INTEGRATED SPATIAL INFORMATION SOLUTIONS, INC.
1597 Cole Boulevard, Suite 300B
Golden, CO 80401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held November 16, 2000
TO THE SHAREHOLDERS OF INTEGRATED SPATIAL INFORMATION SOLUTIONS, INC.:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of INTEGRATED
SPATIAL INFORMATION SOLUTIONS, INC. will be held at 10:00 a.m. Eastern Time on
the 16th day of November, 2000 at the Marriott Hotel, 6400 Ivy Lane, Greenbelt,
Maryland, for the following purposes:
1. To elect a board of six directors to serve for the ensuing year.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on October 12, 2000
are entitled to notice of and to vote at the meeting or at any adjournment or
adjournments thereof. The proxies are being solicited by the Board of Directors
of the Company.
Shareholders are cordially invited to attend the meeting. Please specify
your choices on the enclosed Proxy, then date, sign, and return it in the
enclosed envelope. If you attend the meeting, you may revoke the Proxy and vote
your shares in person.
A copy of the 1999 Annual Report to Shareholders is enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ Frederick G. Beisser
---------------------------------------
Frederick G. Beisser, Secretary
Dated: October 13, 2000
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INTEGRATED SPATIAL INFORMATION SOLUTIONS, INC.
PROXY STATEMENT
Annual Meeting of Shareholders
November 16, 2000
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of INTEGRATED SPATIAL
INFORMATION SOLUTIONS, INC. (the "Company"), a Colorado corporation, by order of
its Board of Directors, in connection with the solicitation of Proxies for the
Annual Meeting of Shareholders of the Company. The meeting will be held at 10:00
a.m. Eastern Time on the 16th day of November 2000 at the Marriott Hotel, 6400
Ivy Lane, Greenbelt, Maryland for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders.
THIS SOLICITATION IS MADE BY THE BOARD OF DIRECTORS OF THE COMPANY. It is
expected that this Proxy Statement and form of proxy will first be sent to
shareholders on or about October 17, 2000. This Proxy Statement is being mailed
in conjunction with the mailing of the Annual Report. Solicitation expenses will
be paid by the Company.
Receipt, Voting and Revocation of Proxies:
All Proxies that are properly executed and received at or before the meeting
will be voted at the meeting. If a shareholder specifies how the Proxy is to be
voted on any business to come before the meeting, it will be voted in accordance
with such specification. If no specification is made, it will be voted for the
election of the six nominees for directors named. Management knows of no other
matters to come before the meeting. If any other matters are properly brought
before the meeting, all Proxies will be voted in accordance with the judgment of
the person or persons voting them.
Any Proxy may be revoked by a shareholder by any of the following: 1) a later
dated and executed Proxy properly delivered to the Secretary of the Company
before the Proxy has been voted; 2) a written notice of revocation delivered to
Secretary of the Company before the close of business on the day before the
meeting at the Company's Administrative Offices located at 1597 Cole Boulevard,
Suite 300B, Golden, CO 80401; or 3) by appearing in person at the meeting and
revoking the Proxy before the Proxy has been voted.
Record Date, Shares Outstanding, Voting Rights:
Only shareholders of record at the close of business on October 12, 2000 will be
entitled to vote at the meeting. As of that date there were issued and
outstanding 18,633,319 shares of Common Stock, no par value. Each share is
entitled to one vote on all matters submitted to the shareholders. The
shareholders do not have cumulative voting rights in the election of directors.
One-third of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at any shareholder's meeting. A simple majority vote
of the shares represented at the meeting and entitled to vote is necessary to
approve any such matters. Votes will be counted by the Company's transfer agent,
American Securities Transfer, Inc. Abstentions and broker non-votes are included
in determining the presence or absence of a quorum, but not considered votes in
favor of items of business.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Percentages of shares held by officers and directors of the Company, as well as
those parties owning more than five (5) percent of the Company's common stock,
as of the date of this proxy statement, are as follows:
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Security ownership of certain beneficial owners:
Based on a review of Rule 13d-1 filings under the Exchange Act, there presently
is no party other than management owning more than five percent of the common
stock of the Company.
