<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SIENA HOLDINGS, INC.
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
SIENA HOLDINGS, INC.
5068 West Plano Parkway, Suite 300
Plano, Texas 75093
NOTICE OF ANNUAL MEETING
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of
Siena Holdings, Inc. will be held on December 13, 1999 at 10 o'clock EST, at
The Hotel DuPont, Wilmington, Delaware, for the following purposes:
1. To elect five directors to serve until the next annual
meeting and until their successors are elected and qualified;
2. To approve and authorize the Board to effect, in its
discretion, a reverse stock split followed by a forward stock
split of the Company's Common Stock.
3. To ratify the appointment of KPMG LLP as independent public
accountants for the Company for the fiscal year ending June
30, 2000; and
4. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
Only holders of record of Common Stock as of the close of business on
November 17, 1999 are entitled to receive notice of and vote at the meeting or
any adjournment or adjournments thereof.
By Order of the Board of Directors:
/s/ W. Joseph Dryer
-------------------------------------------
Secretary
Dated at Plano, Texas
November 1, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID RETURN ENVELOPE.
<PAGE> 3
SIENA HOLDINGS, INC.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by and on behalf of the Board of Directors of Siena Holdings, Inc. (together
with its wholly-owned subsidiaries, the "Company") of proxies from the holders
of the Company's common stock for use at the Annual Meeting (the "Meeting") to
be held on December 13, 1999, and any adjournment or adjournments thereof. The
giving of a proxy does not affect your right to vote should you attend the
Meeting in person, and the proxy may be revoked at any time before it is voted
by giving the Secretary of the Company a signed instrument revoking the proxy
or a signed proxy of a later date. Each properly executed proxy not revoked
will be voted in accordance with instructions thereon. If no contrary
instructions are specified in the proxy, it is the intention of the persons
named in the accompanying proxy to vote FOR the election of the nominees named
herein as directors of the Company and FOR the matters described in Items 2, 3,
and 4 in the Notice of Annual Meeting.
The Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1999 (the "Annual Report"), containing audited consolidated financial
statements, in the form of the information filed by the Company with the
Securities and Exchange Commission on Form 10-K, is being mailed to
Stockholders along with the Notice of Annual Meeting and Proxy Statement. The
consolidated financial statements and discussion and analysis by management of
the Company's financial condition and results of operations contained in the
Annual Report are incorporated herein by reference.
The mailing address of the Company's principal executive office is:
5068 West Plano Parkway, Suite 300, Plano, Texas 75093, and the approximate
date on which this Proxy Statement and the form of proxy are first being sent
to stockholders is November 23, 1999.
Only holders of record of the Company's Common Stock, par value $.10
per share (the "Common Stock"), at the close of business on November 17, 1999,
are entitled to vote at the Meeting, one vote for each share of Common Stock so
held. On that date, there were 6 million shares of Common Stock outstanding.
PRINCIPAL STOCKHOLDERS
The following table shows, as of November 1, 1999, the total number of
shares of Common Stock owned beneficially by persons or groups, within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
known to the Company to be the beneficial owners of more than 5% of the Common
Stock:
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<PAGE> 4
<TABLE>
<CAPTION>
Shares Beneficially
Name and Address of Owned Directly or Percent of
Beneficial Owner Indirectly Common Stock
- ------------------- ------------------- ------------
<S> <C> <C>
John P. Kneafsey 2,504,753 41.7%
c/o Pathfinder Advisory Services
9515 Deereco Road, Suite 903
Timonium, MD 21093
Credit Suisse 910,509 15.2%
First Boston Corporation
11 Madison Avenue
New York, NY 10010
</TABLE>
ELECTION OF DIRECTORS
The five persons named in the following table have been designated as
nominees for election to the Board of Directors, each to serve for a one-year
term and until his successor is duly elected and qualified. All of the nominees
listed below currently serve as directors of the Company. If any of such
nominees declines or becomes unable to serve, the persons named in the proxy
will vote for the election of any substitute nominee designated by the Board of
Directors. The Company has no reason to believe that any nominee will decline
or be unable to serve.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation During Past Five Served as Shares Beneficially Owned
Years, and Other Corporate Director
Directorships Since Amount Percent
- ------------------------------------------------- ---------- --------------------------- --------
<S> <C> <C> <C>
JOHN P. KNEAFSEY - Chairman and Chief Executive 1997 2,504,753 41.7%
Officer of the Company, since October 1996;
President, Pathfinder Advisory Services, Inc., since
1997; Senior Vice President-Investments, Prudential
Securities, Inc., from 1980 to 1997. Age 52.
