<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2)
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Multimedia Games, Inc.
----------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value or transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
May 4, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Multimedia Games, Inc. which will be held on Wednesday, May 31, 2000 at 10:00
a.m., local time, at the Holiday Inn Northwest, 8901 Business Park Drive,
Austin, Texas 78759.
Details of the business to be conducted at the annual meeting are given in
the attached Notice of Annual Meeting of Shareholders and Proxy Statement.
Whether or not you attend the annual meeting it is important that your
shares be represented and voted at the meeting. To assure that your vote is
counted, please sign, date, and promptly return your proxy in the enclosed
postage-prepaid envelope. If you decide to attend the annual meeting and vote in
person, you will of course be able to do so.
YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN AND RETURN THE ENCLOSED PROXY
OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of our Annual Report on Form 10-K for our fiscal year ended
September 30, 1999 is also enclosed.
On behalf of our Board of Directors and Management, I would like to express
our appreciation for your continued support of the Company. We sincerely hope
you will be able to join us at the meeting. We look forward to seeing you at
that time.
Sincerely yours,
Gordon T. Graves
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
MULTIMEDIA GAMES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 31, 2000
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of
Multimedia Games, Inc., a Texas corporation, will be held on Wednesday, May 31,
2000 at 10:00 a.m., local time, at the Holiday Inn Northwest, 8901 Business Park
Drive, Austin, Texas 78759 for the following purposes:
1. To elect the following nominees as directors to serve for the
ensuing year and until their successors are elected: Gordon T. Graves;
Larry D. Montgomery; Thomas W. Sarnoff; Ali P. Alizadeh and Clifton E. Lind
2. To ratify and approve the appointment of BDO Seidman, LLP, as our
independent auditors; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Each of these items of business is more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on April 14, 2000 are
entitled to notice of and to vote at the annual meeting. A complete list of
shareholders entitled to vote will be available for inspection at our offices,
8900 Shoal Creek Blvd., Austin, Texas, 78757, for ten days prior to the meeting.
All of you are invited to attend the annual meeting in person. However, to
assure that your vote is represented, you are urged to mark, sign and return the
enclosed proxy card as promptly as possible in the postage-prepaid envelope
enclosed for that purpose. If you receive more than one proxy card because you
own shares registered in different names or addresses, each proxy card should be
completed and returned by you. If you attend the annual meeting in person you
may vote in person even if you have returned a proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
Gordon T. Graves
Chairman of the Board
and Chief Executive Officer
May 4, 2000
<PAGE> 4
MULTIMEDIA GAMES, INC.
8900 SHOAL CREEK BOULEVARD, SUITE 300
AUSTIN, TEXAS 78757
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 31, 2000
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Multimedia Games, Inc. for use at our annual meeting of shareholders. The annual
meeting will be held May 31, 2000 at 10:00 a.m., local time, at the Holiday Inn
Northwest, 8901 Business Park Drive, Austin, Texas 78759. The Holiday Inn
Northwest telephone number is (512) 343-0888.
These proxy solicitation materials were mailed on or about May 8, 2000 to
all shareholders entitled to vote at the annual meeting.
REVOCATION OF PROXIES
You may revoke any proxy that has been executed and returned by you at any
time prior to the voting of that proxy. To revoke a prior proxy, you must do one
of the following:
- execute and return a subsequently dated revised proxy,
- give written notice of revocation to the Company, Attention: Frank W.
Rehanek, Jr., Inspector of Elections, or
- vote in person at the meeting.
If not revoked, your proxy will be voted at the annual meeting in
accordance with your instructions marked on the proxy card. If no instructions
are marked, your proxy will be voted FOR the election of the five (5) nominees
for director listed in this Proxy Statement and FOR the appointment of BDO
Seidman, LLP, as our independent auditors. As to any other matter that may be
properly brought before the annual meeting, your proxy will be voted as the
Board of Directors may recommend. In the absence of a Board of Directors
recommendation, your proxy will be voted as the proxy holders identified in your
proxy deem advisable. The Board of Directors does not know of any other matter
that is expected to be presented for consideration at the annual meeting.
