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
[X] Definitive proxy statement Commission only (as permitted
[ ] Definitive additional materials by Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to
Sec. 240.14a-11(c) or Sec. 240.14a-12
SKYMALL, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions 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):
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(5) Total fee paid:
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[ ] 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:
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(4) Date filed:
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<PAGE>
SKYMALL, INC.
1520 East Pima Street
Phoenix, Arizona 85034
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NOTICE AND PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD JUNE 4, 1999
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To the Shareholders of SkyMall, Inc.:
The Annual Meeting of Shareholders of SkyMall, Inc., a Nevada corporation
(the "Company"), will be held at the South Mountain Pointe Hilton Resort, 7777
South Pointe Parkway, Phoenix Arizona, 85044 on Friday, June 4, 1999, at 10:00
a.m. local time for the following purposes:
1. To elect four directors to serve until the next annual meeting;
2. To amend the Company's 1994 Stock Option Plan (the "Option Plan") to
increase the aggregate number of shares available for issuance
thereunder from 1,100,000 to 1,500,000;
3. To ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company for the fiscal year ending December
31, 1999; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The Company is presently aware of no other
business to come before the Annual Meeting.
Shareholders of record at the close of business on April 6, 1999 (the
"Record Date") are entitled to vote at the Annual Meeting or any adjournment or
postponement thereof. Shares may be voted at the Annual Meeting only if the
holder is present or represented by proxy. A list of shareholders entitled to
vote at the Annual Meeting will be available for inspection at the Company's
corporate headquarters for any purpose germane to the Annual Meeting during
ordinary business hours for ten (10) days prior to the Annual Meeting.
A copy of the Company's 1998 Annual Report to Shareholders, which includes
audited financial statements, is enclosed. Management and the Board of Directors
cordially invite you to attend the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
Robert M. Worsley
Chairman, Chief Executive Officer
and President
Phoenix, Arizona
May 6, 1999
SHAREHOLDERS ARE ENCOURAGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY. A
PRE-ADDRESSED ENVELOPE IS PROVIDED FOR THEIR CONVENIENCE. SHAREHOLDERS ARE
ENCOURAGED TO VOTE REGARDLESS OF WHETHER OR NOT THEY ATTEND THE ANNUAL MEETING
OF SHAREHOLDERS.
<PAGE>
SKYMALL, INC.
1520 East Pima Street
Phoenix, Arizona 85034
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PROXY STATEMENT
1999 ANNUAL MEETING OF SHAREHOLDERS
JUNE 4, 1999
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This Proxy Statement is furnished by the Board of Directors of SkyMall,
Inc., a Nevada corporation (the "Company" or "SkyMall"), in connection with the
solicitation of proxies to be used for the purpose of voting at the Annual
Meeting of Shareholders (the "Annual Meeting"). The Annual Meeting will be held
on Friday, June 4, 1999 at 10:00 a.m. local time at the South Mountain Pointe
Hilton Resort, 7777 South Pointe Parkway, Phoenix Arizona, 85044.
The enclosed proxy is solicited by the Board of Directors of the Company.
The proxy materials relating to the Annual Meeting were mailed on or about May
6, 1999 to shareholders of record at the close of business on April 6, 1999 (the
"Record Date"). Only shareholders of record at the close of business on the
Record Date will be entitled to vote at the Annual Meeting, or any adjournment
or postponement thereof, either in person or by valid proxy. As of the Record
Date, there were outstanding 8,871,798 shares of common stock, $.001 par value
per share (the "Common Stock").
Shareholders are entitled to one vote for each share of Common Stock held
of record on each matter of business to be considered at the Annual Meeting.
Ballots cast at the Annual Meeting will be counted by the Inspector of Elections
and determinations of whether a quorum exists and whether the proposals are
approved will be announced at the Annual Meeting.
The Inspector of Elections will treat abstentions and broker non-votes
received as shares that are present and entitled to vote for purposes of
determining a quorum, but as unvoted for purposes of determining the approval of
any matter. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to that matter.
The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation materials to the beneficial owners of the outstanding Common Stock.
In addition to soliciting proxies by mail, proxies may be solicited by personal
interview or telephone. A person giving the enclosed proxy has the power to
revoke it at anytime before it is exercised by: (i) attending the Annual Meeting
and voting in person; (ii) duly executing and delivering a proxy bearing a later
date; or (iii) sending a written notice of revocation to the Secretary of the
Company at its corporate offices. The corporate offices of the Company are
located at 1520 East Pima Street, Phoenix, Arizona 85034 and its telephone
number at that address is (602) 254-9777.
The information included herein should be reviewed in conjunction with the
financial statements, notes to financial statements, independent accountants'
report and other information included in the Company's 1998 Annual Report to
Shareholders that was mailed with this Proxy Statement to all shareholders of
record on the Record Date.
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Board of Directors currently consists of four members. Each director of
the Company is elected for a period of one year at the Company's Annual Meeting
of shareholders and serves until his or her successor is duly elected and
qualified. Unless otherwise noted thereon, the shares represented by the
enclosed proxy will be voted for the election as directors of the four nominees
named below to serve until the 2000 Annual Meeting of shareholders or until
their successors have been duly elected and qualified. The four nominees
receiving the highest number of votes cast at the Annual Meeting will be
elected. If any of them become unavailable for any reason or if a vacancy should
occur before the election (which events are not anticipated), the shares
represented by the enclosed proxy may be voted for such other person or persons
as may be determined by the holders of such proxy.
The following persons have been nominated as directors:
ROBERT M. WORSLEY (43) has been the Chairman of the Board, Chief Executive
Officer and President of the Company since it was founded in 1989. From 1985 to
1989, Mr. Worsley was a principal of ExecuShare, Inc., an executive services
firm that provided time-shared financial executives for small companies. From
1980 to 1985, Mr. Worsley was an accountant with Price Waterhouse, a public
accounting firm, where he most recently held the position of Audit Manager. Mr.
Worsley received a bachelor's degree in accounting from Brigham Young University
in 1980. Mr. Worsley is a Certified Public Accountant.
