<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
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the CC only (as permitted by RULE 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MICRO-ASI, INC.
(Name of registrant as specified in its charter)
XXXXXXXXXXXXXXXX
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1 and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed: December 3, 1999
<PAGE> 2
MICRO-ASI, INC.
12655 North Central Expressway
Suite 1000
Dallas, TX 75243
To the Shareholders of Micro-ASI, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Micro-ASI, Inc., a Texas corporation (the "Company"), will be held at 10:00 a.m.
(local time) on Wednesday, December 15, 1999, at the Westin Park Central Hotel,
12720 Merit Drive, Tenison Room A & B, Dallas, Texas 75243, to consider and act
upon the following matters:
(1) To elect five (5) directors for all three classes or until their
successors are duly elected and qualified;
(2) To approve the 1999 Stock Option Plan of the Company;
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record of the Company's shares of common
stock at the close of business on October 31, 1999 will be entitled to notice of
and to vote at the meeting or any adjournment thereof.
The list of shareholders entitled to vote at the meeting will be
available for inspection during regular business hours at the Company's
corporate offices at 12655 North Central Expressway, Suite 1000, Dallas, Texas
75243 for ten days prior to the meeting.
By Order of the Board of Directors,
Joel E. Claybrook
President and CEO
Dallas, Texas
December 3, 1999
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, THE BOARD OF DIRECTORS URGES YOU TO
SIGN, DATE AND RETURN BY MAIL OR FACSIMILE (972-392-9639) THE ENCLOSED PROXY
AS SOON AS POSSIBLE.
<PAGE> 3
MICRO-ASI, INC.
12655 North Central Expressway
Suite 1000
Dallas, TX 75243
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 15, 1999
-------------------
This Proxy Statement and the accompanying Proxy Card are being
furnished in connection with the solicitation by the Board of Directors of
Micro-ASI, Inc. (the "Company") of proxies to be voted at the Annual Meeting of
Shareholders to be held at 10:00 a.m. (local time) on Wednesday, December 15,
1999 at the Westin Park Central, 12720 Merit Drive, Tenison Room A & B, Dallas,
Texas 75251 and at any adjournment thereof, with respect to the matters referred
to in the accompanying notice. It is anticipated that this Proxy Statement and
the accompanying materials will first be mailed to shareholders on or about
December 3, 1999.
ACTION TO BE TAKEN AT MEETING
The accompanying proxy, unless the shareholders otherwise
specifies in the proxy, will be voted:
(i) for the election as directors of the nominees listed under
"Election of Directors, (ii) for approval and ratification of the
1999 Stock Option Plan of Micro-ASI, Inc. and (iii) at the
discretion of the proxy holders on any other matter that may
properly come before the meeting or any postponements thereof.
OUTSTANDING CAPITAL STOCK
The Company's shares of Common Stock, par value $.001 per share,
("Shares") are the only outstanding class of voting securities. Holders of
record at the close of business on October 31, 1999 (the "Record Date") are
entitled to notice of and to vote at, the Annual Meeting and any adjournment
thereof. At the close of business on October 31, 1999, there were issued and
outstanding 18,854,111 Shares, each entitled to cast one vote.
QUORUM AND VOTING
The presence, in person, or by proxy, of the holders of a majority
of the outstanding Common Stock is necessary to constitute a quorum at the
meeting. In deciding all questions, a holder of Common Stock is entitled to one
vote, in person or by proxy for each share held in his or her name on the record
date. Abstentions may be specified on all proposals except the election of
directors. Abstentions, other than for the election of directors, will have the
same effect as a vote against such proposal. Broker non-votes, if any, will not
be included in vote totals and, as such, will have no effect on any proposals.
REVOCABILITY OF PROXIES
A shareholder may revoke a proxy at any time prior to its exercise
by (1) delivering to the Secretary of the Company a written notice of revocation
prior to the Annual Meeting, (2) delivering to the Secretary of the Company
prior to the Annual Meeting a duly executed proxy bearing a later date, and (3)
attending the Annual Meeting, filing a written notice of revocation with the
Secretary of the meeting, and voting in person.
