<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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[x] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Ciprico Inc.
--------------------------------------------------------------------------------
(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:
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(4) Date Filed:
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<PAGE> 2
CIPRICO INC.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------
The Annual Meeting of Shareholders of Ciprico Inc. will be held on
Thursday, January 25 2001 at 3:30 p.m. (Minneapolis time), at the Radisson Plaza
Hotel, 35 South Seventh Street, Minneapolis, Minnesota, for the following
purposes:
1. To set the number of directors at six (6).
2. To elect one Class I director for the ensuing year.
3. To approve a 250,000 share increase in the number of shares
reserved for the Company's 1999 Amended and Restated Stock Option
Plan.
4. To consider and act upon such other matters as may properly come
before the meeting and any adjournments thereof.
Only shareholders of record at the close of business on December 11,
2000, are entitled to notice of and to vote at the meeting or any adjournment
thereof.
Your vote is important. We ask that you complete, sign, date and return
the enclosed proxy in the envelope provided for your convenience. The prompt
return of proxies will save the Company the expense of further requests for
proxies.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT H. KILL
President and Chief Executive Officer
Plymouth, Minnesota
December 18, 2000
<PAGE> 3
CIPRICO INC.
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 25, 2001
------------------
PROXY STATEMENT
------------------
INTRODUCTION
Your Proxy is solicited by the Board of Directors of Ciprico Inc. ("the
Company") for use at the Annual Meeting of Shareholders to be held on January
25, 2001, at the location and for the purposes set forth in the notice of
meeting, and at any adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly and
mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to beneficial owners of stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a proxy may revoke it at any time prior to its
use at the meeting by giving written notice of such revocation to the Secretary
of the Company. Proxies not revoked will be voted in accordance with the choice
specified by shareholders by means of the ballot provided on the Proxy for that
purpose. Proxies which are signed but which lack any such specification will,
subject to the following, be voted in favor of the proposals set forth in the
Notice of Meeting and in favor of the number and slate of directors proposed by
the Board of Directors and listed herein. If a shareholder abstains from voting
as to any matter, then the shares held by such shareholder shall be deemed
present at the meeting for purposes of determining a quorum and for purposes of
calculating the vote with respect to such matter, but shall not be deemed to
have been voted in favor of such matter. Abstentions, therefore, as to any
proposal will have the same effect as votes against such proposal. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder of the shares and a lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote shall be deemed present at the meeting for purposes of determining
a quorum but shall not be deemed to be represented at the meeting for purposes
of calculating the vote required for approval of such matter.
The mailing address of the principal executive office of the Company is
2800 Campus Drive, Plymouth, Minnesota 55441. The Company expects that this
Proxy Statement, the related proxy and notice of meeting will first be mailed to
shareholders on or about December 18, 2000.
1
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed December 11, 2000, as
the record date for determining shareholders entitled to vote at the Annual
Meeting. Persons who were not shareholders on such date will not be allowed to
vote at the Annual Meeting. At the close of business on December 11, 2000,
5,037,459 shares of the Company's Common Stock were issued and outstanding. The
Common Stock is the only outstanding class of capital stock of the Company
entitled to vote at the meeting. Each share of Common Stock is entitled to one
vote on each matter to be voted upon at the meeting. Holders of Common Stock are
not entitled to cumulative voting rights.
PRINCIPAL SHAREHOLDERS
The following table provides information concerning persons known to
the Company to be the beneficial owners of more than 5% of the Company's
outstanding Common Stock as of the dates indicated in the respective footnotes
to the table.
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
------------------- ------------------ ----------------
Perkins Capital Management, Inc. 564,275 (1) 11.2%
730 E. Lake Street
Wayzata, MN 55391
Heartland Advisors, Inc. 549,800 (1) 10.9%
789 North Water Street
Milwaukee, WI 53202
Kennedy Capital Management, Inc. 426,379 (1) 8.5%
10829 Olive Boulevard
St. Louis, MO 63141
Dimensional Fund Advisors, Inc. 373,925 (1) 7.4%
1299 Ocean Avenue
Santa Monica, CA 90401
------------------
(1) Such shares were owned as of December 11, 2000 according to a report
provided to the Company by Nasdaq-AMEX Online.
2
<PAGE> 5
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of Common Stock
beneficially owned as of December 11, 2000 by each executive officer of the
Company named in the Summary Compensation Table, by each current director and
nominee for director of the Company and by all directors and executive officers
(including the named individuals) as a group. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
NAME OF DIRECTOR/NOMINEE OR NUMBER OF SHARES
IDENTITY OF GROUP BENEFICIALLY OWNED PERCENT OF CLASS (1)
------------------------------------- ----------------------- --------------------
<S> <C> <C>
Robert H. Kill 137,033 (2) 2.7%
Donald H. Soukup 77,250 (3) 1.5%
Stephen R. Hansen 63,722 (4) 1.3%
William N. Wray 45,000 (3)(5) *
Gary L. Deaner 38,100 (5)(6) *
Robert G. Brown 28,587 (7) *
Joan K. Berg 15,250 (8) *
William C. Hartman 13,500 (9) *
Bruce J. Bergman 12,000 (5)(10) *
Thomas F. Burniece 7,000 (5)(10) *
All current officers and di-
rectors as a Group (10 persons) 422,192 (11) 8.0%
</TABLE>
------------------------
* Less than 1%
(1) Shares not outstanding but deemed beneficially owned by virtue
of the right of a person to acquire them as of December 11,
2000, or within sixty days of such date, are treated as
outstanding only when determining the percent owned by such
individual and when determining the percent owned by a group.
