(1)
Shares ----------------------- --------------------------
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard R. Smedley 10,000 12,500 431,665 25,000 284,687 0
Jack D. Daily 15,000 27,719 99,076 0 89,230 0
William K. Presley 10,000 13,813 67,466 0 77,325 0
Stuart P. Dawley 6,300 11,306 105,811 0 97,431 0
Jeffery B. Weinress 0 0 66,666 38,334 62,499 35,938
</TABLE>
(1) Calculated by determining the difference between the exercise price of the
options and $3.9375, the closing price of the Company's Common Stock on
December 31, 1999, the last trading day of the fiscal year.
<PAGE>
EMPLOYMENT CONTRACTS
Employment Agreements
The Company entered into employment agreements, dated June 11, 1997,
with Messrs. Smedley, Daily, Presley and Dawley, and on December 17, 1998 with
Mr. Weinress. Under these employment agreements, Messrs. Smedley, Daily,
Presley, Dawley and Weinress are entitled to annual salaries of $250,000,
$131,000, $131,000, $96,000 and $140,000, respectively. In the event the Company
generates annual revenues equal to or greater than that specified in an approved
three-year plan, Mr. Smedley's annual salary is subject to increase by the
Company's Board of Directors, and the annual salaries of Messrs. Daily, Presley,
Oswald, Dawley and Weinress are subject to increase as determined by the
Company's management and approved by its Board of Directors.
In consideration for their executing employment agreements containing
restrictive covenants, the Company granted to Messrs. Smedley, Daily, Presley
and Dawley fully vested, non-qualified stock options to purchase 125,000,
50,000, 50,000, and 50,000 shares, respectively, of the Company's Common Stock,
at an exercise price of $2.25 per share and on the terms and conditions
described in their stock option agreements with the Company. In consideration of
Mr. Weinress executing an employment agreement containing restrictive covenants,
the Company granted 20,000 incentive stock options, 50% of which have vested and
became exercisable on January 1, 2000 and the remaining 50% will vest and become
exercisable on January 1, 2001.
The employment agreements, as amended to date, provide that the Company
shall grant additional options to purchase the Company's Common Stock to Messrs.
Smedley, Daily, Presley and Dawley based on the Company achieving certain
financial goals as outlined in the Annual Executive Incentive Plan approved by
the Board of Directors from year to year. Due to the fact that the corporate
gate did not open for fiscal year 1998(b), there were no bonuses paid to
executive management. Long-term incentive stock options were granted to keep the
management focused on increasing shareholder value. Messrs. Daily, Presley and
Dawley were granted 20,000, 10,000 and 20,000 fully vested incentive stock
options on June 30, 1999 at $4.2188 per share on the terms specified in their
stock option agreements with the Company.
Under Mr. Smedley's employment agreement, the Company provides at its
expense a life insurance policy in the amount of $600,000 with the beneficiary
designated by Mr. Smedley. Mr. Smedley also receives up to $10,000 of otherwise
nonreimbursable medical expenses incurred by Mr. Smedley or his wife, 75% of his
annual dues at a local yacht club, and reimbursement for all of his business
expenses associated with his employment by the Company.
The employment agreements entitle Messrs. Smedley, Daily, Presley,
Dawley and Weinress to participate in the insurance and other fringe benefit
plans generally available to the Company's other employees.
Each of Messrs. Smedley, Daily, Presley and Dawley's employment
agreements are for a term of three years from the commencement date, unless
extended by mutual written agreement of the Company and the employee in writing
at least three months prior to expiration of the term. Mr. Weinress' employment
agreement is for a term of two years from the commencement date, unless extended
by mutual written agreement of the Company and the employee in writing.
In the event of termination of employment without due cause, Messrs.
Smedley, Daily, Presley and Dawley are entitled to receive severance pay equal
to 18 months' salary if termination occurs during the first year of employment,
12 months' salary if termination occurs during the second year of employment, 6
months' salary if termination occurs during the third year of employment, and 3
months' salary if termination occurs after the third year of employment.
