<PAGE> 1
GO2NET, INC.
ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
The Annual Meeting of the Stockholders of go2net, Inc. will be held on
Thursday, March 12, 1998, at 11:00 a.m., Local Time, at First Interstate Center,
999 Third Avenue, 40th Floor Conference Room, Seattle, Washington, for the
following purposes:
1. To elect five directors of the Company to serve until the next
Annual Meeting of Stockholders as more fully described in the accompanying
Proxy Statement.
2. To consider and act upon a proposal to ratify, confirm and approve
an amendment to the go2net, Inc. 1996 Stock Option Plan to increase the
number of shares reserved for grant thereunder from 750,000 to 1,500,000.
3. To consider and act upon a proposal to ratify, confirm and approve
the selection of Ernst & Young LLP as the independent certified public
accountants of the Company for fiscal year 1998.
4. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on January 20, 1998
as the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By order of the Board of Directors
ETHAN CALDWELL
Secretary
Seattle, Washington
January 28, 1998
<PAGE> 2
GO2NET, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of go2net, Inc. (the "Company") for use at the
1998 Annual Meeting of Stockholders to be held on Thursday, March 12, 1998, at
the time and place set forth in the notice of the meeting, and at any
adjournments thereof. The approximate date on which this Proxy Statement and
form of proxy are first being sent to stockholders is February 6, 1998.
If the enclosed proxy is properly executed and returned, it will be voted
in the manner directed by the stockholders. If no instructions are specified
with respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person signing the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Secretary of the Company at any time before the proxy is
exercised.
The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the meeting in order to constitute a quorum for the
transaction of business. The election of the nominees for director will be
decided by plurality vote. The affirmative vote of the holders of at least a
majority of the shares of Common Stock voting in person or by proxy at the
meeting are required to approve all other matters listed in the notice of the
meeting.
The Company will bear the cost of the solicitation. It is expected that the
solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telecopier and in
person and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy materials to their principals at the
expense of the Company.
The Company's principal executive offices are located at 999 Third Avenue,
Suite 4700, Seattle, Washington 98104, (206) 447-1595.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on January 20, 1998
are entitled to notice of and to vote at the meeting. On that date, the Company
had outstanding and entitled to vote 4,503,092 shares of Common Stock, par value
$.01 per share ("Company's Common Stock" or "Common Stock"). Each outstanding
share of the Company's Common Stock entitles the record holder to one vote. All
votes will be tabulated by employees of Continental Stock Transfer Corporation,
the Company's transfer agent for the Common Stock, who will serve as inspectors
of election. Abstentions and broker non-votes are each included in the
determination of the number of shares present but are not counted on any matters
brought before the meeting.
ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at five for the
coming year. It is proposed that each of the nominees listed below will be
elected to hold office until the next Annual Meeting of Stockholders and until
his successor is duly elected and qualified or until he sooner dies, resigns or
is removed.
The persons named in the accompanying proxy will vote, unless authority is
withheld, for the election of the nominees named below. If any nominee should
become unavailable for election, which is not anticipated,
<PAGE> 3
the persons named in the accompanying proxy will vote for such substitute as the
Board of Directors may recommend. No nominee is related to any other executive
officer of the Company.
NOMINEES
The nominees for election as directors, their ages, their positions with
the Company, the period during which they have served as directors and their
principal occupations and other directorships held by them are set forth below.
RUSSELL C. HOROWITZ, 31 years old, is a founder of the Company and has
served as its President, Chief Executive Officer, Chief Financial Officer and a
director since its inception in February 1996. In March 1996, Mr. Horowitz
founded Xanthus Capital, L.P., a Seattle, Washington-based merchant bank that
focuses primarily on developing companies in emerging growth industries or
special situations. Mr. Horowitz serves as the Chief Executive Officer and a
director of Xanthus Management, L.L.C., the general partner of Xanthus Capital,
L.P., and of DMR Investments, L.L.C., the investment advisor to Xanthus Capital,
L.P. In July 1992, Mr. Horowitz was a founder of Active Apparel Group, Inc., a
New York based apparel supplier. From 1992 until April 1994, Mr. Horowitz served
as its Chief Financial Officer; and from May 1994 until May 1997, Mr. Horowitz
served as its Director of Corporate Development and Investor Relations. Prior to
July 1992, Mr. Horowitz served as a financial advisor to start-up and developing
companies. Mr. Horowitz received a B.A. in Economics from Columbia College of
Columbia University in 1988.
JOHN KEISTER, 31 years old, is a founder of the Company and has served as
the Company's Chief Operating Officer since its inception in February 1996 and a
director since September 1997. From 1994 to February 1996, Mr. Keister served as
the President, Chief Operating Officer and a director of ViewCom Technology
International, Inc., a Seattle, Washington-based computer software developer.
From 1992 to 1994, Mr. Keister managed European marketing operations for Dorian
International, Inc., a White Plains, New York-based export management company.
Mr. Keister received a B.A. in International Affairs and Philosophy from
Occidental College in 1989.
DENNIS CLINE, 37 years old, currently serves as the Executive
Vice-President of Worldwide Sales for Network Associates, Inc., formerly known
as McAfee Associates, Inc., a leading provider of network security and
management tools for corporate accounts whose common stock is trading on the
Nasdaq National Market System under the symbol "NETA." Mr. Cline has served in a
variety of executive sales positions for McAfee Associates, Inc. since 1994.