ERIK M. BODOW - Chief Administrative Officer, GEM 1997 ----- -----
Capital Management, Inc., since 1998, Senior
Vice-President, Sagner/Marks, Inc., since 1992-1998;
Vice President, First National Bank of Chicago, from
1985 to 1992. Age 57.
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C> <C> <C>
JAMES D. KEMP - Principal, Antaean Solutions, LLC, 1997 ----- -----
since 1997; President and Chief Executive Officer,
The Trust Company, N.A., from 1996 to 1997; President
and Chief Executive Officer, Kemp Consulting, from
1992 to 1997; President, Ameritrust Texas, N.A.,
from 1980 to 1992. Age 52.
MATTHEW S. METCALFE - Chairman and President, 1997 5,129 0.1%
Airland Corporation; Director Emeritus, Amsouth
Bankcorporation; Member, State of Alabama Oil and
Gas Board; Chairman, Mobile Airport Authority. Age
68.
FRANK B. RYAN - Professor of Mathematics at Rice 1997 ----- -----
University (currently on leave); Director, Danielson
Holding Corporation; Director, Texas Micro, Inc.;
Director, America West Airlines, Inc. Age 63.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
ABOVE NOMINEES AS DIRECTORS OF THE COMPANY.
BOARD ORGANIZATION AND COMPENSATION
The Board of Directors held six meetings during the fiscal year ended
June 30, 1999. Four directors attended all six meetings, and one director
attended five out of six meetings. In addition, the Company has an Audit
Committee and a Compensation Committee, but does not have a Nominating
Committee.
The Audit Committee of the Board of Directors is composed of all four
independent members of the Board. The Audit Committee reviews with KPMG LLP,
the Company's independent auditors, the audit plan and the internal accounting
controls for the Company and its subsidiaries, as well as the Company's
consolidated financial statements and management letter. The Audit Committee
reports to the full Board of Directors. It also recommends to the Board of
Directors the selection of independent auditors for the Company.
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<PAGE> 6
The Compensation Committee of the Board of Directors, composed of all
four independent members of the Board of Directors, did not meet during the
fiscal year ended June 30, 1999. This Committee periodically reviews the
Company's management compensation and reports its actions or recommendations to
the Board of Directors. The Committee also approves the general salary scale
for employees of the Company. There were no changes to management compensation
during this period.
EXECUTIVE MANAGEMENT COMPENSATION
Compensation of Executive Officers
The following table sets forth all compensation paid by the Company
for the year ended June 30, 1998, the three-month period ended June 30, 1997 and
the nine-month period ended March 31, 1997, for services rendered in all
capacities to the two executive officers of the Company during fiscal year 1999.
<TABLE>
<CAPTION>
Base Other Cash Total Cash
Officer Period Compensation Compensation Compensation
<S> <C> <C> <C> <C>
John P. Kneafsey Year Ended 6/30/99 $128,000 $298,000 $426,000
Year Ended 6/30/98 $ 84,667 $ 6,200 $ 90,867
3 Mos. Ended 6/30, $ 6,000 - $ 6,000
9 Mos. Ended 3/31, $ 12,000 - $ 12,000
W. Joseph Dryer Year Ended 6/30/99 $144,000 - $144,000
Year Ended 6/30/98 $139,000 $197,467 $336,467
3 Mos. Ended 6/30, $ 33,000 - $ 33,000
9 Mos. Ended 3/31, $170,106 - $170,106
</TABLE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of June 30, 1999 and related
information are as follows:
John P. Kneafsey, Chairman and Chief Executive Officer (See information under
"Election of Directors" above.)
W. Joseph Dryer, President and Chief Accounting Officer since October 4, 1996;
Secretary/Treasurer of Worldcorp, Inc. since February 1999; prior thereto,
Senior Vice President from January 1995; also, President and Director of
Russian River Energy Co. from 1992 to 1994; and President and Director of
Geothermal Resources International, Inc. since 1994; prior thereto, an Officer
since 1984. Age 44.
