<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:
[x] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
INTERACTIVE TELESIS 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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] 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: N/A
(2) Form, schedule or registration statement no.: N/A
(3) Filing party: N/A
(4) Date filed: N/A
<PAGE> 2
DONALD E. CAMERON
PRESIDENT and
CHIEF EXECUTIVE OFFICER
December 6, 2000
Dear Shareholder:
We cordially invite you to our Annual General Meeting. The meeting will be held
on Friday, January 26, 2001, at 10:00 a.m. at The Del Mar Hilton Hotel in Del
Mar, California.
At this year's meeting, you will vote on the election of five Directors, the
reservation of additional shares for issuance under the Interactive Telesis 1996
Stock Plan, an amendment to the Company's Charter regarding its Common and
Preferred Stock, and ratification of Pannell Kerr Forster's appointment as
independent auditors.
We also have attached a notice of meeting and a proxy statement that contains
more information about these items, the meeting, different methods you can use
to vote, including telephone and Internet.
Your vote is important. We encourage you to sign and return your proxy card (or
use telephone or Internet voting) before the meeting so that your shares will be
represented and voted at the meeting even if you can not attend.
/s/DONALD E. CAMERON
DONALD E. CAMERON
PRESIDENT and CEO
<PAGE> 3
Interactive Telesis Inc.
12636 High Bluff Drive, 2nd Floor
San Diego, California 92130
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 26, 2001
TO THE STOCKHOLDERS OF
INTERACTIVE TELESIS INC.:
You are invited to attend the Annual Meeting of Stockholders of Interactive
Telesis Inc. a Delaware corporation (the "Company"), to be held at The Del Mar
Hilton Hotel, 15575 Jimmy Durante Blvd., Del Mar, California, on Friday, January
26, 2001, 10:00 a.m., for the following purposes:
1. To elect a board of five directors;
2. To reserve an additional 1,500,000 shares for issuance under the
Interactive Telesis Inc. 1996 Stock Plan;
3. To amend the Company's Charter to authorize the issuance of up to 100
million shares of Common Stock and 25 million shares of Preferred Stock.
4. To ratify the appointment of Pannell Kerr Forster as our independent
auditors for our fiscal year ending July 31, 2001.
5. To act upon such other matters as may properly come before the meeting or
any adjournment thereof.
The foregoing items are more fully described in the attached Proxy Statement.
The Board of Directors has fixed the close of business on November 27, 2000, as
the record date for the determination of Stockholders entitled to notice of and
to vote at the meeting or any adjournment or adjournments thereof. You are
cordially invited to attend the meeting in person. However, to assure your
representation at the meeting, you are urged to mark, sign, date, and return the
enclosed proxy card as promptly as possible in the postage-prepaid envelope
enclosed for that purpose. You may vote in person at the meeting, even if you
returned a proxy.
The Company's Proxy Statement and proxy are submitted herewith along with the
Company's Annual Report to Stockholders for the fiscal year ended July 31, 2000.
IMPORTANT -- YOUR PROXY IS ENCLOSED.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE URGE YOU TO EXECUTE AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors
/s/ Donald E. Cameron
----------------------------------------
Donald E. Cameron,
Chief Executive Officer
Del Mar, California
December 6, 2000
<PAGE> 4
INTERACTIVE TELESIS INC.
12636 High Bluff Drive, 2nd Floor
San Diego, California 92130
---------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
The enclosed proxy is solicited by the Board of Directors of Interactive Telesis
Inc., a Delaware corporation (the "Company"), for use at the Company's Annual
Meeting of Stockholders to be held at The Del Mar Hilton Hotel, 15575 Jimmy
Durante Blvd., Del Mar, California, at 10:00 a.m. on Friday, January 26, 2001,
and any adjournments thereof (the "Meeting").
We will bear the cost of soliciting proxies. In addition to solicitation of
proxies by mail, our employees, without extra remuneration, may solicit proxies
personally or by telephone. We will reimburse brokerage firms and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses
for forwarding proxy materials to beneficial owners and seeking instruction with
respect thereto.
Copies of this Proxy Statement and accompanying proxy card were mailed to
Stockholders on or about December 6, 2000.
When the enclosed proxy is properly executed and returned (and not subsequently
properly revoked), the shares it represents will be voted in accordance with the
directions indicated thereon, or, if no direction is indicated thereon, it will
be voted:
(1) FOR the election of the five nominees for Director identified below;
(2) FOR the reservation of an additional 1,500,000 shares for issuance under
the Interactive Telesis Inc. 1996 Stock Plan;
(3) FOR the amendment to the Company's Charter, increasing its authorized
Common Stock to 100,000,000 shares and authorizing the issuance of up to
25,000,000 shares of Preferred Stock;
(4) FOR ratification of the appointment of Pannell Kerr Forster, San Diego,
California, as independent auditors of the Company for our fiscal year
ending July 31, 2001; and
(5) In the discretion of the proxies with respect to any other matters properly
brought before the Stockholders at the Meeting.
Only the holders of record of our Common Stock at the close of business on the
record date, November 27, 2000, (the "Record Date"), are entitled to notice of
and to vote at the Meeting. On the Record Date, 31,874,460 shares of Common
Stock were outstanding. Stockholders will be entitled to one vote for each share
of Common Stock held on the Record Date.
<PAGE> 5
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING
1. WHAT IS A PROXY?
It is your legal designation of another person to vote Stock you own. That other
person is called a proxy. If you designate someone as your proxy in a written
document, that document also is called a proxy or a proxy card. Two of our
Officers have been designated as proxies for the Fiscal Year 2000 Annual General
Meeting. These two Officers are Donald E. Cameron and William R. Adams.
2. WHAT IS A PROXY STATEMENT?
It is a document the SEC regulations require us to give you when we ask you to
sign a proxy card designating Donald E. Cameron and William R. Adams each as
proxies to vote on your behalf.
