<PAGE>
- - --------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(c)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
UTILX CORPORATION
- - --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Investment Company Act Rule 20a -1(c)
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
CALCULATION OF FILING FEE
- - --------------------------------------------------------------------------------
Per unit price or
Title of each Aggregate other
class of number of underlying value Proposed
securities to securities to of maximum
which which transaction aggregate
transaction transaction computed value of Total Fee
applies: applies: Act Rule 0-11: transaction: Paid:
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
------------------ ------------------
Form, Schedule or
Registration Statement No.: Date Filed:
-------------- --------------------
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<PAGE>
UTILX-Registered Trademark- CORPORATION
22404-66TH AVENUE SOUTH
P. O. BOX 97009
KENT, WASHINGTON 98064-9709
June 28, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of UTILX Corporation at 3:00 p.m., Pacific Daylight Time, on Thursday, July 25,
1996, at the Doubletree Inn at Southcenter, Elm-Oak Room, 205 Strander
Boulevard, Tukwila, Washington 98188.
The Notice of Meeting and Proxy Statement on the following pages describe
the matters to be presented at the meeting.
Whether or not you plan to attend the meeting, we hope you will have your
stock represented by signing, dating and returning the enclosed Proxy Card in
the enclosed envelope AS SOON AS POSSIBLE. Your stock will be voted in
accordance with the instructions you have given in your Proxy.
Sincerely,
William M. Weisfield
CHAIRMAN OF THE BOARD
- - --------------------------------------------------------------------------------
IMPORTANT
A Proxy Statement and Proxy Card are submitted herewith. All stockholders
are urged to complete and mail the enclosed Proxy Card promptly. The enclosed
envelope for return of proxy requires no postage. Any stockholder attending the
meeting may personally vote on all matters that are considered, in which event
the signed Proxy Card is revoked.
- - --------------------------------------------------------------------------------
IT IS IMPORTANT THAT YOUR STOCK BE VOTED.
<PAGE>
UTILX-Registered Trademark- CORPORATION
22404-66TH AVENUE SOUTH
P. O. BOX 97009
KENT, WASHINGTON 98064-9709
-------------------------
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
JULY 25, 1996
-------------------------
To the Stockholders:
The 1996 Annual Meeting of Stockholders of UTILX Corporation will be held
at 3:00 p.m., Pacific Daylight Time, on Thursday, July 25, 1996, at the
Doubletree Inn at Southcenter, Elm-Oak Room, 205 Strander Boulevard, Tukwila,
Washington 98188, for the following purposes:
I. To elect two (2) directors to hold office until their successors are
elected and qualified (page 1 of enclosed Proxy Statement);
II. To ratify and approve the appointment of Coopers & Lybrand L.L.P. as
independent auditors for the Company for fiscal year 1997 (page 13 of
enclosed Proxy Statement); and
III. To transact such other business as may properly come before the
meeting.
The nominees for directors are set forth in the enclosed Proxy Statement.
May 31, 1996 has been fixed as the record date for the 1996 Annual Meeting.
Only stockholders of record at the close of business on that date will be
entitled to notice of and to vote at the meeting.
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON, BUT EVEN IF
YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO MARK, DATE, SIGN
AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID
ENVELOPE PROVIDED TO ASSURE YOUR REPRESENTATION. STOCKHOLDERS ATTENDING THE
MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE PREVIOUSLY SENT IN A PROXY CARD.
By Order of the Board of Directors
Thomas L. Markl
VICE PRESIDENT/SALES & MARKETING AND SECRETARY
Kent, Washington
June 28, 1996
THE 1996 ANNUAL REPORT OF UTILX CORPORATION
ACCOMPANIES THIS PROXY STATEMENT.
<PAGE>
UTILX-Registered Trademark- CORPORATION
----------------
PROXY STATEMENT
----------------
GENERAL
The enclosed Proxy is solicited by the Board of Directors (the "Board of
Directors" or the "Board") of UTILX Corporation ("UTILX" or the "Company")
for use at the 1996 Annual Meeting of Stockholders to be held at 3:00 p.m.,
Pacific Daylight Time, on Thursday, July 25, 1996, at the Doubletree Inn at
Southcenter, Elm-Oak Room, 205 Strander Boulevard, Tukwila, Washington 98188
and at any adjournment or adjournments thereof. Only stockholders of record
of common stock of UTILX Corporation, par value $0.01 per share (the "Common
Stock"), at the close of business on May 31, 1996, will be entitled to vote
at the 1996 Annual Meeting of Stockholders. On that date, the Company had
outstanding 7,184,116 shares of Common Stock.
The address of the Company's principal executive offices is 22404 - 66th
Avenue South, Kent, Washington 98032-4801 and the mailing address is P.O. Box
97009, Kent, Washington 98064-9709. This Proxy Statement and the accompanying
Proxy Card are being mailed to the stockholders of the Company on or about
June 28, 1996.
VOTING
Each share of Common Stock outstanding on the record date of May 31,
1996 is entitled to one vote per share at the 1996 Annual Meeting of
Stockholders. Under Delaware law and the Company's Certificate of
Incorporation, if a quorum is present at the meeting the nominees for
election as directors must be elected by a plurality vote. In the election
of directors, shares that are not voted for the election of directors
(including abstentions and broker nonvotes) will not count in determining the
total number of votes for each nominee.
SHARES FOR WHICH PROXIES ARE PROPERLY EXECUTED AND RETURNED WILL BE VOTED
AT THE MEETING IN ACCORDANCE WITH THE DIRECTIONS NOTED THEREON, AND IN THE
ABSENCE OF DIRECTIONS TO THE CONTRARY, SUCH SHARES WILL BE VOTED (I) "FOR"
THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS NAMED IN THE
FOLLOWING PAGES, PROVIDED THAT IF SUCH NOMINEES SHOULD BECOME UNAVAILABLE FOR
ELECTION FOR ANY REASON, SUCH SHARES WILL BE VOTED FOR THE ELECTION OF A
SUBSTITUTE NOMINEE AS THE BOARD OF DIRECTORS MAY PROPOSE AND (II) "FOR" THE
RATIFICATION AND APPROVAL OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
AUDITORS FOR FISCAL YEAR 1997.