VOTING AND SOLICITATION
Only holders of shares of Common Stock and Series A Preferred Stock
("Preferred Stock") of the Company as of the close of business on April 14, 2000
(the "Record Date") are entitled to notice of and to vote at the annual meeting.
On the Record Date, there were 5,653,149 shares of Common Stock and 90,789
shares of Preferred Stock outstanding. You will have one vote for each share of
Common Stock and Preferred Stock held by you on the Record Date.
All shares of Common Stock and Preferred Stock will vote together as a
single class on all matters coming before the annual meeting. In order to have a
meeting it is necessary that a quorum be present. A quorum will be present if a
majority of the combined shares of Common Stock and Preferred Stock are
represented at the annual meeting in person or by proxy. Abstentions and broker
non-votes will be counted for purposes of determining the presence or absence of
a quorum. Abstentions and broker non-votes will not be counted as voted either
for or against a proposal. If a quorum is present, the affirmative vote of the
holders of a majority of the shares entitled to vote on, and that actually vote
for or against, the matter is required to approve any matter.
All costs associated with soliciting proxies will be paid by the Company.
In addition to solicitation by mail, we may use our directors, officers and
regular employees to solicit proxies by telephone or otherwise.
<PAGE> 5
These personnel will not be specifically compensated for these services. We will
pay persons holding shares of Common Stock for the benefit of others, such as
nominees, brokerage houses, banks, and other fiduciaries, for the expense of
forwarding solicitation materials to the beneficial owner.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record Date
with respect to the number of shares of Common Stock and Preferred Stock owned
by (i) each person known by us to own beneficially more than 5% of the
outstanding shares of each of the Common Stock and Preferred Stock, (ii) each
director and director nominee, (iii) each executive officer named in the Summary
Compensation Table, and (iv) all directors and executive officers of the Company
as a group:
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
---------------------------- --------------------------
NUMBER OF NUMBER OF
SHARES SHARES
BENEFICIALLY PERCENT BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED OF CLASS(1) OWNED OF CLASS(1)
- ---------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Gordon T. Graves....................... 1,097,249(2) 19.85 80,175(3) 88.8%
1604 Crested Butte
Austin, Texas 78746
Clifton E. Lind........................ 251,717(4) 4.55 -- --
2 Las Brisas
Austin, Texas 78746
Larry D. Montgomery.................... 110,684(5) 2.00 1,411 1.5
1920 S. West Union Road
Topeka, Kansas 66615
Gordon T. Sjodin....................... 79,383(6) 1.44 1,272 1.4
5804 E. 104th Street
Tulsa, Oklahoma 74137
Thomas W. Sarnoff...................... 17,500(7) (8) -- --
2451 Century Hill
Los Angeles, California 90067
Ali P. Alizadeh........................ -- -- -- --
15 High Circle Way
North Oaks, Minnesota 55137
All executive officers and directors as
a group (10 persons)................. 1,642,576(9) 29.71 83,351 91.8
</TABLE>
- ---------------
(1) Based upon 5,528,149 shares of Common Stock and 90,789 shares of Series A
Preferred Stock outstanding.
(2) Consists of (i) 581,545 shares owned of record by Graves Properties, Ltd., a
limited partnership controlled by Mr. Graves, (ii) 51,000 shares owned of
record by Graves Management, Inc. Defined Benefit Trust (Graves Management,
Inc. is a corporation controlled by Mr. Graves), (iii) 54,200 shares owned
of record or beneficially in street name by Mr. Graves, (iv) 400,875 shares
issuable upon the conversion of the Preferred Stock and (v) 19,629 shares
issuable upon the exercise of warrants that are currently exercisable. Does
not include an aggregate of 90,600 shares as to which Mr. Graves disclaims
beneficial ownership, consisting of: (i) 44,100 shares owned of record by
Cynthia Graves, Mr. Graves' wife, and (ii) 46,500 shares owned of record by
the Gordon Graves Grandchildren Trust.
