RESOURCEPHOENIX.COM
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 18, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ReSourcePhoenix.com., a Delaware corporation (the "Company"), will be held on
May 18, 2000 at 9:30 a.m., local time, at the Embassy Suites Hotel, 101 McInnis
Parkway, San Rafael, CA 94903, for the following purposes:
1. To elect four (4) directors to serve for the ensuing year and
until their successors are duly elected and qualified.
2. To approve an amendment to the Company's Restated 1999 Stock Plan
to increase the number of shares of Class A Common Stock available
for grant thereunder by 2,000,000 to a total of 3,260,000.
3. To ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for the fiscal year ending December 31,
2000.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Stockholders of record at the close of business on April 11, 2000 are
entitled to vote at the meeting and any postponement or adjournment thereof.
FOR THE BOARD OF DIRECTORS
Gus Constantin
Chairman of the Board of Directors and
Chief Executive Officer
San Rafael, California
April 25, 2000
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WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
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<PAGE>
RESOURCEPHOENIX.COM
2401 Kerner Boulevard
San Rafael, CA 94901
(415) 485-4600
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PROXY STATEMENT FOR
2000 ANNUAL MEETING OF STOCKHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors of
ReSourcePhoenix.com for use at the 2000 Annual Meeting of Stockholders, which
will be held on Thursday, May 18, 2000, at 9:30 a.m., local time, and at any
adjournment or postponement thereof. The Annual Meeting will be held at the
Embassy Suites Hotel, 101 McInnis Parkway, San Rafael, CA 94903.
These materials were first mailed on or about April 25, 2000.
INFORMATION CONCERNING SOLICITATION AND VOTING
Purposes of the Annual Meeting
The purposes of the Annual Meeting are as follows:
o to elect four (4) directors to serve for the ensuing year and until
their successors are duly elected and qualified;
o to approve an amendment to the Company's Restated 1999 Stock Plan to
increase the number of shares of Class A Common Stock available for
grant thereunder by 2,000,000 to a total of 3,260,000;
o to ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for the fiscal year ending December 31, 2000;
and
o to transact such other business as may properly come before the meeting
or any adjournment thereof.
Record Date and Shares Outstanding
Stockholders of record at the close of business on April 11, 2000 (the
"Record Date") are entitled to vote at the Annual Meeting. On the Record Date,
4,028,000 shares of the Company's Class A Common Stock were outstanding and
7,172,000 shares of Class B Common Stock were outstanding. For information
regarding security ownership by management and by beneficial owners of more than
5% of the Company's Common Stock, see "Security Ownership of Certain Beneficial
Owners and Management."
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked at any
time before its use by: (1) delivering to our corporate secretary a written
notice of revocation, (2) delivering to our corporate secretary a duly executed
proxy bearing a later date or (3) attending the Annual Meeting and voting in
person. Attending the Annual Meeting and not voting will not revoke a proxy.
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Voting and Solicitation
Shares of common stock represented by properly executed proxies will be
voted in accordance with the instructions given on such proxies. In the absence
of specific instructions to the contrary, properly executed proxies will be
voted:
o FOR the election of each of the nominees as a director;
o FOR the approval of the amendment to the Company's 1999 Stock
Plan; and
o FOR ratification of the appointment of Arthur Andersen LLP as
independent auditors for the fiscal year ending December 31, 2000.
No business other than that set forth in the accompanying Notice of Annual
Meeting of Stockholders is expected to come before the Annual Meeting. Should
any other matter requiring a vote of stockholders properly arise, the persons
named in the enclosed form of proxy will vote such proxy as recommended by the
Board of Directors. Stockholders are not entitled to cumulative voting.
We will pay the costs of soliciting proxies. We will reimburse
brokerage firms and other persons representing beneficial owners for their
expenses in forwarding solicitation material to such beneficial owners. Proxies
may also be solicited by our directors, officers and employees, without
additional compensation, personally or by telephone, telegram or letter.
Quorum; Abstentions; Broker Non-Votes
The presence, in person or by proxy, of at least a majority of the
voting power of the shares outstanding on the record date, April 11, 2000, is
necessary to attain a quorum. All votes will be tabulated by the inspector of
elections appointed for the Annual Meeting, who will separately tabulate
affirmative and negative votes, abstentions and broker non-votes. Broker
non-votes occur when a nominee, such as a financial institution, returns a
proxy, but does not have the authorization from the beneficial owner to vote the
owner's shares on a particular proposal because the nominee did not receive
voting instructions (via proxy vote) from the beneficial owner. Broker non-votes
and abstentions are counted toward a quorum.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
Four (4) directors will be elected at the Annual Meeting. Unless
otherwise instructed, properly executed proxies will be voted "FOR" each of the
nominees named below. In the event that any nominee is unable or declines to
serve as a director, the proxies will be voted for a nominee designated by the
Board of Directors. The term of each person elected as a director will continue
until the next annual meeting of stockholders or until his successor has been
elected and qualified. We do not expect that any nominee will be unable or will
decline to serve as a director.