Severance payments are payable in equal installments in accordance with the
Company's normal pay periods. If any of Messrs. Smedley, Daily, Presley or
Dawley is terminated without due cause, the employee is also eligible to receive
group medical insurance benefits during any applicable severance payment period
plus any additional extension of the applicable noncompete period.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Daniel J. Stark, a member of the Board of Directors, resigned his
position with the Company effective July 17, 1998, and was compensated pursuant
to the terms of a Confidential Release and Waiver Agreement ("Release
Agreement") dated August 11, 1998. Pursuant to the Release Agreement, Mr. Stark
received a total of $91,520 of severance pay over twelve regularly scheduled
paydays commencing from August 31, 1998. Mr. Stark also received salary
continuation between July 17 and July 31, 1998, and accrued vacation and sick
leave allowances. In addition to numerous other covenants, promises and
restrictions for the benefit of the Company, Mr. Stark provided the Company with
certain unconditional releases and non-competition covenants. The Release
Agreement expired on August 11, 1999.
Don F. Riordan, Jr.'s, position with the Company was terminated
effective March 31, 2000. Mr. Riordan is a member of the Board of Directors.
Pursuant to the terms of his Employment Agreement dated June 11, 1997, Mr.
Riordan will receive six (6) months salary, based on his current salary of
$108,852 as of the effective date of termination, payable in equal installments
in accordance with the Company's normal pay periods. Mr. Riordan is also
entitled to receive group medical insurance, accrued vacation pay, plus, if
applicable, any additional extension of the applicable non-competition period.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year ending December 31, 1999, the Compensation Committee
consisted of Messrs. Collier, Comerford, Helm, Janowiak, Smedley and Usher. Mr.
Smedley is the Company's Chairman and Chief Executive Officer. There were no
committee interlocks with other companies in fiscal year ending December 31,
1999 within the meaning of the Securities and Exchange Commission's proxy rules.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
performance graph set forth herein shall not be incorporated by reference into
any such filings and shall not otherwise be deemed filed under such Acts. The
stock price performance shown in the Performance Graph is not necessarily
indicative of future stock price performance.
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for fiscal year ending December 31,
1999.
In mid-1997, the Company formed a Compensation Committee consisting of
a non-employee director and the CEO. Currently, the Compensation Committee
includes five independent directors (Mr. Collier, Mr. Usher, Mr. Helm, Mr.
Janowiak and Mr. Comerford) and the CEO (Mr. Smedley). The Company's
compensation plans, as a whole, are reviewed on a regular basis to ensure
competitiveness. The Compensation Committee implemented and approved employment
agreements for management and established stock option plans to reward employees
for past performance. The CEO voted on the compensation plans for employees and
abstained from voting on matters relating to his compensation.
What is the Company's philosophy of executive officer compensation?
The Company's executive compensation plans are designed to attract, retain,
motivate and appropriately reward individuals who are responsible for the
Company's long-term profitability, growth and return to stockholders.
Compensation for executive officers consists of:
- - Base salary;
- - Annual incentive award based upon performance; and
- - Long-term incentive awards, typically in the form of stock options.
The Compensation Committee believes that this three-part approach best serves
the interests of the Company and its stockholders. As a result, much of the
executive officers' compensation depends on the Company's financial performance.
This enables the Company to meet the requirements of the highly competitive
environment in which the Company operates while ensuring that executive officers
are compensated in a way that advances both the short- and long-term interests
of stockholders. Under this approach, compensation for these officers involves a
significant proportion of pay that is "at risk" - namely, the annual bonus and
stock options. The variable annual bonus permits individual performance to be
recognized on an annual basis, and is based, in significant part, on an
evaluation of the contribution made by the officer to Company performance.
(Bonus arrangements applicable to the Chief Executive Officer are described
below.) Stock options relate a significant portion of long-term remuneration
directly to stock price appreciation realized by all of the Company's
stockholders.