3. WHAT IS THE DIFFERENCE BETWEEN A SHAREHOLDER OF RECORD AND A SHAREHOLDER
WHO HOLDS STOCK IN STREET NAME?
If your shares are registered in your name, you are a shareholder of record.
If your shares are in the name of your broker or bank, your shares are held in
street name.
4. WHAT DIFFERENT METHODS CAN YOU USE TO VOTE?
(a) In writing: All shareholders can vote by written proxy card.
(b) By telephone and Internet: All shareholders of record also can vote their
proxies by touch-tone telephone from the U.S. and Canada, using the
toll-free telephone number on the proxy card, or by the Internet, using the
procedures and instructions described on the proxy card and other
enclosures. Street name holders may vote by telephone or the Internet if
their bank or broker makes those methods available, in which case the bank
or broker will enclose the instructions with the proxy statement. The
telephone and Internet voting procedures, including the use of control
numbers, are designed to authenticate shareholders' identities, to allow
shareholders to vote their shares, and to confirm that their instructions
have been properly recorded.
(c) In person: All shareholders may vote in person at the meeting (UNLESS THEY
ARE STREET NAME HOLDERS WITHOUT A LEGAL PROXY). If you own shares in street
name, you will need to ask your broker or bank for a legal proxy. You will
need to bring the legal proxy with you to the meeting. If you do not
receive the legal proxy in time, bring your most recent brokerage statement
with you to the meeting. We can use that to verify your ownership of Common
Stock and admit you to the meeting; however, you will not be able to vote
your shares at the meeting without a legal proxy.
5. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?
The record date for the Fiscal Year 2000 Annual General Meeting is November 27,
2000. The record date is established by the Board of Directors as required by
Delaware law. Owners of Common Stock at the close of business on the record date
are entitled to:
(a) receive notice of the meeting, and
(b) vote at the meeting and any adjournments or postponements of the
meeting.
6. HOW CAN YOU REVOKE A PROXY?
A shareholder can revoke a proxy by any one of the following three actions:
(a) giving written notice to the Secretary of the Company,
(b) delivering a later-dated proxy, or
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(c) voting in person at the meeting.
7. ARE VOTES CONFIDENTIAL? WHO COUNTS THE VOTES?
We will continue our long-standing practice of holding the votes of all
shareholders in confidence from Directors, Officers, and employees, except:
(a) as necessary to meet applicable legal requirements and to assert or
defend claims for or against the Company,
(b) in case of a contested proxy solicitation,
(c) if a shareholder makes a written comment on the proxy card or
otherwise communicates his/her vote to management, or
(d) to allow the independent inspectors of election to certify the results
of the vote.
We will retain an independent tabulator to receive and tabulate the proxies and
independent inspectors of election to certify the results.
8. WHAT ARE YOUR VOTING CHOICES WHEN VOTING FOR DIRECTOR NOMINEES, AND WHAT
VOTE IS NEED TO ELECT DIRECTORS?
In voting on the election of Director nominees, shareholders may vote in one of
the following ways:
(a) in favor of all nominees,
(b) withhold votes as to all nominees, or
(c) withhold votes as to specific nominees.
Directors will be elected by a plurality.
The Board recommends a vote "FOR" each of the nominees.
9. WHAT ARE YOUR VOTING CHOICES WHEN VOTING ON THE PROPOSAL OF THE RESERVATION
OF AN ADDITIONAL 1,500,000 SHARES FOR ISSUANCE UNDER THE INTERACTIVE TELESIS
INC'S 1996 STOCK PLAN?
A separate vote will be held on the proposal of the reservation of additional
shares for issuance under INTERACTIVE TELESIS INC's 1996 Stock Plan.
Shareholders may vote in one of the following ways:
(a) in favor of the proposal,
(b) against the proposal, or
(c) abstain from voting on the proposal.
In order to be approved, the proposal would require approval by a majority of
the votes cast by the holders of the shares of Common Stock voting in person or
by proxy at the meeting. The Board recommends a vote "FOR" this proposal.
10. WHAT ARE VOTING CHOICES WHEN VOTING ON THE PROPOSAL TO AMEND THE COMPANY'S
CHARTER TO AUTHORIZE THE ISSUANCE OF ADDITIONAL COMMON STOCK AND PREFERRED
STOCK?
A separate vote will be held on the proposal to amend the Company's Charter to
authorize the issuance of up to 100,000,000 shares of Common Stock and
25,000,000 shares of Preferred Stock. Shareholders may vote in one of the
following ways:
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(a) in favor of the proposal,
(b) against the proposal, or
(c) abstain from voting on the proposal.
11. WHAT ARE YOUR VOTING CHOICES WHEN VOTING ON THE RATIFICATION OF THE
APPOINTMENT OF PANNELL KERR FORSTER, AND WHAT VOTE IS NEEDED TO RATIFY THEIR
APPOINTMENT?
(a) in favor of ratification,
(b) against the ratification, or
(c) abstain from voting on the ratification.
The proposal to ratify the appointment of Pannell Kerr Forster will require
approval by a majority of the votes cast by the holders of the shares of Common
Stock voting in person or by proxy at the meeting. The Board recommends a vote
"FOR" this proposal.
12. WHAT IF A SHAREHOLDER DOES NOT SPECIFY A CHOICE FOR A MATTER WHEN
RETURNING A PROXY?
Shareholders should specify their choice for each matter on the enclosed form of
proxy. If no instructions are given, proxies which are signed and returned will
be voted FOR the election of all Director nominees, FOR the proposal to ratify
the appointment of Pannell Kerr Forster, and FOR the proposal to reserve
additional shares for issuance under the 1996 Stock Plan.
13. HOW ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?
Abstentions and broker non-votes will not be included in the vote totals and
will not affect the outcome of the vote.