(2) Amount includes 20,000 shares held by Mr. Kill's wife and
58,750 shares purchasable upon exercise of options presently
exercisable or exercisable within sixty days of December 11,
2000.
(3) Amount includes 36,000 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
(4) Amount includes 51,373 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
(5) Does not include an option for 6,000 shares which will be
granted to such individual as of the date of the Annual
Meeting and which will become exercisable as of the
3
<PAGE> 6
date of the Company's 2001 Annual Meeting pursuant to an
automatic grant under the Company's 1999 Amended and Restated
Stock Option Plan.
(6) Amount includes 34,500 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
(7) Amount includes 21,500 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
(8) Amount includes 12,250 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
(9) Amount includes 7,500 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
(10) Such shares are not outstanding but are purchasable upon
exercise of options presently exercisable or exercisable
within sixty days of December 11, 2000.
(11) Amount includes 264,623 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 11, 2000.
ELECTION OF DIRECTORS
(PROPOSALS #1 AND #2)
GENERAL INFORMATION
The Certificate of Incorporation and Bylaws of the Company provide that
the Board of Directors shall consist of not less than three directors and not
more than six directors, that the number of directors to be elected shall be
determined by the shareholders at each annual meeting, and that the number of
directors may be increased by the Board between annual meetings. The Certificate
of Incorporation also provides for the election of three classes of directors
with terms staggered so as to require the election of only one class of
directors each year. Only directors who are members of Class I will be elected
at the Annual Meeting. Directors who are members of Classes II and III will
continue to serve for the terms for which they were previously elected. The
Board recommends that the number of directors be set at six and that one Class I
director be elected at the Annual Meeting. The Board of Directors nominates
William N. Wray for re-election as a Class I director. If elected, Mr. Wray will
serve for a three-year term as a Class I director and until his successor has
been duly elected and qualified. Donald H. Soukup, currently a Class I director,
has indicated he does not wish to stand for re-election. The Board intends to
seek a qualified candidate to fill the Board seat currently held by Mr. Soukup.
The affirmative vote of the holders of a majority of the shares represented and
voting at the Annual Meeting is required to set the number of directors at six.
Unless authority is withheld, the proxies solicited hereby will be
voted for the election of William N. Wray as a director for a term of three
years. If, prior to the meeting, it should become known that the Class I nominee
will be unable to serve as a director after the meeting by reason of
4
<PAGE> 7
death, incapacity or other unexpected occurrence, the proxies will be voted for
such substitute nominee as is selected by the Board of Directors or,
alternatively, not voted for any nominee. The Board of Directors has no reason
to believe that the nominee will be unable to serve. The election of directors
is decided by a plurality of the votes cast. Following is information about the
nominee and all other directors of the Company whose terms continue beyond the
Annual Meeting.
Robert H. Kill (Class III, term ending at 2003 Annual Meeting), age 53,
has been President and Chief Executive Officer of the Company since March 1988,
Chairman of the Board from June 1996 to November 2000, and a director since
September 1987. Mr. Kill was Executive Vice President of the Company from
September 1987 to March 1988, Secretary from September 1987 to July 1988 and
from November 1989 to October 1993, and Vice President and General Manager from
August 1986 to September 1987. Mr. Kill held several marketing and sales
positions at Northern Telecom, Inc. from 1979 to 1986, his last position being
Vice President, Terminals Distribution.
Gary L. Deaner (Class III, term ending at 2003 Annual Meeting), age
60, was elected a director of the Company in May 1995. Mr. Deaner has been
Managing Director Raintree Associates, a marketing and planning company since
June 1998. Mr. Deaner has also served as President and Chief Executive Officer
of Cross Works, Inc., a software development company, from May 1999 to April
2000, Vice President of Marketing and Strategic Development for J. River, Inc.,
a software products company, from September 1996 to June 1998, and as Vice
President and General Manager, Lan Connect, of Digi International, Inc., a
manufacturer of computer communications products, from January 1995 to September
1996. From August 1991 to January 1995 Mr. Deaner served as President of Arnet
Corporation, a subsidiary of Digi International, and from 1985 to 1991 he was
Vice President of Marketing for Digi International.
William N. Wray (Class I, term ending at 2001 Annual Meeting), age 72,
has been a director of the Company since July 1993. Prior to his retirement in
1988, Mr. Wray held various management positions at Honeywell, Inc., the most
recent being Executive Vice President of Honeywell Information Systems (from
1985 to 1987) and Executive Vice President of Corporate Marketing (from 1987 to
1988).
Bruce J. Bergman (Class II, term ending at 2002 Annual Meeting), age
59, has been a director of the Company since January 1999. Mr. Bergman has been
a principal with Bergman & Associates, a high tech consulting practice, since
August 1998. Prior to founding Bergman & Associates, Mr. Bergman was President
and CEO (from 1996 to 1998) of Brocade Communications Systems, Inc., a provider
of gigabit switching hardware and software products, President and CEO (from
1995 to 1996) of ATG Cygnet, Inc., a supplier of multiple-media, robotic mass
storage libraries, President and CEO (from 1993 to 1994) of Proteon, Inc., a
supplier of internetworking hardware and software products, and President and
CEO (from 1983 to 1993) of Xylogics, Inc. a provider of computer network access,
remote access, networking and input/output hardware and software products.