From January 1993 to November 1993, Mr. Cline was Vice President of Worldwide
Sales for Fifth Generation Systems, a software utilities company. Prior to 1993,
Mr. Cline worked in sales management for various technology companies including:
GCC Technologies, Inc., a manufacturer of computer printers, Alias Research, a
graphic software company, Claris Corporation, an application software company,
and the Microsoft Corporation.
MICHAEL J. RICCIO, JR., 36 years old, has served as a director of the
Company since September 1997. Mr. Riccio has been an attorney with Hutchins,
Wheeler & Dittmar, a Boston-based law firm, since 1989, and currently is a
shareholder of the Firm. Prior to joining Hutchins, Wheeler & Dittmar, Mr.
Riccio was an associate of Willkie Farr & Gallagher, a New York-based law firm.
Mr. Riccio is also a director of F3 Software Corporation, a developer of forms
automation software. Mr. Riccio received a B.S. in Business Administration from
Bucknell University in 1983 and a J.D. from Albany Law School of Union
University in 1986.
MARTIN L. SCHOFFSTALL, 37 years old, has served as a director of the
Company since August 1996. Mr. Schoffstall was a co-founder of PSINet, Inc., an
Internet access and service provider whose common stock is quoted for trading on
the Nasdaq National Market System under the symbol "PSIX." Mr. Schoffstall had
been a Senior Vice President, Chief Technology Officer and a director of PSINet,
Inc. since its inception
2
<PAGE> 4
in 1990 until 1996. In 1996 Mr. Schoffstall founded TimeSink, Inc., an Internet
content provider of software, technology and on-line gaming for the World Wide
Web. Mr. Schoffstall serves as the President, Chief Executive Officer and
Chairman of the Board of TimeSink, Inc. Since June 1996, Mr. Schoffstall has
served as a director of Ascend Communications, Inc., a world-wide provider of
remote computer networking solutions whose common stock is quoted for trading on
the Nasdaq National Market System under the symbol "ASND." Prior to forming
PSINet, Inc. and TimeSink, Inc., Mr. Schoffstall was co-founder of, and from
January 1987 to December 1989, served as Vice President for Technology and
Marketing for, NYSERNet. From May 1985 until December 1988, Mr. Schoffstall was
an instructor at Rensselaer Polytechnic Institute. Mr. Schoffstall also served,
from May 1984 until May 1985, as a Senior Systems Engineer for Cadmus Computer
Systems and, from June 1982 until May 1984, as a systems engineer for Internet
protocols at Bolt, Beranek & Newman Inc. Mr. Schoffstall co-authored the
national standard network management software, Simple Network Management
Protocol. Mr. Schoffstall received a E.C.S.C. from Rensselaer Polytechnic
Institute in 1982.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE
NOMINEES.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During fiscal 1997, there were two meetings of the Board of Directors of
the Company. All of the directors attended at least 75% of the aggregate of (i)
the total number of meetings of the Board of Directors during which they served
as director and (ii) the total number of meetings held by committees of the
Board of Directors on which they served. The Board of Directors does not have a
Nominating Committee. None of the directors received compensation for serving as
directors of the Company, except that each of Messrs. Cline, Riccio and
Schoffstall received options to acquire 10,000 shares of Common Stock of the
Company under the Company's 1996 Stock Option Plan, and Messrs. Horowitz and
Keister received compensation as employees of the Company. Directors are
reimbursed for reasonable out-of-pocket expenses incurred in attending Meetings
of the Board or committees thereof.
The Board of Directors has a Compensation Committee whose present members
are Messrs. Cline and Riccio. The Compensation Committee determines the
compensation to be paid to key officers of the Company and administers the
Company's stock option plans. During fiscal 1997, there was one meeting of the
Compensation Committee.
The Company also has an Audit Committee whose present members are Messrs.
Cline and Schoffstall. The Audit Committee reviews with the Company's
independent auditors the scope of the audit for the year, the results of the
audit when completed and the independent auditors' fee for services performed.
The Audit Committee also recommends independent auditors to the Board of
Directors and reviews with management various matters related to its internal
accounting controls. During fiscal 1997, there was one meeting of the Audit
Committee.
3
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of January 20, 1998 (i) by each
person who is known by the Company to own beneficially more than five percent
(5%) of the Company's Common Stock, (ii) by each of the Company's directors,
(iii) by each executive officer of the Company, and (iv) by all directors and
executive officers who served as directors or executive officers at January 20,
1998 as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
- - ---------------------------------------------------------- ----------------------- ----------------
<S> <C> <C>
Russell C. Horowitz(2)(3)................................. 1,733,650 37.56%
c/o go2net, Inc.
999 Third Avenue
Seattle, Washington 98104
Xanthus Capital, L.P.(3).................................. 516,150 11.46%
999 Third Avenue
Seattle, Washington 98104
John Keister(4)........................................... 237,500 5.15%
c/o go2net, Inc.
999 Third Avenue
Seattle, Washington 98104
Paul S. Phillips.......................................... 75,000 1.67%
c/o go2net, Inc.
999 Third Avenue
Seattle, Washington 98104
Dennis Cline(5)........................................... 85,000 1.89%
47 Harrowgate Drive
Cherry Hill, New Jersey 08003
Michael J. Riccio, Jr.(5)................................. 25,000 .55%
101 Federal Street
Boston, Massachusetts 02110
Martin L. Schoffstall(5)(6)............................... 60,000 1.33%
5790 Devonshire Road
Harrisburg, Pennsylvania 17112
All executive officers and
directors as a group (6 persons)(3)..................... 2,216,150 46.58%
</TABLE>
- - ---------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options held by that person that are
currently exercisable, or become exercisable within 60 days from the date
hereof, are deemed outstanding. However, such shares are not deemed
outstanding for purposes of computing the percentage ownership of any other
person. Percentage ownership is based on 4,503,092 shares of Common Stock
outstanding as of January 20, 1998.