The name of and certain information regarding each nominee is set forth
below.
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Name of Nominee Age Principal Occupation Director Since
--------------- --- -------------------- --------------
Gus Constantin 62 Chairman of the Board and
Chief Executive Officer 1999
James Barrington (1)(2) 59 Private business consultant 1999
Glen McLaughlin (1)(2) 65 President and Chief Executive
Officer of Venture Leasing
Associates 1999
Roger Smith (1)(2) 59 Principal, Smith Venture
Group 1999
- ---------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
GUS CONSTANTIN has served as our Chairman of the Board and Chief
Executive Officer since founding the company in 1996. In 1972, Mr. Constantin
founded Phoenix Leasing Incorporated, a company specializing in lease financing
for businesses. Mr. Constantin currently serves as Chairman of the Board and
Chief Executive Officer of Phoenix Leasing, as well as Phoenix Cable
Incorporated, Phoenix Precision Graphics, Inc. and Phoenix American
Incorporated. Each of these entities is located in San Rafael, California. Mr.
Constantin devotes approximately 40% of his professional time to us, 40% to
Phoenix Leasing, 5% to Phoenix Cable, and 15% to Phoenix Precision Graphics.
From 1969 to 1972, he served as Director, Computer and Technical Equipment of
DCL Incorporated (formerly Diebold Computer Leasing Incorporated), a corporation
formerly listed on the American Stock Exchange, and as Vice President and
General Manager of DCL Capital Corporation, a wholly-owned subsidiary of DCL
Incorporated. Mr. Constantin was actively engaged in marketing manufacturer
leasing programs to computer and medical equipment manufacturers and in
directing DCL Incorporated's IBM System/370 marketing activities. Prior to 1969,
Mr. Constantin was employed by IBM Corporation as a data processing systems
engineer for four years. Mr. Constantin received his B.S. in engineering from
University of Michigan and his M.S. in management science from Columbia
University.
JAMES BARRINGTON has been a director since September 1999. Mr.
Barrington is currently a private business consultant. From 1965 to 1999, Mr.
Barrington was with Arthur Andersen LLP, serving primarily as an audit and
business advisory partner. Mr. Barrington received his B.S. in accounting from
San Jose State University and his M.B.A. from the University of California at
Berkeley.
GLEN McLAUGHLIN has been a director since August 1999. Since December
1986, Mr. McLaughlin has served as President, Chief Executive Officer and a
director of Venture Leasing Associates, a general equipment leasing company.
From 1982 to 1990, Mr. McLaughlin was a director of Phoenix American Inc. From
1995 to 1998, Mr. McLaughlin was a director of Phoenix Receivables I, Inc. Mr.
McLaughlin currently serves on the Board of Directors of Phoenix Receivables II,
Inc. and Phoenix Receivables III, Inc. Mr. McLaughlin is also a director of
Greater Bay Bancorp, a bank holding company and several privately-held
companies. Mr. McLaughlin received his B.B.A. in accounting and business
administration from the University of Oklahoma and his M.B.A. in finance and
business administration from Harvard University.
ROGER SMITH has been a director since August 1999. Since January 1999,
Mr. Smith has been the owner of Smith Venture Group, a venture capital firm, a
position he also held from February 1994 to March 1998. From March 1998 to
January 1999, Mr. Smith was President of Venture Banking at Greater Bay Bancorp,
a bank holding company. Since July 1994, Mr. Smith has served on the board of
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directors of Venture Lending and Leasing Inc., an investment company. Mr. Smith
received his B.S. in business administration from the University of Colorado and
his M.B.A. from the University of Santa Clara.
There are no family relationships among our directors or executive officers.
Required Vote
Directors will be elected by a plurality of the votes cast at the
meeting assuming a quorum is present. Each share of Class A Common Stock is
entitled to one vote and each share of Class B Common Stock is entitled to five
votes. Abstentions and broker non-votes will have no effect on the outcome of
the vote.
Gus Constantin controls all shares of Class B Common Stock and intends
to vote all such shares in favor of the nominees listed above. Accordingly, the
election of each nominee listed above is assured. See "Security Ownership of
Certain Beneficial Owners and Management."
Board Meetings and Committees
The Board of Directors met or took action by written consent seven
times during 1999. The Company was formed in July 1999. No incumbent director
attended less than 75% of the aggregate of all meetings of the Board of
Directors and any committees of the board on which he served, if any. The Board
of Directors has an Audit Committee and a Compensation Committee. It does not
have a nominating committee or a committee performing the functions of a
nominating committee.
