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:
[X] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
(S)240.14a-11(c) or 240.14a-12
[_] Definitive Proxy Statement
[_] Definitive Additional Materials [_] Confidential, for Use of the
Commission Only(as Permitted by Rule
14a-6(e)(2))
TRIDON ENTERPRISES, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Shares and Series A Preferred Shares
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(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:
[_] 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:
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TRIDON ENTERPRISES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on October 15, 1999
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of
Tridon Enterprises, Inc., a Colorado corporation (the "Company"), will be
held on October 15, 1999 at 10:00 a.m., local time, at 11601 Wilshire Blvd.,
Suite 2040, Los Angeles, California, for the following purposes:
1. To elect five directors to serve for the ensuing one year and
until their successors are duly elected;
2. To approve the acquisition of the Satellite Link Communications, Inc. by
the Company pursuant to a reorganization under Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended;
3. To approve The Incentive Plan (the "Stock Incentive Plan") for the
Company;
4. To approve an amendment to the Company's Certificate of Incorporation to
eliminate the Series A Preferred Stock;
5. To approve Caldwell, Becker, Petrick & Dervin, L.L.P. as the independent
certified accountants for the Company; and
6. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on August 15, 1999
as the record date for the determination of stockholders entitled to vote at
this meeting. Only stockholders of record at the close of business on August
15, 1999 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if the stockholder has previously
returned
a proxy.
By Order of the Board of Directors
_________________________,
CHIEF EXECUTIVE OFFICER
TRIDON ENTERPRISES, INC.
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<PAGE>
PROXY STATEMENT FOR 1999
ANNUAL MEETING OF STOCKHOLDERS
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PROCEDURAL MATTERS
General
The enclosed Proxy is solicited on behalf of Tridon Enterprises, Inc., a
Colorado corporation (the "Company"), for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on October 15, 1999 at 10:00
a.m., local time, and at any adjournment thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting of Stockholders. The
Annual Meeting will
be held at 11601 Wilshire Blvd., Suite 2040, Los Angeles, California. The
Company's telephone number at its principal business offices is (310) 726-
3559.
These proxy solicitation materials were mailed on or about September 10,
1999 to all stockholders entitled to vote at the Annual Meeting.
Record Date and Principal Share Ownership
Only stockholders of record at the close of business on August 15, 1999
(the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. The Company has one class of Common Stock, $0.001 par value. As of
the Record Date, 66,094,734 shares of the Company's Common Stock were issued
and outstanding and held of record by approximately 2,000 stockholders. See
"Security Ownership of Certain Beneficial Owners and Management" below for
information regarding beneficial owners of more than five percent of the
Company's Common Stock.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to its use by delivering to the Secretary of the
Company a written instrument revoking the proxy or a duly executed proxy
bearing a later date or by attending the Annual Meeting and voting in person.
Voting and Solicitation
Each holder of Common Stock is entitled to one vote for each share held.
This solicitation of proxies is made by the Company, and all related costs
will be borne by the Company. In addition, the Company may reimburse
brokerage firms and other persons representing beneficial owners of shares
for their expenses in forwarding solicitation material to such beneficial
owners. Proxies may also be solicited by certain of the Company's directors,
officers and regular employees, without additional compensation, personally
or by telephone.
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date. Shares that are voted "FOR,"
"AGAINST" or "WITHHELD FROM" a matter are treated as being present at the
meeting for purposes of establishing a quorum and are also treated as shares
entitled to vote at the Annual Meeting (the "Votes Cast") with respect to
such matter.
While there is no definitive statutory or case law authority in Colorado as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or
absence of a quorum for the transaction of business and (ii) the total number
of Votes Cast with respect to a proposal (other than the election of
directors). In the absence of a controlling precedent to the contrary, the
Company intends to treat abstentions in this manner. Accordingly, abstentions
will have the same effect as a vote against the proposal.
All shares entitled to vote and represented by properly executed,
unrevoked proxies received prior to the Annual Meeting will be voted at the
Annual Meeting in accordance with the instructions indicated on those
proxies. If no instructions are indicated on a properly executed proxy, the
shares represented by that proxy will be voted as recommended by the Board of
Directors. If any other matters are properly presented for consideration at
the Annual Meeting, including, among other things, consideration of a motion
to adjourn the Annual Meeting to another time or place (including, without
limitation, for the purpose of soliciting additional proxies), the persons
named in the enclosed proxy and acting thereunder will have discretion to
vote on those matters in accordance with their best judgment. The Company
does not currently anticipate that any other matters will be raised at the
Annual Meeting.
Deadline for Receipt of Stockholder Proposals
Stockholders are entitled to present proposals for action at a forthcoming
meeting if they comply with the requirements of the proxy rules promulgated
by the Securities and Exchange Commission (the "SEC"). Proposals of
stockholders of the Company intended to be presented for consideration at the
Company's 2000 Annual Meeting of Stockholders must be received by the Company
no later than February 15, 2000 in order that they may be considered for
inclusion in the proxy statement and form of proxy relating to that meeting.
In addition, the Company's Bylaws establish an advance notice procedure
with regard to certain matters, including stockholder proposals not included
in the Company's proxy statement, to be brought before an annual meeting of
stockholders. In general, nominations for the election of directors may be
made by: (i) the Board of Directors or (ii) any stockholder entitled to vote
who has delivered written notice to the Secretary of the Company not fewer
than 10 days nor more than 60 days in advance of the annual meeting (or, with
respect to an election of directors to be held at a special meeting, the
close of business on the seventh day following the date on which notice of
such meeting is first given to stockholders), which notice must contain
specified information concerning the nominees and concerning the stockholder
proposing such nominations. In the event that less than 60 days notice or
prior public disclosure of the date of the annual meeting is given or made to
stockholders, notice by the stockholders must be received not later than the
close of business on the tenth day following the earlier of the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. The Company's Bylaws also provide that the only business
that shall be conducted at an annual meeting is business that is brought
before such meeting: (i) by or at the direction of the Board of Directors, or
(ii) by any stockholder entitled to vote who has delivered written notice to
the Secretary of the Company not less than 60 days nor more than 90 days in
advance of the annual meeting, which notice must contain specified
information concerning the matters to be brought before such meeting and
concerning the stockholder proposing such matters. In the event that less
than 60 days notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, notice by the stockholder must be
received not later than the close of business on the tenth day following the
earlier of the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. If a stockholder who has notified
the Company of his or her intention to present a proposal at an annual
meeting does not appear or send a qualified representative to present his or
her proposal at such meeting, the Company need not present the proposal for a
vote at such meeting. A copy of the full text of the Bylaw provisions
discussed above may be obtained by writing to the Secretary of the Company.