(2) Includes 450,000 shares of Common Stock held by The Porpoise Corporation, a
Washington corporation wholly owned by Mr. Horowitz. Also includes options
to purchase 112,500 shares of Common Stock that are currently exercisable.
(3) Includes 516,150 shares of Common Stock held by Xanthus Capital, L.P. Mr.
Horowitz may be deemed to be the beneficial owner of the shares of Common
Stock held by Xanthus Capital, L.P. by virtue of his role as a director,
executive officer and interest holder of Xanthus Management, L.L.C., the
general
4
<PAGE> 6
partner of Xanthus Capital, L.P. Mr. Horowitz disclaims beneficial ownership
of such shares except to the extent of his pecuniary interest in Xanthus
Capital, L.P.
(4) Includes options to purchase 112,500 shares of Common Stock that are
currently exercisable.
(5) Includes options to purchase 10,000 shares of Common Stock that are
currently exercisable.
(6) Includes 37,500 shares of Common Stock held by MLS-I, L.L.C., a limited
liability company of which Mr. Schoffstall is an executive officer.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors has
furnished the following report on executive compensation.
The Company's executive compensation program is administered by the
Committee. The Committee, which is composed of two independent directors,
establishes and administers the Company's executive compensation policies and
plans and administers the Company's stock option and other equity-related
employee compensation plans. The Committee considers internal and external
information in determining officers' compensation.
Compensation Philosophy
The Company's compensation policies for executive officers are based on the
belief that the interests of executives should be closely aligned with those of
the Company's shareholders. The Compensation policies are designed to achieve
the following objectives:
Offer compensation opportunities that attract highly qualified
executives, reward outstanding initiative and achievement, and retain the
leadership and skills necessary to build long-term shareholder value.
Maintain a significant portion of executives' total compensation at
risk, tied to both the annual and long-term financial performance of the
Company and the creation of shareholder value.
Further the Company's short and long-term strategic goals and values
by aligning compensation with business objectives and individual
performance.
Compensation Program
The Company's executive compensation program has three major integrated
components, base salary, annual incentive awards, and long term incentives.
Base Salary. Base salary levels for executive officers are determined
annually by reviewing the competitive pay practices of Internet companies of
similar size and market capitalization, the skills, performance level, and
contribution to the business of individual executives, and the needs of the
Company. Overall, the Company believes that base salaries for its executive
officers are below competitive salary levels for similar positions in these
Internet companies.
Annual Incentive Awards. The Company's executive officers may be eligible
to receive annual cash bonus awards designed to motivate executives to attain
short-term and long-term corporate and individual management goals. The
Committee establishes the annual incentive opportunity for each executive
officer in relation to his or her base salary. For 1997, there was no formal
bonus program established for executives.
5
<PAGE> 7
Long-Term Incentives. The Committee believes that stock options are an
excellent vehicle for compensating its officers and employees. The Company
provides long-term incentives through its 1996 Stock Option Plan, the purpose of
which is to create a direct link between executive compensation and increases in
shareholder value. Stock options are granted at fair market value and vest in
installments generally over one to four years. When determining option awards
for an executive officer, the Committee considers the executive's current
contribution to Company performance, the anticipated contribution to meeting the
Company's long term strategic performance goals, and industry practices and
norms. Long-term incentives granted in prior years and existing levels of stock
ownership are also taken into consideration. Because the receipt of value by an
executive officer under a stock option is dependent upon an increase in the
price of the Company's Common Stock, this portion of the executive's
compensation is directly aligned with an increase in shareholder value.
Chief Executive Officer Compensation
Mr. Horowitz's base salary, annual incentive award and long-term incentive
compensation are determined by the Committee based upon the same factors as
those employed by the Committee for executive officers generally. Mr. Horowitz's
current annual base salary is $36,000 subject to annual review and increase by
the Board of Directors of the Company. During fiscal 1997, Mr. Horowitz was
granted options to purchase 150,000 shares of Common Stock at an exercise price
of $8.00 per share, the initial public offering price of the Company's Common
Stock. The options have a 60-month term and provide that one-half of the options
vest on the 90th day following completion of the initial public offering (July
27, 1997), and one-quarter of the options vest on the one year and 18th month
anniversary of the option grants.
Section 162(m) Limitation
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1
million for compensation paid to certain executives of public companies. Having
considered the requirements of Section 162(m), the Committee believes that
grants made pursuant to the Company's 1996 Stock Option Plan meet the
requirement that such grants be "performance based" and are, therefore, exempt
from the limitations on deductibility. Historically, the combined salary and
bonus of each executive officer has been well below the $1 million limit. The
Committee's present intention is to comply with Section 162(m) unless the
Committee feels that required changes would not be in the best interest of the
Company or its shareholders.
COMPENSATION COMMITTEE
DENNIS CLINE
MICHAEL J. RICCIO, JR.
6
<PAGE> 8
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
GENERAL
Messrs. Cline and Riccio serve as members of the Compensation Committee.
Neither Mr. Cline nor Mr. Riccio was an officer or employee of the Company or
any of its subsidiaries during fiscal 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1996, the Company sold an aggregate of 350,000 shares of its
Preferred Stock in a private placement for an aggregate purchase price of
$350,000 ($1.00 per share). John Keister, Chief Operating Officer of the
Company, purchased 5,000 shares of Preferred Stock in the private placement,
which was subsequently gifted to members of his immediate family. In addition,
certain members of Russell Horowitz's immediate family purchased an aggregate of
93,000 shares of Common Stock in the private placement.
