<PAGE> 1
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. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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-11(c) or Rule 14a-12
</TABLE>
Firearms Training Systems, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
(FATS LOGO)
FIREARMS TRAINING SYSTEMS, INC.
7340 MCGINNIS FERRY ROAD
SUWANEE, GA 30024
November 9, 2000
To Our Stockholders:
On behalf of the Board of Directors and management of Firearms Training
Systems, Inc., I cordially invite you to the Annual Meeting of Stockholders to
be held on December 15, 2000, at 10:00 a.m., at Firearms Training Systems,
Inc.'s Headquarters, 7340 McGinnis Ferry Road, Suwanee, GA 30024.
As you know, significant changes in the Company occurred on August 25, 2000
when the Company, its lenders and its largest shareholders (a group of
Partnerships affiliated with Centre Partners Management LLC) completed a
restructuring transaction that resulted in a change of control of the Company.
As a result of that transaction, five of our existing directors (including three
associated with the Centre Partnerships) resigned; the Board of Directors
reduced the size of the Board from nine to seven directors and elected three new
directors to the existing vacancies in the Board. You can read about our new
directors, Ronald Whitaker, Ronavan Mohling and Randy Sugarman, in the attached
Proxy Statement.
At the Annual Meeting, stockholders will be asked to elect three directors
of the Company, two of whom are currently directors of the Company and one of
whom is new to the Company and to authorize an increase in the number of shares
available for issuance under our Stock Option Plan from 2,490,000 to 7,500,000
shares. Information about these and certain other matters is contained in the
accompanying Proxy Statement.
A copy of the Company's Fiscal Year 2000 Annual Report to Stockholders,
which contains information about the restructure, financial statements and other
important information about the Company's business, is also enclosed.
It is important that your shares of stock are represented at the meeting,
regardless of the number of shares you hold. You are encouraged to specify your
voting preferences by marking and dating the enclosed proxy card. However, if
you wish to vote for re-electing the directors and/or approving the increase in
the shares available for issuance under our Stock Option Plan, all you need to
do is sign and date the proxy card.
Please complete and return the proxy card in the enclosed envelope whether
or not you plan to attend the meeting. If you do attend and wish to vote in
person, you may revoke your proxy at that time.
We hope you are able to attend, and look forward to seeing you.
Sincerely,
/s/ ROBERT F. MECREDY
Robert F. Mecredy
CHIEF EXECUTIVE OFFICER AND PRESIDENT
<PAGE> 3
FIREARMS TRAINING SYSTEMS, INC.
7340 MCGINNIS FERRY ROAD
SUWANEE, GA 30024
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 15, 2000
To the Stockholders of
Firearms Training Systems, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Firearms
Training Systems, Inc. will be held at 10:00 a.m. on Friday, December 15, 2000
at Firearms Training Systems, Inc.'s Headquarters, 7340 McGinnis Ferry Road,
Suwanee, GA 30024, for the following purposes:
1. To elect three of the seven directors constituting the Board of
Directors to serve for three years and until their successors are elected and
qualified,
2. To authorize an increase in the number of shares available for issuance
under our Stock Option Plan from 2,490,000 to 7,500,000 shares, and
3. Such other matters as may properly come before the meeting and any
adjournment or postponement thereof.
Only stockholders of record on October 17, 2000, are entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ John A. Morelli
John A. Morelli
SECRETARY
Suwanee, Georgia
November 9, 2000
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE FILL IN,
DATE, SIGN, AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED BUSINESS
REPLY ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE PRESENT AT
THE ANNUAL MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.
<PAGE> 4
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 2000
This Proxy Statement is furnished by Firearms Training Systems, Inc.
("FATS" or the "Company") to stockholders in connection with the solicitation of
proxies by the Board of Directors of FATS for use at FATS' 2000 Annual Meeting
of Stockholders ("Annual Meeting") to be held on Friday, December 15, 2000,
including any postponement, adjournment, or adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting. The Company's
principal offices are located at 7340 McGinnis Ferry Road, Suwanee, Georgia
30024. The cost of soliciting proxies will be borne by the Company. The
directors, officers and employees of the Company will solicit proxies through
the use of the mails. Management intends to mail this Proxy Statement and the
accompanying form of proxy to stockholders on or about November 13, 2000.
Only stockholders of record at the close of business on October 17, 2000
(the "Record Date") are entitled to notice of and to vote in person or by proxy
at the Annual Meeting. As of the Record Date, there were 69,912,220 shares of
Class A Voting Common Stock, $.000006 par value per share ("Common Stock") of
FATS outstanding and entitled to vote at the Annual Meeting. The presence of a
majority of such shares is required, in person or by proxy, to constitute a
quorum for the conduct of business at the Annual Meeting. Each outstanding share
of Common Stock is entitled to one vote on any matter submitted for vote by the
stockholders. Proxies submitted which contain abstentions or broker non-votes
are included in determining whether a quorum is present, but will not affect the
outcome of the vote. Unless otherwise indicated on a proxy, all duly executed
proxies granted by the holders of the Common Stock will be voted individually at
the Annual Meeting for the election of each nominee. Each nominee for the Board
of Directors has indicated that he will serve if elected, but if the situation
should arise that any nominee is no longer able or willing to serve, the proxy
may be voted for the election of such other person as may be designated by the
Board of Directors.
Directors are elected by a plurality of the votes cast by the holders of
shares of Common Stock entitled to vote for the election of directors at a
meeting at which a quorum is present. Each other question shall, unless
otherwise provided by law, the Certificate of Incorporation or the By-laws, be
decided by the vote of the holders of stock having a majority of votes which
could be cast by the holders of all stock entitled to vote on such question
which are present in person or by proxy at the meeting.
Proxies in the accompanying form, duly executed and returned to the
management of the Company, and not revoked, will be voted at the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the stockholder
at any time prior to the voting of the proxy by delivery of a subsequently dated
proxy, by written notification to the Secretary of the Company, or by personally
withdrawing the proxy at the Annual Meeting and voting in person.
Proxies that are executed but which do not contain any specific
instructions will be voted for the election of all the nominees for directors
specified herein and in the discretion of the persons appointed as proxies on
any other matter that may properly come before the Annual Meeting or any
postponement, adjournment or adjournments thereof, including any vote to
postpone or adjourn the Annual Meeting.
A copy of the Company's Annual Report on Form 10-K405/A is being furnished
herewith to each shareholder of record as of the close of business on October
17, 2000. Additional copies of the Company's Annual Report on Form 10-K405/A for
the fiscal year ended March 31, 2000 will be provided free of charge upon
written request to:
FIREARMS TRAINING SYSTEMS, INC.
ATTN: INVESTORS RELATIONS DEPARTMENT
7340 McGINNIS FERRY ROAD
SUWANEE, GEORGIA 30024
If the person requesting the Form 10-K405/A was not a stockholder of record
on October 17, 2000, the request must include a representation that the person
was a beneficial owner of Common Stock on that date. Copies of any exhibits to
the Form 10-K405/A will also be furnished on request and upon payment of the
Company's expenses in furnishing the exhibits.
<PAGE> 5
OWNERSHIP OF STOCK BY DIRECTORS, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS
RESTRUCTURE TRANSACTION
On August 25, 2000, the Company, its lenders and its largest shareholders
(a group of Partnerships affiliated with Centre Partners Management LLC (the
"Centre Partnerships") completed a restructuring transaction with retroactive
effect to April 1, 2000 which significantly reduced the Company's outstanding
indebtedness.
In connection with the restructuring, the Company and holders of its
outstanding bank debt consisting of $79,000,000 aggregate principal amount with
and accrued interest thereon and the holders of its outstanding 20,284 shares of
Series A Preferred stock exchanged all such debt and preferred stock for the
following:
- A new senior secured revolving credit line in the amount of approximately
$882,000 to support existing letters of credit and future working capital
requirements.
- $12 million of senior secured debt with cash interest payable at prime
plus 1% and no principal payments due until maturity in 2003, with a one
year extension at the Company's option.
- $23 million of junior secured debt with 10% interest payable in
additional notes or cash, depending on the Company's profitability, and
no principal payments until maturity in 2003, with a one year extension
at the Company's option.
- Approximately $21 million of new preferred stock with a 10% cumulative
dividend rate payable in additional shares of preferred stock. This new
preferred stock must be redeemed by the Company when junior secured debt
is repaid.