LYLE R. KNIGHT (53) has been a director of the Company since December 1996.
Mr. Knight has more than twenty-seven years of banking experience. Mr. Knight
currently serves as President and a Director of First Interstate BancSystem in
Billings, Montana. From 1989 until 1992, Mr. Knight was President and Chief
Executive Officer of Security Pacific Bank, Nevada. From 1992 until 1995, Mr.
Knight served as President of Caliber Bank, a wholly owned subsidiary of
Independent Banks of Arizona, which was subsequently merged with Norwest
Corporation. From 1995 until 1996, Mr. Knight was a Management Consultant for
Norwest Banks, Arizona and from 1996 until 1997 he held the position of Senior
Vice President of Norwest Banks, Arizona. From 1997 until 1998, Mr. Knight was
the President of Pacific Century Bank, Arizona. Mr. Knight is a principal of C&K
Investments, a property development and management company. Mr. Knight graduated
from the University of Utah in 1968 with a Bachelor of Science degree in Banking
and Finance and in 1982 graduated with honors from Pacific Coast Banking School.
Mr. Knight has served as Chairman of the Phoenix Chamber of Commerce, as
Chairman of the Arizona Chamber of Commerce, a Director of the Barrows
Neurological Institute, a Director of the Pacific Coast Banking School, and
served on the Arizona Community Foundation.
THOMAS J. LITLE (58) has been a director of the Company since December
1996. In 1985, Mr. Litle founded Litle & Company, Inc., which provided
information sharing, payment processing and electronic network services to the
direct marketing industry. Mr. Litle was Chairman of Litle & Company's Board of
Directors and its Chief Executive Officer until 1995, when the business was sold
to First USA. In connection with the sale to First USA, Mr. Litle retained the
networking and non-payment processing parts of the business and formed
OrderTrust LLC (formerly LitleNet LLC), of which he is the Chairman, which also
provides direct commerce connection and information sharing services to the
direct marketing industry. Mr. Litle received an M.B.A. from Harvard Graduate
School of Business Administration in 1964 after graduating from California
Institute of Technology with a Bachelor of Science degree in 1962. Mr. Litle
also serves on the Board of Directors of DM Management.
RANDY PETERSEN (43) has been a director of the Company since December 1996.
In 1986, Mr. Petersen founded and is currently the President and Chairman of the
Board of Frequent Flyer Services. Frequent Flyer Services publishes a monthly
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frequent flyer magazine and an annual frequent flyer guidebook, produces
frequent traveler-oriented merchandise and provides various travel-related
services. Mr. Petersen is a member of the Association of Corporate Travel
Executives and serves on the Advisory Board of the International Airline
Passenger Association. Mr. Petersen also serves on the Board of Directors of
FlightPlan, Inc., TeleMiles, Inc., Netcentives, Inc. and Pointsmart, Inc.
The Company's Bylaws provide that any shareholder entitled to vote in an
election of directors may nominate persons for election as directors only if
written notice of such shareholder's intent to make such nomination is given,
either by personal delivery or by United States mail, postage prepaid to the
Secretary, SkyMall, Inc., 1520 East Pima Street, Phoenix, Arizona 85034. Such
notice must be given not less than thirty (30) days and not more than sixty (60)
days prior to the Annual Meeting; provided that if less than forty-five (45)
days notice or prior public disclosure of the date of the Annual Meeting is
given or made to shareholders, such nomination must be mailed or delivered to
the Secretary not later than the close of business on the 10th day following the
date on which the notice of the meeting was mailed or public disclosure was
made, whichever occurs first.
Each such notice must set forth: (a) with respect to each nominee, (i) the
name, age, business address and, if known, residence address of the nominee,
(ii) the principal occupation or employment of the nominee, (iii) the number of
shares of stock of the Company which are beneficially owned by the nominee, and
(iv) any other information concerning the nominee that must be disclosed with
respect to nominees in proxy solicitations pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such persons' written
consent to be named as a nominee and to serve as a director if elected); and (b)
as to the shareholder giving the notice, (i) the name and address, as they
appear on the Company's books, of such shareholder and (ii) the class and number
of shares of the Company that are beneficially owned by such shareholder; and
(c) as to the beneficial owner, if any, on whose behalf the nomination is made,
(i) the name and address of such person and (ii) the class and number of shares
of the Company that are beneficially owned by such person. The chairman of the
Annual Meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedures.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE. During 1998, Lyle R. Knight and Thomas J. Litle served on
the Company's Audit Committee. The Audit Committee is responsible for reviewing
and making recommendations regarding the Company's employment of independent
auditors, the annual audit of the Company's financial statements and the
Company's internal accounting controls, practices and policies. The Audit
Committee met twice in 1998.
COMPENSATION COMMITTEE. During 1998, Alan C. Ashton and Randy Petersen
served on the Company's Compensation Committee. Mr. Ashton resigned as a member
of the Board of Directors on December 30, 1998. The Compensation Committee is
responsible for making recommendations to the Board of Directors regarding
compensation arrangements for executive officers of the Company, including
annual bonus compensation, and consults with management of the Company regarding
compensation policies and practices. The Compensation Committee also makes
recommendations concerning the adoption of any compensation plans in which
management is eligible to participate, including the granting of stock options
or other benefits under such plans. The Compensation Committee met once in 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
Compensation Committee of the Board of Directors during 1998 consisted of
Messrs. Ashton and Petersen, neither of whom was an employee of the Company
during 1998.
OTHER COMMITTEES. The Company does not maintain a standing nominating
committee.
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BOARD MEETINGS. During 1998, the Board of Directors met six times. Each
director attended in excess of 75% of the meetings held in 1998 by the Board and
the committees of the Board on which such director served, except Alan Ashton,
who attended four Board meetings, but attended 100% of the Compensation
Committee meetings.
DIRECTORS' FEES AND EMPLOYMENT AGREEMENTS
Directors who are not employees of the Company receive a quarterly retainer
of $2,500, an option to purchase 5,000 shares of the Company's Common Stock at
its fair market value on the date of grant upon appointment to the Board of
Directors, and an annual option to purchase 3,000 shares of the Company's Common
Stock at its fair market value on the date of grant provided they have attended
a required minimum number of Board and committee meetings during the year. All
directors are reimbursed for expenses incurred in connection with attendance at
meetings of the Board of Directors or committees thereof. Directors who are also
officers of the Company are not compensated for their services as directors.