In June 1996, the Company sold an aggregate of 500,000 shares of its
Preferred Stock in a private placement for an aggregate purchase price of
$1,000,000 ($2.00 per share). The sole purchaser of such shares was Xanthus
Capital, L.P., a Seattle, Washington based merchant bank. Russell C. Horowitz
serves as the Chief Executive Officer and a director of Xanthus Management,
L.L.C., the general partner of Xanthus Capital, L.P., and of DMR Investments,
L.L.C., the investment advisor to Xanthus Capital, L.P. In addition, Mr.
Horowitz is also a limited partner of Xanthus Capital, L.P.
In August 1996, the Company sold an aggregate of 37,500 shares of Preferred
Stock to MLS-I, L.L.C., a limited liability company of which Martin L.
Schoffstall is an executive officer, for an aggregate purchase price of $75,000
($2.00 per share). The Company has also entered into an agreement with Mr.
Schoffstall pursuant to which Mr. Schoffstall contributes articles to be
included on the Company's Web site. The agreement commenced on September 1, 1996
and will expire on September 1, 1998, subject to extensions by the parties
thereto. In consideration of providing such articles, Mr. Schoffstall received a
one-time grant of 12,500 shares of Common Stock (subject to repurchase by the
Company depending on the length of time Mr. Schoffstall continues to provide
such articles to the Company).
In September 1996, the Company sold 25,000 shares of Preferred Stock to an
immediate family member of John Keister for an aggregate purchase price of
$50,000 ($2.00 per share).
Between November 8, 1996 and November 20, 1996, all of the Company's
927,500 shares of Preferred Stock issued and outstanding were converted, at a
conversion rate of one share of Preferred Stock for one share of Common Stock,
into an aggregate of 927,500 shares of Common Stock.
In December 1996, the Company sold an aggregate of 75,000 shares of Common
Stock to Dennis Cline for an aggregate purchase price of $150,000 ($2.00 per
share).
Mr. Riccio, a director of the Company and a member of the Compensation
Committee, is a shareholder of the law firm Hutchins, Wheeler & Dittmar, which
is general counsel to the Company.
7
<PAGE> 9
PERFORMANCE GRAPH
The graph set forth below compares the change in the Company's cumulative
total stockholder return on its Common Stock (as measured by dividing (i) the
sum of (A) the cumulative amount of dividends for the period indicated, assuming
dividend reinvestment, and (B) the difference between the Company's share price
at the end of the period and April 23, 1997, the date the Company's Common Stock
commenced trading on The Nasdaq SmallCap Market; by (ii) the share price at
April 23, 1997) with the cumulative total return of The Nasdaq Stock Market
(U.S.) Index and the cumulative total return of the NASDAQ stocks business
services index (assuming the investment of $100 in the Company's Common Stock,
the Nasdaq Stock Market (U.S.) Index and the NASDAQ stocks business services
index on April 23, 1997, and reinvestment of all dividends). During fiscal year
1997, the Company paid no dividends.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
GO2NET, INC.
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
PRODUCED ON 01/26/98 INCLUDING DATA TO 09/30/97
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) NASDAQ STOCK MARKET go2net
<S> <C> <C> <C>
09/30/92 36.932 46.380 0.000
39.994 48.206 0.000
42.230 52.043 0.000
41.726 53.959 0.000
43.553 55.495 0.000
41.494 53.424 0.000
43.625 54.971 0.000
40.489 52.624 0.000
43.879 55.768 0.000
43.591 56.026 0.000
40.298 56.092 0.000
41.412 58.991 0.000
09/30/93 43.806 60.748 0.000
44.645 62.114 0.000
44.625 60.262 0.000
44.375 61.942 0.000
46.770 63.823 0.000
47.212 63.227 0.000
45.013 59.339 0.000
44.977 58.569 0.000
46.941 58.712 0.000
44.181 56.565 0.000
44.431 57.725 0.000
49.084 61.405 0.000
09/30/94 49.108 61.248 0.000
53.923 62.452 0.000
53.159 60.380 0.000
53.744 60.549 0.000
52.711 60.889 0.000
56.655 64.109 0.000
60.556 66.010 0.000
63.458 68.088 0.000
64.327 69.845 0.000
71.102 75.505 0.000
75.414 81.055 0.000
75.432 82.698 0.000
09/30/95 77.455 84.600 0.000
81.332 84.115 0.000
82.110 86.090 0.000
81.453 85.632 0.000
81.084 86.054 0.000
85.939 89.329 0.000
86.133 89.626 0.000
96.202 97.061 0.000
99.447 101.518 0.000
96.243 96.942 0.000
86.803 88.307 0.000
09/30/96 89.257 93.255 0.000
98.940 100.389 0.000
96.767 99.280 0.000
103.096 105.417 0.000
101.834 105.323 0.000
110.448 112.808 0.000
101.334 106.571 0.000
93.328 99.614 0.000
100.000 100.000 100.000
104.223 102.728 108.228
116.243 114.375 82.278
118.832 117.873 62.025
130.692 130.315 68.354
127.307 130.117 68.354
09/30/97 129.729 137.812 89.873
</TABLE>
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LEGEND
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 09/30/92 09/30/93 09/30/94 09/29/95 09/30/96 09/30/97
- - ------------- ---------------------------------------------------- -------- -------- -------- -------- --------
<C> <S> <C> <C> <C> <C> <C> <C>
------- O go2net, Inc. 89.9
-- -- -- K Nasdaq Stock Market (US Companies) 46.4 60.7 61.2 84.6 100.4 137.8
--------- M NASDAQ Stock (SIC 7300-7399 US Companies) 36.9 43.8 49.1 77.5 98.9 129.7
Business services
NOTES:
A. THE LINES REPRESENT MONTHLY INDEX LEVELS DERIVED FROM COMPOUNDED DAILY RETURNS THAT INCLUDE ALL DIVIDENDS.
B. THE INDEXES ARE REWEIGHTED DAILY, USING THE MARKET CAPITALIZATION ON THE PREVIOUS TRADING DAY.
C. IF THE MONTHLY INTERVAL, BASED ON THE FISCAL YEAR-END, IS NOT A TRADING DAY, THE PRECEDING TRADING DAY IS
USED.