<PAGE> 4
PERSONS MAKING THE SOLICITATION
The accompanying proxy is being solicited by the Board of
Directors of the Company. In addition to solicitation by mail, directors,
officers and employees of the Company may solicit proxies for the Annual Meeting
from the shareholders of the Company personally or by telephone, mail, or
facsimile without additional remuneration therefore. The Company will also
provide persons, firms, banks and corporations holding Shares in their names or
in the names of nominees, which in either case are beneficially owned by others,
proxy materials for transmittal to such beneficial owners. The costs of this
solicitation are being borne by the Company and no other person or persons will
bear such risk either directly or indirectly.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth information
regarding the beneficial ownership of the Company's shares of Common Stock as of
the Record Date by (i) each person known by the Company to be the beneficial
owner of more than 5% of voting security, (ii) each director and nominee for
director, (iii) each of the named executive officers of the Company, and (iv)
all executive officers and directors of the Company as a group. The percentages
have been calculated by taking into account all shares of Common Stock owned on
such date as well as all shares with respect to which such person has the right
to acquire beneficial ownership at such date or within sixty (60) days
thereafter. Unless otherwise indicated, all persons listed below have sole
voting and sole investment power over the shares of Common Stock owned.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Name & Address of beneficial owner Shares of Common Stock beneficially Percentage of Common Stock
owned; Relationship (1) (2) beneficially owned (1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cecil E. Smith, Jr. 5,060,000 (3) 26.84%
Park Central Plaza I Chairman of the
12655 N. Central Expwy. Board of Directors
Suite 1000
Dallas, Texas 75243
- --------------------------------------------------------------------------------------------------------------------
Joel E. Claybrook 1,835,000 (4) 9.73%
Park Central Plaza I President and
12655 N. Central Expwy. Chief Executive Officer
Suite 1000 Member, Board of Directors
Dallas, Texas 75243
- --------------------------------------------------------------------------------------------------------------------
Dr. Meng-Sheng Lin 860,000 (5) 4.56%
Park Central Plaza I Director
12655 N. Central Expwy. Member, Board of Directors
Suite 1000
Dallas, Texas 75243
- --------------------------------------------------------------------------------------------------------------------
Dr. Myles Welborn 45,500 .24%
Park Central Plaza I Director
12655 N. Central Expwy. Member, Board of Directors
Suite 1000
Dallas, Texas 75243
- --------------------------------------------------------------------------------------------------------------------
James Hamner 0
Park Central Plaza I Director
12655 N. Central Expwy. Member, Board of Directors
Suite 1000
Dallas, Texas 75243
- --------------------------------------------------------------------------------------------------------------------
Dr. James Dukowitz 0 (6)
Park Central Plaza I Senior Vice President
12655 N. Central Expwy. Chairman of Executive
Suite 1000 Committee
Dallas, Texas 75243
- --------------------------------------------------------------------------------------------------------------------
Robert J. Hoyt 1,800,000 9.16%
174 The Masters Circle Beneficial Owner
Costa Mesa, CA 92627
- --------------------------------------------------------------------------------------------------------------------
All Directors & Officers as a Group 7,800,500 41.37%
(6 persons)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on a total of 18,854,111 shares of Common Stock issued and
outstanding as of the Record Date.
2
<PAGE> 5
(2) If the Stock Option Plan is approved, an additional 837,500 shares could be
purchased within 60 days of the Record Date.
(3) Mr. Smith's shares do not include 175,000 shares that could be purchased
under the proposed Stock Option Plan. If his options were exercised, he
would own 5,235,000 representing 26.58% of the outstanding shares after the
shares were exercised.
(4) Mr. Claybrook's shares do not include 175,000 shares that could be
purchased under the proposed Stock Option Plan. If his options were
exercised, he would own 2,010,000 representing 10.21% of the outstanding
shares after the shares were exercised.
(5) Dr. Meng-Sheng Lin's shares do not include 125,000 shares that could be
purchased under the proposed Stock Option Plan. If her options were
exercised, she would own 985,000 representing 5.00% of the outstanding
shares after the shares were exercised.
(6) Dr. Dukowitz's shares do not include shares could be purchased under the
proposed Stock Option Plan. If his options were exercised, he would own
100,000 shares representing .51% of the outstanding shares after the shares
were exercised. Dr. Dukowitz does not currently won any shares of stock.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Five (5) directors are to be elected at the Annual Meeting to hold
office until their respective successors have been elected and qualified or
until their prior death, resignation or removal. The By-laws of the Company
provide that the Board of Directors ("Board") shall consist of no less than five
(5) members, provided that the Board may by resolution increase or decrease the
number of directors. The Board has established the number of directors at five
(5).