-5-
<PAGE> 7
Compensation of Directors
Directors of the Company receive annual compensation at the rate of
$5,000 and fees of $1,000 for each directors' meeting attended, plus
reimbursement for all reasonable expenses. In addition, at the Annual Meeting
of Shareholders on December 16, 1998, the Directors were granted options to
purchase certain shares of the Company's common stock, while additional
compensation was provided to the non-officer members of the Board, including
success-based financial incentives contingent on the sale or liquidation of
certain assets of the Company.
PROPOSAL TO AMEND THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO EFFECT A REVERSE STOCK SPLIT FOLLOWED BY A
FORWARD STOCK SPLIT OF THE COMMON STOCK
The Board has unanimously adopted a resolution declaring the
advisability of, and submits to the Stockholders for approval, a proposal to
amend the Company's certificate of incorporation (a) to effect, as determined
by the Board in its discretion, a reverse stock split of the outstanding Common
Stock as of 5:00 p.m. (Delaware time) on the effective date of the amendment
(the "Effective Date"), pursuant to which each 100 shares then outstanding will
be converted into one share (the "1-for-100 Reverse Split"), and (b) to effect
a forward split of the Common Stock as of 6:00 a.m. (Delaware time) on the day
following the effective date of the Reverse Split, pursuant to which Common
Stock then outstanding as of such date will be converted into the number of
shares of the Common Stock that such shares represented immediately prior to
the Effective Date ("Forward Split"). In lieu of issuing less than one whole
share resulting from the proposed stock split to holders of fewer than 100
shares, as the case may be, the Company would make a cash payment based on the
higher of either the stated book value of the Company on June 30, 1999 or the
closing prices of the Common Stock, as discussed below. The Board will select,
in its discretion, to effect the Reverse Split based on factors existing at the
time of determination, including (a) the availability of funds necessary to
consummate the Reverse Split and the cost of such funds; (b) the market price
of the Common Stock; (c) the Board's determination of whether the Reverse Split
will result in a reduction in the Company's administrative expenses; (d)
prevailing market conditions; (e) the likely effect on the market price of the
Common Stock; and (f) other relevant factors.
Consummation of the Reverse Stock Split/Forward Stock Split will not
change the number of shares of Common Stock authorized by the Company's
certificate of incorporation, which will remain at 15 million shares.
Stockholders may approve or reject the Reverse Split/Forward Split in whole but
not in part. If, for any reason the Board deems it advisable to abandon the
proposed stock splits following their approval by Stockholders, the proposed
stock splits may be abandoned by the Board at any time before the Effective
Date. The Reverse Split/Forward Split will become effective on the date that
the certificate of amendment to the Company's certificate of incorporation is
accepted for filing by the Delaware Secretary of State. If the Board determines
to consummate a Reverse Stock Split/Forward Stock Split, the Company will
publicly announce the determination at least 10 days prior to the Effective
Date.
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<PAGE> 8
The combined effect of the proposed stock splits on the holders of
Common Stock will be as follows:
(a) The Common Stock of holders of record of fewer than 100 shares of
Common Stock on the Effective Date will automatically be converted in the
Reverse Split into the right to receive cash in lieu of less than one whole
share in the amount set forth below. See "Cash Payment in Lieu of Shares."
(b) The Common Stock of holders of record of 100 or more shares on the
Effective Date will be automatically converted in the Reverse Split into the
number of shares equal to the number of their shares divided by 100 shares.
However, as of 6:00 a.m. (Delaware time), on the day after the Effective Date,
each such remaining Stockholder's Common Stock (giving effect to the Reverse
Split) will be converted, pursuant to the Forward Split, into Common Stock, on
the basis of 100 shares per share of Common Stock and any fraction thereof held
immediately after the Reverse Stock Split. As a result, the number of shares
held by each remaining Stockholder immediately after the Forward Stock Split
will equal the number of shares of Common Stock such record holder held
immediately prior to the Reverse Stock Split.
CASH PAYMENT IN LIEU OF SHARES. In lieu of issuing less than one whole
share resulting from the Reverse Split to holders of record of fewer than 100
shares, the Company will value each outstanding share of Common Stock held on
the Effective Date of the Reverse Split at the higher of the stated book value
as of June 30, 1999 or the average daily closing price per share of the Common
Stock as reported for the 10 trading days preceding the Effective Date. Such
per share price is hereinafter referred to as the "Purchase Price."
