<PAGE> 1
SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Auspex Systems, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
AUSPEX SYSTEMS, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 14, 2000
TO THE STOCKHOLDERS OF AUSPEX SYSTEMS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of AUSPEX SYSTEMS, INC., a Delaware corporation (the "Company"), will
be held at 9:00 a.m., local time, on Tuesday, November 14, 2000, at the
Company's headquarters, 2800 Scott Boulevard, Santa Clara, California 95050, for
the following purposes:
1. To elect two (2) Class I directors of the Company to serve for a
two-year term.
2. To approve amendments to the Company's 1993 Directors' Stock Option Plan
increasing the size of the grants awarded thereunder and modifying the
vesting and change of control provisions thereof, as more fully set
forth in the accompanying proxy statement.
3. To ratify the appointment of Arthur Andersen LLP as independent auditors
of the Company for the fiscal year ending June 30, 2001.
4. To transact such other business as may come properly before the meeting
or any postponements or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on October 2, 2000 are
entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person; however, to ensure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible in
the postage prepaid envelope enclosed for that purpose. YOU MAY REVOKE YOUR
PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME
BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING. ANY STOCKHOLDER ATTENDING THE
ANNUAL MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE HAS RETURNED A PROXY.
By Order of the Board of Directors,
/s/ Henry P. Massey, Jr.
Henry P. Massey, Jr.
Secretary
Santa Clara, California
October 13, 2000
<PAGE> 3
AUSPEX SYSTEMS, INC.
------------------------
PROXY STATEMENT FOR THE
2000 ANNUAL MEETING OF STOCKHOLDERS
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
AUSPEX SYSTEMS, INC., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Tuesday,
November 14, 2000 at 9:00 a.m., local time, or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the
Company's headquarters at 2800 Scott Boulevard, Santa Clara, California 95050.
The telephone number at that location is (408) 566-2000. When proxies are
properly dated, executed and returned, the shares they represent will be voted
at the Annual Meeting in accordance with the instructions of the stockholder. If
no specific instructions are given, the shares will be voted "FOR": (i) the
election of the two (2) Class I nominees for director set forth herein; (ii) the
approval of the amendments to the Company's 1993 Directors' Stock Option Plan
increasing the size of the grants awarded thereunder and modifying the vesting
and change of control provisions thereof, as more fully set forth below; (iii)
the ratification of the appointment of Arthur Andersen LLP as independent
auditors; and (iv) at the discretion of the proxy holders, upon such other
business as may properly come before the Annual Meeting or any adjournment or
postponement thereof.
These proxy solicitation materials and the Annual Report to Stockholders
for the fiscal year ended June 30, 2000 including financial statements, were
first mailed on or about October 13, 2000, to all stockholders entitled to vote
at the meeting.
RECORD DATE AND VOTING SECURITIES
Stockholders of record at the close of business on October 2, 2000 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. At
the Record Date, 44,875,723 shares of the Company's Common Stock, $.001 par
value, were issued and outstanding. No shares of the Company's Preferred Stock
were outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by: (i) filing
with the Secretary of the Company at or before the taking of the vote at the
Annual Meeting a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Company at or before the taking of the
vote at the Annual Meeting, or (iii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be delivered to the principal executive offices of the
Company at Auspex Systems, Inc., 2800 Scott Boulevard, Santa Clara, California
95050, Attention: Secretary, or hand-delivered to the Secretary of the Company
at or before the taking of the vote at the Annual Meeting.
VOTING AND SOLICITATION
On all matters, each share has one vote.
The cost of soliciting proxies will be borne by the Company. The Company
may engage a proxy solicitation firm, to assist in its solicitation of proxies
from brokers, nominees, institutions and individuals and
<PAGE> 4
estimates that such service will cost approximately $7,500. Arrangements will be
made with custodians, nominees and fiduciaries for forwarding of proxy
solicitation materials to beneficial owners of shares held of record by such
custodians, nominees and fiduciaries. The Company will reimburse such
custodians, nominees and fiduciaries for reasonable expenses incurred in
connection therewith. In addition, proxies may be solicited by directors,
officers and employees of the Company in person or by telephone, telegram or
other means of communication. No additional compensation will be paid for such
services.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date. Shares that are voted "FOR",
"AGAINST", or "WITHHELD FROM" on a matter are treated as being present at the
meeting for purposes of establishing a quorum and are also treated as shares
entitled to vote at the Annual Meeting (the "Votes Cast") with respect to such
matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both: (i) the presence or absence
of a quorum for the transaction of business, and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, abstentions will have the same effect
as a vote against the proposal.
In a 1989 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes should be counted for the purpose of
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for the purpose of determining the number
of Votes Cast with respect to the particular proposal on which the broker has
expressly not voted. Accordingly, the Company intends to treat broker non-votes
in this manner. Thus, a broker non-vote will not affect the outcome of the
voting on a proposal.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
The Company currently intends to hold its 2001 Annual Meeting of
Stockholders in November 2001 and to mail proxy statements relating to such
meeting in October 2001. Stockholders are entitled to present proposals for
action at a forthcoming meeting if they comply with the requirements set forth
in the Company's Bylaws and in the proxy rules promulgated by the Securities and
Exchange Commission ("SEC"). The Company's Bylaws provide that the Company must
receive all stockholder proposals by August 29, 2001 or such proposal may not be
presented at the 2001 Annual Meeting. In addition, if a stockholder would like
to include a proposal in the Company's proxy statement for the 2001 Annual
Meeting, then the Company must receive the proposal by June 8, 2001. Such
stockholder proposals should be submitted to Auspex Systems, Inc., 2800 Scott
Boulevard, Santa Clara, California 95050, Attention: Secretary.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
Pursuant to the Company's Restated Certificate of Incorporation, the Board
of Directors is divided into two classes. The directors are elected to serve
staggered two-year terms, such that the term of one class of directors expires
each year. The Company currently has four directors divided among the two
classes as follows: Class I -- Gary J. Sbona and Richard E. Chapman; and Class
II -- John E. McNulty and Karl C. Powell. Two (2) Class I directors have been
nominated for election at the Annual Meeting for a two-year term ending at the
2002 Annual Meeting of Stockholders and until such director's successor is
elected.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Class I nominees named below. In the event that such
nominee is unable or declines to serve as a director at the time
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of the Annual Meeting, the proxies will be voted for a nominee who shall be
designated by the present Board of Directors to fill the vacancy. In the event
that additional persons are nominated for election as director, the proxy
holders intend to vote all proxies received by them in such a manner as will
assure the election of the nominees listed below, and, in such event, the
specific nominees to be voted for will be determined by the proxy holders. The
Company is not aware that any nominee will be unable or will decline to serve as
a director. The director elected at this Annual Meeting will serve until the
term of such director's class expires and until such director's successor has
been duly elected and qualified. The Board of Directors will consider the names
and qualifications of candidates for the Board of Directors submitted by
stockholders in accordance with the procedures set forth in "Stockholder
Proposals for Next Annual Meeting" above.