14. COMPLETION AND RETURN OF PROXY
Completed forms of proxy must be deposited at the office of the Company's
registrar and transfer agent, Pacific Corporate Trust Company, 830 - 625 Howe
Street, Vancouver, British Columbia V6C 3B8, not later than forty-eight (48)
hours, excluding Saturdays, Sundays and holidays, prior to the time of the
Meeting, unless the chairman of the Meeting elects to exercise his discretion to
accept proxies deposited subsequently.
15. SEC ANNUAL REPORT FORM 10-KSB
The Company will provide a copy of its Annual Report Form 10-KSB with exhibits
without charge, if requested in writing from a shareholder. The Company's Form
10-KSB Report is available free of charge on the Internet at www.freedgar.com or
at www.sec.gov under Interactive Telesis.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
Our Bylaws provide that the number of directors constituting the Board of
Directors shall set from time to time by the Board, but in no event shall be
less than three. The number of directors is currently set at five and the number
authorized to be elected at the Meeting is five. Therefore, five directors are
to be elected to serve for one year, until the election and qualification of
their successors, and it is intended that proxies, not limited to the contrary,
will be voted FOR all of the management nominees named below. If any such
nominee is unable or declines to serve as a director at the time of the Meeting,
the individuals named in the enclosed proxy may exercise their discretion to
vote for any substitute proposed by the Board of Directors. We do not anticipate
that any nominee listed below will be unable or will decline to serve as a
director. None of the directors or nominees is related by blood, marriage or
adoption to any other nominee or any of our executive officers.
<TABLE>
<CAPTION>
Name Age Director Since
---- --- --------------
<S> <C> <C>
Donald E. Cameron 48 1993
Willard Lee McVey 53 2000
Kenneth G. Ravazzolo (1) 45 2000
Albert L. Staerkel 47 2000
Robert G. Wilson (1)(2) 56 1994
</TABLE>
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
DONALD E. CAMERON. Mr. Cameron founded and has served as President and CEO of
Interactive Telesis since 1993. Prior to joining the Company, Mr. Cameron was a
lawyer specializing in the area of corporate/securities law for a period of
thirteen years and was partner in the law firm of Worrall, Scott, and Page,
Vancouver, Canada. As CEO of the Company, Mr. Cameron oversees all areas of the
Company's activities, including sales, marketing, technical development,
operations, and administration. Mr. Cameron attended the University of British
Columbia where he received a BA in Economics and an LLB.
WILLARD LEE MCVEY. Mr. McVey is currently a consultant specializing in
Electrical Engineering providing consulting services to power utilities and
large industrial firms. Prior to consulting, Mr. McVey was an Electrical
Engineer (1998-2000) and the Electrical Utility Systems Manager (1990-1997) at
Lawrence Livermore National Laboratory. Mr. McVey received a BSEE from
California State University at Fresno and an MSEE from the University of Santa
Clara.
KENNETH G. RAVAZZOLO. Since 1991 Mr. Ravazzolo has been the President and CEO of
Paragon Voice Systems, a subsidiary of Interactive Telesis Inc. Mr. Ravazzolo
was Marketing Manager at Simpact Associates from 1990-1991. Prior to joining
Simpact, Mr. Ravazzolo was Vice President, Industry Marketing, at Data
Acquisition from 1974-1990.
ALBERT L. STAERKEL. Mr. Staerkel is vice president of sales and marketing and
a director of SL3D, Inc., a Boulder, Colorado-based technology start-up company.
Prior to joining SL3D, Inc., in 2000, Mr. Staerkel had been a financial advisor
and registered representative of Morgan Stanley Dean Witter since 1998 and a
financial consultant and registered representative with Merrill Lynch from 1991
until 1998. Mr.
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Staerkel holds a BS degree in engineering from the United States Military
Academy.
ROBERT G. WILSON. Since 1992, Mr. Wilson has been an active Board member for
several private and public companies in the United States and Canada, including
Nanovation Technologies Inc., a private company in Miami involved in optical
engineering; Stamford International Inc., an Ontario, Canada- based merchant
banking firm traded on the OTC Toronto; and Amusement International Ltd., a
Calgary company, traded on the ASE. Mr. Wilson received a BS from the University
of Alberta and an MBA from the University of Western Ontario.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The business of the Company is under the general management of the Board of
Directors as provided by the laws of Delaware and the Bylaws of the Company.
During the fiscal year ended July 31, 2000, the Board of Directors held four
formal meetings. There were no actions by unanimous written consent of the Board
during this period. Each Member of the Board attended at least 75% of the fiscal
meetings of Board of Directors and Board committees of which he was a member.
Each Director holds office until his successor is elected and qualified or until
his earlier resignation in the manner provided in the Bylaws of the Company. The
Board of Directors has established an Audit Committee, consisting of Messrs.
Ravazzolo and Wilson, and a Compensation Committee, consisting of Mr. Wilson.
The Audit Committee reviews the Company's independent auditors, the scope and
timing of the audit services, and other services they are asked to perform,
including the Auditor's report on the Company's financial statements following
completion of the audit, and the Company's policies and procedures, with respect
to internal accounting and financial controls. In addition, the Audit Committee
makes annual recommendations to the Board of Directors for the appointment of
independent auditors for the ensuing year. The Compensation Committee reviews
and recommends to the Board of Directors the compensation and benefits of all
officers of the Company and reviews general policy matters relating to
compensation and benefits of employees of the Company.
VOTE REQUIRED
The five nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted at the Meeting shall be
elected as our directors. Votes withheld from any director will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but have no other effect under Delaware law. However, because
directors are elected by a plurality vote, abstentions in the election of
directors have no effect once a quorum exists. Furthermore, shares represented
by proxies returned by a broker holding such shares in nominee or "street" name
will be counted as present or represented for purposes of determining the
presence or absence of a quorum for the transaction of business, even if such
shares are not voted in matters where discretionary voting by the broker is not
allowed ("broker non-votes"). Withheld votes and broker non-votes, if any, are
not treated as votes cast and therefore, will have no effect on the proposal to
elect directors.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" THE ELECTION OF THE MANAGEMENT NOMINEES LISTED ABOVE.