Thomas F. Burniece (Class II, term ending at 2002 annual Meeting), age
59, has been a director of the Company since November 1999, and Chairman of the
Board since November 2000. For more than five years Mr. Burniece has been owner
and President of Thomas Burniece Consulting, a firm offering technical,
marketing and management consulting services across a
5
<PAGE> 8
wide range of high technology markets. Mr. Burniece has also been Chief
Executive Officer since April 1997 of Voelker Technologies, Inc., a startup
company developing an intelligent physical layer switching product. In addition,
in June 1998 he co-founded and served as the original Chief Executive Officer of
Rutilus Software, Inc., and is currently a director of such company. Rutilus is
a startup company developing a unique, centrally-managed approach to the backup
of network-attached desktop computers.
There are no arrangements or understandings between any of the
directors or any other person (other than arrangements or understandings with
directors acting as such) pursuant to which any person was selected as a
director or nominee of the Company. There are no family relationships among the
Company's directors.
COMMITTEE AND BOARD MEETINGS
The Company's Board of Directors has two standing committees, the Audit
Committee and the Compensation Committee. The Audit Committee members during
fiscal 2000 were Donald H. Soukup, Bruce J. Bergman and Thomas F. Burniece. This
committee is responsible for reviewing the Company's internal audit procedures
and quarterly and annual financial statements, reviewing with the Company's
independent accountants the results of the annual audit, and implementing and
monitoring the Company's cash investment policy. The Audit Committee met four
times during fiscal 2000.
The Compensation Committee members are Gary L. Deaner and William N.
Wray. The Compensation Committee recommends to the Board of Directors from time
to time the salaries and other compensation to be paid to executive officers of
the Company and administers the Company's stock option and restricted stock
plans. The Compensation Committee met once during fiscal 2000.
The Board and Committee members often communicate informally to discuss
the affairs of the Company and, when appropriate, take formal Board and
Committee action by unanimous written consent of all Board or Committee members,
in accordance with Delaware law, rather than hold formal meetings. During fiscal
2000, the Board of Directors held six meetings. Each incumbent director attended
75% or more of the total number of meetings (held during the period(s) for which
he has been a director or served on committee(s)) of the Board and of
committee(s) of which he was a member.
DIRECTORS FEES
Directors who are not employees of the Company receive $500 for each
Board meeting attended. In addition, under the terms of the Company's 1999
Amended and Restated Stock Option Plan, each nonemployee director who is elected
or re-elected to the Board, or whose term of office continues after an annual
meeting of shareholders, will receive a seven-year option for 6,000 shares at an
exercise price equal to the closing price of the Company's Common Stock on the
date of grant, exercisable one year from the date of grant if the director has
continued to serve on the Board throughout such period. On January 27, 2000,
Messrs. Bergman, Burniece, Deaner, Soukup and Wray each received an option to
purchase 6,000 shares at $11.00 per share. Such options will become exercisable
on January 25, 2001.
6
<PAGE> 9
CERTAIN TRANSACTIONS
During fiscal 2000, Mr. Burniece was paid $23,400 for consulting
services provided to the Company. Beginning in December, the Company has an
arrangement with Mr. Burniece to provide such services for a monthly retainer of
$7,500.
AUDIT COMMITTEE REPORT
The Board of Directors maintains an Audit Committee comprised of three
of the Company's outside directors. The Board of Directors and the Audit
Committee believe that the Audit Committee's current member composition
satisfies the rule of the National Association of Securities Dealers, Inc.
("NASD") that governs audit committee composition, Rule 4310(c)(26)(B)(i),
including the requirement that audit committee members all be "independent
directors" as that term is defined by NASD Rule 4200(a)(15).
In accordance with its written charter adopted by the Board of
Directors (set forth in Appendix A to this proxy statement), the Audit Committee
assists the Board of Directors with fulfilling its oversight responsibility
regarding the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. In discharging its oversight
responsibilities regarding the audit process, the Audit Committee:
(1) reviewed and discussed the audited financial statements with
management;
(2) discussed with the independent auditors the material required to
be discussed by Statement on Auditing Standards No. 61; and
(3) reviewed the written disclosures and the letter from the
independent auditors required by the Independence Standards
Board's Standard No. 1, and discussed with the independent
auditors any relationships that may impact their objectivity and
independence.
Based upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2000, as filed with the Securities and Exchange
Commission.
MEMBERS OF THE FISCAL 2000 AUDIT COMMITTEE:
Donald H. Soukup
Bruce J. Bergman
Thomas F. Burniece
7
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board of Directors of the Company is currently
composed of directors William N. Wray and Gary L. Deaner. None of the members of
the Committee is an employee or officer of the Company and none is affiliated
with any entity other than the Company with which an executive officer of the
Company is affiliated.
Overview and Philosophy. The Company's executive compensation program
is comprised of base salaries, annual and quarterly performance bonuses,
long-term incentive compensation in the form of stock options and restricted
stock grants and various benefits, including the Company's savings plan and
employee stock purchase plan in which all qualified employees of the Company
participate. In addition, the Compensation Committee from time to time may award
special cash bonuses, stock options and restricted stock grants in connection
with new hiring, promotions or non-recurring, extraordinary performance.
