<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Tyrex Oil Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
TYREX OIL COMPANY
Notice of Annual Meeting of Shareholders
To Be Held on June 18, 1998
Notice is hereby given that the Annual meeting of Shareholders of Tyrex
Oil Company, a Wyoming corporation, will be convened at 9:00 a.m. M.D.T. on
June 18, 1998 at the offices of the Company, 6886 S. Yosemite Street,
Englewood, Colorado, for the following purposes:
1. To ratify the adoption of the Company's 1998 Stock Option Plan;
2. To elect a Board of Directors consisting of five members to hold
office until the next annual meeting of shareholders and until their
successors shall be elected and shall qualify;
3. To approve the change in the Company's legal name to 3Si Holdings,
Inc.;
4. To ratify the appointment of John M. Hanson & Company, P.C., as
independent auditors of the Company for the fiscal year ending
June 30, 1998; and,
5. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
Shareholders of record at the close of business on May 15, 1998 will be
entitled to vote at the Meeting.
A proxy statement explaining the matters to be acted upon at the Annual
Meeting is enclosed.
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF YOU
CANNOT ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE SO THAT YOUR SHARES MAY BE VOTED AT THE MEETING. YOUR VOTE IS
IMPORTANT.
By the Board of Directors,
F. Larry Valdez, Chairman
Englewood, Colorado
May 21, 1998
<PAGE>
TYREX OIL COMPANY
6886 S. YOSEMITE STREET
ENGLEWOOD, COLORADO 80112
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1998
GENERAL
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Tyrex Oil Company (the "Company"), to be
used at the Annual Meeting of Shareholders (the "Meeting") to be held at the
offices of the Company, 6886 S. Yosemite Street, Englewood, Colorado, on June
18, 1998 at 9 a.m. MDT for the purposes set forth in the accompanying Notice
of Annual Meeting. This statement was sent to shareholders of the Company on
or about May 21, 1998.
SOLICITATION OF PROXIES
The shares covered by the enclosed Proxy, if such is properly executed and
received by the Board of Directors prior to the Meeting, will be voted in favor
of the proposals to be considered, and in favor of the election of five nominees
to the Board of Directors as listed in "Election of Directors" below, unless
such proxy specifies otherwise or the authority to vote in the election of
directors has been withheld. A proxy may be revoked at any time before it is
exercised by giving written notice to the Secretary of the Company at its above
address. Shareholders may vote their shares in person if they attend the
Meeting, even if they have executed and returned a proxy.
PURPOSE OF THE MEETING
The matters to be brought before the Meeting are the approval of the
Company's 1998 Stock Option Plan, the election of directors to serve for the
ensuing year, the ratification of the name change of the Company from Tyrex
Oil Company to 3Si Holdings, Inc. and the ratification of John M. Hanson &
Company, P.C. as the Company's auditors.
VOTING SECURITIES
Only shareholders of record at the close of business on May 15, 1998
will be entitled to vote at the Meeting. On that date, there were issued and
outstanding 33,756,798 shares of Company's $0.01 par value common stock
("Common Stock"), entitled to one vote per share. In the 1998 stock option
plan and election of directors, cumulative voting is not permitted.
A majority of the outstanding Common Stock (the presence in person or by
proxy of at least 16,878,400 shares) will constitute a quorum for the
transaction of business at the meeting. The vote of a majority of such
quorum is needed to approve the stock option plan, elect directors, ratify
the name change and the Company's auditors.
As a result of the merger transaction between Tyrex Oil Company and 3Si,
Inc. in May 1997, the three 3Si shareholders (Frederick J. Slack, Frank W.
Backes, and F. Larry Valdez) hold and vote 83.4% of the Common Shares of the
Company. The 3Si shareholders intend to vote in favor of all the matters (1
through 4 in the Notice of Annual Meeting) to be brought before the Meeting.
2
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RATIFICATION OF COMPANY'S 1998 STOCK OPTION PLAN
On January 21, 1998, the Board of Directors of the Company adopted,
subject to shareholder approval and ratification, the 3Si 1998 Option Plan
(the "1998 Plan"). The 1998 Plan is intended to advance the interests of the
Company and its shareholders by encouraging and enabling selected officers,
directors and key employees upon whose judgment, initiative and effort the
Company is largely dependent for the successful conduct of its business, to
acquire and retain proprietary interest in the Company by ownership of its
stock. The following summary of the material terms of the 1998 Plan is
qualified in its entirety by reference to the complete text of the 1998 Plan
which is attached as Exhibit 1 to this Proxy Statement.
Under the terms of the 1998 Plan, up to 5,000,000 shares of the authorized
but unissued shares of Common Stock of the Company may be issued to
directors, officers and employees of the Company. All classes of employees
are eligible to participate in the 1998 Plan.
Options are granted by the Board of Directors. The grantee is then notified
of the grant of the option, and if he/she accepts such grant, enters into a
written Stock Option Agreement.
The 1998 Plan shall terminate on December 31, 2007. No option may be
exercised more than ten (10) years after the date the option is granted.
Options granted under the Plan may be either Incentive Stock Options
("ISO's") qualified under Section 422A of the Internal Revenue Code, or
Nonqualified Stock Options, which are not qualified under Section 422A.
An optionee shall not be granted stock options exercisable in any one
calendar year which exceed $100,000 in value.
In the case of Incentive Stock Options granted to a 10% shareholder in the
Company, the option price shall be not less than 100% of the fair market
value of the shares (on the date of grant), and the exercise period shall not
exceed five (5) years.
The option price of the Incentive Stock Options cannot be less than 100%
of the fair market value of the Stock at the time the option is granted.
Options are not transferable other than by will or descent, and may not be
pledged or hypothecated.