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PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO THE 1996 STOCK PLAN
PROPOSED AMENDMENT TO 1996 PLAN
An amendment to the 1996 Plan to increase the number of shares reserved for
issuance thereunder from 3,335,000 shares to 4,835,000 shares.
The amendment was approved by the Board of Directors on Oct. 26, 2000. At the
Meeting, the Board of Directors is asking the shareholders to approve this
Amendment. Absent Stockholder approval, all future grants from the 1,500,000
additional shares which are subject to this Amendment will not qualify for
favorable tax treatment as incentive Stock options.
CURRENT PLAN PROVISIONS
A total of 4,835,000 shares of Common Stock have been reserved for issuance
under the 1996 Plan, 1,500,000 of which are subject to Stockholder approval at
the Meeting.
BACKGROUND AND GENERAL INFORMATION
The Interactive Telesis Inc. 1996 Stock Plan (the "1996 Plan") was adopted and
approved by the Board of Directors on October 3, 1996 and by our Stockholders on
December 20, 1996. On Oct. 26, 2000, The Board of Directors approved the
amendment to the 1996 Plan, increasing the number of shares issuable thereunder
by 1,500,000 shares from 3,335,000 shares to 4,835,000 shares. The 1996 Plan
allows the Board of Directors, in its discretion, to award key full-time
employees, non-employee directors, consultants or advisors as an additional
incentive to promote the success of our Company's business incentive Stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended ("ISOs"), Stock Appreciation Rights ("SARs"), non-qualified Stock
options ("NSOs"), restricted Stock, and/or phantom Stocks. To date, the Board
has issued only ISOs and NSOs under the 1996 Plan. As of November 30, 2000,
112,750 shares of Common Stock had been issued upon exercise of options granted
under the 1996 Plan, and options for 2,906,250 shares were outstanding
thereunder at a weighted average exercise price of $0.65 per share. Absent
Stockholder approval, only 101,000 shares remain available for issuance under
the 1996 Plan as ISOs, NSOs or other grants and all future grants from the
500,000 shares subject to this proposal will not qualify as incentive Stock
options.
Options granted under the 1996 Plan to date vest 25% per year on each of the
first, second, third and fourth anniversaries of the date of grant.
As of November 30, 2000, approximately fifty-two persons were eligible to
receive grants under the 1996 Plan. The 1996 Plan is administered by the Board
of Directors. Subject to the restrictions of the 1996 Plan, the Board determines
who is granted options, the terms of options granted, including exercise price,
the number of shares subject to the option and the option's exercisability.
The exercise price of options granted under the 1996 Plan is determined on the
date of grant, and in the case of ISOs must be at least 100% of the fair market
value per share at the time of grant. The exercise price of any option granted
to an optionee who owns Stock possessing more than 10% of the voting power of
our outstanding capital Stock must equal at least 110% of the fair market value
of the Common Stock on the date of grant. The aggregate fair market value of
Common Stock (determined as of the date of the option grant) for which ISOs may
for the first time become exercisable by any individual in any calendar year may
not exceed $100,000. Payment of the exercise price may be made by delivery of
cash or a check to the order of the Company, or by any other means determined by
the Board of Directors.
Options granted to employees under the 1996 Plan generally become exercisable in
increments, based on the optionee's continued employment with us, over a period
of up to four years. The form of option agreement generally provides that
options granted under the 1996 Plan, whether ISOs or NSOs, expire ten years from
the date of grant. ISOs granted pursuant to the 1996 Plan are not transferable
by the optionee, other than by will or the laws of descent and distribution, and
are exercisable during the optionee's
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lifetime only by the optionee. Generally, in the event of a merger of the
Company with or into another corporation or a sale of all or substantially all
of our assets, all outstanding options under the 1996 Plan shall accelerate and
become fully exercisable upon consummation of such merger or sale of assets.
The Board may amend the 1996 Plan at any time or from time to time or may
terminate the 1996 Plan without the approval of the Stockholders, provided that
Stockholder approval is required for any amendment to the 1996 Plan requiring
Stockholder approval under applicable law as in effect at the time. However, no
action by the Board of Directors or Stockholders may alter or impair any option
previously granted under the 1996 Plan. The Board may accelerate the
exercisability of any option or waive any condition or restriction pertaining to
such option at any time. The 1996 Plan will terminate in August 2006, unless
terminated sooner by the Board.
TAX CONSEQUENCES OF OPTIONS
An optionee who is granted an ISO will generally not recognize taxable income
either at the time the option is granted or upon its exercise, although the
exercise will increase the optionee's alternative minimum taxable income by an
amount equal to the difference, if any, between the fair market value of the
shares at the time of exercise and the option's exercise price, and therefore
may subject the optionee to the alternative minimum tax. Upon the sale or
exchange of the shares more than two years after grant of the option and more
than one year after exercising the option, any gain or loss will be treated as
long-term capital gain or loss. If these holding periods are not satisfied, the
optionee will recognize ordinary income at the time of sale or exchange equal to
the difference between the exercise price and the lower of (i) the fair market
value of the shares at the date of the option's exercise or (ii) the sale price
of the shares. We will be entitled to a deduction in the same amount as the
ordinary income recognized by the optionee. Any gain or loss recognized on such
a premature disposition of the shares in excess of the amount treated as
ordinary income will be characterized as long-term or short-term capital gain or
loss, depending on the optionee's holding period with respect to such shares.
All other options that do not qualify as an ISO are referred to as an NSO.
Generally, an optionee will not recognize any taxable income at the time he or
she is granted an NSO. Upon its exercise, however, the optionee will generally
recognize taxable ordinary income measured as the excess of the then fair market
value of the shares acquired over the exercise price of the option. Any taxable
income recognized in connection with an option exercise by an optionee who is
also one of our employees will be subject to tax withholding by us. We will be
entitled to a tax deduction in the same amount as the ordinary income recognized
by the optionee with respect to shares acquired upon exercise of a non-statutory
option. Upon resale of such shares by the optionee, any difference between the
sales price received and the fair market value for the shares on the date of
exercise of the option will be treated as long-term or short-term capital gain
or loss, depending on the optionee's holding period with respect to such shares.