VOTE REQUIRED
The two (2) nominees in Class I receiving the highest number of affirmative
votes of the shares entitled to be voted shall be elected to the Board of
Directors. Votes withheld from any nominee will have no legal effect.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW.
The names of the directors, certain information about them and their ages
as of October 2, 2000 are set forth below:
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME OF DIRECTOR AGE POSITION(S) WITH THE COMPANY SINCE EXPIRES CLASS
---------------- --- ---------------------------- -------- ------- -----
<S> <C> <C> <C> <C> <C>
NOMINEES FOR CLASS I DIRECTORS
Gary J. Sbona.................... 57 Chief Executive Officer and 2000 2002 I
Chairman of the Board
Richard E. Chapman............... 52 Director 2000 2002 I
CLASS II DIRECTORS WHOSE TERMS
CONTINUE
John E. McNulty.................. 54 Director 2000 2001 II
Karl C. Powell................... 57 Director 2000 2001 II
</TABLE>
Nominees for Class I Director:
Mr. Gary J. Sbona, 57, joined the Company in February 2000 as Chairman and
Chief Executive Officer. Mr. Sbona also serves as Chairman, President and Chief
Executive Officer of Verity, Inc., a publicly traded software company,
specializing in knowledge retrieval software. Since 1999, Mr. Sbona has served
as a Director of 3 D Systems Corporation, a publicly traded mass customization
equipment manufacturer. Since 1974, Mr. Sbona has also served as the Chairman
and Chief Executive Officer of Regent Pacific Management Corporation, a
professional services company that is currently providing our company with
management services. Mr. Sbona has held positions as an officer and/or director
of numerous publicly and privately held companies.
Mr. Richard E. Chapman joined the Company in July 2000 as an outside
Director. Mr. Chapman also has served since October 1997 as Senior Vice
President and Chief Information Officer of Vencor, Inc., a longterm healthcare
provider. From August 1993 to September 1997, he was Senior Vice President and
CIO for Columbia/HCA Healthcare Corporation, which owns and operates
approximately 200 hospitals and other healthcare facilities in 24 states. From
March 1993 to August 1993, he was Vice President of Information Systems for
Galen Healthcare, Inc. From September 1988 to February 1993, he was Vice
President of Information Systems for Humana, Inc.
Directors Whose Term Continues:
Mr. John E. McNulty joined the Company in February 2000 as an outside
Director. Mr. McNulty also has served since May 1999 as Chairman of the Board,
President and Chief Executive Officer of Secure Computing Corporation, a
provider of e-business security products. Mr. McNulty was
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<PAGE> 6
employed by Genesys Telecom, a provider of enterprise interaction Management
Software, where he served as Senior Vice President from 1997 to 1999. Mr.
McNulty served as Senior Director of Marketing for Intel Corporation, a
semiconductor chip manufacturer, from 1993 to 1997.
Mr. Karl C. Powell joined the Company in February 2000 as an outside
Director. Mr. Powell is President and CEO of N H M & P, Inc., a newly formed
Oregon Corporation engaged in the development of software management tools.
Formerly Mr. Powell, a co-founder of Sequent Computer Systems, Inc., was
Chairman of the Board and Chief Executive Officer, and a director of that
company from 1983 until 1999, when it was merged with IBM. Mr. Powell served as
Sequent's CEO since it's inception. From 1974 to 1983, Mr. Powell was employed
by Intel Corporation, where his most recent position was General Manager for
Microprocessor Operations.
There are no family relationships among any of the Directors or nominees
for Director.
Proxies cannot be voted for a greater number of persons than those
nominated.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of sixteen (16) meetings
during the fiscal year ending June 30, 2000. All directors attended at least 75%
of the sum of the total number of meetings of the Board of Directors and
committees thereof on which they served, held during the fiscal year or such
shorter period as the directors may have served. The Board of Directors has an
Audit Committee, a Compensation Committee and a Stock Option Committee. The
Board of Directors does not have a nominating committee or any committee
performing similar functions.
The Audit Committee, which consists of John E. McNulty and Karl C. Powell,
held four (4) meetings during the fiscal year. Dr. W. Frank King and R. Stephen
Cheheyl were members of the Audit Committee until their resignation from the
Board of Directors effective June 30, 2000. This committee is primarily
responsible for approving the services performed by the Company's independent
auditors and for reviewing and evaluating the Company's accounting principles
and its system of internal accounting controls.
The Compensation Committee, which consists of John E. McNulty and Karl C.
Powell, held four (4) meetings during the fiscal year. Dr. W. Frank King and R.
Stephen Cheheyl were members of the Compensation Committee until their
resignation from the Board of Directors effective June 30, 2000. This committee
reviews and approves the Company's executive compensation policies and approves
all stock option grants to executive officers.
The Stock Option Committee, which consists of Gary J. Sbona, acted on nine
(9) occasions during the fiscal year. This committee is primarily responsible
for approving stock option grants to employees (other than executive officers).
BOARD OF DIRECTORS COMPENSATION
As of February 14, 2000, compensation for directors who are not employees
of the Company was decreased to the rate of $12,000 per annum and an additional
$2,000 per meeting attended in person. Non-employee directors are automatically
granted an initial option to purchase 25,000 shares of the Company's Common
Stock and thereafter annual options to purchase 8,000 shares of the Company's
Common Stock pursuant to the terms of the 1993 Directors' Stock Option Plan (the
"Directors' Plan"). For information regarding certain proposed amendments to the
Directors' Plan, see Proposal 2.
During fiscal 2000, the Company appointed two additional directors, John
McNulty and Karl C. Powell. Each new director was granted options to purchase
100,000 shares of the Company's common stock from the 1997 Stock Plan.
Additionally, Richard E. Chapman was appointed on July 31, 2000 to serve as an
outside director. Mr. Chapman was granted options to purchase 25,000 shares of
the Company's common stock from the Directors' Plan and will be granted options
to purchase 75,000 shares of the Company's Common Stock from the 1997 Stock
Plan.
4
<PAGE> 7
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS TO THE 1993
DIRECTORS' STOCK OPTION PLAN
At the Annual Meeting, the stockholders are being requested to consider and
approve amendments to the Company's 1993 Directors' Stock Option Plan (the
"Directors' Plan") (i) to increase the number of shares of Common Stock subject
to the initial and annual option grants automatically awarded to the Company's
non-employee directors thereunder from 25,000 and 8,000 to 100,000 and 25,000,
respectively, (ii) to modify the vesting period for options granted under the
Directors' Plan, so that any option granted thereunder shall become exercisable
as to 1/24 of the shares subject to such option monthly for the first 12 months
following the date of grant of such option, and as to 1/2 of the shares subject
to such option two years after the date of grant of such option, and (iii) to
modify the change of control provisions of the Directors' Plan so that, upon a
proposed sale of all or substantially all of the Company's assets or a merger of
the Company with or into another corporation, to the extent an option is
unvested, such option shall become vested and exercisable as to 100% of the
shares subject to such option.