The Compensation Committee has followed a policy of paying annual base
salaries which are on the moderate side of being competitive in its industry and
of awarding cash bonuses based on achievement of operating profit goals and
secondarily on achievement of revenue goals. If minimum operating profit goals
are achieved, the officer receives a cash bonus in an amount equal to the
percentage of goal achieved multiplied by the established target bonus which is
a minimum of 30% and a maximum of 150% of annual base salary. The goals are
established annually by the Compensation Committee or President of the Company.
The Company does not have formal employment agreements with any of its officers.
The Company's executive officers participate in the Company's stock
option and restricted stock plans as well as the management cash bonus plan
described above. Cash bonuses earned by executive officers in fiscal 2000 are
set forth in the Summary Compensation Table.
General. The Company provides medical and insurance benefits to its
executive officers which are generally available to all Company employees. The
Company has a savings plan in which all qualified employees, including the
executive officers, may participate. Each year the Company contributes to the
savings plan an amount equal to two percent of gross wages for each employee who
contributes four percent and the Company may contribute an additional two
percent of gross wages based on the operating profit of the Company for the
fiscal year and plan contributions by the individual employee. The amount of
perquisites allowed to executive officers, as determined in accordance with
rules of the Securities and Exchange Commission, did not exceed 10% of salary in
fiscal 2000.
Chief Executive Officer Compensation. Robert H. Kill served as the
Company's Chief Executive Officer in fiscal 2000. His annual base salary and
eligibility for a cash bonus was determined in accordance with the policies
described above as applicable to all executive officers. His base salary was
$195,000 for fiscal 2000.
8
<PAGE> 11
In 2000, in order to continue providing incentive for participation in
long-term appreciation in shareholder value, the Committee granted Mr. Kill
options to purchase 40,000 shares at the market price on the respective dates of
grant, 25 percent of which will vest on each of the first four anniversaries of
the date of grant. Grants of stock options are based on qualitative rather than
quantitative factors and reflect the desire of the Board of Directors and
Compensation Committee to retain key executives, encourage excellent performance
and increase Company stock ownership by key executives in order to align their
interests with those of shareholders generally.
Summary. The Compensation Committee annually reviews its compensation
policies but anticipates generally continuing its policy of paying relatively
moderate base salaries, basing bonuses on specific revenue and operating profit
goals and granting stock options and restricted stock to provide long-term
incentives.
MEMBERS OF THE COMPENSATION COMMITTEE:
William N. Wray
Gary L. Deaner
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid
during each of the Company's last three fiscal years to the Company's Chief
Executive Officer and to the other executive officers whose total salary and
bonus for fiscal 2000 exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- ----------------------------------
Awards Payouts
------------------------ --------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($)(1) ($)(2) (#) ($) ($)(3)
------------------ ----- ---------- ---------- ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H. Kill, 2000 193,333 - - - 40,000 - 12,884(4)
President and 1999 175,000 88,268 - - 15,000 - 4,229
CEO 1998 171,667 - - 69,375 15,000 - 5,045
Joan K. Berg, Former 2000 131,916 - - - - - 4,753
Vice President-Finance 1999 120,000 42,143 - - 9,000 - 2,726
and CFO 1998 10,000 - - 16,408 20,000 - 200
Stephen R. Hansen, 2000 125,000 8,924 - - - - 9,202(4)
Vice President - 1999 104,756 36,275 - 8,125 9,000 - 2,372
Strategic Product 1998 94,750 2,559 - 6,900 7,500 - 2,364
Development
William C. Hartman, 2000 150,000 14,438 - - - - 3,603
Vice President -
Marketing and
Business Development
(5)
Robert G. Brown, 2000 174,970 (6) - - - - - 4,745
Vice President -
Sales (5)
</TABLE>
9
<PAGE> 12
(1) Does not include automobile allowance, the amount of which was less
than 10% of the individual's listed compensation.
(2) Dividends, if declared by the Company, will be paid on the shares.
Aggregate shares of restricted stock held by the named executive
officers at September 30, 2000 and the value of such shares on that
date (based on a closing stock price of $10.125 per share) are as
follows: Mr. Kill held 10,000 shares valued at $101,250, Mr. Hansen
held 1,600 shares valued at $16,200, Mr. Brown held 6,670 shares valued
at $67,534, and Mr. Hartman held 6,000 shares valued at $60,750.
(3) Amounts reflect Company contributions to the Company's Savings Plan, a
401(k) plan.
(4) Includes amount earned but not taken pursuant to Company's Paid Time
Off policy ($7,500 for Mr. Kill and $4,423 for Mr. Hansen).
(5) Amounts for 1999 and 1998 are excluded for Messrs. Hartman and Brown as
they did not serve as executive officers for these years.
(6) Includes commissions of $74,970.
OPTION/SAR GRANTS DURING 2000 FISCAL YEAR
The following table sets forth information regarding stock options
granted to the named executive officers during the fiscal year ended September
30, 2000. The Company has not granted stock appreciation rights.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN EXERCISE OR BASE EXPIRATION -------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
---- ------------ ----------- ---------------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Kill 10,000 (1) 3.7% $9.875 10/20/04 27,283 60,288
30,000 (2) 11.1% $10.125 9/28/05 83,921 185,442
</TABLE>
---------------------
(1) Such option is exercisable annually as to 25% of the total number of
shares, commencing October 22, 2000.
(2) Such option is exercisable annually as to 25% of the total number of
shares, commencing September 29, 2001.