- 48,695,212 additional shares of Class A Voting Common Stock (the "Class A
Common Stock") valued at $0.50 per share based upon the twenty trading
days ending April 27, 2000. As a result of this share issuance, the
Company's senior lenders have the power to vote a majority of the
Company's voting common stock. See Change of Control.
- Warrants to purchase 2,000,000 shares of Class A Common Stock with an
exercise price of $0.25 issued to the Centre Partnerships, expiring March
31, 2005.
- Amended warrants already held by the Centre Partnerships and certain
co-investors to purchase 3,246,164 shares of Class A Common stock at
$1.03 per share by providing for payment of the exercise price in cash
rather than the Series A Preferred Stock, extending the expiration date
to March 31, 2005 and making a slight adjustment in the exercise price to
$1.00 per share.
2
<PAGE> 6
CHANGE OF CONTROL
In connection with the Restructure, 40,235,548 shares of Class A Common
Stock constituting 57.55% of the Class A Common Stock as of October 17, 2000
were issued to the Lenders under the Company's senior credit agreement (the
"Senior Credit Agreement"), as partial consideration of the exchange by the
Lenders of the Company's senior indebtedness at March 31, 2000 as follows:
<TABLE>
<CAPTION>
(1) CLASS A VOTING (3) NUMBER OF SHARES (4) PERCENT OF CLASS AS
COMMON STOCK (2) NAME OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED OF OCTOBER 17, 2000
------------------ ------------------------------- -------------------- -----------------------
<S> <C> <C> <C>
Class A Voting Bank of America, N.A. 12,307,203 shares 17.60%
Common Stock
Class A Voting BHF (USA) Capital Corp. 7,100,391 shares 10.16%
Common Stock
Class A Voting U.S. Bank National Association 4,260,375 shares 6.09%
Common Stock
Class A Voting First Source Financial LLP 9,467,188 shares 13.54%
Common Stock
Class A Voting Centre Partnerships(2) 7,100,391 shares 10.16%
Common Stock
</TABLE>
------------------------------------
(1) Form 13-D's filed by the first four listed entities below on September 6,
2000 indicate that the following additional entities affiliated with the
respective named party also claim beneficial ownership of such entity's
shares: (a) Bank of America, N.A.: Bank of America Corporation and NB
Holdings Corporation; (b) BHF (USA) Capital Corporation: ING Groep NV, BHF
Bank Aktiengesellschaft, and BHF (USA) Holdings, Inc.; and (c) First Source
Financial LLP: Dominion Resources, Inc., Dominion Capital, Inc., Virginia
Financial Ventures, Inc., and N.H. Capital, Inc.
(2) The foregoing shares are registered in the names of various of the Centre
Partnerships and are included in their total beneficial share ownership set
forth under the caption Ownership of Stock by Directors, Officers and
Principal Stockholders below. The Centre Partnerships received the foregoing
shares as a result of the acquisition by such Partnerships of the senior
indebtedness held by one member of the original Lender group.
All of the foregoing shares are held pursuant to a Voting and Stock
Restriction Agreement dated as of April 1, 2000 (the "Voting Agreement") and
entered into on August 25, 2000 whereby the Lenders agreed to vote such shares
as determined by Lenders holding a majority of the commitments to provide
revolving credit advances (the "Required Lenders") and granted an irrevocable
proxy to Bank of America, N.A., the Agent, to vote as so directed. In addition,
the Centre Partnerships agreed that three of the four Directors of the Company
affiliated with the Centre Partnerships would resign. The Required Lenders
agreed for so long as the Voting Agreement was in effect to vote their shares
for election of one qualified person affiliated with the Centre Partnerships
nominated by the Centre Partnerships to the Board of Directors such that one
such person was serving on the Board at all times. The Centre Partnerships also
agreed to cooperate with the Lenders to identify and urge the selection of
mutually acceptable, qualified candidates to constitute a majority of the
current Board of Directors to serve in the interim before the next election of
Directors. In addition, all parties agreed to cooperate to identify and urge the
selection of a mutually acceptable, qualified candidate to serve as an active
Chairman of the Board of Directors and to give due consideration in that regard
to selection of a representative of the management consultant required to be
retained by the Company pursuant to the Senior Credit Agreement.
Pursuant to the Voting Agreement, on October 17, 2000, three of the four
Directors of the Company affiliated with the Centre Partnerships (Lester
Pollack, Jonathan H. Kagan and Paul J. Zepf) resigned as well as two other
directors (Gilbert F. Decker and Frank S. Jones). After reducing the size of the
Board of Directors from nine directors to seven directors, the remaining
directors elected Ronald Whitaker, Ronald Mohling and Randy Sugarman to fill the
vacancies created by such resignations. Ronald Whitaker was elected
3
<PAGE> 7
to fill the directorship term expiring at the 2000 Annual Meeting of Directors
and has been included in the nominees for this meeting, Ronald Mohling was
elected to the Class of directors whose term will expire in 2001 and Randy
Sugarman was elected to the Class of directors whose term will expire in 2002.
Randy Sugarman was elected as Chairman of the Board of Directors. In addition,
the firm of Sugarman & Company LLP was retained as consultants to the Company.
4
<PAGE> 8
OWNERSHIP OF STOCK BY DIRECTORS, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Class A Voting Common Stock ("Common Stock") as of October 17, 2000
by: (i) each person (or group of affiliated persons) who is known by the Company
to own beneficially more than 5% of the outstanding shares of Common Stock; (ii)
each of the Company's directors; (iii) the Company's chief executive officer and
each of the other employees included in the Summary Compensation Table; and (iv)
the Company's current directors and officers as a group. Except as indicated in
the footnotes to the table, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock indicated as being
beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(6) %
------------------------ ------------ ----
<S> <C> <C>
Bank of America Corporation(1) 12,757,426 18.3%
ING Groep NV(2) 7,100,391 10.2%
Dominion Resources, Inc. c/o First Source Financial, LLP(3) 9,467,188 13.5%
U.S. Bank National Association (First Bank, N.A.)(4) 4,260,375 6.1%
Centre Capital Investors II, LP(5) 21,468,963 29.2%
Centre Partners Coinvestment LP(5) 3,102,072 4.4%
Centre Capital Offshore Investors II, LP(5) 4,254,330 6.0%
Centre Capital Tax-Exempt(5) 2,399,949 3.4%
Centre Partners Management LLC(7) 28,229,942 37.8%
Centre Partners II LLC(8) 31,853,626 42.4%
Peter A. Marino -- RETIRED(9) 370,457 0.5%
Juan C.G. de Ledebur -- RESIGNED(9) 58,663 *
Robert F. Mecredy(9) 136,530 *
Caryl G. Marsh -- RESIGNED(9) 41,099 *
John A. Morelli(9) 51,492 *
William J. Bratton 20,767 *
Craig I. Fields 53,534 *
Scott Perekslis(10) 53,534 *
All current directors and executive officers as a group 786,076 1.1%
</TABLE>
------------------------------------
(1) The address of Bank of America Corporation is 100 North Tryon Street,
Charlotte, North Carolina. Bank of America is the parent of NB Holdings
Corporation, which is the parent company of Bank of America, N.A.
Information regarding ownership of Common Stock included herein is in
reliance on information set forth in a Form 3 filed on September 6, 2000
with the Securities Exchange Commission (the "Commission"), reflecting
ownership as of August 25, 2000, as well as information set forth in
Schedule 13-D filed on September 6, 2000.
(2) The address of ING Groep NV is Stravinskylaan 2631, 1077 ZZ Amsterdam, The
Netherlands. It is the parent company of BHF-Bank Aktiengesellschaft, BHF
(USA) Holdings, Inc. and BHF (USA) Capital Corporation is 590 Madison
Avenue, New York City, New York. Information regarding ownership of Common
Stock included herein is in reliance on information set forth in a Form 3
filed on September 6, 2000 with the Commission, reflecting ownership as of
August 25, 2000, as well as information set forth in Schedule 13-D filed
on September 6, 2000.
5
<PAGE> 9
(3) The address of Dominion Resources, Inc. is 120 Tredegear Street, Richmond,
Virginia 23219. Dominion Resources is a holding company and its
subsidiaries include Dominion Capital, Inc., whose subsidiaries include
Virginia Financial Ventures, Inc. and N.H. Capital, Inc., the general
partners of First Source Financial, LLP. Information regarding ownership
of Common Stock included herein is in reliance on information set forth in
a Schedule 13-D filed on September 6, 2000 with the Commission, reflecting
ownership as of August 25, 2000.