The Audit Committee of the Board of Directors consists of Messrs.
Barrington, McLaughlin and Smith. The Audit Committee met once during 1999. The
Audit Committee recommends engagement of our independent auditors, and is
primarily responsible for approving the services performed by our independent
auditors and for reviewing and evaluating our accounting policies and our
systems of internal accounting controls.
The Compensation Committee of the Board of Directors consists of
Messrs. Barrington, McLaughlin and Smith. The Compensation Committee met once
during 1999. The Compensation Committee reviews and makes recommendations to the
Board concerning our executive compensation policy.
Compensation of Directors
Directors do not currently receive any cash compensation for their
service as directors, but are reimbursed for reasonable expenses incurred in
attending meetings. Each director is granted on a quarterly basis an option to
purchase 1,250 shares of Class A Common Stock at an exercise price equal to the
fair market value of our Class A Common Stock on the date of grant. These
options are fully vested at the time of grant.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE
NOMINEES LISTED ABOVE.
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PROPOSAL NO. 2
AMENDMENT TO THE RESTATED 1999 STOCK PLAN
General
The Restated 1999 Stock Plan (the "Stock Plan") was approved by the
Board of Directors and the stockholders in 1999. There are currently a total of
1,260,000 shares of Class A Common Stock reserved for issuance under the Stock
Plan. As of April 1, 2000, options to purchase approximately 1,095,010 shares
were outstanding under the Stock Plan and an aggregate of 154,190 shares were
available for future grant thereunder.
Proposal
In March 2000, the Board of Directors approved an amendment to the
Stock Plan to increase the number of shares of Class A Common Stock reserved for
issuance thereunder by an additional 2,000,000 shares, for an aggregate of
3,260,000 shares reserved for issuance thereunder. At the Annual Meeting, the
stockholders are being requested to approve this amendment. The amendment to
increase the number of shares reserved under the Stock Plan is proposed in order
to give the Board of Directors flexibility to grant stock options. The Company
believes that grants of stock options motivate high levels of performance and
provide an effective means of recognizing employee contributions to the success
of the Company. The Company believes that this policy is of great value in
recruiting and retaining highly qualified technical and other key personnel who
are in great demand. The Board of Directors believes that the ability to grant
options will be important to the future success of the Company by allowing it to
remain competitive in attracting and retaining such key personnel.
Description of the Restated 1999 Stock Plan
Purpose
The purpose of the Stock Plan is to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentives to employees and consultants of the Company and to promote
the success of the Company's business.
Administration
The Stock Plan may be administered by the Board of Directors of the
Company or by a committee of the Board. All stock option grants are currently
being administered by the Board of Directors, except for grants to executive
officers, which are currently being administered by the Compensation Committee
of the Board of Directors. All questions of interpretation of the Stock Plan are
determined by the Board of Directors or its committee, and such determinations
are final and binding upon all participants.
Eligibility
The Stock Plan permits participation by employees and consultants of
the Company or its majority- owned subsidiaries. Incentive Stock Options may be
granted only to employees, including officers and directors. Nonstatutory Stock
Options may be granted to employees or consultants of the Company.
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Limitations
Section 162(m) of the Code places limits on the deductibility for
federal income tax purposes of compensation paid to certain executive officers
of the Company. In order to preserve the Company's ability to deduct the
compensation income associated with options and stock purchase rights granted to
such persons, the Plan provides that no employee may be granted, in any fiscal
year of the Company, options and stock purchase rights to purchase more than
400,000 shares of Common Stock.
Terms of Options Granted to Employees and Consultants
The terms of options granted under the Stock Plan may be determined by
the Board of Directors or its committee and are currently being determined by
the Board of Directors, except for options granted to executive officers, which
are currently being determined by the Compensation Committee of the Board of
Directors. Each option is evidenced by a stock option agreement between the
Company and the employee or consultant to whom such option is granted and is
generally subject to the following additional terms and conditions:
(a) Exercise of the Option: The Board of Directors of the Company or
its committee determines the vesting terms of the options granted to employees
and consultants under the Stock Plan. The current form of option agreement for
new employees provides that options may be exercised at the rate of twenty-five
percent (25%) of the shares granted at the end of the first year after
commencement of employment and one-forty-eighth ( 1/48 ) of the shares at the
end of each month thereafter, for a total vesting period of four (4) years. The
Board or its committee may at any time or from time to time accelerate the
vesting of any outstanding option. An option is exercised by giving written
notice of exercise to the Company, specifying the number of full shares of
Common Stock to be purchased, and tendering payment to the Company of the
purchase price. The purchase price of the shares purchased upon exercise of any
option shall be paid in consideration of such form as is determined by the Board
of Directors or its committee, and such form of consideration may vary for each
option.