The Directors' Plan was adopted by the Board of Directors in March 1993 and
was approved by the stockholders in April 1993. Including the 500,000 shares
reserved for issuance by the Board of Directors in August 2000, a total of
825,000 shares of Common Stock has been reserved for issuance under the
Directors' Plan. In October 2000, the Board of Directors approved amendments to
the Directors' Plan (i) to increase the number of shares of Common Stock subject
to the initial and annual option grants from 25,000 and 8,000 to 100,000 and
25,000, respectively, (ii) to modify the vesting period for options granted
under the Directors' Plan, so that any option granted thereunder shall become
exercisable as to 1/24 of the shares subject to such option monthly for the
first 12 months following the date of grant of such option, and as to 1/2 of the
shares subject to such option two years after the date of grant of such option,
and (iii) to modify the change of control provisions of the Directors' Plan so
that, upon a proposed sale of all or substantially all of the Company's assets
or a merger of the Company with or into another corporation, to the extent an
option is unvested, such option shall become vested and exercisable as to 100%
of the shares subject to such option. As of September 25, 2000, options to
purchase 116,000 shares of Common Stock were outstanding under the Directors'
Plan, 691,000 shares remained available for future option grants and options for
the purchase of 18,000 shares had been exercised. A copy of the Directors' Plan
(which assumes adoption of the proposed amendments) is located in Appendix A to
this Proxy Statement.
PURPOSE AND EFFECT OF AMENDMENTS
The primary purpose of the proposed amendments to the Directors' Plan is
(i) to increase the number of shares of Common Stock subject to the initial and
annual option grants automatically awarded to the Company's non-employee
directors thereunder, (ii) to reduce the period after which options granted
thereunder shall become exercisable, and (iii) to accelerate the vesting of
options upon a change of control, thereby conforming the change of control
provisions of the Directors' Plan to the terms of options granted to certain
directors during Fiscal Year 2000. The Directors' Plan currently provides that
(i) each new non-employee director will automatically be granted an initial
option to purchase twenty-five thousand (25,000) shares of the Company's Common
Stock on the date on which such person first becomes a member of the Board of
Directors and thereafter annual options to purchase eight thousand (8,000)
shares of the Company's Common Stock, (ii) each option shall become exercisable
in installments cumulatively as to 1/16 of the shares subject to such option on
the last day of each calendar quarter beginning with, in the case of an initial
grant, the first full calendar quarter after the date of grant of such option
and, in the case of a subsequent grant, the calendar quarter in which such
option is granted, and (iii) in the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each option, to the extent unvested, shall
become vested and exercisable as to an additional 25% of the shares subject to
such option.
The Board of Directors believes that stock option grants are an essential
element in attracting and retaining qualified individuals to serve as directors
of the Company. The pool of individuals qualified to be
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<PAGE> 8
directors of growing technology companies is relatively small and the number of
companies seeking such expertise is increasing. In addition, many qualified
individuals are reluctant to serve on boards of directors unless appropriately
compensated for the responsibility and risk they assume. The Board of Directors
believes that most individuals it seeks as Board of Director members expect
equity compensation as an inducement for their services. Further, the Board of
Directors believes that equity compensation serves to better align the interests
of non-employee directors with those of the Company and its stockholders than
does cash compensation.
The Board of Directors believes that the proposed amendments to the
Directors' Plan are in the best interests of the Company and its stockholders
for several reasons. First, the Board of Directors believes that increasing the
number of shares subject to the initial and annual option grants made to
non-employee directors under the Directors' Plan, modifying the vesting periods
for those options and accelerating the vesting of those options upon a change of
control will make those options more valuable to the grantees and thus will help
to attract and retain qualified individuals to serve as directors of the
Company. Second, the Board of Directors believes that providing non-employee
directors with an earlier opportunity to acquire a significant ownership
interest in the Company's Common Stock by increasing the number of shares
subject to the initial and annual option grants, modifying the vesting periods
of those options and accelerating the vesting of those options upon a change of
control will help to incentivize those directors to use their influence and
talent to maximize stockholder value for all stockholders.
AMENDED DIRECTORS' PLAN BENEFITS
Pursuant to the initial grant provisions of the Directors' Plan, Richard E.
Chapman was automatically granted stock options for 25,000 shares of the
Company's Common Stock on July 31, 2000. Mr. Chapman, as part of his
compensation package, will be granted additional stock options to purchase
75,000 shares of the Company's Common Stock under the Company's 1997 Stock Plan.
Although neither Karl C. Powell nor John E. McNulty was eligible for grants
under the initial grant provisions of Directors' Plan during Fiscal Year 2000
because such plan had been temporarily suspended and neither is eligible for
grants under the annual grant provisions of the Directors' Plan during Fiscal
Year 2001, each was granted stock options for 100,000 shares of the Company's
Common Stock under the 1997 Stock Plan when he first became a member of the
Company's Board of Directors.
Assuming adoption of the proposed amendments and continued service as a
director of the Company, each of Mr. Chapman, Mr. Powell and Mr. McNulty will be
automatically granted, pursuant to the Directors' Plan, stock options for 25,000
shares of the Company's Common Stock on the first day of Fiscal Year 2002.
VOTE REQUIRED
The affirmative vote of a majority of the Votes Cast will be required to
approve the proposed amendments to the Company's Directors' Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
PROPOSED AMENDMENTS TO THE DIRECTORS' PLAN (I) TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK SUBJECT TO THE INITIAL AND ANNUAL OPTION GRANTS AUTOMATICALLY
AWARDED TO THE COMPANY'S NON-EMPLOYEE DIRECTORS THEREUNDER FROM 25,000 AND 8,000
TO 100,000 AND 25,000, RESPECTIVELY, (II) TO MODIFY THE VESTING PERIOD FOR
OPTIONS GRANTED UNDER THE DIRECTORS' PLAN, SO THAT ANY OPTION GRANTED THEREUNDER
SHALL BECOME EXERCISABLE AS TO 1/24 OF THE SHARES SUBJECT TO SUCH OPTION MONTHLY
FOR THE FIRST 12 MONTHS FOLLOWING THE DATE OF GRANT OF SUCH OPTION, AND AS TO
1/2 OF THE SHARES SUBJECT TO SUCH OPTION TWO YEARS AFTER THE DATE OF GRANT OF
SUCH OPTION, AND (III) TO MODIFY THE CHANGE OF CONTROL PROVISIONS OF THE
DIRECTORS' PLAN SO THAT, UPON A PROPOSED SALE OF ALL OR SUBSTANTIALLY ALL OF THE
COMPANY'S ASSETS OR A MERGER OF THE COMPANY WITH OR INTO ANOTHER CORPORATION, TO
THE EXTENT AN OPTION IS UNVESTED, SUCH OPTION SHALL BECOME VESTED AND
EXERCISABLE AS TO 100% OF THE SHARES SUBJECT TO SUCH OPTION.