Security ownership of management:
--------------------------------------------------------------------------------
Title of Name of Beneficial Amount & Nature of Percent
Class Owner(1) Beneficial Ownership(2) of Class
--------------------------------------------------------------------------------
Common Jeanne M. Anderson 114,000 @
Director Sole voting power
Common John C. Antenucci 1,701,841(4) 8.4
President and Director Sole voting power
Common Frederick G. Beisser 235,743 1.2
Chief Financial Officer, Sole Voting power
Secretary
Treasurer, and Director
Common Raymund E. O'Mara 317,261 1.7
Director
Common Gary S. Murray 1,805,250(3) 8.8
Chairman and Director Sole voting power
Common J. Gary Reed 305,877 1.6
Director
All Directors and Officers
as a group (6 persons) 4,482,471 19.4%
NOTES: @ The number of shares constitutes less than one percent of
outstanding shares.
1. The address for each of the directors of the company is "In Care
Of Integrated Spatial Information Solutions, Inc., 1597 Cole
Boulevard, Suite 300B, Golden, CO 80401.
2. The number of shares beneficially owned includes 1,510,992 shares
that may be acquired within 60 days pursuant to warrants and
stock options held by Officers and Directors of the Company. Such
shares and management personnel holding them are: Mr. Antenucci,
508,966; Mr. Beisser, 187,843 shares; Mr. O'Mara, 112,500 shares;
Mr. Murray, 396,250 and Mr. Reed, 302,934 shares.
3. The quantity for Mr. Murray includes 530,979 shares and warrants
to acquire 250,000 shares of common stock owned by Human Vision
LLC. Mr. Murray is a control person in Human Vision LLC.
4. The quantity for Mr. Antenucci includes 13,000 shares of common
stock owned by his spouse for which he is deemed to be a control
person.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related party transaction. Mr. Antenucci is a minority partner in the
organization that owns the facilities leased by PlanGraphics, Inc. in Frankfort,
Kentucky, at an annual lease cost of approximately $327,000 per year for 20,500
square feet. The lease, which exceeds average fair market values in Frankfort,
Kentucky by approximately 20 percent was originally entered into by the
Company's subsidiary, PlanGraphics, Inc., in 1995 prior to its acquisition by
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the Company. At the time the lease was entered into the lease rate exceeded the
fair market value for similar facilities in the area, but was considered to be
in the best interests of PlanGraphics, Inc. by its Board of Directors.
Related party agreement. Mr. Murray is the principal owner and executive officer
of HumanVision LLC, an organization that entered into a consulting agreement
with the Company on July 6, 1999. The agreement ends upon the earlier of June
30, 2001; the date upon which Mr. Murray is not elected as a Director or is
removed as a Director; and the date upon which he does not own more than 50% of
the voting power of HumanVision. Under the agreement, HumanVision will provide
certain services related to developing and implementing actions to increase
shareholder value through articulation of a vision for the Company, identifying
and reviewing merger and acquisition candidates, obtaining capital (debt or
equity) to finance mergers and acquisitions, and recruiting and evaluating
candidates for senior executive and director position. Compensation for these
services consists of performance options in two quantities of 322,581 each to
acquire common stock of the Company at an exercise price of $0.31 per share if
the market capitalization of the Company exceeds $30 million for the first
quantity and $60 million for the second quantity for 20 of 30 consecutive
business days at any time prior to June 30, 2002. The Company will issue each
performance option granted within 30 days of the date the respective performance
goal is achieved and the option will be exercisable for a period of three years
from the date of issue. The Company is obligated to register the public sale of
the underlying common stock as soon as practicable after the options become
exercisable. The agreement also provides for a success fee of 1.5% of the
transaction value in the event the Company successfully completes a merger with
or into another entity or completes any acquisition of stock or assets during
the term of the agreement. The fee, which applies only to those activities
outside the normal course of business and only to entities other than existing
subsidiaries of the Company, is to be paid in the currency of the applicable
transaction for which it is earned.
