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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DBS Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[DBSINDUSTIRES, INC. LETTERHEAD]
To the Stockholders of DBS Industries, Inc.:
You are invited to attend the Annual Meeting of the Stockholders of DBS
Industries, Inc. ("DBSI" or the "Company") which will be held on May 22, 2000,
at 2:00 p.m. (PDT) at the Acqua Hotel, 555 Redwood Highway, Mill Valley,
California 94941.
The accompanying Notice of the Annual Meeting of the Stockholders and
Proxy Statement contain the matters to be considered and acted upon, and you
should read such material carefully.
The Proxy Statement contains information about three nominees for
election as Directors, an amendment to the Certificate of Incorporation to
increase the number of authorized shares of Common Stock and Preferred Stock,
and the adoption of the 2000 Stock Option Plan. The Board of Directors strongly
recommends your approval of these proposals.
We hope you will be able to attend the meeting, but, if you cannot do
so, it is important that your shares be represented. Accordingly, we urge you to
mark, sign, date and return the enclosed proxy promptly. You may, of course,
withdraw your proxy if you attend the meeting and choose to vote in person.
Sincerely,
/s/ Fred W. Thompson
----------------------
April 14, 2000 Fred W. Thompson
Chairman and President
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DBS INDUSTRIES, INC.
100 SHORELINE HIGHWAY, SUITE 190A
MILL VALLEY, CALIFORNIA 94941
TELEPHONE: (415) 380-8055
FACSIMILE: (415) 380-8199
WEBSITE: http://www.dbsindustries.com
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
DBS Industries, Inc., a Delaware corporation ("DBSI" or the "Company"), will be
held on May 22, 2000, at 2:00 p.m. (PDT) at the Acqua Hotel, 555 Redwood
Highway, Mill Valley, California 94941, for the following purposes, which are
more completely discussed in the accompanying Proxy Statement:
1. To elect three directors, to hold office for a three-year term
ending at the Annual Meeting of Stockholders in 2003 and until
their successors are elected and qualified;
2. To approve an amendment to the Company's Certificate of
Incorporation to (i) increase the number of authorized shares of
Common Stock from Fifty Million (50,000,000) to One Hundred
Million (100,000,000); and (ii) increase the number of
authorized shares of Preferred Stock from Five Million
(5,000,000) to Ten Million (10,000,000);
3. To approve the 2000 Stock Option Plan; and
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on April 3, 2000,
are entitled to notice of and to vote at the Annual Meeting of the Stockholders.
By Order of the Board of Directors
/s/ Fred W. Thompson
----------------------
April 14, 2000 Fred W. Thompson
Chairman and President
YOU ARE CORDIALLY INVITED TO ATTEND DBSI'S ANNUAL MEETING OF STOCKHOLDERS. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN
IF YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF
YOU ATTEND THIS MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY
GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
<PAGE>
PROXY STATEMENT
OF
DBS INDUSTRIES, INC.
100 SHORELINE HIGHWAY, SUITE 190A
MILL VALLEY, CALIFORNIA 94941
TELEPHONE: (415) 380-8055
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished to the stockholders of DBS Industries,
Inc. ("DBSI" or the "Company") in connection with the solicitation of proxies on
behalf of the Company's Board of Directors for use at the Company's Annual
Meeting of the Stockholders (the "Meeting") to be held on May 22, 2000, at 2:00
p.m. (PDT), at the Acqua Hotel, 555 Redwood Highway, Mill Valley, California
94941, and at any and all adjournments thereof. Only stockholders of record on
April 3, 2000, will be entitled to notice of and to vote at the Meeting.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted at the Meeting in
accordance with the instructions contained therein. If no contrary instructions
are given, each signed proxy received will be voted "FOR" the nominees for the
Board of Directors, "FOR" the amendment to the Certificate of Incorporation,
"FOR" the adoption of the 2000 Stock Option Plan and, at the proxy holders'
discretion, on such other matters, if any, which may come before the Meeting
(including any proposal to adjourn the Meeting). Any stockholder giving a proxy
has the power to revoke it at any time before it is exercised by (i) filing with
DBS Industries, Inc. written notice of its revocation addressed to: Secretary,
DBS Industries, Inc., 100 Shoreline Highway, Suite 190A, Mill Valley, California
94941, (ii) submitting a duly executed proxy bearing a later date, or (iii)
appearing in person at the Meeting and giving the Secretary notice of his or her
intention to vote in person.
The Company will bear the entire cost of preparing, assembling, printing
and mailing proxy materials furnished by the Board of Directors to stockholders.
Copies of proxy materials will be furnished to brokerage houses, fiduciaries and
custodians to be forwarded to beneficial owners of the Common Stock. In addition
to the solicitation of proxies by use of the mail, some of the officers,
directors, employees and agents of the Company may, without additional
compensation, solicit proxies by telephone or personal interview, the cost of
which the Company will also bear.
This Proxy Statement and form of proxy were first mailed to stockholders
on or about April 14, 2000.
RECORD DATE AND VOTING RIGHTS
The Company is currently authorized to issue up to 50,000,000 shares of
Common Stock, par value $0.0004, and 5,000,000 shares of Preferred Stock, par
value $0.0004. As of April 3, 2000, 14,455,057 shares of Common Stock were
issued and outstanding and 35,897 Series A Preferred Shares were issued and
outstanding. Each share of Common Stock shall be entitled to one vote on all
matters submitted for stockholder approval, including the election of directors.
Each share of Series A Preferred Shares is entitled to vote on each matter
submitted to shareholders and each Series A Preferred Share shall be counted for
the number of votes equal to the number of full shares of Common Stock to which
each share of Series A Preferred Stock is convertible, which is ten shares of
Common Stock. The record date for determination of stockholders entitled to
notice of, and to vote at the Meeting, is April 3, 2000. The Company's
Certificate of Incorporation does not provide for cumulative voting.
One-third (1/3) of the outstanding shares of Common Stock of the Company
entitled to vote must be represented in person or by proxy at the Meeting to
constitute a quorum for the transaction of business. The
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Directors shall be elected by a plurality of the votes of Common Shares and
Series A Preferred Shares, voting as a group, present in person or represented
by proxy at the Meeting and entitled to vote on the election of directors. The
amendment to the Certificate of Incorporation must be approved by the
affirmative vote of a majority of the outstanding shares of Common Stock and
Series A Preferred Shares, voting as a group, and the 2000 Stock Option Plan
must be approved by a majority of the votes of shares of Common Stock and Series
A Preferred Shares, voting as a group, present in person or represented by proxy
at the Meeting. Under Delaware law, abstentions and broker non-votes shall be
counted for purposes of determining quorum. Broker non-votes, however, will not
be counted for purposes of calculating voting power, but abstentions will be
counted towards calculating voting power.
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL INFORMATION
The Company adopted staggered terms for its Board of Directors at the
1996 Annual Stockholders' Meeting. Directors of the first class served until the
1997 Annual Meeting of Stockholders. Directors of the second class served until
the 1998 Annual Meeting of Stockholders, and directors of the third class served
until the 1999 Annual Meeting of Stockholders. At the Meeting, stockholders will
be asked to elect Messrs. Jerome W. Carlson, Roy T. Grant, and Stanton C.
Lawson, all as first class directors to serve until the 2003 Annual Meeting of
Stockholders. Mr. Jerome W. Carlson has been a director since May 1997. Mr. Roy
T. Grant was appointed to the Board in August 1999 and Stanton Lawson was
appointed to the Board in December 1999.
NOMINEES FOR DIRECTORS
The nominees for directors have consented to being named as nominees in
this Proxy Statement and have agreed to serve as director if elected at the
Annual Meeting. In the event that any nominee is unable to serve, the person
named in the Proxy has discretion to vote for other persons if such other
persons are designated by the Board of Directors. The Board of Directors has no
reason to believe that any of the nominees will be unavailable for election. The
directors who are elected shall hold office for three years, as set forth under
Article VIII of the Company's Restated Certificate of Incorporation, or until
their successors are elected and qualified.
The following sets forth the persons nominated by the Board of Directors
for election as a directors and certain information with respect to that person.
<TABLE>
<CAPTION>
Nominee Age Term
------- --- ----
<S> <C> <C>
Jerome W. Carlson 63 2000-2003
Roy T. Grant 42 2000-2003
Stanton C. Lawson 42 2000-2003
</TABLE>
BACKGROUND OF NOMINEES
JEROME W. CARLSON, a Director appointed in May 1997, is currently
President of Raljer, Inc., a management consulting firm, and has held that
position since January 1995. Previously, from 1984 to 1995, Mr. Carlson was the
Chief Financial Officer, Vice President of Finance and Corporate Secretary for
Triad Systems Corporation in Livermore, California. Mr. Carlson has over 20
years experience in both finance and general management positions with Hewlett
Packard. Since 1995, he has assisted a number of businesses in developing and
achieving certain strategic and tactical goals in their industries. Mr. Carlson
is a director of Valley Community Bank and Tri-Valley Business Council, as well
as director and advisor for several private companies. He earned a BS degree
from the University of California at Davis and an MBA from the Stanford Graduate
School of Business.
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ROY T. GRANT, a Director appointed in August 1999. Previously from
November 1996 through April 1999, Mr. Grant was employed by Iridium, LLC, most
recently as Vice President and Chief Financial Officer. Iridium, LLC filed for
protection under the bankruptcy laws in 1999. Prior thereto, from 1992 to 1996,
Mr. Grant served as Finance Director for Edison Mission Energy, the largest
independent power developer in the United States. Mr. Grant also worked for
Marriott Corporation and American Airlines in various financial functions. Mr.
Grant is a director of Wayport, Inc., Datafusion, Inc., e-tel Corporation and
TheMovieSource.com. Mr. Grant earned a BS in Administration and Management
Science, Mathematics and Economics from Carnegie Mellon University, and an MBA
in Finance from the University of Chicago.
STANTON C. LAWSON, a Director appointed in December 1999, has served as
Senior Vice President of Finance since October 18, 1999. Mr. Lawson has over 17
years of experience in international environments as a financial professional.
He was employed by Olivetti from 1981 to 1990 managing finance and accounting
functions of Olivetti's Italian and U.S. divisions as an internal auditor,
Controller and Finance Director. Mr. Lawson was Finance Director from 1990 to
1992 for Jackson Publishing Group in Milan, Italy. From 1992 to 1994, he served
as Director of Finance for Francesco Cinzano. From 1994 to 1997, Mr. Lawson was
president of Lawsons' Resort, a family owned beach resort located in Marin
County, California. From 1997 to 1999, Mr. Lawson worked as Finance Manager for
the Worldwide Information Systems Division of Autodesk, Inc. Mr. Lawson holds a
BA degree in Business Economics and Italian Literature from U.C. Santa Barbara.
VOTE REQUIRED
The plurality of votes of shares of Common Stock present in person or
represented by proxy and entitled to vote on the election of directors is
required to elect the nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR THE NOMINEES
FOR THE ELECTION OF DIRECTORS
PROPOSAL TWO
AMENDMENT TO CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF AUTHORIZED SHARES
The Board of Directors has concluded that it would be advisable to amend
the Company's Certificate of Incorporation to increase the authorized number of
shares of Common Stock from 50,000,000 to 100,000,000, and the authorized number
of shares of Preferred Stock from 5,000,000 to 10,000,000.
The availability of additional share capital is needed to provide the
Company with sufficient available equity to complete funding for the
construction and operations of its systems.