The Board of Directors has established three classes of Directors.
These classes are for different lengths of time and serve to stagger the
election of Directors to the Board. Class I Directors will serve for a period of
one (1) year, Class II Directors will serve for a period of two (2) years and
Class III Directors will serve for a period of three (3) years.
To be elected a director, each nominee of each class of director
must receive a plurality of all the votes cast at the meeting for the election
of directors within the class. Should any nominee be unable to accept nomination
or election, shareholders will vote for the election of such other person to the
office of director as management may recommend in place of such nominee;
however, management knows of no reason to anticipate that this will occur.
Unless a proxy specifies that it is not to be voted in favor of a nominee for
director, it is intended that Shares represented by the proxy will be voted in
favor of the nominees listed below. In the event that any nominee shall be
unable to serve, it is intended that the proxies will be voted for the nominees
designated by the Board. The Company believes that all nominees will be able to
serve.
The following table sets forth certain information with respect to
each nominee for election as a director. There are no arrangements or
understandings between the Company and any director or nominee pursuant to which
such person was elected or nominated to be a director of the Company. For
information with respect to security ownership of directors, see "Share
Ownership of Certain Beneficial Owners and Management."
Nominees for election of directors are as follows:
<TABLE>
<CAPTION>
NAME AGE CLASS POSITIONS FIRST YEAR
- ---- --- ----- --------- BECAME
----------
<S> <C> <C> <C> <C>
DIRECTOR
Cecil E. Smith, Jr. 61 III Chairman of the Board 1995
Joel E. Claybrook 50 III President and CEO 1997
Dr. Meng-Sheng Lin 55 II Director 1999
Dr. Myles Welborn 71 I Director 1999
James Hamner 61 I Director 1999
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF
SUCH NOMINEES.
3
<PAGE> 6
Set forth below is certain information concerning each of the
persons nominated for election as directors of the company.
CECIL E. SMITH, JR., 61, serves as Chairman of the Board of Directors. Since
1973, Mr. Smith has served as Chief Executive Officer of S&N Corporation
("S&N"), a provider of strategic planning and business development services to
the electronics industry. From 1996 to October 1999, Mr. Smith served as a
contract employee to the Company and joined the Company on a full time basis in
October 1999. Mr. Smith served as a director for Microelectronic Packaging
Systems, Inc. from 1991 to 1996, and as Executive Vice President and Director of
Alcoa Electronic Packaging, Inc. from December, 1988 to March, 1992. Mr. Smith
attended the University of Texas and performed advanced studies with the
American Management Association (Executive Development) in Hemphill, New York
and Bell Laboratories (Advanced Semiconductor Technology) Phillipsburg,
Pennsylvania.
JOEL E. CLAYBROOK, 50, serves as a member of the Board of Directors and as
President, Chief Executive Officer and Chief Financial Officer of the Company.
Mr. Claybrook has 28 years of experience in finance, marketing, and
administrative management including over 10 years of experience in sales
management with the high tech and communications industries. Prior to joining
Micro-ASI, Inc. in 1998, Mr. Claybrook, served four years as General Partner of
Hawk Financial Company, Ltd., an automobile finance company. From 1992 to 1993,
he served as Chief Financial Officer for Pinpoint Communications, Inc., a
Texas-based high-tech wireless data communications company. Mr. Claybrook, a
Certified Public Accountant since 1974, has served as chief financial officer of
several companies and practiced as a financial consultant to the service,
distribution, and manufacturing industries. He received a Bachelor of Business
Administration degree in 1971 from The University of North Texas.
DR. MENG-SHENG LIN, 55, serves as a member of the Board of Directors and as
Director of International Development. Dr. Lin has taught and practiced medicine
for 29 years. Dr. Lin earned her Doctor of Medicine degree from Peking China
Medical College in 1970. As well, from 1982-83, Dr. Lin was a Postdoctoral
Fellow with the World Health Organization at the M.D. Anderson Hospital & Tumor
Center, University of Texas Health Science Center, Houston, Texas.
DR. MYLES WELBORN, 71, has 40 years experience in dentistry, and has served as
teacher and principal in the Texas school system. Upon earning a Bachelors
Degree from Hardin-Simmons Universtiy in 1949, Dr. Welborn served in the Army
for three years, attaining the rank of Cpl. Chief of Congressional Section of
the General's Office. After the military, he spent several years in education as
a teacher and principal in elementry schools. Dr. Welborn attended the Baylor
College of Dentistry, earning a DDS with honors. Since 1960 he has been
practicing dentistry.