(4) The address of U.S. Bank National Association is U.S. Bank Place, 601
Second Avenue South, Minneapolis, Minnesota. Information regarding
ownership of Common Stock included herein in reliance on information set
forth in a Schedule 13-D filed on September 6, 2000 with the Commission,
reflecting ownership as of August 25, 2000.
(5) The address of Centre Capital Investors II, L.P., Centre Partners
Coinvestment, L.P., Centre Capital Tax-exempt Investors II, L.P. (together
with Centre Capital Offshore Investors II, L.P., the "Centre
Partnerships"), Centre Partners Management LLC ("Centre Management") and
Centre Partners II, LLC (together with Centre Capital Offshore Investors
II, L.P., the "Centre Partnerships") is 30 Rockefeller Plaza, New York,
New York 10020; and the address of Centre Capital Offshore Investors II,
L.P. is c/o Reid Management, Cedar House, 41 Cedar Avenue, Box HM 1179,
Hamilton, Bermuda.
(6) Based on 69,912,220 shares of Common Stock outstanding on October 17,
2000. Calculation of percentage of beneficial ownership assumes the
exercise of all options exercisable within 60 days of October 17, 2000
only by the respective named shareholder.
(7) Information regarding ownership of Common Stock by the Centre Partnerships
is included herein in reliance on information provided by Centre
Management. Pursuant to a Management Agreement, Centre Capital Investors
II, L.P., Centre Partners Offshore Investors II, L.P. and Centre Capital
Tax-exempt Investors II, L.P. have delegated voting and investment power
with respect to the Common Stock beneficially owned by them to Centre
Management; accordingly, the aggregate security ownership of those Centre
Partnerships is reflected for Centre Management as well.
(8) As general partner of Centre Partners Coinvestment, L.P. and general
partner of Centre Capital Investors II, L.P., Centre Partners Offshore
Investors II, L.P. and Centre Capital Tax-exempt Investors II, L.P.,
Centre Partners II LLC ("Centre Partners") is reflected as beneficially
owning the Common Stock owned by those Centre Partnerships. In addition,
pursuant to certain co-investment arrangements, Centre Partners has been
delegated voting and investment power with respect to an additional
571,181 shares of Common Stock and 57,131 warrants. In addition, included
within the shares of Common are 5,246,164 warrants currently exercisable
into shares of Common Stock.
(9) Messrs. Marino, Marsh, Mecredy and Morelli's beneficial ownership includes
exercisable options for 272,185 shares, 42,099 shares, 100,125 shares and
50,187 shares, respectively. In addition, Messrs. de Ledebur, Mecredy and
Morelli's beneficial ownership includes 6,044 shares, 7,076 shares and
4,877 shares, respectively held in a 401(k) plan for the benefit of each
person, over which each such person has been delegated voting and
investment power.
(10) Includes 9,005 shares of Common Stock held in a 401(k) plan for the
benefit of Mr. Perekslis over which Mr. Perekslis has delegated voting and
investment authority to Centre Partners pursuant to certain co-investment
arrangements.
6
<PAGE> 10
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
AND INFORMATION REGARDING DIRECTORS
(ITEM NUMBER 1 ON THE PROXY CARD)
The by-laws of FATS provide that the Board of Directors shall consist of
not less than one director, with the exact number being set from time to time by
the Board. The Restated Certificate of Incorporation of the Company divides the
Board of Directors into three classes, as nearly equal in number as possible,
two of which are elected for a three year term. On October 17, 2000, the Board
of Directors reduced the total number of directors from nine to seven, and
accordingly reduced the number of directors comprising Classes II and III to
two. Class I directors, consisting of the three nominees shown below, two of
whom are currently serving as a director of the Company, will stand for election
at the 2000 Annual Meeting for three-year terms expiring at the Annual Meeting
of Stockholders in 2003 or until their successors are elected and qualified. The
terms of the other four directors listed below will continue as indicated. The
Board currently consists of seven directors.
<TABLE>
<S> <C>
ROBERT F. MECREDY PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
FIREARMS TRAINING SYSTEMS, INC.
</TABLE>
Robert F. Mecredy, age 54, has served as President, Chief Executive
Officer, and Director since October 1,1999. Prior thereto, Mr. Mecredy served as
Executive Vice President from July 18, 1997 to September 30, 1999, as Vice
President, Domestic from 1996 to 1997, Director of the Company from 1993 to
1996, as Director of Domestic Sales and Marketing from 1994 to 1996 and as
Director of U.S. Military Marketing from 1990 to 1994. Before joining the
Company, Mr. Mecredy served as Director of Army and Marine Corps
Marketing -- Washington Operations at Raytheon Corporation from 1988 to 1990.
Mr. Mecredy served as a noncommissioned and commissioned officer of infantry and
aviation in the U.S. Army for 20 years, retiring in 1986 with the rank of
lieutenant colonel.
<TABLE>
<S> <C>
SCOTT PEREKSLIS DIRECTOR
CENTRE PARTNERS MANAGEMENT LLC
</TABLE>
Scott Perekslis, age 32, has served as a Director of the Company since July
31, 1996. Mr. Perekslis also served as a Vice President of the Company from July
31, 1996 through July 18, 1997. Since 1995, Mr. Perekslis has been a Principal
of Centre Partners Management LLC and a Principal of Corporate Advisors, L.P.
From 1991 to 1995, Mr. Perekslis was an Associate of Corporate Advisors, L.P.
Mr. Perekslis also serves as a director of Hyco International, Inc. and KIK
Corporation Holdings, Inc. Mr. Perekslis is a member of the Compensation
Committee of the Board of Directors.
<TABLE>
<S> <C>
RONALD C. WHITAKER PRESIDENT AND CEO
STRATEGIC DISTRIBUTION
</TABLE>
Ron Whitaker, age 53, was elected as a Director of the Company in October
2000. Mr. Whitaker has been with Strategic Distribution Inc. since September
2000. Prior to joining SDI, he was an Operating Partner with Pegasus Investors
(a private equity funds group) from 1999 to 2000. Previous operational positions
were President and CEO of Johnson Worldwide Associates (a sporting goods
manufacturer) from 1996 to 1999, President and CEO of EWI, Inc. (an automotive
tier 1 supplier) from 1995 to 1996, Chairman, President and CEO of Colt's
Manufacturing Company (a designer and producer of military firearms) from 1992
to 1995, and President & CEO of Wheelabrator Corporation (an industrial
equipment manufacturer). In addition to Strategic Distribution Inc., he serves
on the Board of Directors of Weirton Steel Corporation, Precision Navigation,
Inc., and Code-Alarm Inc. as well as a member of the Board of Trustees for The
College of Wooster. Mr. Whitaker is a member of the Audit Committee of the Board
of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY VOTE "FOR" THE PROPOSAL TO ELECT ROBERT F. MECREDY, SCOTT PEREKSLIS, AND
RONALD WHITAKER AS CLASS I DIRECTORS OF THE COMPANY TO HOLD OFFICE UNTIL THE
2003 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND
QUALIFIED.
7
<PAGE> 11
Class II directors were elected in fiscal 1999 and their present terms
expire with the Annual Meeting of Stockholders in 2001. Jonathan H. Kagan and
Frank S. Jones resigned effective October 17, 2000. The Board of Directors of
the Company selected Ronald Mohling to serve until the Annual Meeting of
Shareholders in 2001.
<TABLE>
<S> <C>
WILLIAM J. BRATTON CHIEF OPERATING OFFICER AND PRESIDENT
THE BRATTON GROUP
</TABLE>
William J. Bratton, age 53, has served as a Director of the Company since
September 17, 1996. Mr. Bratton has been the President and Chief Operating
Officer of CARCO Group, Inc. since 1998. From 1996 to 1997, Mr. Bratton served
as Vice Chairman of First Security Services Corporation and President of its new
subsidiary First Security Consulting, Inc. From 1994 to 1996, Mr. Bratton served
as Police Commissioner of the City of New York. In 1992, he served as
Superintendent in Chief of the Boston Police Department and was appointed Police
Commissioner of the Boston Police Department in 1993. From 1990 to 1992, Mr.
Bratton served as Chief of the New York City Transit Police. Mr. Bratton also
serves as a director of Rite-Aid Corporation and First Security Services
Corporation. Mr. Bratton is a member of the Compensation Committee and is a
member of the Stock Option Subcommittee of the Compensation Committee of the
Board of Directors.