With the exception of Robert M. Worsley, Curtis D. Brown and Thomas C.
Edwards, who have employment agreements with the Company, each of the executive
officers serve at the pleasure of the Company's Board of Directors.
OTHER EXECUTIVE OFFICERS
Following are the executive officers of SkyMall, Inc. who are not also
directors:
CHRISTINE A. AGUILERA (34) joined SkyMall in February 1997 and served as
Vice President of Business Development, General Counsel and Secretary until
February 1999. Effective March 1, 1999, Ms. Aguilera was appointed as Executive
Vice President of Business Development, General Counsel and Secretary of
SkyMall. Ms. Aguilera also serves as an officer of the Company's subsidiaries,
skymall.com and Durham & Company. From 1992 until joining the Company, Ms.
Aguilera was an attorney in private practice in Phoenix, Arizona practicing in
the areas of corporate and securities law, including most recently at Squire,
Sanders & Dempsey LLP. From 1986 until 1989, Ms. Aguilera was a Certified Public
Accountant with Coopers & Lybrand. Ms. Aguilera received bachelors' degrees in
accounting and finance from New Mexico State University in 1986 and received her
law degree from the University of Texas in 1992. Ms. Aguilera is a member of the
State Bar of Arizona.
SCOTT R. DASTRUP (43) joined SkyMall in May 1998 and served as Chief
Information Officer until February 1999. Effective March 1, 1999, Mr. Dastrup
was appointed as Executive Vice President of Operations and Chief Information
Officer of SkyMall. From 1997 until joining the Company, Mr. Dastrup was a
principal of The SyntheSolutions Group in Tempe, Arizona, an information
technology consulting firm. From March 1996 through December 1996, Mr. Dastrup
was Vice President of Data Services for ProMark One, a telecommunications
service company located in Scottsdale, Arizona. From July 1993 through February
1996, Mr. Dastrup was Vice President of Operations for BankOne's credit card
processing services located in Phoenix, Arizona. Mr. Dastrup received his
bachelor's degree from Brigham Young University in 1984 and received his M.B.A.
from the University of Utah in 1988.
STEPHEN R. PETERSON (44) served as the Acting Chief Financial Officer of
SkyMall from July 1998 through November 1998, and became the Chief Financial
Officer of SkyMall's subsidiary, skymall.com, in November 1998. Effective March
1, 1999, Mr. Peterson became the Chief Financial Officer of SkyMall and its
subsidiaries, skymall.com and Durham & Company. Prior to joining SkyMall, Mr.
Peterson was employed in various financial capacities for over 12 years with US
WEST, Inc., a telecommunications company based in Englewood, Colorado. He most
recently served as director of international financial analysis and director
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of finance for the residential market unit. Prior to joining US WEST, Mr.
Peterson was a Certified Public Accountant with Deloitte and Touche. Mr.
Peterson received his bachelor's degree in accounting from Brigham Young
University in 1980 and received his M.B.A. from Arizona State University in
1995.
MARK S. SCHNEIDER (47) joined SkyMall in September 1997 and served as Vice
President of Marketing until February 1999. Effective March 1, 1999, Mr.
Schneider was appointed as Executive Vice President of Marketing and
Merchandising. From 1988 until joining the Company, Mr. Schneider was employed
with the Airfone division of GTE where he most recently held the position of
Vice President of Marketing and had principal responsibility for advertising,
promotions, sales, customer service, market planning, new business development
and the implementation of new products and services. Prior to joining GTE
Airfone, Mr. Schneider worked in various capacities in the airline industry for
more than ten years, including in various marketing and revenue management
positions. Mr. Schneider received his bachelor's degree in economics from
Colorado State University and M.B.A. from the same university in 1977.
The following are the executive officers of SkyMall's subsidiary,
skymall.com, inc.:
CURTIS D. BROWN (35) joined the Company in February 1999 as Chief
Technology Officer of skymall.com. From April 1994 until joining the Company,
Mr. Brown was employed by N2K, Inc., the parent company of MusicBoulevard.com, a
leading music entertainment company on the Internet, where he most recently
served as Senior Director of Technology. Mr. Brown received his bachelor's
degree in psychology from New York University in 1991.
THOMAS C. EDWARDS (41) joined the Company in January 1999 as Chief
Marketing Officer and head of skymall.com. From 1989 until joining the Company,
Mr. Edwards was employed by Visa U.S.A., where he most recently served as Senior
Vice President of Emerging Technology and Business Development. Prior to joining
Visa U.S.A., Mr. Edwards served as Vice President of Marketing and Product
Development at CitiCorp Credit Services, Inc. and in various marketing and
management positions with the American Express Company. Mr. Edwards received his
bachelor's degree in general arts and sciences from Pennsylvania State
University in 1979 and his M.B.A. from the same university in 1980.
SANFORD GOLDMAN (41) joined the Company in January 1999 as Vice President
of Business Development of skymall.com. From June through December 1998, Mr.
Goldman was President and Chief Executive Officer of Pix.com., Inc., which
operated an e-commerce Web site. From November 1996 until June 1998, Mr. Goldman
was Senior Vice President and General Manager of WaveTop, a consumer data
broadcast product division of WavePhore, Inc. and from February 1993 until
October 1996, Mr. Goldman was Senior Vice President of Shoppers Express, Inc.,
an Internet-based grocery-shopping service. Mr. Goldman received his bachelor's
degree in accounting from the University of Maryland in 1980.