The Company is currently authorized to issue up to 50,000,000 shares of
Common Stock, par value $0.0004, of which 14,354,911 shares were issued and
outstanding as of December 31, 1999. Additionally, as of December 31, 1999,
there were outstanding options and warrants totaling 6,153,167. The Company is
currently authorized to issue up to 5,000,000 shares of Preferred Stock, par
value $0.0004, of which zero shares were issued and outstanding as of December
31, 1999. The proposed amendment will not change the number of outstanding
shares, although, as a result of the proposed amendment, more shares will be
available for future issuances.
PURPOSE AND EFFECT OF AMENDMENT
The proposed amendment will authorize sufficient additional shares of
Common Stock and Preferred Stock to provide the Company the flexibility to make
such issuances as may be necessary in order to complete financings, acquisitions
or other corporate transactions and to issue shares in connection with the
Company's stock options, stock purchase and other existing employee benefit
plans.
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We intend to utilize additional equity to raise capital to build the
NewStar System. The proposed amendment to the Certificate of Incorporation would
facilitate the Company's ability to accomplish these goals and other business
and financial objectives in the future without the necessity of delaying such
activities for further stockholder approval, except as may be required in
particular cases by the Company's charter documents, applicable law or the rules
of any stock exchange or other system on which the Company's securities may then
be listed. Future issuances of additional shares of Common Stock or securities
convertible into Common Stock, whether pursuant to an acquisition or other
corporate transaction, would have the effect of diluting the voting rights and
could have the effect of diluting earnings per share and book value per share of
existing stockholders. The availability for issuance of additional shares of
Common Stock could discourage or make more difficult efforts to obtain control
of the Company.
COMPANY COMMITMENTS TO ISSUE STOCK
The Company has agreed to issue the equivalent of $5,000,000 of Common
Stock to Alcatel Space Industries on the effective date of its prime contract.
In January 2000, the Company began offering up to 500,000 shares of
Series A Convertible Preferred Shares in a private placement. The purpose of the
private placement is to finance the building of the NewStar System. The offering
price was $30.00 per share. Expenses were approximately $2.10 per share,
including commissions, out-of-pocket expenses and legal fees. Holders of Series
A Preferred Shares are entitled to receive, out of funds legally available,
cumulative dividends of $1.50 per share on December 31 of each year. Cumulative
dividends must be paid to Series A Preferred Shareholders before dividends may
be paid to holders of Common Stock. Holders of Series A Preferred Shares are
entitled to a Liquidation Preference of $30.00 per share. The holders of Series
A Preferred Shares are entitled to vote on any matters submitted to shareholders
for a vote, and each Series A Preferred Share shall be counted for the number of
votes equal to the highest number of full shares of Common Stock to which each
share of Series A Preferred Shares is convertible.
Series A Preferred Shares are convertible into 10 shares of Common
Stock. Beginning three months from purchase, if the Common Stock is trading for
less than $3.00 per share, then the Series A Preferred Shares will be
convertible by the result of dividing $30.00 by the 5 day Average Trading Price.
The Company has the right to redeem the Series A Shares, if the average trading
price for the Common Stock is $6.00 or more for 20 consecutive trading days. The
holder of Series A shares may choose to convert his or her shares within 20 days
of notice of the Company's intention to redeem the Series A Shares. The
redemption price is $30.00 per share, plus any unpaid dividend. As of April 3,
2000, 35,897 shares of Series A Preferred Shares were outstanding.
As of the date of this proxy statement, the Company (1) intends to issue
the equivalent of $5,000,000 shares of Common Stock to Alcatel Space Industries
pursuant to a construction contract; (2) has outstanding options, warrants or
other commitments to issue approximately 6,500,000 shares of Common Stock; and
(3) is currently conducting a private placement of Series A Preferred Stock.
Further, as previously discussed, the Company may issue equity securities to
finance the construction of the NewStar System. However, the Company, at this
time, has no intent, agreements, understandings or commitments to issue any
equity securities in excess of which is currently authorized under the Company's
Certificate of Incorporation.
AMENDED CERTIFICATE OF INCORPORATION
Article V, Section 5.01(a) of the Company's Certificate of Incorporation
presently reads as follows:
The aggregate number of shares which the Company shall have
authority to issue is Fifty-Five Million (55,000,000). Fifty
Million (50,000,000) shares shall be designated "Common Stock"
and shall have a par value of $0.0004. Five Million (5,000,000)
shall be designated "Preferred Stock" and shall have a par value
of $0.0004. All shares of the Company shall be issued for such
consideration, expressed in dollars, as the Board of Directors
may, from time to time, determine.
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If the amendment as proposed to the stockholders is approved, Article V,
Section 5.01(a) of the Certificate of Incorporation will be amended to read as
follows:
The aggregate number of shares which the Company shall have
authority to issue is One Hundred Ten Million (110,000,000).
One Hundred Million (100,000,000) shares shall be designated
"Common Stock" and shall have a par value of $0.0004. Ten
Million (10,000,000) shares shall be designated "Preferred
Stock" and shall have a par value of $0.0004. All shares of
the Company shall be issued for such consideration, expressed
in dollars, as the Board of Directors may, from time to time,
determine.
The foregoing proposed amendment to the Certificate of Incorporation was
unanimously adopted by the Board of Directors on February 29, 2000, who directed
that it would be submitted for stockholder approval at the Annual Meeting. The
amendment will not result in any changes to the issued and outstanding shares of
the Company and will only affect the number of shares which may be issued by the
Company. The terms of the shares of Common Stock before and after the proposed
amendment will be the same, and the proposed amendment will not affect any
stockholders' proportionate equity interest in the Company or the rights,
preferences or privileges of any stockholder. If at any time the Board of
Directors shall determine that additional authorized shares are necessary, the
Certificate of Incorporation may be further amended, after receiving the
required stockholder approval, to increase the number of authorized shares.
Issuing additional shares has the effect of potential dilution to existing
shareholders.
If Proposal Two is adopted, the Company's authorized capital will
increase and the Company will be subject to an increase in the Delaware
Franchise Tax. However, the Company believes the increase in the number of
authorized shares will not materially increase the Delaware Franchise Tax of the
Company.
The approval of the amendment to the Certificate of Incorporation
requires the affirmative vote of a majority of the outstanding shares of Common
Stock.
The Board of Directors recommends a vote "FOR" the amendment of the
Certificate of Incorporation. Proxies solicited by the Board of Directors will
be so voted unless stockholders specify otherwise.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR THE AMENDMENT
TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL THREE
ADOPTION OF THE DBSI
2000 STOCK OPTION PLAN
On February 29, 2000, subject to stockholder approval, the Board of
Directors approved of the DBS Industries, Inc. 2000 Stock Option Plan (herein
the "Plan") to serve as a vehicle to attract and retain the services of key
employees and to help such key employees realize a direct proprietary interest
in the Company. As discussed below, the Plan is a "dual plan" which provides for
the grant of both Non-Qualified Options and Incentive Stock Options. The Plan is
set forth in Exhibit "A" attached to this Proxy Statement.
DESCRIPTION OF THE PLAN
Adoption of the Plan will not affect options previously granted under
prior plans, and the Company will no longer issue any options under the prior
plans. The Plan is intended to attract, retain and motivate officers, employees,
consultants and directors of the Company, or a subsidiary of the Company, by
giving them the opportunity to acquire stock ownership in the Company.
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The Plan covers 1,750,000 shares of the Company's Common Stock, which
shares will be reserved upon confirmation of the Plan. The following is a
summary of the provisions of the Plan. The summary is not intended to be a
complete description of all terms and provisions of the Plan. The Plan is set
forth in Exhibit "A" to this Proxy Statement.
ELIGIBILITY. The Plan provides for the grant of options to employees,
directors, officers, consultants or other persons who the Board determines are
rendering valuable services to the Company (the "participants"). The Committee
(as defined below) determines which participants are to be granted options under
the Plan.
ADMINISTRATION. The Plan will be administered by the Board or the Board
may delegate the administration to the Compensation Committee, consisting of two
or more disinterested Board members (herein the "Committee"). The Board or the
Committee will be responsible for the operation of the Plan and, subject to the
terms thereof, will make all determinations regarding (i) participation in the
Plan by eligible persons, and (ii) the nature and extent of participation. The
interpretation and construction of any provisions of the Plan by the Board or
Committee shall be final. The Board may at any time remove a Committee member
and appoint a successor, provided the successor is a disinterested Board member.
Other than the ability to receive compensation individually as directors
or employees of the Company, Committee members shall serve without compensation,
unless otherwise determined by the Board, provided that the Company shall pay
the expenses of such members incurred in the administration of the Plan, subject
to approval of the Board.
TERMS OF OPTIONS. Each option will be evidenced by a stock option
agreement between the Company and the participants to whom such options may be
granted. Options granted shall have a term of up to 10 years, as determined by
the Committee, and shall be subject to the following additional terms and
conditions. In the case of a participant who owns more than 10% of the Company's
Common Stock, the term of any Incentive Stock Option shall not be more than five
years from the date of grant.
NUMBER OF SHARES OF COMMON STOCK SUBJECT TO ANY ONE OPTION. The
Committee shall determine the number of shares subject to an option grant.
However, the fair market value of the Common Stock to any Incentive Stock
Options granted to an employee in any calendar year may not exceed $100,000.
EXERCISE OF THE OPTION. Options shall become exercisable during a period
or during such periods as the Committee shall determine and may be specifically
conditioned upon achieving specified performance goals. An option may be
exercised by giving written notice of exercise to the Company specifying the
number of full shares of Common Stock to be purchased and tendering payment of
the purchase price to the Company. Payment of the option price upon exercise of
a stock option may be made in cash, by check, by the delivery of shares of
Common Stock (valued at their fair market value as of the date of the exercise
of an option), by the optionee's or purchaser's promissory note in a form and on
terms acceptable to the Administrator, by the cancellation of indebtedness of
the Company to the optionee or purchaser, by the waiver of compensation due or
accrued to the optionee or purchaser for services rendered, or by any
combination of the foregoing methods of payment. In addition, the option price
for options granted under the Plan may be made by a "same day sale" commitment
from the optionee and a broker-dealer that is a member of the National
Association of Securities Dealers, Inc. ("NASD Dealer") whereby the optionee
irrevocably elects to exercise his or her options and to sell a portion of the
shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such shares to forward the Exercise Price
directly to the Company, by a "margin" commitment from the optionee and an NASD
Dealer whereby the optionee irrevocably elects to exercise his or her option and
to pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price,
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the exercise price directly to the Company, or any combination of the
foregoing methods of payment.
RELOAD OPTION. The Administrator of the Plan may, in its discretion,
grant a participant a Reload Option. A participant with a Reload Option, who
pays for his or her stock in whole or in part, with stock owned by the
participant may be granted another option to purchase the number of shares
tendered at a price no less than the
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fair market value of the shares at the date the additional option is granted.
The purpose of a Reload Option is to incent insiders to own stock in the
Company.
OPTION PRICE. The option price of an Incentive Stock Option will be
determined by the Committee and shall be the fair market value of the Company's
Common Stock on the date of grant. In the case of an Incentive Stock Option
granted to a participant who owns more than 10% of the Common Stock, the
exercise price will be 110% of the fair market value.
EMPLOYMENT AGREEMENT. The Committee may include in an option agreement a
condition that the participant shall agree to remain in the employ of the
Company for a specified period of time following the date of grant.
TERMINATION OF STATUS AS AN EMPLOYEE. In the case of an Incentive Stock
Option, if the participant ceases to serve as an employee of the Company, other
than for permanent and total disability or death, all or part of the shares that
the optionee was entitled to exercise at the date of such termination may be
exercised within three months after the date employment ceases. After such
three-month period, all unexercised options shall terminate. Non-Qualified Stock
Options are not limited to such three-month exercise period. Notwithstanding the
foregoing, in no event may an option be exercised after its term has expired.