Base Salary. The Company targets executive base salary ranges at the 50th to
75th percentile of relevant market data. The Chief Executive Officer annually
establishes recommendations for each executive officer's base salary, based on
an evaluation of the executive officer's performance and contribution for the
previous year and on competitive pay practices. The Chief Executive Officer
provides his/her recommendations to the Compensation Committee, and then
presents them to the Board of Directors for approval.
Annual Bonus. Each year, in accordance with the Company's Executive Annual
Incentive Plan, the Company's executive officers are eligible to receive an
incentive bonus. The bonus is based on the Company's performance as measured
against corporate financial and individual performance goals. The Chief
Executive Officer provides his/her recommendations to the Compensation
Committee, and then presents them to the Board of Directors for approval. To
encourage stock ownership, the bonus is paid in a combination of cash and stock.
<PAGE>
For the fiscal year ending December 31, 1999, no bonuses were paid to any
executive officers pursuant to the executive incentive compensation plan, as
corporate financial goals were not met.
Stock Options. Stock option grants may be made to executive officers upon
initial employment, upon promotion to a new, higher level position that entails
increased responsibility and accountability, in connection with the execution of
a new employment agreement, in connection with the achievement of certain
company-wide performance or earnings goals, and/or when all previously granted
stock options have either fully vested or are within twelve months of full
vesting. The Chief Executive Officer recommends the number of options to be
granted to executive officers, within a range associated with the individual's
salary level, and presents this to the Compensation Committee for review and
subsequent presentation to the Board of Directors for approval.
How is the Company's Chief Executive Officer compensated?
Under his three-year employment agreement dated June 11, 1997, Mr. Smedley's
base salary is $250,000. Mr. Smedley's base salary may be increased by the
Company's Board of Directors. On June 30, 1999, the Compensation Committee
recommended to the Board of Directors the grant of 50,000 options at an exercise
price of $4.2188 per share based upon the review of CEOs in peer group
companies, the William M. Mercer study, and other inputs relative to aligning
the CEO's long-term interests with the shareholders of the Company. The vesting
schedule is as follows: 25,000 on June 30, 1999, 12,500 on June 30, 2000, and
the remaining 12,500 on June 30, 2001. Under Section 162(m) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder,
deductions for employee remuneration in excess of $1 million which is not
performance-based are disallowed for publicly traded companies. Since levels of
compensation paid by the Company are expected to be significantly below $1
million, the Compensation Committee has determined that it is unnecessary at
this time to seek to qualify the components of its compensation program as
performance-based compensation within the meaning of Section 162(m).
COMPENSATION COMMITTEE
Arthur H. Collier (Co-Chair)
William R. Usher (Co-Chair)
Gordon J. Comerford
Scott B. Helm
Robert M. Janowiak
Bernard R. Smedley
<PAGE>
PERFORMANCE GRAPH
[OBJECT OMITTED]
<PAGE>
Exigent International, Inc.
Annual Meeting of Shareholders
June 23, 2000
PROXY CARD
The undersigned stockholder votes all of the Common Shares of Exigent
International, Inc. held of record in the name of the undersigned at the close
of business on April 21, 2000 as indicated below.
[x] Please mark votes as in this example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSALS.
1. Elect the following as Directors of the Company:
Class I: For a term expiring in 2003
Gordon J. Comerford
Stephen S. Wolff
Joseph S. Kraemer
[ ] FOR all nominees (except those withheld below)
[ ] WITHHOLD all nominees
[ ] WITHHOLD authority to vote for any individual nominee. Write
names of nominee(s) below:
-----------------------
2. Ratification of the selection of the firm of Ernst & Young LLP as
independent auditors of the Company for its fiscal year ending December 31,
2000:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
3. The transaction of such other business as may properly come before the
Annual Meeting or any adjournment thereof.
SIGNED:
--------------------------
PRINTED NAME:
--------------------------
DATED:
--------------------------
Exhibit A
Exigent International, Inc.
Audit Committee Charter
ARTICLE I.