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EXECUTIVE COMPENSATION
The following table sets forth certain information regarding annual and
long-term compensation for services rendered to the Company during the years
ended December 31, 1998, 1997 and 1996 by the Chief Executive Officer of the
Company and certain other executive officers of the Company (collectively, the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
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Securities
Other Annual Underlying All Other
Name and Principal Fiscal Compensation Options/SARs Compensation
Position Year Salary ($) Bonus ($) ($) (1)(#) (2)($)
- ------------------------ ------ ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Worsley 1998 197,308 -0- 3,598 (3) -0- 2,553
Chairman of the 1997 190,000 28,500 3,598 (3) -0- 274
Board, Chief 1996 159,077 20,000 6,110 (3) -0- 1,369
Executive Officer
and President
Christine A. Aguilera 1998 93,462 -0- -0- 30,000 3,040
Executive Vice President 1997 69,854 (4) 10,000 -0- 70,000 174
of Business Development, 1996 N/A N/A N/A N/A N/A
General Counsel and
Secretary
Scott R. Dastrup 1998 76,928 (5) -0- -0- 50,000 -0-
Executive Vice President 1997 N/A N/A N/A N/A N/A
of Operations and Chief 1996 N/A N/A N/A N/A N/A
Information Officer
Mark S. Schneider 1998 140,192 -0- -0- 30,000 4,356
Executive Vice President 1997 38,942 (6) 5,000 -0- 70,000 -0-
of Marketing and 1996 N/A N/A N/A N/A N/A
Merchandising
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(1) Consists entirely of stock options.
(2) Employer matching contributions pursuant to the Company's 401(k) plan.
(3) Includes a pro rata portion of premiums paid on a life insurance policy on
the life of Mr. Worsley under which a portion of the benefits are payable
to beneficiaries other than the Company.
(4) Ms. Aguilera joined the Company in February 1997. Had Ms. Aguilera been
employed by the Company for the entire year, her annual base salary would
have been $90,000.
(5) Mr. Dastrup joined the Company in May 1998. Had Mr. Dastrup been employed
by the Company for the entire year, his annual base salary would have been
$125,000.
(6) Mr. Schneider joined the Company in September 1997. Had Mr. Schneider been
employed by the Company for the entire year, his annual base salary would
have been $135,000.
</TABLE>
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<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth for each Named Executive Officer certain
information concerning individual grants of stock options during the 1998 fiscal
year.
<TABLE>
<CAPTION>
Individual Grants Potential Realized
--------------------------------------------------- Value at Assumed
Number of % of Total Rates of Annual Stock
Securities Options/SARs Price Appreciation
Underlying Granted to Exercise For Option Term (2)
Name and Principal Options/SARs Employees in Price Expiration ---------------------
Position Granted (1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- -------------------------- ------------ ------------ -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Christine A. Aguilera 30,000(3) 8.5% $3.75 11/04/2008 $70,751 $179,296
Executive Vice President
of Business Development,
General Counsel and
Secretary
Scott R. Dastrup 25,000(4) 7.1% $4.25 05/20/2008 $66,820 $169,335
Executive Vice President 25,000(5) 7.1% $3.50 08/19/2008 $55,028 $139,452
of Operations and Chief
Information Officer
Mark S. Schneider 30,000(3) 8.5% $3.75 11/04/2008 $70,751 $179,296
Executive Vice President
of Marketing and
Merchandising
- ------------------
(1) Consists entirely of stock options.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% or 10% compounded
annually from the date the respective options were granted to their
expiration date and are not presented to forecast possible future
appreciation, if any, in the price of the Common Stock. The potential
realizable value of the foregoing options is calculated by assuming that
the market price of the underlying security appreciates at the indicated
rate for the entire term of the option and that the option is exercised at
the exercise price and sold on the last day of its term at the appreciated
price.
(3) The option may be exercised for 33% of the underlying stock beginning on
November 4, 1999, for another 33% beginning on November 4, 2000, and for
the final 34% beginning on November 4, 2001.
(4) The option may be exercised for 33% of the underlying stock beginning on
May 20, 1999, for another 33% beginning on May 20, 2000, and for the final
34% beginning on May 20, 2001.
(5) The option may be exercised for 33% of the underlying stock beginning on
August 19, 1999, for another 33% beginning on August 19, 2000, and for the
final 34% beginning on August 19, 2001.
</TABLE>
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AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth the number of shares covered by both
exercisable and unexercisable stock options as of fiscal year-end 1998, together
with the values for "in-the-money" options which represent the positive spread
between the exercise price of any such outstanding stock options and the
year-end price of the Company's Common Stock.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs
Fiscal Year End at Fiscal Year End
------------------------------- ------------------------------
Name Exercisable Unexercisable (1) Exercisable Unexercisable(2)
- ---------------------- ----------- ----------------- ----------- ----------------
<S> <C> <C> <C> <C>
Christine A. Aguilera 23,333 76,667 $300,179 $1,114,121
Scott R. Dastrup 0 50,000 $0 $850,000
Mark S. Schneider 23,333 76,667 $318,512 $1,150,788
- -------------
(1) Consists entirely of stock options.
(2) Value is based on the difference between the exercise price of such options
and the closing price of the Company's Common Stock on the Nasdaq National
Market on December 31, 1998 of $20.875 per share.
</TABLE>
STOCK OPTION PLANS
1994 STOCK OPTION PLAN. The Company has adopted the SkyMall 1994 Stock
Option Plan (the "Option Plan") pursuant to which incentive and nonqualified
stock options may be granted from time to time to directors, officers and other
key employees of the Company at an exercise price of not less than the fair
market value on the date of grant. The recipients of options, length of options,
exercise price and other terms are determined by the Board of Directors. As of
April 15, 1999, options to purchase a total of 918,119 shares were outstanding
under the Option Plan. For additional information regarding the Option Plan, see
Proposal No. 2.
NON-EMPLOYEE DIRECTORS PLAN. The Company has also adopted the SkyMall
Non-Employee Director Stock Option Plan (the "Non-Employee Directors Plan"),
which authorizes the Board of Directors to grant options to non-employee
directors of the Company to purchase shares of Common Stock of the Company.