The foregoing is only a summary, based on the current Code and Treasury
Regulations thereunder, of the federal income tax consequences to the optionee
and the Company with respect to the grant and exercise of options under the 1996
Plan. The Summary does not purport to be complete, and does not discuss the tax
consequences of the optionee's death or the income tax laws of any municipality,
state or foreign country in which an optionee may reside.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of our Common
Stock present or represented and voting on this proposal at the Meeting will be
required to approve the Share Amount Amendment. Failure to obtain Stockholder
approval of the Share Amount Amendment will prevent us
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from granting incentive Stock options out of the additional 1,500,000 shares,
but will not necessarily prevent us from otherwise granting other awards under
the 1996 Plan.
Votes withheld on this proposal will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business and will be
treated as shares represented and voting on this proposal at the Meeting. In
accordance with Delaware law, abstentions will also be counted for purposes of
determining the total number of shares represented and voting on this proposal.
While broker non-votes will be counted for purposes of determining the presence
or absence of a quorum, broker non-votes will not be counted for purposes of
determining the number of shares represented and voting with respect to the
particular proposal on which the broker has expressly not voted and,
accordingly, will not affect the approval of this proposal.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR" THE
PROPOSED AMENDMENT TO THE 1996 PLAN.
PROPOSAL NO. 3
TO AMEND THE COMPANY'S CHARTER TO INCREASE NUMBER OF
AUTHORIZED SHARES
At the annual meeting, the shareholders of the Company will be asked to approve
an amendment to the Company's Certificate of Incorporation (the "Charter") to
increase the authorized shares of the Company to 100,000,000 and to authorize
the issuance of up to 25,000,000 shares of Preferred Stock.
PROPOSED AMENDMENT TO CHARTER
To amend and restate Article V of the Company's Charter in its entirety to read
as follows:
"FOURTH: The Corporation is authorized to issue two classes of Stock to be
designated, respectively, Common Stock and Preferred Stock. The total
number of shares of Stock which the Corporation has authority to issue
is One Hundred Twenty-five Million (125,000,000) shares, par value
one-tenth of one cent ($0.001), of which One Hundred Million
(100,000,000) shares shall be designated "Common Stock" and
Twenty-five Million (25,000,000) shares shall be designated "Preferred
Stock." Shares of Preferred Stock may be issued from time-to-time in
one or more series, each series to have such distinctive designation
or title as may be fixed by the Board of Directors prior to the
issuance of any shares of such series. Each such series of Preferred
Stock shall have such voting rights, designations, preferences and
relative, participating, optional or other special rights, and such
qualifications, limitations, or restrictions as shall be stated and
expressed in the resolution or resolutions providing for the issuance
of such shares of Preferred Stock as may be adopted from time to time
by the Board of Directors, in accordance with the laws of the state of
Delaware."
CURRENT CHARTER PROVISION
Article Fourth of the Company's Charter currently provides that the
Company can issue up to 50,000,000 shares, $0 .001 par value, of
Common Stock, and does not authorize the issuance of Preferred Stock.
9
<PAGE> 13
BACKGROUND AND GENERAL INFORMATION
The proposed amendment to the Company's charter must be approved by its
shareholders in order to authorize the Preferred Stock the Company has agreed to
issue under the convertible notes and the equity credit line described below.
On October 24, 2000, the Company and Hambrecht and Quist Guaranty Finance, LLC
("H&QGF") entered into a letter of intent whereby H&QGF will invest up to $4.0
million in the Company, $1.0 million by the purchase of a convertible note and
up to $3.0 million pursuant to an equity line of credit. The $1.0 million
convertible note will bear interest at 7.5% per annum, have a term of 3 years,
and be convertible into the Company's convertible Preferred Stock at a price of
$1.10 per share during the first year, $1.52 during the second year, and $2.00
per share during the third year.
Under the equity credit line, the Company is entitled to sell ("put"), from time
to time to H&QGF up to $3 million of its Preferred Stock at a price equal to 83%
of the lower of (x) the average of the closing bid prices of the Company's
Common Stock for the five trading days immediately preceding notice, of the date
of its notice to put the Stock or (x) the closing price of the day of the put.
Each put creates a subseries of convertible Stock which will have a liquidation
preference equal to the price paid. The equity line of credit will have a term
of 12 months and allow the Company to sell as much as $500,000 in Preferred
Stock at any time, subject to certain conditions and the requirement that H&QGF
hold no more than 9.9% of the Company's outstanding Stock at any time.
Each series of this convertible Preferred Stock will have a dividend rate equal
to 7.5% of the Stock's liquidation preference payable at the election of the
Company either in cash or in kind in Preferred Stock. All such convertible
Preferred Stock will be convertible into Common Stock on a one-per-one basis.
The convertible note and the convertible Preferred Stock will be adjusted to
reflect any split, subdivision or combination of the Company's Common or
convertible Preferred Stock.
In addition to authorizing the above-described Preferred Stock, management
believes that it is in the best interests of the Company to increase the amount
of its authorized capital Stock so as to allow the Board maximum flexibility in
issuing additional shares in possible future public and private offerings, for
cash and possibly as consideration for the acquisition of assets in purchase,
merger and/or consolidation transactions.
If the proposal is approved, the potential capitalization of the Company will
differ from that presently authorized by the Charter. Presently, the authorized
capital Stock of the Company will be increased from 50,000,000 shares of Common
Stock. Of these shares, 31,874,460 shares of which are issued and outstanding,
with up to 4,000,000 of the remaining unissued shares reserved for issuance
under outstanding options and commitments under the June 12, 2000 Agreement with
BH Capital Investments LP and Excalibur Limited Partner. If the proposal is
approved, the authorized capital Stock of the Company will be 100,000,000 shares
of Common Stock par value $.001 per share and 25,000,000 shares of Preferred
Stock, par value $.001 per share (the "Preferred Stock"). No change in the
number of outstanding or reserved shares of Common Stock will occur as a result
of the proposal.