(b) Option Price: The price of option grants under the Stock Plan is
determined by the Board of Directors of the Company or its committee at the time
the options are granted. In the case of an incentive stock option granted to an
employee, the option price may not be less than 100% of the fair market value of
the Common Stock on the date the option is granted, with the exception that in
the case of an option granted to a stockholder who, immediately prior to such
grant, owns stock representing more than 10% of the voting power or value of all
classes of stock of the Company, the exercise price may not be less than 110% of
such fair market value. In the case of a nonstatutory option granted to any
other eligible person, the per share exercise price shall be no less than 85% of
fair market value per share on the date of grant.
(c) Termination of Employment or Consulting Relationship: If the
optionee's status as an employee or consultant terminates for any reason other
than death or disability, options under the Stock Plan may be exercised within
such period of time after such termination as the Board or its committee may
determine, up to ninety (90) days in the case of incentive and nonstatutory
stock options, and may be exercised only to the extent the option was
exercisable on the date of termination.
(d) Death or Disability of Optionee: If an optionee should die or
become totally and permanently disabled while employed by the Company, options
may be exercised within twelve (12) months from the date of termination, but
only to the extent such options were exercisable on the date of termination and
in no event later than the expiration of the term of such options.
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(e) Term of Option: Options granted under the Stock Plan expire ten
(10) years from the date of grant or such shorter term as may be provided in the
notice of grant. However, in the case of an option granted to an employee who at
the time the option is granted owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any parent
or subsidiary, the term of an incentive stock option shall not be greater than
five (5) years from the date of the grant or such shorter term as may be
provided in the notice of grant. No option may be exercised by any person after
such expiration.
(f) Non-transferability of Options: Unless otherwise determined by the
administrator, an option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner, other than by will or the laws of
descent or distribution, and may be exercised only by the optionee during his
lifetime.
(g) Other Provisions: The option agreement may contain such other
terms, provisions and conditions not inconsistent with the Stock Plan as may be
determined by the Board of Directors or its committee.
Adjustments Upon Changes in Capitalization
In the event any change is made in the Company's capitalization which
results from a stock split or payment of a stock dividend or any other increase
or decrease in the number of shares of Common Stock effected without receipt of
consideration, appropriate adjustment shall be made with respect to shares and
options available under the Stock Plan. In the event of the proposed dissolution
or liquidation of the Company, to the extent that an option has not been
previously exercised, it will terminate immediately prior to the consummation of
the proposed action, unless otherwise provided for by the Board in its sole
discretion. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, the option shall be assumed or an equivalent option or right shall
be substituted by the successor corporation unless the Board makes the option
fully exercisable prior to the merger. If the Board makes an option exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Board shall notify the participant that the option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice and
the option will terminate upon the expiration of such period.
Amendment and Termination
The Board of Directors may at any time or from time to time amend,
alter, suspend or terminate the Stock Plan without the approval of the
stockholders; provided, however, that the Company shall obtain stockholder
approval for any amendment to the Stock Plan to the extent necessary to comply
with applicable law. No such action by the Board or stockholders may
unilaterally alter or impair any rights previously granted under the Stock Plan
without the written consent of the optionee.
Federal Income Tax Consequences
(a) Incentive Stock Options: An optionee who is granted an incentive
stock option does not recognize taxable income at the time the option is granted
or upon its exercise, although the exercise is an adjustment item for
alternative minimum tax purposes and may subject the optionee to the alternative
minimum tax. Upon a disposition of the shares more than two years after grant of
the option and one year after exercise of the option, any gain or loss is
treated as long-term capital gain or loss. Net capital gains on shares held more
than 12 months may be taxed at a maximum federal rate of 20%. Capital losses are
allowed in full against capital gains and up to $3,000 against other income. If
these holding periods are not satisfied, the optionee recognizes ordinary income
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at the time of disposition equal to the difference between the exercise price
and the lower of (i) the fair market value of the shares at the date of the
option exercise or (ii) the sale price of the shares. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income is treated as long-term or short-term capital gain or
loss, depending on the holding period. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director, or 10% stockholder of the Company. Unless limited by Section
162(m) of the Code, the Company is entitled to a deduction in the same amount as
the ordinary income recognized by the optionee.
(b) Nonstatutory Stock Options: An optionee does not recognize any
taxable income at the time he or she is granted a nonstatutory stock option.
Upon exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. Unless limited by
Section 162(m) of the Code, the Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Upon a disposition of
such shares by the optionee, any difference between the sale price and the
optionee's exercise price, to the extent not recognized as taxable income as
provided above, is treated as long-term or short-term capital gain or loss,
depending on the holding period. Net capital gains on shares held more than 12
months may be taxed at a maximum federal rate of 20%. Capital losses are allowed
in full against capital gains and up to $3,000 against other income.