Non-employee directors of the Company receive an automatic grant of options to
purchase 5,000 shares of Common Stock on appointment to the Board of Directors
and thereafter receive an automatic grant of options to purchase 3,000 shares
annually subject to satisfying certain attendance requirements. In general,
options granted under the Non-Employee Directors Plan are not transferable and
expire ten years after the date of the grant. The per share exercise price of a
stock option granted under the Non-Employee Directors Plan may not be less than
the fair market value of the Common Stock on the date of the grant. The maximum
number of shares of Common Stock that may be outstanding at any time under the
Non-Employee Directors Plan is 100,000, subject to a proportionate increase or
decrease in the event of a stock split, reverse stock split, stock dividend, or
other adjustment to the Company's total number of outstanding shares of Common
Stock. The Company has granted options to non-employee directors to purchase a
total of 53,000 shares.
401(K) PLAN
Under the Company's 401(k) Plan, adopted in 1992 (the "Plan"), eligible
employees may direct that a portion of their compensation, up to a legally
established maximum, be withheld by the Company and contributed to their
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accounts. All Plan contributions are placed in a trust fund and invested by the
Plan's trustee, except that the Plan may permit participants to direct the
investment of their account balances among mutual or investment funds available
under the Plan. The Plan provides a matching contribution of 50% of a
participant's contributions up to a maximum of 6% of the participant's annual
salary.
Amounts contributed to participant accounts under the Plan and any earnings
or interest accrued on the participant accounts are generally not subject to
federal income tax until distributed to the participant and may not be withdrawn
until death, retirement or termination of employment.
EMPLOYMENT AGREEMENT
On September 30, 1996, the Company's Board of Directors approved an
employment agreement with Robert M. Worsley for services as Chairman of the
Board, Chief Executive Officer and President. This agreement requires Mr.
Worsley to devote his full time to the Company during normal business hours in
exchange for a base annual salary of $190,000, subject to annual increases at
the discretion of the Board of Directors. In addition, Mr. Worsley is entitled
to receive bonuses at the discretion of the Board of Directors in accordance
with the Company's bonus plans in effect from time to time and the Company pays
certain life and disability insurance premiums on behalf of Mr. Worsley. The
agreement has an initial three-year term and is automatically extended for
successive two-year renewal periods without any action of the Company or Mr.
Worsley unless the Company or Mr. Worsley provides written notice of termination
to the other party no less than thirty (30) days prior to the expiration of the
initial term of the agreement or of any successive renewal period. Pursuant to
the agreement, Mr. Worsley may not compete with the Company anywhere in the
United States on the termination of Mr. Worsley's employment for a period of two
years.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company has developed and implemented compensation policies and
programs which seek to improve the Company's overall financial performance and
thus improve shareholder value by aligning the interests of senior management
with those of its shareholders. The Company's Compensation Committee, which is
comprised entirely of independent, outside members of the Company's Board of
Directors, has furnished the following report on executive compensation.
OVERVIEW AND PHILOSOPHY
The Company's philosophy is to structure overall compensation for
executives at levels that enable the Company to attract, motivate and retain
highly qualified executives. The Company's compensation program for executive
officers is primarily comprised of base salary, bonus and long-term incentives
in the form of stock option grants.
In determining compensation for its officers, the Company emphasizes
incentive-based compensation, particularly cash bonuses and stock options
grants. The Company awards bonuses as a reward for performance based principally
on the Company's overall financial results. Stock option grants are intended to
result in no reward if the stock price does not appreciate, but may provide
substantial rewards to executives as shareholders benefit from stock price
appreciation. The Company periodically reviews the compensation levels of other
companies in its industry to ensure that the Company's executive compensation is
appropriate in light of industry practices.
9
<PAGE>
BASE SALARY AND BONUSES
Each Company executive receives a base salary, which when aggregated with
their other incentive-based compensation, is intended to be competitive with
similarly situated executives in the Company's industry. The Company typically
targets base pay at the minimum level necessary to attract highly qualified
executives, which in some cases may be less than market rates. In determining
salaries, the Company takes into account individual experience and performance
and specific needs particular to the Company.
In addition to base salary, the Company typically pays its executives an
annual bonus. The Company believes that bonuses properly motivate the executive
officers to perform to the greatest extent of their abilities to generate the
highest attainable profits for the Company. For 1998, the Company declined to
pay any bonuses to senior management because management failed to achieve
targets established by the Board for 1998. However, to retain certain key
management, the Board paid certain modest incentive bonuses to key management in
early 1999.
OPTIONS
Because the long-term financial success of the Company depends to a
significant degree on its management team, the Company believes that it is
crucial for its management team to have an equity stake in the Company. Thus,
the Company makes option grants to key executives from time to time. In making
option awards, the Company reviews the level of awards granted to executives at
companies in the Company's industry, the awards granted to other executives
within the Company and the individual officer's specific role at the Company.
Although the Company, in some cases, pays base salaries to executives that are
less than market rates, the Company believes that its option awards enable it to
attract and retain highly qualified executives.
In 1998, the Board approved stock option grants to several officers. These
options were granted at, or in excess of, the fair market value of the Company's
Common Stock on the date of grant. All of the options granted in 1998 were
subject to vesting over a three-year period, with approximately one-third of the
options becoming exercisable on each successive anniversary of the date of
grant, and expire ten years after the grant date.
OTHER BENEFITS
Executive officers are eligible to participate in benefit programs designed
for all full-time employees of the Company. These programs include medical,
dental, vision, disability and life insurance and a savings program qualified
under Section 401(k) of the Internal Revenue Code.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Worsley founded the Company in 1989 and has served as its Chief
Executive Officer since that time. Prior to the Company's initial public
offering in December of 1996, the Company entered into a three-year employment
agreement with Mr. Worsley. The agreement established Mr. Worsley's base salary
at $190,000, subject to adjustment by the Board from time to time. Mr. Worsley
is eligible to receive standard benefits under the Company's insurance programs
and 401(k) Plan. Mr. Worsley has never been awarded stock options by the
Company. The Compensation Committee believes that Mr. Worsley's compensation is
at or below the compensation levels of chief executive officers of comparable,
publicly held companies.