Upon termination of an optionee's employment with the Company, his or her
option privileges shall be terminated unless the Board of Directors, in its
sole discretion, elects to continue the options. Optionee whose employment
is terminated (other than for cause) shall have a period of three (3) months
in which to exercise their options. The granting of an option to an eligible
person does not alter in any way the Company's existing rights to terminate
such person's employment at any time for any reason, nor does it confer upon
such person any rights or privileges except as specifically provided for in
the 1998 Plan.
If an optionee dies while in the employ of the Company or any subsidiary, his
or her option privileges shall be limited to the shares which were immediately
purchasable by him/her at the date of death and such option
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<PAGE>
privileges shall expire unless exercised by his/her successor within one year
after the date of death, disability or retirement.
The Board of Directors has the right to suspend or terminate the 1998 Plan at
any time, or to amend it from time to time, provided that no amendment may
increase the maximum number of shares for which options may be granted, change
the option price, change the provisions regarding the expiration date of the
options, or change the term of the 1998 Plan, without stockholder approval.
The Board of Directors recommends that shareholders vote FOR ratification of
the Company's 1998 Stock Option Plan.
ELECTION OF DIRECTORS
The Company has no nominating or similar committee of its Board of Directors;
therefore, it is the recommendation of the Board of Directors that the Board for
the coming year, and until successors have been duly elected and qualified,
shall consist of five members.
Unless the authority is withheld, it is intended that the shares represented
by your proxy will be voted for the election of the five nominees named below,
all of whom are presently members of the Board of Directors, subsequent to the
merger between Tyrex and 3Si. If any nominees should not serve for any reason,
or if a vacancy should occur before the election (which is not anticipated) your
proxy will be voted for any person who is designated by the Board of Directors
to replace such nominee. The Board of Directors has no reason to expect that
any nominee will be unable to serve. There is no arrangement between any of the
nominees and any other person pursuant to which he was or is to be elected as a
director or nominee, nor is there any family relationship between or among any
nominees or the executive officers of the Company.
The following sets forth information as of the record date for the Meeting
concerning each nominee, including such person's ownership of Common Stock, (the
Company's only class of voting securities) on an individual basis and ownership
by all nominees of the Company as a group:
<TABLE>
Period of Service Shares
Position with as Director or beneficially
Name and Age The Company Officer owned (1) Percent
- ------------ ----------- ------- ------------ -------
<S> <C> <C> <C> <C>
Frederick J. Slack President, CEO, and 5/28/97 9,387,777 27.8%
Age: 43 a Director to present (3Si)
Frank W. Backes Vice President and 5/28/97 9,387,777 27.8%
Age: 37 a Director to present (3Si)
Felipe L. Valdez Chairman of the Board, 5/28/97 9,387,778 27.8%
Age: 45 COO and Treasurer to present (3Si)
Tom N. Richardson A Director 7/10/86 188,724 < 1.0%
Age: 48 to present (Tyrex)
Doris K. Backus Secretary and 12/5/91 53,567 < 1.0%
Age: 44 a Director to present (Tyrex)
All Directors as a Group 28,405,623 84.1%
</TABLE>
- ---------------
(1) Beneficial ownership results in each case from the possession of sole or
shared voting and investment power with respect to the shares.
FREDERICK J. SLACK has served as Chief Executive Officer and a Director of 3Si
since August 1993. Mr. Slack received his B.A. degree in Education in 1977 from
the University of Northern Colorado. Mr. Slack began his business career as a
Methods and Procedures Analyst for National Farmers Union Insurance in Denver,
where he was first introduced to mainframe computer environments. Mr. Slack
then went to work as the Western Territory Sales Manager for Travenol Labs
selling hospital/medical information systems involving IBM
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<PAGE>
equipment. In 1986, Mr. Slack became a sales/project manager for Digital
Equipment Corporation. Initially, Mr. Slack served as one of the project
managers within the LSST (Large Systems Selling Team) which focused on large
complex, $1,000,000 solutions to larger customers. LSST selling required
multi-computer system disciplines including hardware, software, consulting,
training and implementation. Mr. Slack then moved his sales expertise and
success, into the Government Sales Division for Digital. Over the next 5
years, Mr. Slack served as project manager for similarly large, sophisticated
government customers with mission critical, classified systems needs. Mr.
Slack's responsibilities included writing "white papers", preparing and
presenting bids and proposals, negotiating contracts, and implementation of
contracts once awarded. Mr. Slack, throughout his career, has been involved
in preparing personal, division and corporate budgets and implementation of
those budgets at all levels.
FRANK W. BACKES has served as Director of Technology and a Director of 3Si
since August 1993. Mr. Backes received his B.S.E.E.degree in Semiconductor
Physics in 1984. Mr. Backes started his career working for Science
Applications International Corporation designing Command and Control systems
for the Department of Defense. Mr. Backes' accomplishments in the field of
Command and Control systems include: research and successful development of
client-server based systems in 1987; dynamic user interface designs in 1988
using Ada and PHIGS; implementing 3-D graphics for display of command center
information in 1989; training and working in combat position as an orbital
analyst in the Space Surveillance Center at NORAD; and, designing and
implementing several command centers pushing the development of state of the
art high availability techniques. In 1989, Mr. Backes went to work for
Digital Equipment Corporation as a computer industry analyst. In addition to
his work in the computer industry Mr. Backes has utilized his skills in
working with and teaching students from elementary schools to high schools.
One project was coordination, management and teaching students to interact,
over the Internet, with the Mars Land Rover developed by Jet Propulsion Lab
for NASA. This project was the first time that anyone outside of NASA was
given the opportunity to send commands over the Internet to the Mars rover.
Other projects include coaching Odyssey of the Mind teams and working as a
tutor for students in math and science.