If the proposal is approved, the Company will authorize and issue such series of
Preferred Stock to complete the sale of the convertible notes and establish the
equity line of credit discussed above. If the amendment is approved, the Board
will also be empowered by Articles to fix for each such series the terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption on such other series of Preferred as are permitted by
the Delaware General Corporations Law. Accordingly, if the Board so authorizes,
the holders of Preferred Stock may be entitled to vote separately as a class in
connection with approval of certain extraordinary corporate transactions in
circumstances where the Delaware General Corporation Law does not ordinarily
require such a class vote, or might be given a disproportionately large number
of votes. Such Preferred Stock could also be convertible into a large number of
shares of Common Stock under certain circumstances or have other terms which
might make acquisition of a controlling interest in the Company more difficult
or more costly, including the right to elect additional directors to the Board.
Potentially, the Company could issue its Preferred Stock to create
10
<PAGE> 14
voting impediments or to frustrate persons seeking to effect a merger or
otherwise to gain control of the Company. Also, the Preferred Stock could be
privately placed with purchasers which might side with the management in
opposing a hostile tender offer or other attempt to obtain control of the
Company. It is not the present intention of the Board to seek Stockholder
approval prior to any issuance of any additional Preferred Stock or Common
Stock, except as required by law.
In the event the amendment is not approved, the Company would be unable to issue
Preferred Stock under either the equity line of credit or upon conversion of the
convertible notes. In such event, the Company would not be able to obtain
additional financing from the sale of its equity Stock, including the $4 million
of financing as proposed from H&QGF, and would not have this capital available
for its ASR hosting services capabilities and business. In the event the
amendment is not approved, management intends to immediately seek approval of a
similar amendment to its charter authorizing Preferred Stock.
VOTE REQUIRED
Under the Company's Charter and Delaware law, approval of the shareholders of
the Company requires the affirmative vote of the holders of a majority of the
outstanding Shares of the Company. For this purpose, the term "majority of the
outstanding shares" means the vote of the holders of more than 50% of the
Company's outstanding shares eligible to vote as of the Record Date which are
present or represented by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND
RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY VOTE IN FAVOR OF THE PROPOSAL.
UNLESS OTHERWISE INSTRUCTED, THE PROXIES WILL VOTE IN FAVOR OF THE PROPOSAL TO
AMEND THE COMPANY'S CHARTER.
If shareholders of the Company fail to approve this proposal, the Board will
immediately consider what action to take and could request the shareholders of
the Company to reconsider an amendment to the Articles of Incorporation at a
future time.
PROPOSAL NO. 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Our Board of Directors has appointed the firm of Pannell Kerr Forster, San
Diego, California, to serve as our independent auditors for the fiscal year
ending July 31, 2001, and recommends that the Stockholders ratify such action.
Pannell Kerr Forster has audited our accounts since 1999 and has advised us that
it does not have, and has not had, any direct or indirect financial interest in
the Company or its subsidiaries in any capacity other than that of serving as
independent auditors. Representatives of Pannell Kerr Forster are expected to
attend the Meeting. They will have an opportunity to make a statement, if they
desire to do so, and will also be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares of our Common
Stock present or represented and voting on this proposal at the Meeting shall
constitute ratification of the appointment of Pannell Kerr Forster. If the
appointment of Pannell Kerr Forster is not ratified by the Stockholders, the
Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PANNELL KERR FORSTER AS OUR INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING JULY 31, 2001.
11
<PAGE> 15
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock as of November 27, 2000, by (i) each
person who is known by the Company to be the beneficial owner of more than five
percent (5%) of the issued and outstanding shares of Common Stock, (ii) each of
the Company's directors and executive officers, and (iii) all directors,
directors nominees, and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
NAME SHARES OWNED OR OWNED OR
FULLY VESTED FULLY VESTED
--------------------------- ----------------- ------------
<S> <C> <C>
William R. Adams (1)(5) 37,500 0.12%
Donald E. Cameron (1)(2) 1,479,544 4.45%
Kenneth M. Gotthelf(1) N/A N/A
Marc Goyette (1)(3) 169,643 0.53%
Douglas T. Luke (1) 27,350 0.09%
Willard Lee McVey (1) 1,038,000 3.37%
Larry W. Ohl(1) N/A N/A
Kenneth Ravazzolo (1) N/A N/A
Albert Staerkel (1)(6) 264,150 0.84%
David Webb (1)(4) 250,000 0.78%
Robert Wilson (1)(3) 62,500 0.20%
All current directors and
officers as a group (eleven) 3,328,687 9.52%
</TABLE>
(1) Address is 12636 High Bluff Drive, Suite 200, San Diego, California
92130.
(2) Includes fully vested options granted to Mr. Cameron to purchase
965,000 shares of Common Stock at an exercise price of 40 cents per share
for 395,000 shares an 35 cents per share for 570,000 shares and 407,401
warrants granted to Mr. Cameron pursuant to a 1996 private placement to
purchase 407,401 shares of Common Stock at an exercise price of 40 cents
per share.
(3) Includes options granted to Messrs. Goyette and Wilson to purchase
100,000 shares each of Common Stock at an exercise price of 40 cents per
shares (37,500 vested shares each), and 25,000 shares each of Common Stock
at an exercise price of 35 cents per share (all shares granted under this
option fully vested). Effective October 13, 2000, the Board has accepted
the resignation of Marc Goyette.
(4) Includes fully vested options granted to Mr. Webb to purchase 250,000
shares of Common Stock at an exercise price of 40 cents per share for
100,000 shares and at 35 cents per share for 150,000 shares.