<TABLE>
<S> <C>
RONAVAN MOHLING PARTNER AND PRINCIPAL
CAPITOL PLACES, LLC
</TABLE>
Ronavan Mohling, age 59, was elected as a Director of the Company in
October 2000. Mr. Mohling, a Partner and Principal of Capitol Places, LLC (a
private real estate group) since 1998, recently served for ten years with
Bristol-Myers Squibb Company in Europe, the Middle East, and Africa from 1988 to
1998. From 1995 to 1998, he was the Vice President of Business Development,
responsible for acquisitions and divestitures, for the company's Consumer
Medicines Division and, from 1992 to 1995 was President of the Consumer Products
Division with responsibility for the regions of Europe, the Middle East, and
Africa. From 1972 to 1988, Mr. Mohling served in the capacities of President and
Vice-President with Schering-Plough Corporation where he was responsible for
overseeing the company's Consumer Products Division. Mr. Mohling is a member of
the Audit Committee of the Board of Directors.
Class III directors were elected in fiscal 2000 and their present terms
expire with the Annual Meeting of Stockholders in 2002. Directors Paul J. Zepf
and Gilbert F. Decker resigned effective October 17, 2000. The Board of
Directors of the Company, after reducing the size of Class III to two, selected
Randy Sugarman to serve until the Annual Meeting of Shareholders in 2002.
<TABLE>
<S> <C>
CRAIG I. FIELDS CORPORATE DIRECTOR
</TABLE>
Craig I. Fields, age 54, has served as a Director of the Company since
September 17, 1996. From 1994 until the present, Dr. Fields has served on
various boards of directors, including the boards of ENSCO, Projectavision,
Inc., Alliance Gaming Corporation, Perot Systems, Network Solution and Music
Holdings Corp. From 1990 to 1994, Dr. Fields served as Chairman and Chief
Executive Officer of the Microelectronics and Computer Technology Corporation, a
for-profit research and development consortium involved in information
technology. Dr. Fields is Chairman of the Defense Science Board. Mr. Fields is a
member of the Compensation Committee and is a member of the Stock Option
Subcommittee of the Compensation Committee of the Board of Directors.
<TABLE>
<S> <C>
RANDY SUGARMAN, CPA MANAGING PARTNER
SUGARMAN & COMPANY, LLP
</TABLE>
Randy Sugarman, age 59, was named as a director and as Chairman of the
Board of Directors in October 2000. Randy Sugarman is the managing partner of
Sugarman & Company LLP (Financial Consultants), which he founded in 1977. Mr.
Sugarman is a member of the Compensation Committee.
8
<PAGE> 12
DIRECTORS' COMPENSATION
Each director of the Company who is not an employee of the Company is
entitled to receive annual compensation of $20,000, payable quarterly. In
addition, directors of the Company are reimbursed for their reasonable expenses
incurred in attending meetings of the Board of Directors or committees thereof.
Directors who are also employees of the Company are not separately compensated
for their services as directors.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company meets on a regular basis to
supervise, review, and direct the business and affairs of the Company. During
the Company's 2000 fiscal year, the Board held five meetings and also approved
actions through three unanimous consents of the Board of Directors in lieu of a
meeting. The Board of Directors has established an Audit, a Compensation and a
Strategic Planning Committee, to which it has assigned certain responsibilities
in connection with the governance and management of the Company's affairs. The
Company has no standing nominating committee or other committee performing
similar functions and the Board of Directors performs such functions.
Each of the current directors attended at least 75% of the total number of
meetings of the Board and the committees on which he served during the period he
served in such position.
Audit Committee. The Board of Directors established the Audit Committee in
September 1996 to: (i) make recommendations concerning the engagement of
independent public accounts; (ii) review with the independent public accountants
the plans for and scope of the audit, the audit procedures to be utilized and
the results of the audit; (iii) approve the professional services provided by
the independent public accountants; (iv) review the independence of the
independent public accountants; and (v) review the adequacy and effectiveness of
the Company's internal accounting controls. Messrs. Kagan, Decker and Jones were
the members of the Audit Committee until October 17, 2000 when they resigned as
directors. During the Company's 2000 fiscal year, the Audit Committee held no
meetings. Messrs. Ronavan Mohling and Ronald Whitaker have been appointed
members of the Audit Committee effective November 1, 2000.
Compensation Committee. The Board of Directors established the
Compensation Committee in September 1996 to determine compensation of the
Company's executive officers and to administer the Company's Stock Option Plan.
Messrs. Pollack, Perekslis, Fields and Zepf were the members of the Compensation
Committee until October 17, 2000 when Messrs. Pollack and Zepf resigned as
directors. During the Company's 2000 fiscal year, the Compensation Committee
held no meetings. Mr. Randy Sugarman and Mr. William Bratton have been appointed
as members of the Compensation Committee effective November 1, 2000.
Option Subcommittee. The Board of Directors established the Option
Subcommittee of the Compensation Committee to consider and approve all
compensation items which qualify as performance-based compensation within the
meaning of Section 162(m)(4)(c) of the Internal Revenue Code, including without
limitation, all grants of stock options pursuant to the Company's Stock Option
Plan. Messrs. Fields and Zepf were the members of the Option Subcommittee until
October 17, 2000 when Mr. Zepf resigned as a director. During the Company's 2000
fiscal year, the Option Subcommittee together with its predecessor committee
held three meetings and also approved no actions through unanimous consents of
the Compensation Committee in lieu of a meeting. Mr. William J. Bratton was
appointed a member of the Option Subcommittee on November 1, 2000.
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth information concerning
the annual and long-term compensation earned by our chief executive officer and
each of the other highly compensated executive officers whose annual salary and
bonus during fiscal 2000 exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------------- -----------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING
FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS
OFFICER NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#)
----------------------------------- ------ ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Peter A. Marino 2000 350,000(1) -- 2,577(2) -- --
President and Chief Executive
Officer -- Retired 1999 350,000 -- 4,800(2) 21,000
1998 350,000 150,000 6,865(2) --
Robert F. Mecredy 2000 160,000(1) -- 5,049(2) -- --
President and Chief Executive Officer 1999 158,000 -- 4,740(2) 20,000
1998 155,000 120,000 2,435(2) 10,000
Juan C.G. de Ledebur 2000 135,000 -- 5,348(2) -- (5)
Vice President, Sales and
Marketing -- Resigned 1999 145,000 -- 2,417(2) 10,000
1998 156,477 110,000 7,115(2) 212,148
Caryl G. Marsh 2000 122,000 -- 0 12,500 50,000(4)
Vice President, Operations -- Resigned 1999 133,901 -- 0 23,000(3)
1998 78,495 20,000 0 22,000
John A. Morelli 2000 105,000 -- 5,689(2) 18,750 90,000(4)
Chief Financial Officer 1999 84,950 -- 2,482(2) 13,000(3)
1998 72,000 6,000 1,170(2) 3,000
</TABLE>
------------------------------------
(1) Mr. Marino retired effective September 30, 1999. Under the terms of Mr.
Marino's employment agreement, he is entitled to be compensated his base
salary of $350,000 per year until March 31, 2002 reduced by any salary or
bonus he receives from another employer. Mr. Mecredy became the Company's
President and Chief Executive Officer on October 1, 1999.
(2) Matching contributions made by the Company to its 401(k) plan.
(3) Messrs. Marsh and Morelli had 22,000 and 3,000 options, respectively;
repriced at $3.253 per share during fiscal 1999 (They were not executive
officers at the time).
(4) Messrs. Marsh and Morelli received 20,000 and 30,000 grants, respectively,
priced at $0.625 per share during fiscal 2000. During fiscal year 2000, the
Company granted 272,500 shares of restricted stock with a fair value at the
date of grant of $0.69 per share to various employees under the Company's
Employee Stock Compensation Plan, including the grants to Messrs. Marsh and
Morelli. 50% of these shares vested on September 30, 2000 and the remaining
shares will vest on March 31, 2001 so long as the employee remains
continuously employed through the vesting date.
(5) Mr. de Ledebur resigned effective March 27, 2000. Under the terms of Mr. de
Ledebur's resignation agreement, he was entitled to be compensated his base
salary of $135,000 per year until September 30, 2000 reduced by any salary
and bonus he receives from another employer.