JIM HAMNER, 61, has forty years of business experience, specializing in
information technology. He began his professional career in 1960 at the U.S.
Naval Ordnance Laboratory in Corona, California, working in early computing
evaluations of missile development and testing. For 32 years prior to 1998, he
was employed by Texas Instruments, Dallas, Texas in multiple technical,
management, and administrative roles. Since 1998, Mr. Hamner has been employed
as a Senior Manager at Andersen Consulting in Dallas. He holds a Bachelors
Degree in Mathematics from Baylor University.
BOARD MEETINGS, ATTENDANCE AND COMMITTEES
The Board of Directors currently has no standing committees. The
Board of Directors held five (5) meetings during the fiscal year commencing
November 1, 1998 and ending October 31, 1999. During this period all directors
attended at least 75% of the meetings of the Board of Directors.
4
<PAGE> 7
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Federal securities laws, the Company's directors, its
executive officers and any person holding more than 10% of the Company's Shares
are required to report their ownership of the Company's Shares and any changes
in that ownership to the Securities and Exchange Commission ("SEC") on the SEC's
Forms 3, 4 and 5. The Company believes that all of its officers and directors
have complied with all filing requirements applicable to them with respect to
their stock ownership on November 2, 1999.
EXECUTIVE OFFICERS
The board elects executive officers annually at its first meeting following the
Annual Meeting of Shareholders. In addition to the executive officers who are
directors, Dr. James A. Dukowitz, 54, is the Executive Vice President and
Chairman of the Executive Committee of the Office of the Chief Executive. Dr.
Dukowitz holds a Ph.D. from the Massachusetts Institute of Technology, where he
also served as Special Assistant to MIT President Dr. Jerome Wiesner to
establish the Congressional Office of Technology Assessment. Prior to 1999, Dr.
Dukowitz spent over 20 years with Texas Instruments, Dallas, Texas, serving as
President of TI Asia and TI China for six years; Vice President of European and
Latin American Marketing; and Vice President, Corporate Staff with
responsibilities for Corporate Strategic Planning, Corporate Marketing, and
Corporate Relations.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows cash and non-cash
compensation for the last three fiscal years paid by the Company to the Chief
Executive Officer and President of the Company. No other executive officers of
the Company received salary and bonus compensation, which exceeded $100,000 in
such fiscal years.
The entire Board of Directors agreed on the salaries set forth in
the Summary Compensation Table below. These amounts were based on the fair
market value of employees considering their experience and anticipated
contributions to the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Securities
Underlying All Other
Name and Fiscal Salary Options/SAR's Compensation
Principal Position Year ($) (1) (#)(6)(7) ($)(2) (3)
- ------------------ ------ ------- ----------- ------------
<S> <C> <C> <C> <C>
Cecil E. Smith, Jr. 1999 15,000 750,000 245,000
Chairman of the 1998 330,000
Board (2) 1997 135,000
Joel E. Claybrook 1999 150,000 750,000
President & CEO 1998 95,000
(3) 1997 40,000
Dr. James A. Dukowitz 1999 30,000 400,000
Executive Vice President
& Chairman of the
Executive Committee of
the Office of the Chief
Executive (4)
Dr. Meng-Sheng Lin 1999 60,000 500,000
Director of Int'l
Development (5)
</TABLE>
- ------------------------
(1) Salaries shown above are from the period of January 1, 1999 through the
Record Date.
(2) Cecil E. Smith, Jr. received consulting fees and expenses in lieu of salary
until October 1, 1999. This consulting agreement ended September 30, 1999
when Mr. Smith became an employee of the Company.
(3) Joel E. Claybrook received consulting fees and expenses in lieu of salary
until December 31, 1998. This consulting agreement ended December 31, 1998
when Mr. Claybrook became an employee of the Company.
5
<PAGE> 8
(4) Dr. Dukowitz joined the Company September 1, 1999. He is deferring $22,500
of his salary until January 2000.
(5) Dr. Lin joined the Company July 1, 1999.
(6) The above officers and Directors were granted options pursuant to the 1999
Stock Option Plan, which is Proposal No. 2 in this document. The total
options granted have been included in the above table. The 1999 Stock
Option Plan must be approved by the Shareholders. Please refer to the
Option Exercises and Holdings section for further detail l on the options
granted.