Stockholders who hold fewer than 100 shares of record on the Effective
Date will be entitled to receive in lieu of the less than one whole share
arising as a result of the Reverse Split, cash in the amount of the Purchase
Price times the number of shares of Common Stock held immediately prior to the
Reverse Split.
Any Stockholder owning of record fewer than 100 shares of Common Stock
who desires to retain an equity interest in the Company after the Effective
Date may do so by purchasing, prior to the Effective Date, sufficient shares of
Common Stock in the open market to increase the number of shares held in his
name to 100 or more shares.
As soon as practical after the Effective Date, the Company will mail a
letter of transmittal to each holder of record of a stock certificate or
certificates which represent issued Common Stock outstanding on the Effective
Date. The letter of transmittal will contain instructions for the surrender of
such certificate or certificates to the Company's designated exchange agent in
exchange for cash payments in lieu of shares or certificates representing the
number of whole shares of Common Stock into which the shares of Common Stock
has been converted as a result of the proposed stock splits. No cash payment
will be made or new certificate issued to a Stockholder until he has
surrendered his
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<PAGE> 9
outstanding certificates together with the letter of transmittal to the
Company's exchange agent. See "Exchange of Stock Certificates."
EFFECT OF THE PROPOSED STOCK SPLITS. Under Delaware law, Stockholders
have no right to dissent from the proposed stock splits, or to dissent from the
payment of cash in lieu of issuing less than one whole share resulting from the
Reverse Split.
On the Effective Date, each Stockholder of record who owns fewer than
100 shares of Common Stock will have only the right to receive cash based upon
the Purchase Price in lieu of receiving less than one whole share. The interest
of each such Stockholder in the Company will thereby be terminated, and each
such Stockholder will have no right to vote as a Stockholder or share in the
Company's assets, earnings or profits.
Each Stockholder on the Effective Date who owns of record 100 or more
shares of Common Stock will continue as a Stockholder with respect to the share
or shares resulting from the Reverse Split, and such shares will be forward
split as of 6:00 a.m. (Delaware time), on the date immediately after the
Effective Date so as to convert each share plus any fraction thereof held by
such record holder immediately after the Effective Date into Common Stock, on
the basis of 100 shares of Common Stock for each share then held. Each such
Stockholder will continue to share in the Company's assets, earnings or
profits, if any, to the extent of each such Stockholder's ownership of Common
Stock following the proposed stock splits.
The Common Stock is currently registered under Section 12(g) of the
Exchange Act and as a result, the Company is subject to the periodic reporting
and other requirements of the Exchange Act. The proposed stock splits will not
affect the registration of the Common Stock under the Exchange Act, and the
Company has no current intention of terminating its registration under the
Exchange Act to become a "private" company.
The cost of administering each Stockholder's account and the amount of
time spent by management in responding to Stockholder requests is the same
regardless of the number of shares held in the account. Accordingly, the cost
to the Company of maintaining many small accounts is disproportionately high
when compared with the total number of shares involved. In view of the
disproportionate cost to the Company of retaining small Stockholder accounts,
management believes that it would be beneficial to the Company and its
Stockholders as a whole to eliminate the administrative burden and cost
associated with accounts containing fewer than 100 shares of Common Stock.
Also, the Reverse Split will enable Stockholders holding of record
fewer than 100 shares to dispose of their investment at market value and, in
effect, avoid brokerage fees on the transaction. Stockholders owning a small
number of shares would, if they chose to sell their shares, probably incur
brokerage fees disproportionately high relative to the market value of their
shares. In some cases, it might be difficult to find a broker to handle such
small transactions.
-8-
<PAGE> 10
EXCHANGE OF STOCK CERTIFICATES. If the Board determines to consummate
the proposed stock splits, as soon as practicable after the Effective Date, the
Company will send letters of transmittal to all Stockholders of record on the
Effective Date for use in transmitting stock certificates ("old certificates")
to the Company's exchange agent. Upon proper completion and execution of the
letter of transmittal and return thereof to the exchange agent, together with
old certificates, each stockholder who holds of record fewer than 100 shares on
the Effective Date will receive cash in the amount to which the holder is
entitled. After the Effective Date and until surrendered, each outstanding old
certificate held by a Stockholder who holds of record fewer than 100 shares
shall be deemed for all purposes to represent only the right to receive the
amount of cash to which the holder is entitled as a result of the Reverse
Split. No interest will be paid on cash sums due as of the Effective Date. See
"Cash Payment in Lieu of Shares."