D. THE INDEX LEVEL FOR ALL SERVICES WAS SET TO $100.0 ON 04/23/97.
</TABLE>
- - --------------------------------------------------------------------------------
8
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to the Company's Chief Executive Officer and Chief Operating Officer for
all services rendered in all capacities to the Company for the Company's fiscal
year ended September 30, 1997 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION ---------------------
---------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS # COMPENSATION($)
- - ---------------------------------------- ---- ------- ----- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Russell C. Horowitz..................... 1997 $36,000 $ 0 150,000 $17,791
President and Chief Executive Officer 1996 $21,000 $ 0 0 $ 5,292
John Keister............................ 1997 $45,000 $ 0 150,000 $ 9,459
Chief Operating Officer 1996 $26,250 $ 0 0 $ 4,549
</TABLE>
GRANTS OF STOCK OPTIONS
The following table sets forth certain information with respect to
individual grants of stock options to the Named Executive Officers during the
fiscal year ended September 30, 1997.
1997 OPTION GRANTS(L)
<TABLE>
<CAPTION>
POTENTIAL
REALIZATION
VALUE AT ASSUMED
ANNUAL RATES OF
INDIVIDUAL STOCK PRICE
GRANTS % OF TOTAL APPRECIATION FOR
---------- OPTIONS GRANTED OPTION TERM
OPTION TO EMPLOYEES EXERCISE EXPIRATION --------------------
NAME GRANTS IN 1997 PRICE DATE 5% 10%
- - ------------------------- ---------- ----------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Russell C. Horowitz...... 150,000 29% $ 8.00 11/15/2001 $331,538 $732,612
John Keister............. 150,000 29% $ 8.00 11/15/2001 $331,538 $732,612
</TABLE>
- - ---------------
(1) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates of appreciation
only, based on the Securities and Exchange Commission rules. Actual gains,
if any, on stock option exercises are dependent on the future performance of
the Common Stock, the timing of such exercises and the option holder's
continued employment through the vesting period. The amounts reflected in
this table may not accurately reflect or predict the actual value of the
stock options.
STOCK OPTION EXERCISES AND SEPTEMBER 30, 1997 STOCK OPTION VALUES
Set forth in the table below is information concerning the value of stock
options held at September 30, 1997 by the Named Executive Officers of the
Company. None of the Named Executive Officers exercised any stock options during
the year ended September 30, 1997.
9
<PAGE> 11
AGGREGATE OPTION EXERCISES IN LAST FISCAL
YEAR AND OPTION VALUES AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT SEPTEMBER 30, 1997 AT SEPTEMBER 30, 1997(1)
SHARES ACQUIRED VALUE ------------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------------- --------------- -------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Russell C.
Horowitz.......... -- -- 112,500 37,500 $ 112,500 $37,500
John Keister........ -- -- 112,500 37,500 $ 112,500 $37,500
</TABLE>
- - ---------------
(1) The amounts set forth represent the difference, if positive, between the
fair market value of the Common Stock underlying the options at September
30, 1997 ($9 per share) and the exercise price of the options, multiplied by
the applicable number of options.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Russell C.
Horowitz and John Keister pursuant to which they serve as President and Chief
Executive Officer and Chief Operating Officer, respectively, of the Company.
Mr. Horowitz's employment agreement with the Company provides for a
four-year term commencing March 1, 1996. Under this agreement, Mr. Horowitz
receives an annual salary of $36,000. Mr. Keister's employment agreement with
the Company provides for a four-year term commencing March 1, 1996. Under this
agreement, Mr. Keister receives an annual salary of $45,000, which was increased
to an annual salary of $72,000 starting October 1, 1997. While Mr. Horowitz's
employment agreement provides that he may be engaged in other non-competing
business activities, Mr. Horowitz has devoted substantially all of his time and
effort to performing his duties as an executive officer of the Company. Mr.
Horowitz will continue to devote substantially all of his time and effort to
serving as an executive officer of the Company until, if ever, replacements or
successors to his duties are employed by the Company.
Each of the employment agreements described above provides for certain
employee benefits, including, without limitation, participation in the Company's
stock option plan or any other incentive or bonus plan which the Company may
institute in the future, as well as health insurance. Each of the employment
agreements provides for a one-year non-competition period following termination
of the employment agreement. Each of such employment agreements provides for
termination upon a change of control of the Company.
APPROVAL OF AMENDMENT OF THE
GO2NET, INC. 1996 STOCK OPTION PLAN
GENERAL
The go2net, Inc. 1996 Stock Option Plan (the "1996 Plan") was adopted by
the Board of Directors and approved by the Company's shareholders in March 1996.