All notices of proposals by stockholders, whether or not included in the
Company's proxy materials, should be sent to Tridon Enterprises, Inc., 11601
Wilshire Blvd, Suite 2040, Los Angeles, CA 90025, Attention: Secretary.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of Common Stock of the Company as of June 30, 1999 as to (i) each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director and each nominee for
director of the Company, (iii) each of the executive officers named in the
Summary Compensation Table in "Executive Compensation and Other Matters"
below and (iv) all directors and executive officers as a group.
SHAREHOLDERS WITH FIVE PERCENT OWNERSHIP OR MORE, NUMBER OF SHARES OWNED BY
DIRECTORS AND EXECUTIVE OFFICERS
Percentage Number of Shares
of Shares Beneficially Owned
25.75% Paul Ebeling................ 17,017,712
c/o Tridon Enterprises, Inc.
23.38% Antebi Children's Insurance Trust 15,452,444
c/o Tridon Enterprises, Inc.
All directors and executive officers as a group
6.81% (2 persons)........................... 4,500,000
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options or warrants held by that person
that are currently exercisable or will become exercisable within 60 days are
deemed outstanding, while such shares are not deemed outstanding for purposes
of computing the percentage ownership of any other person. Unless otherwise
indicated in the footnotes below, the persons and entities named in the table
have sole voting and investment power with respect to all shares beneficially
owned, subject to community property laws where applicable.
(2) Represents 15,452,444 common shares held in the name of the Antebi
Children's Insurance Trust of 1995.
(3) Includes zero (0) shares of Common Stock issuable upon exercise of
warrants currently exercisable.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Company's Board of Directors is currently comprised of two members. A
director serves in office until his or her respective successor is duly
elected and qualified unless the director resigns or by reason of death or
other cause is unable to serve in the capacity of director.
Nominees For Directors
Five directors are to be elected at the Annual Meeting for the year term
ending in 2001. The Board of Directors has nominated:
KEVIN WELCH
EMILLIO FRANCISCO
NANCI RUFFING
NABIL BADER
MELVIN WEISS
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's nominees named below. In the event that
any nominee of the Company is unable or declines to serve as a director at
the time of the Annual Meeting of Stockholders, the proxies will be voted for
any nominee who shall be designated by the present Board of Directors to fill
the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner as will assure the election of as
many of the nominees listed below as possible, and in such event, the
specific nominees to be voted for will be determined by the proxy holders.
Vote Required; Election of Directors
If a quorum is present and voting, the five (5) nominees receiving the
highest number of votes will be elected to the Board of Directors. Votes
withheld from any nominee, abstentions and broker non-votes will be counted
for purposes of determining the presence or absence of a quorum.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
NOMINEES LISTED BELOW.
Nominees
The names of the nominees and certain information about them as of June 30,
1999 are set forth below:
Director Name of Nominee Age Positions with the
Company
KEVIN WELCH......... 38 Chief Executive
Officer and
Chairman of the Board
EMILLIO FRANCISCO.... 50 NONE
NANCY RUFFING........ 34 NONE
NABIL BADER......... 35 NONE
MELVIN WEISS........ 62 NONE
Kevin Welch has served as the Company's Chief Executive Officer since
April 21, 1999 and its President since April 21, 1999.
Mr. Welch has been a director of Tridon Enterprises Incorporated since
May, 1995. Mr. Welch's industry experience envelopes all aspects of
corporate finance specializing in emerging growth companies, focusing on
mergers and acquisitions, private placements, initial public offerings,
public offerings and market strategy since 1989. Most recently Mr. Welch
served as an Officer and Director of Sutana Corporation and Novante
Communications Corporation. Sutana Corporation is engaged in merchant
banking and venture capital for emerging growth companies. Novante
Communications is a financial consulting firm that advises corporations in
the areas business and financing goals and plans, strategic issues, including
alliance partnerships and joint ventures, and existing or alternative
financial structures.
Emillio Francisco has served as the President of SLC since July 6, 1999.
Mr. Francisco is an attorney practicing in Newport Beach, California
with over 20 years experience in the legal aspects of financial matters, with
an emphasis in federal issues. His clients have included the Ministry of
Higher Education of Saudi Arabia. Mr. Francisco is also CEO of Airomax
International, a supplier of Boeing and Douglas aircraft parts for commercial
airliners. Clients of Airomax include Mexicana, Saudi Arabia Airlines, JAL,
Varig and Lanchile Airlines. Mr. Francisco speaks English, Arabic and French
fluently, and is conversant in Portuguese. Mr. Francisco has recently been
active in developing private telephone lines in the Middle East and Latin
America.
Nanci Ruffing has served as the Chief Executive Officer of SLC since July
6, 1999.
Ms. Ruffing is a ten year veteran of the telecommunications industry.
She holds a degree in Business Administration from National University in Los
Angeles. In 1995 Ms. Ruffing became the founder and President of Universal
Communications Network Inc. (UCN). Under the leadership of Ms. Ruffing, it
took little time for UCN to become one of the telecommunication industry's
fastest growing international wholesale carriers. Within three years, Ms.
Ruffing took UCN from a two-person operation to $35,000,000 a year in sales
with a staff of over 30 people.