REVOCATION
Any stockholder giving a Proxy may revoke it at any time before it is
voted by delivering to the Secretary of the Company either a written notice
of revocation or a duly executed Proxy bearing a later date, or by attending
the meeting and electing to vote in person.
I. PROPOSAL TO ELECT DIRECTORS
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of six directors who,
according to the Company's By-laws, are divided into three classes. The
provision is designed to ensure that approximately one-third of the Board is
eligible for reelection in any given year. At the 1996 Annual Meeting of
Stockholders, two directors will be elected to serve for a term of three years
expiring in 1999. William M. Weisfield, one of the two directors nominated for
election at the 1996 Annual Meeting, was elected a director at the 1995 Annual
Meeting of Stockholders for a three year term expiring in 1998. Mr. Weisfield
has resigned that position contingent upon
1
<PAGE>
and effective upon his election as a director at the 1996 Annual Meeting.
Effective upon the resignation of Granville W. Holman from the Board of
Directors in November 1995, the division of classes of the Board of Directors
became unequal, resulting in one class of three directors whose terms expire in
1998, one class of two directors whose terms expire in 1997 and one class of one
director whose term expires in 1996. In January 1996, the size of the Board of
Directors was reduced to six members. In order to comply with the Company's
By-laws and to ensure that the Board shall be divided into three classes with
said classes to be as equal in number as may be possible, the classes of the
Board of Directors of the Company were reconstituted in April 1996 so that the
six directors are divided into three classes of two directors each whose terms
expire in 1997, 1998 and 1999. The directors elected will continue in office
until a successor has been elected or until resignation or removal in the manner
provided by the By-laws of the Company. The names of the nominees and
continuing members of the Board of Directors are listed on pages 2 and 3.
Shares represented by a properly executed Proxy in the form of the accompanying
Proxy Card will be voted for such nominees. However, discretionary authority is
reserved to vote such shares, in the best judgment of the persons named in the
Proxy, in the event that any person other than the nominees listed below is to
be voted upon at the meeting due to the unavailability of the nominees so
listed.
All persons named below are directors of the Company at the present time.
No family relationships exist between any nominees, directors or executive
officers of the Company.
BOARD RECOMMENDED NOMINEES
The names of the nominees for the Board of Directors, together with certain
information regarding them, are as follows:
STANLEY J. BRIGHT (age 56) has been a director of the Company since
January 1995. Mr. Bright has been President, Office of the CEO, of
MidAmerican Energy Company, an electric and gas utility company formed in the
merger of Iowa-Illinois Gas and Electric Company and Midwest Resources, Inc.,
since July 1995. Prior to becoming Chairman of the Board and Chief Executive
Officer of Iowa-Illinois Gas and Electric Company in May 1991, Mr. Bright
served as its President and Chief Operating Officer from April 1990 to April
1991 and Vice President-Finance and Chief Financial Officer from September
1986 to March 1990. His prior work experience includes a number of
accounting, finance and treasury positions in utility-related businesses,
including serving as Senior Vice President of Potomac Electric Power Company
and as President and director of Potomac Capital Investment Corporation, a
wholly owned, nonregulated subsidiary of Potomac Electric Power Company. Mr.
Bright is also a director of Synergics, Inc., Utech Venture Capital
Corporation, St. Ambrose University in Davenport, Iowa, Genesis Medical
Center, Des Moines Development Corporation, Norwest Bank Iowa, N.A. and the
Iowa Business Council, and is a member of the Board of Visitors of the
College of Business Administration of The University of Iowa. Mr. Bright is
also a director of the Association of Edison Illuminating Companies, the
Edison Electric Institute, the Illinois Energy Association, the Iowa Utility
Association and the North Central Electric Association.
WILLIAM M. WEISFIELD (age 54) has been a director of the Company since
January 1995. Mr. Weisfield has been Chief Operating Officer of Northern
Capital Corporation, a privately held investment company specializing in
development of Pacific Northwest real estate and other investments, since
January 1, 1994. Mr. Weisfield previously served as Chief Operating Officer for
Robbins Company, an underground tunnel boring manufacturing company from
November 1992 to December 1993, and as President and CEO of Cornerstone Columbia
Development Company, a real estate joint venture between Weyerhaeuser and
Portland General Electric, from April 1987 to November 1992. Previous positions
include President and CEO of the following companies: Northwest Building
Company, a real estate company; Brittsport Ltd., a clothing manufacturer; Quorum
Corporation, a restaurant holding company; and Weisfield's Jewelers, an 85-store
retail jewelry chain. Mr. Weisfield also acts as a director of Lindal Cedar
Homes, Inc. and serves as a Regent of Seattle University.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE ABOVE NOMINEES FOR THE BOARD OF DIRECTORS.
2
<PAGE>
CONTINUING MEMBERS OF THE BOARD OF DIRECTORS
The names of the continuing members of the Board of Directors, together
with certain information regarding them, are as follows:
CRAIG E. DAVIES (age 53) has been a director of the Company and President
and Chief Executive Officer since April 1994. Mr. Davies' term as a director
expires in 1998. From May 1993 to April 1994, he was employed by Sithe
Energies, a publicly owned developer, owner and operator of independent electric
power generating facilities, most recently as Vice President and Chief Operating
Officer. From August 1985 to May 1993, he was President and Chief Executive
Officer of North American Energy Services Company, a utility services company,
and from August 1985 to November 1992, he served as Chairman of the Board. For
the prior 16 years, he held a succession of management and executive positions
with Westinghouse Electric Corporation, a diversified, technology-based company.