FELIPE LARRY VALDEZ has served as Chief Operating Officer and a Director of
3Si since August 1993. Mr. Valdez began his career working in
telecommunications electronic manufacturing operations in Logistics,
Production and Inventory planning in 1971. Mr. Valdez moved from
telecommunications manufacturing to computer manufacturing when he joined
Digital Equipment Corporation in 1977 in its Albuquerque Operations as an
Inventory Control Planner. Shortly after that, Mr. Valdez relocated to
Digital's Colorado Springs operations where he was responsible for New
Product introduction on a variety of leading technology storage products.
Mr. Valdez was promoted into Digital's Customer Support Center where he led
technical support teams in providing remote support to a variety of customers
on a national level. Mr. Valdez joined Digital's Software Support
organization where he led technical and business consultants in providing
pre- and post-sales support to Digital's Sales Representatives in major
Federal Government and Commercial Accounts. Mr. Valdez' teams were
successful at winning and deploying numerous programs for Digital Equipment
where both he, individually, and his teams, collectively, were recognized
numerous times for their accomplishments. Mr. Valdez obtained Bachelor and
Masters Degrees in Business Administration while employed full-time. In 1997,
Mr. Valdez was selected by the University of Phoenix as a faculty member in
its Organization Behavior studies program where he teaches Organization
Communications courses.
TOM N. RICHARDSON graduated from the University of Wyoming in 1972 with a B.S.
degree in Business Administration. From 1976 to 1980, he worked as a Landman
and Contracts Supervisor for Gulf Oil Corporation in Casper, Wyoming. In 1980,
he joined the Company as Manager of Land. He was elected President and Chief
Financial Officer of the Company in March 1994. He is a Certified Professional
Landman, a member of the Wyoming Association of Professional Landmen and a
member of the American Association of Professional
5
<PAGE>
Landmen. Mr. Richardson has been a member of the Board of Directors of Tyrex
since July 10, 1986. On December 31, 1997, subsequent to the completion of the
Company's self-tender offer, Mr. Richardson tendered his resignation as an
officer of the Company but remains as a member of the Board of Directors. He is
currently an independent oil producer.
DORIS K. BACKUS graduated from the National College of Business in 1974 with
an Associate's Degree as a legal secretary. She has over 20 years experience
in various areas of the oil and gas business and has been employed by the
Company since 1983. Ms. Backus has been a member of the Board of Directors of
Tyrex since December 5, 1991. Ms. Backus is currently the Secretary of the
Company and remains as a member of the Board of Directors. She currently
owns and operates her own candy distribution company, Sweets & Treats.
No family relationship exists between or among any of the nominees and
executive officers of the Company. Except as disclosed above, none of the
nominees are directors of any other company having a class of equity securities
registered under or required to file periodic reports pursuant to the Securities
Exchange Act of 1934, as amended, or any company registered as an investment
company under the Investment Company Act of 1940, as amended.
EXECUTIVE COMPENSATION
COMPENSATION
The following table presents the aggregate compensation which was earned by
the Executive Officers for the fiscal years ended June 30, 1997, 1996 and 1995
for Tyrex and the six months ended June 30, 1997 and the calendar years 1996,
1995 and 1994 for 3Si:
<TABLE>
Long-term compensation
Annual compensation ---------------------------------
------------------------------------- Awards Payouts
Other ---------------------- ------- All
annual Restricted other
Name and compen- Stock Options/ LTIP compen-
principal position Year Salary ($) Bonus sation (1) Awards SARs payouts sation(1)(2)
------------------ ---- ---------- ----- ---------- ------ ---- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TYREX OIL COMPANY:
Tom N. Richardson 1997 $52,500 - - - - - -
President, CFO 1996 52,500 - - $7,813 - - -
1995 52,500 - - - - - -
3SI:
Frederick J. Slack 1997 $37,500 - - - - - $13,279
Chief Executive 1996 68,000 - - - - - 31,871
Officer 1995 68,000 - - - - - 71,518
1994 68,000 - - - - - 45,775
Frank W. Backes 1997 $37,500 - - - - - $13,279
Vice-President 1996 68,000 - - - - - 31,871
1995 68,000 - - - - - 71,518
1994 68,000 - - - - - 45,775
Felipe L. Valdez 1997 $37,500 - - - - - $13,279
Chief Operating 1996 68,000 - - - - - 31,871
Officer 1995 68,000 - - - - - 71,518
1994 68,000 - - - - - 45,775
</TABLE>
(1) Perquisites and other personal benefits or property did not, in
aggregate, exceed $50,000 or 10% of the total compensation.
(2) 3Si was a subchapter S corporation prior to its acquisition by Tyrex.
Amounts indicated are distributions to the three officers of 3Si named
above, made to them in their capacities as shareholders.
There were no aggregated options or SAR exercises during the fiscal year
ended June 30, 1997 and no unexercised options as of April 9, 1998.
6
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CERTAIN TRANSACTIONS
In connection with the sale of Tyrex's producing oil and gas properties on
May 30, 1997, 10% of the purchase price was paid by, and a 10% interest in the
properties was assigned to, Tom N. Richardson. Mr. Richardson paid the same
price for his interest as did the non-affiliated purchasers of the remaining 90%
interest.
Other than as set forth herein, no officer, director or principal shareholder
of Tyrex or 3Si has or proposes to have any direct or indirect material interest
by security holdings, contracts or otherwise in the Company or in any assets
proposed to be acquired by the Company or in any purchase, the value of which
will be affected by the operations of the Company.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held 6 meetings during the fiscal year ended June 30,
1997. All directors were present for all but two of the meetings when 4 of the
Directors were present. In addition, the Board acted by unanimous written
consent on 2 occasions. The Company's officers have made a practice of keeping
its directors informed of corporate activities by personal meetings and
telephone discussions.
At the present time the Company has no nominating, executive or similar
committees. The Company has an audit committee currently consisting of Messrs.
Slack and Valdez and Ms. Backus and a compensation committee currently
consisting of Messrs. Richardson, Slack and Backes.
