<PAGE> 1
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 240.14a-11(c) or 240.14a-12
ON ASSIGNMENT
- --------------------------------------------------------------------------------
(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)(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 transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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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
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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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
On Assignment Logo
April 28, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of On Assignment, Inc. (the "Company") on Tuesday, June 13, 2000, at 10:00 a.m.,
at the Company's corporate headquarters, 26651 West Agoura Road, Calabasas,
California 91302. The formal Notice of Annual Meeting of Stockholders and Proxy
Statement accompanying this letter describe the business to be acted upon.
Please sign and return your Proxy now whether or not you plan to attend the
meeting. If you attend the meeting, you may still vote in person if you so
desire.
Sincerely,
H. Tom Buelter
Chairman of the Board and
Chief Executive Officer
YOUR VOTE IS IMPORTANT
SO THAT YOUR COMMON STOCK WILL BE REPRESENTED AT THE ANNUAL MEETING IN THE EVENT
YOU ARE NOT PERSONALLY PRESENT, PLEASE DATE, SIGN AND RETURN PROMPTLY THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED. EXECUTION OF THE PROXY WILL NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
<PAGE> 3
ON ASSIGNMENT, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 2000
TO THE STOCKHOLDERS OF ON ASSIGNMENT, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of On
Assignment, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, June 13, 2000, at 10:00 a.m. local time, at the Company's corporate
headquarters, 26651 West Agoura Road, Calabasas, California 91302, for the
following purposes:
1. To elect two directors to serve for the ensuing three year term or until
his or her respective successor is elected and qualified.
2. To approve an amendment to the Company's Restated 1987 Stock Option Plan
(the "Option Plan") to increase the number of shares of the Company's
Common Stock reserved for issuance under the Option Plan by 2,000,000
shares.
3. To approve an amendment to the Company's Restated Certificate of
Incorporation, as Amended, to increase the authorized number of shares
of Common Stock.
4. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 31, 2000.
5. To transact such other business as may properly come before the meeting
or any adjournment 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 April 17, 2000 are
entitled to notice of and to vote at the meeting. A list of such stockholders
will be available for inspection at the Company's corporate headquarters during
ordinary business hours for the ten day period prior to the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to sign and
return the enclosed Proxy as promptly as possible in the envelope enclosed for
that purpose. Any stockholder attending the meeting may vote in person even if
he or she has returned a Proxy.
Sincerely,
H. Tom Buelter
Chairman of the Board and
Chief Executive Officer
Calabasas, California
April 28, 2000
<PAGE> 4
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION FOR STOCKHOLDERS........................ 1
MATTERS TO BE CONSIDERED AT ANNUAL MEETING.................. 4
PROPOSAL ONE -- ELECTION OF DIRECTORS..................... 4
PROPOSAL TWO -- APPROVAL AND RATIFICATION OF AMENDMENT TO
RESTATED 1987 STOCK OPTION PLAN........................ 6
PROPOSAL THREE -- APPROVAL OF AMENDMENT TO RESTATED
CERTIFICATE OF INCORPORATION........................... 14
PROPOSAL FOUR -- RATIFICATION OF INDEPENDENT
ACCOUNTANTS............................................ 15
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
OF 1934................................................... 16
EXECUTIVE COMPENSATION AND RELATED INFORMATION.............. 16
Board of Directors and Compensation Committee Report...... 16
Stock Performance Graph................................... 18
Summary of Cash and Certain Other Compensation............ 19
Stock Options............................................. 19
Option Exercises and Holdings............................. 20
Severance Plan and Change in Control...................... 20
Certain Relationships and Related Transactions............ 21
ANNUAL REPORT AND FORM 10-K................................. 21
OTHER MATTERS............................................... 21
</TABLE>
i
<PAGE> 5
ON ASSIGNMENT, INC.
26651 WEST AGOURA ROAD
CALABASAS, CA 91302
------------------------
PROXY STATEMENT
------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 13, 2000
GENERAL INFORMATION FOR STOCKHOLDERS
The enclosed proxy ("Proxy") is solicited on behalf of the Board of
Directors of On Assignment, Inc., a Delaware corporation (the "Company"), for
use at the Annual Meeting of Stockholders to be held on Tuesday, June 13, 2000
(the "Annual Meeting"), and at any adjournment or postponement of the Annual
Meeting. The Annual Meeting will be held at 10:00 a.m. at the Company's
corporate headquarters, 26651 West Agoura Road, Calabasas, California 91302.
These proxy solicitation materials were mailed on or about April 28, 2000 to all
stockholders entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any person giving a Proxy has the power to revoke it at any time before its
exercise. It may be revoked by filing with the Executive Vice President, Finance
and Chief Financial Officer of the Company at the Company's principal executive
offices, On Assignment, Inc., 26651 West Agoura Road, Calabasas, California
91302, a notice of revocation or another signed Proxy with a later date. You may
also revoke your Proxy by attending the Annual Meeting and voting in person.
SOLICITATION
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional soliciting materials furnished to stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, or other means by directors, officers, employees or agents
of the Company. No compensation will be paid to these individuals for any such
services. Except as described above, the Company does not presently intend to
solicit proxies other than by mail.
RECORD DATE, VOTING AND SHARE OWNERSHIP
Stockholders of record on April 17, 2000 are entitled to notice of and to
vote at the Annual Meeting. At January 31, 2000, 21,678,622 shares of the
Company's Common Stock, $.01 par value, were issued and outstanding. No shares
of the Company's preferred stock are outstanding. Each stockholder is entitled
to one vote for each share of Common Stock held by such stockholder. All votes
will be tabulated by the inspector of election appointed for the Annual Meeting,
who will separately tabulate affirmative and negative votes, abstentions and
broker non-votes. Abstentions and broker non-votes are counted as present for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions will be counted toward the tabulations of votes cast on
proposals presented to the stockholders and will have the same effect as
negative votes, whereas broker non-votes will not be counted for purposes of
determining whether a proposal has been approved or not.
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<PAGE> 6
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
January 31, 2000 by (i) all persons who are known to the Company to be
beneficial owners of five percent or more of the Company's Common Stock, (ii)
each director and nominee, (iii) the Named Officers (as defined below in the
section titled "Executive Compensation and Related Information"), and (iv) all
current directors and executive officers as a group. Unless otherwise indicated,
each of the stockholders has sole voting and investment power with respect to
the shares beneficially owned, subject to community property laws, where
applicable. Beneficial ownership has been determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934. Under this rule, shares are
deemed to be beneficially owned by a person if the person has the right to
acquire shares (for example, upon exercise of an option) within sixty (60) days
of the date as of which the information is provided; in computing the percentage
ownership of any person, the amount of shares is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason of
such acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in the following table does not necessarily reflect the
person's actual voting power at a particular date.
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NUMBER OF SHARES
NAME AND ADDRESS SHARES OUTSTANDING(1)
---------------- --------- ----------------
<S> <C> <C>
Credit Suisse Asset Management, LLC(2)...................... 2,697,300 12.4%
153 East 53rd Street
New York, NY 10022
Fiduciary Trust Company International(3).................... 2,274,400 10.5%
Two World Trade Center
New York, NY 10048
Putnam Investments, Inc.(4)................................. 1,422,300 6.6%
One Post Office Square
Boston, MA 02109
Arbor Capital Management, LLC(5)............................ 1,319,200 6.1%
One Financial Plaza
120 South Sixth Street, Suite 1000
Minneapolis, Minnesota 55402
Wasatch Advisors, Inc.(6)................................... 1,150,110 5.3%
150 Social Hall Avenue
Salt Lake City, Utah 84111
H. Tom Buelter(7)........................................... 521,642 2.4%
Karen Brenner(8)............................................ 72,000 *
William E. Brock(9)......................................... 96,000 *
Jonathan S. Holman(10)...................................... 68,044 *
Jeremy M. Jones(11)......................................... 108,000 *
Kathy J. West(12)........................................... 202,965 *
Ronald W. Rudolph(13)....................................... 44,493 *
Carrie S. Nebens(14)........................................ 70,663 *
All directors and officers as a group (8 persons)(15)....... 1,183,807 5.5%
</TABLE>
- ---------------
* Less than one percent.
(1) Percentage of beneficial ownership is calculated assuming 21,678,622 shares
of Common Stock were outstanding on January 31, 2000. This percentage also
includes Common Stock of which such individual or entity has the right to
acquire beneficial ownership within sixty days of January 31, 2000,
including but not limited to the exercise of an option; however, such
Common Stock is not deemed outstanding for the purpose of computing the
percentage owned by any other individual or entity. Such calculation is
required by General Rule 13d-3(1)(i) under the Securities Exchange Act of
1934.