The purpose of the 1996 Plan is to attract and retain key employees, directors
and consultants of the Company, to provide an incentive for them to achieve
long-range performance goals, and to enable them to participate in the long-term
growth of the Company. Under the 1996 Plan, incentive stock options may be
granted to employees and officers of the Company or any subsidiary and
non-qualified stock options may be granted to employees, officers, directors and
consultants of the Company or any subsidiary.
10
<PAGE> 12
PROPOSED AMENDMENT TO THE 1996 PLAN
The Board of Directors has adopted an amendment to the 1996 Plan, subject
to approval by the shareholders, to increase the aggregate number of shares that
may be subject to grants thereunder from 750,000 to 1,500,000 in order to ensure
that a sufficient number of shares are available for issuance in the future. The
Board of Directors has adopted the amendment to the 1996 Plan to further the
growth and financial success of the Company by aligning the personal interests
of employees (through the ownership of Common Stock) with those of the
shareholders of the Company. The Board of Directors believes that the increase
in the number of shares that may be subject to option grants under the 1996 Plan
will enhance the ability of the Company to attract, retain, compensate and
motivate key employees, directors and consultants, and that the adoption of the
amendment will be important to the future success of the Company.
Set forth below is a summary of the principal provisions of the 1996 Plan,
a copy of which may be obtained from the Secretary of the Company upon request.
The affirmative vote of the holders of at least a majority of the Common Stock
voting in person or by proxy at the meeting will be required for the approval of
the amendment to the 1996 Plan.
ADMINISTRATION
The 1996 Plan is administered by the Compensation Committee of the Board of
Directors, subject to the supervision and control of the entire Board. The
members of the Compensation Committee are appointed by the Board of Directors
and the Board may from time to time appoint a member or members of the
Compensation Committee in substitution for or in addition to the member or
members then in office and may fill vacancies on the Compensation Committee
however caused. The present members of the Compensation Committee are Messrs.
Cline and Riccio.
ELIGIBILITY
Subject to the provisions of the 1996 Plan, the Compensation Committee has
the authority to select optionees and to determine the terms of the options
granted, including (i) the number of shares subject to each option, (ii) when
the option becomes exercisable, (iii) the exercise price of the option, (iv) the
duration of the option (which in the case of an incentive stock option granted
to employees or officers holding 10% or more of the voting stock of the Company
cannot be in excess of five years), and (v) the time, manner and form of payment
upon exercise of an option.
In determining the eligibility of an individual to be granted an option, as
well as in determining the number of shares to be optioned to any individual,
the Compensation Committee takes into account the position and responsibilities
of the individual being considered, the nature and value to the Company or its
subsidiaries of the individual's service and accomplishments, his or her present
and potential contribution to the success of the Company or its subsidiaries,
and such other factors as the Compensation Committee deems relevant.
TERMS OF OPTIONS
Options granted under the 1996 Plan are exercisable at such times and
during such period as is set forth in the option agreement, but cannot have a
term in excess of ten years from the date of grant. The Compensation Committee
is entitled to accelerate the date of exercise of any installment of any option,
except that without the consent of the optionee, the Compensation Committee
shall not accelerate the exercise date of any installment of any incentive stock
option if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Internal Revenue Code of 1986, as amended
(the "Code"). The option agreement may contain such provisions and conditions as
may be determined by the Compensation
11
<PAGE> 13
Committee. The option exercise price for options designated as non-qualified
stock options granted under the 1996 Plan is determined by the Compensation
Committee. The option exercise price for incentive stock options granted under
the 1996 Plan shall be no less than fair market value of the Common Stock of the
Company at the time the option is granted and no less than 110% of the fair
market value in the case of employees or officers holding 10% or more of the
voting stock of the Company. Options granted under the 1996 Plan may provide for
the payment of the exercise price by delivery of cash or a check payable to the
Company or shares of Common Stock of the Company owned by the optionee having a
fair market value equal in amount to the exercise price of the options being
exercised, or any combination thereof. The maximum number of shares of Common
Stock with respect to which an option or options may be granted to any employee
in any one calendar year cannot exceed 250,000 shares.
An option is not transferable by the optionee except by will or by the laws
of descent and distribution. Options are exercisable only while the optionee
remains in the employ of the Company or for a limited period of time thereafter.
TERMINATION OR AMENDMENT OF THE 1996 PLAN
Unless sooner terminated, the 1996 Plan shall terminate on March 10, 2006,
ten years from the date on which the 1996 Plan was adopted by the Board of
Directors of the Company. The Board of Directors may at any time terminate the
1996 Plan or make such modification or amendment as it deems advisable;
provided, however, that the Board of Directors may not, without shareholder
approval, increase the maximum number of shares for which options may be granted
or change the designation of the class of persons eligible to receive options
under the 1996 Plan or make any other change in the 1996 Plan which requires
shareholder approval under applicable law or regulations. The Compensation
Committee may terminate, amend or modify any outstanding option without the
consent of the option holder, provided however that, without the consent of the
optionee, the Compensation Committee shall not change the number of shares
subject to an option, or the exercise price or term thereof.
RECAPITALIZATION; REORGANIZATION; CHANGE OF CONTROL
The 1996 plan provides that the number and kind of shares as to which
options may be granted thereunder and as to which outstanding options then
unexercised shall be exercisable shall be adjusted to prevent dilution in the
event of any reorganization or recapitalization (other than as the result of an
Acquisition, as such term is hereinafter defined), reclassification, stock
subdivision, combination of shares or dividends payable in capital stock. If the
Company is to be consolidated with or acquired by another entity in a merger or
in a sale of all or substantially all of the Company's assets or otherwise (an
"Acquisition"), the Compensation Committee or the Board of Directors of any
entity assuming the obligations of the Company (the "Successor Board"), shall,
as to outstanding options, either (i) make appropriate provision for the
continuation of such options by substituting on an equitable basis for the
shares then subject to such options the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Acquisition, (ii)
upon written notice to the optionees, provide that all options must be exercised
(to the extent then exercisable) within a specified number of days of the date
of such notice, at the end of which period the options shall terminate, or (iii)
terminate all options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such options (to the extent then
exercisable) over the exercise price thereof.