(7) The Board of Directors will meet in early 2000 to vote on an amendment to
the Articles of Incorporation to increase the authorized shares of Common
Stock. The Board of Directors will then call a Special Meeting of the
Shareholders to consider this increase and any other matters that may come
to the attention of the Board.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information regarding options
granted, subject to shareholder approval, under the 1999 Stock Option Plan for
each of the executive officers and employees named below:
<TABLE>
<CAPTION>
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Name Number of % of Exercise Expiration Number of % of Exercise Expiration
Securities Total Price Date Securities Total Price Date
Underlying Incentive Per Underlying Non-Qualified per
Incentive Options Share ($) Non-Qualified Options Share ($)
Options (#) Granted Options Granted
(1) (2) in 1999 (#)(3) in 1999
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cecil E. Smith, Jr. 500,000 16.95% 1.10 9/6/2004 250,000 50.00% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Joel E. Claybrook 500,000 16.95% 1.10 9/6/2004 250,000 50.00% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Dr. Meng-Sheng Lin 500,000 16.95% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Dr. James Dukowitz 400,000 13.56% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Scott Smith 250,000 8.47% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Jerry Kline 200,000 6.78% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Tom Miller 200,000 6.78% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Ari Reubin 200,000 6.78% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Randy Williams 150,000 5.08% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Maryanne Jolley 35,000 1.19% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Ann Williams 15,000 .51% 1.00 9/6/2009
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
Totals 2,950,000 100.00% 500,000 100.00%
- ------------------------ ------------ ----------- ---------- ------------ ------------- ------------- ---------- -------------
</TABLE>
(1) No shares have been exercised under this Plan.
(2) The Incentive options are first exercisable 25% in 1999, 25% in 2000, 25%
in 2001 and 25% in 2002. The exercise price is $1.00 per share except for
Messer's. Cecil E. Smith, Jr. and Joel E. Claybrook who have an exercise
price of $1.10 per share.
(3) The Nonqualified options are first exercisable 20% per year for five years
beginning in 1999 at $1.00 per share.
CERTAIN TRANSACTIONS
Cecil E. Smith, Jr., Chairman of the Board was retained by the
Company under a consulting agreement that ended September 30, 1999, at which
time he joined the Company as a full time employee. Prior to becoming an
employee, Mr. Smith was paid consulting fees plus travel expenses, which are
shown in the Summary Compensation Table listed under All Other Compensation for
the years 1997, 1998 and 1999.
On May 7, 1999, the Company entered into a consulting contract
with Darwin's Beagle.Com, Inc. Ari Reubin and Dr. James Dukowitz were members of
the consulting firm. The Company paid Darwin's Beagle.Com, Inc. consulting fees
per their contract in the amount of $70,000.00 in cash for services rendered
from May 1999 through August 1999. Subsequently, Ari Reubin and Dr. James
Dukowitz became employees of the Company in September 1999. The agreement also
called for the issuance of 28,000 shares of the Company's Common Stock, which as
of October 31, 1999 has not been issued.
STOCK PERFORMANCE GRAPH
The Company's stock is not currently traded on any public market
or exchange. Therefore, it is not possible to provide a Stock Performance Graph.
6
<PAGE> 9
1999 STOCK OPTION PLAN
(PROPOSAL NO. 2)
The Micro-ASI, Inc. 1999 Stock Option Plan was adopted by the
Board of Directors on September 6, 1999 subject to shareholder approval. The
Board of Directors believes that the use of long term incentives based on the
value of the common stock is helpful in attracting and retaining qualified key
executives and other key employees, non-employee directors, independent
contractors and consultants and motivating such personnel to achieve long-range
goals through providing compensation opportunities that are competitive with
those offered by other corporations similar to the Company.
DESCRIPTION OF THE 1999 STOCK OPTION PLAN
The following description of the 1999 Stock Option Plan is only a
summary and is not the detailed plan. A copy of the 1999 Stock Option Plan in
its entirety will be forwarded to any shareholder upon receiving a request in
writing to the Company Secretary. Capitalized terms used and not otherwise
defined in this portion of this Proxy Statement have the respective meanings
ascribed to such terms in the 1999 Stock Option Plan.