(2) Pursuant to a Schedule 13G dated February 15, 2000 and filed with the
Securities and Exchange Commission, Credit Suisse Asset Management, LLC has
reported that: it had sole power to dispose of 2,697,300 shares; it had
sole voting power with respect to 2,697,300 shares; its beneficial
ownership of
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<PAGE> 7
such shares arose from its services as investment adviser to investment
accounts which own such shares; and none of such investment accounts
individually owns more than five percent of the Company's securities.
(3) Pursuant to a Schedule 13G dated January 6, 2000 and filed with the
Securities and Exchange Commission, Fiduciary Trust Company International,
a Bank as defined in Section 3(a)(6) of the Securities Exchange Act of
1934, has reported that: it had sole power to dispose of 2,019,400 shares
and shared power to dispose of 255,000 shares; and had sole voting power
with respect to 2,197,400 shares and shared voting power with respect to
77,000 shares.
(4) Pursuant to a Schedule 13G dated February 9, 2000 and filed with the
Securities and Exchange Commission, Putnam Investments, Inc. has reported
that: it had shared power to dispose of 1,422,300 shares; it had shared
voting power with respect to 333,000 shares; its beneficial ownership of
such shares arose from its services as investment adviser to investment
accounts which own such shares; and none of such investment accounts
individually owns more than five percent of the Company's securities.
(5) Pursuant to a Schedule 13G dated February 9, 2000 and filed with the
Securities and Exchange Commission, Arbor Capital Management, LLC has
reported that: it had sole power to dispose of 1,319,200 shares; it had
sole voting power with respect to 1,124,400 shares; its beneficial
ownership of such shares arose from its services as investment adviser to
investment accounts which own such shares; and none of such investment
accounts individually owns more than five percent of the Company's
securities.
(6) Pursuant to a Schedule 13G dated February 11, 2000 and filed with the
Securities and Exchange Commission, Wasatch Advisors, Inc. has reported
that: it had sole power to dispose of 1,150,110 shares; it had sole voting
power with respect to 1,150,110 shares; its beneficial ownership of such
shares arose from its services as investment adviser to investment accounts
which own such shares; and none of such investment accounts individually
owns more than five percent of the Company's securities.
(7) Includes 311,878 shares underlying stock options exercisable within 60 days
of January 31, 2000.
(8) Includes 72,000 shares underlying stock options exercisable within 60 days
of January 31, 2000.
(9) Includes 96,000 shares underlying stock options exercisable within 60 days
of January 31, 2000.
(10) Includes 60,000 shares underlying stock options exercisable within 60 days
of January 31, 2000 and 8,044 shares held by The Holman Group, Inc. Profit
Sharing Trust.
(11) Includes 96,000 shares underlying stock options exercisable within 60 days
of January 31, 2000 and 12,000 shares held by the Jones Family Trust.
(12) Includes 77,601 shares underlying stock options exercisable within 60 days
of January 31, 2000.
(13) Includes 43,749 shares underlying stock options exercisable within 60 days
of January 31, 2000.
(14) Includes 65,393 shares underlying stock options exercisable within 60 days
of January 31, 2000.
(15) Includes 822,621 shares underlying stock options exercisable within 60 days
of January 31, 2000.
3
<PAGE> 8
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE -- ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall be
comprised of not less than four nor more than seven Directors, with the exact
number to be fixed by the Board. The currently authorized number of Directors is
five. The Company's Restated Certificate of Incorporation provides for a
classified Board of Directors, with the terms of office of each class of
Directors ending in successive years. At the 2000 Annual Meeting, two Directors
will be elected to serve until the 2003 annual meeting or until his or her
respective successor is elected and qualified. The Board of Directors has
selected two nominees, both of whom are current Directors of the Company. Unless
otherwise instructed, the proxy holders will vote the Proxies received by them
FOR the nominees named below. If, however, either of the nominees named in the
Proxy is unable or unwilling to serve (which is not expected) at the time of the
Annual Meeting, the proxies (except those marked to the contrary) will be voted
for such other person(s) as the persons named in the enclosed Proxy may
recommend. The two candidates receiving the highest number of affirmative votes
of the shares entitled to vote at the Annual Meeting will be elected Directors
of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE FOLLOWING NOMINEES TO SERVE AS DIRECTORS OF THE COMPANY UNTIL
THE THIRD ANNUAL MEETING FOLLOWING THE 2000 ANNUAL MEETING OR UNTIL THEIR
RESPECTIVE SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
NOMINEES FOR TERM ENDING IN 2003
Set forth below is information regarding the nominees, including their
ages, the period during which they have served as Directors, and information
furnished by them as to principal occupations and directorships held by them in
corporations whose shares are publicly registered.
KAREN BRENNER, 44, has served as a Director of the Company since October
1993. Ms. Brenner has been a principal of Brenner & Company, LLC, a financial
and management advisory firm since February 1999. From September 1997 through
December 1999, Ms. Brenner served as a Director of Motorcar Parts and
Accessories, an automotive remanufacturer of alternators and starters. From
October 1996 through June 1998, Ms. Brenner served as Chairman, President and
Chief Executive Officer of Carlyle Industries, Inc. ("Carlyle"), formerly
Belding Heminway Co., Inc., a distributor of buttons and home sewing and craft
products. She was elected Chairman of the Board of Carlyle in May 1996, and
previously had been Vice Chairman and a Director of and consultant to Carlyle
since February 1996. From June 1994 through June 1998, Ms. Brenner served as
Chairman and Chief Executive Officer of Lincoln Snacks, a snack food company.
Ms. Brenner was formerly the Chairman of Swiss Army Brands, formerly The
Forschner Group, a consumer goods company, from February 1992 through February
1994 and a consultant to The Forschner Group, Inc. from July 1990 through
December 1994. From November 1991 through February 1998, Ms. Brenner was
Managing Director of Noel Group, Inc. ("Noel"), a holding company for
controlling or significant equity interests in small and medium-sized operating
companies. From October 1989 to November 1991, Ms. Brenner was a Director and a
Vice President of Noel. Ms. Brenner served as Director of Simons Outdoor Group,
a consumer good company, from 1991 to 1995, and as a Director of VISX, Inc., an
ophthalmic laser company, from 1989 to 1995.
JEREMY M. JONES, 58, has served as a Director of the Company since May
1995. Mr. Jones has served as Chief Executive Officer of Mobile Laser Services,
LLC, a provider of mobile excimer lasers, since July 1999, and an Investor and
Business Development Consultant since February 1998. From 1995 through January
1998, Mr. Jones was Chief Executive Officer and Chairman of the Board of Apria
Healthcare Group, Inc., a home healthcare services provider. From 1991 to 1995,
Mr. Jones was Chief Executive Officer and Chairman of the Board of Homedco
Group, Inc., a home healthcare services company which was merged into Apria
Healthcare Group, Inc. in 1995.
4
<PAGE> 9
CONTINUING DIRECTORS
Set forth below is information regarding the continuing Directors of the
Company, including their ages, the period during which they have served as
Directors, and information furnished by them as to principal occupations and
directorships held by them in corporations whose shares are publicly registered.
TERM ENDING IN 2001
H. TOM BUELTER, 59, has served as Chief Executive Officer and a Director of
the Company since March 1989, and he has served as Chairman of the Company's
Board of Directors since December 1992. Mr. Buelter also held the title of
President of the Company from March 1989 through September 1997. Since January
1999, Mr. Buelter has served as a Director for U.S. Personnel, Inc., an employee
leasing company. From 1983 to 1989, Mr. Buelter was Senior Vice President of
Kelly Services, Inc., a temporary personnel firm, and Chief Operating Officer of
Kelly Assisted Living, a division of Kelly Services, Inc. which provides
temporary home-care personnel.