MATTERS FOR SHAREHOLDER VOTE
1. ELECTION OF DIRECTORS
The Board of Directors recommends election of the following six nominees as
Directors, Jeanne M. Anderson, John C. Antenucci, Frederick G. Beisser, Raymund
E. O' Mara, Gary S. Murray and J. Gary Reed, listed below. Directors hold office
until the next Annual Meeting of Shareholders (tentatively scheduled for June 1,
2001), or until their successors are elected and qualified or until their
earlier death, resignation or removal. The Articles of Incorporation, as
amended, provide for a Board of Directors. At present, the number of Directors
of the Company has been set at seven by the Company's Board of Directors. The
six members comprising the present Board of Directors have been nominated for
reelection. The Board of Directors anticipates filling the vacancy for the
seventh Board member during the ensuing year. The election of directors requires
the affirmative vote of a majority of all shares represented at the annual
meeting and entitled to vote in person or by Proxy. If at the time of the
Meeting any of the nominees named below should be unable to serve, which event
is not expected to occur, the discretionary authority provided in the Proxy will
be exercised to vote for such substitute nominee or nominees, if any, as shall
be designated by the Board of Directors.
Directors and Current Officers
Name Age Position
---- --- --------
Jeanne M. Anderson 48 Director
John C. Antenucci 54 Vice Chairman, President, Acting CEO
and Director
Frederick G. Beisser 58 Vice President - Finance and
Administration, Secretary, Treasurer
and Director
Raymund E. O'Mara 57 Director
Gary S. Murray 48 Chairman and Director
J. Gary Reed 51 Director and Chief Operating Officer,
PlanGraphics, Inc.
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The Board of Directors met 11 times during Fiscal Year 1999. Each of the
Company's then incumbent Directors attended (either in person or by telephone)
at least 75% of the aggregate number of meetings of the Board of Directors held
during fiscal year 1999. During fiscal year 1999 the Board had two committees,
audit and compensation, the present members of which are Mr. Murray and Mr.
O'Mara. The compensation committee met twice during the fiscal year the members
attended at least 75% of the aggregate number of meetings held during that time
period by the respective Committee(s) of which such Director was a member.
Biographical Sketch of Director Nominees and Incumbent Executive Officers
Ms. Jeanne M. Anderson, retired, is a former President and CEO of the Company.
She served as President and Chief Executive Officer from October 1, 1991 through
December 31, 1996. She was Chairman of the Board of Directors from January 1,
1997 through October 2, 1997 and has been a Director of the Company continuously
since 1987.
Mr. John C. Antenucci, President, was appointed a director on November 3, 1997.
He is the founder of, and has been president and CEO of PlanGraphics, Inc. since
1979. He is a former president of AM/FM International, a professional
association for utility industry users of GIS. He is also a former member of the
National Academy of Sciences Advisory Committee for Mapping Sciences, an advisor
to Ohio State University's Center for Mapping and editor of a leading textbook
on geographic information systems. Mr. Antenucci holds an MS in Civil
Engineering/Water Resources from Catholic University of America in Washington,
DC and a Bachelor of Civil Engineering from the same institution.
Mr. Frederick G. Beisser, Vice President - Finance and Administration, joined
the Company as Chief Financial Officer in July 1990 and was promoted to his
present position on March 28, 1997. He was appointed to the Board of Directors
in March 1991, at which time he became Treasurer and was appointed Secretary on
October 1, 1991. Mr. Beisser is a Colorado Certified Public Accountant.