In May, 1998, Ms. Ruffing started a new company called Clarion Global
Com, an international wholesale carrier. The company was 60% owned by
Clarion Resources, a subsidiary of Telenor, the Norwegian PTT. Six months
later it merged with Clarion Global Networks. As Senior Vice President of
Sales and Marketing, Ms. Ruffing lead the company from $500,000 per month in
revenue to over $6,000,000 per month in less than a year.
Ms. Ruffing's extensive experience has included the development and
implementation of sales strategies in the areas of international wholesale,
call back, domestic and international prepaid and wireless. She has been
covered by the telecommunications industry's top magazine for her success and
leadership role.
Nabil Bader has served as the Secretary of SLC since July 6, 1999.
Mr. Bader's experience in the telecommunications industry spans over 6
years. One of Mr. Bader's most successful management positions was as a
General Manager of Universal Communications Network (UCN), an international
wholesale carrier. During its three at UCN, Mr. Bader played a significant
role in the growth of the company from $1,000,000 in annual sales to well
over $35,000,000. While at UCN, Mr. Bader recognized the need for
competition in the telecommunications industry in foreign countries. Mr.
Bader immediately began to build foreign relations in the hopes of expanding
the company's opportunities for revenue. Shortly thereafter, Mr. Bader became
the Vice President of International Affairs for Clarion Global Networks, a
company co-owned by Telenor, the Norwegian owned PTT. While at Clarion, Mr.
Bader worked on the procurement and implementation of private lines in
various foreign countries. Private lines gave the company the ability to
compete and expand its business on a global level.
Melvin Weiss has served as Director of SLC since July 6, 1999.
Mr. Weiss spent twenty years in the United states Navy, in the
department of finance and administration, where he was responsible for
budgets in excess of $135,000,000. After retiring from the Navy, he held
senior management positions in the United States Civil Service in the United
States, Japan and Europe. Most recently, Mr. Weiss founded Management
Consultants Ltd.. Some of Mr. Weiss' clients include Columbia University,
Southern Methodist University, the Olympic Committee, and others. Mr. Weiss
has received numerous awards and commendations throughout his carreer.
Board Meetings and Committees
The Board of Directors of the Company held a total of four (4) meetings
during fiscal 1999. The Board of Directors has no Compensation Committee,
Audit Committee, nominating committee or any committee performing such
functions.
No director attended fewer than 75% of the aggregate of the meetings of the
Board of Directors, if any, upon which such director served during the period
for which he has been a director or committee member.
Compensation of Directors
Each director is paid $0 for each Board of Directors meeting attended in
person and $0 for each Board of Directors meeting attended by telephone.
Each Director is reimbursed for travel expenses incurred to attend meetings
of the Board of Directors.
PROPOSAL TWO
APPROVE THE ACQUISITION OF SLC BY THE COMPANY
Background of the Offer
In December of 1998, the Company entered into discussions with SLC, Inc.,
("SLC") pursuant to which the Company would acquire certain valuable contract
rights held by SLC in exchange for shares of common stock of the Company.
The discussions continued throughout the months of January and February, and
in February, 1999, the Company entered into a definitive written agreement
with SLC. This Agreement expired by its own terms. Nevertheless, the
Company had a great interest in pursuing a relationship with SLC and, after
expiration of the initial agreement, SLC and the Company continued to discuss
various economic formats for a business combination.
The Company and its advisors identified SLC as a potentially suitable
acquisition candidate based on the assets which SLC could acquire under its
contract rights, which assets would immediately place the Company in a
position to operate as a telecommunications company; a goal which the Company
has pursued since the Fall of 1998.
Following early meetings between SLC and the Company, the parties
executed a customary confidentiality agreement dated as of the same day and
subsequently, commencing in February 1999, SLC began providing the Company
with certain non-public financial and operating information regarding the
contract rights it possessed.
In April, 1999, the Company's Board of Directors received from SLC a
letter inviting the Company to submit a formal written offer to merge with
SLC. This letter was accompanied by an initial draft of the Reorganization
Agreement. In May, 1999, SLC reiterated its interest in acquiring the
Company and proposed a transaction structure that included an exchange of
stock of SLC for stock of the Company. Specifically, SLC's shareholders
would receive ninety five percent (95%) of all of the issued and outstanding
stock of the Company at the closing. However, prior to the closing, the
Company shall cause to take effect a reverse stock split and cancellation of
the Series A Preferred Stock such that prior to the Closing, the total issued
and outstanding common stock of the Company shall have equaled two million
(2,000,000) shares. As such, SLC would become a wholly owned subsidiary of
the Company. This proposal was explicitly made subject to the satisfaction
of several conditions, including completion of a satisfactory due diligence
review of the Company, Board of Director approval, completion of the reverse
stock split by the Company, shareholder approval and certain other matters.
The Company, after receipt of the proposal from SLC provided its initial
comments to the draft Reorganization Agreement and discussed several open
issues with respect to the transaction. Thereafter, SLC, SLC delivered
additional clarifying comments to the draft Reorganization Agreement.
In June, 1999, SLC, together with its legal and financial advisors,
conducted a preliminary financial and legal due diligence review of the
Company. This process included a management presentation at which SLC and
its representatives were provided with certain non-public information,
including budget information, concerning the business of the Company.
In July, 1999, SLC sent to the Company a written indication of its
continued interest in consummating the reorganization and merger with the
Company pursuant to the transaction structure proposed in its draft agreement
and prior letters.
The parties and their respective legal and financial advisors engaged in
substantially continuous discussions regarding the Reorganization Agreement
and other matters with respect to the transaction through June, 1999.
On August 2, 1999, the parties entered into the Reorganization
Agreement. On August 3, 1999, the Board of Directors of the Company
approved the Reorganization Agreement. On August 3, 1999, the Board of
Directors of SLC approved the Reorganization Agreement.
Following these approvals and the execution of Reorganization Agreement,
the transaction was publicly announced on August 4, 1999.
The Reorganization Agreement; Acquisition Purpose.
The purpose of the transaction is to acquire control of SLC.