PURPOSE
The audit committee assists the Board of Directors in fulfilling its oversight
responsibilities. The Audit Committee's primary responsibilities are to serve as
an independent and objective party to:
o Review the corporation's auditing, accounting, and financial reporting
processes;
o Monitor the corporation's internal controls regarding accounting, finance,
legal compliance, and ethics;
o Review and evaluate the corporation's outside auditors and internal
auditing function; and
o Provide an open avenue of communication among the outside auditors,
financial and senior management, the internal auditing function, and the
Board of Directors.
Consistent with these responsibilities, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the corporation's
policies, procedures, and practices at all levels. The Audit Committee will
primarily fulfill these responsibilities by carrying out the activities
enumerated in Article V of this charter.
ARTICLE II.
RELATIONSHIP WITH THE OUTSIDE AUDITORS
The corporation's outside auditor is ultimately responsible to the Board of
Directors and the Audit Committee. Subject to an affirming vote by a plurality
of stockholders. The Board of Directors has the ultimate authority and
responsibility to select, evaluate, and replace the outside auditors.
Management is responsible for preparing the corporation's financial statements.
The corporation's outside auditors are responsible for auditing the financial
statements. The activities of the committee are in no way designed to supersede
or alter these traditional responsibilities.
ARTICLE III.
COMPOSITION
The Audit Committee shall be comprised of three or more directors as determined
by the Board. The Board of Directors shall also designate a chairperson of the
committee. Each member of the Audit Committee shall be an independent director
who is free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgement from management
and the corporation. Notwithstanding the foregoing, in cases where the Audit
Committee reasonably believes it to be in the best interests of the Company, a
non-independent director may be nominated who is financially literate provided
i) a majority of Audit Committee members are independent, and ii) the
Chairperson is independent. The members of the Audit Committee shall satisfy at
all times the requirements for audit committee membership of any exchange on
which the corporation's securities are listed or of any applicable law.
Relationships that would disqualify a director from serving on the audit
committee include:
o Employment by the corporation or its affiliates during the current year of
any of the past three years;
<PAGE>
o Being an immediate family member of a person who is or has been in the past
three years an executive officer of the corporation or its affiliates; or
o Being an executive of a company if any executive of the corporation sits on
the compensation committee of such other company.
In addition, each member of the Audit Committee shall be or become within a
reasonable period of time after his or her appointment to the committee,
financially literate. At least one member of the Audit Committee shall have
accounting or related financial management expertise. The Board of Directors
shall determine whether a member of the Audit Committee is financially literate
or has accounting or related financial management expertise. Committee members
may enhance their financial literacy by participating in educational programs.
ARTICLE IV.
MEETINGS
The Audit Committee shall meet regularly and as circumstances dictate. Regular
meetings of the Audit Committee may be held without notice at such time and at
such place as shall from time to time be determined by the chairperson of the
Audit Committee, the president, or the secretary of the corporation. Special
meetings of the Audit Committee may be called by or at the request of any member
of the Audit Committee, any of the corporation's executive officers, the
secretary, the director of internal auditing or the outside auditors, in each
case on at least twenty-four hours notice to each member.
If the Board of Directors, management, the director of internal auditing
function, or outside auditors desire to discuss matters in private, the Audit
Committee shall meet in private with such person or group.
A majority of the Audit Committee members shall constitute a quorum for the
transaction of the committee's business. Unless otherwise required by applicable
law, the corporation's charter or bylaws or the Board of Directors, the Audit
Committee shall act upon the vote or consent of a majority of its members at a
duly called meeting at which a quorum is present. Any action of the audit
committee may be taken by a written instrument signed by all of the members of
the Audit Committee. Meetings of the Audit Committee may be held at such place
or places as the Audit Committee shall determine or as may be specified or fixed
in the respective notices or waivers of a meeting. Members of the Audit
Committee may participate in Audit Committee proceedings by means of conference
telephone or similar communications equipment by means of which all persons
participating in the proceedings can hear each other, or such participation
shall constitute presence in person at such proceedings.
ARTICLE V.
SPECIFIC ACTIVITIES
Without limiting the Audit Committee's authority, the Audit Committee shall
carry out the following specific activities.