Based solely upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company during the fiscal year ended June 30, 1997, and for
the subsequent quarters ended September 30, 1997, December 31, 1997 and March
31, 1998, the Company is unaware of any officer, director or beneficial
owners of more than 10% of the Company's Common Stock who failed to file
reports required by Section 16 of the Securities Exchange Act of 1934.
PROPOSAL TO RATIFY THE CHANGE OF NAME OF THE COMPANY
The Board of Directors of the Company is proposing to change the name of
the Company from Tyrex Oil Company to 3Si Holdings, Inc. The change in the
name of the Company will help indicate the change in the nature of the
business the Company is now engaged in as well as align the holding company's
name with that of its significant operating subsidiary, 3Si, Inc. The
Company also intends to change its trading symbol for its common stock
currently traded on the over-the-counter market from "TYRX" to "3SIH".
PROPOSAL TO RATIFY THE SELECTION OF JOHN M. HANSON & COMPANY, P.C.
On July 21, 1997, the Board of Directors of the Company determined that it
would: (a) engage the firm of John M. Hanson & Company, P.C. as the Company's
independent auditors; and, (b) not continue to use the services of Hocker,
Lovelett, Hargens & Skogen, P.C. The change was reported on Form 8-K dated
July 21, 1997 to which reference is made for further information. John M.
Hanson & Company, P.C. has no relationship with the Company except in its
capacity as the Company's auditors.
The audit reports of Hocker, Lovelett, Hargens & Skogen, P.C. on the
financial statements of Tyrex as of May 28, 1997 and for each of the years in
the two year period prior to the 11 month period then ended, did not contain an
adverse opinion or disclaimer of opinion, nor were they qualified or modified as
to uncertainty, audit scope or accounting principles. In connection with the
audits of the 11 months and two fiscal years ended May 28, 1997, and the
subsequent interim period through July 21, 1997, there were no disagreements
with Hocker, Lovelett, Hargens & Skogen, P.C. on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Hocker,
Lovelett, Hargens & Skogen, P.C., would have caused Hocker, Lovelett, Hargens &
Skogen, P.C. to make a reference to the subject matter of the disagreements in
connection with its audit reports.
Although ratification of the appointment of John M. Hanson & Company, P.C. as
the Company's
7
<PAGE>
independent auditors is not required by Wyoming corporate law or by the
Company's Articles of Incorporation or Bylaws, the Board of Directors and the
Audit Committee recommends this selection be ratified and approved by the
shareholders. If shareholder approval is not received, the Board of Directors
will reconsider the appointment of its auditors.
It is expected that a representative of John M. Hanson & Company, P.C. will
be present at the Meeting and will be given an opportunity to make a statement
if he/she desires to do so. It is also expected that the representative will be
available to respond to appropriate questions from shareholders.
OTHER MATTERS
The Board of Directors is aware of no other matters to be brought before the
Meeting which requires a shareholder vote; if other matters properly come before
the Meeting, it is the intention of the persons named in the solicited proxy to
vote such proxy in accordance with their judgment.
No compensation will be paid to any person in connection with solicitation of
proxies. Brokers, banks, and other entities will be reimbursed out-of-pocket
and reasonable clerical expenses incurred in obtaining instructions from
beneficial owners of the Common Stock. Special solicitation of proxies may in
certain instances be made personally or by telephone by officers and employees
of the Company and by employees of certain banking and brokerage houses. All
expenses, estimated to be normal in connection with this solicitation, will be
borne by the Company.
ANNUAL REPORT AND FINANCIAL STATEMENTS
You are referred to the Company's Form 10-K filed with the Securities and
Exchange Commission October 10, 1997, including financial statements filed
therein for the fiscal year ended June 30, 1997. Attached for your information
is recent information regarding the Company's financial results subsequent to
June 30, 1997. The Form 10-K and other financial information is not
incorporated in this proxy statement and is not to be considered part of the
soliciting material. Copies of the Company's Annual Report for the fiscal year
ended June 30, 1997, as filed with the Securities and Exchange Commission on
Form 10-K, including financial statements and schedules thereto may be obtained
by written request from Frederick J. Slack, 3Si, Inc., 6886 S. Yosemite Street,
Englewood, Colorado 80112.
DEADLINE OF RECEIPT OF SHAREHOLDER PROPOSALS FOR
ANNUAL MEETING SCHEDULED TO BE HELD DECEMBER 1998
Any proposal by a shareholder to be presented at the Company's next Annual
Meeting of Shareholders scheduled to be held in December, 1998 must be received
at the Company's offices, 6886 S. Yosemite Street, Englewood, Colorado 80112, no
later than July 31, 1998. Such proposals may be included in next year's Proxy
Statement if they comply with certain rules and regulations promulgated by the
SEC.
By Order of the Board of Directors
/s/ F. Larry Valdez
---------------------------------------
F. Larry Valdez, Chairman
8
<PAGE>
TYREX OIL COMPANY
(and its current subsidiary, 3Si, Inc.)
April 30, 1998
Dear Tyrex/3Si Shareholders:
We are pleased to forward to you the Proxy Statement for the Annual Meeting
to be held June 18, 1998 at the 3Si offices in Englewood, Colorado and some
selected current financial information.
On May 28, 1997, Tyrex Oil Company (Tyrex) merged with 3Si, Inc. (3Si)
3Si is a wholly owned subsidiary of Tyrex although for financial statement
purposes the merger has been accounted for as a purchase of Tyrex by 3Si.
As such, the information attached is predominantly that of 3Si both past and
present versus Tyrex. On May 30, 1997, Tyrex sold all of its oil and gas
properties. The operations of Tyrex subsequent to the merger include only
a limited amount of operating expenses and interest income.