TERMINATION OF STATUS AS A DIRECTOR OR CONSULTANT. If an optionee ceases
to serve as a director or consultant of the Company, any Non-Qualified Stock
Option held at the date of such termination may be exercised, in whole or in
part, at any time during the term of the option as set forth in the option
agreement and after such period of time all unexercised options shall terminate.
Notwithstanding the foregoing, in no event may an option be exercised after its
term has expired.
DEATH OR PERMANENT DISABILITY. If an optionee should die or become
permanently or totally disabled while serving as an employee, officer,
consultant or director of the Company, Incentive Stock Options held by the
participant may be exercised by the participant, the participant's estate, or
descendant at any time within 12 months after the death or permanent disability
and shall terminate thereafter. If a participant should die within one month
after ceasing to serve as an employee or officer of the Company, the options may
be exercised within 12 months after the death to the extent the option was
exercisable on the date of such death. Non-Qualified Stock Options shall not be
limited to such 12-month exercise period, and such options may be exercised
within the time specified in the option agreement. Notwithstanding the
foregoing, in no event may an option be exercised after its term has expired.
SUSPENSION OR TERMINATION OF OPTIONS. No option shall be exercisable by
any person after its expiration date. If the Committee reasonably believes that
a participant has committed an act of misconduct, the Committee may suspend the
participant's right to exercise any option pending a final determination by the
Committee. If the Committee determines a participant has committed an act of
embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the
Company, breach of fiduciary duty or deliberate disregard of the Company's
rules, or if a participant makes an unauthorized disclosure of any Company trade
secret or confidential information, engages in any conduct constituting unfair
competition, induces any of the Company's customers or contracting parties to
breach a contract with the Company, or induces any principal for whom the
Company acts as an agent to terminate such agency relationship, neither the
participant nor his or her estate shall be entitled to exercise any option
whatsoever. In making such determination, the Committee shall act fairly and in
good faith and shall give the participant an opportunity to appear and present
evidence on the participant's behalf at a hearing before the Committee. The
determination of the Committee shall be final and conclusive unless overruled by
the Board of Directors.
TRANSFERABILITY OF OPTIONS. An Incentive Stock Option is
non-transferable, other than by will or the laws of descent and distribution,
and is exercisable only by the participant, his or her guardian or legal
representative during his or her lifetime, or, in the event of death, by the
executors, administrators, designated beneficiary, legatees or heirs of his or
her estate during the time period provided above. The Administrator may provide
for transfer of an option (other than an Incentive Stock Option), without
payment of consideration, to the following family members of the optionee,
including adoptive relationships: a child, stepchild, grandchild, parent,
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<PAGE>
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law, niece, nephew,
former spouse (whether by gift or pursuant to a domestic relations order), any
person sharing the employee's household (other than a tenant or employee), a
family-controlled partnership, corporation, limited liability company and trust,
or a foundation in which family members heretofore described control the
management of assets. The assigned portion may only be exercised by the person
or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Administrator may deem
appropriate.
COMPLIANCE WITH SECURITIES LAWS. It is the intent of the Company that
the 2000 Stock Option Plan will comply with Rule 16b-3 of the Securities
Exchange Act of 1934, as amended.
OTHER PROVISIONS. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined by
the Board or Committee.
U.S. FEDERAL TAX ASPECTS
Options granted under the Plan may be either Incentive Stock Options
which satisfy the requirements of Section 422 of the Internal Revenue Code or
Non-Qualified Options which are not intended to meet such requirements. The
federal income tax treatment for the two types of options differs as follows:
INCENTIVE OPTIONS. No taxable income is recognized by the optionee at
the time of the option grant, and no taxable income is generally recognized at
the time the option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise made the
subject of a taxable disposition. For federal tax purposes, dispositions are
divided into two categories: (i) qualifying, and (ii) disqualifying. A
qualifying disposition occurs if the sale or other disposition is made after the
optionee has held the shares for more than two years after the option grant date
and more than one year after the exercise date. If either of these two holding
periods is not satisfied, then a disqualifying disposition will result.
Upon a qualifying disposition of the shares, the optionee will recognize
long-term capital gain in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased shares over (ii)
the exercise price paid for those shares. If there is a disqualifying
disposition of the shares, then the excess of (i) the fair market value of the
shares on the exercise date over (ii) the exercise price paid for those shares
will be taxable as ordinary income to the optionee. Any additional gain or loss
recognized upon the disposition will be taxable as a capital gain or loss.
If the optionee makes a disqualifying disposition of the purchased
shares, then the Company will be entitled to an income tax deduction for the
taxable year in which such disposition occurs, equal to the excess of (i) the
fair market value of such shares on the option exercise date over (ii) the
exercise price paid for the shares. In no other instance will the Company be
allowed a deduction with respect to the optionee's disposition of the purchased
shares.
NON-QUALIFIED OPTIONS. No taxable income is recognized by an optionee
upon the grant of a Non-Qualified Option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares, and the optionee will be required
to satisfy the tax withholding requirements applicable to such income.
If the shares acquired upon exercise of the Non-Qualified Option are
unvested and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal Revenue Code to
include as ordinary income in the year of exercise of the option an amount equal
to the excess of (i) the fair market value of the purchased shares on
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<PAGE>
the exercise date over (ii) the exercise price paid for such shares. If the
Section 83(b) election is made, the optionee will not recognize any additional
income as and when the repurchase right lapses.
The Company will be entitled to an income tax deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised Non-Qualified Option. The deduction will in general be allowed for the
taxable year of the Company in which such ordinary income is recognized by the
optionee.
SPECIAL TAX ELECTION. The Administrator may, in its discretion, provide
one or more holders of Non-Qualified Options with the right to have the Company
withhold a portion of the shares otherwise issuable to such individuals in
satisfaction of the tax liability incurred by such individuals in connection
with the exercise of those options. Alternatively, the Administrator may allow
such individuals to deliver previously acquired shares of Common Stock in
payment of such tax liability.
WITHHOLDING TAXES. The Company is entitled to take appropriate measures
to withhold from the shares of Common Stock, or to otherwise obtain from the
recipients, sufficient sums in cash, check or shares of stock as the Company
deems necessary to satisfy any applicable federal, state and local withholding
taxes, including FICA taxes, before the delivery of the Common Stock to the
recipient.
ACCOUNTING TREATMENT
Option grants with an exercise price per share equal to 110% of the fair
market value of the shares at the time of grant will not result in any direct
charge to the Company's earnings. However, the fair value of those options must
be disclosed in the notes to the Company's financial statements, in the form of
proforma statements to those financial statements, the impact those options
would have upon the Company's reported earnings were the value of those options
at the time of grant treated as compensation expense. In addition, the number of
outstanding options may be a factor in determining the Company's earnings per
share on a diluted basis.
On March 31, 1999, the Financial Accounting Standards Board issued an
Exposure Draft of a proposed interpretation of APB Opinion 25, "Accounting for
Stock Issued to Employees." Under the proposed interpretation, as modified on
August 11, 1999, option grants made to non-employee consultants (but not
non-employee Board members) after December 15, 1998, will result in a direct
charge to the Company's reported earnings based upon the fair value of the
option measured initially as of the grant date and then subsequently on the
vesting date of each installment of the underlying option shares (if vesting
applies). Such charge will accordingly include the appreciation in the value of
the option shares over the period between the grant date of the option (or, if
later, the effective date of the final amendment) and the vesting date of each
installment of the option shares (if vesting applies).
ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event any change, such
as a stock split, is made in the Company's capitalization which results in an
exchange of Common Stock for a greater or lesser number of shares, an
appropriate adjustment shall be made in the option price and in the number of
shares subject to the option. In the event of the proposed dissolution or
liquidation of the Company, all outstanding options shall automatically
terminate, provided that the participant shall have the right, immediately prior
to the dissolution or liquidation, to exercise his or her options. In the event
of the sale of all or substantially all of the Company's assets or the merger of
the Company with or into another corporation, (i) if the Company is the
surviving corporation following a merger or consolidation each option shall,
upon exercise, entitle the holder to the issuance of securities to which a
holder of the number of shares of Common Stock subject to the option would be
entitled after the merger or consolidation, or (ii) all options shall otherwise
terminate, provided that the participant shall have the right, immediately prior
to the merger, consolidation, dissolution or liquidation to exercise his or her
options.
AMENDMENT AND TERMINATION. The Board of Directors may amend the Plan to
materially increase the benefits accruing to the option holder without
stockholder approval, except to the extent that stockholder approval is required
to maintain the status of the Plan as an Incentive Stock Option Plan.
Notwithstanding the foregoing, no action by the Board of Directors or
stockholders may alter or impair any option previously granted under the Plan
without the consent of the participant.
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VOTE REQUIRED
The affirmative vote of a majority of the Common Stock represented and
voting at the Meeting is necessary to approve the adoption of the 2000 Stock
Option Plan. The Board of Directors recommends a vote "FOR" the adoption of the
2000 Stock Option Plan. Proxies solicited by the Board of Directors will be so
voted unless stockholders specify otherwise.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR THE ADOPTION OF
THE 2000 STOCK OPTION PLAN.
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DIRECTORS AND EXECUTIVE OFFICERS
IDENTIFICATION OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS. The
directors and executive officers of the Company, their ages, positions held, and
duration as such, are as follows:
<TABLE>
<CAPTION>
NAME POSITION AGE PERIOD
- ---- -------- --- ------
<S> <C> <C> <C>
Fred W. Thompson Chairman of the Board, President, Chief 57 December 1992 - present
Executive Officer
Michael T. Schieber Director 60 December 1992 - present
H. Tate Holt Director 48 February 1996 - present
President, NewStar Ltd. June 1999 - present
Jerome W. Carlson Director 63 May 1997 - present
Jessie J. Knight, Jr. Director 49 February 1999 - present
Roy T. Grant Director 42 August 1999 - present
Gregory T. Leger Executive Vice President Engineering 44 March 1998 - present
Frederick R. Skillman, Jr. Vice President, Operations 38 August 1995 - present
Stanton C. Lawson Director, Senior Vice President of 42 October 1999 - present
Finance, Chief Financial Officer
Randy Stratt Senior Vice President, General Counsel 43 November 1999 - present
and Secretary
</TABLE>
BACKGROUND OF PRESENT DIRECTORS AND EXECUTIVE OFFICERS
FRED W. THOMPSON has served as Chairman of the Board, President and CEO
since 1992. Up until October 1999, Mr. Thompson also served as Chief Financial
Officer. Mr. Thompson has over 30 years of senior management experience in the
telecommunications industry, including more than 20 years with AT&T Bell Labs,
Western Electric Co. and the Long Lines Dept. As founder and Chief Executive
Officer of Inter Exchange Consultants, Inc., Mr. Thompson provided management,
design and engineering services leading several of the pioneering cellular
telephone operations in major world markets, including New York, San Francisco,
London and Tokyo. Mr. Thompson utilized his skills and experience in bringing
new communications technologies to market by founding DBS Industries, Inc. and
steering it through the FCC licensing process toward the operational phase. Mr.
Thompson received a BS degree in Electrical Engineering from California
Polytechnic.
H. TATE HOLT, a Director appointed in February 1996, is serving as
President of NewStar, Ltd. and will market, implement and manage the delivery of
service to DBSI customers. Previously since July 1990, Mr. Holt was President of
Holt & Associates, a management consulting firm assisting clients in developing
and achieving growth targets, both domestically as well as internationally. From
1987 to 1990, Mr. Holt was a Senior Vice President at Automatic Data Processing,
Inc., in Roseland, New Jersey and Santa Clara, California. Mr. Holt has over 25
years of experience in various senior sales, marketing and general management
positions with IBM, Triad Systems, and ADP. Mr. Holt is also an active director
of Onsite Energy and AremisSoft, companies registered under the Exchange Act of
1934, as well as for several private companies. Mr. Holt holds an AB from
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Indiana University.