Previously he held various financial management and controller positions with
the United States Air Force in the United States and abroad. Retired with the
rank of Major in 1989, he holds a Ph.D. from American International University
in Canoga Park, California, an MBA from Golden Gate University in San Francisco
and a BS in Business Administration from the University of Southern Colorado at
Pueblo, Colorado. In addition he has a diploma from the Air War College. Mr.
Beisser is also a member of the Board of Directors of Wastemasters, Inc. of El
Reno, Oklahoma.
Mr. Raymund E. O'Mara was appointed a director on November 3, 1997. He is a
principal with Booz Allen & Hamilton, consultants since 1996. Prior to joining
Booz Allen & Hamilton Mr. O' Mara was vice president of Mason and Hanger
Company, Lexington, Kentucky from 1994 to 1996. Mr. O'Mara retired from the
United States Air Force in 1994 with the rank of major general; from 1993 until
his retirement he was Director, Defense Mapping Agency, Bethesda, Maryland and
prior to that was Vice Commander in Chief, Atlantic Command, Norfolk, Virginia
for two years. Mr. O'Mara holds a Master of Arts from State University of New
York at Plattsburgh, NY and BS in Electrical Engineering from the New Jersey
Institute of Technology at Newark.
Mr. Gary S. Murray, Chairman, was appointed a director of the Company on June
26, 1998. He was appointed Chairman of the Board of Directors on July 6, 1999.
Mr. Murray is the founder and president of Human Vision LLC, Greenbelt, MD an
advisory and investment firm. He is also a founder and a principal of Timebridge
Technologies (Lanham, MD), an e'commerce firm specializing in database and
network services. Mr. Murray was founder, chairman and president of systems
integrator Sylvest Management Systems (Lanham, MD) until its acquisition by
Federal Data Corporation in June 1997. He holds a BBA from Howard University,
Washington, DC and is a Certified Public Accountant.
Mr. J. Gary Reed, Chief Operating Officer of PlanGraphics, Inc. was appointed a
director on November 3, 1997. He has been employed with PlanGraphics in several
capacities since 1995. Prior to joining them he held several executive positions
during a 21-year career with Geonex Corporation and was named President of the
corporation in 1994. Mr. Reed holds an MBA from the Keller Graduate School of
Management in Chicago and a BS in Biology from Virginia Polytechnic Institute
and State University in Blacksburg, Virginia.
All directors hold office until the earlier of the next annual meeting of
shareholders or until their successors are duly elected and qualified or until
their earlier death, resignation or removal.
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Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of Forms 3, 4 and 5 submitted to the Company during
and with respect to its most recent fiscal year, the Company believes that all
directors, officers and any beneficial owner of more than 10 percent of its
registered shares are in compliance with Section 16(a) of the Exchange Act.
Compensation of Directors and Officers
The following table sets forth information concerning the cash compensation paid
and accrued by the Company for services rendered during the fiscal years ending
September 30, 1999, 1998 and 1997 to the CEO and other executive officers of the
Company who had aggregate compensation exceeding $100,000. Ms. Anderson was
President and CEO through December 31, 1996 when Mr. Carreker became President
and CEO on January 1, 1997. On November 3, 1997 the position of President was
assumed by Mr. Antenucci while Mr. Carreker remained CEO and became Chairman of
the Board of Directors. Eight days of compensation was paid to Mr. Antenucci as
an employee of the Company during fiscal year 1997 subsequent to the acquisition
of PlanGraphics, Inc. although the table, below, reflects his entire
compensation during that year. Mr. Carreker's service as Chairman and CEO ceased
on July 1, 1999 and the Company entered into a settlement agreement with him on
November 19, 1999 (See Disputes with Former Executives, below).