COMPENSATION COMMITTEE
Randy Petersen
10
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Company's Common Stock commenced trading on the Nasdaq National Market
under the symbol "SKYM" on December 11, 1996. The following graph compares the
Company's cumulative shareholder return at the last trading day of each month
commencing on January 1, 1997 through December 31, 1998 with shareholder returns
on (i) the Nasdaq National Market Composite Index and (ii) Nasdaq National
Market Retail Trade Stocks. The graph assumes that the value of the investment
in the Common Stock and each index was $100 at December 31, 1996 and that all
dividends, if any, were reinvested.
TOTAL RETURNS
<TABLE>
<CAPTION>
The Nasdaq The Nasdaq
Nasdaq Retail Nasdaq Retail
Stock Trade SkyMall, Stock Trade SkyMall,
Date Market Stocks Inc. Date Market Stocks Inc.
- ---------- -------- -------- -------- ---------- -------- -------- --------
Base Point
<S> <C> <C> <C> <C> <C> <C> <C>
12/31/96 $100.00 $100.00 $100.00 01/31/98 $126.55 $162.17 $ 56.34
01/31/97 107.11 138.98 104.23 02/28/98 138.44 176.92 53.52
02/28/97 101.18 134.20 112.68 03/31/98 143.55 191.89 49.30
03/31/97 94.58 129.46 95.78 04/30/98 145.99 192.29 57.75
04/30/97 97.53 125.14 80.28 05/31/98 137.97 185.23 53.52
05/30/97 108.59 138.28 84.51 06/30/98 147.71 195.95 50.70
06/30/97 111.91 146.25 87.32 07/31/98 146.15 182.03 46.48
07/31/97 123.72 152.87 50.70 08/31/98 117.49 134.96 32.39
08/31/97 123.53 155.49 52.11 09/30/98 133.72 142.49 29.58
09/30/97 130.84 165.80 71.83 10/31/98 139.18 158.51 25.35
10/31/97 124.06 156.83 64.79 11/30/98 152.89 179.97 52.82
11/30/97 124.68 160.37 54.23 12/31/98 172.46 193.49 235.21
12/31/97 122.68 159.89 56.34
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and beneficial owners of more than 10% of the
Common Stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership and statements of changes in beneficial
ownership of the Common Stock and other equity securities of the Company held by
such persons. Except as noted below, the Company believes, based solely upon a
review of the copies of such beneficial ownership statements furnished to it,
that during the fiscal year ended December 31, 1998, all Section 16(a) filing
requirements applicable to the Company's officers, directors and owners of more
than 10% of the Company's Common Stock were complied with.
11
<PAGE>
In August 1998, Scott R. Dastrup purchased 1,000 shares of Common Stock and
received options to purchase 25,000 shares of Common Stock under the 1994 Stock
Option Plan of the Company. Due to an inadvertent error, this officer failed to
timely report the acquisition of Common Stock and Options on Form 4.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information as of April 6, 1999
concerning the beneficial ownership of the Company's Common Stock by (i) each
beneficial owner of more than 5% of the Company's Common Stock, (ii) each
executive officer of the Company, including the Named Executive Officers, (iii)
each director of the Company, and (iv) all directors and executive officers of
the Company as a group. To the knowledge of the Company, all persons listed in
the table have sole voting and investment power with respect to their shares,
except to the extent that authority is shared by their respective spouses under
applicable law.
Shares Beneficially Owned (1)
-----------------------------
Name and Address of Beneficial Owner (2) Number Percent
- ---------------------------------------- ------------ -------------
Robert M. and Christi M. Worsley (3) 4,577,416 51.6%
Christine A. Aguilera (4) 45,816 *
Curtis D. Brown(5) 25,000 *
Scott R. Dastrup(6) 9,333 *
Thomas C. Edwards(7) 25,000 *
Sanford Goldman(8) 25,000 *
Stephen R. Peterson 0 *
Mark S. Schneider(9) 33,333 *
Lyle R. Knight (10)(11) 86,800 *
Thomas J. Litle (10)(11) 46,000 *
Randy Petersen (10) 20,287 *
All directors and executive officers
as a group (11 persons) 4,893,985 55.2%
- -------------------
* Less than 1%
(1) A person is deemed to be the beneficial owner of securities that can be
acquired within 60 days from the date set forth above through the exercise
of any option, warrant or right. Shares of Common Stock subject to options,
warrants or rights that are currently exercisable or exercisable within 60
days are deemed outstanding for computing the percentage of the person
holding such options, warrants or rights, but are not deemed outstanding
for computing the percentage of any other person. The amounts and
percentages are based upon 8,871,798 shares of Common Stock outstanding as
of April 6, 1999.
(2) The business address for all directors and officers of the Company is c/o
the Company, 1520 E. Pima Street, Phoenix, Arizona 85034.
(3) Includes 900 shares of Common Stock issuable upon exercise of certain
warrants acquired in the Company's 1996 Private Placement.
(4) Includes 41,666 shares issuable upon exercise of stock options granted to
Ms. Aguilera pursuant to the Option Plan.
(5) Includes 25,000 shares issuable upon exercise of stock options granted to
Mr. Brown pursuant to the Option Plan.
(6) Includes 8,333 shares issuable upon exercise of stock options granted to
Mr. Dastrup pursuant to the Option Plan.
(7) Includes 25,000 shares issuable upon exercise of stock options granted to
Mr. Edwards pursuant to the Option Plan.
(8) Includes 25,000 shares issuable upon exercise of stock options granted to
Mr. Goldman pursuant to the Option Plan.
(9) Includes 23,333 shares issuable upon exercise of stock options granted to
Mr. Schneider pursuant to the Option Plan.
(10) Includes 14,000 shares issuable upon exercise of certain stock options
granted pursuant to the Company's Non-Employee Director Stock Option Plan.
(11) Includes 6,000 shares of Common Stock issuable upon exercise of certain
warrants acquired in the Company's 1996 Private Placement.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 19, 1996, the Company entered into an agreement with OrderTrust
LLC (formerly LitleNet LLC), a company in which Thomas Litle, a director of the
Company, has a controlling ownership interest, pursuant to which OrderTrust LLC
provides the Company with order processing management services. On December 4,
1998, the Company entered into a new agreement with OrderTrust LLC to continue
to provide such services. In 1998, the Company incurred processing fees of
approximately $343,000 pursuant to such agreements.