THE HONORABLE WILLIAM E. BROCK, 69, was elected to the Board of Directors
of the Company in April 1996. Since October 1996, he has been the Founder and
Chairman of Intellectual Development Systems, Inc., a firm specializing in the
servicing and delivery of learning development systems to public schools. From
1994 to 1996, he was the Founder and Chief Executive Officer of The Brock
Offices, a consulting office on education and trade issues. From 1998 to 1994,
Senator Brock was the Chairman of The Brock Group, a firm specializing in
international trade, investment and human resources. From 1988 to 1991 he served
as Chairman of the National Endowment for Democracy, an organization he helped
found. Senator Brock served in President Reagan's cabinet as the United States
Trade Representative from 1981 to 1985 and as Secretary of Labor from 1985 to
1987. From 1977 to 1981, Senator Brock served as National Chairman of the
Republican Party. From 1970 to 1976, he was a member of the U.S. Senate and from
1962 to 1970 a member of the U.S. House of Representatives. Senator Brock served
as a Director of Sinclair Broadcasting Group, Inc., a broadcasting company, from
1996 to 1998 and has served as a Director of United Payors & United Providers,
Inc., an intermediary between insurance companies and healthcare providers and a
network management company, since 1996.
TERM ENDING IN 2002
JONATHAN S. HOLMAN, 54, has served as a Director of the Company since March
1994. Since 1981, Mr. Holman has been the President and Founder of The Holman
Group, Inc., an executive search firm.
There are no family relationships among executive officers or Directors of
the Company.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1999, the Board of Directors held
five meetings. The Board of Directors has an Audit Committee, a Compensation
Committee and a Stock Option Committee, and does not have a Nominating
Committee.
The Audit Committee currently consists of three directors, Ms. Brenner, Mr.
Holman and Mr. Jones. The Audit Committee is primarily responsible for approving
the services performed by the Company's independent accountants and reviewing
their reports regarding the Company's accounting practices and systems of
internal accounting controls. The Audit Committee held four meetings during
1999.
The Compensation Committee consists of two directors, Mr. Brock and Mr.
Holman. The Compensation Committee held two meetings during 1999 and acted by
written consent on five occasions. It reviews the Company's general compensation
policies, recommends to the full Board of Directors the compensation levels for
the Company's executive officers, and administers the Company's Restated 1987
Stock Option Plan and Employee Stock Purchase Plan.
The Stock Option Committee consists of one director, Mr. Buelter. The Stock
Option Committee acted by written consent on 43 occasions during 1999. It has
limited authority to grant stock options to eligible
5
<PAGE> 10
individuals who are not officers or Directors of the Company who are subject to
the short-swing profit restrictions of the Federal securities laws.
No currently serving Director attended fewer than 75% of the aggregate
number of meetings of the Board of Directors and meetings of the Committees of
the Board on which he or she served during 1999.
DIRECTOR COMPENSATION
Non-employee Directors receive the following fees for services as
Directors: $10,000 per year (payable quarterly in arrears) during the period of
their service as a Director; $1,500 per Board meeting or Committee meeting (if
held separately) attended in person; and $250 per telephonic Board meeting or
Committee meeting (if held separately). In addition, the Company reimburses all
non-employee Directors for their reasonable expenses incurred in attending Board
or Committee meetings. Also, non-employee Directors are paid $1,500 per day for
substantial services requested by the Company in addition to regular Board or
Committee oversight and review duties. Accordingly, the Company paid Messrs.
Brock and Holman $500 and $500, respectively, for such additional services
during 1999.
Directors also receive stock option grants under the Company's Restated
1987 Stock Option Plan. Under the automatic option grant program in effect under
the Company's Restated 1987 Stock Option Plan, each non-employee Board member
who has been or is first elected to the Board after October 13, 1993 has been or
will be automatically granted options to purchase 18,000 shares of Common Stock,
provided such individual has not previously been in the Company's employ. At
each Annual Meeting of Stockholders beginning with the 1993 Annual Meeting and
ending with the 1995 Annual Meeting, each individual who was at the time serving
as a non-employee Board member was automatically granted an option to purchase
3,000 shares of Common Stock on the date of the Annual Meeting, provided he or
she had served as a Board member for at least six months prior to the date of
such meeting. At each Annual Meeting of Stockholders beginning with the 1996
Annual Meeting, each individual who is at the time serving as a non-employee
Board member automatically was or will be granted an option to purchase 6,000
shares of Common Stock on the date of the Annual Meeting, without regard to
prior Board service. All four non-employee Directors were each granted an
automatic stock option to purchase 12,000 shares, plus a discretionary option
grant to purchase 12,000 shares of the Company's Common Stock at an exercise
price of $12.5625 per share on June 8, 1999, the date of the 1999 Annual
Meeting.
PROPOSAL TWO -- APPROVAL AND RATIFICATION OF AMENDMENT TO
RESTATED 1987 STOCK OPTION PLAN
INTRODUCTION
Stockholders are being asked to vote on a proposal to ratify an amendment
to the Company's Restated 1987 Stock Option Plan ("Option Plan") to increase by
2,000,000 the number of shares of the Company's Common Stock reserved for
issuance under the Option Plan from 8,000,000 shares to 10,000,000 shares. The
affirmative vote of a majority of the Company's outstanding Common Stock
represented and entitled to vote at the Annual Meeting is required for approval
of the amendment.
The Option Plan was adopted by the Board of Directors on October 9, 1987,
and has been amended on numerous occasions, most recently as of September 21,
1992, the date of the Company's initial public offering, on September 30, 1992
to permit the establishment of a secondary committee to administer the Plan, on
October 13, 1993 to amend the automatic director grant program and limit the
maximum number of shares any individual may be granted over the remaining term
of the Option Plan, on December 7, 1995 to approve further amendment of the
automatic director grant program and on February 13, 1997 to increase the number
of shares reserved for issuance under the Option Plan by 2,000,000 shares. The
Option Plan, as amended, and amendments thereto were approved by the
stockholders on December 11, 1987, September 4, 1992, May 23, 1994, May 30, 1996
and June 9, 1997.
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<PAGE> 11
The Board of Directors believes that a competitive stock option plan is
crucial to the Company's ability to recruit and retain highly qualified
officers, employees, non-employee directors and other advisors. The Board
therefore recommends a vote FOR Proposal Two.
The terms and provisions of the Option Plan are summarized below. The
summary, however, does not purport to be a complete description of the Option
Plan. Copies of the actual plan document may be obtained by any stockholder upon
written request to the Secretary of the Company at the corporate offices in
Calabasas, California.
PLAN STRUCTURE; ELIGIBILITY
The Option Plan is comprised of two parts: a discretionary grant program
and an automatic grant program. Under the discretionary grant program, options
may be granted to employees (including officers), consultants and other
independent contractors of the Company or its parent or subsidiary corporations
who contribute to the management, growth and financial success of the Company or
its parent or subsidiary corporations. Under the automatic grant program,
options are automatically granted to the non-employee members of the Board.
As of January 31, 2000, approximately 199 employees (including 4 executive
officers) were eligible to participate in the Option Plan and four non-employee
Board members were eligible for automatic option grants.
ADMINISTRATION
The Option Plan is administered by the Compensation Committee, comprised of
at least two non-employee members of the Board of Directors ("Committee"). In
addition, the Option Plan may be administered (including the granting of
options) with respect to individuals who are not officers or directors of the
Company by a secondary committee comprised of one or more Board members. The
Company has such a secondary committee (the "Stock Option Committee") which has
limited authority to grant stock options to eligible individuals who are not
officers or Directors of the Company subject to the short-swing profit
restrictions of Federal securities laws.
The Committee (or the Stock Option Committee to the extent acting as plan
administrator) has the sole and exclusive authority, subject to the provisions
of the Option Plan, to determine the eligible individuals who are to receive
discretionary options under the Option Plan, the number of shares to be covered
by each granted option, the date or dates on which the option is to become
exercisable and the maximum term for which the option is to remain outstanding.
The Committee will also have the authority to determine whether the granted
option is to be an incentive stock option under the Federal tax laws and to
establish rules and regulations for proper plan administration. The automatic
grant program is self-administering.
ISSUABLE SHARES
The maximum number of shares of Common Stock which may be issued over the
term of the Option Plan is currently restricted to 8,000,000 shares. Such
authorized share reserve is comprised of (i) the 6,000,000 shares authorized by
the Board under the Option Plan, and subsequently approved by the stockholders;
and (ii) the 2,000,000 shares approved by stockholders on June 9, 1997. The
Company seeks an additional increase of 2,000,000 shares which is the subject of
this Proposal Two. The maximum number of authorized shares under the Option Plan
is subject to adjustment from time to time in the event of certain changes in
the Company's capital structure.
In no event may any one individual participating in the Option Plan be
granted stock options after December 31, 1993 for more than 1,000,000 shares of
Common Stock over the remaining term of the Option Plan.
Should any option under the Option Plan expire or terminate prior to
exercise or surrender in full, the shares subject to the portion of the option
not so exercised or surrendered will be available for subsequent option grants.