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
---------------------------------------------------- ------------------------
Name and Other Stock All Other
Principal Annual Comp- Options Compen-
Position Year Salary ($) ensation (#) sation ($)
---------- ---- ---------- ---------- ------- ----------
FORMER OFFICERS
Jeanne M. 1999 $ -- -- -- $ --
Anderson 1998 -- -- -- --
Former Pres- 1997 48,317 58,000(1) 111,000 --
Ident & CEO
Stephen 1999 $ 124,808 -- -- $ --
Carreker 1998 175,000 -- 327,655(2) --
Former Chair- 1997 106,958 -- 660,622 --
man & CEO
CURRENT OFFICER
John C. 1999 $ 159,374 -- -- --
Antenucci 1998 175,000 -- 260,853(2) --
President & 1997 114,500 20,407(3) 531,851 --
Acting CEO
1. Amount of $58,000 Other Annual Compensation represents severance
payment in connection with Ms. Anderson's resignation as President and
CEO.
2. Quantity of Stock Options granted during fiscal year 1998 for Carreker
and Antenucci represents the quantity of antidilution stock options
accrued during the year pursuant to Employment Agreements (the Board
of Directors and the employees have since agreed to annul this
provision for periods subsequent to June 30, 1998) at prices ranging
from $1.125 to $2.125 per share. These antidilution options are
prorated between immediately vesting options and performance based
options.
3. Amount of Other Annual Compensation represents payment of certain
deferred compensation accrued in prior fiscal years for Mr. Antenucci.
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A total of 30,000 stock options were issued to officers of the Company under the
1991 Stock Option Plan during fiscal year 1997. None were granted in fiscal
years 1998 or in 1999. In addition, the Company granted incentive stock options
in connection with officers' employment agreements amounting to 1,490,000
options and 61,000 to a director during FY 1997. It also granted 360,000 stock
options to a new officer pursuant to his employment agreement in FY 1998. As a
result of antidilution provisions in employment agreements, 380,657 additional
options accrued to officers of the Company during FY 1997 and 877,543 during FY
1998, which were prorated between immediately vested options and performance
based options according to their employment agreements. No such antidilution
options accrued during FY 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
There were no grants to the named officers during fiscal year 1999. The Company
did not make new grants of stock options to the named officers of the Company
during fiscal year 1998. Fiscal year 1997 grants to Messrs. Carreker (former
CEO) and Antenucci in connection with their employment agreements consisted of
fully vested options of 200,000 and 300,000 shares, respectively, which are
immediately exercisable, and performance options of 180,000 and 225,000,
respectively, for which attainment of certain management goals vests 35%, 35%,
and 30% for each of the ensuing three fiscal years at which time they become
exercisable. During fiscal year 1997 they accrued antidilution options of
280,622 and 6,851 and during fiscal year 1998 327,655 and 260,853, respectively.
Mr. Carreker's 486,279 unvested antidilution and performance options reported
previously have been relinquished.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-The-Money
Stock Options Stock Options
at FY-End (#) at FY-End ($)
Shares acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
--------- --------------- ------------ ------------- -------------
FORMER OFFICERS
Jeanne M.
Anderson
Former Presi- -- -- 75,000/-0-(1) $ -/-
dent & CEO
Stephen
Carreker
Chairman & CEO -- -- 526,998/-0-(2) $ -/-
CURRENT OFFICER
John C.
Antenucci, Vice
Chairman & President -- -- 452,966/340,038(3) $ -/-
1. Options for 75,000 shares were granted on April 19, 1995 under the
1991 Plan at $.71875. The grant was at fair market value; no options were
exercised prior to their expiration during FY 2000.
2. Mr. Carreker was granted options for 30,000 shares of common stock
under the Company's 1991 Stock Option plan on January 2, 1997 at a price of
$1.125 of which 5,000 have been exercised. In connection with his
employment agreement he received fully vested stock options for 200,000
shares of the Company's common stock awarded effective January 7, 1997. In
addition, at fiscal year end Mr. Carreker was entitled to 301,988
antidilution options related to vested options.