10
<PAGE> 13
AGGREGATED OPTION/SAR EXERCISES DURING 2000 FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table provides information related to options exercised
by the named executive officers during fiscal 2000 and the number and value of
options held at fiscal year end.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END(#) FY-END ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE (1)
----------------- ---------------- ------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Robert H. Kill 15,000 83,745 37,500 / 62,500 938 / 5,313
Joan K. Berg - N/A 12,250 / 16,750 37,589 / 41,526
Stephen R. Hansen 7,500 48,688 42,625 / 14,375 9,000 / 12,938
William C. Hartman - N/A 7,500 / 22,500 17,813 / 53,438
Robert G. Brown - N/A 19,000 / 17,000 6,313 / 9,563
</TABLE>
--------------------------
(1) These amounts represent the difference between the exercise price of
the in-the-money options and the market price of the Company's Common
Stock on September 30, 2000. The closing price of the Company's Common
Stock on that day on the Nasdaq Stock Market was $10.125. Options are
in-the-money if the market value of the shares covered thereby is
greater than the option exercise price.
11
<PAGE> 14
STOCK PERFORMANCE CHART
The following chart compares the cumulative total shareholder return on
the Company's Common Stock with the S&P SmallCap 600 Index and the Computers
(Peripherals) Small Index. The comparison assumes $100 was invested on September
30, 1995 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
Total Return To Shareholder's
(Dividends reinvested monthly)
<TABLE>
<CAPTION>
ANNUAL RETURN PERCENTAGE
Years Ending
Company / Index Sep96 Sep97 Sep98 Sep99 Sep00
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CIPRICO INC 172.7397 -24.375 -51.6562 52.14716 -8.98876
S&P SMALLCAP 600 INDEX 15.3114 36.96813 -18.672 17.5371 24.17344
COMPUTERS(PERIPHERALS)-SMALL -42.7325 3.665524 -55.4284 7.181135 -3.50852
</TABLE>
<TABLE>
<CAPTION>
INDEXED RETURNS
Base Years Ending
Period
Company / Index Sep95 Sep96 Sep97 Sep98 Sep99 Sep00
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CIPRICO INC 100 272.7397 206.2594 99.71362 151.7114 138.0745
S&P SMALLCAP 600 INDEX 100 115.3114 157.9399 128.4494 150.9757 187.4717
COMPUTERS(PERIPHERALS)-SMALL 100 57.26749 59.36664 26.46065 28.36083 27.36578
</TABLE>
APPROVAL OF INCREASE IN SHARES RESERVED FOR
1999 AMENDED AND RESTATED STOCK OPTION PLAN
(PROPOSAL NO. 3)
General. The Company currently has in effect a 1999 Amended and
Restated Stock Option Plan (the "1999 Plan"). The Board has approved, subject to
shareholder approval, a 250,000 share increase in the number of shares reserved
for the 1999 Plan. The Board believes that the 1999 Plan has been, and will
continue to be, important for attracting, retaining and providing incentives for
those officers, directors and key employees upon whose judgment, initiatives and
efforts the Company is largely dependent for the successful conduct of its
business.
A more detailed description of the 1999 Plan is set forth below, but
such description is qualified in its entirety by reference to the full text of
the Plan, a copy of which may be obtained without charge upon written request to
the Company's Vice President of Finance.
12
<PAGE> 15
Purpose. The purpose of the 1999 Plan is to promote the success of the
Company by facilitating the employment and retention of competent personnel and
by furnishing incentive to directors, officers and employees upon whose efforts
the success of the Company will depend to a large degree.
Term. Incentive stock options may be granted pursuant to the 1999 Plan
until October 22, 2008, ten years from the date the 1999 Plan was adopted by the
Board. Nonqualified options may be granted under the 1999 Plan until the Plan is
discontinued or terminated by the Board.
Administration. The 1999 Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"). The 1999 Plan gives broad
powers to the Committee to administer and interpret the 1999 Plan, including the
authority to select the individuals to be granted options and to prescribe the
particular form and conditions of each option granted.
Eligibility. All officers and employees of the Company or any
subsidiary are eligible to receive incentive stock options pursuant to the 1999
Plan. All directors, officers and employees of, and consultants and advisors to,
the Company or any subsidiary are eligible to receive nonqualified stock options
pursuant to the 1999 Plan. As of December 11, 2000, the Company had
approximately 120 employees and five non-employee directors.
Directors' Formula Grant. The 1999 Plan provides that each nonemployee
director who is elected or re-elected as a director of the Company or whose term
of office continues after an annual meeting at which directors are elected will
automatically be granted an option to purchase 6,000 shares at an exercise price
equal to the closing price of the Company's Common Stock on the date on which
the option is granted. Each such option will be for a term of seven years and
will become exercisable one year from the date of grant if the director has
continued to serve on the Board throughout such period.
Options. When an option is granted under the 1999 Plan, the Committee
at its discretion specifies the option price, the type of option (whether
"incentive" or "nonqualified") to be granted and the number of shares of Common
Stock which may be purchased upon exercise of the option. The exercise price of
an incentive stock option and, unless otherwise determined by the Committee, the
exercise price of a nonqualified stock option, may not be less than 100% of the
fair market value of the Company's Common Stock on the date of grant. The market
value of the Company's Common Stock on December 11, 2000 was $7.8125. The term
during which the option may be exercised and whether the option will be
exercisable immediately, in stages or otherwise are set by the Committee, but
the term of an incentive stock option may not exceed ten years from the date of
grant. Each incentive stock option and, unless otherwise determined by the
Committee, each nonqualified stock option granted under the 1999 Plan is
nontransferable during the lifetime of the optionee. Each outstanding option
under the 1999 Plan may terminate earlier than its stated expiration date in the
event of the optionee's termination of employment or directorship.