Shares subject to any option surrendered in accordance with the Option Plan and
all share
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issuances under the Option Plan, whether or not the Company repurchased such
shares pursuant to its repurchase rights under the Option Plan, will reduce on a
share-for-share basis the number of shares available for subsequent option
grants.
Because the Option Plan is discretionary, benefits to be received by
individual optionees are not determinable, except that the options to be
received by the non-employee members of the Board are set pursuant to a formula
as described below. The table below shows, as to each of the executive officers
named in the Summary Compensation Table and the various indicated individuals
and groups, (i) the number of shares of Common Stock for which options have been
granted under the Option Plan for the one (1)-year period ended December 31,
1999 and (ii) the weighted average exercise price payable per share.
NEW PLAN BENEFITS AND OPTION GRANT TABLE
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
NUMBER OF EXERCISE PRICE OF
NAME AND POSITION OPTION SHARES GRANTED OPTIONS
----------------- ------------- -----------------
<S> <C> <C>
H. Tom Buelter, Chairman of the Board and Chief
Executive Officer.................................... 60,000 $13.6875
Kathy J. West, President and Chief Operating Officer... 50,000 13.6875
Ronald W. Rudolph, Executive Vice President, Finance
and Chief Financial Officer.......................... 30,000 13.6875
Carrie S. Nebens, Executive Vice President, U.S.
Operations........................................... 30,000 13.6875
Karen Brenner, Director................................ 24,000 12.5625
William E. Brock, Director............................. 24,000 12.5625
Jonathan S. Holman, Director........................... 24,000 12.5625
Jeremy M. Jones, Director.............................. 24,000 12.5625
Executive Officers as a group (4 persons).............. 170,000 13.6875
Non-employee directors as a group (4 persons).......... 96,000 12.5625
All employees, including current officers who are not
executive officers, as a group (195 persons)......... 908,900 $13.4677
</TABLE>
As of January 31, 2000, approximately 2,781,516 shares of Common Stock were
subject to outstanding options under the Option Plan(1) and 4,744,426 shares of
Common Stock had been issued upon exercise of options. Accordingly, 474,058
shares of Common Stock were available for future option grants under the Option
Plan.
OPTION PRICE AND EXERCISABILITY
The exercise price of options issued under the Option Plan may not be less
than eighty-five percent (85%) of the fair market value of the Common Stock on
the grant date, and the maximum option term may not exceed ten (10) years.
Options issued under the Option Plan may become exercisable in cumulative
increments over a period of months or years as determined by the Committee.
The option price may be paid in cash or in shares of Common Stock valued at
fair market value on the exercise date. Outstanding options may also be
exercised through a same-day sale program, pursuant to which a designated
brokerage firm is instructed to effect an immediate sale of the shares purchased
under the option and pay to the Company, out of the sales proceeds available on
the settlement date, sufficient funds to cover the option price for the
purchased shares plus all applicable withholding taxes.
The Committee may also assist any optionee (including an officer or
director) in the exercise of outstanding options under the discretionary grant
program by authorizing a loan from the Company or
- ---------------
(1) The shares available for future option grants will be increased to the
extent outstanding options terminate or expire unexercised and will be
adjusted in the event of certain changes to the Company's capital structure.
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<PAGE> 13
permitting the optionee to pay the option price in installments over a period of
years. The terms and conditions of any such loan or installment payment will be
established by the Committee in its sole discretion, but in no event may the
maximum credit extended to the optionee exceed the aggregate option price
payable for the purchased shares (less the par value) plus any Federal, state or
local income taxes or Federal employment taxes incurred by the optionee in
connection with the option exercise.
VALUATION
For purposes of establishing the option price and for all other valuation
purposes under the Option Plan, the fair market value per share of Common Stock
on any relevant date will be the closing price per share on such date, as
reported on the Nasdaq Stock Market. If there is no reported closing price for
such date, then the closing price for the last previous date for which such
quotation exists will be determinative of fair market value.
On January 31, 2000, the fair market value of the Common Stock was $15.625
per share.
TERMINATION OF SERVICE
Outstanding options under the Option Plan will remain exercisable for 3
months following the optionee's cessation of service with the Company (other
than cessation as a result of permanent disability or death), unless the
Committee determines that such exercise period should be further extended for
one or more additional months or years. Under no circumstances, however, may any
such option remain exercisable after the specified expiration date of the option
term. Should the optionee become permanently disabled while holding one or more
exercisable options, then those options may subsequently be exercised by the
optionee or his or her personal representative within 12 months following such
optionee's cessation of service. Should the optionee die while holding one or
more exercisable options, then those options may subsequently be exercised by
the personal representative of the optionee's estate or by the persons to whom
such options are transferred by the optionee's will or by the laws of
inheritance within 36 months following such optionee's cessation of service.
During the applicable exercise period following the optionee's cessation of
service, the option may not be exercised for option shares which were not vested
at the time of such cessation of service. However, the Committee will have the
discretionary authority to accelerate in whole or in part the vesting of any
outstanding options held by the optionee and may exercise this discretion at any
time while the option remains outstanding.
For purposes of the Option Plan, the optionee will be deemed to be in the
service of the Company for so long as such individual renders periodic services
to the Company or any parent or subsidiary, whether as an employee, a member of
the Board of Directors or an independent consultant.
STOCKHOLDER RIGHTS AND ASSIGNABILITY OF OPTIONS
No optionee is to have any stockholder rights with respect to the option
shares until such individual has exercised the option, paid the option price and
been issued a stock certificate for such shares. Options are not assignable or
transferable other than by will or by the laws of inheritance and, during the
optionee's lifetime, the option may be exercised only by the optionee.
ACCELERATION OF OPTIONS
In the event of any of the following stockholder-approved transactions to
which the Company is a party (a "Corporate Transaction"):
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company; or
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<PAGE> 14
(iii) any reverse merger in which the Company is the surviving entity
but in which 50% or more of the Company's outstanding voting stock is
transferred to holders different from those who held the stock immediately
prior to such merger,
each outstanding option under the discretionary grant program will automatically
become exercisable for all of the option shares, unless (1) the option is either
to be assumed by the successor corporation (or its parent corporation) in such
Corporate Transaction or is otherwise to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or (2) the
acceleration of such option is subject to other limitations imposed by the
Committee at the time of grant.
Upon the consummation of the Corporate Transaction, all outstanding options
under the Option Plan will terminate and cease to be exercisable, except to the
extent assumed by the successor corporation.
The acceleration of options as described above may have the effect of
discouraging or deterring a change in the control of the Company.
SURRENDER OF OPTIONS FOR CASH OR STOCK
Officers of the Company subject to the short-swing profit restrictions of
the Federal securities laws may be granted limited stock appreciation rights as
part of any stock option grants made to such officers under the Option Plan. Any
option with such a limited stock appreciation right in effect for at least 6
months shall automatically be cancelled upon the occurrence of a Hostile
Take-Over, to the extent the option is at the time exercisable for fully vested
shares. In return, the optionee will be entitled to a cash distribution from the
Company in an amount equal to the excess of (i) the Take-Over Price of the
shares of Common Stock at the time subject to the cancelled option over (ii) the
aggregate exercise price payable for such shares.
For purposes of such limited stock appreciation right, the following
definitions will be in effect under the Option Plan:
Hostile Take-Over: (i) the acquisition by any person or related group
of persons (other than the Company or its affiliates) of securities
possessing more than 50% of the combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer which the
Board of Directors does not recommend the Company's stockholders to accept
and (ii) more than 50% of the securities so acquired in such tender or
exchange offer are accepted from holders other than officers and directors
of the Company who are subject to the short-swing profit restrictions of
the Federal securities laws.
Take-Over Price: the greater of (i) the fair market value per share on
the date of cancellation, as determined in accordance with the valuation
provisions of the Option Plan described above, or (ii) the highest reported
price per share paid by the acquiring entity in effecting the Hostile
Take-Over.
Outstanding stock appreciation rights granted before September 21, 1992 to
certain officers and directors of the Company under the Option Plan allow such
individuals to surrender the underlying options to the Company for a cash
distribution, calculated in the manner indicated above, in the event a hostile
tender offer for 25% or more of the Company's outstanding voting securities is
successfully completed or a change in the majority of the Board of Directors is
effected through one or more proxy contests.