(3) Consists of (i) 5,175 shares owned of record by Mr. Graves, and (ii) 75,000
shares owned of record by Graves Properties, Ltd., a limited partnership
controlled by Mr. Graves.
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<PAGE> 6
(4) Consists of (i) 12,088 shares owned of record or beneficially in street name
by Mr. Lind, (ii) 220,000 shares issuable upon the exercise of stock options
that are currently exercisable and (iii) 19,629 shares that are issuable
upon the exercise of warrants that are currently exercisable.
(5) Consists of (i) 96,129 shares owned of record by Mr. Montgomery, (ii) 7,055
shares issuable upon conversion of the Preferred Stock and (iii) 7,500
shares issuable upon the exercise of stock options that are currently
exercisable (3,750 shares) or are exercisable within the next 60 days (3,750
shares).
(6) Consists of (i) 13,373 shares owned of record by Mr. Sjodin, (ii) 59,650
shares issuable upon the exercise of stock options that are currently
exercisable, and (iii) 6,360 shares issuable upon conversion of the
Preferred Stock.
(7) Consists of shares issuable upon the exercise of stock options that are
currently exercisable.
(8) Less than 1%.
(9) Consists of (i) 814,711 shares owned of record or beneficially in street
name, (ii) 374,325 shares issuable upon the exercise of stock options that
are currently exercisable (370,575 shares) or are exercisable within the
next 60 days (3,750 shares), (iii) 414,290 shares issuable upon conversion
of Preferred Stock and (iv) 39,250 shares issuable upon the exercise of
warrants that are currently exercisable.
3
<PAGE> 7
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES AND VOTE REQUIRED TO ELECT NOMINEES
A board of five (5) directors is to be elected at the annual meeting. The
five (5) nominees who receive the highest number of affirmative votes of the
shares voting shall be elected as directors. You may vote the number of shares
of Common Stock and Preferred Stock owned by you for up to five (5) persons.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them FOR the five (5) nominees named below. If any of the nominees is unable or
declines to serve as a director at the time of the annual meeting, the proxies
will be voted for any nominee designated by the present Board of Directors to
fill the vacancy. Management has no reason to believe that any of the nominees
will be unable or unwilling to serve if elected. The term of office of each
person elected as a director will continue until the next annual meeting of
shareholders or until his successor has been elected and qualified.
The following table sets forth the nominees, their ages, their principal
occupations and, where applicable, the year in which each became a director of
the Company.
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- --------------- --- -------------------- --------------
<S> <C> <C> <C>
Gordon T. Graves............ 62 Chairman of the Board,
Chief Executive Officer
and Director 1991
Larry D. Montgomery......... 62 Director and Independent
Consultant to Company 1992
Thomas W. Sarnoff........... 73 Director and President
of Academy of Television
Arts & Sciences Foundation 1997
Ali P. Alizadeh............. 36 Director and Senior Vice
President of Jefferies & Company 1999
Clifton E. Lind............. 53 President and Chief
Operating Officer N/A
</TABLE>
Gordon T. Graves has been Chairman of the Board and a director of the
Company since its inception, and has been Chief Executive Officer since
September 1994. Since December 1993 and from 1989 to 1990, Mr. Graves has been
the President of Graves Management, Inc., a management consultant and investment
company. From 1992 through December 1993, Mr. Graves was president and Chief
Executive Officer of Arrowsmith Technologies, Inc. ("Arrowsmith"), a computer
systems company. From 1991 to 1993, Mr. Graves was employed by KDT Industries,
Inc., a high-tech manufacturing and services company and an affiliate of
Arrowsmith, as, successively, Vice President of Corporate Development and
President. From 1987 to 1989, Mr. Graves was the Chairman of the Board of
Directors of Gamma International Ltd. (currently American Gaming and
Entertainment, Ltd., a company co-founded by him).