Amendment. The Board of Directors may from time to time suspend or
discontinue the 1999 Plan or revise or amend it in any respect; provided, that
no such revision or amendment may impair the terms and condition of any
outstanding option to the detriment of the optionee without
13
<PAGE> 16
the consent of the optionee except as authorized in the event of merger,
consolidation or liquidation of the Company.
Federal Income Tax Consequences of the Plan. Under present law, an
optionee will not realize any taxable income on the date a nonqualified option
is granted pursuant to the 1999 Plan. Upon exercise of the option, however, the
optionee must recognize, in the year of exercise, ordinary income equal to the
difference between the option price and the fair market value of the Company's
Common Stock on the date of exercise. Upon the sale of the shares, any resulting
gain or loss will be treated as capital gain or loss. The Company will receive
an income tax deduction in its fiscal year in which options are exercised, equal
to the amount of ordinary income recognized by those optionees exercising
options, and must withhold income and other employment-related taxes on such
ordinary income.
Incentive stock options granted under the 1999 Plan are intended to
qualify for favorable tax treatment under Code Section 422. Under Section 422,
an optionee recognizes no taxable income when the option is granted. Further,
the optionee generally will not recognize any taxable income when the option is
exercised if he or she has at all times from the date of the option's grant
until three months before the date of exercise been an employee of the Company.
The Company ordinarily is not entitled to any income tax deductions upon the
grant or exercise of an incentive stock option. Certain other favorable tax
consequences may be available to the optionee if he or she does not dispose of
the shares acquired upon the exercise of an incentive stock option for a period
of two years from the granting of the option and one year from the receipt of
the shares.
Plan Benefits. The table below shows the total number of stock options
that have been received by the following individuals and groups under the 1999
Plan.
<TABLE>
<CAPTION>
Total number of
Name and Position/Group Options Received (1)
----------------------- --------------------
<S> <C>
Robert H. Kill, President and Chief Executive Officer 175,000
Joan K. Berg, Former Vice President-Finance 29,000
Stephen R. Hansen, Vice President-Strategic Product Development 78,000
William C. Hartman, Vice President-Marketing and Business Development 30,000
Robert G. Brown, Vice President-Sales 36,000
Current Executive Officer Group 369,000
Current Non-executive Officer Director Group 182,500(2)
Current Non-executive Officer Employee Group 1,129,119
</TABLE>
-----------------------
(1) This table reflects the total stock options granted without
taking into account exercises or cancellations. Because future
grants of stock options are subject to the discretion of the
Compensation Committee, the future benefits that may be
received by these individuals or groups under the Plan cannot
be determined at this time, except for the automatic grants of
options to outside directors as described under "Directors'
Formula Grant" above.
14
<PAGE> 17
(2) Includes 6,000 share options which will be granted to Messrs.
Bergman, Burniece, Deaner and Wray on the date of the 2000
Annual Meeting pursuant to the provisions of the 1999 Plan.
15
<PAGE> 18
VOTE REQUIRED
The Board of Directors recommends that the shareholders approve the
increase in the number of shares reserved for the 1999 Amended and Restated
Stock Option Plan. Approval of the increase requires the affirmative vote of the
holders of a majority of the voting power of the shares represented in person or
by proxy at the meeting with authority to vote on such matter.
16
<PAGE> 19
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors of the Company, and persons who beneficially own more
than 10 percent of the Company's outstanding shares of Common Stock, to file
initial reports of ownership and reports of changes in ownership of securities
of the Company with the Securities and Exchange Commission. Officers, directors
and greater than 10 percent shareholders are required by Securities and Exchange
Commission regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based upon a review of the copies of such reports furnished to or
obtained by the Company and upon other information known to the Company, the
Company believes that during the fiscal year ended September 30, 2000, all
filing requirements applicable to its directors, officers or beneficial owners
of more than 10% of the Company's outstanding shares of Common Stock were
complied with except that one report covering two transactions was filed late by
Gary L. Deaner and Messrs. Bergman, Burniece, Deaner and Kill were each late
filing a form to report an option grant.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Grant Thornton LLP acted as the Company's independent accountants for
fiscal 2000. The Company has not yet selected its independent auditors for the
current fiscal year ending September 30, 2001. Representatives of Grant Thornton
LLP are expected to be present at the Annual Meeting, will be given an
opportunity to make a statement regarding financial and accounting matters of
the Company if they so desire, and will be available at the meeting to respond
to appropriate questions from the Company's shareholders.
17
<PAGE> 20
OTHER BUSINESS
Management knows of no other matters to be presented at the meeting. If
any other matter properly comes before the meeting, the appointees named in the
proxies will vote the proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2002 annual meeting of shareholders must be
received by the Company by August 16, 2001, to be considered for inclusion in
the Company's proxy statement and related proxy for the next annual meeting.
Also, if a shareholder proposal intended to be presented at the next
annual meeting but not included in the Company's proxy statement and proxy is
received by the Company after October 31, 2001, then management named in the
Company's proxy form for the next annual meeting will have discretionary
authority to vote shares represented by such proxies on the shareholder
proposal, if presented at the meeting, without including information about the
proposal in the Company's proxy material.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended September 30, 2000, accompanies this notice of meeting and Proxy
Statement. No part of the Annual Report is incorporated herein and no part
thereof is to be considered proxy soliciting material.
FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
BEING SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30,
2000, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES THERETO. THE COMPANY
WILL FURNISH TO ANY SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING
THE FORM 10-K, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE FEES RELATED TO THE
COMPANY'S FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH REPORT AND/OR
EXHIBITS(S) SHOULD BE DIRECTED TO MR. THOMAS WARGOLET, VICE PRESIDENT OF
FINANCE, AT THE COMPANY'S PRINCIPAL ADDRESS. THE COMPANY'S FORM 10-K MAY ALSO BE
ACCESSED THROUGH THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT H. KILL
President and Chief Executive Officer
Dated: December 18, 2000
Plymouth, Minnesota
18
<PAGE> 21
Exhibit A
AUDIT COMMITTEE CHARTER OF CIPRICO, INC.
Committee Purpose
The Board of Directors ("Board") is the ultimate corporate governance
body of Ciprico, Inc. ("Company"). As such, the Board is charged with overseeing
all material aspects of the Company's operations. To assist the Board in
performing its oversight role, and to help the Board meet its fiduciary duties
to the shareholders of the Company, the Board has created an audit committee
("Committee"). For its part, the Committee is charged with the active and
regular performance of the Board's oversight of the Company's internal control
systems, its external audit process, and its external and internal financial
reporting process. This audit committee charter is intended to set forth the
roles, responsibilities, authority, and procedures of the Committee.
The Committee's main role includes a particular focus on the
qualitative aspects of financial reporting. Accordingly, one of the Committee's
main responsibilities will be to coordinate and control the Company's internal
control procedures, as well as its procedures for periodically reviewing and
assessing the effectiveness of its internal control procedures. Such internal
control procedures include, but are not limited to, those designed to identify,
manage, monitor, and ultimately account for and report on the business
transactions and risks arising from the Company's operating and non-operating
activities. The Committee's role will culminate with the annual preparation of
the Company's audited financial statements, which the Committee will recommend
to the Board as provided herein.
Committee Membership
The Committee shall consist of at least three (3) independent
directors. "Independent director" means a person other than an individual having
a relationship which, in the opinion of Company's Board, would interfere with
the exercise of independent, disinterested judgment in carrying out the
responsibilities of a Committee member. Though not all-inclusive, the following
categories of people shall not be considered independent for audit committee
purposes:
(1) a director who is or was employed by the Company or any of its
affiliates for the current or any of the past three years;
(2) a director who is an immediate family member(1) of any
management-level employee of the Company;
(3) a director who personally accepted any compensation from the
corporation or any of its affiliates in excess of $60,000
during the previous fiscal year, other than compensation for
Board service, benefits under a tax-qualified retirement plan,
or non-discretionary compensation;
----------------
1 As used in this charter, the phrase "immediate family member" includes a
person's spouse, parents, children, siblings, mother-in-law, father-in-law,
brother-in-law, sister-in-law, son-in-law, daughter-in-law, and anyone who
resides in such person's house.
<PAGE> 22
(4) a director who is a partner, controlling shareholder, or an
executive officer of any for-profit business organization to
which the Company made, or from which the Company received,
payments (other than those arising solely from investments in
the securities of the Company or organization) that exceed 5%
of the Company's or organization's consolidated gross revenues
for that year, or $200,000, whichever is more, in any of the
past three years; and
(5) a director who is employed as an executive of another entity
where any of the Company's executives serve on that entity's
compensation committee.
Committee members shall have (1) knowledge of the primary industries in
which the Company operates; (2) the ability to read and understand fundamental
financial statements, including the Company's balance sheet, income statement,
statement of cash flow, and key performance indicators; and (3) the ability to
understand key business and financial risks and related controls and control
processes. One member, preferably the chairperson, must be literate in business
and financial reporting and control and have past employment experience in
finance or accounting or other comparable experience or background.
Structure
The Committee members shall be appointed by the Board, in accordance
with the preceding independence requirements. Each appointment shall be for an
indefinite term, but the Board may remove Committee members at any time by Board
action. If a Committee member is removed or resigns from the Committee, he or
she shall serve until a successor is appointed.
The Committee shall elect a chairperson annually. The chairperson shall
create the agenda for Committee meetings and otherwise preside over Committee
meetings.
Meetings
The Committee shall meet at least two times annually. Additional
meetings shall be scheduled as considered necessary by the Committee
chairperson. Minutes of all meetings shall be recorded and maintained by the
Committee.
Reporting to the Board
The Committee chairperson shall formally report (whether as required
pursuant to specific requirements herein or otherwise) to the Board at least
semi-annually.
Quorum
A majority of the appointed Committee members shall constitute a quorum
and shall be able to conduct the Committee's business.
A-2
<PAGE> 23
Duties and Responsibilities
In accordance with the Committee's purpose, it shall have the following
duties and responsibilities:
Audit & Review Function
-- The Committee shall select, or nominate for selection by the
Board and/or shareholders, the Company's external auditors.
-- The Committee shall annually ensure receipt of a formal
written statement from the external auditors consistent with
Independence Standards Board Standard 1. Additionally, the
Committee shall discuss with the external auditor any
relationships or services that may affect the external
auditor's objectivity or independence. If the Committee is not
satisfied with the external auditor's assurances of
independence, it shall take or recommend to the Board
appropriate action to oversee the independence of the external
auditor.