The Option Plan includes a stock appreciation rights feature whereby the
Committee has the authority to accept the surrender of one or more outstanding
options under the Option Plan and authorize in exchange the payment by the
Company of an appreciation distribution equal to the excess of (i) the fair
market value (on the date of surrender) of the vested shares of Common Stock
over (ii) the option price payable for such vested shares. Such payment may be
made, at the discretion of the Committee, in shares of Common Stock valued at
fair market value on the date of surrender or in cash. Whether an option is
surrendered for cash or Common Stock, the shares covered by the surrendered
option will not thereafter be available for issuance under the Plan. With the
exception of the limited stock appreciation rights described above, no stock
appreciation rights have been granted under the Option Plan to date.
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<PAGE> 15
CANCELLATION AND NEW GRANT OF OPTIONS
With the consent of the affected optionees, the Committee has the authority
to cancel outstanding options under the Option Plan and to grant replacement
options covering the same or different numbers of shares of Common Stock but
having an option price per share not less than 85% of the fair market value of
the Common Stock on the new grant date (100% of fair market value in the case of
an Incentive Option). It is anticipated that the option price under the
replacement grant will in all instances be less than the option price in effect
under the cancelled option.
CHANGES IN CAPITALIZATION
In the event any change is made to the Common Stock issuable under the
Option Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares, or other change in corporate
structure effected without the Company's receipt of consideration, appropriate
adjustments will be made to (i) the maximum number and/or class of securities
issuable under the Option Plan, (ii) the number and/or class of securities and
price per share in effect under each outstanding option, (iii) the maximum
number of shares which may be granted to each individual participant, and (iv)
the number of shares to be made the subject of subsequent automatic option
grants.
Each outstanding option which is assumed or is otherwise to continue in
effect after a merger or business combination will be appropriately adjusted to
apply and pertain to the number and class of securities which would have been
issuable, in connection with such merger or business combination, to an actual
holder of the same number of shares of Common Stock as are subject to such
option immediately prior to such merger or business combination. Appropriate
adjustments will also be made to the option price payable per share and to the
number and class of securities available for issuance under the Option Plan.
Option grants under the Option Plan will not affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
EXCESS GRANTS
The Option Plan permits the grant of options to purchase shares of Common
Stock in excess of the number of shares then available for issuance under the
Option Plan. Any options so granted cannot be exercised prior to stockholder
approval of an amendment sufficiently increasing the number of shares available
for issuance under the Option Plan.
NON-EMPLOYEE DIRECTOR AUTOMATIC GRANT PROGRAM
The automatic grant program under the Option Plan authorizes the grant of
options to non-employee members of the Board as described in Proposal One under
"Director Compensation." The option price per share for each automatic grant
will be the fair market value per share of Common Stock on the date of grant,
and the option price for purchased shares will be payable in cash or shares of
Common Stock or through a cashless exercise procedure.
The initial automatic option grants to purchase 18,000 shares become
exercisable in 3 annual installments beginning on the grant date, provided the
optionee remains a member of the Board. The annual automatic option grant for
6,000 shares to Board members who have served at least 6 months prior to the
grant date are immediately exercisable upon grant. The annual automatic grant
for 6,000 shares to non-employee Board members who have not served as Board
members for at least 6 months prior to the date of such grant, shall be subject
to a 6-month vesting schedule from the grant date, provided the optionees remain
members of the Board. However, full and immediate vesting of the initial
automatic grant and the annual automatic grant will occur upon a Corporate
Transaction (as such term is defined in the section above entitled "Acceleration
of Options") and Change in Control (as such term is defined below). Also, each
automatic option grant will be automatically cancelled upon the occurrence of a
Hostile Take-Over (as such term is defined in the section above entitled
"Surrender of Options for Cash or Stock"), whether or not the option is
otherwise at the time
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<PAGE> 16
exercisable for such shares. In return the optionee will be entitled to a cash
distribution from the Company in an amount equal to the excess of (i) the
Take-Over Price of the shares of Common Stock subject to the surrendered option
over (ii) the aggregate exercise price payable for such shares.
For all purposes under the Option Plan, a Change in Control shall be deemed
to have occurred if:
(i) any person or related group of persons (other than the Company or
a person that directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership of securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's stockholders which
the Board does not recommend such stockholders to accept; or
(ii) there is a change in the composition of the Board over a period
of 24 consecutive months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more
proxy contests for the election of Board members, to be comprised of
individuals who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated for election
as Board members during such period by at least a majority of the Board
members described in clause (A) who were still in office at the time such
election or nomination was approved by the Board.
Upon cessation of Board service, the options exercisable by the director
will remain exercisable for 6 months. Should the optionee die while holding one
or more options, then those options may subsequently be exercised by the
personal representative of the optionee's estate or by the persons to whom such
options are transferred by the optionee's will or by the laws of inheritance
within 3 years after the date of the optionee's cessation of Board service.
AMENDMENT AND TERMINATION OF THE OPTION PLAN
The Board of Directors may amend or modify the Option Plan in any or all
respects whatsoever; provided, however, that the automatic grant program (and
the options outstanding thereunder) may not be amended more frequently than once
every 6 months, and no amendment to the Option Plan may adversely affect the
rights of outstanding option holders without their consent. The Board of
Directors may not, without the approval of the Company's stockholders: (i)
materially increase the maximum number of shares issuable under the Option Plan
or the number of shares for which automatic grants may be made to non-employee
Board members, except in the event of certain changes to the Company's capital
structure as indicated above; (ii) materially modify the eligibility
requirements for option grants; or (iii) otherwise materially increase the
benefits accruing to participants under the Option Plan.
The Board of Directors may terminate the Option Plan at any time, and the
Option Plan will in all events terminate not later than June 21, 2002. Any
options outstanding at the time of such plan termination will continue to remain
outstanding and exercisable in accordance with the terms and provisions of the
instruments evidencing those grants. The Option Plan will, however,
automatically terminate on the date all shares available for issuance are issued
or cancelled pursuant to the exercise, surrender or cash-out of outstanding
options under the Option Plan.
FEDERAL TAX CONSEQUENCES
Options granted under the Option Plan may be either incentive stock options
which satisfy the requirements of Section 422 of the Internal Revenue Code or
non-statutory options which are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as described
below:
Incentive Options. No taxable income is recognized by the optionee at
the time of the option grant, and no taxable income is generally recognized
at the time the option is exercised. However, the difference between the
fair market value of the purchased shares and the exercise price is
generally included as alternative minimum taxable income for purposes of
the alternative minimum tax. The optionee will recognize taxable income in
the year in which the purchased shares are sold or otherwise made the
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<PAGE> 17
subject of disposition. For Federal tax purposes, dispositions are divided
into two categories: (i) qualifying and (ii) disqualifying. The optionee
will make a qualifying disposition of the purchased shares if the sale or
other disposition of such shares is made after the optionee has held the
shares for more than 2 years after the grant date of the option and more
than 1 year after the exercise date. If the optionee fails to satisfy
either of these two minimum holding periods prior to the sale or other
disposition of the purchased shares, then a disqualifying disposition will
result.
Upon a qualifying disposition of the shares, the optionee will
recognize long-term capital gain in an amount equal to the excess of (i)
the amount realized upon the sale or other disposition of the purchased
shares over (ii) the exercise price paid for such shares. If there is a
disqualifying disposition of the shares, then the excess of (i) the fair
market value of those shares on the exercise date over (ii) the exercise
price paid for the shares will be taxable as ordinary income. Any
additional gain recognized upon the disposition will be a capital gain.
If the optionee makes a disqualifying disposition of the purchased
shares, then the Company will be entitled to an income tax deduction for
the taxable year in which such disposition occurs, equal to the excess of
(i) the lower of the fair market value of such shares on the exercise date
or the sale price over (ii) the exercise price paid for the shares. In no
other instance will the Company be allowed a deduction with respect to the
optionee's disposition of the purchased shares.
Non-Statutory Options. No taxable income is recognized by an optionee
upon the grant of a non-statutory option. The optionee will in general
recognize ordinary income, in the year in which the option is exercised,
equal to the excess of the fair market value of the purchased shares on the
exercise date over the exercise price paid for the shares, and the optionee
will be required to satisfy the tax withholding requirements applicable to
such income.
The Company will be entitled to a business expense deduction equal to
the amount of ordinary income recognized by the optionee with respect to
the exercised non-statutory option. The deduction will in general be
allowed for the taxable year of the Company in which such ordinary income
is recognized by the optionee. The Company anticipates that the deductions
attributable to the compensation income arising from most exercises of
non-statutory options under the Option Plan will not be subject to the
annual $1 Million deduction limit which covers certain executive officers
of the Company.