The foregoing is only a summary of the effect of federal income
taxation upon the optionee and the Company with respect to the grant and
exercise of options under the Stock Plan, does not purport to be complete, and
does not discuss the income tax laws of any municipality, state or foreign
country in which an optionee may reside.
Required Vote; Recommendation of the Board of Directors
A majority of the votes cast at the meeting is required to approve this
proposal assuming a quorum is present. Each share of Class A Common Stock is
entitled to one vote and each share of Class B Common Stock is entitled to five
votes. Abstentions and broker non-votes will have no effect on the outcome of
the vote.
Gus Constantin controls all shares of Class B Common Stock and intends
to vote all such shares in favor of this proposal. Accordingly, the passage of
this proposal is assured. See "Security Ownership of Certain Beneficial Owners
and Management."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE AMENDMENT
TO THE STOCK PLAN.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
auditors, to audit our consolidated financial statements for the fiscal year
ending December 31, 2000 and recommends that stockholders ratify such
appointment.
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Arthur Andersen LLP has audited the financial statements of the Company
and its operating subsidiary for each fiscal year since the inception of the
Company and its operating subsidiary. Representatives of Arthur Andersen are
expected to be present at the meeting, will have the opportunity to make a
statement if they desire to do so and are expected to be available to respond to
appropriate questions.
Required Vote; Recommendation of the Board of Directors
A majority of the votes cast at the meeting is required to approve this
proposal assuming a quorum is present. Each share of Class A Common Stock is
entitled to one vote and each share of Class B Common Stock is entitled to five
votes. Abstentions and broker non-votes will have no effect on the outcome of
the vote.
Gus Constantin controls all shares of Class B Common Stock and intends
to vote all such shares in favor of this proposal. Accordingly, the passage of
this proposal is assured. See "Security Ownership of Certain Beneficial Owners
and Management."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2000.
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OTHER INFORMATION
Executive Officers
Our executive officers as of April 20, 1999 are as follows:
Name Age Position
---- --- --------
Gus Constantin 62 Chairman of the Board and Chief
Executive Officer
Michael D'Almada-Remedios 36 Senior Vice President and Chief
Technology Officer
David Brunton 49 Senior Vice President, Operations
W. Corey West 37 Senior Vice President, Sales &
Marketing
Gregory Thornton 47 Vice President and Chief Financial
Officer
Biography for Mr. Constantin is set forth above under "Election of Directors."
DAVID BRUNTON has served as Senior Vice President, Operations since
December 1999. Prior to assuming his current position, Mr. Brunton served as
Vice President and Chief Financial Officer from January 1997 to December 1999.
From February 1987 to December 1996, Mr. Brunton served as Corporate Controller
of Phoenix Leasing Incorporated and Phoenix American Incorporated. Mr. Brunton
received his B.A. in social welfare from the University of California at Chico
and is a Certified Public Accountant.
MICHAEL D'ALMADA-REMEDIOS has served as Senior Vice President and Chief
Technology Officer since December 1999. From September 1998 to December 1999,
Dr. D'Almada-Remedios served as Vice President and Chief Technology Officer.
From February 1992 to September 1998, Dr. D'Almada-Remedios was with Wells Fargo
Bank, most recently as a vice president responsible for selecting technologies,
developing applications and running operations to support numerous areas of
consumer and business banking. Dr. D'Almada-Remedios received his B.Sc. in
physics and computer science from Kings College, University of London and his
Ph.D. in fluid dynamics and computer control from Nottingham (Trent) University,
England.
W. COREY WEST has served as Senior Vice President, Sales and Marketing
since December 1999. From October 1998 to December 1999, Mr. West served as
Group Vice President, Sales and Marketing. From July 1986 to October 1998, Mr.
West was with Arthur Andersen LLP, most recently as a partner. Mr. West received
his B.S. in accounting and finance from the University of Washington and is a
Certified Public Accountant.
GREGORY THORNTON has served as our Vice President and Chief Financial
Officer since December 1999. Prior to assuming his current position, Mr.
Thornton served since 1990 in various capacities with Harding Lawson Associates
Group, Inc., an international engineering and consulting firm, including most
recently as Vice President and Chief Financial Officer. Mr. Thornton received
his B.A. in political science and business administration from Seattle Pacific
University and an M.B.A. from the University of Southern California.
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Section 16(a) Beneficial Ownership Reporting Compliance
The Company's directors, executive officers and 10% stockholders are
required to report their ownership of the Company's common stock and any changes
in that ownership to the SEC. To the Company's knowledge, all required filings
in 1999 were properly made in a timely fashion. In making the foregoing
statement, the Company has relied on the representations of the persons involved
and on copies of their reports filed with the SEC.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of our common stock as of April 1, 2000 by:
o each person or entity known to us to own beneficially more than 5% of
either class of our common stock;
o each of our directors;
o each of our named executive officers; and
o all directors and executive officers as a group.