JOHN W. ELLIS (age 67) has been a director of the Company since August
1988. Mr. Ellis' term as a director expires in 1997. He is also Chief Executive
Officer of the Baseball Club of Seattle. Since 1969, he has been a director of
Puget Sound Power & Light Company, an electric utility, where he was President
from 1976 to 1987, and Chief Executive Officer from 1976 until his retirement in
1993. Mr. Ellis is also a director of Washington Mutual Savings Bank, a banking
company, SAFECO Corporation, an insurance company, and Associated Electric & Gas
Insurance Services Limited, an insurance company, and serves as a Regent of
Washington State University and a Trustee of Seattle University. He is past
Chairman of the Edison Electric Institute and of the Electric Power Research
Institute.
FRANK W. GRIFFITH (age 74) has been a director of the Company since October
1989. Mr. Griffith's term as a director expires in 1998. He was a director of
Midwest Resources Inc., an electric and gas utility holding company until 1991
and was Chairman Emeritus and a director of Midwest Energy Company prior to its
merger in 1990 into Midwest Resources, Inc. Prior to his retirement from
Midwest Resources Inc., he was Chairman from 1969 to 1986 and President from
1966 to 1985. Mr. Griffith also serves as a Trustee of Iowa National Heritage
Foundation and is a former Chairman of the Edison Electric Institute and a
former director of the Electric Power Research Institute.
ROBERT E. RUNICE (age 66) has been a director of the Company since November
1988. Mr. Runice's term as a director expires in 1997. Mr. Runice is a private
investor and business consultant. From 1983 until his retirement in 1991,
Mr. Runice had been Vice President of U S WEST Inc., a diversified
telecommunications company, and President of its Commercial Development
Division. He has over 40 years of experience in the telephone industry, having
served in various operations, marketing and corporate assignments with AT&T and
Northwestern Bell prior to his association with U S WEST Inc. Mr. Runice is
also a director of The Bombay Company, Inc., a specialty retail company, and
Tandy Brands Accessories, Inc., a manufacturer of men's, women's and boys'
accessories.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established standing committees, including an
Audit Committee, a Compensation Committee and a Nominating and Organization
Committee. All committees are responsible to the full Board of Directors and
their activities are therefore subject to approval of the Board of Directors.
As provided in the Company's By-laws, each committee is appointed annually by
the Board of Directors and consists of not less than three directors, at least a
majority of whom must be independent and not members of management. The
functions performed by these Committees are summarized as follows:
AUDIT COMMITTEE. The Audit Committee reviews and makes recommendations
regarding the selection of outside auditors, the scope and results of the annual
audit, internal controls, procedures and the adequacy of staff for the safeguard
of the Company's assets, related-party transactions, potential conflicts of
interest and compliance with corporate policies including the Company's Code of
Ethical Conduct. The members of the Audit Committee
3
<PAGE>
are Frank W. Griffith (Chairman), Robert E. Runice and William M. Weisfield.
The Audit Committee met six times during fiscal year 1996.
COMPENSATION COMMITTEE. The Compensation Committee reviews and makes
recommendations regarding compensation, including salaries and other incentives,
of directors, officers and other executives of the Company. Those members of
the Compensation Committee who are "disinterested" within the meaning of the
rules adopted under Section 16 of the Securities Exchange Act of 1934 also act
as plan administrator of the Company's stock option plans. The members of the
Compensation Committee are Robert E. Runice (Chairman), John W. Ellis and
Frank W. Griffith. The Compensation Committee met five times during fiscal year
1996.
NOMINATING AND ORGANIZATION COMMITTEE. The Nominating and Organization
Committee reviews and makes recommendations regarding the size and composition
of the Board of Directors, nominees for directors, election of officers and the
organization of the Company. The Nominating and Organization Committee also
considers nominees for directors recommended by any stockholder of the Company.
Any stockholder desiring to do so must mail a written recommendation and any
comments to the Chairman of the Nominating and Organization Committee addressed
in care of the Secretary of the Company at the Company's corporate offices at
P.O. Box 97009, Kent, Washington 98064-9709. The members of the Nominating and
Organization Committee are John W. Ellis (Chairman), Stanley J. Bright and
Robert E. Runice. The Nominating and Organization Committee met three times
during fiscal year 1996.
FISCAL YEAR 1996 DIRECTOR MEETING ATTENDANCE
During fiscal year 1996, there were 16 meetings of the Board of Directors.
Each director attended at least 75% of the aggregate of the meetings of the
Board of Directors and the Committees of the Board of Directors on which each
such director served.
DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive any fees for
their services as directors. Directors of the Company who are not employees are
paid a quarterly retainer of $1,500 and committee chairpersons are paid an
additional quarterly retainer of $500. Nonemployee directors are also paid $500
for each Board of Directors meeting and $400 for each committee meeting attended
in person and one-half of those amounts for telephonically conducted meetings,
plus reimbursement of expenses incurred in attending such meetings. The
Chairman, also a nonemployee director, receives a yearly retainer of $35,000 for
his services as Chairman, except that during fiscal year 1996 Mr. Holman
received a quarterly retainer of $2,000 for his services as Chairman of the
Board. For extraordinary services beyond those incidental to service on the
Board and its committees, nonemployee directors receive fees for work on matters
specially requested by the Board at a rate of $125 per hour with a daily minimum
of $500 and a daily maximum of $1,000.
The Company has also adopted the 1987 Restated Stock Option Plan for
Nonemployee Directors (the "1987 Director Plan"), which provides for the grant
of options to acquire up to 300,000 shares of Common Stock to nonemployee
directors. Pursuant to the 1987 Director Plan, each nonemployee director
receives an option to purchase 10,000 shares of Common Stock upon initial
appointment to the Board, which options vest 40% one year after the date of
grant and 20% each year thereafter. Each nonemployee director then automatically
receives annually an option to purchase 5,000 shares of Common Stock,
concurrently with each year's Annual Meeting of Stockholders. Such options vest
upon the date of grant. All grants under the 1987 Director Plan are made at an
exercise price equal to the fair market value of the Common Stock on the date of
grant. The purpose of the 1987 Director Plan is to help the Company attract and
retain qualified nonemployee directors.