Larry D. Montgomery has been a director of the Company since November 1992.
Mr. Montgomery was the President of the Company from November 1992 until
December 1996, having held the position of Chief Executive Officer from November
1992 through September 1994. From December 1991 until December 1993, Mr.
Montgomery was also a private consultant to gaming companies. From 1989 through
1991, Mr. Montgomery was the President of Public Gaming Research Institute, and
from 1987 to 1989 was the Executive Director of the Kansas State Lottery. Mr.
Montgomery is currently an independent consultant to the Company specializing in
Indian regulatory affairs.
Thomas W. Sarnoff was elected as a director of the Company in December
1997, to fill the vacancy resulting from the resignation of his son, Daniel J.
Sarnoff. Thomas W. Sarnoff was employed by the National Broadcasting Company,
Inc. ("NBC") for over 25 years, holding positions that included Vice President,
Production and Business Affairs, Executive Vice President of West Coast
activities, and last serving as President of NBC Entertainment Corporation from
1969 to 1977. After retiring from NBC in 1997,
4
<PAGE> 8
Mr. Sarnoff has been engaged in the production of television and film
entertainment, primarily through Sarnoff Entertainment Corporation which was
formed in 1987. Mr. Sarnoff serves on many civic and charitable organizations
and is currently the President and a member of the Board of Directors of the
Academy of Television Arts & Sciences Foundation.
Ali P. Alizadeh was elected as a director of the Company in August 1999, to
fill the vacancy resulting from the death of Mr. Robert Bullock. Mr. Alizadeh is
currently a Senior Vice President in the Corporate Finance Department of
Jefferies & Company, Inc., an investment banking firm. Mr. Alizadeh joined
Jefferies in May 1999 to focus on origination of transactions in the gaming and
leisure industries. Mr. Alizadeh has completed in excess of $550 million in over
45 transactions for corporate, tribal and vendors in the gaming industry. He has
substantial industry expertise and is a frequent speaker at various gaming
conferences. Prior to joining Jefferies, Mr. Alizadeh spent two years at Dain
Rauscher and five years at Miller & Schroeder. He has also held corporate
finance positions at Citicorp, N.A. in Chicago and New York. He holds a B.A. in
Economics from Macalester College, and an M.B.A. in Finance from the University
of Rochester's Simon School of Business in Rochester, New York.
Clifton E. Lind has been the President and Chief Operating Officer of the
Company since June 1998. From January 1997 until joining the Company as
President, Mr. Lind was President of Celmark, Inc., an Austin, Texas based
company owned by Mr. Lind that provided management and financial consulting
services to start-up companies and that provided financial consulting services
to the Company. From 1991 to 1993, Mr. Lind was the Executive Vice President,
Chief Operating Officer and Chief Financial Officer of KDT Industries, where he
worked with Mr. Graves. From 1994 until January 1997, Mr. Lind was the President
and Chief Executive Officer of KDT Industries.
Daniel J. Sarnoff, the son of Thomas W. Sarnoff, is the President of
Gamebay.com, Inc., which was a wholly-owned subsidiary of the Company until
December 1999. Except for that family relationship, no other family relationship
exists between any of the directors or executive officers of the Company.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended September 30, 1999, the Board of Directors
held five meetings. Each director attended all of the meetings of the Board held
during the period he was a director. Each director also attended all of the
meetings held by all Committees of the Board of Directors on which he served
during the period.
The Company has an Audit Committee of the Board of Directors, whose members
are Messrs. Alizadeh, Graves and Montgomery, and a Compensation Committee whose
members are Messrs. Alizadeh, Graves and Sarnoff. None of the members of the
Audit Committee is "independent" as such term is defined in the National
Association of Securities Dealers' listing standards (see "Certain Relationships
and Related Transactions"). The Board of Directors has not adopted a written
charter for the Audit Committee.