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<PAGE> 9
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Arthur Andersen LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ending June 30, 2001, and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
Arthur Andersen LLP has audited the Company's financial statements since
1987. Its representatives are expected to be present at the Annual Meeting with
the opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions.
VOTE REQUIRED
The affirmative vote of a majority of the Votes Cast will be required to
approve the ratification of the appointment of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending June 30, 2001.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
7
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the three most recently
completed fiscal years concerning the compensation of the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers of the Company (collectively, the "Named Executive Officers") in the
fiscal year ended June 30, 2000:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
FISCAL ------------------------ UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#) ($)(2)
--------------------------- ------ --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Gary J. Sbona(3)................... 2000 --(3) --(3) 2,400,000 --(3)
Chairman and Chief Executive
Officer
Dennis J. Dunnigan(3).............. 2000 --(3) --(3) --(3) --(3)
Chief Operating Officer
Peter R. Simpson(3)................ 2000 --(3) --(3) --(3) --(3)
Chief Financial Officer
Stephen L. Aleshire(4)............. 2000 247,534 85,750(5) 15,000 2,248
Vice President of Worldwide 1999 197,305 54,000 65,000 34,325(6)
Sales and Customer Service
John P. Livingston(7).............. 2000 240,942 -- 15,000 2,248
Vice President of Operations 1999 43,269 30,000 100,000 1,768
Bruce N. Moore(8).................. 2000 327,205 -- -- 297,306(13)
Chief Executive Officer and 1999 383,653 135,835 250,000 2,892
President 1998 373,944 -- 100,000 1,392
R. Marshall Case(9)................ 2000 156,603 -- -- 1,111
Vice President of Finance and 1999 199,324 54,000 65,000 2,211
Chief Financial Officer 1998 60,000 43,450(10) 100,000 1,713
Fred Wiele(11)..................... 2000 149,889 -- -- 4,180
Vice President of Marketing 1999 205,768 117,500(12) 125,000 4,752
</TABLE>
---------------
(1) May include (in each fiscal year) bonuses earned during the fiscal year and
paid in the subsequent fiscal year.
(2) Represents group term life insurance premiums and 401K matching
contributions except as otherwise indicated.
(3) Mr. Sbona, Mr. Dunnigan and Mr. Simpson are all employees of and are paid
by Regent Pacific Management Corporation. See Section entitled "Employment
and Change of Control Agreements" for more information on the agreement
with Regent Pacific Management Corporation.
(4) Mr. Aleshire's employment with the Company terminated on October 2, 2000.
(5) Includes a sign-on bonus.
(6) Includes $31,629 of relocation expenses.
(7) Mr. Livingston terminated his employment with the Company on August 16,
2000.
(8) Mr. Moore terminated his employment with the Company on February 14, 2000.
(9) Mr. Case terminated his employment with the Company on January 28, 2000.
(10) Includes a $25,000 sign-on bonus and a guaranteed bonus equal to 30% of Mr.
Case's fiscal year 1998 salary ($18,450) pursuant to the terms of his offer
letter for employment with the Company.
(11) Mr. Wiele terminated his employment with the Company on January 7, 2000.
(12) Includes a $50,000 sign-on bonus.
(13) Includes a severance payment of $295,313.
8
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth each grant of stock options made during the
fiscal year ended June 30, 2000 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
---------------------------------------------------------- AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ---------------------------
NAME GRANTED(#) FISCAL YEAR(1) ($/SHARE)(2) DATE 5%($) 10%($)
---- ----------- -------------- -------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary J. Sbona(4)......... 2,400,000 39.5% $9.4375 02/14/05 6,257,777 $13,828,052
Dennis J. Dunnigan....... -- -- -- -- -- --
Peter R. Simpson......... -- -- -- -- -- --
Stephen L. Aleshire...... 15,000 0.2% $6.2813 05/11/10 59,254 150,161
John P. Livingston....... 15,000 0.2% $6.2813 05/11/10 59,254 150,161
Bruce N. Moore........... -- -- -- -- -- --
R. Marshall Case......... -- -- -- -- -- --
Fred Wiele............... -- -- -- -- -- --
</TABLE>
---------------
(1) An aggregate of 6,083,175 options to purchase shares of the Company's Common
Stock was granted to directors, employees, and consultants during the fiscal
year ended June 30, 2000.
(2) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of shares that are already owned or by offset of the
underlying shares, subject to certain conditions.
(3) These columns show the hypothetical gains or "option spreads" of the options
granted based on assumed annual compound stock appreciation rates of 5% and
10% over the full term of the option. The 5% and 10% assumed rates of
appreciation are mandated by the rules of the SEC and do not represent the
Company's estimate or projection of future Common Stock prices.
(4) Mr. Sbona's option was not granted under the Company's 1997 Stock Plan or
under the 1998 Non-Statutory Stock Option Plan, but was granted outside
these Plans.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides certain information concerning option
exercises by the Named Executive Officers during the fiscal year ended June 30,
2000 and fiscal year-end option values:
<TABLE>
<CAPTION>
{NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES VALUE OPTIONS AT JUNE 30, 2000 JUNE 30, 2000($)(2)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary J. Sbona............... -- -- 800,000 1,600,000 -- --
Dennis J. Dunnigan.......... -- -- -- -- -- --
Peter R. Simpson............ -- -- -- -- -- --
Stephen L. Aleshire......... 68,435 530,371 19,688 71,877 12,989 45,122
John P. Livingston.......... -- -- 26,250 88,750 -- --
Bruce N. Moore.............. 562,499 4,422,478 -- -- -- --
R. Marshall Case............ 81,248 521,491 -- -- -- --
Fred Wiele.................. 50,000 373,445 -- -- -- --
</TABLE>
---------------
(1) Calculated by determining the difference between the closing price of the
Company's Common Stock on The Nasdaq National Market on the date of exercise
and the exercise price of the options, and multiplying such difference by
the number of shares.
(2) Calculated by determining the difference between the fair market value of
the Company's Common Stock underlying the options at June 30, 2000 (the
closing price of the Common Stock of the Company
9
<PAGE> 12
was listed on The Nasdaq National Market at $4.9375 per share on June 30,
2000) and the exercise price of the options, and multiplying such difference
by the number of shares subject to outstanding options.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
RETAINER AGREEMENT WITH REGENT PACIFIC MANAGEMENT CORPORATION AND OPTION GRANT
TO MR. SBONA
The Company entered into a Retainer Agreement with Regent Pacific
Management Corporation ("Regent") on February 10, 2000. Regent is currently
performing certain management services for the Company and has provided the
Company with a five person management team which includes Gary J. Sbona, Dennis
J. Dunnigan, Thomas E. Gardner, James A. Garvey and Peter R. Simpson. The
agreement has a twelve-month term, provides for a fee of $75,000 per week to be
paid to Regent, includes a retainer of $300,000, and provides for reimbursement
of certain expenses. The Company does not pay salaries to any member of the
management team provided by Regent. In addition, the Company has granted an
option to purchase 2,400,000 shares of Common Stock to Mr. Sbona. This option
vests and becomes fully exercisable upon a Change of Control or if Mr. Sbona's
employment is terminated without cause. Pursuant to the terms of Mr. Sbona's
option grant, a "Change of Control" is generally deemed to occur in the event
of: (1) a merger, (2) a sale of substantially all of the Company's assets, or
(3) any person acquiring control over fifty percent (50%) of the Company's
voting securities.