3Si (Solution, System and Service Integration) has provided comprehensive
computer information systems solutions for over 18 years to clients throughout
the continent. Founded in 1979, as Kimbrough Computer Sales, Inc., 3Si offers a
wide array of systems integration services, including Internet and network
security services, software development, business needs assessments, hardware
sales, maintenance and support, and technical consulting, training and
education. Based on the increasing growth and future of 3Si products, the
Board of Directors has recommended that the corporate name be changed from
Tyrex Oil Company to 3Si Holdings, Inc.
3Si is headquartered in Englewood, Colorado and has sales offices in
Colorado Springs, Colorado; Albuquerque, New Mexico; and, Raleigh, North
Carolina. The Raleigh office directly supports 3Si's technical consulting
sub-contract with the U.S. Postal Service while the Albuquerque office
directly supports 3Si's Equipment and Services Schedule Contract (ESS
Contract) with the State of New Mexico. As of December 31, 1997, 3Si had 136
employees.
3Si is currently in the process of developing certain proprietary products,
including technical feasibility, marketability and economic feasibility relative
to products applicable to the Internet Security and Help Desk markets. We
continue to explore ways to increase the value of our efforts for our
shareholders in areas of efficiency, productivity and proprietary opportunities.
We at 3Si are certainly excited about our activities and we look forward to
serving you, our shareholders, into the future.
Sincerely,
Tyrex Oil Company
/S/ FREDERICK J. SLACK
FREDERICK J. SLACK, CEO
F-1
<PAGE>
TYREX OIL COMPANY
Selected Financial Information
Quarter and Six Months Ended December 31, 1997 and 1996
(Unaudited)
This information is excerpted from the Company's Form 10-Q filed with the SEC
on February 13, 1998. The accounting policies followed by the Company are those
set forth in Note 1 to the Company's financial statements in the Company's
report on Form 10-K and readers are advised to consider this information in
conjunction with the Company's financial statements and footnotes thereto in its
Forms 10-K and 10-Q's previously filed with the SEC. Operating results for the
quarter and six months ended December 31, 1997 are not necessarily indicative of
the results that may be expected for the year ending June 30, 1998.
<TABLE>
Quarter Ended Six Months Ended
Operating Statement Information: December 31, December 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $7,866,614 5,917,634 $15,168,256 10,286,052
Net earnings (loss) $51,859 (197,079) $97,007 (213,675)
Earnings (loss) per common share $0.00 (656.93) $0.00 (712.25)
Weighted average shares outstanding(1) 38,605,153 300 38,949,289 300
Balance Sheet Information: December 31, 1997 June 30, 1997
(Audited)
Total Current Assets $7,264,572 6,258,151
Total Property and Equipment, Net 383,813 362,742
Total Other Assets 631,595 642,930
Total Assets $8,279,980 7,263,823
Total Current Liabilities $7,219,827 4,490,749
Total Long-Term Debt 48,558 64,502
Total Stockholders' Equity 1,011,595 2,708,572
Total Liabilities and Stockholders' Equity $8,279,980 7,263,823
</TABLE>
Fred Slack, CEO of 3Si said, "We feel the substantial increase in sales (32.9%)
and profitability for the quarter and year-to-date are a result of our
completing the merger with Tyrex, paying off the royalty ($625,000) to 3Si's
former stockholders, and refinancing our bank debt with a $5 million revolving
line of credit facility. This afforded us the ability to successfully increase
our sales for the quarter and year-to-date. More importantly, CALENDAR year
sales grew from $19 million in 1996 to over $25 million in 1997."
Tyrex President Tom N. Richardson said, "Tyrex is pleased with the second
quarter and year-to-date results as well as its completion of its self-tender
offer on December 23, 1997 (whereby it paid $1,851,366 to acquire 6,005,626
shares into its treasury). Tyrex continues to be excited about the potential
this merger creates to enhance shareholder values."
(1) Earnings per share for the quarter and six months ended December 31, 1997
is computed on the basis of the weighted average number of Tyrex common
stock shares and includes shares issued as part of the Tyrex/3Si merger
(i.e. subsequent to the merger). Shares outstanding for the quarter and
six months ended December 31, 1996 are calculated using the 300 shares of
3Si ONLY outstanding at that time (prior to the merger).
F-2
<PAGE>
3SI HOLDINGS, INC.
1998 STOCK OPTION PLAN
1. PURPOSE. This 1998 Stock Option Plan (the "Plan") is intended to
encourage stock ownership by employees and directors of 3Si Holdings, Inc., a
Colorado corporation (the "Corporation"), so that they may acquire or
increase their proprietary interest in the Corporation, and to encourage such
employees and directors to remain in the employ of the Corporation and to put
forth maximum efforts for the success of the business. It is further
intended that options granted by the Committee (as defined in Section 2
below) pursuant to Section 5 hereof shall constitute "incentive stock
options" ("Incentive Stock Options") and Non-Qualified Stock Options. Both
Incentive Stock Options and Non-Qualified Stock Options are sometimes
hereinafter collectively referred to as "Options."
2. ADMINISTRATION. The Plan shall be administered by the Stock Option
and Compensation Committee (the "Committee"), consisting of not less than three
(3) members of the Board of Directors of the Corporation (the "Board"), none of
whom are or shall have been for at least one year prior to such appointment,
eligible to participate in the Plan or any other plan of the Corporation
entitling the participants therein to acquire stock, stock options or stock
appreciation rights of the Corporation or any of its affiliates. Initially, the
Committee shall consist of __________________, __________________ and
__________________.
2.1 AUTHORITY. The Committee shall have the authority in its
discretion, subject to and not inconsistent with the express provisions of the
Plan, to administer the Plan and to exercise all the powers and authorities
either specifically granted to it under the Plan or necessary or advisable in
the administration of the Plan, including, without limitation, the authority to
grant Options; to determine which Options shall constitute Incentive Stock
Options and which Options shall constitute Non-Qualified Stock Options; to
determine the purchase price of the shares of Common Stock covered by each
Option (the "Option Price"); to determine the persons to whom, and the time or
times at which, Option shall be granted; to determine the number of shares of
Common stock to be covered by each Option; to interpret the Plan; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the Option Agreements (which need not be identical)
evidencing Options granted under the Plan; and to make all other determinations
deemed necessary or advisable for the administration of the Plan. The Committee
may delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any
delegate may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.