The Audit Committee meets with management and the Company's independent
accountants to determine the adequacy of internal controls and other financial
matters. The Compensation Committee reviews general policy matters relating to
compensation and benefits of employees and officers of the Company and
administers the Company's stock option plans. The Audit Committee held two
meetings in fiscal 1999, and the Compensation Committee held one meeting in
fiscal 1999.
REPORT OF THE COMPENSATION COMMITTEE
Overview and Philosophy
The Compensation Committee (the "Committee") of the Board of Directors
regularly reviews and approves all executive officer pay plans and develops
recommendations for stock option grants for approval by the Board of Directors.
These include the following major compensation elements: base salaries, annual
cash incentives, stock options and various benefit plans.
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<PAGE> 9
The Committee is composed of Messrs. Sarnoff, Alizadeh and Graves. It is
the Committee's objective that executive compensation be directly determined by
achievement of the Company's planned business performance. Specifically, the
Company's executive compensation program is designed to reward exceptional
performance that results in enhanced corporate and share values.
The Committee recognizes that the industry sector in which the Company
operates is both highly competitive and is challenged by significant legal and
regulatory uncertainty with the result that there is substantial demand for
qualified, experienced executive personnel. The Committee considers it crucial
that the Company be assured of retaining and rewarding its top caliber
executives who are essential to the attainment of the Company's ambitious
long-term goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by other
companies of similar size, scope, performance levels and complexity of
operations.
Cash Compensation
The Committee believes that annual cash compensation should be paid
commensurate with attained performance. For these reasons, the Company's
executive cash compensation consists of "fixed" base compensation (salary) and
variable incentive compensation (annual bonus). Base salaries for executive
officers are established considering a number of factors, including the
executive's individual performance and measurable contribution to the Company's
success, and pay levels of similar positions with comparable companies in the
industry. The Committee supports the Company's compensation philosophy of
moderate fixed compensation for elements such as base salary. Base salary
decisions are made as part of the Company's structured annual review process.
Stock Options
The Committee recommends executive stock options under the Company's stock
option plans to foster executive officer ownership and to provide direct linkage
with shareholder interests. The Committee considers options previously granted,
industry practices, the executive's accountability level, and assumed, potential
stock value in the future when granting stock options. The Committee recommends
option amounts to provide retention considering projected earnings to be derived
from option gains based upon relatively aggressive assumptions relating to
growth and earnings. In this manner, executive gains closely parallel those of
other shareholders over the long-term. Therefore, the stock option program
serves as an effective long-term incentive and retention tool for the Company's
executives, as well as other key employees. The exercise prices of stock options
granted to executive officers are equal to the market value of the stock on the
date of grant. Therefore, stock options provide an incentive to executives to
maximize the Company's profitable growth which ordinarily, over time, should be
reflected in the price of the Company's stock.
Benefits
The Company provides benefits to the executive officers that are generally
available to all Company employees. The amount of executive level benefits and
prerequisites, as determined in accordance with the rules of the Securities and
Exchange Commission relating to executive compensation, did not exceed 10% of
total salary and bonus for fiscal year 1999, for any executive officer.
Chief Executive Officer Performance and Compensation
In setting Mr. Grave's base salary for fiscal 1999, the Committee took note
of the Company's rapid growth in revenue and earnings in fiscal 1998, the fact
that Mr. Grave's salary was below the norm for the industry, and that he has
never been compensated with any Company stock options. Mr. Grave's compensation
for fiscal 1999 was $122,000 in base salary, with a bonus of $20,000.
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<PAGE> 10
It is the opinion of the Committee that the aforementioned compensation
policies and structures provide the necessary discipline to properly align the
Company's corporate economic performance and the interest of the Company's
shareholders with progressive and competitive executive compensation practices
in an equitable manner.