Stock Appreciation Rights. An optionee who is granted a stock
appreciation right will recognize ordinary income in the year of exercise
equal to the amount of the appreciation distribution. The Company will be
entitled to a business expense deduction equal to the appreciation
distribution for the taxable year of the Company in which the ordinary
income is recognized by the optionee.
Parachute Payments. If the exercisability of an option or stock
appreciation right is accelerated as a result of a change of control, all
or a portion of the value of the option or stock appreciation right at that
time may be a parachute payment for purposes of the excess parachute
provisions of the Internal Revenue Code. Those provisions generally provide
that if parachute payments exceed three times an employee's average
compensation for the 5 tax years preceding the change of control, the
company loses its deduction and the recipient is subject to a 20% excise
tax on the amount of the parachute payments in excess of one times such
average compensation.
Note Forgiveness. If any promissory note delivered in payment of
shares acquired under the Option Plan is forgiven in whole or in part, the
amount of such forgiveness will be reportable by the participant as
ordinary compensation income. The Company will be entitled to a business
expense deduction equal to the amount of ordinary income recognized by the
participant in connection with the acquisition of the shares and any note
forgiveness. The deduction will be allowed for the taxable year of the
Company in which the ordinary income is recognized by the participant.
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<PAGE> 18
ACCOUNTING TREATMENT
Option grants at 100% of fair market value will not result in any charge to
the Company's earnings. The number of outstanding options may be a factor in
determining the Company's earnings per share on a fully-diluted basis.
Should optionees be granted stock appreciation rights which have no
conditions upon exercisability other than a service or employment requirement,
then such rights will result in a compensation expense to be charged against the
Company's earnings. Accordingly, at the end of each fiscal quarter, the amount
(if any) by which the fair market value of the shares of Common Stock subject to
such outstanding stock appreciation rights has increased from the prior
quarter-end will be accrued as compensation expense, to the extent such amount
is in excess of the aggregate exercise price in effect for those rights.
STOCKHOLDER APPROVAL
The affirmative vote of a majority of the outstanding shares of the
Company's voting Common Stock represented and voted at the 2000 Annual Meeting
is required for approval of the amendment to the Option Plan. If such
stockholder approval is not obtained, then the amendment will not be adopted and
the number of shares reserved for issuance under the Option Plan will not be
increased by 2,000,000 shares and will remain at 8,000,000.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Company is seeking the affirmative vote of a majority of the issued and
outstanding voting shares for approval of the amendment to the Option Plan. The
Board of Directors believes that the amendment to the Option Plan is necessary
in order to continue to provide equity incentives to attract and retain the
services of high quality officers, employees, non-employee Directors and other
advisors.
FOR THIS REASON, THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THIS PROPOSAL AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR
THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL THREE -- APPROVAL OF AMENDMENT TO RESTATED
CERTIFICATE OF INCORPORATION
The Company's Restated Certificate of Incorporation, (the "Certificate of
Incorporation"), authorizes the Company to issue 25,000,000 shares of Common
Stock, $.01 par value, and 1,000,000 shares of Preferred Stock, $.01 par value.
The Board of Directors of the Company has approved an amendment to the
Certificate of Incorporation to increase the authorized number of shares of the
Company to 76,000,000 shares, consisting of 75,000,000 shares of Common Stock
and 1,000,000 shares of Preferred Stock and to submit the proposed amendment to
the stockholders at this Meeting.
PURPOSE AND EFFECT OF THE AMENDMENT
The general purpose and effect of the proposed amendment to the Company's
Certificate of Incorporation will be to authorize 50,000,000 additional shares
of Common Stock. On March 7, 2000, the Board of Directors authorized a 2 for 1
stock split, effected as a 100% Common Stock dividend, distributed on April 3,
2000, to shareholders of record on March 27, 2000. As a result of this stock
split, the Company has approximately 22,000,000 shares of Common Stock
outstanding and 3,000,000 authorized but unissued shares of Common Stock. The
Company has no Preferred Stock outstanding. The maximum number of shares
currently authorized under the Option Plan is 8,000,000 and 800,000 shares are
authorized under the Company's Employee Stock Purchase Plan.
The Board of Directors believes that it is prudent to have the additional
shares of Common Stock proposed by the amendment to its Certificate of
Incorporation for future use, including the availability of such additional
shares for any future stock dividends, stock splits or other recapitalizations,
and for any future
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<PAGE> 19
acquisitions, equity financings, and issuance under the Option Plan and Employee
Stock Purchase Plan. Proposal Two seeks approval to increase from 8,000,000 to
10,000,000, the number of shares that may be issued under the Option Plan.
The Board of Directors does not have any current plans to effect any of the
transactions described above, other than issuance of shares under its Option
Plan and Employee Stock Purchase Plans. The Board of Directors wants to maintain
the ability, however, to effect such transactions in the future if it determines
that they are in the best interests of the Company and its stockholders.
Accordingly, the Company has determined that securing stockholder approval of
50,000,000 additional authorized shares of Common Stock would be appropriate to
provide the Company with the flexibility it may need to consider the issuance of
additional shares of Common Stock in the future.
If the Board of Directors deems it to be in the best interests of the
Company and the stockholders to issue additional shares of Common Stock in the
future, it is not anticipated that the Company will seek further authorization
by vote of the stockholders, unless such authorization is otherwise required by
applicable laws or regulations.
The increase in the authorized number of shares of Common Stock could have
an anti-takeover effect. If the Company's Board of Directors desired to issue
additional shares in the future, such issuance could dilute the voting power of
a person seeking control of the Company, thereby deterring or rendering more
difficult a merger, tender offer, proxy contest or an extraordinary corporate
transaction opposed by the Company.
STOCKHOLDER APPROVAL
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the Annual Meeting will be required to approve the
amendment to the Company's Certificate of Incorporation increasing the number of
authorized shares of the Company from 26,000,000 to 76,000,000 and increasing
the number of authorized shares of Common Stock from 25,000,000 to 75,000,000.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION, AND PROXIES
SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
PROPOSAL FOUR -- RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed the firm of Deloitte & Touche LLP,
independent accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 2000, and is asking the
stockholders to ratify this appointment.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors feels that such a change would be in the best interests of the Company
and its stockholders. The affirmative vote of the holders of a majority of the
Company's voting shares represented and voting at the Annual Meeting is required
to ratify the selection of Deloitte & Touche LLP.
Deloitte & Touche LLP has audited the Company's consolidated financial
statements annually since 1986. A representative of Deloitte & Touche LLP is
expected to be present at the Annual Meeting, will have the opportunity to make
a statement if he or she desires to do so, and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP TO SERVE AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000 AND PROXIES
SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
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<PAGE> 20
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934 which require them to file reports with respect
to their ownership of the Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1999 fiscal year transactions in the Common
Stock and their Common Stock holdings and (ii) the written representations
received from one or more of such persons that annual Form 5 reports were
required to be filed by them for the 1999 fiscal year, the Company believes that
all reporting requirements under Section 16(a) for such fiscal year were met in
a timely manner by its executive officers, Board members and greater than 10%
stockholders, except for the following. Form 5 reports were filed on February
25, 2000 for H. Tom Buelter, Chairman and Chief Executive Officer; Kathy J.
West, President and Chief Operating Officer; Ronald W. Rudolph, Executive Vice
President-Finance and Chief Financial Officer; and Carrie S. Nebens, Executive
Vice President, U.S. Operations, reporting stock options granted to them on
December 9, 1999.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
BOARD OF DIRECTORS AND COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of Directors
recommends to the Board the compensation of the Company's executive officers and
administers the Company's Restated 1987 Stock Option Plan (the "Option Plan")
under which grants may be made to such officers and other employees and the
Company's Employee Stock Purchase Plan. In addition, the Committee recommends to
the Board the individual bonus programs to be in effect for executive officers
each fiscal year. The full Board sets the base salaries and approves individual
bonus programs of the Company's executive officers, with Mr. Buelter abstaining
as to his own salary and bonus program.
For the 1999 fiscal year, the Board accepted the recommendations of the
Committee in establishing the compensation payable to Mr. H. Tom Buelter, the
Company's Chief Executive Officer and Chairman of the Board, and the Company's
other executive officers.