2.2 RULES. The Board shall fill all vacancies, however caused, in the
Committee. The Board may from time to time appoint additional members to the
Committee, and may at any time remove one or more Committee members and
substitute others. One member of the Committee shall be selected by the Board
as Chairman. The Committee shall hold its meeting at such times and places as
it shall deem advisable. All determinations of the Committee shall be made by a
majority of its members either present in person or participating by conference
telephone at a meeting or by written consent. The Committee may appoint a
secretary and make such rules and regulations for the conduct of its business as
it shall deem advisable, and shall keep minutes of its meetings.
2.3 LIABILITY. No member of the Board or Committee shall be liable for
any action taken or determination made in good faith with respect to the Plan or
any Option.
Exhibit 1
1
<PAGE>
3. ELIGIBILITY. Options may be granted to employees, officers and
directors of the Corporation. In determining the persons to whom Options shall
be granted and the number of shares to be covered by each Option, the Committee
shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Corporation and such other factors
as the Committee shall deem relevant in connection with accomplishing the
purpose of the Plan. A person to whom an Option has been granted is sometimes
referred to herein as an "Optionee." An Optionee shall be eligible to receive
more than one Option during the term of the Plan, but only on the terms and
subject to the restrictions hereinafter set forth.
4. SHARES. The shares subject to Options hereunder shall be shares of
the Corporation's Common Stock (the "Common Stock"). Such shares may, in whole
or in part, be authorized but unissued shares or shares that shall have been or
that may be reacquired by the Corporation. The aggregate number of shares of
Common Stock as to which Options may be granted from time to time under the Plan
shall not exceed 500,000. The limitation established by the preceding sentence
shall be subject to adjustment as provided in Section 7.9 hereof. If any
outstanding Option expires or is terminated without having been exercised in
full, the shares of Common Stock allocable to the unexercised portion of such
Option shall (unless the Plan shall have been terminated) become available for
subsequent grants of Options.
5. INCENTIVE STOCK OPTIONS. Options granted pursuant to this Section 5
are intended to constitute Incentive Stock Options under IRC Section 422A, and
shall be subject to the following special terms and conditions, in addition to
the general terms and conditions specified in Section 7 hereof.
5.1 VALUE OF SHARES. The aggregate fair market value (determined as of
the date the Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Options granted under this Plan and all other option plans
of the Corporation become exercisable for the first time by an Optionee during
any calendar year shall not exceed $100,000.
5.2 TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock Option
granted to a 10% Stockholder, (a) the Option Price shall not be less than 110%
of the Fair Market Value of the shares of Common stock of the Corporation on the
date of grant of such Incentive Stock Option, and (b) the exercise period shall
not exceed 5 years from the date of grant of such Incentive Stock Option.
6. NONQUALIFIED STOCK OPTIONS. Options granted pursuant to this
Section 6 are intended to constitute Nonqualified Stock Options and shall be
subject only to the general terms and conditions specified in Section 7 hereof.
7. TERMS AND CONDITIONS OF OPTIONS (BOTH INCENTIVE STOCK OPTIONS AND
NON-QUALIFIED OPTIONS). Each Option shall be evidenced by a written Option
Agreement between the Corporation and the Optionee, which agreement shall comply
with and be subject to the following terms and conditions:
7.1 NUMBER OF SHARES. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.
7.2 TYPE OF OPTION. Each Option Agreement shall specifically identify
the portion, if any, of the Option which constitutes an Incentive Stock Option
and the portion, if any, which constitutes a Nonqualified Stock Option.
Exhibit 1
2
<PAGE>
7.3 OPTION PRICE. Each Option Agreement shall state the Option Price
which, in the case of Incentive Stock Options, shall be not less than 100% of
the Fair Market Value of the shares of Common Stock of the Corporation on the
date of grant of the Option. The Option Price shall be subject to adjustment as
provided in Section 7.9 hereof. The date on which the Committee adopts a
resolution expressly granting an Option shall be considered the day on which
such Option is granted.
7.4 MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full,
at the time of exercise, in cash and may be effected in whole or in part (a)
with monies received from the Corporation at the time of exercise as a
compensatory cash payment, or (b) with monies borrowed from the Corporation
pursuant to repayment terms and conditions as shall be determined from time to
time by the Committee, in its discretion, separately with respect to each
exercise of Options and each Optionee; provided, however, that each such method
and time for payment and each such borrowing and terms and conditions of
repayment shall be permitted by and be in compliance with applicable law, and
provided, further, if the Option Price is paid with monies borrowed from the
Corporation, such fact shall be noted conspicuously on the certificate
evidencing such shares in accordance with applicable law.
7.5 TERM AND EXERCISE OF OPTIONS. Options shall be exercisable over the
exercise period as and at the times and upon the conditions that the Committee
may determine, as reflected in the Option Agreement; provided, however, that the
Committee shall have the authority to accelerate the exercisability of any
outstanding Option at such time and under such circumstances as it, in its sole
discretion, deems appropriate. The exercise period shall be determined by the
Committee for all Options; provided, however that such exercise period shall not
exceed 10 years from the date of grant of such Option. The exercise period
shall be subject to earlier termination as provided in Sections 7.6 and 7.7
hereof. An Option may be exercised, as to any or all full shares of Common
Stock as to which the Option has become exercisable, by giving written notice of
such exercise to the Committee; provided, however, that an Option may not be
exercised at any one time as to fewer than 100 shares (or such number of shares
as to which the Option is then exercisable if such number of shares is less than
100).