The Compensation Committee:
Ali P. Alizadeh
Thomas W. Sarnoff
Gordon T. Graves
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Mr. Alizadeh is an officer and employee of Jefferies & Company, Inc., which
has been engaged to act as the exclusive financial advisor to the Company in
connection with financing and acquisition related activities. Mr. Sarnoff is the
father of Daniel J. Sarnoff, the President of the Company's Gamebay.com
subsidiary. Mr. Graves is the Chairman of the Board and Chief Executive Officer
of the Company and is also a Director of Gamebay.com. See "Certain Relationships
and Related Transactions."
PROPOSAL TWO
APPROVAL AND RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed BDO Seidman, LLP, as the Company's
independent certified public accountants, to audit the books and records of the
Company for the current fiscal year. The Board recommends that the shareholders
of the Company ratify such appointment.
Representatives of BDO Seidman, LLP, are expected to be available at the
annual meeting to respond to appropriate questions and will be given the
opportunity to make a statement if they desire to do so.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock and Preferred Stock entitled to vote on, and that vote for or against, is
required to approve Proposal Two.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP, AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS.
PREVIOUS INDEPENDENT PUBLIC ACCOUNTANTS
On June 25, 1999, the Company and its then independent public accountants,
Pricewaterhouse-Coopers LLP ("PWC"), mutually agreed that PWC would be replaced
by Arthur Andersen LLP ("Andersen") as the Company's independent auditors
effective upon the issuance of the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1999. PWC's prior reports on the Company's
audited financial statements contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles. In addition, there had been no disagreement between the
Company and PWC on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of PWC would have caused PWC to make a reference to
the subject matter of the disagreement in connection with its reports, nor had
the Company been advised of any matters described in Regulation S-K, Item
304(a)(1)(v), promulgated under the Securities Act of 1933, as amended and the
Securities Exchange Act of 1934, as amended (the "Securities Acts").
On June 25, 1999, the Company engaged Andersen as its new independent
public accountants effective with respect to the Company's fiscal year ending
September 30, 1999. Prior to that date, the Company had not consulted with
Andersen regarding the application of accounting principles to a specified
transaction, the type of audit opinion that might be rendered by Andersen on the
Company's financial statements, or any other
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<PAGE> 11
matter that, had such matter existed, would have been described in response to
Regulation S-K, Item 304(a)(1)(iv) or (v) promulgated under the Securities Acts.
On September 22, 1999, Andersen confirmed to the Company that it had
terminated its engagement as the Company's independent auditors effective
immediately. At the time of this confirmation, Andersen had not rendered any
reports on any financial statements of the Company for any period. Since its
engagement in June 1999, there has been no disagreement between the Company and
Andersen on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, nor had the Company been
advised of any matters described in Regulation S-K, Item 304(a)(1)(v)
promulgated under the Securities Laws.
On October 8, 1999, the Company engaged BDO Seidman, LLP ("Seidman") as its
new independent public accountants. Prior to October 8, 1999, the Company had
not consulted with Seidman regarding the application of accounting principles to
a specified transaction, the type of audit opinion that might be rendered by
Seidman on the Company's financial statements, or any other matter that, had
such matter existed, would have been described in response to Regulation S-K,
Item 304(a)(1)(iv) or (v) promulgated under the Securities Laws.
The Company's Board of Directors and Audit Committee approved of all
changes in accountants.
INFORMATION REGARDING EXECUTIVE OFFICER COMPENSATION
The executive officers of the Company, and their respective ages and
positions with the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Gordon T. Graves......... 62 Chairman of the Board and Chief Executive Officer
Clifton E. Lind.......... 53 President and Chief Operating Officer
Gordon T. Sjodin......... 58 President of MegaBingo Inc.