AMENDMENT TO SKYMALL, INC. 1994 STOCK OPTION PLAN
(PROPOSAL NO. 2)
At the Annual Meeting, the Company will seek shareholder approval of an
amendment (the "Amendment") to the Option Plan to increase the number of shares
authorized for issuance thereunder from 1,100,000 to 1,500,000. The Option Plan
provides employees with an incentive to actively direct and contribute to the
Company's growth by enabling them to acquire a proprietary interest in the
Company. The Company's Board of Directors has approved the Amendment to the
Option Plan and has directed that the Amendment be submitted as a proposal for
shareholder approval at the Annual Meeting.
CURRENT PLAN PROVISIONS
The Option Plan authorizes grants of incentive stock options ("ISOs") and
non-qualified stock options ("NQSOs") to all employees of the Company. The
Company currently has 315 employees; however, the Company typically grants
options only to management employees.
The Board of Directors believes that use of stock options authorized under
the Option Plan is beneficial to the Company as a means of promoting the success
and enhancing the value of the Company by linking the personal interests of its
employees and others to those of its shareholders and by providing employees and
others with an incentive for outstanding performance. These incentives also
provide the Company flexibility in its ability to attract and retain the
services of employees and others upon whose judgment, interest and special
effort the successful conduct of the Company's operation is largely dependent.
The Option Plan is administered by the Board of Directors. The Board of
Directors has the exclusive authority to administer the Option Plan, including
the power to determine eligibility, the types and sizes of options and the
timing of options.
Generally, options issued under the Option Plan have been subject to
vesting over a three-year period, with approximately one-third of the options
becoming exercisable by the holder thereof on each anniversary of the date of
grant. To date, the exercise price of options granted under the Option Plan has
been equal to or in excess of the fair market value of the Common Stock on the
date of the grant. On April 15, 1999, the closing sale price of the Common Stock
on the Nasdaq National Market was $14.25 per share.
INCENTIVE STOCK OPTIONS
An ISO is a stock option that satisfies the requirements specified in
Section 422 of the Internal Revenue Code (the "Code"). Under the Code, ISOs may
only be granted to employees. In order for an option to qualify as an ISO, the
price payable to exercise the option must equal or exceed the fair market value
of the stock at the date of the grant, the option must lapse no later than 10
years from the date of the grant, and the stock subject to ISOs that are first
exercisable by an employee in any calendar year must not have a value of
13
<PAGE>
more than $100,000 as of the date of grant. Certain other requirements must also
be met. The Company determines the consideration to be paid to the Company upon
exercise of any options. The form of payment may include cash, Common Stock, or
other property.
An optionee is not treated as receiving taxable income upon either the
grant of an ISO or upon the exercise of an ISO. However, the difference between
the exercise price and the fair market value on the date of exercise is an item
of tax preference at the time of exercise in determining liability for the
alternative minimum tax, assuming that the Common Stock is either transferable
or is not subject to a substantial risk of forfeiture under Section 83 of the
Code. If at the time of exercise, the Common Stock is both nontransferable and
is subject to a substantial risk of forfeiture, the difference between the
exercise price and the fair market value of the Common Stock (determined at the
time the Common Stock becomes either transferable or not subject to a
substantial risk of forfeiture) will be a tax preference item in the year in
which the Common Stock becomes either transferable or not subject to a
substantial risk of forfeiture.
If Common Stock acquired by the exercise of an ISO is not sold or otherwise
disposed of within two years from the date of its grant and is held for at least
one year after the date such Common Stock is transferred to the optionee upon
exercise, any gain or loss resulting from its disposition is treated as
long-term capital gain or loss. If such Common Stock is disposed of before the
expiration of the above-mentioned holding periods, a "disqualifying disposition"
occurs. If a disqualifying disposition occurs, the optionee realizes ordinary
income in the year of the disposition in an amount equal to the difference
between the fair market value of the Common Stock on the date of exercise and
the exercise price, or the selling price of the Common Stock and the exercise
price, whichever is less. The balance of the optionee's gain on a disqualifying
disposition, if any, is taxed as capital gain.
The Company is not entitled to any tax deduction as a result of the grant
or exercise of an ISO, or on a later disposition of the Common Stock received,
except that in the event of a disqualifying disposition, the Company is entitled
to a deduction equal to the amount of ordinary income realized by the optionee.
NON-QUALIFIED STOCK OPTIONS
A NQSO is any stock option other than an ISO. Such options are referred to
as "non-qualified" because they do not meet the requirements of, and are not
eligible for, the favorable tax treatment provided by Section 422 of the Code.
No taxable income is realized by an optionee upon the grant of a NQSO, nor
is the Company entitled to a tax deduction by reason of such grant. Upon the
exercise of a NQSO, the optionee realizes ordinary income in an amount equal to
the excess of the fair market value of the Common Stock on the date of exercise
over the exercise price and the Company is entitled to a corresponding tax
deduction.
Upon a subsequent sale or other disposition of Common Stock acquired
through exercise of a NQSO, the optionee realizes a short-term or long-term
capital gain or loss to the extent of any intervening appreciation or
depreciation. Such a resale by the optionee has no tax consequence to the
Company.
OPTION PLAN BENEFITS
The following table sets forth grants of options made under the Option Plan
to (i) each of the Named Executive Officers; (ii) all current executive
officers, as a group; (iii) all current directors who are not executive
officers, as a group; and (iv) all employees, including all current officers who
are not executive officers, as a group. Grants under the Option Plan are made at
the discretion of the Board of Directors. Accordingly, future grants under the
Option Plan are not yet determinable.
14
<PAGE>
Number of Shares Weighted Average
Subject To Exercise Price
Name and Position Option Grants(#) Per Share (#/Sh)
- --------------------------------------- ---------------- ----------------
Christine A. Aguilera 100,000 $ 6.73
Executive Vice President of Business
Development, General Counsel and
Secretary
Curtis D. Brown 75,000 $24.50
Chief Technology Officer of skymall.com
Scott R. Dastrup 75,000 $ 6.52
Executive Vice President of Operations
and Chief Information Officer
Thomas C. Edwards 75,000 $16.06
Chief Marketing Officer of skymall.com.