GENERAL COMPENSATION POLICY. Our fundamental policy is to offer the
Company's executive officers competitive compensation opportunities based upon
their personal performance, the financial performance of the Company and their
contribution to that performance. It is our objective to make a substantial
portion of each officer's compensation contingent upon the Company's performance
as well as upon his or her own level of performance. Accordingly, each executive
officer's compensation package is comprised of three elements: (i) base salary
which reflects individual performance and is designed primarily to be
competitive with salary levels of similarly sized companies, (ii) annual
variable performance awards payable in cash and tied to the Company's
achievement of performance goals, and (iii) long-term stock-based incentive
awards which strengthen the mutuality of interests between the executive
officers and the Company's stockholders. Generally, as an officer's level of
responsibility increases, a greater portion of his or her total compensation
will depend upon Company performance and stock price appreciation rather than
base salary.
FACTORS. Several of the more important factors which were considered in
establishing the components of each executive officer's compensation package for
the 1999 fiscal year are summarized below. Additional factors were also taken
into account to a lesser degree. The Committee and/or the Board may in their
discretion apply entirely different factors, particularly different measures of
financial performance, in recommending and/or setting executive compensation for
future fiscal years, but all compensation decisions will be designed to further
the general compensation policy indicated above.
- BASE SALARY. The base salary for each executive officer is set on
the basis of personal performance, the average salary levels in effect for
comparable positions with companies with total revenues similar to the
Company's and internal comparability standards.
16
<PAGE> 21
- ANNUAL INCENTIVE COMPENSATION. Annual bonuses, set as a percentage
of salary based on position, are earned by each executive officer on the
basis of the Company's achievement of corporate performance targets
established by the Board at the start of the fiscal year. For fiscal year
1999, the performance targets were based on the Company's 1999 Budget as
approved by the Board at its December 9, 1998 meeting. The Committee
recommended and the Board granted bonuses at targeted levels, as the
Company achieved record revenues and net income.
- LONG-TERM INCENTIVE COMPENSATION. The Committee periodically
approves grants of stock options to each of the Company's executive
officers under the Option Plan. The grants are designed to align the
interests of each executive officer with those of the stockholders and
provide each individual with a significant incentive to manage the Company
from the perspective of an owner with an equity stake in the business. Each
grant generally allows the officer to acquire shares of the Company's
common stock at a fixed price per share (the market price on the grant
date) over a specified period of time (up to 10 years), thus providing a
return to the executive officer only if the market price of the shares
appreciates over the option term. The size of the option grant to each
executive officer generally is set to achieve a potential percentage
ownership stake in the Company that the Committee deems appropriate in
order to create a meaningful opportunity for stock ownership based upon the
individual's current position with the Company, but it also takes into
account the individual's potential for future responsibility over the
option term, the individual's personal performance in recent periods and
the individual's current holdings of the Company's stock and options. New
options were granted to all of the Company's executive officers in fiscal
1999 and such grants were consistent with these policies.
CEO COMPENSATION. The 1999 base salary for the Company's Chief Executive
Officer, Mr. H. Tom Buelter, remained the same as his salary rate for the last
six months of 1998 by virtue of the Compensation Committee's and Board's
decisions at their December 1998 meetings to not increase Mr. Buelter's salary
at that time. Mr. Buelter's 1999 base salary was set on the basis of his
personal performance, internal comparability standards, the rate of base salary
paid to the chief executive officers of the companies with total revenues
similar to the Company's revenues and the desire to increase the percentage of
his compensation which varies with the Company's performance. The remaining
components of Mr. Buelter's 1999 fiscal year compensation depended entirely upon
the Company's financial performance and provided no dollar guarantees. The bonus
paid to Mr. Buelter for the 1999 fiscal year was based on the Company's
performance in 1999, including the achievement of record profits and revenues,
and the growth of the Company's annual operating income and revenues by 28% and
20%, respectively.
We conclude our report with the acknowledgment that no member of the
Compensation Committee is a former or current officer or employee of the Company
or any of its subsidiaries and that except for Mr. Buelter, no member of the
Board of Directors is a former or current officer or employee of the Company or
any of its subsidiaries.
The Board of Directors
Karen Brenner
William E. Brock*
H. Tom Buelter
Jonathan S. Holman*
Jeremy M. Jones
* Compensation Committee Member
17
<PAGE> 22
STOCK PERFORMANCE GRAPH
The graph depicted below shows the Company's stock price as an index
assuming $100 invested on January 1, 1995. Also depicted are the composite
prices of companies listed on the Nasdaq Stock Market and of companies listed in
the SIC Code No. 736 -- Personnel Supply Services Companies Index. The
comparisons shown in the graph below are based upon historical data and the
Company cautions that the stock price performance shown in the graph below is
not indicative of, nor intended to forecast, the potential future performance of
the Company's Common Stock. Information used in the graph was obtained from
Media General Financial Services, a source believed to be reliable, but the
Company is not responsible for any errors or omissions in such information.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ON ASSIGNMENT, INC., NASDAQ
COMPOSITE INDEX AND PEER GROUP INDEX
COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN AMONG ON ASSIGNMENT, INC.
NASDAQ MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
ON ASSIGNMENT PEER GROUP NASDAQ INDEX
------------- ---------- ------------
<S> <C> <C> <C>
1/1/95 100.00 100.00 100.00
12/31/95 204.69 133.33 129.71
12/31/96 184.38 160.94 161.18
12/31/97 331.25 202.17 197.16
12/31/98 431.25 202.17 278.08
12/31/99 373.44 224.65 490.46
</TABLE>
Assumes $100 invested on January 1, 1995 and dividends reinvested.
18
<PAGE> 23
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer (the "CEO") and the Company's three most highly
compensated executive officers other than the CEO (collectively, the "Named
Officers"), for services rendered in all capacities to the Company for each of
the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------------
AWARDS
ANNUAL COMPENSATION SECURITIES
----------------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- --------- -------- ---------------------
<S> <C> <C> <C> <C>
H. Tom Buelter.............................. 1999 $275,000 $150,000 60,000
Chairman of the Board 1998 275,000 162,745 90,000
and Chief Executive Officer 1997 253,820 96,250 160,000
Kathy J. West............................... 1999 225,000 100,000 50,000
President and 1998 205,000 82,146 50,000
Chief Operating Officer 1997 185,000 55,500 80,000
Ronald W. Rudolph........................... 1999 183,000 75,000 30,000
Executive Vice President, Finance 1998 175,000 50,000 20,000
and Chief Financial Officer 1997 162,000 46,200 50,000
Carrie S. Nebens............................ 1999 162,000 65,000 30,000
Executive Vice President, U.S. Operations 1998 120,048 40,000 80,000
1997 130,000 39,000 50,000
</TABLE>
STOCK OPTIONS
The following table provides information with respect to the stock option
grants made during the 1999 fiscal year under the Company's Restated 1987 Stock
Option Plan to the Named Officers for such fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED ANNUAL
NUMBER OF OPTIONS/SARS RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION
UNDERLYING EMPLOYEES IN OR BASE FOR OPTION TERM
OPTIONS/SARS FISCAL PRICE EXPIRATION ------------------------
NAME GRANTED(#)(1) YEAR(2) ($/SH)(3) DATE 5%($)(4) 10%($)(4)
---- -------------- ------------ --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
H. Tom Buelter.......... 60,000 5.1% $13.6875 12/9/2009 $516,480 $1,308,861
Kathy J. West........... 50,000 4.3 13.6875 12/9/2009 430,400 1,090,717
Ronald W. Rudolph....... 30,000 2.6 13.6875 12/9/2009 258,240 654,430
Carrie S. Nebens........ 30,000 2.6 13.6875 12/9/2009 258,240 654,430
</TABLE>
- ---------------
(1) Options become exercisable in equal monthly installments over 48 months from
the date of their grants, which was December 9, 1999 so long as employment
with the Company or one of its subsidiaries continues. To the extent not
already exercisable, the options generally become exercisable upon a
Corporate Transaction unless the option is assumed or replaced with a
comparable option by the surviving entity. The options are also subject to
"limited stock appreciation rights" pursuant to which the options, to the
extent exercisable and outstanding for at least six months at the time of a
"Hostile Takeover", will automatically be cancelled in return for a cash
payment to the optionee based upon the tender-offer price of the Common
Stock subject to that option. Each option has a maximum term of 10 years,
subject to earlier termination in the event of the optionee's cessation of
service to the Company.
(2) Based on options for 1,174,900 shares of Common Stock granted to the
Company's employees during the 1999 fiscal year.