<TABLE>
<CAPTION>
Class A Common Stock Class B Common Stock
-------------------- --------------------
Shares Shares Percent of
Beneficially Beneficially Total Voting
Name Owned Percent (1) Owned Percent (1) Power (1)
---- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
Gus Constantin (2) 3,040 * 7,172,000 100% 89.9%
Bryant Tong (3) 405,354 9.1% -- -- *
David Brunton (3) 42,480 1.0% -- -- *
W. Corey West (3) 53,856 1.3% -- -- *
Michael D'Almada-Remedios (3) 28,800 * -- -- *
James Barrington (3) 3,040 * -- -- *
Glen McLaughlin (3) 3,040 * -- -- *
Roger Smith (3) 3,040 * -- -- *
Greg Thornton 500 * -- -- *
All directors and executive 543,150 11.9% 7,172,000 100% 90.0%
officers as a group (9 persons)
</TABLE>
* Less than one percent
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Beneficial ownership is determined in accordance with the rules of the SEC. In
computing the number of shares beneficially owned by a person and the percentage
ownership of that person, shares of Class A common stock subject to options held
by that person that are currently exercisable or exercisable within 60 days of
April 1, 2000 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other
person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each stockholder named in the table has sole
voting and investment power with respect to the shares set forth opposite such
stockholder's name.
(1) The foregoing percentages are based on 11,200,000 shares of Class
A and Class B common stock outstanding.
(2) The shares of Class A common stock owned consist of options that
are exercisable within 60 days of April 1, 2000. All of the Class
B securities are held by the Gus and Mary Constantin 1978 Living
Trust, of which Mr. Constantin and his wife are trustees. The
living trust can be amended or revoked at any time at the option
of Mr. Constantin and his wife. Mr. Constantin and his wife, as
trustees of the living trust, are authorized to exercise all
rights with respect to the Class B common stock held by the trust,
including the right to vote and dispose of such shares. The
address of each of Mr. Constantin and his wife is c/o
ReSourcePhoenix.com, 2401 Kerner Boulevard, San Rafael, CA
94901-55529.
(3) Consists of shares of Class A Common Stock subject to options that
are exercisable within 60 days of April 1, 2000.
12
<PAGE>
Executive Compensation
The following table summarizes the compensation paid to our named
executive officers during the two fiscal years ended December 31, 1999:
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
--------------------- ----------------------------------------------
Securities
Other Annual Underlying All Compensation
Name and Principal Position Fiscal Year Salary Bonus Compensation Options (#) (1)
- ----------------------------------------- ----------- -------- ------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Gus Constantin 1999 $148,029 $ -- $ -- 1,890 $ --
Chairman of the Board and Chief Executive 1998 -- -- -- -- --
Officer
Bryant Tong (6) 1999 200,000 49,591 10,747(2) 427,204 14,122
President and Chief Operating Officer 1998 180,000 -- 10,747(2) -- 13,497
W. Corey West 1999 136,666 -- 44,000(3) 70,956 --
Senior Vice President, Sales & Marketing 1998(4) 25,538 -- 11,250(3) -- --
Michael D'Almada Remedios 1999 143,625 10,200 -- 40,900 --
Senior Vice President and Chief Technology 1998(5) 40,114 2,500 -- -- --
Officer
David Brunton 1999 129,583 10,100 -- 54,900 8,016
Senior Vice President, Operations 1998 100,000 10,000 -- -- 10,830
- ------------------------------
</TABLE>
(1) The amounts shown are allocations of employer contributions to our
profit sharing plan.
(2) The amounts shown for Mr. Tong include an automobile allowance of
$7,800, company paid health insurance premiums of $2,664 and long term
disability premiums of $283.
(3) The amounts shown include payments to Mr. West of commissions of
$38,000 and $10,000 and car allowances of $6,000 and $1,250, for 1998
and 1997, respectively.
(4) Mr. West joined us effective October 15, 1998.
(5) Dr. Remedios joined us effective September 1, 1998.
(6) On April 19, 2000, Mr. Tong resigned his positions as President, Chief
Operating Officer and member of the Board of Directors.