Following the Closing, the Company intends to acquire, directly or indirectly
all of the common stock of SLC. The Reorganization and the other
transactions effecting the acquisition of such common stock are being made
pursuant to the Reorganization Agreement.
The Reorganization Agreement.
The following is a summary of the material terms and
conditions of the Reorganization Agreement, a copy of which was filed as
Exhibit A to the Form 8-K of the Company and filed with the Colorado
Corporate Commission. The Reorganization Agreement should be available for
inspection and copies should be obtainable from the Company. The following
summary is qualified in its entirety by reference to the Reorganization
Agreement.
Satellite Link Communications is a California Corporation "SLC"). The
shareholders of SLC are Emillio Francisco, Nancy Ruffing, Nabil Bader, Tridon
Trust and Growth Capital Investments, Inc., a California corporation (the
"Shareholders"). The Shareholders own all of the outstanding stock of the
SLC. SLC holds certain valuable contract rights with respect to
telecommunications related Termination Agreements, Private Line Agreements,
Minute Purchase Agreements, Time Marketing Agreements and Sales Agreements
with all customers with the Peoples Republic of China, Taiwan, the Republic
of the Philippines, Clarion Global Communications, and others. In addition,
the SLC has certain valuable rights related to real property located in the
City of Carson, State of California. Pursuant to the reorganization
agreement dated August 2, 1999 (the "Reorganization Agreement"), the Company
shall acquire from the Shareholders, and the Shareholders shall transfer to
the Company, all of the issued and outstanding stock of the SLC solely in
exchange for whole shares of the Company's voting Common Stock on the terms
and conditions hereinafter set forth in the Reorganization Agreement. The
Company, the Shareholders and the SLC believe that it would be in their
mutual best interests and in the best interest of the shareholders of the
Company for the Company so to acquire all of the issued and outstanding stock
of the SLC. The Company, the Shareholders and the SLC have adopted a Plan of
Reorganization in accordance with the provisions of section 354 and
section 368(a)(1)(B) of the Internal Revenue Code of 1986, as more fully set
forth in the Reorganization Agreement.
Reorganization of SLC and the Company. At the Closing Date, the SLC
shall be become a subsidiary of the Company (the "Reorganization"). The
Company shall be the parent corporation and the SLC shall be a wholly owned
subsidiary of the Company. The corporate existence of the Company shall
continue to operate for the purposes set forth in the Company's Articles of
Incorporation and continue to be governed by the laws of the State of
Colorado. The corporate existence of SLC shall continue to operate for the
purposes set forth in SLC's Articles of Incorporation and continue to be
governed by the laws of the State of California.
Effective Time of Reorganization. The Reorganization shall become
effective on the Closing Date. The Reorganization Agreement shall be filed
with the Secretary of State of the States of California and Colorado,
respectively, as soon as practicable.
Exchange and Payment of Shares of SLC. Each share of the SLC stock
outstanding on the Closing Date shall be transferred to the Company and the
Company shall concurrently issue its common stock to the Shareholders.
Conversion of Preferred Stock of the Company. Prior to the Closing
Date, the Company shall cause all of its Series A Preferred Stock to either
be canceled or to be exchanged for its pre-reorganizational voting stock such
that the Company shall have no issued and outstanding Series A Preferred
Stock at Closing Date.
Reverse Stock Split of the Company Stock. Prior to the Closing Date,
the Company shall cause a reverse stock split to be effectuated at a rate to
be determined by the Company and the SLC such that at the Closing Date the
Series A Preferred Stock and common stock shareholders of the Company shall
receive that number of shares following the merger that will result in all of
the Company's existing shareholders (including those persons whose preferred
stock has been converted) owning ten percent (10%) of the issued and
outstanding shares of the Company following the reorganization. Immediately
following the Closing Date the issued and outstanding capital of the Company
will consist of 40,000,000 shares of issued and outstanding common stock to
be owned as follows:
a. Shareholders: 38,000,000
b. the Company Insiders(1) and
the Company Shareholders: 2,000,000
Total 40,000,000
(1) The number of shares to be provided to all existing
shareholders, option holders, insiders and persons holding
convertible securities will be two million (2,000,000) shares of
voting common stock. The shares will be distributed pro rata based
upon the number of shares held by a particular bears to the total
number of shares issued and outstanding after taking into
consideration the exercise of all options, warrants and convertible
preferred shares.
Transfer of Stock of SLC. The Shareholders agree to transfer to the
Company certificates, duly endorsed to the Company or with Assignments of
Stock attached thereto duly endorsed to the Company by the Shareholders,
representing the shares of Common Stock, without par value, of the SLC
presently issued and outstanding and owned of record by the Shareholders.
The certificates representing the shares of Common Stock of the SLC to be
delivered to the Company hereunder shall not contain any restrictive legends
on their face other than a legend stating that the securities have not been
registered under the Securities Act of 1933, as amended (the "Act"), or under
any relevant state securities laws. For convenience, the shares of stock to
be transferred to the Company at the Closing are sometimes referred to
hereafter as the "SLC Common Stock." the Company hereby acknowledges that
the certificates have been reissued to eliminate prior restrictions against
transfer which restrictions the Company understands to have been eliminated
in accordance with applicable law.
Delivery of the Company Stock. In exchange for the SLC Common Stock
delivered to the Company at the Closing, the Company agrees to deliver to the
Shareholders, pro rata according to their ownership of SLC Common Stock,
certificates representing that number of shares which, after taking into
consideration all of the issued and outstanding shares of the Company stock
at the Closing will result in the Shareholders owning ninety-five percent
(95%) of the issued and outstanding shares of the authorized and issued
shares of the Company Common Stock, $.001 par value. Such shares of the
Company Common Stock will evidence ownership in the Company after taking into
account the Company reverse stock split and conversion of Series A Preferred
Stock referred to in Section 2.1 hereof.