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS
The following table sets forth as of May 31, 1996 information regarding the
beneficial ownership of the Common Stock by each stockholder who, to the
Company's knowledge, owned more than 5% of the outstanding Common Stock, by each
of the directors, by each of the executive officers named in the Summary
Compensation
4
<PAGE>
Table, and by all directors and executive officers, as a group. Each of the
named persons and members of the group has sole voting and investment power with
respect to the shares shown, except as stated below.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
----------------------------------------------
OUTSTANDING OPTIONS AND
SHARES OF OTHER RIGHTS
COMMON EXERCISABLE
STOCK WITHIN 60 PERCENT
BENEFICIALLY DAYS OF MAY OF
BENEFICIAL OWNER OWNED 31,1996 TOTAL CLASS(1)
------------------- ------------- ----------- ------- --------
<S> <C> <C> <C> <C>
Dimensional Fund Advisors Inc.(2)
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 462,200 0 462,200 6.4%
Kennedy Capital Management, Inc.
Suite 181
425 North New Ballas Road
St. Louis, MO 63141-6821 374,500 0 374,500 5.2%
Trilon Dominion Partners, L.L.C.(3)
Suite 2020
250 Park Avenue
New York, NY 10017 426,525 0 426,525 5.9%
UVCC Fund I
Suite 1040
6110 Executive Boulevard
Rockville, MD 20852 435,293 0 435,293 6.1%
Craig E. Davies 115,500 15,000(4) 130,500 1.8%
Stanley J. Bright 0 14,000(5) 14,000 *
John W. Ellis 0 50,000(5) 50,000 *
Frank W. Griffith 3,000 45,000(5) 48,000 *
Granville W. Holman 0 38,000(6) 38,000 *
Robert E. Runice 4,000 42,000(5) 46,000 *
William M. Weisfield 3,000 14,000(5) 17,000 *
M. Bruce Boswell 20,000 5,540(7) 25,540 *
Gregory W. Daul 12,833 8,000(7) 20,833 *
Thomas L. Markl 25,289 6,540(8) 31,829 *
All directors and executive
officers, as a group (15 persons) 208,400 296,500 504,900 6.8%
</TABLE>
NOTES TO BENEFICIAL OWNERSHIP TABLE:
*Less than 1% of the outstanding Common Stock
(1)In calculating the percentage ownership of any stockholder holding
options or other rights exercisable within 60 days of May 31, 1996, it is
assumed that such options or rights were exercised.
(2)Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 462,200 shares of the
Company's common stock as of May 31, 1996, all of which shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
5
<PAGE>
(3)See "Related Party Transactions -- Trilon Dominion Partners, L.L.C."
(4)Consists of options to purchase 10,000 shares of Common Stock granted
under the Company's 1984 Restated Stock Option Plan (the "1984 Plan") and
options to purchase 5,000 shares of Common Stock granted under the
Company's 1994 Option and Restricted Stock Plan (the "1994 Plan").
(5)Consists of options to purchase shares of Common Stock granted under the
1987 Director Plan and includes options to purchase 5,000 shares of Common
Stock that will automatically be granted on July 25, 1996. See "Director
Compensation."
(6)Consists of options to purchase shares of Common Stock granted under the
1987 Director Plan. Mr. Granville resigned as Chairman of the Board and
director in November 1995.
(7)Consists of options to purchase shares of Common Stock granted under the
1994 Plan.
(8)Consists of options to purchase 4,000 shares of Common Stock granted
under the 1984 Plan and options to purchase 2,540 shares of Common Stock
granted under the 1994 Plan.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to the Company's Chief
Executive Officer and the other most highly compensated executive officers whose
salary and bonuses exceeded $100,000 (the "named executive officers") for
services rendered in fiscal year 1996 and the two prior fiscal years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------- ----------------------
Restricted Securities
Name and Stock Underlying All Other
Principal Position Year(1) Salary ($)Bonus Awards($) Awarded(#) Compensation($)
- - ------------------ ----- ------ ------- -------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Craig E. Davies (2) 1996 $200,000 $0 $0 25,000 $3,557(4)
President and 1995 $200,000 $0 $61,725(3) 25,000 $0
Chief Executive Officer
M. Bruce Boswell (5) 1996 $105,000 $0 $0 12,700 $101,904(6)
Vice President/ 1995 $ 52,802 $0 $41,150(3) 15,000 $0
Manufacturing and
Engineering
Gregory W. Daul (7) 1996 $170,000 $0 $0 20,000 $ 13,151(8)
Senior Vice President/ 1995 $104,997 $0 $41,150(3) 20,000 $0
North American
Operations
Thomas L. Markl (9) 1996 $110,000 $0 $0 12,700 $3,127(10)
Vice President/Sales 1995 $ 90,545 $0 $24,690(3) 10,000 $0
and Marketing
- - -------------------
</TABLE>
(1) The Company's fiscal year ended March 31 of the year indicated.
(2) Mr. Davies became an executive officer of the Company on April 1, 1994.
6
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(3) Restricted stock is valued at the closing price of the Common Stock as
reported on the Nasdaq National Market on the date of grant. During
the restricted period, shares are forfeited upon termination of
employment, except for termination due to death or retirement. The
restrictions lapse with respect to the shares granted, one-third at a
time, on April 1, 1995, 1996 and 1997 for Mr. Davies, on October 1,
1995, 1996 and 1997 for Mr. Boswell, on August 22, 1995, 1996 and 1997
for Mr. Daul, and on June 1, 1995, 1996 and 1997 for Mr. Markl,
subject to acceleration in the event of a Change of Control. A
"Change of Control" is defined under "Employment Contracts and
Termination of Employment and Change of Control Arrangements -- 1994
Option and Restricted Stock Plan." On March 31, 1996, Messrs. Davies,
Boswell, Daul and Markl held 10,000, 6,667, 6,667 and 4,000 shares,
respectively, of restricted Common Stock, with market values, based on
the closing price of the Common Stock as reported on the Nasdaq
National Market on March 29, 1996, of $28,750, $19,168, $19,168 and
$11,500, respectively. Dividends are payable on restricted stock at
the same rate payable to all stockholders.