Michael E. Newell........ 48 Vice President
Robert F. Lannert........ 44 Vice President
Gary L. Loebig........... 50 Vice President
Frank W. Rehanek, Jr. ... 38 Chief Financial Officer
</TABLE>
Gordon T. Graves has been Chairman of the Board and a director of the
Company since its inception, and has been Chief Executive Officer since
September 1994. Since December 1993 and from 1989 to 1990, Mr. Graves has been
the President of Graves Management, Inc., a management consultant and investment
company. From 1992 through December 1993, Mr. Graves was president and Chief
Executive Officer of Arrowsmith Technologies, Inc. ("Arrowsmith"), a computer
systems company. From 1991 to 1993, Mr. Graves was employed by KDT Industries,
Inc., a high-tech manufacturing and services company and an affiliate of
Arrowsmith, as, successively, Vice President of Corporate Development and
President. From 1987 to 1989, Mr. Graves was the Chairman of the Board of
Directors of Gamma International Ltd. (currently American Gaming and
Entertainment, Ltd., a company co-founded by him).
Clifton E. Lind has been the President and Chief Operating Officer of the
Company since June 1998. From January 1997 until joining the Company as
President, Mr. Lind was President of Celmark, Inc., an Austin, Texas based
company owned by Mr. Lind that provided management and financial consulting
services to start-up companies and that provided financial consulting services
to the Company. From 1991 to 1993, Mr. Lind was the Executive Vice President,
Chief Operating Officer and Chief Financial Officer of KDT Industries, where he
worked with Mr. Graves. From 1994 until January 1997, Mr. Lind was the President
and Chief Executive Officer of KDT Industries.
Gordon T. Sjodin was Vice President of the Company since September 1994
prior to being elected President of the Company's wholly-owned subsidiary,
MegaBingo, Inc., in December 1998. In April 1994, Mr. Sjodin joined MegaBingo,
Inc., as its Vice President -- Sales and served in such position until September
8
<PAGE> 12
1994, when he became Vice President of the Company. From August 1989 until April
1994, Mr. Sjodin was employed by American Gaming and Entertainment ("AGE") as,
successively, Director, Sales and Marketing, and Director, Corporate
Development.
Michael E. Newell has been Vice President of the Company since September
1994. In April 1994, Mr. Newell joined MegaBingo, Inc. as its Vice
President-Chief Operating Officer and served in such position until November
1995, when he became Senior Vice President of game operations for the Company.
From 1988 until April 1994, Mr. Newell was employed by AGE as
Director -- MegaBingo operations.
Robert F. Lannert has been Vice President of the Company since August 1997.
Mr. Lannert has been employed by the Company since June 1996 as supervisor of
its computer and data processing operations. From 1988 until August 1995, Mr.
Lannert was Director of data processing for Debartolo Racing at Remington Park,
Oklahoma City, Oklahoma, and from August 1995 until joining the Company, Mr.
Lannert was Vice President of Operations for Spector Entertainment Group.
Gary L. Loebig was elected a Vice President of the Company for New Market
Development in December 1998. Since 1984, Mr. Loebig was employed by Stuart
Entertainment, dba Bingo King, Omaha, Nebraska, a publicly traded company
engaged in the manufacture and sale of bingo cards and related equipment and
products. With Bingo King, Mr. Loebig served in various capacities, beginning as
general sales manager and last serving as Senior Vice President -- Market and
Product Development.
Frank W. Rehanek, Jr. has been the Chief Financial Officer of the Company
since September, 1999. He has been the Corporate Controller since February of
1997. In addition, Mr. Rehanek serves as the accounting systems coordinator,
creating custom reports for management using MAS90 accounting software. Prior to
joining the Company, Mr. Rehanek was Controller of the Oklahoma Corporate Credit
Union for more than three years. A Certified Public Accountant with 15 years of
experience in industry, Mr. Rehanek graduated from Northeastern State University
in Tahlequah in 1983.