The Closing. The Closing hereunder shall take place at the offices of
the Company on October 15, 1999, at 10:00 a.m., or such other date as the
parties hereto may specify (the "Closing Date"). In no event shall the
Closing occur until such time as the Company shall have received approval
from its existing shareholders to the terms and conditions of this
reorganization pursuant to proper shareholder solicitation and duly held
meeting in accordance with the requirements of the Colorado corporation law
and the statutes, rules and regulations of the Securities and Exchange
Commission.
Agreements to Purchase Acquired Interests; The Acquisition.
On the terms and subject to the conditions of the Reorganization
Agreement, the Company has agreed to acquire, directly or indirectly as more
fully described below, (i) 100% of the outstanding shares of SLC.
Vote Required to Approve Acquisition.
The Merger will require the approval of the holders of a majority of the
outstanding Common Stock of the Company.
PROPOSAL THREE
APPROVAL OF STOCK INCENTIVE PLAN
Proposed Plan
The Stock Incentive Plan is to be adopted by the Board of Directors in
1999 and to be approved by the stockholders in 1999. The Board approved a
Stock Incentive Plan to attract employees subject to completion of the
acquisition of SLC..
Reasons for the Plan
The Company will rely upon the Stock Incentive Plan as one of the benefits
necessary to attract and retain skilled employees. The Board of Directors
believes it is in the Company's best interests to adopt the Stock Incentive
Plan so that the Company may continue
to attract and retain the services of qualified employees by providing
employees an opportunity to purchase the Company's Common Stock through
option grants.
Activity Under the Stock Incentive Plan
The Company believes that its Stock Incentive Plan is an important factor
in attracting and retaining skilled personnel.
Vote Required for Approval
The affirmative vote of a majority of the Votes Cast will be required to
approve the Stock Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT OF THE
STOCK INCENTIVE PLAN.
Summary of the Stock Incentive Plan.
The essential features of the Stock Incentive Plan are outlined below.
Purpose.
The purpose of the Stock Incentive Plan is to provide a means whereby
eligible employees, officers, directors, consultants and independent
contractors of the Company can acquire the Company's Common Stock.
Number of Shares.
The Board of Directors, following the approval by the shareholders of
the acquisition of SLC, will set aside two million (2,000,000) shares of its
common stock for issuance under the Stock Incentive Plan.
Administration.
The Stock Incentive Plan may be administered by the Board or a committee
of the Board (the "Plan Administrator"). Subject to the other provisions of
the Stock Incentive Plan, the Plan Administrator has the power to determine
the terms and conditions of any options and stock purchase rights granted,
including but not limited to the exercise price, the number of shares subject
to the option or stock purchase right and the exercisability thereof.
Eligibility, Terms of Options and Limitations.
The Stock Incentive Plan provides that nonstatutory stock options and
stock purchase and bonus rights may be granted only to employees, officers,
directors, independent contractors and consultants of the Company. Incentive
stock options may be granted only to employees. The Stock Incentive Plan also
provides that stock or stock appreciation rights ("SARs") may be granted.
With respect to any optionee who owns stock possessing more than 10% of the
voting power of all classes of stock of the Company (a "10% Stockholder"),
the exercise price of any incentive stock option granted must equal at least
110% of the fair market value on the grant date and the maximum term of the
option must not exceed five years. The term of all other incentive stock
options under the Stock Incentive Plan may not exceed ten years. The Plan
Administrator selects the optionees and determines the number of shares to be
subject to each option. In making such determination, the duties and
responsibilities of the employee, director or consultant, the value of his or
her services, his or her present and potential contribution to the success of
the Company, the anticipated number of years of future service and other
relevant factors are taken into account.
Conditions of Options.
Each option granted under the Stock Incentive Plan is evidenced by a
written stock option agreement between the optionee and the Company and is
subject to the following conditions:
(a) Exercise Price. The Plan Administrator determines the exercise price
of options to purchase shares of Common Stock. However, the exercise price of
an incentive stock option must not be less than 100% (110%, if issued to a
10% Stockholder) of the fair market value of the Common Stock on the date the
option is granted. The exercise price of a nonstatutory stock option shall be
determined by the Plan Administrator. For so long as the Company's Common
Stock is traded on the Nasdaq National Market, the fair market value of a
share of Common Stock shall be the closing sale price for such stock as
quoted on the Nasdaq National Market for the day of determination.
(b) Value Limitation. The aggregate fair market value of all shares of
Common Stock subject to an optionee's incentive stock option which are
exercisable for the first time during any calendar year shall not exceed
$100,000. In the event the optionee holds two or more such options that
become exercisable for the first time in the same calendar year, such
limitation shall be applied on the basis of the order in which such options
are granted.
(c) Form of Consideration. The consideration to be paid for the shares of
Common Stock issued upon exercise of an option shall be cash, certified
check, bank draft, or postal or express money order payable to the Company.
However, the Plan Administrator, in its sole discretion, may permit an
optionee to pay the option price in whole or in part by tendering other
shares of the Company's Common Stock meeting certain criteria, a promissory
note, or any combination thereof. The Plan Administrator, in its sole
discretion, may authorize the surrender by an optionee of all or part of an
unexercised option and authorize a payment in consideration thereof of an
amount equal to the difference between the aggregate fair market value of the
stock subject to the option and the aggregate option price of such stock.
(d) Exercise of the Option. Each stock option agreement will specify the
term of the option and the date when the option is to become exercisable. The
terms of such vesting are determined by the Plan Administrator. Options
granted under the Stock Incentive Plan generally have a ten-year term (five
years, if issued to a 10% Stockholder) and to date generally become
exercisable over four years at a rate of one-fourth of the shares subject to
the options at the end of twelve months from the date of grant and
one-forty-eighth of the shares every month thereafter, subject to the
optionee's continuation as a service provider. An option is exercised by
giving written notice of exercise to the Company and by tendering full
payment of the purchase price to the Company.