Upon dissolution or liquidation of the Company, all options granted under
the 1996 Plan shall terminate.
12
<PAGE> 14
TAX EFFECTS OF PARTICIPATION IN THE 1996 PLAN
Incentive Stock Options. Except as provided below with respect to the
alternative minimum tax, the optionee will not recognize taxable income upon the
grant or exercise of an incentive stock option. In addition, if the optionee
holds the shares received pursuant to the exercise of the option for more than
one year after the date of transfer of stock to the optionee upon exercise of
the option and for more than two years after the option is granted, the optionee
will recognize long-term capital gain or loss upon the disposition of the stock
measured by the difference between the option exercise price and the amount
received for such shares upon disposition.
In the event that the optionee disposes of the stock prior to the
expiration of the required holding periods (a "disqualifying disposition"), the
optionee generally will recognize ordinary income to the extent of the lesser of
(i) the fair market value of the stock at the time of exercise over the exercise
price, or (ii) the amount received for the stock upon disposition over the
exercise price. The basis in the stock acquired upon exercise of the option will
equal the amount of income recognized by the optionee plus the option exercise
price. Upon eventual disposition of the stock, the optionee will recognize
long-term or short-term capital gain or loss, depending on the holding period of
the stock and the difference between the amount realized by the optionee upon
disposition of the stock and his basis in the stock.
For alternative minimum tax purposes, the excess of the fair market value
of stock on the date of the exercise of the incentive stock option over the
exercise price of the option is included in alternative minimum taxable income
for alternative minimum tax purposes. If the alternative minimum tax does apply
to the optionee, an alternative minimum tax credit may reduce the regular tax
upon eventual disposition of the stock.
The Company will not be allowed an income tax deduction upon the grant or
exercise of an incentive stock option. Upon a disqualifying disposition of
shares by the optionee acquired upon exercise of the incentive stock option, the
Company will be allowed a deduction in an amount equal to the ordinary income
recognized by the optionee.
Under proposed regulations issued by the Internal Revenue Service, the
exercise of an option with previously acquired stock of the Company will be
treated as, in effect, two separate transactions. Pursuant to Section 1036 of
the Code, the first transaction will be a tax-free exchange of the previously
acquired shares for the same number of new shares. The new shares will retain
the basis and, except, as provided below, the holding periods of the previously
acquired shares. The second transaction will be the issuance of additional new
shares having a value equal to the difference between the aggregate fair market
value of all of the new shares being acquired and the aggregate option exercise
price for those shares. Because the exercise of an incentive stock option does
not result in the recognition by the optionee of income, this issuance will also
be tax-free (unless the alternative minimum tax applies, as described above).
The optionee's basis in these additional shares will be zero and the optionee's
holding period for these shares will commence on the date on which the shares
are transferred. For purposes of the one and two-year holding period
requirements which must be met for favorable incentive stock option tax
treatment to apply, the holding periods of previously acquired shares are
disregarded.
Non-Qualified Stock Options. As in the case of incentive stock options, no
income is recognized by the optionee on the grant of a nonqualified stock
option. On the exercise by an optionee of a non-qualified option, generally the
excess of the fair market value of the stock when the option is exercised over
its cost to the optionee will be (a) taxable to the optionee as ordinary income
and (b) generally deductible for income tax purposes by the Company. The
optionee's tax basis in his stock will equal his cost for the stock plus the
amount of ordinary income he had to recognize with respect to the non-qualified
stock option.
13
<PAGE> 15
The Internal Revenue Service will treat the exercise of a non-qualified
stock option with already owned stock of the Company as two transactions. First,
there will be a tax-free exchange of the old shares for a like number of new
shares under Section 1036 of the Code, with the exchanged shares retaining the
basis and holding periods of the old shares. Second, there will be an issuance
of additional new shares representing the spread between the fair market value
of all the new shares (including the exchanged shares and the additional new
shares) and the aggregate option price therefor. The fair market value of the
additional new shares will be taxable as ordinary income to the employee under
Section 83 of the Code. The additional new shares will have
a basis equal to the fair market value of the additional new shares.
Accordingly, upon a subsequent disposition of stock acquired upon the
exercise of a non-qualified option, the optionee will recognize short-term or
long-term capital gain or loss, depending upon the holding period of the stock
equal to the difference between the amount realized upon disposition of the
stock by the optionee and his basis in the stock.
NEW PLAN BENEFITS
It is not possible to state the persons who will receive stock options
under the 1996 Plan in the future, nor the amount of options which will be
granted thereunder. The following table provides information as to options
granted under the 1996 Plan during fiscal 1997.
<TABLE>
<CAPTION>
1996
-------------------
DOLLAR NUMBER
NAME AND POSITION VALUE OF UNITS
------------------------------------------------------------------- ------ --------
<S> <C> <C>
Russell C. Horowitz................................................ (1) 150,000
John Keister....................................................... (1) 150,000
Executive officers as a Group...................................... (1) 330,000
Non-Executive Officer Employee Group............................... (1) 178,500
</TABLE>
- - ---------------
(1) The dollar value of options is equal to the difference between the exercise
price of the options granted and the fair market value of the Company's
Common Stock at the date of exercise. Accordingly, such dollar value is not
readily ascertainable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Ernst & Young LLP as independent
certified public accountants to audit the consolidated financial statements of
the Company and its subsidiaries for the fiscal year ending September 30, 1998.