CHANGE OF CONTROL AGREEMENTS WITH OTHER EXECUTIVE OFFICERS
The Company has in place Change of Control Severance Agreements with the
Named Executive Officers, other than the Named Executive Officers provided by
Regent. Generally, under the terms of these agreements with the other executive
officers, in the event of a Change of Control of the Company, the executive
officers shall receive an amount equal to one hundred percent (100%) of the
executive officers' annual compensation only in the case that such Change of
Control leads to the termination of the Named Executive Officer. Such payments
would only apply to the extent the executive officers' employment is terminated
by the Company other than for cause, or due to death or disability. Pursuant to
the terms of these agreements, a "Change of Control" is generally deemed to
occur in the event of: (1) a merger, (2) a sale of substantially all of the
Company's assets, (3) any person acquiring control over fifty percent (50%) of
the Company's voting securities, or (4) a change in the composition of the board
of directors over a two-year period as a result of which fewer than a majority
of the directors are incumbent directors.
CHANGE OF CONTROL PROVISIONS IN OTHER AGREEMENTS
The option granted to Michael Worhach in connection with his appointment as
President on August 1, 2000 vests and becomes fully exercisable upon a Change of
Control. Pursuant to the terms of Mr. Worhach's option grant, a "Change of
Control" is generally deemed to occur in the event of: (1) a merger, (2) a sale
of substantially all of the Company's assets, or (3) any person acquiring
control over fifty percent (50%) of the Company's voting securities.
The option granted to Mr. Chapman vests and becomes fully exercisable upon
a Change of Control. Pursuant to the terms of Mr. Chapman's option grant, a
"Change of Control" is generally deemed to occur in the event of: (1) a merger,
(2) a sale of substantially all of the Company's assets, or (3) any person
acquiring control over fifty percent (50%) of the Company's voting securities.
The options granted to Mr. McNulty and Mr. Powell vest and become fully
exercisable upon a Change of Control. Pursuant to the terms of Mr. McNulty's and
Mr. Powell's option grants, a "Change of Control" is generally deemed to occur
in the event of: (1) a merger, (2) a sale of substantially all of the Company's
assets, (3) any person acquiring control over fifty percent (50%) of the
Company's voting securities, or (4) a change in the composition of the Board in
which the majority of the members are not incumbent directors within a two-year
period.
10
<PAGE> 13
The 1998 Non-Statutory Stock Option Plan and the 1997 Stock Plan both
contain change of control provisions. Generally, under these plans, in the event
of a change of control each unvested outstanding option or stock purchase right
shall become vested and exercisable as to an additional 1/12 (Non-Statutory
Plan) or 1/16 (1997 Stock Plan) of the shares subject to the option or stock
purchase right for each full year that such option or stock purchase right has
been outstanding, and any restricted stock will vest. In addition, each
outstanding option or stock purchase right may be assumed or an equivalent
option or right substituted by the successor corporation.
REPORT OF THE COMPENSATION COMMITTEE
The following is the Report of the Compensation Committee of the Company's
Board of Directors. It describes the compensation policies and rationale with
respect to the compensation paid to the Company's executive officers for the
fiscal year ended June 30, 2000. The information contained in the report shall
not be deemed to be "soliciting material" or to be "filed" with the SEC, nor
shall such information be incorporated by reference into any future filing under
the Securities Act of 1933, as amended (the "Securities Act") or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent that
the Company specifically incorporates it by reference into such filing.
INTRODUCTION
The Compensation Committee administers the Company's executive compensation
programs. The Compensation Committee was comprised of non-employee directors of
the Company, John E. McNulty, Dr. W. Frank King, until his resignation June 30,
2000, and R. Stephen Cheheyl, until his resignation June 30, 2000, during the
fiscal year ended June 30, 2000. Karl C. Powell was appointed to the
Compensation Committee effective June 27, 2000. The Company's programs and
policies are designed to enhance stockholder value by closely linking executive
rewards with the Company's success.
The Company's executive compensation program has three elements:
- Base Salary
- Annual Cash Incentive Plan
- Stock Option Program
BASE SALARY
The base salaries for the Company's executive officers, except for Gary J.
Sbona, Peter R. Simpson and Dennis J. Dunnigan, for the fiscal year ended June
30, 2000 as set forth in the Summary Compensation Table were determined by the
Compensation Committee. With respect to Gary J. Sbona, Peter R. Simpson and
Dennis J. Dunnigan, the Compensation Committee negotiated the contract terms
with Regent Pacific Management Corporation. See "Executive
Compensation -- Summary Compensation Table." The Compensation Committee
considers the recommendations made by the Chief Executive Officer for the
Company's officers other than the Chief Executive Officer. In addition, the
Compensation Committee retains the services of an outside compensation
consulting firm. In its deliberations, the Compensation Committee takes into
consideration:
- Salaries of officers in similar positions in similar sized and comparable
high technology companies. This peer group of companies may be different
than those companies incorporated in the stock performance graph inasmuch
as it represents competitors for executive talent, rather than commercial
competitors;
- Company performance as measured by achievement of goals and objectives
established at the start of the previous fiscal year; and
- Evaluations of each individual's contributions as made by the Chief
Executive Officer (the Chief Executive Officer's performance is evaluated
independently by the Committee).
11
<PAGE> 14
ANNUAL CASH INCENTIVE PROGRAM
The annual cash incentive plan is designed to reward participants for
achievement of predetermined Company goals and objectives. These predetermined
goals and objectives are designed to drive Company performance toward enhanced
stockholder returns. During the fiscal year ended June 30, 2000, the Company
paid a portion of the eligible awards as set forth in the summary compensation
table.
STOCK OPTION PROGRAM
The stock option program is designed to attract, retain and motivate the
Company's officers and other participants by providing them with a meaningful
stake in the Company's long-term success.
In making its determinations, the Compensation Committee takes into
consideration:
- Grants made to individuals in similar positions in comparable high
technology companies;
- Participants' contributions to the Company's performance, both short and
long-term;
- Prior stock option grants, especially as they relate to the number of
options vested and unvested; and
- Impact that total option grants made to all participants have on dilution
of current stockholder ownership and the Company's earnings.
Stock option grants made to the Named Executive Officers are set forth in
the table of option grants in the last fiscal year set forth above. See
"Executive Compensation -- Option Grants in Last Fiscal Year."