(e) Termination of Employment. The Plan Administrator shall establish and
set forth in each instrument that evidence an option whether the option will
continue to be exercisable, and the terms and conditions of such exercise, if
an optionee ceases to be employed by, or to provide services to, the Company
or an affiliate of the Company, which provisions may be waived or modified by
the Plan Administrator at any time.
(f) Assignability. Each option granted pursuant to this Stock Incentive
Plan shall, during optionee's lifetime, be exercisable only by him or her,
and the option shall not be transferable by the optionee by operation of law
or otherwise other than by will or the laws of descent and distribution.
Notwithstanding the foregoing, and to the extent permitted by Section 422 of
the Internal Revenue Code of 1986, as amended, (the"Code"), the Plan
Administrator, in its sole discretion, may permit such transfer, assignment
and exercisability and may permit an optionee to designate a beneficiary who
may exercise the option after the optionee's death; provided, however, that
any option so transferred or assigned shall be subject to all the same terms
and conditions contained in the instrument evidencing the option. Stock
subject to a Restricted Stock Purchase Agreement or a Restricted Stock Bonus
Agreement shall be transferable only as provided in such Agreement.
(g) Termination of Options. Excluding incentive stock options issued to
10% Stockholders, options granted under the Stock Incentive Plan expire on
the date set forth in the option agreement (not to exceed ten years from the
date of grant in the case of incentive stock options). Incentive stock
options granted to 10% Stockholders expire five years from the date of grant
(or such shorter period set forth in the option agreement). No option may be
exercised by any person after the expiration of its term.
(h) Terms and Conditions of Stock Purchase Rights. Each sale or grant of
stock under the Stock Incentive Plan will be evidenced by a written
restricted stock purchase agreement or restricted stock bonus agreement
executed by the Company and the person to whom such stock is sold or granted.
The restricted stock purchase agreement or restricted stock bonus agreement
may contain such other terms, provisions and conditions consistent with the
Stock Incentive Plan as may be determined by the Plan Administrator,
including not by way of limitation, restrictions on transfer, forfeiture
provisions, repurchase provisions and vesting provisions. To the extent
required by applicable law, any right of the Company to repurchase stock
granted pursuant to a restricted stock purchase or restricted stock bonus at
the original purchase price, if the right is assignable, the assignee must
pay the Company upon assignment of the right cash equal to the difference
between the original price and fair value if the original purchase price is
less than fair value. Furthermore, the purchase price of stock sold pursuant
to a restricted stock purchase agreement shall be the price determined by the
Plan Administrator on the date the right to purchase stock is granted;
provided, however that (i) such price shall not be less than 85% of the price
per share fair market value of such stock on the day the right to purchase
stock is granted and (ii) to the extent required by applicable law, in the
case of any 10% Stockholder such price shall be 100% of the per share fair
market value of such stock at the time the right to purchase stock is
granted, or at the time the purchase is consummated.
Stock Appreciation Rights. The Plan Administrator may, under such terms
and conditions as it deems appropriate, authorize the issuance of SARs
evidenced by a written SAR agreement (which, in the case of tandem options,
may be part of the option agreement to which the SAR relates) executed by the
Company and the person to whom such SAR is granted. The SAR agreement may
contain such terms, provisions and conditions consistent with the Stock
Incentive Plan as may be determined by the Plan Administrator.
Adjustment Upon Changes in Capitalization. If there is any change in the
stock subject to the Stock Incentive Plan, an option agreement, a restricted
stock purchase agreement, a restricted stock bonus agreement or an SAR
agreement through merger, consolidation, reorganization, reincorporation,
stock split, stock dividend, or other change in the capital structure of the
Company, appropriate adjustments shall be made by the Plan Administrator in
order to preserve, but not to increase the benefits to the individual,
including adjustments to the aggregate number, kind and price per share of
shares subject to the Stock Incentive Plan, an option agreement, a restricted
stock purchase agreement, a restricted stock bonus agreement or an SAR
agreement.
Dissolution or Liquidation. In the event of any "Corporate Transaction"
(as defined in the Plan), any option or outstanding Stock Appreciation Rights
shall terminate and any restricted stock shall be reconveyed to or
repurchased by the Company immediately prior to the specified effective date
of the Corporate Transaction; provided, however, that to the extent permitted
by applicable law, any unvested option, SARs or any restricted stock shall
vest and become exercisable as to the unvested shares or become
nonforfeitable as to the forfeitable shares, as the case may be, immediately
prior to the specified effective date of the Corporate Transaction.
Notwithstanding the foregoing, options, SARs or restricted stock shall not
terminate if, in connection with the Corporate Transaction, they are to be
assumed or substituted for by the successor corporation or its parent
company, pursuant to options, SARs or restricted stock agreements providing
substantially equal value and having substantially equivalent provisions as
the options, SARs or restricted stock granted pursuant to the Stock Incentive
Plan. If options, SARs or restricted stock purchase rights are not assumed or
substituted for by the successor corporation or its parent company, such
options, SARs or restricted stock purchase rights shall become exercisable
immediately prior to the effective date of the Corporate Transaction.
For the purpose of the Stock Incentive Plan, a "Corporate Transaction"
shall include any of the following stockholder-approved transactions to which
the Company is a party:
(i) a merger or consolidation in which the Company is not the surviving
entity, except for (1) a transaction the principal purpose of which is to
change the state of the Company's incorporation, or (2) a transaction in
which the Company's stockholders immediately prior to such merger or
consolidation hold (by virtue of securities received in exchange for their
shares in the Company) securities of the surviving entity representing more
than fifty percent (50%) of the total voting power of such entity
immediately after such transaction;
(ii) the sale, transfer or other disposition of all or substantially all
of the assets of the Company unless the Company's stockholders immediately
prior to such sale, transfer or other disposition hold (by virtue of
securities received in exchange for their shares in the Company) securities
of the purchaser or other transferee representing more than fifty percent
(50%) of the total voting power of such entity immediately after such
transaction; or
(iii) any reverse merger in which the Company is the surviving entity
but in which the Company's stockholders immediately prior to such merger do
not hold (by virtue of their shares in the Company held immediately prior to
such transaction) securities of the Company representing more than fifty
percent (50%) of the total voting power of the Company immediately after such
transaction.