Pursuant to the Stock Option Plan, the purpose of the Plan is to
provide key employees and others with a proprietary interest in the Company
through the granting of options, which will increase the interest of the
grantee, furnish an incentive to key employees, non-employee directors,
independent contractors and consultants. The Plan will also provide a means
through which the Company may attract qualified persons to enter into employment
with the Company.
Pursuant to the Plan, 4,000,000 shares of Common Stock are
reserved for issuance under the Plan.
The Plan is administered by the Board of Directors or a committee
designated by the Board of Directors to administer the Plan, which committee is
constituted in such a manner as to permit the Plan to comply with Rule 16b-3 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
respect to a plan intended to qualify as a discretionary plan. With respect to
grants of options to employees, consultants or advisors who are not directors or
officers of the Company, the Plan is administered by the Board of Directors or a
committee designated by the Board of Directors, which committee is constituted
in such a manner as to satisfy the legal requirements relating to the
administration of an incentive stock option plan of applicable corporate and
securities laws and the Internal Revenue Code of 1986, as amended.
The Board or any designated Committee (herein "Committee") has the
authority to select employees, directors and advisors to whom stock options are
granted. Subject to limitations set forth in the Plan, the Committee has the
authority in its discretion to determine the persons to whom options shall be
granted and the number of shares covered by each option, to interpret the Plan,
to establish vesting schedules, to specify the type of consideration to be paid
upon exercise and, subject to certain restrictions, to specify other terms of
the options.
The maximum term of the options granted under the Plan is ten
years, except that the term of an incentive stock option granted to an optionee
owning more than ten percent of the voting stock of the Company may not exceed
five years. Options granted under the Plan are in most cases nontransferable and
generally expire 90 days after the termination of the optionee's services. In
general, if an optionee is disabled or dies, such option may be exercised up to
12 months following such disability or death.
The aggregate fair market value of the shares of Common Stock
which any employee is first eligible to purchase in any calendar year by
exercise of Incentive Options granted under the Plan and all incentive stock
option plans of the Company
7
<PAGE> 10
shall not exceed $100,000. For this purpose, the fair market value (determined
at the respective date of grant of each option) of the stock purchasable by
exercise of an Incentive Option (or an Installment) shall be counted against the
$100,000 annual limitation for an employee only for the calendar year such stock
is first purchasable.
The option price for Incentive Options shall not be less than 100%
of the fair market value per share of the Common Stock, or 110% of the fair
market value per share for any employee that owns more than 10% of the voting
stock of the Company on the date the option is granted. The option price for a
Nonqualified Option shall be, as determined by the Committee, any price per
share of the Common Stock that is greater than the par value per share of the
Common Stock. For puropses of the plan, fair market value of a share of Common
Stock shall be the closing price of the Common Stock for the day before the
option is granted if the stock is traded on an established securities market or
if the stock is not traded, an amount determined by the Committee in good faith
using any reasonable valuation method it deems relevant to the determination.
The Plan shall automatically terminate on September 5, 2009. The
Committee may not grant options under the Plan after that date.
The Committee may establish rules and procedures in order to
satisfy any obligation of the Company to withold federal income taxes or other
taxes with respect to any option granted under the Plan. If the Common Stock is
traded in the over-the-counter market or on any securities exchange, such rules
and procedures may provide that in the case of the exercise of a Nonqualified
Option, the witholding obligation shall be satisfied by the Company witholding
shares of Common Stock otherwise issuable upon exercise of such option, in an
amount equal to the statutory prescribed minimum withholding appplicable to the
ordinary income resulting from the exercise of the option.
The Company recommends ratification the 1999 Stock Option Plan in
order to offer key employees and others the opportunity to acquire an equity
interest in the Company, thereby aligning the interests of these persons more
closely with the long term interests of shareholders. Awards under the Plan may
be in the form of Incentive Options or Nonqualified Options. None of the
Incentive Options or Nonqualified Options may be exercised until the Plan is
approved by the shareholders.
TAX STATUS OF STOCK OPTIONS
The Committee may provide for an option under the 1999 Stock
Option Plan to qualify either as an Incentive Stock Option (`ISO") or as a
Nonqualified Stock Option for United States federal income tax purposes.