OPTIONS GRANTED IN FISCAL 2000
The following table contains certain information regarding stock options
granted to Executive Officers during fiscal 2000.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OF FOR OPTION TERMS(2)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
OFFICER NAME GRANTED FISCAL YEAR ($/SHARE)(1) DATE 5% 10%
------------ ------------ ------------ ------------ ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Caryl G. Marsh 30,000 4.47% 0.68750 3/22/2007 -- --
John A. Morelli 60,000 8.94% 0.68750 3/22/2007 -- --
</TABLE>
------------------------
(1) Options were granted at the market value based on the last sale price on the
date of grant of the common stock.
10
<PAGE> 14
(2) The dollar amounts are the result of calculations at the 5% and 10% rates
set by the Securities and Exchange Commission and, therefore, are not
intended to forecast possible future appreciation, if any, of the price of
the Company's common stock or the present or future value of the options.
FISCAL YEAR-END OPTION VALUES
The following table contains certain formation regarding stock options
exercised during the fiscal year and options to purchase common stock held as of
March 31, 2000 by each of the Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END AT FISCAL YEAR-END(1)
---------------------------- ----------------------------
OFFICER NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Peter A. Marino 272,185 -- -- --
Robert F. Mecredy 67,302 145,298 -- --
Juan C.G. de Ledebur 76,702 167,446 -- --
Caryl G. Marsh 10,350 53,150 -- --
John A. Morelli 9,277 76,683 -- --
</TABLE>
------------------------------------
(1) As required by the rules of the Securities and Exchange Commission, the
value of unexercised in-the-money options is based on the closing sales
price of the Company's common stock on the Over the Counter Bulletin Board
Stock Market as of the last business day of he fiscal year, March 31, 2000,
which was $ 0.6250 per share.
11
<PAGE> 15
EMPLOYMENT AND RELATED MATTERS
Employment Agreement with Mr. Mecredy. The Company through its principal
subsidiary, FATS, Inc. has entered into an employment agreement dated as of
April 1, 2000 with Mr. Mecredy for a term expiring March 31, 2003 pursuant to
which Mr. Mecredy serves as Chief Executive Officer and President of the Company
at an annual base salary of $200,000 subject to annual review by the
Compensation Committee of the Board of Directors. Mr. Morelli is also eligible
for annual bonuses as determined in the discretion of the Board of Directors,
not in excess of 60% of his annual base salary, taking into consideration
corporate and individual performance and the Company's liquidity position. In
connection with the execution of the employment agreement, subject to approval
by stockholders of the increase in shares available under the Company's Stock
Option Plan, Mr. Mecredy received 240,000 Series F, 240,000 Series G and 240,000
Series H options which expire on the earlier of the seventh anniversary of issue
or 90 days after a termination of employment other than as a result of death or
disability, in which event the options, to the extent vested on the termination
of employment, expire on the earlier of the first anniversary of termination or
the seventh anniversary of issue or termination for Cause, as defined, in which
case the options expire on the date the Board of Directors authorized such
termination. Series F and Series G Options have an exercise price of $0.50 per
share. Series H Options have an exercise price of $0.01 per share. One third of
the Series F Options will vest on March 31 of each of 2001, 2002 and 2003,
subject to acceleration in case of a Sale of the Company transaction in which
all shareholders of the Company receive cash or Marketable Securities, as
defined, for their shares. One third of the Series G Options will vest over each
of the three years beginning with the fiscal year ending March 31, 2001, at the
rate of 50%-100% based on a sliding scale to the extent the Company's financial
performance achieves certain levels and in the case of a Sale of the Company in
accordance with performance to such date. Unvested Series G options expire on
the third anniversary of issue. Series H Options vest in the event of a Sale of
the Company ratably from 0% to 100% to the extent the value per common share
generated by such sale equals or exceeds the range of $0.75 to $1.50 per share
and expire to the extent unvested on the third anniversary of grant. In the
event of a termination other than for Cause or Good Reason prior to the third
anniversary, a portion of the Series G options based on the current market price
per share will vest. Mr. Mecredy is subject to a covenant not to compete with
the Company during any period in which he receives payments from the Company
pursuant to his employment agreement and for a period of two years thereafter.
Mr. Mecredy has also agreed that during the period of his employment and any
period of time during which he is receiving payments from the Company pursuant
to his employment agreement and for 3 years thereafter, he will not participate
in any activity which would lead to a Change in Control of the Company, as
defined.
Employment Agreement with Mr. Marino. Effective September 30, 1999, Peter
Marino's employment by the Company as Chief Executive Officer was terminated.
Under his employment contract dated September 18, 1996, upon termination other
than for cause involving breach of duty, misconduct, or gross negligence, Mr.
Marino remains entitled to receive his base salary of $350,000 per year until
the fiscal year ending March 31, 2002. Such amounts would be offset by the
amount of compensation Mr. Marino received from a subsequent employer. In
addition, in connection with his departure, the exercise date of his vested
stock options was extended to December 29, 2001.
Employment Agreement with Mr. Morelli. The Company, through its principal
subsidiary, FATS, Inc. has entered into an employment agreement dated November
1, 2000 with Mr. Morelli for a term commencing October 1, 2000 and expiring
September 30, 2003 pursuant to which Mr. Morelli serves as Vice President of
Finance and Administration and Chief Financial Officer of the Company at an
annual base salary of $125,000, subject to annual review by the Compensation
Committee of the Board of Directors. Mr. Morelli is also eligible for annual
bonuses as determined in the discretion of the Board of Directors, not in excess
of 60% of his annual base salary, taking into consideration corporate and
individual performance and the Company's liquidity position. In connection with
the execution of the employment agreement, subject to approval by the
stockholders of the increase in shares available under the Company's Stock
Option Plan, Mr. Morelli received 150,000 Series F, 150,000 Series G and 150,000
Series H Options which expire on the earlier of the first anniversary of
termination or the seventh anniversary of issue or termination for Cause, as
defined, in which case the Options expire on the date the Board of Directors
authorized such termination. Series F and Series G
12
<PAGE> 16
Options have an exercise price of $0.50 per share. Series H Options have an
exercise price of $0.01 per share. One third of the Series F Options will vest
on March 31 of each of 2001, 2002 and 2003, subject to acceleration in case of a
Sale of the Company transaction in which all shareholders of the Company receive
cash or Marketable Securities, as defined, for their shares. One third of the
Series G Options will vest over each of the three years beginning with the
fiscal year ending March 31, 2001, at the rate of 50%-100% based upon a sliding
scale to the extent the Company's financial performance achieves certain levels
and in the case of a Sale of the Company in accordance with performance to such
date. Unvested Series G Options to the extent the Company has not achieved the
required financial performance on a cumulative basis expire on the third
anniversary of issue. Series H Options vest in the event of a Sale of the
Company ratably from 0% to 100% to the extent the value per common share
generated by such Sale equals or exceeds the range of $0.75 to $1.50 per share
and expire to the extent unvested on the third anniversary of the date of grant.
In the event a termination of employment other than for Cause or Good Reason
occurs prior to the third anniversary, a portion of the Series H Options based
upon current market price per share will vest. Mr. Morelli is subject to a
covenant not to compete with the Company during any period in which he receives
payments from the Company pursuant to his employment agreement and for a period
of two years thereafter. Mr. Morelli has also agreed that during the period of
his employment and any period of time during which he is receiving payments from
the Company pursuant to his employment agreement and for 3 years thereafter, he
will not participate in any activity which would lead to a Change in Control of
the Company, as defined. The employment agreement replaced a prior employment
agreement with Mr. Morelli, which would have expired September 30, 2001.
Non-Competition Agreements. The Company has entered into an Agreement to
Limit Future Competition with each current member of senior management of the
Company and other key employees. Pursuant to such agreements each such employee
has agreed, for a period of two years following the termination of employment
with the Company, not to: (i) be employed by specified businesses in an
executive capacity; (ii) use or permit to be used his executive skills,
knowledge or expertise for the benefit of any such business; and (iii) use or
permit to be used competitively sensitive information received while employed by
the Company for the benefit of any such business.
The Company's Employee Stock Compensation Plan adopted on July 1, 1997
provided for issuance of up to 500,000 shares of Common Stock, including
issuances to make Company matching contributions under the Company's 401(k)
Profit Sharing Plan. During the year ended March 31, 2000, the Company also
granted 272,500 shares of restricted stock to various employees under the Stock
Compensation Plan. In view of continued employee participation in the Company's
401(k) Profit Sharing Plan during the current fiscal year, additional company
contributions of its Common Stock in excess of the current Plan size have been
required. In order to provide for sufficient shares to enable continued matching
contributions of Common Stock to the Company's Profit Sharing Plan and for other
permitted uses under the Plan, the Board of Directors on October 16, 2000
approved an increase in the total number of shares which could be issued under
the Plan to 1,000,000 shares and reserved such additional shares for issuance.