Amendment and Termination of the Stock Incentive Plan. The Board of
Directors may at any time amend, suspend or terminate this Stock Incentive
Plan as it deems advisable; provided that such amendment, suspension or
termination complies with all applicable requirements of state and federal
law, including any applicable requirement that the Stock Incentive Plan or an
amendment to the Stock Incentive Plan be approved by the Company's
stockholders, and provided further that, except in the case of an adjustment
to the capitalization of the Company as described above, the Board of
Directors shall in no event amend the Stock Incentive Plan in the following
respects without the consent of stockholders then sufficient to approve the
Stock Incentive Plan in the first instance:
(i) To increase the maximum number of shares subject to incentive stock
options issued under the Stock Incentive Plan; or
(ii) To change the designation or class of persons eligible to receive
incentive stock options under the Stock Incentive Plan.
No option may be granted nor any stock issued under the Stock Incentive
Plan during any suspension or after the termination of the Stock Incentive
Plan, and no amendment, suspension or termination of the Stock Incentive Plan
shall, without the affected individual's consent, alter or impair any rights
or obligations under any option previously granted under the Stock Incentive
Plan. The Stock Incentive Plan shall terminate with respect to the grant of
incentive stock options on October 15, 2009, unless previously terminated by
the Board.
Federal Tax Information
Options granted under the Stock Incentive Plan may be either incentive
stock options, as defined in Section 422 of the Code, or nonstatutory
options. An optionee who is granted an incentive stock option will not
recognize taxable income either at the time the option is granted or upon its
exercise, although the exercise may subject the optionee to the alternative
minimum tax. Upon the sale or exchange of the shares more than two years
after grant of the option and one year after exercise of the option, any gain
or loss will be treated as long-term capital gain or loss. If these holding
periods are not satisfied, the optionee will recognize ordinary income at the
time of sale or exchange equal to the difference between the exercise price
and the lower of (i) the fair market value of the shares at the date of the
option exercise or (ii) the sale price of the shares. Any gain or loss
recognized on such a premature disposition of the shares in excess of the
amount treated as ordinary income will be characterized as long-term, or
short-term capital gain or loss, depending on the holding period. A different
rule for measuring ordinary income upon such a premature disposition may
apply if the optionee is also an officer, director, or 10% Stockholder of the
Company. The Company will be entitled to a deduction in the same amount as
the ordinary income recognized by the optionee.
All of the options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any
taxable income at the time he is granted a nonstatutory option. However, upon
its exercise, the optionee will recognize taxable income generally measured
as the excess of the then fair market value of the shares purchased over the
purchase price. Any taxable income recognized in connection with an option
exercise by an optionee who is also an employee of the Company will be
subject to tax withholding by the Company. The Company will be entitled to a
tax deduction in the same amount as the ordinary income recognized by the
optionee. Upon disposition of such shares by the optionee, any difference
between the sales price and the optionee's purchase price, to the extent not
recognized as taxable income as described above, will be treated as long-term
or short-term capital gain or loss, depending on the holding period.
Stock purchase rights will generally be taxed in the same manner as
nonstatutory stock options. However, restricted stock is generally purchased
upon the exercise of a stock purchase right. At the time of purchase,
restricted stock is subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code. As a result, the purchaser will not
recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when such restricted stock ceases
to be subject to a substantial risk of forfeiture. The restricted stock will
generally cease to be subject to a substantial risk when it is no longer
subject to the Company's right to repurchase such stock upon the purchaser's
termination of employment with the Company or upon vesting. At such times,
the purchaser will recognize ordinary income measured as the difference
between the purchase price and the fair market value of such stock on the
date the stock is no longer subject to a substantial risk of forfeiture.
The purchaser may accelerate to the date of purchase his or her
recognition of ordinary income, if any, and the beginning of any capital gain
holding period by timely filing an election pursuant to Section 83(b) of the
Code. In such event, the ordinary income recognized, if any, is measured as
the difference between the purchase price and the fair market value of the
stock on the date of purchase, and the capital gain holding period commences
on such date. The ordinary income recognized by a purchaser who is an
employee will be subject to tax withholding by the Company. Different rules
may apply if the purchaser is also an officer, director, or 10% Stockholder
of the Company.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES, HOLDERS OF STOCK PURCHASE RIGHTS, AND THE COMPANY WITH
RESPECT TO THE SHARES PURCHASED UNDER THE STOCK INCENTIVE PLAN. IT DOES NOT
PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE TAX CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE
TAX CONSEQUENCES OF THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE INCOME TAX
LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE EMPLOYEE OR
CONSULTANT June RESIDE.
PROPOSAL FOUR
TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF
INCORPORATION TO ELIMINATE SHARES OF CLASS A PREFERRED STOCK
Proposed Plan
To approve an amendment to the Company's Certificate of Incorporation to
eliminate the Series A Preferred Stock.
Reasons for the Plan
The Company desires to amend its charter to eliminate the Series A
Preferred Stock that the Board of Directors is presently authorized to issue
for two reasons. First, the Board of Directors believes that through
elimination of the Series A Preferred Stock, there can be no dilution to
existing shareholders and future shareholders if the holder of Series A
Preferred Stock converted said stock into shares of common stock. Second,
the Board of Directors believes that the elimination of preferred stock will
not reduce dividends that could otherwise be paid to holders of common stock
since there would no longer be a superior equity position to that of common
stock in the Company.
Vote Required for Approval of Amendment
The affirmative vote of a majority of the Votes Cast will be required to
approve the amendment to the Stock Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT OF PROPOSAL
FOUR.
PROPOSAL FIVE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Caldwell, Becker, Dervin & Petrick &
Dervin, L.L.P., independent auditors, to audit the financial statements of
the Company for the fiscal year ending October 15, 2000, and recommends that
stockholders vote for ratification of such appointment. In the event of a
negative vote on ratification, the Board of Directors will reconsider its
selection.