Upon proper completion and execution of the letter of transmittal and
return thereof to the exchange agent, together with old certificates, holders
of record of 100 or more shares on the Effective Date will receive certificates
("new certificates") representing the number of whole shares of Common Stock
into which their shares of Common Stock have been converted as a result of the
proposed stock splits. Until surrendered, each outstanding old certificate held
by a Stockholder who holds of record 100 or more shares shall be deemed for all
purposes to represent the number of whole shares to which the holder is
entitled as a combined result of the proposed stock splits.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion describes
certain federal income tax consequences of the proposed stock splits to
Stockholders who are citizens or residents of the United States, other than
Stockholders who received their Common Stock as compensation. The consequences
for each Stockholder will be governed by the specific facts and circumstances
pertaining to his acquisition and ownership of Common Stock. THUS, THE COMPANY
RECOMMENDS THAT EACH STOCKHOLDER CONSULT WITH HIS TAX ADVISOR CONCERNING HIS
OWN PERSONAL TAX SITUATION. In general, the federal income tax consequences of
the proposed stock splits will vary among Stockholders depending upon whether
they receive solely cash for their shares or solely new certificates in
exchange for old certificates. Further, the income tax consequences to a
Stockholder who receives cash for shares and who continues to own, or is
treated (see description of constructive ownership under item 5 below) as
continuing to own, Common Stock immediately following the transaction will
depend on factors which cannot be predicted with certainty. A Stockholder may
receive cash in the transaction and own shares immediately after the
transaction, if he holds shares in more than one account. The Company has not
sought and will not seek an opinion of counsel or a ruling from the Internal
Revenue Service regarding the federal income tax consequences of the proposed
stock splits. The Company, however, believes that because the proposed stock
splits are not part of a plan to increase periodically a stockholder's
proportionate interest in the Company's assets or earnings and profits, the
proposed stock splits probably will have the following federal income tax
effects:
1. A stockholder who receives only cash as a result of the Reverse
Split and who is not treated as owning any Common Stock immediately following
the transaction will generally be treated as having sold his Common Stock
represented by old certificates and will recognize gain or loss to the extent
that the cash received differs from his basis in such Common Stock. If the
shares
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<PAGE> 11
are a capital asset in the hands of the Stockholder, the gain or loss will be
recognized as a capital gain or loss. Whether gains or losses from the sale or
exchange of capital assets are short-term or long-term capital gains or losses
depends on the period the capital asset was held.
2. A Stockholder who receives solely new certificates will not
recognize gain or loss on the exchange. In the aggregate, the Stockholder's
basis in the Common Stock represented by new certificates will equal the
holder's basis in the Common Stock represented by old certificates.
3. The income tax consequences to a Stockholder who receives cash as a
result of the Reverse Split and who owns, or is treated as owning, any Common
Stock immediately following the transaction will depend on whether the
percentage of the outstanding Common Stock which the stockholder owned, or is
treated as owning, immediately after the transaction is less than the
percentage of the outstanding Common Stock which the Stockholder owned, or was
treated as owning, immediately prior to the transaction. If there has been a
reduction in such percentage, the Stockholder will generally be treated as
having sold the shares for which he received cash and will recognize gain or
loss on such shares in the manner described under item 1 above. If there is no
reduction in such percentage, the stockholder will generally be treated as
having received a dividend distribution equal to the amount of cash received. A
dividend distribution would be ordinary income to the extent of the Company's
current or accumulated earnings and profits. Amounts in excess of earnings and
profits would be a return of capital to the extent of the Stockholder's basis
in his directly owned shares and, assuming the shares are held as a capital
asset, any balance of the cash distribution would be capital gain.
4. Generally a taxpayer is deemed to own shares actually owned by, and
in certain instances, constructively owned by, certain family members,
corporations in which the stockholder has a major interest, partnerships,
trusts and estates in which the Stockholder has an interest, or which the
taxpayer may acquire by exercise of an option or by conversion of a security.