19
<PAGE> 24
(3) Each option was granted at an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant. The exercise price may
be paid in cash, in shares of the Company's Common Stock valued at fair
market value on the exercise date or through a cashless exercise procedure
involving a same-day sale of the purchased shares. The Company may also
finance the option exercise by loaning the optionee sufficient funds to pay
the exercise price for the purchased shares and the federal and state income
tax liability incurred by the optionee in connection with such exercise. The
Compensation Committee has the discretionary authority to reprice
outstanding options under the Option Plan through the cancellation of those
options and the grant of replacement options with an exercise price equal to
the lower fair market value of the option shares on the regrant date.
(4) The 5% and 10% assumed rates of appreciation are mandated by rules of the
Securities and Exchange Commission. The potential realizable value is
calculated based on the 10-year option term and is calculated by assuming
that the stock price on the date of grant appreciates at the indicated
annual rate compounded annually for the entire term of the option and that
the option is sold on the last day of its term for the appreciated price.
There is no assurance provided to any executive officer or any other holder
of the Company's securities that the actual stock price appreciation over
the 10-year option term will be at the assumed 5% and 10% levels or at any
other defined level. Unless the market price of the Common Stock appreciates
over the option term, no value will be realized from the option grants made
to the Named Officers or any other optionee.
OPTION EXERCISES AND HOLDINGS
The table below sets forth information concerning the exercise of options
during the 1999 fiscal year and unexercised options held as of the end of such
year by the Named Officers for such fiscal year. No stock appreciation rights
were exercised during the 1999 fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
AGGREGATE NUMBER OF UNEXERCISED
VALUE REALIZED SECURITIES UNDERLYING IN-THE-MONEY
(MARKET PRICE AT UNEXERCISED OPTIONS/SARS OPTIONS/SARS AT
SHARES EXERCISE LESS AT FY-END(#) FY-END($)(1)
ACQUIRED ON EXERCISE PRICE) --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
H. Tom Buelter......... 210,000 $2,531,080 292,504 207,500 $1,759,188 $360,000
Kathy J. West.......... 34,148 315,312 66,352 127,500 244,062 205,000
Ronald W. Rudolph...... 30,418 316,316 33,750 83,750 123,047 232,266
Carrie S. Nebens....... 200 713 55,394 115,000 159,872 126,563
</TABLE>
- ---------------
(1) Based on the closing price per share of the Company's Common Stock as listed
on the Nasdaq Stock Market as of December 31, 1999 of $14.9375, less the per
share exercise price.
SEVERANCE PLAN AND CHANGE IN CONTROL
On February 12, 1998, the Board adopted the On Assignment, Inc. Change in
Control Severance Plan ("Severance Plan") to provide severance benefits for
officers and other eligible employees who lose their jobs following an
acquisition of the Company. Under the Severance Plan, if an eligible employee is
involuntarily terminated within 18 months of a Change in Control (as defined in
the Severance Plan), then the employee will be entitled to salary plus target
bonus payable in a lump sum. Involuntary termination is defined in the Severance
Plan to include a termination by the Company without cause or a voluntary
termination by the employee following (I) a reduction in compensation, (II) a
relocation in the employee's place of employment which is more than 35 miles or
(III) in the case of an officer, a change in the employee's position with the
Company that materially reduces his or her level of responsibility or authority.
Upon a termination of employment following a change in control, the Company's
Chief Executive Officer would receive 18 months of salary and target bonus, a
president or senior vice president would receive 12 months of salary and target
20
<PAGE> 25
bonus, all other officers would receive nine months of salary and target bonus,
and other employees would receive lesser amounts. The Severance Plan provides
for a reduction in the cash severance benefit payable under the Severance Plan
if the employee would be subject to the golden parachute excise tax imposed
under Section 280G of the Internal Revenue Code, but only to the extent that
such reduction results in the receipt of a greater after-tax benefit by the
employee.
Upon a corporate transaction, options granted to persons other than
non-employee directors under the Option Plan, will become fully vested and
exercisable unless the options are assumed or replaced with comparable options
by the surviving entity. Upon a corporate transaction or change in control,
options granted to non-employee directors under the Option Plan will become
fully vested and exercisable. Upon a hostile take-over, options granted to
non-employee directors and executive officers subject to Section 16(a) of the
Securities Exchange Act of 1934 under the Option Plan will be canceled in
exchange for a cash distribution from the Company in an amount equal to the
take-over price per share less the exercise price per share subject to the
options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the Company's Named Officers have employment agreements with the
Company, and their employment may be terminated at any time at the discretion of
the Board of Directors.
ANNUAL REPORT AND FORM 10-K
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1999 has been mailed concurrently with this Proxy Statement to all
stockholders entitled to notice of and to vote at the Annual Meeting. The Annual
Report is not incorporated into this Proxy Statement and is not considered proxy
soliciting material.
The Company files an Annual Report on Form 10-K with the Securities and
Exchange Commission. A copy of this report for the year ended December 31, 1999
is included in the Company's 1999 Annual Report which has been mailed with this
Proxy Statement. Stockholders may obtain an additional copy of this report,
without charge, by writing to "Investor Relations Department" at the Company's
principal executive offices, 26651 West Agoura Road, Calabasas, California
91302.
OTHER MATTERS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's Annual Meeting of stockholders in 2001
that are eligible for inclusion in the Company's proxy statement and related
proxy materials for that meeting under the applicable rules of the Securities
and Exchange Commission must be received by the Company no later than February
8, 2001 in order to be included. Pursuant to new amendments to Rule 14a-4(c) of
the Securities Exchange Act of 1934, as amended, if a stockholder who intends to
present a proposal at the Company's Annual Meeting of stockholders in 2001 does
not notify the Company of such proposal on or prior to February 8, 2001, then
management proxies would be allowed to use their discretionary voting authority
to vote on the proposal when the proposal is raised at the annual meeting, even
though there is no discussion of the proposal in the 2001 proxy statement. The
Company currently believes that the Company's Annual Meeting of stockholders in
2001 will be held during the second week of June 2001. Such stockholder
proposals should be addressed to "Investor Relations Department" at the
Company's principal executive offices, 26651 West Agoura Road, Calabasas,
California 91302.
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is granted
by the execution of the enclosed Proxy.
THE BOARD OF DIRECTORS
Dated: April 28, 2000
21
<PAGE> 26
PROXY ON ASSIGNMENT, INC. PROXY
26651 WEST AGOURA ROAD, CALABASAS, CA 91302
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders and the Proxy Statement and
appoints H. Tom Buelter and Ronald W. Rudolph and each of them, the Proxy of the
undersigned, with full power of substitution, to vote all shares of Common Stock
of On Assignment, Inc. (the "Company") held of record by the undersigned on
April 17, 2000, either on his or her own behalf or on behalf of any entity or
entities, at the Annual Meeting of Stockholders of the Company to be held June
13, 2000, and at any adjournment or postponement thereof, with the same force
and effect as the undersigned might or could do if personally present thereat.
The shares represented by this Proxy shall be voted in the manner set forth
below.
1. To elect the following directors to serve until the 2003 annual meeting of
stockholders or until his or her successor is elected and qualified:
<TABLE>
<S> <C> <C>
FOR WITHHOLD AUTHORITY TO VOTE
Karen Brenner [ ] [ ]
Jeremy M. Jones [ ] [ ]
</TABLE>
2. To approve an amendment to the Company's Restated 1987 Stock Option Plan to
increase the number of shares of the Company's Common Stock reserved for
issuance under the Option Plan by 2,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please Date and Sign on Reverse Side)
<PAGE> 27
3. To approve an amendment to the Company's Restated Certificate of
Incorporation, to increase the authorized number of total shares and
authorized shares of Common Stock, as described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the Board of Director's selection of Deloitte & Touche LLP to serve
as the Company's independent accountants for the fiscal year ending December
31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To transact such other business as may properly come before the meeting or
any adjournments or postponement thereof.
This Proxy, when properly executed, will be voted in the manner directed
herein. THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS LISTED AND
FOR THE OTHER PROPOSALS IF NO SPECIFICATION IS MADE.
Dated: , 2000
-------------------------
Signature
-------------------------
Signature if held jointly
Please sign exactly as
your name(s) is (are)
shown on the stock
certificate to which the
Proxy applies. When
shares are held by joint
tenants, both should
sign. When signing as an
attorney, executor,
administrator, trustee or
guardian, please give
full title, as such. If a
corporation, please sign
in full corporate name by
the President or other
authorized officer. If a
partnership, please sign
in the partnership's name
by an authorized person.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