CERTAIN TRANSACTIONS
Senior Lender Restructure Transaction. As described under Restructure
Transaction and Change of Control, in connection with the restructure of the
Company on August 25, 2000, the Company's Senior Lenders received in addition to
other securities and in exchange for a portion of the existing senior
indebtedness of the Company shares of the Company's common stock and each
thereby became a beneficial owner of more than 5% of the Company's common stock.
Centre Partnerships Transactions. On June 1, 1999, certain subsidiaries of
the Company established a revolving line of credit in the amount of $3,000,000
with a financial institution with a maturity date of July 31, 2000. Payment
obligations under the Subsidiary Line were guaranteed by the Centre Partnerships
as well as by the Company and certain of its subsidiaries. In exchange for such
guarantees the Centre Partnerships received a fee of $50,000 in cash and were
entitled to be paid an additional funding fee of $250,000 in the event any
payments were made by any Centre Partnerships to the financial institution. Such
obligations to the Centre Partnerships were satisfied in connection with the
Restructure as described below.
13
<PAGE> 17
On August 25, 2000, with effect from April 1, 2000, the Centre Partnerships
and the Company, in connection with the Restructure, completed the following
transactions by which the Company issued certain additional securities to the
Centre Partnerships in exchange for the $3,250,000 obligation of the Company
with regard to the Centre guarantee described above (the "Centre Guarantee
Obligation"), the Series A Preferred Stock held by the Centre Partnerships and
certain co-investors and a portion of the senior indebtedness assigned to the
Centre Partnerships by one of the original Lenders immediately prior to the
Restructure, as follows:
(1) The Company issued $504,129 principal amount of Centre senior secured
loans which are pari passu with and secured by the same security as the Lender
senior secured loans in exchange for a portion of the Centre Guarantee
Obligation;
(2) The Company issued $966,248 principal amount of Centre junior secured
loans which are pari passu with and secured by the same security as the Lender
junior secured loans in exchange for a portion of the Centre Guarantee
Obligation;
(3) The Company issued 897.397 shares of Series B Preferred Stock having a
liquidation value of $897,397 in exchange for a portion of the Centre Guarantee
Obligation;
(4) The Company issued 1,764,452 shares of Class A Common Stock in exchange
for a portion of the Centre Guarantee Obligation;
(5) The Company issued 6,695,212 additional shares of Class A Common Stock
in exchange for the existing Series A Preferred Stock, having a liquidation
value of $3,607,606 held by the Centre Partnerships and certain co-investors and
amended existing warrants held by the Centre partnerships and such co-investors
to purchase 3,246,164 shares of Class A Common Stock at $1.03 per share by
providing for payment of the exercise price in cash rather than the Series A
Preferred Stock, extending the expiration date to March 31, 2005 and making a
slight adjustment in the original exercise price to $1.00 per share;
(6) The Company issued to the Centre Partnerships Warrants to purchase
2,000,000 shares of Class A Common Stock at $0.25 per share expiring March 31,
2005; and
(7) The Centre Partnerships received with respect to their portion of the
secured debt under the senior credit agreement, $2,028,683 principal amount of
senior secured debt, $3,888,309 principal amount of junior secured debt,
3,611.244 shares of Series B Preferred Stock having a liquidation value of
$3,611,244 and 7,100,391 shares of Class A Common Stock which are subject to the
Voting Agreement and letter described under Change of Control.
Consulting Agreement with Sugarman & Company LLP. By letter dated October
4, 2000, the Company agreed to retain the firm of Sugarman & Company LLP
("Sugarman & Co."), of which Randy Sugarman is the Managing Partner, to assist
the Company in evaluating its current financial position and operations and to
make recommendations to senior management concerning changes that need to be
made to improve its profitability and liquidity. Sugarman & Co. will be
compensated on an hourly basis including the time devoted by Randy Sugarman as
Chairman of the Board of Directors of the Company on the basis of specified
hourly rates and to reimburse Sugarman & Co. for its out-of-pocket costs in
connection with performing such services. Either party may terminate the
relationship at any time. Sugarman & Co. has billed the Company for
approximately $59,338 for fees and expenses in connection with services
performed under the agreement through October 24, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Pollack, Fields, Perekslis and Zepf served as members of the
Company's Compensation Committee during the 2000 fiscal year. While Mr. Pollack
was Chairman of the Board and Mr. Perekslis was a Vice President of the Company
through July 18, 1997, none is otherwise an employee, officer or former employee
or officer of the Company or its subsidiaries.
14
<PAGE> 18
REPORT ON EXECUTIVE COMPENSATION
The New Compensation Committee has provided the following report:
The compensation policies of the Company have been developed to link the
compensation of executive officers with the development of enhanced value for
the Company's stockholders. Through the establishment of both short-term and
long-term incentive plans and the use of base salary and performance bonus
combinations, the Company seeks to align the financial interests of its
executive officers with those of its stockholders.
PHILOSOPHY AND COMPONENTS
In designing its compensation programs, the Company follows its belief that
compensation should reflect both the Company's recent performance and the value
created for stockholders, while also supporting the broader business strategies
and long-range plans of the Company. In doing so, the compensation programs
reflect the following general characteristics:
* The Company's financial performance and, in particular, that of the
individual.
* An annual incentive arrangement that generates a portion of compensation
based on the achievement of specific performance goals in relation to the
Company's internal budget and strategic initiatives, with superior performance
resulting in enhanced total compensation.
The Company's executive compensation is based upon the components listed
below, each of which is intended to serve the overall compensation philosophy:
Base Salary. Base salary is intended to be set at a level that
approximates the competitive amounts paid to executive officers of similar
businesses in structure, size, and industry orientation. Competitive amounts are
determined informally through a review of published compensation surveys and
proxy statements of other companies, including some, but not all, of the
companies in the peer group selected for purposes of the stock performance graph
set forth elsewhere in this Proxy Statement.
Incentive Compensation. Compensation. In accordance with the Company's
philosophy of tying a substantial portion of the overall compensation of its
executive officers to the achievement of specific performance goals, an
incentive plan has been developed for the executive officers. The Company's
incentive plan is designed to reward superior performance with total
compensation above competitive levels. On the other hand, if performance goals
are not achieved and the Company suffers as a result, compensation of affected
executive officers may fall below competitive levels.
Stock Options. The Company periodically considers awards to its executive
officers of stock options granted under the terms of its Stock Option Plan.
Options are awarded by the Option Subcommittee to selected executive officers
and other persons in recognition of outstanding contributions they may have made
(or are being motivated to make) to the Company's growth, development, or
financial performance. The awarding of options is designed to encourage
ownership of the Company's Common Stock by its executive officers, thereby
aligning their personal interests with those of our shareholders.
The Compensation Committee reviews and determines the compensation of the
executive officers of the Company with this philosophy on compensation as its
basis. While promoting initiative and providing incentives for superior
performance on behalf of the Company for the benefit of its shareholders, the
Compensation Committee also seeks to assure that the Company is able to compete
for and retain talented personnel who will lead the Company in achieving levels
of growth and financial performance that will enhance shareholder value over the
long-term as well as short-term.
CEO COMPENSATION
Effective October 15, 1996, the Company entered into an employment
agreement with Mr. Marino as Chief Executive Officer and President for a term
that extended to March 31, 2002. Mr. Marino's employment
15
<PAGE> 19
was terminated on September 30, 1999 but he continues to be entitled to receive
the base salary under the terms of his contract. See "Employment and Related
Matters."
Effective October 1, 1999, the Company appointed Mr. Robert F. Mecredy as
Chief Executive Officer and President to replace Mr. Marino. The Company and Mr.
Mecredy agreed that he would perform the duties of Chief Executive Officer and
President without adjustment to compensation until conclusion of fiscal 2000. On
November 1, 2000, after completion of the Restructure described above, the
Company and Mr. Mecredy entered into an employment contract with effect from
April 1, 2000 described under Compensation and Related Matters.