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Gary J. Sbona serves as the Company's Chief Executive Officer and
Chairman. The Compensation Committee has independently reviewed the compensation
of the Chief Executive Officer. Mr. Sbona's receives no direct compensation from
the Company as he is employed by Regent Pacific Management Corporation. Please
see section entitled "Employment and Change of Control Agreements" for more
information on the agreement with Regent Pacific Management Corporation.
The foregoing report has been furnished by the Compensation Committee of
the Board of Directors of the Company.
Compensation Committee
John E. McNulty
Karl C. Powell
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended June 30, 2000, the Compensation Committee
consisted of John E. McNulty and Karl C. Powell. Dr. W. Frank King and R.
Stephen Cheheyl were members of the Compensation Committee until their
resignations from the Board of Directors effective June 30, 2000.
Mr. Gary J. Sbona, the Company's Chief Executive Officer and Chairman of
the Board of Directors, and the Company entered into an agreement with Regent
Pacific Management Corporation ("Regent Pacific"), a management firm of which
Mr. Sbona is the Chief Executive Officer. Pursuant to the agreement, Regent
Pacific will provide management services to the Company, including the services
of Mr. Sbona as Chief Executive Officer, one of a five person Regent Pacific
management team. The agreement has a one-year term and may be cancelled by the
Company after expiration of the initial 26-week period, with a minimum
compensation to Regent Pacific of $1,950,000 for that initial period. We rely on
Regent Pacific Management Corporation for the management of Auspex and the loss
of these services could adversely affect our business. The Company is not aware
of any other interlocks or insider participation required to be disclosed under
applicable rules of the SEC.
12
<PAGE> 15
COMPANY PERFORMANCE
The following performance graph compares the cumulative total return to
stockholders of the Company's Common Stock since May 11, 1993 (the date the
Company first became subject to the reporting requirements of the Exchange Act)
to the cumulative total return over such period of (i) The Nasdaq Stock Market
(U.S. Companies) and (ii) the Hambrecht & Quist Technology Index. The
information contained in the performance graph below shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act or
the Exchange Act, except to the extent that the Company specifically
incorporates it by reference into such filing.
The performance graph assumes that $100 was invested on July 1, 1994 in the
Company's Common Stock at the closing price on the first day of trading of $5.00
per share, and in each index, and that all dividends were reinvested. No
dividends have been declared or paid on the Company's Common Stock. Stockholder
returns over the period indicated should not be considered indicative of future
stockholder returns.
PERFORMANCE GRAPH
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Auspex Systems,
Inc. 100.00 250.00 300.00 192.50 108.75 217.50 98.75
Chase H & Q
Technology 100.00 176.91 206.75 270.01 342.03 552.80 971.41
Nasdaq Stock
Market -- U.S 100.00 133.50 171.39 208.36 274.92 389.75 575.47
------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of September 25, 2000 (except as set
forth in the footnotes) certain information with respect to the beneficial
ownership of the Company's Common Stock by (i) each person known by the Company
to own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
each person who served as Chief Executive Officer of the Company during the
Company's last fiscal year and the four most highly compensated officers other
than the Chief Executive Officer who were serving as executive officers at the
end of the Company's last fiscal year, (iii) each director of the Company, and
(iv) all directors and executive officers as a group. The Company knows of no
agreements among its stockholders which relate to voting or investment power of
its shares of Common Stock.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
--------------------------
PERCENTAGE OF
NUMBER OWNERSHIP
--------- -------------
<S> <C> <C>
FIVE PERCENT STOCKHOLDERS, EXECUTIVE OFFICERS AND DIRECTORS
State of Wisconsin Investment Board(2)...................... 6,437,200 14.3%
P.O. Box 7842
Madison, WI 53707
West Highland Capital Inc.(3)............................... 3,500,000 7.8%
300 Drakes Landing Road
Suite 290
Greenbrae, CA 94904
James E. Crabbe(5).......................................... 3,373,000 7.5%
121 SW Morrison, Suite 1400
Portland, OR 97204
Crabbe Huson Group, Inc.(4)................................. 2,877,378 6.4%
121 SW Morrison, Suite 1400
Portland, OR 97204
Gary J. Sbona(6)............................................ 1,800,000 3.9%
Peter R. Simpson(7)......................................... 1,100 *
John P. Livingston(7)....................................... 2,578 *
Dennis J. Dunnigan(7)....................................... 0 *
Stephen L. Aleshire(7)...................................... 44,189 *
Karl C. Powell(7)........................................... 164,500 *
John E. McNulty(7).......................................... 50,900 *
Richard E. Chapman(7)....................................... 12,500 *
Bruce N. Moore.............................................. 0 *
R. Marshall Case............................................ 0 *
Fred Wiele.................................................. 0 *
All executive officers and directors as a group (11
persons)(8)............................................... 2,075,767 4.4%
</TABLE>
---------------
* Less than one percent.
(1) Applicable percentage of ownership is based on 44,861,814 shares of the
Company's Common Stock outstanding as of September 25, 2000 together with
any applicable stock options held by such stockholder. Beneficial ownership
is determined in accordance with the rules of the SEC, and includes voting
and investment power with respect to shares. Shares of Common Stock subject
to options currently exercisable or exercisable within 60 days of September
25, 2000 are deemed outstanding for computing the percentage ownership of
the person holding such options, but are not deemed outstanding for
computing the percentage of any other person.
(2) State of Wisconsin Investment Board claims sole voting and dispositive power
as to the 6,437,200 shares. Information provided herein is based upon a
Schedule 13G/A filed with the SEC in January 2000 and subsequent
conversations with the investor.
14
<PAGE> 17
(3) Lang H. Gerhard is the sole shareholder of West Highland Capital Inc. and
the Manager of Estero Partners, LLC. West Highland Capital, Inc., Estero
Partners, LLC and Lang H. Gerhard are the general partners of West Highland
Partners, L.P. and Buttonwood Partners, L.P. As a group, the parties
mentioned in this footnote (3) claim shared voting and dispositive power
over a total of 3,500,000 shares. Information provided herein is based
solely upon a schedule 13D filed with the SEC in July 2000.
(4) Crabbe Huson Group, Inc. claims shared voting power over a total of
2,668,578 shares and shared dispositive power over a total of 2,877,378
shares. Information provided herein is based upon a Schedule 13G/A filed in
February 2000 and subsequent conversations with the investor.
(5) James E. Crabbe, Trustee of the James E. Crabbe Revocable Trust claims sole
voting and dispositive power as to the 3,373,000 shares. Information
provided herein is based solely upon a Schedule 13D/A filed with the SEC in
September 2000.
(6) Includes 1,800,000 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days of September 25, 2000.
(7) Includes shares of Common Stock issuable upon exercise of options
exercisable within 60 days of September 25, 2000 as follows: Karl C. Powell,
37,500 shares; John McNulty, 37,500 shares; Richard E. Chapman, 12,500
shares; Stephen L. Aleshire, 44,189 shares.