(4) Consists of $2,693 for Company matching contributions to qualified and
nonqualified benefit plans and $864 for taxable life insurance
benefits.
(5) Mr. Boswell became an executive officer of the Company on October 1,
1994 and will cease being an executive officer as of September 30,
1996.
(6) Consists of $1,595 for Company matching contributions to qualified and
nonqualified benefit plans, $506 for taxable life insurance benefits
and $99,803 for relocation and related costs.
(7) Mr. Daul became an executive officer of the Company on August 22, 1994
and will cease being an executive officer as of August 21, 1996.
(8) Consists of $896 for Company matching contributions to qualified and
nonqualified benefit plans, $426 for taxable life insurance benefits
and $11,829 for relocation and related costs.
(9) Mr. Markl became an executive officer of the Company on June 1, 1994.
(10)Consists of $2,920 for Company matching contributions to qualified and
nonqualified benefit plans and $207 for taxable life insurance
benefits.
The following tables set forth information concerning option grants and
exercises during the Company's 1996 fiscal year to or by the named executive
officers and the value of the options held by such officers as of March 31,
1996:
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1996
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------- VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF EMPLOYEES STOCK PRICE
SECURITIES IN EXERCISE APPRECIATION
UNDERLYING FISCAL PRICE FOR OPTION TERM(2)
OPTIONS YEAR PER EXPERATION ------------------
NAME GRANTED 1996 SHARE DATE(1) 5% 10%
---- ---------- ----- ------ --------- -- --
<S> <C> <C> <C> <C> <C> <C>
Craig E. Davies 25,000 14% $3.125 4/20/05 $49,132 $124,511
M. Bruce Boswell 12,700 7% $3.125 4/20/05 $24,959 $ 63,252
Gregory W. Daul 20,000 11% $3.125 4/20/05 $39,306 $ 99,609
Thomas L. Markl 12,700 7% $3.125 4/20/05 $24,959 $ 63,252
- - ------------------------
</TABLE>
(1) The exercise price for the options is the fair market value of the
Common Stock on the date of grant. Exercise of an option requires payment in
cash of the exercise price. The options have a term of 10 years and become
exercisable in five equal annual installments beginning one year after the
date of grant, subject to acceleration upon the occurrence of certain
transactions, including certain mergers and other business
7
<PAGE>
combinations involving the Company. The Compensation Committee also has the
authority to accelerate exercisability before the originally designated exercise
date(s). The exercise price may be paid by the delivery of already-owned shares
or a full-recourse promissory note, and tax-withholding obligations relating to
exercise may be paid by the delivery of already-owned shares or by offsetting
the underlying shares, subject to certain conditions.
(2) The dollar amounts under these columns are the result of calculations at
the 5% and 10% assumed appreciation rates set by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, in the price of the Common Stock.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND 1996 FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED VALUE UNEXERCISED IN-THE-MONEY OPTIONS AT
NAME ON EXERCISE REALIZED OPTIONS AT MARCH 31, 1996(1) MARCH 31, 1996(2)
---- ----------- -------- -------------------------- -------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Craig E. Davies 0 * 5,000 45,000 $0 $0
M. Bruce Boswell 0 * 3,000 24,700 $0 $0
Gregory W. Daul 0 * 4,000 36,000 $0 $0
Thomas L. Markl 0 * 2,000 20,700 $0 $0
</TABLE>
------------------------------------
* Not applicable
(1) Consists of options granted under the 1984 Plan and the 1994 Plan.
(2) Based on a closing price of $2.875 per share on March 29, 1996.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
EMPLOYMENT AGREEMENTS. The Company has entered into term employment
agreements with Craig E. Davies, M. Bruce Boswell, Gregory W. Daul and Thomas L.
Markl. All of the agreements establish starting annual base salary and
eligibility to participate in Company bonus and stock plans. The agreements
obligate the Company to continue employment and compensation of each such
executive officer for one year from the effective date of the agreement and for
successive one-year periods thereafter unless terminated upon 60 days' notice
prior to the anniversary date of the agreement. In addition, if the Company
terminates the executive officer's employment during the term of the agreement
for reasons other than "cause" or if the executive officer terminates employment
for "good reason" or within 180 days of a "change of control" of the Company (as
the foregoing terms are defined in the agreements), the Company will be
obligated to make certain termination payments to the affected executive
officer, including one year's severance pay and continuation of medical benefits
for one year, or until full-time employment of the executive officer, which ever
comes first.
The employment agreement with Mr. Davies, effective April 1, 1994,
established an initial annual base salary of $200,000. The agreement required
the Company to grant Mr. Davies at the commencement of his employment options to
purchase 25,000 shares of Common Stock under the 1984 Plan and 15,000 shares of
restricted Common Stock under the 1994 Plan.
The employment agreement with Mr. Markl, effective June 1, 1994,
established an initial annual base salary of $105,000. The agreement
required the Company to grant Mr. Markl at the commencement of his employment
options to purchase 10,000 shares of Common Stock and 6,000 shares of
restricted Common Stock under the 1994 Plan.
8
<PAGE>
The employment agreement with Mr. Daul, effective August 22, 1994,
established an initial annual base salary of $170,000. The agreement required
the Company to grant Mr. Daul at the commencement of his employment options to
purchase 20,000 shares of Common Stock and 10,000 shares of restricted Common
Stock under the 1994 Plan. The Company has notified Mr. Daul that his
employment agreement will terminate as of August 21, 1996.