7.6 TERMINATION. Except as provided in Section 7.5 and in this Section
7.6 hereof, an Option may not be exercised unless the Optionee is then in the
employ of the Corporation (or a corporation issuing or assuming the Option in a
transaction to which IRC Section 425(a) applies), and unless the Optionee has
remained continuously so employed since the date of grant of the Option. If the
employment of an Optionee shall terminate (other than by reason of death,
disability or retirement), all Options of such Optionee that are exercisable at
the time of such termination may, unless earlier terminated in accordance with
their terms, be exercised within three months after such termination; provided,
however, that if the employment of an Optionee shall terminate for cause, all
Options theretofore granted to such Optionee shall, to the extent not
theretofore exercised, terminate forthwith. Nothing in the Plan or in any
Option shall confer upon an individual any right to continue in the employ of
the Corporation or interfere in any way with the right of the Corporation or any
such division or Subsidiary Corporation to terminate such employment.
7.7 DEATH, DISABILITY OR RETIREMENT. If an Optionee shall die while
employed by the Corporation, or within three months after the termination of
such Optionee's employment, other than for cause, or if the Optionee's
employment shall terminate by reason of disability or retirement, all Options
theretofore granted to such Optionee (to the extent otherwise exercisable) may,
unless earlier terminated in accordance with their terms, be exercised by the
Optionee or by the Optionee's estate or by a person who acquired the right to
exercise such Option by bequest or inheritance or otherwise by reason of the
death or disability of the Optionee, at any time within one year after the date
of death, disability or retirement of the Optionee.
Exhibit 1
3
<PAGE>
7.8 NONTRANSFERABILITY OF OPTIONS. Options granted under the Plan shall
not be transferable otherwise than (a) by will; (b) by the laws of descent and
distribution; or (c) to a revocable inter vivos trust or family partnership for
the primary benefit of the Optionee and his or her spouse. Options may be
exercised, during the lifetime of the Optionee, only by the Optionee, his or her
guardian, legal representative or the Trustee of an above described trust, or
general partner of the family partnership.
7.9 EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common
stock through the declaration of stock dividends, or through recapitalization
resulting in stock splits, or combinations or exchanges of such shares, the
number of shares of Common Stock available for Options, the number of such
shares covered by outstanding Options and the price per share of such Options
shall be proportionately adjusted by the Committee to reflect any increase or
decrease in the number of issued shares of Common Stock; provided, however, that
any fractional shares resulting from such adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, in the event of any corporate separation or division, including,
but not limited to, split-up, split-off or spin-off, or in the event of a
merger or consolidation of the Corporation with another corporation, the
Committee may provide that the holder of each Option then exercisable shall
have the right to exercise such Option (at its then Option Price) solely for
the kind and amount of shares of stock and other securities, property, cash
or any combination thereof receivable upon such dissolution, liquidation, or
corporate separation or division, or merger or consolidation by a holder of
the number of shares of Common Stock for which such Option might have been
exercised immediately prior to such dissolution, liquidation, or corporate
separation or division, or merger or consolidation by a holder of the number
of shares of Common Stock for which such Option might have been exercised
immediately prior to such dissolution, liquidation, or corporate separation
or division, or merger or consolidation; or the Committee may provide, in the
alternative, that each Option granted under the Plan shall terminate as of a
date to be fixed by the Committee; provided, however, that not less than
30-days written notice of the date so fixed shall be given to each Optionee,
who shall have the right, during the period of 30 days preceding such
termination, to exercise the Options as to all or any part of the share of
Common Stock covered thereby, including shares as to which such Options would
not otherwise be exercisable; provided, further, that failure to provide such
notice shall not invalidate or affect the action with respect to which such
notice was required.
(3) If while unexercised Options remain outstanding under the
Plan, the stockholders of the Corporation approve a definitive agreement to
merge or consolidate the Corporation with or into another corporation or to sell
or otherwise dispose of all or substantially all of its assets, or adopt a plan
of liquidation (each, a "Disposition Transaction"), then the Committee may (a)
make an appropriate adjustment to the number and class of shares available for
options, and to the amount and kind of shares or other securities or property
(including cash) receivable upon exercise of any outstanding options after the
effective date of such transaction, and the price thereof, or, in lieu of such
adjustment, provide for the cancellation of all options outstanding at or prior
to the effective date of such transaction; (b) provide that exercisability of
all Options shall be accelerated, whether or not otherwise exercisable; or (c)
in its discretion, permit Optionees to surrender outstanding options for
cancellation; provided, however, that if the stockholders approve such
Disposition Transaction within five years of the date of adoption of this Plan
and before the Corporation is taken public, the Committee shall provide for the
alternative in (b) above. Upon any cancellation of an outstanding Option
pursuant to this Section, the Optionee shall be entitled to receive, in exchange
therefor, a cash payment under any such Option in an amount per share determined
by the Committee in its sole discretion, but not less than the difference
between the per share exercise price of such Option and the Fair Market Value of
a share of the Corporation Common Stock on such date as the Committee shall
determine.
Exhibit 1
4
<PAGE>
(4) In the event of a change in the Common stock of the
Corporation as presently constituted which is limited to a change of all its
authorized shares with par value into the same number of shares with a different
par value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.
(5) To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive, provided that each Incentive Stock Option granted pursuant to this
Plan shall not be adjusted in a manner that causes such option to fail to
continue to qualify as an Incentive Stock Option within the meaning of IRC
Section 422A.
(6) Except as hereinbefore expressly provided in this Section
7.9, the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock or any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation; and any issue by the
Corporation of shares of stock of any class shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to the Option. The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or part of its business or assets.