-- The Committee shall make clear to management and the external
auditors that the external auditors must consider the
Committee to be its client and not management. Towards this
end, the Committee shall meet annually with the external
auditors, without management or others present, in order to
assess the performance and ethical disposition (i.e., the
"tone-at-the-top") of the financial and accounting management
and the effectiveness and independence of the internal
auditors.
-- The Committee shall direct the external auditors to review the
preparation of the quarterly financial statements and notify
the members of the Committee of issues not resolved with the
Company management prior to filing the quarterly Form 10-Q.
-- The Committee shall annually review, with or without
management consultation, the performance (effectiveness,
objectivity, and independence) of the external auditors.
-- The Committee shall annually consider the scope of the annual
audit and accounting fees for the annual audit to ensure that
the economics support the scope and staffing of the annual
audit.
Risk Management Function
-- The Committee shall inquire of external auditors about the
adequacy of the Company's internal control procedures as a
complete system, as well as the discovery of any individually
material gaps and/or failures in the Company's internal
control procedures.
Financial Reporting Function
A-3
<PAGE> 24
-- The Committee shall inquire about the existence and substance
of any significant accounting accruals, reserves,
contingencies, and estimates made by management that have a
material impact on the financial statements and of the
external auditor's opinions regarding the quality (i.e.,
adequacy, including over-adequacy) of all such items.
-- The Committee shall inquire of management and the external
auditors to ascertain whether there were any significant
financial reporting issues that arose during the accounting
period and if so how they were resolved.
-- The Committee shall prepare an annual Audit Committee Report
to be presented to the Board. The Audit Committee Report shall
include, at a minimum, the following representations:
(1) that the Committee has reviewed and discussed the audited
financial statements with management;
(2) that the Committee has discussed with the independent
auditors the matters required to be discussed by SAS 61, as
may be modified or supplemented;
(3) that the Committee has received the written disclosures
and the letter from the independent accountants required by
Independence Standards Board Standard No. 1 (Independence
Standards Board Standard No. 1, Independence Discussions with
Audit Committees), as may be modified or supplemented, and has
discussed with the independent accountant the independent
accountant's independence;
(4) that, based on the review and discussions referred to in
paragraphs (1) through (3) of this item, the Committee
recommends (or declines to recommend) to the Board of
Directors that the audited financial statements be included in
the company's Annual Report on Form 10-K for the last fiscal
year for filing with the Commission; and
(5) that the individual Committee members, and the Committee
in the aggregate, complies with the Committee Membership
requirements set forth in this charter.
The Audit Committee Report may include other information that the
Committee deems appropriate. The Committee will prepare the Audit
Committee Report with the understanding that its representations will
be used by the Board and the Company to comply with Item 306 of
Regulation S-K and Item 7(e)(3) of Schedule 14A as those regulations
affect the Company.
General
-- The Committee shall assess and report to the Board on its
compliance with this charter on an annual basis. This
information may be included in the Audit Committee Report
A-4
<PAGE> 25
referred to above. The Board shall consider the Committee's
report to the Board pursuant to this requirement (and the
Audit Committee Report if prepared separately) to determine if
changes to the Committee membership (e.g., composition and
member number) are appropriate.
-- The Committee shall conduct an appropriate review of all
proposed related party transactions that are individually in
excess of $60,000 in order to ensure that such transactions
are on terms that are materially similar to those that could
be obtained in arms-length transactions with independent third
parties or are otherwise fair to and in the best interests of
the Company. Documentation of each such review and the
Committee's recommendation to the Board regarding whether the
Board should approve or disapprove of the relevant related
party transaction shall be maintained by the Committee.
A-5
<PAGE> 26
CIPRICO, INC.
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 25, 2001
3:30 PM
RADISSON PLAZA HOTEL
35 SOUTH SEVENTH STREET
MINNEAPOLIS, MN 55402
CIPRICO, INC.
2800 CAMPUS DRIVE, PLYMOUTH, MINNESOTA 55441 PROXY
-----------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL
MEETING ON JANUARY 25, 2001.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1, 2, AND 3.
By signing the proxy, you revoke all prior proxies and appoint Robert H. Kill
and Thomas S. Wargolet, and each of them, with full power of substitution, to
vote your shares on the matters shown on the reverse side and any other
matters which may come before the Annual Meeting and all adjournments.
See reverse for voting instructions.
<PAGE> 27
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, AND 3.
<TABLE>
<S> <C> <C>
1. Election of Class I director: 01 William N. Wray [ ] Vote FOR [ ] Vote Withheld
nominee from nominee
</TABLE>
Please fold here
The Board of Directors recommends that you vote FOR each proposal below.
<TABLE>
<S> <C> <C> <C>
2. Set the number of directors at six (6): [ ] For [ ] Against [ ] Abstain
3. To approve a 250,000 share increase in the shares reserved for the Company's
1999 Amended and Restated Stock Option Plan. [ ] For [ ] Against [ ] Abstain
4. OTHER MATTERS. In their discretion, the Proxies are... [ ] Authorized [ ] Not Authorized
to vote upon such other business as may properly come before the Meeting.
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL, AND WILL BE DEEMED TO GRANT AUTHORITY
UNDER PROPOSAL NUMBER 4.
Address Change? Mark Box [ ]
Indicate changes below:
Date ________________________________
[ ]
Signature(s) in Box
Please sign exactly as your name(s) appear
on Proxy. If held in joint tenancy, all
persons must sign. Trustees, administrators,
etc., should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.