SEPARATION AGREEMENT. The employment agreement with Mr. Boswell, effective
October 1, 1994, established an annual base salary of $105,000 and entitled him
to participate in Company bonus and stock plans. In May 1996, the Company and
Mr. Boswell entered into a separation agreement in connection with Mr. Boswell's
termination of employment with the Company. The separation agreement provided
that Mr. Boswell will continue as an employee at his current salary with all
current benefits until the Termination Date, which is the earlier of
September 30, 1996 or five days after the date on which Mr. Boswell gives
written notice of intent to terminate, pursuant to the provisions of the
employment agreement. The separation agreement also provides that, so long as
Mr. Boswell remains unemployed following the Termination Date, he shall receive
his current salary, excluding all benefits, through November 30, 1996. The
Company agreed to extend to one year past the Termination Date the period of
time to exercise certain of his stock options. In exchange, Mr. Boswell agreed
to assist the Company in its leadership training program and to refrain from
competing with the Company and soliciting employees and customers for two years.
1994 OPTION AND RESTRICTED STOCK PLAN. The 1994 Plan provides that upon a
Change of Control each outstanding option will automatically become exercisable
in full for the total remaining number of shares covered by the option. In
addition, unless the plan administrator determines otherwise at the time of
grant, during the 90-day period following a Change of Control an optionee may
choose to receive cash equal to the difference between the exercise price of the
option and the fair market value of a share of Common Stock as determined under
the 1994 Plan, in lieu of exercising the option and paying the option price.
Also, all restrictions on shares of restricted stock will lapse upon a Change of
Control. A "Change of Control" is defined in the 1994 Plan as: (i) a change in
the Board of Directors such that a majority of the seats on the Board are
occupied by individuals who are neither nominated by a majority of the Incumbent
Directors (as defined below) of the Company then in office nor appointed by
directors so nominated; (ii) the acquisition by any person (other than the
Company or a Company employee benefit plan) of, in the case of transactions not
approved by a majority of the directors of the Company who were either nominated
by a majority of the directors of the Company then in office or appointed by
directors so nominated ("Incumbent Directors"), 20% or more of the combined
general voting power of the Common Stock and any other voting securities of the
Company and, in the case of other transactions, 33% or more of such voting
power; or (iii) the approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company or a merger, consolidation or sale of
substantially all the assets of the Company (collectively, a "Business
Combination"), other than a Business Combination in which all or substantially
all the stockholders of the Company receive or hold 60% or more of the stock of
the corporation resulting from the Business Combination in substantially the
same proportions as their ownership before the Business Combination, no holder
has more than 33% of the combined voting power of the capital stock of the
resulting corporation and at least a majority of the board of directors of the
resulting corporation are Incumbent Directors or were approved by a majority of
the Incumbent Directors.
1984 STOCK OPTION PLANS. The 1984 Restated Stock Option Plan and the 1984
Restated Nonqualified Stock Option Plan provide that upon the occurrence of
certain transactions, including certain mergers and other business combinations
involving the Company, outstanding options will be fully exercisable. Such
options, if not exercised, will then terminate upon consummation of such
transactions. In the alternative, at the discretion of the Company and the
corporation(s) participating in such transactions, such options may be assumed
by the acquiring or surviving corporation.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of directors who are not employees of the Company. Current
members of the Committee are Robert E. Runice,
9
<PAGE>
Chairman, John W. Ellis and Frank W. Griffith. None of the members of the
Committee participate in the compensation programs described in this report.
PHILOSOPHY, PROCEDURES AND GENERAL POLICIES. In determining executive
compensation, the Committee and the Board are guided by the following
objectives:
-Attracting, retaining and motivating highly qualified and committed
executives.
-Using the competitive employment marketplace as a guide to assessing and
establishing compensation levels.
-Determining total compensation to a meaningful degree by returns to the
Company's stockholders.
-Exercising appropriate discretion and judgment in making individual
compensation determinations based on the performance and particular
employment position of the affected executive, the current economic and
business circumstances of the Company, and the prevailing conditions in the
relevant employment marketplace.
-Encouraging executives to obtain and hold an equity stake in the Company.
The responsibility of the Committee is to review and make recommendations
regarding executive compensation to the Board of Directors. The Board of
Directors exercises final authority with respect to approval of executive
compensation, except with regard to grants under the Company's stock plans for
which the Committee, as plan administrator, has final authority. The Committee
and the Board also specifically approve the compensation of individual
executives, including any merit or promotional adjustments, and individually
review the performance of those executives on at least an annual basis. Base
salary increases are based upon the results of such performance reviews and, for
executives other than the President and Chief Executive Officer, such increases
are also based upon the recommendation of the President and Chief Executive
Officer. During fiscal year 1996, the Committee used the services of an
independent executive compensation consultant to assist the Committee in
evaluating the Company's executive compensation programs and practices and to
recommend changes for future years.
EXECUTIVE COMPENSATION PLAN. Under the Company's fiscal year 1996
Executive Compensation Plan, executive compensation consisted of the following
components:
- annual base salary
- annual incentive bonus
- long-term compensation in the form of stock option grants and restricted
stock
In establishing this plan, comparative executive compensation information
was collected by the Company using both publicly available sources as well as
compensation surveys produced by independent, outside compensation firms. That
information included, but was not specifically limited to, the group of
companies comprising the peer issuers index in the Stock Performance Graph. See
footnote 2 to "Stock Performance Graph" below.
ANNUAL COMPENSATION -- BASE SALARIES. The Company seeks to establish base
salaries of executives at median levels in those employment markets within which
the Company competes in order to recruit and retain qualified executive
employees. The Company reviews base salaries of each executive periodically,
generally on an annual basis, to ensure that the Company remains competitive.
Such annual reviews, conducted in conjunction with annual merit reviews, are to
provide the basis for assessments of base salary and adjustments.
The Committee considers recommendations from the President and Chief
Executive Officer when making adjustments to executive salaries. The Committee
also considers the initial base salaries set forth in the employment agreements
of certain executives and such variables as relative responsibility, expertise,
past years' compensation and performance, and comparative market data, including
median salary data for similar positions
10
<PAGE>
within the industry. In light of the Company's overall performance, general
salary increases were not granted to the executive group in fiscal 1996. Three
executives received salary increases in fiscal 1996 as a result of a change in
scope of responsibilities, a promotion and an adjustment of salary to market
level.