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3. Mr. Antenucci received fully vested stock options for 300,000 of
common stock at a price of $1.75 in connection with his employment
agreement on September 22, 1997. In addition, Mr. Antenucci is entitled to
268,004 antidilution options related to his employment agreement that are
prorated between immediately vested and performance options.
The Company does not have a long term incentive plan or a defined benefit or
actuarial form of pension plan.
Employment Agreements.
Mr. Antenucci and the Company's former chief financial officer, Robert S. Vail
(see "Disputes with former executives" below), entered into three-year
employment agreements effective September 22, 1997, and March 18, 1998,
respectively, at salaries of $175,000 (Antenucci) and $120,000 (Vail) per year
with provisions for bonuses of up to 21% of base salary if certain goals are
achieved. The executives received fully vested stock options for 300,000 shares
of the Company's common stock for Mr. Antenucci, and 200,000 for Mr. Vail with
performance options for 225,000, and 160,000 shares respectively, which vest
upon attainment of certain performance goals. In addition, Mr. Antenucci
received a one-time advance payment of $50,000 of his FY 1998 salary for
entering into the agreement. The employment agreements renew automatically for a
term of three years if the Company does not terminate the agreements by June 30,
2000 (Antenucci) or December 31, 2000 (Vail), unless earlier terminated under
the terms of the Agreement. Messrs. Antenucci and Vail are entitled to continued
base compensation for three years following date of termination if not for
death, disability, cause, voluntary resignation other than constructive
termination or the expiration of the agreement's term; if termination is for one
of these reasons then all benefits including salary are continued for 18 months
for Mr. Antenucci and no benefits for Vail. Mr. Antenucci is entitled to a
three-year consulting period at one half of average annual salary for the
immediately preceding 36-month period should he exercise his option to terminate
his employment voluntarily after June 30, 2000.
On June 26, 1998, the Compensation Committee of the Board of Directors reduced
the annual compensation of Mr. Antenucci by 10 percent to a revised annual
amount of $157,500. In addition, the Committee also reduced by 10 percent the
annual compensation of Mr. Vail and another Company employee, both whose
employment agreements had provided for annual compensation in excess of
$100,000. These reductions became effective October 1, 1998. In July 1999 the
Company notified Mr. Vail that it elected not to continue his existing
employment agreement beyond December 31, 1999. In August 1999 Mr. Vail notified
the Company he viewed certain actions as constructive termination; based on that
assertion, he demanded arbitration of his claim as provided for in his
employment agreement. Mr. Vail sought severance compensation equal to three
year's compensation as allegedly provided for in his employment agreement. The
Company asserted that Mr. Vail resigned and was not constructively discharged;
therefore he is not entitled to severance compensation. The case was arbitrated
in February 2000. A final decision of the arbitrator on April 20, 2000 awarded
Mr. Vail, a total of $330,000 in separation payments, fees and expenses. The
Company asserts that Mr. Vail was not constructively terminated but rather
voluntarily resigned when he notified the Company that he would no longer report
to his place of duty. Accordingly, on July 18, 2000 the Company filed an appeal
of the arbitration award in State Circuit Court for Duval County, Florida. (See
also "Disputes with former executives," below).
Agreement with Mr. Murray. Effective July 6, 1999 the Company entered into an
Agreement for Services with Mr. Murray wherein he is retained as the Chairman of
the Board of Directors. The term of the Agreement begins July 1, 1999 and ends
the earlier of June 30, 2001 or the date upon which he is not elected as a
Director or is removed as a Director. Annual base compensation for Mr. Murray is
set at $50,000, payable in equal monthly installments of the Company's common
stock priced at the average price for the five business days preceding the date
of the Agreement, or $0.2906, and options to purchase 175,000 shares per annum
of the Company's common stock at $0.31 per share vesting in quarterly
installments and exercisable for three years from the date of the Agreement. In
addition, Mr. Murray received incentive options to acquire 688,235 shares of the
Company's common stock fully vested and immediately exercisable at an exercise
price of $0.2906 per share. The Company has agreed to file a registration
statement with the Securities and Exchange Commission as soon as practicable to
register the public sale of the common stock underlying the options granted
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under the Agreement. The rights and duties under the Agreement are not
assignable, except that Mr. Murray may assign options issuable to an entity of
which he owns more than 50% of the voting power and such entity which has
received the options may assign them to Mr. Murray.