Ernst & Young LLP has served as independent accountants since 1996 to audit the
financial statements of the Company.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will have the opportunity to make a statement if he or she so
desires and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF ERNST &
YOUNG LLP.
14
<PAGE> 16
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons owning more than 10% of the outstanding
Common Stock of the Company to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% holders of Common Stock of the Company are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on copies of such forms furnished as provided above,
management believes that through the date hereof all Section 16(a) filing
requirements applicable to its officers, directors and owners of greater than
10% of its Common Stock were complied with.
TIME FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission, any
proposal submitted for inclusion in the Company's Proxy Statement relating to
the Annual Meeting of Stockholders to be held in 1999 must be received at the
Company's principal executive offices in Seattle, Washington on or before
September 20, 1998. Receipt by the Company of any such proposal from a qualified
stockholder in a timely manner will not ensure its inclusion in the proxy
material because there are other requirements in the proxy rules for such
inclusions.
OTHER MATTERS
Management knows of no matters which may properly be and are likely to be
brought before the meeting other than the matters discussed herein. However, if
any other matters properly come before the meeting, the persons named in the
enclosed proxy will vote in accordance with their best judgment.
The cost of this solicitation will be borne by the Company. It is expected
that the solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telecopier and in
person and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to their principals at the
expense of the Company.
10-K REPORT
THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
RUSSELL C. HOROWITZ, GO2NET, INC., 999 THIRD AVENUE, SUITE 4700, SEATTLE,
WASHINGTON 98104.
15
<PAGE> 17
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.
By order of the Board of Directors
ETHAN CALDWELL
Secretary
January 28, 1998
16
<PAGE> 18
GO2NET, INC.
DEAR STOCKHOLDER:
PLEASE TAKE NOTE OF THE IMPORTANT INFORMATION ENCLOSED with this Proxy ballot.
There are some issues related to the management and operation of your Company
that require your attention and approval. These are discussed in detail in the
enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the 1998 Annual Meeting of Stockholders,
March 12, 1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
go2net, Inc.
<PAGE> 19
go2net, Inc.
The 1996 Stock Option Plan of go2net, Inc., (the "Company") is hereby
amended as follows:
1. The number of shares of the Company's Common Stock, par value
$.01 per share, which may be issued under the 1996 Stock
Option Plan is hereby increased from 750,000 to 1,500,000, and
Section 2(a) of the Company's 1996 Stock Option Plan is hereby
amended by replacing the number "750,000" therein with the
number "1,500,000."
2. Except as provided above, the Company's 1996 Stock Option Plan
is hereby restated and confirmed in all respects.
Adopted by the Directors: ____________________
Adopted by the Stockholders:____________________
<PAGE> 20
PROXY PROXY
GO2NET, INC.
1998 ANNUAL MEETING OF STOCKHOLDERS
MARCH 12, 1998
The undersigned hereby appoints Russell C. Horowitz and John Keister, and each
of them, with full power and substitution, proxies to represent the undersigned
at the 1998 Meeting of Stockholders of go2net, Inc. to be held on March 12,
1998, at 11:00 a.m., at First Interstate Center, 999 3rd Avenue, 40th Floor
Conference Room, Seattle, Washington, and at any adjournment or adjournments
thereof, to vote in the name and place of the undersigned, with all powers which
the undersigned would possess if personally present, all the shares of go2net,
Inc. standing in the name of the undersigned upon such business as may properly
come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF DIRECTORS. THE BOARD RECOMMENDS AN
AFFIRMATIVE VOTE ON ALL PROPOSALS SPECIFIED. SHARES WILL BE VOTED AS SPECIFIED.
IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED WILL BE VOTED FOR THE
ELECTION OF THE DIRECTORS AS SET FORTH IN THE PROXY STATEMENT.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN
ENCLOSED ENVELOPE
Please sign exactly as your name(s) appear(s) on the Proxy. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person
HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
- - ------------------------------ ------------------------------
- - ------------------------------ ------------------------------
- - ------------------------------ ------------------------------
<PAGE> 21
[ ] PLEASE MARK VOTES AS IN THIS EXAMPLE
With- For All
1. Election of Directors: For hold Except
[ ] [ ] [ ]
Nominees: Russell C. Horowitz, John Keister, Dennis Cline, Michael J.
Riccio, Jr., and Martin L. Schoffstall
2. To consider and act upon a proposal to amend the Company's 1996 Stock
Option Plan pursuant to which the number of shares reserved for
issuance under such plan will be increased from 750,000 shares of
Common Stock to 1,500,000 shares of Common Stock.
For Against Abstain
[ ] [ ] [ ]
3. To consider and act upon a proposal to ratify, confirm and approve the
selection of Ernst & Young LLP as the independent certified public
accountants of the Company for fiscal year 1998.
For Against Abstain
[ ] [ ] [ ]
4. In their discretion, the proxies are authorized to vote upon such
business as may properly come before the meeting.
For Against Abstain
[ ] [ ] [ ]
RECORD DATE SHARES:
<TABLE>
<S> <C>
I plan to attend in person [ ]
I do not plan to attend in person [ ]
Please be sure to sign and date this Proxy. Date:_______ Mark box at right if comments or address change
have been noted on the reverse side of this card [ ]
Shareholder sign here______________Co-owner sign here______________
</TABLE>
DETACH CARD