ANNUAL COMPENSATION -- ANNUAL INCENTIVE BONUSES. During fiscal year 1996,
the Committee established a program of annual cash incentives to executives in
the form of performance awards. This program is intended to encourage
achievement of certain goals developed and specified at the beginning of the
fiscal year. A performance award target is established for each participating
executive, based on median competitive levels in those employment markets within
which the Company competes. Performance awards are to be distributed out of a
performance award fund whose size is determined by the success of the management
group as a whole in achieving the financial goals of the Company. If Company
goals are met, the performance award fund is divided among all participating
executives based on their respective performance award targets. Although
performance award targets are specified at the beginning of the fiscal year, the
relative share of the performance award fund received by a specific executive
may be increased or decreased at the time of distribution of performance awards,
based upon an assessment by the Board and Committee of the individual's
performance.
In April 1995, the Board and the Committee established performance award
targets for executives for fiscal year 1996 ranging from 20% to 50% of earned
base salary and established Company performance goals relating to revenue, net
income and return on assets. These goals were not reached during fiscal year
1996 and therefore no performance awards were paid.
LONG-TERM COMPENSATION -- STOCK PLANS. Long-term incentives are designed
to link management reward with the long-term interest of the Company's
stockholders. Currently, the Company grants stock options and restricted stock
as long-term incentives.
Awards of stock option grants were made to executives during fiscal year
1996 based on the judgment of the Committee. These awards were based on a
number of factors, including the relative value and importance of the position
to the Company and the number of options and restricted shares that had been
previously made to recipients.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. In April 1994, Craig Davies was
elected President and CEO. Pursuant to an employment contract, he receives an
annual base salary of $200,000 and a performance-based target bonus of 50% of
annual base salary. Under certain conditions, a performance-based bonus award
can be increased beyond the target amount by the Committee. No bonus was
awarded to Mr. Davies for fiscal year 1996, because Company performance goals
for the year were not reached. Pursuant to his employment agreement, the
Company granted Mr. Davies at the commencement of his employment 15,000 shares
of restricted Common Stock and options to purchase 25,000 shares of Common Stock
under the 1994 Plan. In fiscal year 1996, Mr. Davies was granted the option to
purchase an additional 25,000 shares of Common Stock under the 1994 Plan.
The compensation package for Mr. Davies was determined with the assistance
of a compensation consultant and was based upon a number of factors, including
market data indicating median salaries and annual bonuses for similar positions
in the employment market within which the Company competes. In determining
compensation, the Committee considered Mr. Davies' expertise and relevant
operational experience as well as his demonstrated achievement in prior
positions.
TAX DEDUCTIBILITY LIMITATION FOR EXECUTIVE COMPENSATION. Under Section
162(m) of the Code and related federal tax regulations, publicly traded
companies are prohibited from receiving a tax deduction for any compensation
in excess of $1 million paid to the chief executive officer or any of its
four other most highly compensated executive officers for any fiscal year.
The prohibition does not apply to certain performance-based compensation.
The Company's stock option plans have been structured in such a way that the
Committee expects options granted under the plan to be treated as
performance-based compensation that may be excluded from the deductibility
limit. To the extent that there is no adverse effect on the Company's
ability to provide competitive compensation, it is the policy of the
Committee and the Board to minimize executive compensation that is not
deductible for tax purposes. At this time, no executive officer's
compensation exceeds the $1 million limit and,
11
<PAGE>
in the Committee's view, such compensation is not likely to be affected by the
nondeductibility rules in the near future.
COMPENSATION COMMITTEE MEMBERS. The foregoing report has been provided by
the Compensation Committee of the Board of Directors.
Robert E. Runice (Chairman)
John W. Ellis
Frank W. Griffith
Stock Performance Graph
The graph below compares for each of the last five fiscal years ending
March 31, 1996 the cumulative total return of the Company, The Nasdaq Stock
Market index and the SIC 1600 - 1699 index. The cumulative total return of
Common Stock assumes $100 invested on March 31, 1991 in UTILX Common Stock and
for the comparator indices that all dividends are fully reinvested. The Company
has paid no dividend during the period indicated.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
UTILX CORPORATION, NASDAQ INDEX,(1) AND SIC 1600 - 1699 INDEX(2)
03/28/91 03/31/92 03/31/93 03/31/94 03/31/95 03/29/96
-------- -------- -------- -------- -------- --------
100.0 44.4 26.6 36.3 18.5 12.9
100.0 127.5 146.5 158.1 175.9 238.8
100.0 102.1 92.3 89.9 88.7 113.2
(1) Broad market index consisting of all United States companies traded on The
Nasdaq Stock Market during the period indicated.
(2) Peer issuers index consisting of all United States companies traded on The
Nasdaq Stock Market during the period indicated, including the Company,
whose Standard Industrial Classification ("SIC") code is within Major Group
16, "Heavy Construction other than Building Construction-Contractors." The
Company's SIC code is 1623, "Water, Sewer, Pipeline and Communications and
Power Line Construction." The following companies (and their ticker
symbols) comprise the group of peer issuers: Guy F. Atkinson Company of
California (ATKN); Black Industries, Inc. (BLAK); Burnup & Sim, Inc.
(BSIM); Cerbco, Inc. (CERB); Devcon International Corporation (DEVC);
Enviroq Corporation (EROQ); Global Industries, Limited (GLBL); Granite
Construction, Inc. (GCCO); Harding Associates, Inc. (HRDG); Hungarian
Teleconstruction Corporation (HTEL); Instituform East, Inc. (INEI);
Insituform Mid America, Inc. (INSMA); Insituform North
12
<PAGE>
America, Inc. (INSU); Insituform Technologies, Inc. (INSUA); International
Fibercom, Inc. (IFCI); Kasler Corporation (KASL); Mastec, Inc. (MASX);
Meadow Vallley Corporation (MVCO); Naylor Industries, Inc. (NALR); Noxso
Corporation (NOXO); A. J. Ross Logistics, Inc. (AJRL); UTILX Corporation
(UTLX); and Valco Communications, Inc. (VALK and VALKU).