MICHAEL T. SCHIEBER has served as a Director of the Company since
December 1992. From 1987 to December 1992, Mr. Schieber was the Managing Partner
of Amador Telecommunications and since 1990 has been a partner in Columbia
Communications, both investors in nation-wide paging licenses. Mr. Schieber also
holds minority interests in two Illinois cellular telephone licenses. He retired
from the Department of Fisheries with the State of Washington in May 1993 where
he had served as a civil engineer since 1984. He is also a retired Air Force
Major and Command Pilot. Mr. Schieber received an MA degree in International
Relations and Government from the University of Notre Dame, a BS in Engineering
from the Air Force Academy, and a BA in Business from The Evergreen State
College.
JEROME W. CARLSON, a Director appointed in May 1997, is currently
President of Raljer, Inc., management consulting firm, and has held that
position since January 1995. Previously, from 1984 to 1995, Mr. Carlson was the
Chief Financial Officer, Vice President of Finance and Corporate Secretary for
Triad Systems Corporation in Livermore, California. Mr. Carlson has over twenty
years experience in both finance and general management positions with Hewlett
Packard. Since 1995 he has assisted a number of businesses in developing and
achieving certain strategic and tactical goals in their industries. Mr. Carlson
is a director of Valley Community Bank and Tri-Valley Business Council, as well
as director and advisor for several private companies. He holds a BS degree from
the University of California at Davis and an MBA from the Stanford Graduate
School of Business.
JESSIE J. KNIGHT, JR., a Director appointed in February 1999, is
President and Chief Executive Officer of the Greater San Diego Chamber of
Commerce. He was a Commissioner of the California Public Utilities Commission
from 1993 through December 1998. Appointed by former Governor Peter Wilson, he
was one of five individuals responsible for economic and regulatory oversight of
California's telecommunications, utility, trucking and rail industries. Before
his appointment to the Commission, he was Executive Vice President of the San
Francisco Chamber of Commerce, responsible for international operations,
economic development and attracting businesses to San Francisco. He also served
as Vice President, Marketing for the San Francisco Newspaper Agency, a
publishing operation encompassing the San Francisco Chronicle and the San
Francisco Examiner. Mr. Knight is a director of Blue Shield of California and
serves on the board of directors of Avista, Inc. Mr. Knight holds a BA degree
from St. Louis University and an MBA from the University of Wisconsin.
ROY T. GRANT has served as a Director since August 1999. Previously from
November 1996 through April 1999, Mr. Grant was employed by Iridium, LLC., most
recently as Vice President and Chief Financial Officer. Iridium, LLC filed for
protection under the bankruptcy laws in 1999. Prior thereto, from 1992 to 1996,
Mr. Grant served as Finance Director for Edison Mission Energy, the largest
independent power developer in the United States. Mr. Grant also worked for
Marriott Corporation and American Airlines in various financial functions. Mr.
Grant is a director of Wayport, Inc., Datafusion, Inc., e-tel Corporation and
TheMovieSource.com. Mr. Grant holds a BS in Administration and Management
Science, Mathematics and Economics from Carnegie Mellon University and an MBA in
Finance from the University of Chicago.
STANTON C. LAWSON, a Director appointed in December 1999, has served as
Senior Vice President of Finance since October 18, 1999. Mr. Lawson has over 17
years of experience in international environments as a financial professional.
He was employed by Olivetti from 1981 to 1990 managing the finance and
accounting function of Olivetti's Italian and U.S. divisions as an internal
auditor, Controller and Finance Director. Mr. Lawson was Finance Director from
1990 to 1992 for Jackson Publishing Group in Milan, Italy. From 1992 to 1994, he
served as Director of Finance for Francesco Cinzano. From 1994 to 1997, Mr.
Lawson was president of Lawsons' Resort, a family owned beach resort located in
Marin County, California. Just prior to joining DBSI, from 1997 to 1999, Mr.
Lawson worked as Finance Manager for the Worldwide Information Systems Division
of Autodesk, Inc. Mr. Lawson holds a BA degree in Business Economics and Italian
Literature from U.C. Santa Barbara.
RANDY STRATT, Senior Vice President, General Counsel, joined the Company
in November 1999. Mr. Stratt has over 20 years of high-tech in-house counsel and
business development experience with both public
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and private firms. Prior to joining the Company, Mr. Stratt was Director of
Strategic Development and Communications with Dresdner RCM Global Investors, and
facilitated a 2-year transformation of the firm from a single-office domestic
operation to an integrated global investment management firm with over $65
billion of assets under management. From 1993 to 1996, Mr. Stratt co-founded and
served as counsel for Health Action Network, Inc., a 501(c)(3) non-profit
organization, and also served as outside counsel to a number of organizations.
From 1987 to 1993, Mr. Stratt was Senior Vice President and General Counsel of
Spear Financial Services, Inc., a California-based NASDAQ NMS financial services
firm with traditional and on-line broker-dealer operations. From 1980 to 1987,
Mr. Stratt was General Counsel and on the management team of Source
Telecomputing Corporation, one of the first on-line consumer services, which was
eventually acquired by CompuServe and ultimately acquired by America On-line.
Mr. Stratt is a licensed attorney. He holds a BA from Cornell University and
received a JD from George Washington University law school and an MS in
Information Systems from George Washington University Business School.
GREGORY T. LEGER has served as Executive Vice President of Engineering
since March 1998. Mr. Leger, who is responsible for design and construction of
the NewStar System, has more than 20 years' experience in systems engineering,
management and business planning. Prior to joining the company, from 1989 to
1998, Mr. Leger worked for Seimac Limited as its Product Development Manager,
responsible for solutions encompassing electronics data telemetry, software and
packaging. Mr. Leger received both his BS degree in Physics and his MS degree in
Oceanography at Dalhousie University, and a degree in Master Space Systems
Engineering at Technical University of Delft, Netherlands.
FREDERICK R. SKILLMAN, JR., joined the Company in August 1995 and serves
as Vice President, Operations for the Company. Mr. Skillman has over 15 years of
experience working in the utility and the communication industries. Prior to
joining the Company, Mr. Skillman was a Senior Electrical Engineer for Pacific
Gas & Electric Company, San Francisco, California. Mr. Skillman holds a BS
degree in Electrical Engineering from California Polytechnic State University
and an MBA degree from the University of San Francisco.
BOARD OF DIRECTORS
The Board of Directors held four meetings during the year ending
December 31, 1999, and each eligible director attended all meetings. All current
members of the Board of Directors attended more than 75% of all meetings, during
their term of office.
COMMITTEES OF THE BOARD
The Board has an audit committee consisting of Messrs. Carlson
(Chairman), Schieber and Grant, a nominating committee consisting of Messrs.
Knight, Carlson and Thompson, and a compensation committee consisting of Messrs.
Schieber (Chairman), Carlson, Knight and Grant.
The primary functions of the audit committee are to review the scope and
results of audits by our independent auditors, our internal accounting controls,
non-audit services performed by the independent accountants and the cost of
accounting services. The audit committee held one meeting in 1999.
The nominating committee assists in the process of officer and director
nominations. The nominating committee will not consider nominees of the
shareholders. No meetings were held by the nominating committee in 1999.
The compensation committee administers our various stock option plans
and approves compensation, remuneration and incentive arrangements for our
officers of the Company. The compensation committee held four meetings in 1999.
FAMILY RELATIONSHIPS
There are no family relationships between any director and executive
officer.
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<PAGE>
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation of the Company's Chief Executive Officer and each employee of the
Company or its subsidiaries who earned in excess of $100,000 for the year ended
December 31, 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- -----------------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION(2)
<S> <C> <C> <C> <C> <C> <C>
Fred W. Thompson 1999 $215,000 $45,000 $ 8,051 1,000,000 $ 6,789
President, CEO 1998 $180,000 $20,000 $ 8,005 - 0 - $235,691(3)
1997 $180,000(4) - 0 - $ 6,705 185,000 -0-
H. Tate Holt 1999 $100,000 $50,000 $ 780 200,000 -0-
President, NewStar Ltd.
Gregory T. Leger 1999 $126,000 $20,000 $13,560 125,000 $ 56,259(5)
Executive VP Engineering 1998 $ 93,230 $20,000 $ 1,914 125,000 -0-
Frederick R. Skillman, Jr. 1999 $120,415 $54,500 $ 2,782 150,000 $ 4,667
Vice President, Operations 1998 $110,000 - 0 - $ 2,512 - 0 - -0-
E.A. James Peretti (6) 1999 $ 90,417 $38,800 $ 2,125 - 0 - $261,929(7)
Former Chief Operating 1998 $155,000 - 0 - $ 2,576 - 0 -
Officer 1997 $155,000 - 0 - $ 3,732 150,000
</TABLE>
(1) Consists entirely of payment of insurance premiums.
(2) Except where noted, consists entirely of payment of contribution to IRA
Retirement Plan.
(3) Represents $27,691 of pay in lieu of vacation and $208,000 of
compensation deferred in 1996 and 1997.
(4) $80,000 paid in cash, $100,000 deferred pursuant to his employment
agreement.
(5) Includes $51,000 housing/car allowance for overseas living assistance
and payment of $5,259 for French Pension.
(6) Mr. Peretti resigned in July 1999.
(7) In July 1999, the Company agreed to a severance package with Mr. Peretti
including compensation of $219,583 and vacation payout of $35,770. This
amount also includes a contribution of $6,576 to Mr. Peretti's IRA
Retirement Plan.
EMPLOYMENT AGREEMENTS
Mr. Thompson entered into an employment agreement with us on April 18,
1996, effective January 1, 1996. His annual salary under the agreement was
$180,000, and included Non-qualified stock options to purchase 312,500 shares of
our Common Stock. In October 1998, we paid Mr. Thompson the amount of $208,000
related to his previously deferred compensation through December 31, 1997.
Effective July 1, 1999,
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<PAGE>
Mr. Thompson's employment agreement was extended until July 1, 2004. In
connection with the extension, Mr. Thompson's annual salary was increased to
$250,000, and he was granted Non-qualified options to purchase 1,000,000 shares
of Common Stock at an exercise price of $1.3496 based on a formula. Options to
purchase 250,000 shares of Common Stock vest immediately and the remaining
options to purchase 750,000 shares of Common Stock vest in 250,000 increments
beginning on January 1, 2000, and each year thereafter. If Mr. Thompson is
terminated without cause during the term of his employment agreement, his salary
shall continue for 12 months following termination so long as he does not
compete with the Company. Upon such termination or in the event of a change of
control, all options granted to Mr. Thompson in connection with his employment
agreement shall vest immediately. We maintain a key person insurance policy on
Mr. Thompson's life in the face amount of $2,000,000, and we are the sole
beneficiary of such policy.
Effective March 1, 1998, we entered into a three-year employment
agreement with Mr. Gregory T. Leger to serve as Executive Vice President of
Engineering. Under the employment agreement, Mr. Leger's annual salary was
$120,000. He also received $20,000 upon the execution of the agreement and
received an additional $20,000 in March 1999, as a bonus. Mr. Leger also
received a Non-qualified option to purchase 125,000 shares of our Common Stock
subject to vesting requirements. Effective July 1, 1999, Mr. Leger's employment
agreement was extended until July 1, 2002. In connection with the extension, Mr.