(8) Includes 1,928,439 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days of September 25, 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and regulations of the SEC thereunder
require the Company's executive officers and directors, and persons who own more
than 10% of a registered class of the Company's equity securities, to file
reports of initial ownership and changes in ownership with the SEC. Based solely
on its review of copies of such forms received by the Company, or on written
representations from certain reporting persons that no other reports were
required for such persons, the Company believes that, during or with respect to
the fiscal year ended June 30, 2000 all of the Section 16(a) filing requirements
applicable to its executive officers, directors and 10% stockholders were
complied with, except one Form 3 was not timely filed for each of the following
persons: Gary J. Sbona, Peter R. Simpson, Karl C. Powell and John E. McNulty
covering one transaction each for Mr. Simpson and Mr. Powell.
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the accompanying proxy to vote the shares
represented as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
/s/ HENRY P. MASSEY, JR.
Henry P. Massey, Jr.
Secretary
Dated: October 13, 2000
15
<PAGE> 18
APPENDIX A
AUSPEX SYSTEMS, INC.
1993 DIRECTORS' STOCK OPTION PLAN
(INCLUDES PROPOSED AMENDMENTS)
1. Purposes of the Plan. The purposes of this Directors' Stock Option Plan
are to attract and retain the best available personnel for service as Directors
of the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.
All options granted hereunder shall be "nonstatutory stock options".
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Auspex Systems, Inc., a Delaware corporation.
(e) "Continuous Status as a Director" shall mean the absence of any
interruption or termination of service as a Director.
(f) "Director" shall mean a member of the Board.
(g) "Employee" shall mean any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a director's fee by the Company shall not be
sufficient in and of itself to constitute "employment" by the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "Option" shall mean a stock option granted pursuant to the Plan.
(j) "Optioned Stock" shall mean the Common Stock subject to an Option.
(k) "Optionee" shall mean an Outside Director who receives an Option.
(l) "Outside Director" shall mean a Director who is not an Employee.
(m) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(n) "Plan" shall mean this 1993 Directors' Stock Option Plan.
(o) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(p) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 825,000 Shares (the "Pool") of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. If Shares which were acquired upon exercise of an Option
are subsequently repurchased by the Company, such Shares shall not in any event
be returned to the Plan and shall not become available for future grant under
the Plan.
A-1
<PAGE> 19
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein, the Plan shall be
administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder shall be
automatic and nondiscretionary and shall be made strictly in accordance with the
following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to
be covered by Options granted to Outside Directors.
(ii) Each Outside Director who first becomes a member of the Board of
Directors after September 30, 2000 shall be automatically granted an Option
to purchase 100,000 Shares (the "First Option") on the date on which such
person first becomes an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board of Directors to
fill a vacancy.
(iii) Each Outside Director shall be automatically granted an Option
to purchase 25,000 Shares (a "Subsequent Option") on the first business day
of the Company's fiscal year of each year, if on such date, he or she shall
have served on the Board for at least six (6) months.
(iv) Notwithstanding the provisions of subsections (ii) and (iii)
hereof, in the event that a grant would cause the number of Shares subject
to outstanding Options plus the number of Shares previously purchased upon
exercise of Options to exceed the Pool, then each such automatic grant
shall be for that number of Shares determined by dividing the total number
of Shares remaining available for grant by the number of Outside Directors
on the automatic grant date. Any further grants shall then be deferred
until such time, if any, as additional Shares become available for grant
under the Plan through action of the stockholders to increase the number of
Shares which may be issued under the Plan or through cancellation or
expiration of Options previously granted hereunder.
(v) Notwithstanding the provisions of subsections (ii) and (iii)
hereof, any grant of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 17 hereof shall
be conditioned upon obtaining such stockholder approval of the Plan in
accordance with Section 17 hereof.
(vi) The terms of a First Option granted hereunder shall be as
follows:
(A) the First Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(B) the exercise price per Share shall be 100% of the fair market
value per Share on the date of grant of the First Option.
(C) the First Option shall become exercisable in installments
cumulatively as to 1/24 of the Shares subject to the First Option on the
last day of each of the first 12 full calendar months after the date of
grant of such option, and as to 1/2 of the shares subject to such option
on the last day of the 24th full calendar month after the date of grant
of such option.
(vii) The terms of a Subsequent Option granted hereunder shall be as
follows:
(A) the Subsequent Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth
in Section 9 hereof.
(B) the exercise price per Share shall be 100% of the fair market
value per Share on the date of grant of the Subsequent Option.
(C) the Subsequent Option shall become exercisable in installments
cumulatively as to 1/24 of the Shares subject to the Subsequent Option
on the last day of each of the first 12 calendar months beginning with
the calendar month in which such option is granted, and as to 1/2 of the
shares subject to such option on the last day of the 24th calendar month
following the calendar month in which such option is granted.
A-2
<PAGE> 20
(c) Powers of the Board. Subject to the provisions and restrictions of the
Plan, the Board shall have the authority, in its discretion: (i) to determine,
upon review of relevant information and in accordance with Section 8(b) of the
Plan, the fair market value of the Common Stock; (ii) to determine the exercise
price per share of Options to be granted, which exercise price shall be
determined in accordance with Section 8(a) of the Plan; (iii) to interpret the
Plan; (iv) to prescribe, amend and rescind rules and regulations relating to the
Plan; (v) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the President or his or her
designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee 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 rules resulting in loss, damage or injury to the Company, 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 or her estate shall be
entitled to exercise any option whatsoever. In making such determination, the
Board of Directors (excluding the Outside Director accused of such misconduct)
shall act fairly and shall give the Optionee an opportunity to appear and
present evidence on Optionee's behalf at a hearing before the Board or a
committee of the Board.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.
6. Term of Plan; Effective Date. The Plan shall become effective on June
28, 1993. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof.
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option.
(b) Fair Market Value. The fair market value shall be determined by the
Board in its discretion; provided, however, that where there is a public market
for the Common Stock, the fair market value per Share shall be the mean of the
bid and asked prices of the Common Stock in the over-the-counter market on the
date of grant, as reported in The Wall Street Journal (or, if not so reported,
as otherwise reported by the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System) or, in the event the Common Stock is
traded on the NASDAQ National Market System or listed on a stock exchange, the
fair market value per Share shall be the closing price on such system or
exchange on the date of grant of the Option, as reported in The Wall Street
Journal.