The Compensation Committee believes that it was sound business practice to
enter into an employment agreement with Mr. Mecredy effective April 1, 2000 as a
result of the new financial position of the Company and the opportunity to
improve performance of the Company in fiscal 2001. The Compensation Committee
believes that the terms of Mr. Mecredy's employment agreement is consistent with
and reflect the Company's executive compensation philosophy. The base salary
provided to Mr. Mecredy is consistent with what the Compensation Committee
believes is competitive in the Company's industry, opportunities for bonus
compensation are tied to the Company's performance, and options granted to Mr.
Mecredy are subject to vesting over a period of time consistent in terms of
value to its stockholders. During Fiscal Year 2000, the Compensation Committee
consisted of Lester Pollack, Craig I. Fields, Scott Perekslis, and Paul J. Zepf.
On November 1, 2000, the Board of Directors appointed Randy Sugarman as a member
of the Compensation Committee.
16
<PAGE> 20
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Company's Common Stock against the
cumulative total return of The Nasdaq National Market (U.S.) and the cumulative
total return for a group of companies consisting of Apollo Group Inc., CBT Group
Plc, Evans & Sutherland Computer Corporation, Imax Corporation, Learning Tree
International, Orbital Sciences Corporation, REMEC Inc. and the Wyman-Gordon
Company, for the period commencing November 27, 1996, the date that the
Company's Common Stock became publicly traded, and ending on March 31, 2000.
Note: The proxy graph for fiscal years 1997 through 1999 included Wymon-Gordon
Company which currently has no securities which are traded and they have been
excluded from the Peer Group. CBT Group PLC changed its name to SmartForce PLC,
effective February 15, 2000, and it has been replaced by ECC International in
its Peer Group.
TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 11/27/96)
<TABLE>
<CAPTION>
FIREARMS TRAINING PEER GROUP NASDAQ COMPOSITE
----------------- ---------- ----------------
<S> <C> <C> <C>
11/27/96 $100.00 $100.00 $100.00
12/31/96 $ 86.24 $106.97 $100.29
03/31/97 $ 91.74 $ 93.49 $ 94.90
06/30/97 $100.92 $130.78 $112.02
09/30/97 $ 45.87 $147.24 $130.95
12/31/97 $ 38.07 $141.73 $121.99
03/31/98 $ 66.06 $163.09 $142.60
06/30/98 $ 18.35 $150.13 $147.19
09/30/98 $ 5.05 $ 95.43 $133.53
12/31/98 $ 0.32 $121.46 $173.24
03/31/99 $ 7.57 $ 97.13 $193.58
06/30/99 $ 6.65 $ 89.48 $211.42
09/30/99 $ 4.59 $ 78.58 $216.29
12/31/99 $ 3.67 $103.27 $320.67
03/31/00 $ 4.59 $148.68 $360.47
</TABLE>
---------------
Source: Carl Thompson Associates. Data from Bloomberg Financial Markets.
17
<PAGE> 21
INCREASE IN AVAILABLE SHARES UNDER STOCK OPTION PLAN
GENERAL
The Board of Directors has adopted, subject to shareholder approval, an
increase in the number of shares available for the grant of options and other
awards under the Company's Stock Option Plan (the "Stock Option Plan") to
7,500,000 shares of Common Stock. Currently, 2,490,000 shares are authorized
under the Plan, of which 1,974,961 shares are subject to outstanding options and
512,360 shares were available for future grant at September 30, 2000. The Board
believes that such increase is necessary in view of the fact that the options
granted Mr. Mecredy and Mr. Morelli in connection with their employment contract
described above under Employment and Related Matters are contingent upon
approval by shareholders of the increase in additional available shares under
the Plan. Finally, options previously granted to existing employees and current
Outside Directors (as defined below) for approximately 1,974,961 shares were
granted at exercise prices ranging from $0.625 to $12.00, whereas shares of the
Company's common stock have more recently traded at prices substantially below
such option exercise prices. The market price of the Common Stock on the Over
The Counter Bulletin Board (OTC:BB) was $0.19 on November 4, 2000. See "Options
Granted in Fiscal 2000" and "Fiscal Year end Option Values" for a description of
certain options that were granted in Fiscal 2000 as well as certain information
as to outstanding options at the end of Fiscal 2000. As a result, the Board of
Directors believes that to retain existing employees and attract additional
personnel necessary for the continued success of the Company, the grant of
additional options at exercise prices more reflective of current trading values
will be required.
DESCRIPTION OF THE PLAN
The Stock Option Plan, which became effective September 17, 1996, permits
awards of options to purchase shares of Common Stock to the officers, other key
employees, consultants, independent contractors, agents and Outside Directors
(as defined) of the Company and its subsidiaries. The purposes of the Stock
Option Plan are: (i) to align the interest of the Company's shareholders and the
recipients of options under the Stock Option Plan by increasing the proprietary
interest of such recipients in the Company's growth and success; (ii) to advance
the interests of the Company by attracting and retaining officers, other key
employees, consultants, independent contractors, agents and well-qualified
persons who are not officers or employees of the Company for service as
directors of the Company ("Outside Directors"); and (iii) to motivate such
persons to act in the long-term best interests of the Company's shareholders.
Stock options previously granted under the Stock Option Plan are nonqualified
stock options. The Stock Option Plan is administered by the Stock Option
Subcommittee of the Compensation Committee (the "Committee"). The Committee,
subject to the express provisions of the Stock Option Plan, selects eligible
participants to be awarded options and determines the number of shares of Common
Stock subject to each option granted thereunder, the exercise price of such
option, the time and conditions of exercise of such option and all other terms
and conditions of such option, including, without limitation, the form of the
option agreement. The Board generally may amend the Stock Option Plan, subject
to (i) shareholder approval as may be required by applicable law, rule or
regulation, provided, however, that no amendment may be made without shareholder
approval if such amendment would increase the maximum number of shares of Common
Stock available under the Stock Option Plan and (ii) the consent of any holders
of outstanding options, if such amendment impairs the rights of such holder. If
an optionee's employment with the Company or directorship with the Company
terminates for any reason, each option granted under the Stock Option Plan and
held by such optionee generally will be exercisable only to the extent that such
option is exercisable on the effective date of such optionee's termination of
employment or directorship, as the case may be, unless the agreement for such
option provides otherwise at the discretion of the Committee. Thereafter an
option may be exercised by such optionee (or such optionee's legal
representative or similar person) until and including the earliest to occur of:
(i) the date which is set forth in such agreement after the effective date of
such optionee's termination of employment or directorship, as the case may be;
and (ii) the expiration date of the term of such option; provided that, if an
optionee's employment is terminated for Cause (as defined in the Stock Option
Plan), allocations granted under the Stock Option Plan and held by such optionee
will terminate automatically upon the termination of employment. The Stock
Option Plan contains anti-dilution and adjustment provisions applicable in the
event of any action by the Company such as a stock split, stock dividend,
recapitalization, reorganization, merger,
18
<PAGE> 22
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event and certain issuances of shares of
Common Stock or securities convertible into shares of Common Stock at a price
below the market price of the Common Stock. In addition, in the sole discretion
of the Committee, the terms of an agreement related to an option may provide
that an optionee's outstanding options will, immediately upon the occurrence of
a Change in Control (as defined in the Stock Option Plan), become exercisable in
part or in full. The agreement related to an option may specify: (i) in the
event of a merger, consolidation, reorganization, sale of all or substantially
all of the assets of the Company or complete liquidation or dissolution, the
terms and conditions pursuant to which the number and class of shares shall be
substituted for each share of Common Stock subject to option under such
agreement; and (ii) in the event of other Changes in Control (including the
acquisition of 50% or more of the voting securities of the Company or certain
actions resulting in a majority of the Board of Directors changing), the terms
and conditions pursuant to which the optionee can surrender the option to the
Company and any consideration to be paid to the optionee.
OPTIONS RECEIVED OR TO BE RECEIVED
The following chart shows the number of options received, or to be
received, by the certain groups of persons who are employed by or are directors
of the company.
<TABLE>
<CAPTION>
NUMBER OF OPTIONS
RECEIVED OR
TO BE RECEIVED
-----------------
<S> <C>
All current executive officers as a group 1,471,560(1)
All current non-executive directors as a group 185,000
Each nominee for election as a director:
(a) Robert F. Mecredy 932,600(2)
(b) Scott Perekslis 0
(c) Ronald Whitaker 0
All employees who are not executive officers as a group 1,493,401
</TABLE>
------------------------------------
(1) Includes 720,000 shares for Robert F. Mecredy and 450,000 shares for John
Morelli, which were granted November 1, 2000, pending approval of the
increase of shares for the Company's Stock Option Plan.