Leger's annual salary was increased to $132,000 and he was granted Non-qualified
options to purchase 125,000 shares of Common Stock, subject to vesting, at an
exercise price of $1.3496 based on a formula. If Mr. Leger is terminated without
cause during the term of his employment agreement, his salary shall continue for
12 months following termination so long as he does not compete with the Company.
Upon such termination, all options granted to Mr. Leger in connection with his
employment agreement shall vest immediately.
Effective July 28, 1999, we entered into a one-year employment agreement
with Mr. Frederick R. Skillman, Jr., to serve as our Vice President, Operations.
Under the employment agreement, Mr. Skillman's annual salary is $135,000. He
also received $13,500 upon the execution of the agreement and an additional
$13,500 in November, 1999, as a bonus. Mr. Skillman also received a
Non-qualified option to purchase 150,000 shares of Common Stock subject to
vesting requirements at an exercise price equal to $.7573 per share based upon a
formula. If Mr. Skillman is terminated without cause during the term of his
employment agreement, he shall receive a lump sum cash payment of 12 months'
salary following termination so long as he does not compete with the Company.
Upon such termination, all options granted to Mr. Skillman in connection with
his employment agreement shall vest immediately.
Effective June 1, 1999, we entered into a one-year employment agreement
with Mr. H. Tate Holt to serve as President and Chief Executive Officer of
NewStar, Ltd. Under the employment agreement, Mr. Holt's annual salary is
$200,000. He also received $50,000 upon the execution of the agreement, as a
bonus. Mr. Holt also received a Non-qualified option to purchase 200,000 shares
of Common Stock subject to vesting requirements at an exercise price equal to
$1.1019 per share based upon a formula. If Mr. Holt is terminated without cause
during the term of his employment agreement, he shall receive a lump sum cash
payment equal to the remainder of his contract salary following termination.
Upon such termination or in the event of a change of control, all options
granted to Mr. Holt in connection with his employment agreement shall vest
immediately.
Effective October 18, 1999, we entered into a three-year employment
agreement with Mr. Stanton C. Lawson to serve as our Senior Vice President of
Finance. Under the employment agreement, Mr. Lawson's annual salary is $180,000.
Mr. Lawson also received a Non-qualified option to purchase 180,000 shares of
Common Stock at an exercise price equal to $1.0952 per share based upon a
formula. If Mr. Lawson is terminated without cause during the term of his
employment agreement, his salary shall continue for 12 months following
termination so long as he does not compete with the Company. Upon such
termination, all options granted to Mr. Lawson in connection with his employment
agreement shall vest immediately.
Effective November 18, 1999, we entered into a three-year employment
agreement with Mr. Randy Stratt to serve as a Senior Vice President and our
General Counsel. Under the employment agreement, Mr. Stratt's annual salary is
$165,000. Mr. Stratt also received a Non-qualified option to purchase 160,000
shares of Common Stock at an exercise price equal to $1.0797 per share based
upon a formula. If Mr. Stratt is terminated without cause during the term of his
employment agreement, his salary shall continue for 12 months
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<PAGE>
following termination so long as he does not compete with the Company. Upon such
termination, all options granted to Mr. Stratt in connection with his employment
agreement shall vest immediately.
STOCK OPTION PLANS
The Company has established the 1999 Employee Stock Purchase Plan (the
"1999 Plan"), which was approved by the stockholders in June 1999 to serve as a
vehicle to attract and retain the services of key employees and to help such key
employees realize a direct proprietary interest in the Company. Under the 1999
Plan, employees, including officers, who do not beneficially own stock and/or
options totaling 5% or more of the voting power of the Company, will be eligible
to participate. However, no participant may be granted rights to purchase more
than $25,000 worth of Common Stock (valued at the time the purchase right is
granted) for each calendar year in which such purchase rights are outstanding
under any other stock purchase plans. An aggregate of 50,000 shares of Common
Stock of the Company were reserved for issuance under the 1999 Plan. Employees
electing to participate in the 1999 Plan are allowed to deduct from 1% to 10% of
their compensation to purchase shares of Common Stock. Twice a year, the
employees' accumulated payroll deductions will be used to purchase shares of
Common Stock at a price equal to 85% of the closing price of the Common Stock on
either the first business day or last business day of the offering period,
whichever is lower. The 1999 Plan is administered by the Board of Directors and
its Compensation Committee. The 1999 Plan may be amended, suspended, or
terminated by the Board, but may not increase the maximum number of shares
issuable, increase the benefits accruing to participants, or modify the
eligibility requirement under the 1999 Plan without stockholder approval.
The Company has established the 1998 Stock Option Plan (the "1998 Plan")
which was approved by the stockholders in May 1998 to serve as a vehicle to
attract and retain the services of key employees and to help such key employees
realize a direct proprietary interest in the Company. The 1998 Plan provides for
the grant of up to 500,000 Non-Qualified and Incentive Stock Options. Under the
1998 Plan, officers, directors, consultants and employees of the Company are
eligible for participation. The exercise price of any Incentive Stock Option
granted under the 1998 Plan may not be less than 100% of the fair market value
of our Common Stock on the date of grant. The aggregate Fair Market Value
(determined as of the Grant Date) of the shares for which Incentive Stock
Options may first become exercisable by Optionee during any calendar year under
this Plan, together with that of shares subject to Incentive Stock Options first
exercisable by such Optionee under any other of our plans, cannot exceed
$100,000. Shares subject to options under the 1998 Plan may be purchased for
cash. Unless otherwise provided by the Board, an option granted under the 1998
Plan is exercisable for a term of ten years (or for a shorter period up to ten
years). The 1998 Plan is administered by the Board of Directors and its
Compensation Committee, which has discretion to determine optionees, the number
of shares to be covered by each option, the exercise schedule, and other terms
of the options. The 1998 Plan may be amended, suspended, or terminated by the
Board, but no such action may impair rights under a previously granted option.
No option is transferable by the optionee other than by will or the laws of
descent and distribution. As of December 31, 1999, options to acquire 227,011
shares of Common Stock were issued and all remain outstanding.
The Company previously established a 1996 Stock Option Plan (the "1996
Plan") to serve as a vehicle to attract and retain the services of key employees
and to help such key employees realize a direct proprietary interest in us. The
1996 Plan provided for the grant of up to 1,650,000 Non-Qualified and Incentive
Stock Options of which 1,062,528 were issued. As of December 31, 1999, options
to purchase 691,486 shares were outstanding. Under the 1996 Plan, officers,
directors, consultants and employees of ours are eligible for participation. The
exercise price of any Incentive Stock Option granted under the 1996 Plan may not
be less than 100% of the fair market value of our Common Stock on the date of
grant. The aggregate Fair Market Value (determined as of the Grant Date) of the
shares for which Incentive Stock Options may first become exercisable by
Optionee during any calendar year under this Plan, together with that of shares
subject to Incentive Stock Options first exercisable by such Optionee under any
other of our plans, cannot exceed $100,000. Shares subject to options under the
1996 Plan may be purchased for cash. Unless otherwise provided by the Board, an
option granted under the 1996 Plan is exercisable for a term of ten years (or
for a shorter period up to ten years). The 1996 Plan is administered by the
Board of Directors and its Compensation Committee, which has discretion to
determine optionees, the number of shares to be covered by each option, the
exercise schedule, and other terms
18
<PAGE>
of the options. The 1996 Plan may be amended, suspended, or terminated by the
Board, but no such action may impair rights under a previously granted option.
No option is transferable by the optionee other than by will or the laws of
descent and distribution.
The Company also previously developed three stock option plans to award
certain employees, directors, and consultants with the opportunity to purchase
the Company's Common Stock. Under our 1993 Incentive Stock Option Plan ("1993
ISO Plan") options to purchase up to 69,644 shares of Common Stock were issued
to eligible employees. Under the Non-Qualified Stock Option Plan for
Non-Employee Directors ("Director's Plan") options to purchase up to 48,750
shares of Common Stock were granted to non-employee directors. Under the
Non-Qualified Stock Option Plan for Consultants ("Consultant's Plan") options to
purchase up to 14,625 shares of Common Stock were granted to certain
consultants. As of December 31, 1999, options to acquire 24,875, 42,500, and
14,625 shares of Common Stock were outstanding under the 1993 ISO Plan,
Director's Plan and Consultant's Plan, respectively.
On August 25, 1999, the Company's Board of Directors approved the
reservation of Non-Qualified Stock Options for issuance to our new employees and
new employees of our subsidiaries to purchase 500,000 shares of Common Stock
and, on December 9, 1999, increased the reservation to 540,000 shares. The per
share exercise price will be calculated based upon a formula taking into
consideration the current price of a share of Common Stock, term of the option,
anticipated growth rate and the risk free rate. As of December 31, 1999, options
to purchase all 540,000 shares of Common Stock were granted.
The following table shows for the fiscal year ended December 31, 1999,
certain information regarding options granted during the fiscal year to the
executive officers of the Company named in the Summary Compensation Table under
"Executive Compensation".
OPTION GRANTS IN THE FISCAL YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS GRANTED
OPTIONS GRANTED TO EMPLOYEES IN FISCAL YEAR EXERCISE OR BASE EXPIRATION
NAME 1999 1999 PRICE ($/SHARE) DATE
<S> <C> <C> <C> <C>
Fred Thompson 1,000,000 49.6% $1.3496 9/1/2009
President, CEO
H. Tate Holt 200,000 9.9% $1.1019 9/1/2009
President, NewStar, Ltd.
Gregory T. Leger, 125,000 6.2% $1.3496 9/1/2009
Executive Vice President
Frederick R Skillman, Jr. 150,000 7.4% $0.7573 9/1/2009
Vice President
</TABLE>
19
<PAGE>
The following table shows for the fiscal year ended December 31, 1999,
certain information regarding options exercised by and held at year-end by the
executive officers of the Company named in the Summary Compensation Table under
"Executive Compensation".
AGGREGATED OPTION/SAR EXERCISES IN LAST FY
AND FY-END INDIVIDUAL VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTION/SARs AT
OPTIONS/SARs AT FY-END FY-END(1)
# $
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Fred W. Thompson, 12,625 $56,541 941,332/563,043 $1,113,725/$502,416
President, CEO
H. Tate Holt 16,667 $69,168 191,141/150,000 $144,649/$158,145
President, NewStar Ltd.
Gregory T. Leger, 30,000 $163,164 126,250/93,750 $179,695/$75,619
Executive Vice President
Frederick R. Skillman, - 0 - - 0 - 162,500/137,500 $247,122/$206,492
Jr., Vice President
E.A. James Peretti 150,000 $356,288 375,000/-0- $609,450/-0-
Former Chief Operating
Officer
</TABLE>
(1) The value of unexercised in-the-money stock options is based on a per
share price of $2.1562 as quoted on the OTC Bulletin Board on December
31, 1999.
COMPENSATION OF DIRECTORS
On September 1, 1999, our Board of Directors adopted a directors'
compensation plan. Under the compensation plan, each non-employee director shall
receive an annual retainer of $12,000 plus a fee of $1,000 and reasonable travel
expenses for attendance at each Board meeting. Each committee chairman shall
receive $2,500 annually for each year of service as committee chairman, and each
committee member shall receive $500 for attendance at each committee meeting. In
lieu of cash compensation, non-employee directors may elect to receive either
the Company's Common Stock or stock options to purchase Common Stock, the value
of which under either election, shall not exceed $20,000 annually. If either
Common Stock or stock options is elected, the price will be determined by the
average closing price for the five trading days of the Common Stock at the
beginning of a six-month period ending either June 30 or December 31. Further,
with respect to stock options elected as compensation, the cash equivalent
number of stock options will be determined based upon a number of factors,
including but not limited to, vesting periods, estimated growth rates and
risk-free rates.