RELATED PARTY TRANSACTIONS
TRILON DOMINION PARTNERS, L.L.C.
Effective June 30, 1995, certain assets of Dominion Capital, Inc.
("Dominion Capital"), a wholly owned subsidiary of Dominion Resources, Inc.
("Dominion Resources"), including the shares of Common Stock of UTILX held by
Dominion Capital, were contributed to Venture Capital Equities, L.L.C. ("Venture
Capital"). On August 15, 1995, Venture Capital changed its name to Trilon
Dominion Partners, L.L.C. ("Trilon"). Dominion Capital has a membership
interest in Trilon. Dominion Resources is a holding company, whose wholly owned
subsidiaries include Dominion Capital and Virginia Electric and Power Company
("Virginia Power"), an electric utility, which is its principal subsidiary. The
Company began performing work for Virginia Power in November 1985, and sales to
Virginia Power accounted for approximately 16% of total revenues in fiscal year
1996. The Company sells its services to Virginia Power in the ordinary course
of its business, and currently has in place contracts with Virginia Power which
may be terminated in whole or in part by Virginia Power upon 30 days' notice.
II. PROPOSAL TO RATIFY AND APPROVE APPOINTMENT OF AUDITORS
Unless instructed to the contrary, it is intended that votes be cast
pursuant to the accompanying Proxy for the ratification and approval of the
appointment of Coopers & Lybrand L.L.P. by the Board of Directors at its regular
meeting held on April 17, 1996 as the Company's auditors for fiscal year 1997.
Coopers & Lybrand L.L.P. has audited the Company's account since 1986.
Representatives of Coopers & Lybrand L.L.P. are expected to attend the meeting
and will have an opportunity to make a statement and respond to appropriate
questions from stockholders.
The affirmative vote of a majority of the votes cast by stockholders
present in person or by proxy and entitled to vote at the meeting, a quorum
being present, is required to ratify the appointment of Coopers & Lybrand L.L.P.
as the Company's auditors for fiscal year 1997.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS AUDITORS FOR THE COMPANY FOR
FISCAL YEAR 1997.
In the event this ratification and approval of the appointment of auditors
is not made by a majority of the shares entitled to vote thereon, the selection
of other auditors will be considered by the Board of Directors.
III. OTHER MATTERS
The Company knows of no other matters that are likely to be brought before
the meeting. If, however, other matters not now known or determined come before
the meeting, the persons named in the enclosed Proxy Card or their substitutes
will vote such Proxy in accordance with their judgment in such matters.
EXPENSES OF SOLICITATION
Proxies may be solicited by officers, directors and regular supervisory and
executive employees of the Company, none of whom will receive any additional
compensation for their services. Proxies may be solicited personally or by
mail, telephone, telex, telegraph or messenger. The Company will also pay
persons holding
13
<PAGE>
shares of the Common Stock in their names or in the names of the nominees, but
not owning such shares beneficially, such as brokerage houses, banks and other
fiduciaries, for the expense of forwarding soliciting materials to their
principals. All of the costs of the solicitation of Proxies will be paid by the
Company.
PROPOSALS OF STOCKHOLDERS
The Company intends to hold its 1997 Annual Meeting of Stockholders on
approximately July 25, 1997. In order for proposals of stockholders to be
considered for inclusion in the Proxy Statement and Proxy for the 1997 Annual
Meeting of Stockholders, such proposals must be received by the Secretary of the
Company no later than February 28, 1997.
1996 ANNUAL REPORT
A copy of the Company's 1996 Annual Report for the year ended
March 31, 1996, as filed with the Securities and Exchange Commission is being
mailed with this Proxy Statement to each stockholder of record as of
May 31, 1996. Any stockholder not receiving this report will be provided such
report without charge by submitting a written request therefor addressed to
Secretary, UTILX Corporation, P.O. Box 97009, Kent, Washington 98064-9709,
(206) 395-0200 (telephone), (206) 395-1040 (facsimile).
By Order of the Board of Directors
Thomas L. Markl
VICE PRESIDENT/SALES & MARKETING AND SECRETARY
14
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS OF
UTILX CORPORATION
1996 ANNUAL MEETING OF STOCKHOLDERS - JULY 25, 1996
The undersigned hereby appoints William M. Weisfield, Craig E. Davies and
Thomas L. Markl, and each or any of them, with power of substitution, proxies
for the undersigned and authorizes them to represent and vote, as designated
on the reverse side, all of the shares of Common Stock, $0.01 par value, of
UTILX Corporation which the undersigned may be entitled to vote at the 1996
Annual Meeting of Stockholders to be held at the Doubletree Inn at
Southcenter, Elm-Oak Room, 205 Strander Boulevard, Tukwila, Washington 98188,
on Thursday, July 25, 1996, at 3:00 p.m., Pacific Daylight Time, and at any
other adjournment of such meeting, hereby revoking any proxies heretofore
given, for the following purposes and with discretionary authority as to any
other matters that may properly come before the meeting, all in accordance
with and as described in the Notice and accompanying Proxy Statement.
If no direction is given, this proxy will be voted FOR proposals 1 and 2.
IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE
/SEE REVERSE SIDE/
/ X/ Please mark your votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. IF
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
FOR WITHHELD
1. ELECTION OF
BOTH NOMINEES: Stanley J. Bright and
NOMINEES. / / / / William M. Weisfield both
for three (3) year terms
expiring in 1996
FOR AGAINST ABSTAIN.
2. To ratify and approve
the appointmentof Coopers & Lybrand
as independent auditors for the
Company for fiscal year 1997. / / / / / /
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- - -------------------------------
Signature(s) Date
------------------------------------------ ---------------------
Note: Please sign exactly as name appears hereon. Joint owners should each
sign and date. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such.