Sanford Goldman 75,000 $16.06
Vice President of Business Development
of skymall.com
Stephen R. Peterson 50,000 $ 8.31
Chief Financial Officer
Mark S. Schneider 100,000 $ 6.18
Executive Vice President of Marketing
and Merchandising
Executive Officer Group 550,000 $11.71
Director Group (1) (1)
Employee Group 368,119 $ 6.64
- --------------
(1) Non-employee directors are not eligible to participate in the Option Plan.
AMENDMENTS TO OPTION PLAN
The Board of Directors has reviewed the options currently remaining in the
option pool for the Option Plan and has determined that it is appropriate to
increase the number of shares authorized for issuance under the Option Plan. As
of April 15,1999, option grants representing 918,119 shares were outstanding
under the Option Plan. The Board believes that an increase in the number of
authorized shares is necessary for the continued optimal use of the Option Plan
to attract and retain key employees through the use of equity-based incentives
aligned with the interests of the Company's shareholders. Therefore, the Board
is proposing the Amendment to the Option Plan that would increase the number of
shares authorized for issuance under the Option Plan from 1,100,000 to
1,500,000.
15
<PAGE>
REQUIRED VOTE
Approval of the Amendment to the Option Plan requires the affirmative vote
of a majority of shares of Common Stock present at the Annual Meeting in person
or by proxy. Abstentions are considered present for this proposal, so they will
have the same effect as votes against the Amendment. Broker non-votes are not
considered present for this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" APPROVAL OF THE AMENDMENT TO THE
SKYMALL, INC. 1994 STOCK OPTION PLAN.
RATIFICATION OF APPOINTMENT OF AUDITORS
(PROPOSAL NO. 3)
The Board of Directors has selected Arthur Andersen LLP ("Andersen") as the
independent public accountants for the Company for fiscal 1999, and recommends
that the shareholders vote for ratification of such appointment. Shareholder
ratification of the selection of Andersen as the Company's independent auditors
is not required by the Company's Bylaws or otherwise. However, the Board is
submitting the selection of Andersen for shareholder ratification as a matter of
good corporate practice. Andersen has audited the Company's financial statements
since 1996. Notwithstanding the selection, the Board, in its discretion, may
direct the appointment of a new independent accounting firm at any time during
the year if the Board feels that such a change would be in the best interests of
the Company and its shareholders. A representative of Andersen is expected to be
present at the Annual Meeting with the opportunity to make a statement if he or
she so desires and to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" THIS PROPOSAL.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's next
annual meeting of shareholders must be received by the Company no later than
December 20, 1999 to be evaluated by the Board for inclusion in the Proxy
Statement for that meeting.
OTHER BUSINESS
The Annual Meeting is being held for the purposes set forth in the Notice
that accompanies this Proxy Statement. The Board of Directors is not aware of
any other business to be considered or acted upon at the Annual Meeting.
16
<PAGE>
1998 ANNUAL REPORT ON FORM 10-K
The Company files annual reports on Form 10-K with the Securities and
Exchange Commission. A copy of the Annual Report for the Fiscal Year Ended
December 31, 1998 is available upon written request to SkyMall, Inc., 1520 East
Pima Street, Phoenix, Arizona 85034, Attention: Investor Relations. Copies of
all exhibits to the Form 10-K Annual Report are subject to a payment of $0.15
per page.
BY ORDER OF THE BOARD OF DIRECTORS,
Robert M. Worsley
Chairman, Chief Executive Officer
and President
Phoenix, Arizona
May 6, 1999
17
<PAGE>
[FORM OF PROXY CARD]
PROXY SKYMALL, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 4, 1999
The undersigned hereby appoints Robert M. Worsley and Stephen R. Peterson,
or either or them, with full power of substitution, proxies to vote all shares
of common stock, $.001 par value, of SkyMall, Inc., a Nevada corporation (the
"Company") held or owned by the undersigned as directed below, at the Annual
Meeting of Shareholders of SkyMall, Inc. (the "Company") to be held on June 4,
1999 at 10:00 a.m. local time, and at any and all adjournments or postponements
thereof, hereby revoking any proxies heretofore given.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE. YOU MAY REVOKE THIS PROXY AT ANY TIME BY FORWARDING TO THE COMPANY A
SUBSEQUENTLY DATED PROXY RECEIVED BY THE COMPANY PRIOR TO THE TAKING OF A VOTE
ON THE MATTERS HEREIN.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS VOTES "FOR" EACH OF THE
FOLLOWING:
1. Election of the following nominees as Directors: 1. Robert M. Worsley
2. Lyle R. Knight 3. Thomas J. Litle 4. Randy Petersen
FOR ALL WITHHELD For all, except vote withheld from the following
[ ] [ ] nominees (please use corresponding number)
________________________________________________
THIS PROXY IS CONTINUED ON THE REVERSE SIDE. PLEASE DATE, SIGN AND RETURN
PROMPTLY.
<PAGE>
2. Amendment of SkyMall, Inc. 1994 Stock Option Plan to increase the
number of authorized shares from 1,100,000 to 1,500,000
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of Arthur Andersen LLP as Independent Public Accountants
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND THE PROXY STATEMENT FURNISHED HEREWITH.
Note: Please sign your name exactly as it
appears hereon. When signing as attorney,
agent, executor, administrator, trustee,
guardian or corporate officer, please give
full title as such. Joint owners should
each sign.
Date: _______________________________, 1999
___________________________________________
Signature (title, if any)
___________________________________________
Signature (if held jointly)
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS SPECIFIED HEREON, AND IF NO
SPECIFIC DIRECTIONS ARE GIVEN, WILL BE VOTED FOR ELECTION OF ALL NOMINEES AS
DIRECTORS, APPROVAL OF THE PROPOSALS AND, AS TO SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING, IN ACCORDANCE WITH THE DISCRETION OF THE
APPOINTED PROXY.