20
<PAGE>
In addition, each non-employee director shall receive an annual grant of
non-qualified options to purchase 10,000 shares of Common Stock in accordance
with the 1998 Plan. The exercise price shall be determined by the closing price
of the Common Stock of the five trading days up to and including the date of the
Annual Stockholders Meeting, subject to discounting pursuant to a formula
adopted by the Board. These options shall vest one year from date of grant.
Further, upon either the first-time appointment or election to the Board, a new
non-employee director shall receive options to acquire 10,000 shares of Common
Stock, the exercise price of which will be determined by a formula adopted by
the Board. These options shall vest immediately.
In 1999, Michael T. Schieber was awarded options to purchase 10,000
common shares at $0.7235 per share and options to purchase 4,391 at $2.8625 per
share; Jerome W. Carlson was awarded options to purchase 10,000 common shares at
$0.7235 per share and options to purchase 4,391 at $2.8625 per share; Jessie J.
Knight, Jr. was awarded options to purchase 37,500 common shares at $5.50 per
share, options to purchase 12,500 common shares at $2.8125 per share, options to
purchase 10,000 common shares at $0.7235 per share, and options to purchase
4,160 common shares at $2.8625 per share; and Roy T. Grant was awarded options
to purchase 8,333 common shares at $0.7235 per share, options to purchase 10,000
common shares at $0.3897 per share, and options to purchase 3,236 common shares
at $2.8625 per share.
The directors' compensation plan was prepared following a report by an
independent compensation firm. It was recommended by the compensation committee
and adopted by the Board.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than 10% of the Company's Common Stock, to file reports of ownership on
Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange
Commission (the "SEC"). Such executive officers, directors and 10% stockholders
are also required by SEC rules to furnish the Company with copies of all Section
16(a) forms they file. Based solely upon its review of copies of such forms
received by it, or on written representations from certain reporting persons
that no other filings were required for such persons, the Company believes that,
during the year ended December 31, 1999, its executive officers, directors and
10% stockholders complied with all applicable Section 16(a) filing requirements.
21
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of March 13, 2000,
with respect to the beneficial ownership of the Company's Common Stock for (i)
each director, (ii) all directors and officers of the Company as a group, and
(iii) each person known to the Company to own beneficially five percent (5%) or
more of the outstanding shares of the Company's Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIALLY AND
BENEFICIAL OWNER RECORD OWNED (1) PERCENT OF CLASS
<S> <C> <C>
Fred W. Thompson 1,391,308(2) 8.6%
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
Stanton C. Lawson 60,000(3) *
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
Michael T. Schieber 360,380(4) 2.2%
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
H. Tate Holt 212,629(5) 1.3%
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
Jerome W. Carlson 116,891(6) *
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
Jessie J. Knight, Jr 54,160(7) *
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
Roy T. Grant 17,923(8) *
100 Shoreline Highway, Suite 190A
Mill Valley, CA 94941
Officers and Directors as a Group 2,567,874 15.9%
(10 Persons)
Astoria Capital Partners, L.P. 1,000,000 6.2%
6600 Southwest 92nd St., Suite 370
Portland, Oregon 97223
Eurockot Launch Services GMBH 1,333,334 8.2%
Hunefeldstrasse 1-5
D-28199 Bremen, Germany
</TABLE>
* Less than 1%.
(1) The persons named in the table have sole voting or investment power with
respect to all of the Common Stock shown as beneficially owned by them,
subject to community property laws where applicable and the information
contained in the footnotes to this table.
22
<PAGE>
(2) Includes (i) 15,418 shares held by Mr. Thompson; (ii) 434,558 shares
held in Thompson 1996 Revocable Trust; and (iii) options to purchase
312,500 shares at $0.531 per share expiring January 1, 2006, and 5,500
and 123,332 shares of Common Stock exercisable at $0.584 per share and
expiring December 31, 2000 and December 31, 2002, respectively and
options to purchase 500,000 shares of Common Stock at $1.3496 per share
expiring September 1, 2009.
(3) Options to Purchase 60,000 shares of Common Stock at $1.0952 per share
expiring October 7, 2009.
(4) Includes (i) 230,625 shares of Common Stock held jointly with spouse,
Arlene Schieber, (ii) 7,505 shares of Common held solely by Mr.
Schieber, (iii) 4,075 shares of Common Stock held solely by Ms.
Schieber, of which shares Mr. Schieber disclaims beneficial ownership,
and (iv) options to purchase 13,750, 12,534 and 37,500 shares of Common
Stock all exercisable at $1.4375 per share which expire on February 15,
2005, February 15, 2006 and April 30, 2006, respectively, options to
purchase 27,500 shares of Common Stock exercisable at $0.60 per share
which expire May 13, 2007, options to purchase 22,500 shares of Common
Stock at $2.1875 which expire on May 12, 2008, and options to purchase
4,391 shares of Common Stock at $2.8625 per share expiring December 31,
2009.
(5) Includes (i) 21,488 shares held solely by Mr. Holt, and (ii) options to
purchase 7,808 and 75,000 shares of Common Stock all exercisable at
$1.4375 per share which expire December 15, 2006 and April 30, 2006,
respectively, options to purchase 20,833 shares of Common Stock
exercisable at $0.60 per share which expire May 13, 2007, options to
purchase 37,500 shares of Common Stock at $2.1875 per share which expire
May 12, 2008, and options to purchase 50,000 shares of Common Stock at
$1.1019 expiring September 1, 2009.
(6) Includes (i) 37,500 shares of Common Stock held by Mr. Carlson, and (ii)
options to purchase 37,500 shares of Common Stock exercisable at $0.60
per share which expire May 13, 2007, options to purchase 37,500 shares
of Common Stock at $2.1875 per share which expire May 12, 2008, and
options to purchase 4,391 shares of Common Stock at $2.8625 per share
expiring December 31, 2009.
(7) Options to purchase 37,500 shares of Common Stock exercisable at $5.50
per share which expire February 19, 2009, options to purchase 12,500
shares of Common Stock exercisable at $2.8125 per share expiring August
25, 2009, and options to purchase 4,160 shares of Common Stock
exercisable at $2.8625 expiring December 31, 2009.
(8) Includes (i) 4,687 shares of Common Stock held by Mr. Grant, and (ii)
options to purchase 10,000 shares of Common Stock at $.7235 per share
expiring September 1, 2009, and options to purchase 3,236 shares of
Common Stock at $2.8625 which expire December 31, 2009.
OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP
has served as the Company's independent accountant since August 1994. The
Company has had no disagreements with the accountants on accounting and
financial disclosures. For the calendar year 2000, the Board of Directors
expects to retain PricewaterhouseCoopers but may seek competitive bids for its
annual audit. A representative of PricewaterhouseCoopers may be present at the
2000 Annual Meeting of Stockholders and, if present, will have the opportunity
to make a statement if he or she desires to do so and be available to respond to
appropriate questions from stockholders.
OTHER MATTERS. The Board of Directors of the Company knows of no other
matters that may or are likely to be presented to the Meeting. However, if
additional matters should properly be presented at the Meeting, it is the
intention of the persons named in the enclosed proxy to vote such proxy in
accordance with their best judgment on such matters pursuant to the
discretionary authority granted to them by the terms and conditions of the
Proxy.
23
<PAGE>
SHAREHOLDER PROPOSALS. Proposals to be presented by stockholders and to
be included in the Company's Proxy Statement and Proxy for its 2001 Annual
Meeting must be received by the Company's Secretary at 100 Shoreline Highway,
Suite 190A, Mill Valley, California 94941, not less than 60 days nor more than
90 days prior to the 2001 Annual Meeting date.
If notice of a proposal intended to be presented by stockholders at the
2001 Annual Meeting is received by the Company's Secretary no less than 60 days
nor more than 90 days prior to the 2001 Annual Meeting, and if the proxy holders
wish to maintain their discretionary authority to vote on any such proposal,
then the Company must set forth in its Proxy Statement the nature of the matter
to which the proposal relates and how the proxy holders intend to exercise their
discretion to vote on the matter. If any such proposals are not received on or
before 60 days prior to the meeting date, such proposal will not be included in
the Company's Proxy Statement and the proxy holders shall use discretionary
authority in voting. Furthermore, pursuant to the Company's Bylaws, any
stockholder proposal that is not delivered to the Company's Secretary within 10
business days following the day on which Notice of the 2001 Annual Meeting is
mailed or publicly announced, will not be allowed to be presented at the
Meeting.
ADDITIONAL INFORMATION. A copy of Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1999, containing the Company's 1999 audited
financial statements, including the report of its independent public
accountants, accompanies this Proxy Statement. Upon receipt of a written
request, the Company will furnish to any stockholder, without charge, an
additional copy of the Company's 1999 Form 10-KSB. Stockholders should direct
any request to DBS Industries, Inc., 100 Shoreline Highway, Suite 190A, Mill
Valley, California 94941, Attention: Secretary. The Company's Form 10-KSB may
also be accessed on the Internet at http://www.dbsindustries.com.
DBS Industries, Inc.
By Order of the Board of Directors
/s/ Fred W. Thompson
-----------------------
Fred W. Thompson
Chairman and President
Mill Valley, California
April 14, 2000
24
<PAGE>
EXHIBIT "A"
DBS INDUSTRIES, INC.
2000 STOCK OPTION PLAN
1. PURPOSE; DEFINITIONS.
(a) PURPOSE. The purpose of the Plan is to attract, retain
and motivate employees, officers, directors, and consultants of the Company, or
a subsidiary of the Company, by giving them the opportunity to acquire Stock
ownership in the Company.
(b) DEFINITIONS. For purposes of the Plan, the following
terms have the following meanings:
(i) "Administrator" means the Compensation Committee
referred to in Section 4 in its capacity as administrator of the Plan, or the
Board in the event that it abolishes the Compensation Committee and reinvests in
the Board the administration of the Plan.
(ii) "Board" means the Board of Directors of the
Company.
(iii) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(iv) "Commission" means the Securities and Exchange
Commission and successor agency.
(v) "Company" means DBS Industries, Inc., a Delaware
corporation and its subsidiaries.
(vi) "Director" shall mean a member of the Board.
(vii) "Effective Date" has the meaning set forth in
Section 2.
(viii) "Eligible Person" means, in the case of the
grant of an Incentive Stock Option Plan, all employees of the Company or a
subsidiary of the Company and, in the case of a Non-qualified Stock Option, any
director, officer or employee of the Company or other person who, in the opinion
of the Board, is rendering valuable services to the Company, including without
limitation, an independent contractor, outside consultant, or advisor to the
Company.
(ix) "Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, and any successor statute.
(x) "Fair Market Value" means (i) if the stock is
listed or admitted to trade on a national securities exchange, the closing price
of the Stock on the Composite Tape, as published in the Western Edition of the
Wall Street Journal, of the principal national securities exchange on which the
Stock is so listed or admitted to trade, on such date, or, if there is no
trading of the Stock on such date, then the closing price of the Stock as quoted
on such Composite Tape on the next preceding date on which there was trading in
such Stock; (ii) if the Stock is not listed or admitted to trade on a national
securities exchange, the closing price for the Stock on such date, as furnished
by the National Association of Securities Dealers, Inc. ("NASD") through the
NASDAQ National Market System or a similar organization if the NASD is no longer
reporting such information; (iii) if there is no current closing price
information available, the mean between the closing bid and asked prices for the
stock on such date, as furnished by the NASD, and if no bid and asked prices are
quoted on such date, the bid and asked prices on the next preceding day on which
such prices were quoted; and (iv) if the stock is not reported on the National
Market System and if bid and asked prices for the stock are not furnished by the
NASD or a similar organization, the value established by the Administrator for
purposes of granting
1
<PAGE>
options under the Plan.