7.10 RIGHTS AS A SHAREHOLDER. An Optionee or a transferee of an Option
shall have no rights as a shareholder with respect to any shares covered by the
Option until the date of the issuance of a certificate evidencing such shares.
No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distribution of other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 7.9 hereof.
7.11 OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, (a) the
imposition of restrictions upon the exercise of an Option; (b) in the case of an
Incentive Stock Option, the inclusion of any condition not inconsistent with
such Option qualifying as an Incentive Stock Option; and (c) conditions relating
to compliance with applicable federal and state securities laws, as the
Committee shall deem advisable.
8. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES. If the
Committee shall so require, as a condition of the exercise, each Optionee
shall agree that (a) no later than the date of exercise of any Option, the
Optionee will pay to the Corporation or make arrangements satisfactory to the
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the exercise of such Options, and (b) the
Corporation shall, to the extent permitted, or required by law, have the
right to deduct federal, state and local taxes of any kind required by law to
be withheld upon the exercise of such Option from any payment of any kind
otherwise due to the Optionee.
9. TERM OF PLAN. Options may be granted pursuant to the Plan from time
to time within a period of ten (10) years from the date the Plan is adopted by
the Board, or the date the Plan is approved by the stockholders of the
Corporation, whichever is earlier.
DEFINITIONS. As used in this Plan, the term "Fair Market Value" per share as of
a particular date shall mean (i) the closing sales price per share of Common
stock on a national securities exchange for the last preceding date on which
there was a sale of such Common stock on such exchange; or (ii) if the shares of
Common Stock are then traded on an over-the-counter market, the average of the
closing bid
Exhibit 1
5
<PAGE>
and asked prices for the shares of Common Stock in such over-the-counter market
for the last preceding date on which there was a sale of such Common Stock in
such market; or (iii) in case no reported sale takes place, the average of the
closing bid and asked prices on the National Association of Securities Dealers'
Automated Quotations System ("NASDAQ") or any comparable system, or if the
shares of Common Stock are not listed on NASDAQ or comparable system, the
closing sale price or, in case no reported sale takes place, the average of the
closing bid and asked prices, as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by the
Corporation for that purpose; or (iv) if the shares of Common Stock are not then
listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee in its discretion may determine.
11. AMENDMENT AND TERMINATION OF THE PLAN. The Board at any time and
from time to time may suspend, terminate, modify or amend the Plan; provided,
however, that any amendment that would materially increase the aggregate number
of shares of Common Stock as to which Options may be granted under the Plan or
materially increase the benefits accruing to participants under the Plan or
materially modify the requirements as to eligibility for participation in the
Plan shall be subject to the approval of the holders of a majority of the Common
Stock issued and outstanding, except that any such increase or modification that
may result from adjustments authorized by Section 7.9 hereof shall not require
such approval. Except as provided in Section 7 hereof, no suspension,
termination, modification or amendment of the plan may adversely affect any
Option previously granted, unless the written consent of the Optionee is
obtained.
12. APPROVAL OF STOCKHOLDERS. The Plan shall take effect upon its
adoption by the Board of Directors but shall be subject to the
approval of the holders of a majority of the issued and outstanding
shares of Common Stock of the Corporation, which approval must occur
within 12 months after the date the Plan is adopted by the Board.
Exhibit 1
6
<PAGE>
TYREX OIL COMPANY - PROXY
6886 S. Yosemite Street, Englewood, CO 80112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul Kaufhold and Leonard Gilmore as proxies
to vote all shares of the undersigned at the Annual Meeting of Stockholders
to be held June 18, 1998. Each of the named proxies shall have the power to
appoint a substitute proxy for himself. The proxies, or any one of them,
shall have the power to vote: (i) only those shares of the common Stock of
Tyrex Oil Company held of record by the undersigned as of the close of
business on May 15, 1998; (ii) at any adjournment of postponement of the
meeting; and (iii) upon any subject which may properly be brought before the
meeting. The proxies may vote upon all the matters described in the proxy
statement furnished with this proxy, subject to any directions indicated
below. If no directions are given, this proxy will be voted "FOR" the
adoption of the Company's 1998 Stock Option Plan; "FOR" the election of the
nominees listed below for the Board of Directors; "FOR" the change in the
Company's legal name to 3Si Holdings, Inc.; and "FOR" the appointment of John
M. Hanson & Company, P.C., as independent auditors of the Company for the
fiscal year ending June 30, 1998.
<TABLE>
<S> <C>
1. To approve the Company's 1998 Stock Option Plan
/ / FOR this proposal / / AGAINST this proposal / / ABSTAIN from voting
2. Election of the five (5) Directors of the Company's Board of Directors:
FOR All nominees listed below / / WITHHOLD AUTHORITY to vote for all nominees listed below / /
(except as written below)
Fredrick J. Slack F. Felipe Valdez Frank W. Backes Tom N. Richardson Doris K. Backus
(INSTRUCTIONS: To withhold authority to vote for any INDIVIDUAL nominee, write that nominee's
name on the space provided below).
------------------------------------------------------------------------------------------
3. To approve the change in the Company's legal name to 3Si Holdings, Inc.
/ / FOR this proposal / / AGAINST this proposal / / ABSTAIN from voting
4. To approve the appointment of John M. Hanson & Company, P.C., as the Company's independent
auditors for the fiscal year ending June 30, 1998:
/ / FOR this proposal / / AGAINST this proposal / / ABSTAIN from voting
5. In their discretion, the proxies are authorized to vote upon such other business as may
properly be brought before the meeting, or any adjournment or postponement thereof.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY
--------------------------------------------
--------------------------------------------
Dated: , 1998
--------------------------------
The signature(s) should agree with the name(s)
imprinted to the left. Custodians, Executors,
Administrators, Trustees, guardians and Attorneys
should so indicate when signing.
Shares held on record date:
--------------------
</TABLE>