Incentive Stock Options. All stock options that qualify under the
rules of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), will be entitled to ISO treatment. To receive ISO treatment, an
optionee must not dispose of the acquired stock within two years after the
option is granted or within one year after exercise. In addition, the individual
must have been an employee of the Company for the entire time from the date of
grant of the option until three months (or one year if the employee is disabled)
before the date of the exercise. The requirement that the individual be an
employee and the two-year and one-year holding periods are waived in the case of
death of the employee. If all such requirements are met, no tax will be imposed
upon exercise of the option, and any gain upon sale of the acquired stock will
be entitled to capital gain treatment. The employee's gain on exercise (the
excess of fair market value at the time of exercise over the exercise price) of
an ISO is a tax preference item and, accordingly, is included in the computation
of alternative minimum taxable income.
If an employee does not meet the two-year and one-year holding
requirement (a "disqualifying disposition"), but does meet all other
requirements, tax will be imposed at the time of sale of the acquired stock, but
the employee's gain on
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exercise will be treated as ordinary income, rather than capital gain, and the
Company will get a corresponding deduction at the time of sale in an amount
equal to the income that the employee would have recognized on exercise of the
option. Any remaining gain on sale will be short-term or long-term capital gain,
depending on the holding period of the stock. If the amount realized on the
disqualifying disposition is less than the value at the date of exercise, the
amount includible in gross income, and the amount deductible by the Company,
will equal the excess of the amount realized on the sale or exchange over the
exercise price.
An option agreement with the Company may permit payment for stock
upon the exercise of an ISO to be made with other shares of Common Stock. In
such a case, in general, if an employee uses stock acquired pursuant to the
exercise of an ISO to acquire other stock in connection with the exercise of an
ISO, it may result in ordinary income if the stock so used has not met the
minimum statutory holding period necessary for favorable tax treatment as an
ISO.
Nonqualified Options. In general, no taxable income will be
recognized by the optionee, and no deduction will be allowed to the Company,
upon the grant of an option. Upon exercise of a nonqualified option, an optionee
will recognize ordinary income (and the Company will be entitled to a
corresponding tax deduction if applicable withholding requirements are
satisfied) in an amount equal to the amount by which the fair market value of
the shares on the exercise date exceeds the option exercise price. Any gain or
loss realized by an optionee on disposition of such shares generally is a
capital gain or loss and does not result in any tax deduction to the Company.
The foregoing statements are based upon present federal income
tax laws and regulations are subject to change if the tax laws and regulations,
or interpretations thereof, are changed.
REQUIRED VOTE
The favorable vote of the holders of a majority of the shares of
Common Stock present and entitled to vote at the Annual Meeting in person or by
proxy is required to approve the 1999 Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ADOPTION OF THE
STOCK OPTION PLAN.
INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Ernst & Young,
LLP, which has served as independent auditors of the Company since 1998, to act
as the Company's independent certified public accountants for the year ending
December 31, 1999. A representative of the firm is expected to be available at
the Annual Meeting, at which time he will have the opportunity to make a
statement and will respond to appropriate questions from shareholders.
OTHER MATTERS
(PROPOSAL NO. 3)
The Board of Directors is not aware of any other matters which are
likely to be brought before the Annual Meeting. However, in the event that any
other matters properly come before the Annual Meeting, it is intended that the
person named in the accompanying proxy will vote the Shares represented by all
properly executed proxies on such matters in such manner as shall be determined
by a majority of the Board of Directors.
THE COMPANY BECAME A REPORTING COMPANY UNDER THE 1934 ACT ON
NOVEMBER 2, 1999. THE COMPANY WILL PROVIDE, FREE OF CHARGE, TO ALL SHAREHOLDERS
A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB (WITHOUT EXHIBITS) AND/OR A COPY OF
ITS QUARTERLY REPORTS ON FORM 10-QSB (WITHOUT EXHIBITS), UPON WRITTEN REQUEST OF
SUCH SHAREHOLDER TO NANCY K. SMITH, SECRETARY, Micro-ASI, Inc., 12655 NORTH
CENTRAL EXPRESSWAY, SUITE 1000, DALLAS, TEXAS 75243.
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SHAREHOLDER PROPOSAL FOR 2000 ANNUAL MEETING
An eligible shareholder who wishes to submit a proposal to be
included in the Company's proxy materials for the 2000 Annual Meeting of
Shareholders must submit it, in accordance with the SEC's Rule 14a-8, so that it
is received by the Company's Secretary at the principal executive offices, on or
before August 5, 2000.