13
<PAGE>
Option Grants in Last Fiscal Year
The following table summarizes option grants made to each of our named
executive officers during 1999:
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------------
Percent of Potential Realized
Total Value at Assumed
Options Annual Rates of Stock
Number of Granted To Price Appreciation
Securities Employees Exercise for Option Term
Underlying in Fiscal Price Per
Name Options Granted Year Share Expiration Date 5% 10%
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gus Constantin . . . . . 540(1) * $ 8.00 10/12/04 $ 1,194 $ 2,637
100(2) * 15.69 12/06/04 433 958
1,250(1) * 17.25 12/30/04 5,957 13,164
Bryant Tong (4) . . . . . 402,314(3) 40.0% 2.08 08/03/09 526,267 1,333,665
540(1) * 8.00 10/12/09 2,717 6,885
23,000(2) 2.3 8.00 10/12/09 115,717 293,249
100(2) * 15.69 12/06/09 987 2,501
1,250(1) * 17.25 12/30/09 13,561 34,365
W. Corey West. . . . . . . 53,856(3) 5.4 2.08 08/03/09 70,449 178,532
12,000(2) 1.2 8.00 10/12/09 60,374 152,999
100(2) * 15.69 12/06/09 987 2,501
Michael D'Almada-Remedios . 28,800(3) 2.9 2.08 08/03/09 37,673 95,472
12,000(2) 1.2 8.00 10/12/09 60,374 152,999
100(2) * 15.69 12/06/09 987 2,501
David Brunton. . . . . . . 42,480(3) 4.2 2.08 08/03/09 55,568 140,821
12,000(2) 1.2 8.00 10/12/09 60,374 152,999
100(2) * 15.69 12/06/09 987 2,501
- ---------------------------
* Less than one percent
</TABLE>
(1) Automatic grant to directors. Fully vested on grant.
(2) Vest over four years, with first 25% vesting on first anniversary of
grant and remainder vesting monthly thereafter.
(3) Vested in full upon the effectiveness of our initial public offering on
October 13, 1999.
(4) On April 19, 2000, Mr. Tong resigned his positions as President, Chief
Operating Officer and member of the Board of Directors.
The options in this table were granted under our 1999 Stock Option
Plan. These options have ten-year terms, except that the options granted to Mr.
Constantin have five year terms.
The figures representing percentages of total options granted to
employees in the last fiscal year are based on an aggregate of 1,005,410 options
granted by us during our fiscal year ended December 31, 1999 to our employees
and consultants, including the executive officers named in the summary
compensation table.
14
<PAGE>
Under SEC rules, the amounts in the last two columns represent the
hypothetical gain or option spread that would exist for the options in this
table based on assumed stock price appreciation from the date of grant until the
end of such options' applicable terms at assumed annual rates of 5% and 10%. The
5% and 10% assumed annual rates of appreciation are specified by SEC rules and
do not represent our estimate or projection of future stock price growth.
1999 Year-End Option Values
The following table sets forth information, as to the executive
officers included in the summary compensation table, concerning the number of
shares subject to both exercisable and unexercisable stock options as of
December 31, 1999. Also reported are values for in-the-money options that
represent the positive spread between the respective exercise prices of these
options and $19.75, the closing price of our Class A common stock on December
31, 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1999 December 31, 1999
---------------------------- ------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gus Constantin 1,790 100 $ 9,470 $ 406
Bryant Tong (1) 404,104 23,100 7,118,358 270,656
W. Corey West 53,856 12,100 951,635 141,406
Michael D'Almada-Remedios 28,800 12,100 508,896 141,406
David Brunton 42,480 12,100 750,622 141,406
</TABLE>
(1) On April 19, 2000, Mr. Tong resigned his positions with the company.
15
<PAGE>
Report of the Compensation Committee
The Compensation Committee establishes our general compensation
policies as well as the compensation plans and specific compensation levels for
executive officers. It also administers our employee stock benefit plan for
executive officers. The Compensation Committee is currently composed of
independent, non-employee directors who have no interlocking relationships as
defined by the SEC.
The Compensation Committee establishes the salaries of our executive
officers by considering (i) our financial performance for the past year, (ii)
the achievement of certain objectives related to the particular executive
officer's area of responsibility, (iii) the salaries of executive officers in
similar positions of comparably-sized companies and (iv) the relationship
between revenue and executive officer compensation. The Committee believes that
the salaries of our executive officers in the last fiscal year were comparable
in the industry for similarly-sized business.
In addition to salary, the Committee, from time to time, grants options
to executive officers. The Committee thus views stock option grants as an
important component of its long-term, performance-based compensation philosophy.
Since the value of an option bears a direct relationship to the price of our
Class A Common Stock, the Committee believes that options motivate executive
officers to manage in a manner which will also benefit stockholders. As such,
options are granted at the current market price. One of the principal factors
considered in granting stock options to an executive officer is the executive
officer's ability to influence our long-term growth and profitability.
Chief Executive Officer Compensation
The Compensation Committee annually reviews and approves the
compensation of Mr. Constantin, our Chief Executive Officer. In 1999, Mr.
Constantin received a salary of $148,029, an option to purchase 100 shares of
the Company's Class A Common Stock as part of a Company wide grant to all
employees and options to purchase a total of 1,790 shares as a director. Mr.