(xi) "Grant Date" means the date of grant of any
Option.
(xii) "Incentive Stock Option" means an option which
is an option within the meaning of Section 422 of the Code, the award of which
contains such provisions as are necessary to comply with that section.
(xiii) "NASD Dealer" means a broker-dealer that is a
member of the National Association of Securities Dealers.
(xiv) "Non-Employee Director" has the meaning set
forth in Rule 16-3.
(xv) "Non-qualified Stock Option" means an option
which is designated a Non-qualified Stock Option.
(xvi) "Officer" means an officer of the Company and an
officer who is subject to Section 16 of the Exchange Act.
(xvii) "Option" means an option to purchase Common
Stock under this Plan. An Option shall be designated by the Committee as an
Incentive Stock Option or a Non-qualified Stock Option.
(xviii) "Option Agreement" means the written option
agreement covering an Option.
(xix) "Optionee" means the holder of an option.
(xx) "Plan" means this DBS Industries, Inc. 2000
Stock Option Plan as amended from time to time.
(xxi) "Rule 16b-3" means Rule 16b-3 under Section 16
(b) of the Exchange Act, as amended from time to time, and any successor rule.
(xxii) "Stock" means the Common Stock, par value
$0.0004, of the Company, and any successor entity.
(xxiii) "Subsidiary" means any corporation in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of an Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(xxiv) "Tax Date" means the date defined in Section 7.
(xxv) "Vesting Date" means the date on which an Option
becomes wholly or partially exercisable, as determined by the Administrator in
its sole discretion.
2. EFFECTIVE DATE; TERM OF PLAN. The Effective Date of this Plan shall
be upon shareholder approval of this Plan within 12 months of the date of Board
approval. Any Options granted prior to shareholder approval of the Plan, shall,
upon shareholder approval, be deemed issued as of the grant date. This Plan, but
not Options already granted, shall terminate automatically ten years after its
adoption by the Board, unless terminated earlier by the Board under Section 13.
No Options shall be granted after termination of this Plan but all Options
granted prior to termination shall remain in effect in accordance with their
terms.
3. NUMBER AND SOURCE OF SHARES OF STOCK SUBJECT TO THE PLAN. Subject to
the provisions of Section 8, the total number of shares of Stock with respect to
which Options may be granted under this Plan is One Million Seven Hundred Fifty
Thousand (1,750,000) shares of Stock. The shares of Stock covered by any
canceled,
2
<PAGE>
expired or terminated Option or the unexercised portion thereof shall
become available again for grant under this Plan. The shares of Stock to be
issued hereunder upon exercise of an Option may consist of authorized and
unissued shares or treasury shares.
4. ADMINISTRATION OF THE PLAN. Authority to control and manage the
operation and administration of the Plan shall be vested in the Board, which may
delegate such responsibilities in whole or in part to a committee consisting of
two (2) or more members of the Board, all of whom shall be Non-Employee
Directors (the "Compensation Committee"). Members of the Compensation Committee
may be appointed from time to time by, and shall serve at the pleasure of, the
Board. As used herein, the term "Administrator" means the Board or, with respect
to any matter as to which responsibility has been delegated to the Compensation
Committee, the term Administrator shall mean the Compensation Committee.
Subject to the express provisions of this Plan, the Administrator shall
have the authority to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Optionees under this
Plan; to further define the terms used in this Plan; to correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any Option
Agreement; to provide for rights of refusal and/or repurchase rights; to amend
outstanding Option Agreements to provide for, among other things, any change or
modification which the Administrator could have provided for upon the grant of
an Option or in furtherance of the powers provided for herein; to prescribe,
amend and rescind rules and regulations relating to the administration of this
Plan; to determine the duration and purposes of leaves of absence which may be
granted to Optionees without constituting a termination of their employment for
purposes of this Plan; to accelerate the vesting of any Option; and to make all
other determinations necessary or advisable for the administration of this Plan.
Any decision or action of the Administrator in connection with this Plan
or Options granted or shares of Stock purchased under this Plan shall be final
and binding. The Administrator shall not be liable for any decision, action or
omission respecting this Plan, or any Options granted or shares of Stock sold
under this Plan. The Board at any time may abolish the Compensation Committee
and reinvest in the Board the administration of the Plan.
To the extent permitted by applicable law in effect from time to time,
no member of the Compensation Committee or the Board of Directors shall be
liable for any action or omission of any other member of the Compensation
Committee or the Board of Directors nor for any act or omission on the member's
own part, excepting only the member's own willful misconduct or gross
negligence, arising out of or related to the Plan. The Company shall pay
expenses incurred by, and satisfy a judgment or fine rendered or levied against,
a present or former director or member of the Compensation Committee or Board in
any action against such person (whether or not the Company is joined as a party
defendant) to impose liability or a penalty on such person for an act alleged to
have been committed by such person while a director or member of the
Compensation Committee or Board arising with respect to the Plan or
administration thereof or out of membership on the Compensation Committee or
Board or by the Company, or all or any combination of the preceding; provided,
the director or Compensation Committee member was acting in good faith, within
what such director or Compensation Committee member reasonably believed to have
been within the scope of his or her employment or authority and for a purpose
which he or she reasonably believed to be in the best interests of the Company
or its stockholders. Payments authorized hereunder include amounts paid and
expenses incurred in settling any such action or threatened action. The
provisions of this section shall apply to the estate, executor, administrator,
heirs, legatees or devisees of a director or Compensation Committee member, and
the term "person" as used on this section shall include the estate, executor,
administrator, heirs, legatees, or devisees of such person.
5. GRANT OF OPTIONS; TERMS AND CONDITIONS OF GRANT.
(a) GRANT OF OPTIONS. One or more Options may be granted to
any Eligible Person. Subject to the express provisions of the Plan, the
Administrator shall determine from the Eligible Persons those individuals to
whom Options under the Plan may be granted. Each Option so granted shall be
designated by the Administrator as either a Non-qualified Stock Option or an
Incentive Stock Option.
3
<PAGE>
Subject to the express provisions of the Plan, the Administrator shall
specify the Grant Date, the number of shares of Stock covered by the Option, the
exercise price and the terms and conditions for exercise of the Options. If the
Administrator fails to specify the Grant Date, the Grant Date shall be the date
of the action taken by the Administrator to grant the Option. As soon as
practicable after the Grant Date, the Company will provide the Optionee with a
written Option Agreement in the form approved by the Administrator, which sets
out the Grant Date, the number of shares of Stock covered by the Option, the
exercise price and the terms and conditions for exercise of the Option.
The Administrator may, in its absolute discretion, grant Options under
this Plan at any time and from time to time before the expiration of ten years
from the Effective Date to an Eligible Person.
(b) GENERAL TERMS AND CONDITIONS. Except as otherwise
provided herein, the Options shall be subject to the following terms and
conditions and such other terms and conditions not inconsistent with this Plan
as the Administrator may impose:
(i) EXERCISE OF OPTION. In order to exercise all or
any portion of any Option granted under this Plan, an Optionee must remain as an
officer, employee, consultant or director of the Company, or a Subsidiary, until
the Vesting Date. The Option shall be exercisable on or after each Vesting Date
in accordance with the terms set forth in the Option Agreement.
(ii) OPTION TERM. Each Option and all rights or
obligations thereunder shall expire on such date as shall be determined by the
Administrator, but not later than 10 years after the grant of the Option (5
years in the case of an Incentive Stock Option when the Optionee owns more than
10% of the total combined voting power of all classes of stock of the Company),
and shall be subject to earlier termination as hereinafter provided.
(iii) EXERCISE PRICE. The Exercise Price of any Option
shall be determined by the Administrator, but in the case of Incentive Stock
Options shall not be less than 100% (110% in the case of an Optionee who owns
more than 10% of the total combined voting power of all classes of stock of the
Company) of the Fair Market Value of the Stock on the date the Incentive Stock
Option is granted.
(iv) METHOD OF EXERCISE. To the extent the right to
purchase shares of Stock has vested, Options may be exercised, in whole or in
part, from time to time in accordance with their terms by written notice from
the Optionee to the Company stating the number of shares of Stock with respect
to which the Option is being exercised. Payment of the exercise price may be
made in cash or, in the discretion of the Administrator, subject to any legal
restrictions, by: (a) check; (b) the surrender of shares of Stock owned by the
Optionee that have been held by the Optionee for at least six (6) months, which
surrendered shares shall be valued at Fair Market Value as of the date of such
exercise; (c) the Optionee's promissory note in a form and on terms acceptable
to the Administrator; (d) the cancellation of indebtedness of the Company to the
Optionee; (e) provided that a public market for the Stock exists, a "same day
sale" commitment from the Optionee and an NASD Dealer whereby the Optionee
irrevocably elects to exercise the Option and to sell a portion of the shares so
purchased to pay for the Exercise Price and whereby the NASD Dealer irrevocably
commits upon receipt of such shares to forward the Exercise Price directly to
the Company; or (f) any combination of the foregoing methods of payment or any
other consideration or method of payment as shall be permitted by applicable
corporate law. The Administrator may, in its discretion, provide, in an
Agreement or otherwise, that an Optionee who exercises an Option and pays the
exercise price in whole or in part with Stock then owned by the Optionee will be
entitled to receive another Option covering the same number of shares tendered
and with a price of no less than Fair Market Value on the date of grant of such
additional Option ("Reload Option"). Unless otherwise provided in the Agreement,
an Optionee, in order to be entitled to a Reload Option, must pay with Stock
that has been owned by the Optionee for at least the preceding 180 days.
(v) RESTRICTIONS ON STOCK; OPTION AGREEMENT. At the
time it grants Options under this Plan, the Company may retain, for itself or
others, rights to repurchase the shares of Stock acquired under the Option or
impose other restrictions on such shares. The terms and conditions of any such
rights or other restrictions shall be set forth in the Option Agreement
evidencing the Option. No Option shall be exercisable until after execution of
the Option Agreement by the Company and the Optionee.
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(vi) TRANSFERABILITY OF OPTIONS. Except as otherwise
provided below for Non-qualified Stock Options, no Option shall be transferable
other than by will or by the laws of descent and distribution and during the
lifetime of an Optionee, only the Optionee, his guardian or legal representative
may exercise an Option. An Optionee may designate a beneficiary to exercise his
or her Options after the Optionee's death. The Administrator may provide for
transfer of an Option (other than an Incentive Stock Option), without payment of
consideration, to the following family members of the Optionee, including
adoptive relationships: a child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, niece, nephew, former spouse
(whether by gift or pursuant to a domestic relations order), any person sharing
the employee's household (other than a tenant or employee), a family-controlled
partnership, corporation, limited liability company and trust, or a foundation
in which family members heretofore described control the management of assets.
The assigned portion may only be exercised by the person or persons who acquire
a proprietary interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Administrator may deem appropriate.
(vii) EXERCISE AFTER CERTAIN EVENTS.
(1) TERMINATION OF EMPLOYMENT/CONSULTING/
DIRECTORSHIP. If for any reason other than permanent and total disability or
death (as defined below) an Optionee ceases to be employed by or to be a
consultant or director of the Company, or a Subsidiary, Incentive Stock
Options held at the date of such termination (to the extent then exercisable)
may be exercised, in whole or in part, at any time within three months after
the date of such termination or such lesser period specified in the Option
Agreement (but in no event after the earlier of (i) the expiration date of
the Option as set forth in the Option Agreement, and (ii) ten years from the
Grant Date) and Non-qualified Stock Options held at the date of such
termination (to the extent then exercisable) may be exercised, in whole or in
part, at any time within the period specified in the Option Agreement (but in
no event after the earlier of (i) the expiration date of the Option as set
forth in the Option Agreement, and (ii) ten years from the Grant Date), or
such lesser period specified by the Administrator.