(2) Includes 720,000 shares for Robert F. Mecredy, which were granted November
1, 2000, pending approval of the increase of shares for the Company's Stock
Option Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief overview of the United States federal income tax
consequences of participation in the Stock Option Plan and should not be relied
upon as being a complete description. It does not address the state or local tax
aspects of participation in the Stock Option Plan.
Grant of Option. An optionee will not recognize taxable income upon the
grant of a stock option under the Stock Option Plan.
Exercise of Options. An optionee will recognize compensation taxable as
ordinary income, and the Company generally will be allowed a corresponding
deduction for federal income tax purposes, in an amount equal to the excess of
the fair market value, on the date of exercise of an option, of the shares of
Common Stock acquired over the purchase price therefor.
Income Tax Withholding. The taxable compensation recognized by the
optionee upon the exercise of a stock option will be subject to withholding of
tax by the Company.
EFFECTIVE DATE, AMENDMENT AND TERMINATION
If approved by shareholders, the increase in shares available for grant
under the Stock Option Plan will become effective as of October 17, 2000, the
date of its approval by the Company's Board. The Board may amend the Stock
Option Plan at any time, subject to any requirement of shareholder approval
required by
19
<PAGE> 23
applicable law, rule or regulation, including Sections 162(m) and 422 of the
Code. Nonetheless, the Board may not increase the number of shares available
under the Stock Option Plan without shareholder approval. No amendment may
impair the rights of a holder of an outstanding stock option granted under the
Stock Option Plan without the holder's consent.
The Stock Option Plan will terminate when shares of Common Stock are no
longer available for grant of options, but may be terminated earlier by our
Board. Termination of the Stock Option Plan will not affect the terms or
conditions of any stock option granted under the Stock Option Plan prior to the
termination date. No stock options may be granted under the Stock Option Plan
after it has been terminated.
APPROVAL OF THE INCREASE IN AUTHORIZED SHARES AVAILABLE UNDER THE STOCK
OPTION PLAN REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING, IN PERSON OR BY PROXY,
AND ENTITLED TO VOTE THEREON. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR APPROVAL OF THE INCREASE.
20
<PAGE> 24
AMENDMENT TO CERTIFICATE OF INCORPORATION
In connection with the Restructure, the Board of Directors approved an
amendment to increase the number of authorized shares of Class A Voting Common
Stock to 100,000,000 and to fix the number of shares of preferred stock at
100,000, in each case to provide sufficient shares in order to complete the
Restructure and for future uses. This amendment was approved by written consent
of the holders of a majority of the then outstanding Class A Voting Common Stock
(consisting of the Centre Partnerships and Mr. Mecredy) on August 23, 2000. In
view of the pressing need to complete the Restructure without further delay, the
Board of Directors determined to follow the written consent procedure rather
than delay for several weeks to solicit proxies from all outstanding holders of
Class A Voting Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee,
appoints each year the firm that will serve as the Company's independent public
accountants. The Board has appointed Arthur Andersen LLP, which firm served as
independent public accountants for the Company during the past fiscal year, to
serve as such accountants for the current fiscal year. Such appointment is not
subject to ratification or other vote by the stockholders.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting of Stockholders, with opportunity to make a statement if he or
she desires to do so, and is expected to be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS
According to the Company By-laws, only such business shall be conducted at
an annual meeting of stockholders as shall have been properly brought before the
meeting. For business to be properly brought before the meeting it must be: (i)
authorized by the Board of Directors and specified in the notice, or a
supplemental notice, of the meeting, (ii) otherwise brought before the meeting
by or at the direction of the Board of Directors or the chairman of the meeting,
or (iii) otherwise properly brought before the meeting by a stockholder. For
business to be properly brought by a stockholder, the stockholder must have
given written notice thereof to the Secretary, delivered or mailed to and
received at the principal executive offices of the Company (x) not less than 60
days nor more than 90 days prior to the meeting, or (y) if less than 70 days
notice of the meeting or prior public disclosure of the date of the meeting is
given or made to stockholders, not later than the close of business on the tenth
day following the day on which the notice of the meeting was mailed, or if
earlier, the day on which such public disclosure was made. These requirements
are separate and apart from and in addition to the SEC's requirements that a
shareholder must meet to have a shareholder proposal included in the Company's
proxy statement under SEC Rule 14a-8.
Stockholders who desire to submit to the Company proposals for inclusion in
the Company's proxy materials for the 2001 Annual Meeting of Stockholders of
Firearms Training Systems, Inc. must submit such proposals to the Secretary of
the Company for receipt by the Secretary on or prior to April 1, 2001.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("1934 Act") requires
the Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the Commission and the NASDAQ National Market reports of ownership and
changes in ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and greater than ten percent stockholders are
required by the rules promulgated by the Commission to furnish the Company with
copies of all forms they file pursuant to Section 16(a) of the 1934 Act.
Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that during fiscal 2000, all filings required by
21
<PAGE> 25
Section 16 (a) of the 1934 Act applicable to its directors, executive officers
and greater than ten percent beneficial owners were made on a timely basis.
OTHER MATTERS
Management does not intend to present to the Annual Meeting any business
other than the items stated in the "Notice of Annual Meeting of Stockholders"
and knows of no other business to be presented for action at the meeting. If,
however, any other business should properly come before the meeting or any
adjournments thereof, it is intended that all management proxies will be voted
with respect thereto in accordance with the best judgment of the persons named
in the proxies.
FIREARMS TRAININGS SYSTEMS, INC.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ John A. Morelli
John A. Morelli
SECRETARY
Dated: November 9, 2000
22
<PAGE> 26
FTSCM-PS-00
<PAGE> 27
FIREARMS TRAINING SYSTEMS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received notice of the Annual Meeting of Stockholders
and revoking all prior proxies, hereby appoints Robert F. Mecredy and John A.
Morelli, and each of them, attorneys or attorney of the undersigned, with full
power of substitution in each of them, for and in the name of the undersigned,
to attend the Annual Meeting of Stockholders of Firearms Training Systems, Inc.
(the "Company") to be held Friday, December 15, 2000, at 10:00 A.M., Eastern
Time, and any postponement or adjournment thereof, and to vote and act upon the
following matters in respect of all shares of common stock of the Company that
the undersigned would be entitled to vote or act upon, with all powers the
undersigned would possess, if personally present.
The shares represented by this proxy will be voted as directed by the
undersigned and as indicated herein. IF NO DIRECTION IS GIVEN WITH RESPECT TO
THE ELECTION OF DIRECTORS OR THE DISCRETIONARY AUTHORITY OF THE PROXIES TO VOTE
UPON OTHER PROPER BUSINESS, THIS PROXY WILL BE VOTED FOR SUCH ELECTION, AND THE
PROXIES, IN THEIR DISCRETION, WILL VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
Attendance of the undersigned at the meeting or any postponement or adjournment
will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate at such meeting the intention of the undersigned to vote
such shares in person.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
USING THE ENCLOSED ENVELOPE.
IF SHARES ARE HELD BY MORE THAN ONE OWNER, EACH MUST SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS, AND OTHERS SIGNING IN
A REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
<PAGE> 28
[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<S> <C>
----------------------------------------------------- 1. ELECTION OF DIRECTORS:
FIREARMS TRAINING SYSTEMS, INC. To re-elect each of the
---------------------------------------------------- following nominees,
as a director of the
Company, for a term of
three years:
For All Withhold For All
Mark box at right if an address [ ] Nominees Except
change or comment has been noted [ ] [ ] [ ]
on the reverse side of this card. Gilbert F. Decker
Craig I. Fields
Paul J. Zepf
CONTROL NUMBER: NOTE: If you do not wish your shares voted "For"
RECORD DATE SHARES: a particular nominee(s), mark the "For All Except" box
strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
For Against Abstain
[ ] [ ] [ ]
2. TO APPROVE AN AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
THE COMPANY INCREASING THE NUMBER
OF AUTHORIZED SHARES FOR CLASS B
NON-VOTING COMMON STOCK FROM
--------------------- 2,200,000 SHARES TO 6,200,000 SHARES.
Please be sure to sign and date Date
this Proxy. ---------------------
----------------------------------------------------- For Against Abstain
[ ] [ ] [ ]
3. TO VOTE, IN THE PROXIES' DISCRETION,
--------Stockholder sign here----Co-owner sign here-- UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING
OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
DETACH CARD DETACH CARD
</TABLE>