Caldwell, Becker, Petrick & Dervin, L.L.P. has audited the Company's
financial statements annually since 1995. Representatives of Caldwell,
Becker, Petrick & Dervin, L.L.P. are expected to be present at the meeting
with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
Required Vote; Ratification of Appointment of Independent Auditors
The affirmative vote of the holders of a majority of the Votes Cast is
required to approve the appointment of the independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
ADDITIONAL INFORMATION RELATING TO
DIRECTORS AND OFFICERS OF THE COMPANY
Compensation of Executive Officers
The following table sets forth the compensation earned by the Company's
Chief Executive Officer in the fiscal year ended December 31, 1998. No
executive officer earned more than $100,000 in salary and bonus from the
Company in the fiscal year ended December 31, 1998. Paul Ebeling, the
Company's Chief Executive Officer, received no salary or compensation for his
services in 1998.
Name and Principal Position Salary($) Year
Kevin Welch
Chief Executive Officer................$0.................. 1998
Employment Agreements
NONE.
Benefit Plans
The following is a brief summary of plans in effect during the fiscal year
ended December 31, 1998 under which executive officers and directors of the
Company received benefits:
NONE.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities to file reports of ownership on Form 3 and changes in
ownership on Form 4 and Form 5 with the SEC. Executive officers, directors
and greater than ten percent stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely in its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that,
during fiscal 1998, it has complied with all filing requirements applicable
to its executive officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities.
Compensation Committee Report on Executive Compensation
No Committee.
Compensation
The Compensation Committee establishes the salaries of the executive
officers by considering (i) the salaries of executive officers in similar
positions at comparably-sized peer companies, (ii) the Company's financial
performance over the past year based upon revenues and operating results and
(iii) the achievement of individual performance goals related to each
executive officer's duties and area of responsibility.
Summary
The Directors believe that the Company's compensation policies
have been successful in attracting and retaining qualified employees and in
linking compensation directly to corporate performance relative to the
Company's goals. The Company's compensation policies will evolve over time as
the Company moves to attain the near-term goals it has set for itself while
maintaining its focus on building long-term stockholder value.
Certain Relationships and Related Transactions
The Company believes that all the transactions set forth above were made on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. Any future transactions, including loans, between
the Company and its officers, directors and principal stockholders and their
affiliates will be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested directors, and will
be on terms no less favorable to the Company than could be obtained from
unaffiliated third parties.
The Company has entered into indemnification agreements with each of its
executive officers and directors.
Performance Chart
Set forth below is a chart illustrating the quatrerly comparative
results of the Company's stock performance from the fiscal 1st quarter 1998
through the fiscal 1st quarter 1999. The information contained in the chart
below shall not be deemed to be "soliciting material" or to be "filed" with
the SEC, and such information shall not be incorporated by reference into any
future filing under the Securities Act or Exchange Act, except to the extent
that the Company specifically incorporates it by reference into such filing.
HIGH LOW
1st Quarter 1998 .09 .03
2nd Quarter 1998 .065 .02
3rd Quarter 1998 .74 .03
4th Quarter 1998 .72 .10
1st Quarter 1999 .20 .05
Transaction of Other Business
The Board of Directors of the Company knows of no other matters to be
submitted at the meeting. If any other matters come before the meeting, it is
the intention of the persons named in the accompanying form of proxy to vote
the shares they represent as the Board of Directors may recommend.
By Order of the Board of Directors
Kevin Welch
Chief Executive Officer
Beverly Hills, California
August 6, 1999
<PAGE>
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Tridon Enterprises, INC.
Proxy for 1999 Annual Meeting of Stockholders
October 15, 1999
The undersigned stockholder of Tridon Enterprises, Inc. (the "Company")
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders
and Proxy Statement for the 1999 Annual Meeting of Stockholders of the
Company to be held on Monday, October 15, 1999 at 10:00 a.m., local time, at
11601 Wilshire Blvd., Suite 2040, Los Angeles, California and hereby revokes
all previous proxies and appoints Kevin Welch, with full power of
substitution, Proxies and Attorneys-in-Fact, on behalf and in the name of the
undersigned, to vote and otherwise represent all of the shares registered in
the name of the undersigned at said Annual Meeting, or any adjournment
thereof, with the same effect as if the undersigned were present and voting
such shares, on the following matters and in the following manner:
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN
AND DATE THIS PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE.
(Continued and to be signed on reverse side)
Please mark your [X] votes as indicated in this example
1. PROPOSAL ONE: ELECTION OF DIRECTORS
If you wish to withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list below:
FOR WITHHOLD
AUTHORITY
all of the nominees listed to vote for all
below (except as indicated) of the nominees listed
below
Nominees:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I plan to attend the meeting:
- ----------------------------------------------
In their discretion, the Proxies are entitled to vote upon such other
matters as may property come before the Annual Meeting or any adjournments
thereof.
2. PROPOSAL NUMBER TWO: MERGER OF SLC WITH COMPANY
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. PROPOSAL NUMBER THREE: APPROVE INCENTIVE STOCK OPTION PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. PROPOSAL NUMBER FOUR: APPROVE AMENDMENT TO ARTICLES OF
INCORPORATION TO ELIMINATE SERIES A PREFERRED STOCK
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. PROPOSAL NUMBER FIVE: APPROVE XYZ AS INDEPENDENT ACCOUNTANTS
FOR THE COMPANY
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
THE SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE PERSONS AND PROPOSALS, AND
FOR SUCH OTHER MATTERS AS June PROPERLY COME BEFORE THE MEETING AS THE PROXY
HOLDERS DEEM ADVISABLE.
Signature(s) Date
_____________________________ __________, 1999
(This proxy should be marked, dated and signed by each stockholder exactly as
such stockholder's name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. A
corporation is requested to sign its name by its President or other
authorized officer, with the office held designated. If shares are held by
joint tenants or as community property, both holders should sign.)