A shareholder who wishes to make a proposal at the 2000 Annual
Meeting of Shareholders without complying with the requirements of Rule 14a-8
(and therefore without including the proposal in the Company's proxy materials)
must give written notice of that proposal to the Company's Secretary, at the
Company's principal executive offices, by October 19, 2000. If a shareholder
fails to timely give that notice, then the persons named as proxies in the proxy
cards solicited by the Company's Board of Directors for that meeting will be
entitled to vote the proxy cards held by them regarding that proposal, if
properly raised at the meeting, in their discretion.
By Order of the Board of Directors
Joel E. Claybrook
President and CEO
Dated: December 3, 1999
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PROXY
MICRO-ASI, INC.
PLEASE MARK, SIGN, DATE AND RETURN VIA MAIL OR FACSIMILE (972-392-9639)
THIS PROXY CARD PROMPTLY TO ASSURE YOUR SHARES
ARE REPRESENTED AT THE ANNUAL MEETING
The undersigned (1) acknowledges receipt of the Notice of
Annual Meeting of Shareholders of Micro-ASI,Inc., to be held on Wednesday,
December 15, 1999, at 10:00 a.m. Dallas time, at the Westin Park Central Hotel,
12720 Merit Drive, Tenison Room A & B, Dallas, Texas 75243, and the Proxy
Statement in connection therewith; and (2) appoints JOEL E. CLAYBROOK and Cecil
E. Smith, Jr. and each of them, the undersigned's proxies with full power of
substitution, for and in the name, place and stead of the undersigned, to vote
upon and act with respect to all of the shares of Common Stock of the Company
standing in the name of the undersigned, or with respect ot which the
undersigned is entitled to vote and act at the meeting and at any adjournment
thereof, and the undersigned directs that this proxy be voted as indicated
below.
This proxy when properly executed will be voted in the manner
directed. Unless otherwise marked, this proxy will be voted for the election of
the persons named below and for approval of the proposal to ratify the 1999
Stock Option Plan.
If more than one of the proxies named herein shall be present in
person or by substitute at the meeting or any adjournment thereof, both of the
proxies so present and voting, either in person or by substitute, shall exercise
all of the powers hereby given.
The undersigned hereby revokes any proxy or proxies heretofore
given to vote upon or act with respect to such stock and hereby ratifies and
confirms all that the proxies, their substitutes or any of them may lawfully do
by virtue hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
1. Election of Directors
FOR all nominees WITHHOLD
Listed below AUTHORITY
(Except as marked to [ ] to vote for all [ ]
the contrary) nominees listed
below
FOR TERMS TO EXPIRE AT THE 2002 ANNUAL MEETING OF SHAREHOLDERS: CECIL E. SMITH,
JR. AND JOEL E. CLAYBROOK
FOR TERMS TO EXPIRE AT THE 2001 ANNUAL MEETING OF SHAREHOLDERS: DR. MENG-SHENG
LIN
FOR TERMS TO EXPIRE AT THE 2000 ANNUAL MEETING OF SHAREHOLDERS: DR. MYLES
WELBORN AND JAMES HAMNER
(INSTRUCTION: TO WITHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW)
- --------------------------------------------------------------------------------
2. Approval of the 1999 Stock Option Plan
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Any and all other business that may properly come before the Annual Meeting
of Shareholders
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR IN PROPOSALS 1, 2, and 3, ABOVE.
<PAGE> 14
I PLAN TO ATTEND THE ANNUAL MEETING IN PERSON [ ]
DATED:
-------------------------------- ------------------------------
SIGNATURE OF SHAREHOLDER
TELEPHONE:
---------------------------- ------------------------------
NAME (please print)
NUMBER OF SHARES:
--------------------- ------------------------------
SIGNATURE OF JOINT SHAREHOLDER
(if applicable)
------------------------------
NAME JOINT SHAREHOLDER
(please print)
------------------------------
TITLE (if applicable)
When signing as an attorney, administrator, executor, guardian or trustee,
please add your title as such. If executed by a corporation, this proxy should
be signed by a duly authorized officer. Each joint tenant should sign.
NOTE: PLEASE MARK, SIGN, DATE AND RETURN VIA MAIL OR FACSIMILE (972-392-9639)
THIS PROXY CARD PROMPTLY TO:
MICRO-ASI, INC.
12655 N. Central Expressway.
Suite 1000
Dallas, Texas 75243