(5) Includes options granted to Mr. Adams to purchase 75,000 shares of
Common Stock at an exercise price of 40 cents per share for 4,000 shares
(2,000 vested) and at 35 cents per share for 71,000 shares (35,500
vested).
(6) Includes 154,250 shares in the name of Albert Lee Staerkel and 109,900
shares in the name of Luisa Ann Staerkel (wife).
EXECUTIVE COMPENSATION
The following table sets forth all annual and long-term compensation for
services in all capacities to the Company for the last three fiscal years
in respect of each of the individuals who were, as at July 31, 2000, the
Chief Executive Officer and the other four most highly compensated
executive officers of the Company (collectively "the Named Executive
Officers"), including any individual who would have qualified as a Named
Executive Officer but for the fact that individual was not serving as such
an Officer at the end of the most recently completed financial year. The
Company has one Named Executive Officer.
12
<PAGE> 16
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
RESTRICTED
NAME AND SECURITIES SHARES OR
PRINCIPAL FINANCIAL SALARY BONUS OTHER ANNUAL UNDER OPTIONS RESTRICTED
POSITION YEAR-END ($U.S.) ($) COMPENSATION GRANTED (#) SHARE UNITS
<S> <C> <C> <C> <C> <C> <C>
Donald Cameron 1998 $108,300 -- -- -- --
President/CEO
Donald Cameron 1999 $120,000 $ 36,250* -- -- --
President/CEO
Donald Cameron 2000 $150,000 15,697 -- --
President/CEO
David J. Webb 2000 $120,000
Chief Operating Officer
</TABLE>
* Bonus to CEO/Director was used to pay off a loan due from CEO/Director of
$21,000 plus the income taxes associated with such bonus.
The Company's executive bonuses are determined by the Compensation Committee of
the Board of Directors. Annual bonuses are determined by the Committee based on
the executive's performance against the annual objectives and goals of the
Company set by the Committee. A member of the Committee recuses himself from
voting on his own bonus compensation amounts.
EMPLOYMENT AGREEMENTS
We have no written or oral contracts for employment with any of our employees,
directors, or executive officers.
COMPENSATION OF DIRECTORS
The Company has the following arrangement by which non-employee directors are
compensated:
-- Cash: $6,000 per annum plus out of pocket expenses to attend meetings -
paid quarterly.
-- Stock Option: We grant Stock options to purchase 25,000 shares of the
Company annually to each director of the Company under the 1996 Stock Option
Plan, to a cumulative maximum of 150,000 shares per Director. The options are
granted immediately after the Annual General Meeting with an exercise price
equal to the market price at the time of granting. The options vest at the end
of the fiscal year they are granted.
Previously, the following directors were granted options to purchase securities
as follows:
<TABLE>
<CAPTION>
NUMBER
OF SHARES EXERCISE PRICE
--------- --------------
<S> <C> <C>
Marc Goyette* 100,000 40 cents
Marc Goyette 25,000 35 cents
Robert Wilson* 100,000 40 cents
Robert Wilson 25,000 35 cents
</TABLE>
*These options vest annually over four years. Under the 1996 Stock Option Plan,
all Stock options
13
<PAGE> 17
terminate ninety (90) days after the optionee ceases to hold his or her position
with the Company.
The Company has granted Stock options to directors to assist the Company in
compensating, attracting, retaining, and motivating the directors of the Company
and to closely align the personal interests of the directors with those of the
shareholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Exchange Act, our directors and executive
officers are required to file reports with the Securities and Exchange
Commission indicating their holdings of and transactions in our equity
securities. To our knowledge, based solely on a review of the copies of such
reports furnished to us and written representations that no other reports were
required, there were no reports required under Section 16(a) of the Exchange Act
which were not timely filed during the fiscal year ended July 31, 2000.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholders having proposals that they desire to present at next year's annual
meeting of Stockholders of the Company should, if they desire that such
proposals be included in our Proxy Statement relating to such meeting, submit
such proposals in time to be received by us not later than September 30, 2001.
To be so included, all such submissions must comply with the requirements of
Rule 14a-8 promulgated under the Exchange Act and the Board of Directors directs
your close attention to that Rule. In addition, management's proxy holders will
have discretion to vote proxies given to them on any Stockholder proposal of
which we do not have notice prior to November 30, 2000. Proposals may be mailed
to the Corporate Secretary, Interactive Telesis Inc., 12636 High Bluff Drive,
2nd Floor, San Diego, California 92130.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before the
Meeting, but it is intended that, as to any such other business, the shares will
be voted pursuant to the proxy in accordance with the best judgment of the
person or persons acting thereunder.
-----------------------------------------------------
14
<PAGE> 18
PROXY
______________________
GENERAL MEETING OF SHAREHOLDERS OF
INTERACTIVE TELESIS INC.
(Name of Company)
TO BE HELD AT The Hilton Hotel, 15575 Jimmy Durante Blvd., Del Mar, CA 92014,
(Location of Meeting)
ON Friday, January 26, 2001, AT 10:00 AM
(Day of week) (Month/day)(Year) (Time of Meeting)
THE UNDERSIGNED MEMBER ("REGISTERED SHAREHOLDER") OF THE COMPANY HEREBY APPOINTS
DONALD E. CAMERON, A DIRECTOR OF THE COMPANY, or failing this person, WILLIAM R.
ADAMS, AN OFFICER OF THE COMPANY, or in the place of the foregoing,_____________
(print the name) as proxy holder for and on behalf of the Registered Shareholder
with the power of substitution to attend, act and vote for and on behalf of the
Registered Shareholder in respect of all matters that may properly come before
the aforesaid meeting of the Registered Shareholders of the Company (the
"Meeting") and at every adjournment thereof, to the same extent and with the
same powers as if the undersigned Registered Shareholder were present at the
said Meeting, or any adjournment thereof.
The Registered Shareholder hereby directs the proxyholder to vote the securities
of the Company recorded in the name of the Registered Shareholder as specified
herein.