Constantin is a significant stockholder in the Company and therefore is impacted
by any effect on the value of the Company's stock resulting from his performance
as CEO.
Compensation Committee of the Board of Directors
James Barrington
Glen McLaughlin
Roger Smith
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Messrs. Barrington, McLaughlin
and Smith, each of whom is an independent, non-employee director. None of our
executive officers serves as a member of the board of directors or compensation
committee of any entity which has one or more executive officers serving as a
member of our Board of Directors or Compensation Committee.
16
<PAGE>
Company Stock Price Performance
The following graph compares the cumulative total return for the period
beginning on the date that our Class A Common Stock started trading on the
Nasdaq National Market (October 14, 1999) and ending March 31, 2000 for our
Class A Common Stock, the Nasdaq Stock Market and the Russell 2000 Index. The
graph assumes that $100 was invested in our Class A Common Stock and each of
these indices on October 14, 2000. Historic stock price performance is not
necessarily indicative of future stock price performance.
[graph appears here]
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T
10/14/99 3/31/00
-------- -------
ReSourcePhoenix.com 100 163
Nasdaq Stock Market 100 163
Russell 2000 100 129]
The lines represent index levels derived from compounded daily returns
that include all dividends. The Stock Price Performance Graph shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement (or any portion thereof) into any filing under
the Securities Act or the Securities Exchange Act, except to the extent the
Company specifically incorporated this performance by reference, and shall not
otherwise by deemed filed under such Acts.
17
<PAGE>
OTHER MATTERS
We are not aware of any other matters to be submitted at the Annual
Meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent as the Board of Directors may recommend.
Deadline for Receipt of Stockholder Proposals
Any proposal intended to be presented at and included in our proxy
materials for the 2001 Annual Meeting of Stockholders must be received at our
principal offices no later than December 20, 2000.
FOR THE BOARD OF DIRECTORS
Gus Constantin
Chairman of the Board of Directors and
Chief Executive Officer
Dated: April 25, 2000
18
<PAGE>
APPENDIX A
PROXY RESOURCEPHOENIX.COM PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
2000 Annual Meeting of Stockholders
To Be Held on May 18, 2000
The undersigned stockholder of ReSourcePhoenix.com. (the "Company"),
hereby appoints Lisa Olsen and Gregory Thornton and each of them, with power of
substitution to each, true and lawful attorneys, agents and proxies of the
undersigned, and hereby authorizes them to represent and vote, as specified
herein, all the shares of Common Stock of the Company held of record by the
undersigned on April 11, 2000, at the 2000 Annual Meeting of Stockholders of the
Company to be held on Thursday, May 18, 2000 at 9:30 a.m., local time, at the
Embassy Suites Hotel, 101 McInnis Parkway, San Rafael, CA 94903, and any
adjournments or postponements thereof.
(Continued, and to be signed on the other side)
FOLD AND DETACH HERE
<PAGE>
FOR WITHHOLD ALL
1. ELECTION OF DIRECTORS:
Nominees: Gus Constantin, James [ ] [ ]
Barrington, Glen McLaughlin, Roger Smith
INSTRUCTION: If you wish to withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
[X] Please mark your
votes as this
FOR AGAINST ABSTAIN
2. FOR AGAINST ABSTAIN APPROVAL OF AMENDMENT TO [ ] [ ] [ ]
THE 1999 STOCK PLAN. To approve an amendment
to the Company's 1999 Stock Plan to increase
the number of shares available for grant
thereunder by 2,000,000 shares to a total of
3,260,000 shares.
3. APPOINTMENT OF INDEPENDENT AUDITORS To ratify [ ] [ ] [ ]
the appointment of Arthur Andersen LLP as
independentauditors of the Company for the
fiscal year ending December 31, 2000.
4. In their discretion, the proxies are
authorized to vote upon such other business as
may properly come before the meeting, or any
adjournments or postponements thereof.
The shares represented by this proxy will be
voted in the manner directed. In the absence
of any direction, the shares will be voted FOR
each nominee for director and FOR Proposals 2
and 3. The undersigned acknowledges receipt of
the Notice of Annual Meeting of Stockholders,
Proxy Statement dated April 25, 2000 and 1999
Annual Report to Stockholders.
Please mark, sign and date this proxy and
return it promptly whether you plan to attend
the meeting or not. If you do attend, you may
vote in person if you desire.
Signature(s)_________________ Dated_____, 2000
Please sign exactly as name appears hereon.
Joint owners should each sign. Trustees and
others acting in a representative capacity
should indicate the capacity in which they
sign and give their full title. If a
corporation, please sign in full corporate
name by an authorized officer. If a
partnership please sign in partnership name by
an authorized person.
FOLD AND DETACH HERE