(c) Form of Consideration. The consideration to be paid for the Shares to
be issued upon exercise of an Option shall consist entirely of cash, check,
other Shares of Common Stock having a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised
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(which, if acquired from the Company, shall have been held for at least six
months), delivery of a properly executed exercise notice together with
instructions to a broker to deliver promptly to the Company the amount of sale
proceeds required to pay the exercise price, or any combination of such methods
of payment and/or any other consideration or method of payment as shall be
permitted under applicable corporate law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable at such times as are set forth in Section 4(b)
hereof; provided, however, that no Options shall be exercisable until
stockholder approval of the Plan in accordance with Section 17 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as a Director. If an Outside Director ceases to
serve as a Director, he or she may, but only within three (3) months (or such
other period of time not exceeding six (6) months as is determined by the Board)
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination. Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired. To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9(b)
above, in the event a Director is unable to continue his or her service as a
Director with the Company as a result of his or her total and permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue Code), he or
she may, but only within six (6) months (or such other period of time not
exceeding twelve (12) months as is determined by the Board) from the date of
such termination, exercise his or her Option to the extent he or she was
entitled to exercise it at the date of such termination. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 7 has expired. To the extent that he or she was not entitled to exercise
the Option at the date of termination, or if he or she does not exercise such
Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) during the term of the Option who is, at the time of his or her
death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may
be exercised, at any time within six (6) months (or such other period of
time as is determined by the Board) following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as Director for six (6) months (or such
lesser period of time as is determined by the Board) after the date
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<PAGE> 22
of death. Notwithstanding the foregoing, in no event may the Option be
exercised after its term set forth in Section 7 has expired.
(ii) within three (3) months (or such lesser period of time as is
determined by the Board) after the termination of Continuous Status as a
Director, the Option may be exercised, at any time within six (6) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination. Notwithstanding the foregoing, in no event may the option be
exercised after its term set forth in Section 7 has expired.
10. Nontransferability of Options. Unless otherwise provided for by the
Board, the Option may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or
distribution. The designation of a beneficiary by an Optionee does not
constitute a transfer. An Option may be exercised during the lifetime of an
Optionee only by the Optionee or a transferee permitted by this Section.
11. Adjustments Upon Changes in Capitalization or Merger.
(a) Change in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution; Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Option will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board.
The Board may, in the exercise of its sole discretion in such instances, declare
that any Option shall terminate as of a date fixed by the Board and give each
Optionee the right to exercise his or her Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable.
(c) Merger; Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, then, to the extent the Option is unvested,
the Option shall become fully vested and exercisable as to 100% of the Shares
subject to such Option, in addition to any Shares which may have already vested
under such Option (up to a maximum of 100% of the Optioned Stock originally
granted). In addition, the outstanding Options may be assumed or an equivalent
option may be substituted by the successor corporation or a parent or subsidiary
thereof (the "Successor Corporation"). If an Option becomes exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Board shall notify the Optionee that the Option shall be exercisable for a
period of fifteen (15) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
For the purposes of this Section 11(c), an Option shall be considered
assumed if, following the merger or sale of assets, the Option confers the right
to purchase or receive, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of
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<PAGE> 23
consideration chosen by the holders of a majority of the outstanding Shares). If
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.
(d) Certain Business Combinations. In the event it is determined by the
Company's independent public accountants that the acceleration of vesting of
outstanding Options upon a merger pursuant to this Section would preclude
accounting for such merger as a pooling of interests, and the Board desires to
approve such merger which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then any such
option acceleration shall be null and void, but only if the absence of such
option acceleration would preserve the pooling treatment.
12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4(b) hereof. Notice
of the determination shall be given to each Outside Director to whom an Option
is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the Plan
from time to time in such respects as the Board may deem advisable; provided
that, to the extent necessary and desirable to comply with any applicable law or
regulation, the Company shall obtain approval of the stockholders of the Company
to Plan amendments to the extent and in the manner required by such law or
regulation.
(b) Effect of Amendment or Termination. Any such amendment or termination
of the Plan that would impair the rights of any Optionee shall not affect
Options already granted to such Optionee and such Options shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares, if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. Stockholder Approval.
(a) Continuance of the Plan shall be subject to approval by the
stockholders of the Company at or prior to the first annual meeting of
stockholders held subsequent to the granting of an Option hereunder. If such
stockholder approval is obtained at a duly held stockholders' meeting, it may be
obtained by the affirmative
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<PAGE> 24
vote of the holders of a majority of the outstanding shares of the Company
present or represented and entitled to vote thereon. If such stockholder
approval is obtained by written consent, it may be obtained by the written
consent of the holders of a majority of the outstanding shares of the Company.
(b) Any required approval of the stockholders of the Company shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.
18. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports to stockholders, proxy statements and other
information provided to all stockholders of the Company.
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<PAGE> 25
DETACH HERE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AUSPEX SYSTEMS, INC.
2800 SCOTT BOULEVARD, SANTA CLARA, CALIFORNIA 95050
2000 ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 14, 2000
The undersigned stockholder of Auspex Systems, Inc., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated October 13, 2000, and
hereby appoints Gary J. Sbona and Peter R. Simpson, or either of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 2000 Annual
Meeting of Stockholders of the Company to be held on November 14, 2000 at 9:00
a.m. local time, at the Company's headquarters located at 2800 Scott Boulevard,
Santa Clara, California, and at any adjournment(s) thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth on the reverse side.
-------------------------------------------------------------------------------
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
--------------------------------------------------
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<PAGE> 26
------------------------------
DETACH HERE
Please mark [X] votes as in this example.
This proxy, when properly executed, will be voted as directed below, or,
if no contrary direction is indicated, will be voted FOR the election of two (2)
Class I directors, FOR proposal 2, FOR proposal 3, and as said proxies deem
advisable on such other matters as may properly come before the meeting.
1. To elect two (2) Class I directors of the Company to serve for a
two-year term.
Nominees: Gary J. Sbona, Richard E. Chapman
MARK HERE:
FOR [ ] WITHHELD [ ]
IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW[ ]
2. To approve amendments to the Company's 1993 Directors' Stock Option
Plan (the "Directors' Plan") (i) to increase the number of shares of
Common Stock subject to the initial and annual option grants
automatically awarded to the Company's non-employee directors
thereunder from 25,000 and 8,000 to 100,000 and 25,000,
respectively, (ii) to modify the vesting period for options granted
under the Directors' Plan, so that any option granted thereunder
shall become exercisable as to 1/24th of the shares subject to such
option monthly for the first 12 months following the date of grant
of such option, and as to 1/2 of the shares subject to such option
two years after the date of grant of such option, and (iii) to
modify the change of control provisions of the Directors' Plan so
that, upon a proposed sale of all or substantially all of the
Company's assets or a merger of the Company with or into another
corporation, to the extent an option is unvested, such option shall
become vested and exercisable as to 100% of the shares subject to
such option .
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To ratify the appointment of Arthur Andersen LLP as the independent
auditors of the Company for the year ending June 30, 2001.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN
AND DATE THIS PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE.
(This proxy should be marked, dated and signed by the stockholder(s)
exactly as his or her name appears hereon, and returned promptly in the enclosed
envelope. When shares are held by joint tenants, both should sign. When signing
as attorney, as executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by president
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.)
Signature: ________________________ Date: ______________________
Signature: ________________________ Date: ______________________
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