THE UNDERSIGNED REGISTERED SHAREHOLDER HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN
TO ATTEND AND VOTE AT SAID MEETING.
REGISTERED HOLDER SIGN HERE: ______________________________________
DATE SIGNED: ___________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RESOLUTIONS (For full details of each item, please see the enclosed Notice of
Meeting and Proxy Statement)
================================================================================
For Against Withhold
-------------------------------
1. Election of Directors:
--------------------------------------------------------------------------------
- To elect as Director, Donald E. Cameron N/A
--------------------------------------------------------------------------------
- To elect as Director, W. Lee McVey N/A
--------------------------------------------------------------------------------
- To elect as Director, Kenneth Ravazzolo N/A
--------------------------------------------------------------------------------
- To elect as Director, Albert Staerkel N/A
--------------------------------------------------------------------------------
- To elect as Director, Robert G. Wilson N/A
--------------------------------------------------------------------------------
2. To reserve an additional 1,500,000
shares for issuance under the ITI 1996
Stock Plan
--------------------------------------------------------------------------------
3. To amend the Company's Charter to
authorize the issuance of up to 100 million
shares of common stock and 25 million
shares of preferred stock
--------------------------------------------------------------------------------
4. To ratify the appointment of Pannell
Kerr Forster as independent auditors of the
Company
--------------------------------------------------------------------------------
5. To act upon such other matters as may
properly come before the meeting or any
adjournment thereof.
--------------------------------------------------------------------------------
THIS PROXY MUST BE SIGNED AND DATED.
SEE IMPORTANT INSTRUCTIONS ON REVERSE.
<PAGE> 19
INSTRUCTIONS FOR COMPLETION OF PROXY
1. THIS PROXY IS SOLICITED BY THE MANAGEMENT OF THE COMPANY.
2. This form of proxy ("Instrument of Proxy") MUST BE SIGNED by you, the
Registered Shareholder, or by your attorney duly authorized by you in
writing, or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and IF EXECUTED BY AN ATTORNEY, OFFICER,
OR OTHER DULY APPOINTED REPRESENTATIVE, the original or a notarial copy of
the instrument so empowering such person, or such other documentation in
support as shall be acceptable to the Chairman of the Meeting, must
accompany the Instrument of Proxy.
3. IF THIS INSTRUMENT OF PROXY IS NOT DATED in the space provided, authority
is hereby given by you, the Registered Shareholder, for the proxyholder to
date this proxy seven (7) calendar days after the date on which it was
mailed to you, the Registered Shareholder, by Pacific Corporate Trust
Company.
4. A REGISTERED SHAREHOLDER WHO WISHES TO ATTEND THE MEETING AND VOTE ON THE
RESOLUTIONS IN PERSON, may simply register with the scrutineers before the
Meeting begins.
5. A REGISTERED SHAREHOLDER WHO IS NOT ABLE TO ATTEND THE MEETING IN PERSON
BUT WISHES TO VOTE ON THE RESOLUTIONS, may do the following:
(a) APPOINT ONE OF THE MANAGEMENT PROXYHOLDERS named on the Instrument of
Proxy, by leaving the wording appointing a nominee as is (i.e. do not
strike out the management proxyholders shown and do not complete the
blank space provided for the appointment of an alternate proxyholder).
Where no choice is specified by a Registered Shareholder with respect
to a resolution set out in the Instrument of Proxy, a management
appointee acting as a proxyholder will vote the resolution as if the
Registered Shareholder had specified an affirmative vote;
OR
(b) APPOINT ANOTHER PROXYHOLDER, who need not be a Registered Shareholder
of the Company, to vote according to the Registered Shareholder's
instructions, by striking out the management proxyholder names shown
and inserting the name of the person you wish to represent you at the
meeting in the space provided for an alternate proxyholder. If no
choice is specified, the proxyholder has discretionary authority to
vote as the proxyholder sees fit.
6. THE SECURITIES REPRESENTED BY THIS INSTRUMENT OF PROXY WILL BE VOTED OR
WITHHELD FROM VOTING IN ACCORDANCE WITH THE INSTRUCTIONS OF THE REGISTERED
SHAREHOLDER ON ANY POLL of a resolution that may be called for and, if the
Registered Shareholder specifies a choice with respect to any matter to be
acted upon, the securities will be voted accordingly. Further, if so
authorized by this Instrument of Proxy, the securities will be voted by the
appointed proxyholder with respect to any amendments or variations of any
of the resolutions set out on the Instrument of Proxy or matters which may
properly come before the Meeting as the proxyholder in its sole discretion
sees fit.
7. If a Registered Shareholder has submitted an Instrument of Proxy, THE
REGISTERED SHAREHOLDER MAY STILL ATTEND THE MEETING AND MAY VOTE IN PERSON.
To do so, the Registered Shareholder must record his/her attendance with
the scrutineers before the commencement of the Meeting and revoke, in
writing, the prior votes.
================================================================================
TO BE REPRESENTED AT THE MEETING, VOTING INSTRUCTIONS MUST
BE DEPOSITED AT THE OFFICE OF "PACIFIC CORPORATE TRUST COMPANY" NO LATER THAN
FORTY EIGHT ("48") HOURS (EXCLUDING SATURDAYS, SUNDAYS
AND HOLIDAYS) PRIOR TO THE TIME OF THE MEETING, OR ADJOURNMENT THEREOF.
THE MAILING ADDRESS OF PACIFIC CORPORATE TRUST COMPANY IS SUITE 830,
625 HOWE STREET, VANCOUVER, BRITISH COLUMBIA, V6C 3B8,
AND ITS FAX NUMBER IS (604) 689-8144.
TELEPHONE VOTING CAN BE COMPLETED AT 1-888-TEL-VOTE (1-888-835-8683)
AND INTERNET VOTING AT HTTP://WWW.STOCKTRONICS.COM/WEBVOTE
================================================================================