Disputes with Former Executives
The Company is the respondent in an arbitration claim by its former chief
financial officer, Mr. Robert S. Vail, who claimed that he was constructively
discharged and sought severance compensation equal to three year's compensation.
The Company asserts that Mr. Vail resigned and was not constructively
discharged; therefore he is not entitled to any severance compensation. The case
was arbitrated in February 2000 and the arbitrator subsequently awarded Mr. Vail
a total of $330,000 in separation payments, fees and expenses. The Company
believes the arbitrator erred in arriving at an award and, accordingly, filed an
appeal of the award in State Circuit Court for Duval County, Florida. A court
date has not yet been set.
The Company reported on Form 8-K, dated July 1, 1999 the termination of Mr.
Stephen Carreker as Chairman and Chief Executive Officer. The Company and Mr.
Carreker reached a mutually acceptable agreement concerning the terms of his
departure from the Company. The Company also withdrew its civil action against
Mr. Carreker.
Director Compensation
Directors who are employees of the Company do not receive any additional
compensation above their full time employment compensation. Nonemployee
directors receive reimbursement of expenses incurred in carrying out their
duties. During the prior fiscal year the Company instituted a standardized
compensation program for nonemployee directors whereby the nonemployee director
receives stock options on the date of election to the Board of Directors to
purchase 10,000 shares of the Company's common stock at the market price on that
date. Such options vest quarterly provided that the grantee has attended 75
percent or more of the scheduled board meetings. In addition each director is
entitled to reimbursement of expenses incurred on behalf of the Company and
nonemployee directors receive $1,000 for each scheduled Board meeting attended
in person and $250 for each scheduled board meeting attended via conference
call. Meetings of committees of the Board of Directors are compensated at $250
per meeting attended in person or via conference call. One nonemployee director,
Ms. Anderson, is compensated at a rate of $850 per month pursuant to previous
practice. During fiscal year 1999 Ms. Anderson received $10,421 in fees and
expenses for her services as a director. During the current fiscal year the
Company paid Mr. O'Mara $7,008 and Mr. Murray $4,882 in fees and expenses for
duties as outside directors. Mr. O'Mara was awarded options to purchase 10,000
shares each of the Company's common stock at a price of $.3125 per share, the
closing price on September 2, 1999, the date of grant.
2. OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not aware
of any other matter to be presented at the Meeting other than as set forth
herein. If any other matters properly come before the meeting, it is the
intention of the Board of Directors to vote pursuant to the Proxies in
accordance with their judgment in such matters.
OTHER MATTERS
The firm of BDO Seidman, LLP, Certified Public Accountants, audited the
financial statements of the Company for the period ended September 30, 1999, and
has been selected to serve in such capacity for the current fiscal year. They
will also provide such other services as may be necessary. A representative of
BDO Seidman LLP is expected to be present at the annual meeting and will have
the opportunity to make a statement and to respond to appropriate questions.
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Proposals by Shareholders of the Company to be presented at the Annual Meeting
of Shareholders to be held for its fiscal year ended 2000, must be received by
the Board of Directors of the Company at the Company's administrative office,
1597 Cole Boulevard, Suite 300B, Golden, Co 80401, no later than January 31,
2001 to be considered for inclusion in the Company's proxy statement and proxy
for that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ Frederick G. Beisser
--------------------------------------
Frederick G. Beisser, Secretary
Golden, Colorado
October 13, 2000
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