In addition, a taxpayer which is a partnership, trust or estate is deemed to
own shares owned by persons having an interest in the taxpayer and a taxpayer
which is a corporation will be deemed constructively to own shares owned by
major stockholders of the corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED
STOCK SPLITS.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors appointed the firm of KPMG LLP to act as
independent auditors for the Company for the fiscal year ended June 30, 1999.
The Board of Directors, upon recommendation of the Audit Committee, has
selected the firm of KPMG LLP to audit the consolidated financial statements of
the Company for the fiscal year ending June 30, 2000. A representative of KPMG
LLP is expected to be present at the Meeting, have an opportunity to make a
statement, and be available to respond to appropriate questions.
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<PAGE> 12
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY
THE APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
JUNE 30, 2000.
VOTING PROCEDURES
Each proposal submitted to the Company's stockholders for a vote is
deemed approved if a majority of the shares of Common Stock of the Company
present in person or by proxy at a meeting at which a quorum is present votes
in favor of the proposal. The presence in person or by proxy of stockholders
entitled to cast a majority of all the votes entitled to be cast at the meeting
constitutes a quorum. A stockholder is entitled to one vote for each share
owned.
Stockholder votes are tabulated by the Company's Registrar and
Transfer Agent. Proxies received by the Registrar, if such proxy is properly
executed and delivered, will be voted in accordance with the voting
specifications made on such Proxy. Proxies received by the Registrar on which
no voting specification has been made by the stockholder will be voted FOR all
items discussed in the Proxy Statement, in the manner stated on the proxy card.
Stockholders who execute and deliver proxies retain the right to evoke them by
notice in writing delivered to the Company's Secretary at any time before such
proxies are voted.
Under applicable Delaware corporate law and the Charter and By-Laws of
the Company, proxies received by the Registrar specifying an abstention as to
any proposal will cause the shares so represented to be counted toward a
quorum, but are not counted as favorable votes and, therefore, have the same
effect as a vote against the proposal. To the extent holders or brokers having
the right to vote shares do not attend the meeting or return a proxy, such
shares will not count toward a quorum, and if a quorum is otherwise achieved,
will have no effect on the vote of the proposals considered at the meeting
which shall be based solely upon the vote of the shares represented at the
meeting.
2000 ANNUAL MEETING OF STOCKHOLDERS
If any stockholder intends to present a proposal for consideration at
the 2000 Annual Meeting of Stockholders, such proposal must be received by the
Company on or before September 1, 2000, in order to be included in the
Company's Proxy Statement and form of proxy for such meeting. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and form of proxy relating to the 2000 Annual Meeting of Stockholders
any stockholder proposal which does not meet all of the requirements for such
inclusion established by the Securities and Exchange Commission at that time in
effect.
As of the date of this Proxy Statement, the Board of Directors knows
of no matters, other than those stated above, that may be brought before the
Meeting. However, if other matters do properly come before the Meeting, the
persons named in the enclosed proxy will vote upon them in their discretion and
in accordance with their best judgment.
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<PAGE> 13
A COPY OF THE COMPANY'S FORM 10-K ANNUAL REPORT AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C., HAS BEEN PROVIDED TO EACH
STOCKHOLDER OF RECORD IN CONNECTION WITH THE NOTICE OF THE ANNUAL MEETING.
The cost of preparing and mailing the Notice of Meeting, Proxy
Statement and form of proxy will be paid by the Company. The Company will
request banks, brokers, fiduciaries, and similar persons to forward copies of
such material to beneficial owners of the Company's common stock in a timely
manner and to request authority for execution of proxies, and the Company will
reimburse such persons and institutions for their reasonable out-of-pocket
expenses incurred in connection therewith. To the extent necessary to assure
sufficient representation, officers and regular employees of the Company may
solicit the return of the proxies by telephone, telegram, or personal
interview. The extent of this solicitation by personal contact will depend upon
the response to the initial solicitation by mail. It is anticipated that the
costs of such solicitation, if undertaken, will not exceed $4,000.
By the Order of the Board of Directors.
/s/ W. Joseph Dryer
- -----------------------------
Secretary
Dated at Plano, Texas
November 1, 1999
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