Section 5.1. Review of Documents and Reports
a. Review and reassess this charter at least annually.
b. Review the corporation's annual report on Form 10-K, including the
corporation's year end financial statements, before its release and
consider whether the information is adequate and consistent with members'
knowledge about the corporation and its operations.
c. Review the regular internal reports to management prepared by the internal
auditing function and management's response.
<PAGE>
d. Review the corporation's quarterly reports on Form 10-Q prior to their
filing or prior to the release of earnings and consider whether the
information is adequate and consistent with members' knowledge about the
corporation and its operations. The chairperson of the committee may
represent the entire committee for purposes of this review.
Section 5.2. Outside Auditors
a. Recommend to the Board of Directors the selection of the outside auditors,
considering independence and effectiveness and approve the fees and other
compensation to be paid to the outside auditors. On an annual basis, the
committee shall require the outside auditors to provide the committee with
a written statement disclosing all relationships between the corporation
and the outside auditors. The committee should review and discuss these
relationships with the outside auditors to determine the auditors'
independence. The committee shall take or recommend appropriate action to
ensure the independence of the outside auditors.
b. Review with the outside auditors the scope, approach, and results of the
annual auditing engagement.
c. Ensure that the outside auditors inform the committee of any fraud, illegal
acts, or deficiencies in internal control of which they become aware and
communicate certain required matters to the committee.
d. Review with the outside auditors their performance and approve any proposed
discharge of the outside auditors when circumstances warrant.
e. Direct and supervise special audit inquiries by the outside auditors as the
Board of Directors of the committee may request.
Section 5.3. Financial Reporting Processes
a. Review significant accounting and reporting issues, including recent
professional and regulatory pronouncements or proposed pronouncements, and
understand their impact on the corporation's financial statements.
b. In consultation with the outside auditors and the internal auditors, review
the integrity of the organization's financial reporting processes, both
internal and external.
c. Consider the outside auditors' judgments about the quality and
appropriateness of the corporation's accounting principles as applied in
its financial reporting.
d. Consider and approve, if appropriate, major changes to the corporation's
auditing and accounting principles and practices as suggested by the
outside auditors, management, or the internal auditing function.
Section 5.4. Process Improvement
a. Ensure that significant findings and recommendations made by the internal
and outside auditors are received and discussed on a timely basis.
b. Review any significant disagreement among management and the outside
auditors or the internal auditing function in connection with the
preparation of the financial statements.
c. Review with the outside auditors, the internal auditing function, and
management the extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have been
implemented. This review should be conducted at an appropriate time
subsequent to implementation of changes or improvements, as decided by the
committee.
<PAGE>
Section 5.5. Ethical and Legal Compliance
a. Establish, review, and update periodically a code of ethical conduct for
the corporation and ensure that management has established a system to
enforce this code.
b. Review management's monitoring of the corporations compliance with the
organization's code of ethical conduct, and ensure that management has the
proper review system in place to ensure that corporation's financial
statements, reports, and other financial information disseminated to
governmental entities and the public satisfy legal requirements.
c. Review activities, organizational structure, and qualifications of the
internal audit function.
d. Review, with the organization's counsel, legal compliance matters.
e. Review with the organization's counsel, any legal matter that could have a
significant impact on the organization's financial statements.
Section 5.6. Reporting Responsibilities
a. Regularly update the Board of Directors about committee activities and make
appropriate recommendations.
ARTICLE VI.
MISCELLANEOUS
The Audit Committee may perform any other activities consistent with this
charter, the corporation's charter and bylaws, and governing law as the
committee or the board deems necessary or appropriate.
<PAGE>
OTHER MATTERS
The Board knows of no other matter to be presented at the Annual
Meeting. If any other matter should be presented at the Annual Meeting upon
which a vote properly may be taken, shares represented by all proxies received
by the Board will be voted with respect thereto in accordance with the judgment
of the persons named as attorneys and proxies in the proxies.
By Order of the Board of Directors
/s/ Patricia A. Frank
Patricia A. Frank
Secretary
Dated: May 8, 2000