If an Optionee granted an Incentive
Stock Option terminates employment but continues as a consultant, advisor or in
a similar capacity to the Company or a Subsidiary, Optionee need not exercise
the Option within three months of termination of employment but shall be
entitled to exercise within three months of termination of services to the
Company or the Subsidiary (one year in the event of permanent disability or
death). However, if Optionee does not exercise within three months of
termination of employment, the Option will not qualify as an Incentive Stock
Option.
(2) PERMANENT DISABILITY AND DEATH. If an
Optionee becomes permanently and totally disabled (within the meaning of Section
22(e)(3) of the Code), or dies while employed by the Company, or while acting as
an officer, consultant or director of the Company, or a Subsidiary, (or, if the
Optionee dies within the period that the Option remains exercisable after
termination of employment or affiliation), Incentive Stock Options then held (to
the extent then exercisable) may be exercised by the Optionee, the Optionee's
personal representative, or by the person to whom the Incentive Stock Option is
transferred by will or the laws of descent and distribution, in whole or in
part, at any time within one year after the disability or death or any lesser
period specified in the Option Agreement (but in no event after the earlier of
(i) the expiration date of the Option as set forth in the Option Agreement, and
(ii) ten years from the Grant Date). Non-qualified Stock Options shall not be
limited to such one year exercise period upon permanent disability or death and
may be exercised at any time specified in the Option Agreement (but in no event
after the earlier of (i) the expiration date of the Option as set forth in the
Option Agreement, and (ii) ten years from the Grant Date) or such lesser period
specified by the Administrator.
(viii) COMPLIANCE WITH SECURITIES LAWS. The Company
shall not be obligated to issue any shares of Stock upon exercise of an Option
unless such shares are at that time effectively registered or exempt from
registration under the federal securities laws and the offer and sale of the
shares of Stock are otherwise in compliance with all applicable securities laws.
Upon exercising all or any portion of an Option, an Optionee may
5
<PAGE>
be required to furnish representations or undertakings deemed appropriate by the
Company to enable the offer and sale of the shares of Stock or subsequent
transfers of any interest in such shares to comply with applicable securities
laws. Evidences of ownership of shares of Stock acquired upon exercise of
Options shall bear any legend required by, or useful for purposes of compliance
with, applicable securities laws, this Plan or the Option Agreement evidencing
the Option.
6. LIMITATIONS ON GRANT OF INCENTIVE STOCK OPTIONS.
(a) The aggregate Fair Market Value (determined as of the
Grant Date) of the Stock for which Incentive Stock Options may first become
exercisable by any Optionee during any calendar year under this Plan, together
with that of Stock subject to Incentive Stock Options first exercisable (other
than as a result of acceleration pursuant to Section 9(a)) by such Optionee
under any other plan of the Company or any Subsidiary, shall not exceed
$100,000.
(b) There shall be imposed in the Option Agreement relating
to Incentive Stock Options such terms and conditions as are required in order
that the Option be an "incentive stock option" as that term is defined in
Section 422 of the Code.
(c) No Incentive Stock Option may be granted to any person
who, at the time the Incentive Stock Option is granted, owns shares of
outstanding Stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, unless the exercise price of such Option is
at least 110% of the Fair Market Value of the Stock (determined as of the Grant
Date) subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the Grant Date.
(d) No Incentive Stock Option may be granted to any person
who is not an employee of the Company or a Subsidiary of the Company.
7. PAYMENT OF TAXES. Upon the disposition by an Optionee or
other person of shares of an Option prior to satisfaction of the holding
period requirements of Section 422 of the Code, or upon the exercise of a
Non-qualified Stock Option, the Company shall have the right to require such
Optionee or such other person to pay by cash, or check payable to the
Company, the amount of any required withholding on applicable federal, state,
and local taxes and FICA with respect to such transactions. Any such payment
must be made promptly when the amount of such obligation becomes determinable
(the "Tax Date"). To the extent permissible under applicable tax, securities
and other laws, the Administrator may, in its sole discretion and upon such
terms and conditions as it may deem appropriate, permit an Optionee to
satisfy his or her obligation to pay any such tax, in whole or in part, up to
an amount not greater than the Optionee's estimated withholding, by (a)
directing the Company to apply shares of Stock to which the Optionee is
entitled as a result of the exercise of an Option, or (b) delivering to the
Company shares of Stock owned by the Optionee. The shares of Stock so applied
or delivered in satisfaction of the Optionee's tax withholding obligation
shall be valued at their Fair Market Value as of the date of measurement of
the amount of income subject to withholding.
8. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. The existence of
outstanding Options shall not affect the Company's right to effect
adjustments, recapitalizations, reorganizations or other changes in its or
any other corporation's capital structure or business, any merger or
consolidation, any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Stock, the dissolution or
liquidation of the Company's or any other corporation's assets or business or
any other corporate act whether similar to the events described above or
otherwise. Subject to Section 9, if the outstanding shares of the Stock are
increased or decreased in number or changed into or exchanged for a different
number or kind of securities of the Company or any other corporation by
reason of a recapitalization, reclassification, stock split, combination of
shares, stock dividend or other event, an appropriate adjustment of the
number and kind of securities with respect to which Options may be granted
under this Plan, the number and kind of securities as to which outstanding
Options may be exercised, and the exercise price at which outstanding Options
may be exercised will be made.
6
<PAGE>
9. DISSOLUTION, LIQUIDATION, MERGER.
(a) COMPANY NOT THE SURVIVOR. In the event of a dissolution
or liquidation of the Company, a merger, consolidation, combination or
reorganization in which the Company is not the surviving corporation, or a sale
of substantially all of the assets of the Company (as determined in the sole
discretion of the Board of Directors), the Administrator, in its absolute
discretion, may cancel each outstanding Option upon payment in cash to the
Optionee of the amount by which any cash and the fair market value of any other
property which the Optionee would have received as consideration for the shares
of Stock covered by the Option if the Option had been exercised before such
liquidation, dissolution, merger, consolidation, combination, reorganization or
sale exceeds the exercise price of the Option or negotiate to have such option
assumed by the surviving corporation. In addition to the foregoing, in the event
of a dissolution or liquidation of the Company, or a merger, consolidation,
combination or reorganization, in which the Company is not the surviving
corporation, the Administrator, in its absolute discretion, may accelerate the
time within which each outstanding Option may be exercised or negotiate to have
such option assumed by the surviving corporation.
(b) COMPANY IS THE SURVIVOR. In the event of a merger,
consolidation, combination or reorganization in which the Company is the
surviving corporation, the Board of Directors shall determine the appropriate
adjustment of the number and kind of securities with respect to which
outstanding Options may be exercised, and the exercise price at which
outstanding Options may be exercised. The Board of Directors shall determine, in
its sole and absolute discretion, when the Company shall be deemed to survive
for purposes of this Plan.
10. CHANGE OF CONTROL. If there is a "change of control" in the
Company, all outstanding Options shall fully vest immediately upon the Company's
public announcement of such a change. A "change of control" shall mean an event
involving one transaction or a related series of transactions, in which (i) the
Company issues securities equal to 25% or more of the Company's issued and
outstanding voting securities, determined as a single class, to any individual,
firm, partnership, limited liability company, or other entity, including a
"group" within the meaning of SEC Exchange Act Rule 13d-3, (ii) the Company
issues voting securities equal to 25% or more of the issued and outstanding
voting stock of the Company in connection with a merger, consolidation other
business combination, (iii) the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving
company, or (iv) all or substantially all of the Company's assets are sold or
transferred. See Section 9 with respect to Options vesting upon the occurrence
of either of the events described in (iii) or (iv) of this Section 10 and the
result upon the non-exercise of the Options.
11. SUSPENSION AND TERMINATION. In the event the Board or the
Administrator reasonably believes an Optionee has committed an act of misconduct
including, but limited to acts specified below, the Administrator may suspend
the Optionee's right to exercise any Option granted hereunder pending final
determination by the Board or the Administrator. If the Administrator determines
that an Optionee has committed an act of embezzlement, fraud, breach of
fiduciary duty or deliberate disregard of the Company rules or rules made by a
supervisor, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to terminate
such agency relationship, neither the Optionee nor his estate shall be entitled
to exercise any Option hereunder. In making such determination, the Board or the
Administrator shall give the Optionee an opportunity to appear and present
evidence on the Optionee's behalf. The determination of the Board or the
Administrator shall be final and conclusive.
12. NO RIGHTS AS SHAREHOLDER OR TO CONTINUED EMPLOYMENT. An Optionee
shall have no rights as a shareholder with respect to any shares of Stock
covered by an Option. An Optionee shall have no right to vote any shares of
Stock, or to receive distributions of dividends or any assets or proceeds from
the sale of Company assets upon liquidation until such Optionee has effectively
exercised the Option and fully paid for such shares of Stock. Subject to
Sections 8 and 9, no adjustment shall be made for dividends or other rights for
which the record date is prior to the date title to the shares of Stock has been
acquired by the Optionee. The grant of an Option shall in no way be construed so
as to confer on any Optionee the rights to continued employment by the Company,
or a Subsidiary.
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13. TERMINATION; AMENDMENT. The Board may amend, suspend or
terminate this Plan at any time and for any reason, but no amendment, suspension
or termination shall be made which would impair the right of any person under
any outstanding Options without such person's consent not unreasonably withheld.
Further, the Board may also amend this Plan to materially increase the benefits
accruing to existing Option holders under this Plan; provided, however, that any
such amendment shall be subject to the approval of the Company's stockholders if
so required to maintain the status of the Plan as an Incentive Stock Option
Plan.
14. GOVERNING LAW. This Plan and the rights of all persons under
this Plan shall be construed in accordance with and under applicable provisions
of the laws of the State of California.
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<PAGE>
DBS INDUSTRIES, INC.
100 SHORELINE HIGHWAY, SUITE 190A
MILL VALLEY, CALIFORNIA 94941
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Fred W. Thompson and Randy Stratt, and each
of them, as proxies with the power to appoint his or their successor, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
Common Stock of DBS Industries, Inc. ("DBSI"), held of record by the undersigned
on April 3, 2000, at the Annual Meeting of Stockholders, to be held on May 22,
2000, at 2:00 p.m. (PDT), at the Acqua Hotel, 555 Redwood Highway, Mill Valley,
California 94941, and at any and all adjournments thereof.
1. Election of Directors to serve until the Annual Meeting of Stockholders
for the Year 2003:
<TABLE>
<C> <S> <C> <C> <C> <C>
FOR Jerome W. Carlson / / WITHHOLD AUTHORITY / /
FOR Roy T. Grant / / WITHHOLD AUTHORITY / /
FOR Stanton C. Lawson / / WITHHOLD AUTHORITY / /
</TABLE>
2. Approval of Amendment to the Certificate of Incorporation.
FOR / / AGAINST / / ABSTAIN / /
3. Approval of the DBSI 2000 Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted FOR the nominees and FOR Proposals Two and Three.
<PAGE>
Please sign exactly as your name appears on your share certificates. When
shares are held by joint tenants, all joint tenants should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If the signatory is a corporation, please sign the full corporate name
by the president or other authorized officer. If the signatory is a partnership,
please sign in the partnership name by an authorized person.
Dated: ___________________________
__________________________________
Name (Print)
__________________________________
Name (Print) (if held jointly)
__________________________________
Signature (Print)
__________________________________
Signature (if held jointly)
Address: _________________________
City, State, Zip: ________________
I will ____ attend the meeting.
Number of persons to attend ____. I will not ____ attend the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