Summary Compensation Table
The following table sets forth certain information concerning the annual
compensation for the Company's chief executive officer and for each other
executive officer earning more than $100,000 for the fiscal year ended September
30, 1999 (the "named executive officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
SECURITIES
COMPENSATION UNDERLYING
--------------- ANNUAL OPTIONS/ ALL OTHER
FINANCIAL POSITION YEAR AMOUNT WARRANTS(#)(1) COMPENSATION(2)
- ------------------ ---- -------- --------------- ---------------
<S> <C> <C> <C> <C>
Gordon T. Graves............................. 1999 $142,009 0 $3,514
Chairman and CEO 1998 87,308 (3) 4,213
1997 70,000 (4) 3,877
Clifton E. Lind(5)........................... 1999 180,162 0 3,628
President and COO 1998 156,733 338,000 2,492
Larry D. Montgomery(6)....................... 1999 143,000 0 0
1998 171,777 22,500 3,560
1997 115,160 10,000 6,474
Gordon T. Sjodin............................. 1999 120,522 10,000 4,073
Executive Vice President 1998 115,731 10,100 7,647
1997 120,360 5,000 7,222
</TABLE>
9
<PAGE> 13
- ---------------
(1) Consists of shares of Common Stock underlying options granted pursuant to
the Company's 1994 Employee Stock Option Plan, 1996 Stock Incentive Plan and
President's Plan. (See "Stock Plans" below).
(2) Consists of contributions made by the Company on behalf of the named
executive officers to the Company's 401(k) plan.
(3) Does not include shares of Common Stock underlying warrants issued to
Equipment Purchasing II L.L.C. See "Certain Relationships and Related
Transactions."
(4) Does not include (i) shares of Common Stock underlying warrants issued to
Equipment Purchasing L.L.C., or (ii) shares of Common Stock issuable upon
the exercise by AGN Ventures of a put right. See "Certain Relationships and
Related Transactions."
(5) Mr. Lind became President and COO of the Company in June, 1998. Fiscal 1998
compensation includes amounts paid by the Company to Mr. Lind since that
date and for the period commencing October 1, 1997 through June, 1998 while
Mr. Lind served as a consultant to the Company. Does not include shares of
Common Stock underlying warrants issued to Equipment Purchasing II L.L.C.
See "Certain Relationships and Related Transactions."
(6) Mr. Montgomery served as President of the Company during 1996 and 1997 and
resigned as President in December 1997. Mr. Montgomery remained an employee
of the Company until April 1998 at which time he became a consultant.
Amounts paid in 1998 include all amounts paid to Mr. Montgomery while an
employee, and amounts paid to him as a consultant after April 1998. Amounts
paid in 1999 include all amounts paid Mr. Montgomery pursuant to his
consulting agreement with the Company. See "Certain Relationships and
Related Transactions."
Option/Warrant Grant Table
The following table sets forth certain information regarding options and
warrants granted by the Company during its fiscal year ended September 30, 1999
to the named executive officers.
OPTION/WARRANT GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/
UNDERLYING WARRANTS
OPTIONS/ GRANTED TO
WARRANTS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR PER SHARE DATE
- ---- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C>
Gordon T. Graves................................ -- -- -- --
Clifton E. Lind................................. -- -- -- --
Larry D. Montgomery............................. -- -- -- --
Gordon T. Sjodin................................ 10,000 8.3% $3.81 Nov 2008
</TABLE>
Aggregate Option/Warrant Exercises and Year-End Option Table
The following table sets forth certain information regarding the exercise
of stock options and warrants during the fiscal year ended September 30, 1999,
and the unexercised stock options and warrants held as of September 30, 1999, by
the named executive officers.
<TABLE>
<CAPTION>
NO. OF NO. OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED FY-END FY-END(1)
UPON VALUE ----------------------------- ---------------------------
NAME EXERCISE REALIZED $ EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- ---------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gordon T. Graves(2)........ -- -- -- -- -- --
Clifton E. Lind(2)......... -- -- 195,000 143,000 -- --
Larry D. Montgomery........ -- -- 3,750 11,250 -- --
Gordon T. Sjodin........... -- -- 52,150 17,450 $36,562 --
</TABLE>
10
<PAGE> 14
- ---------------
(1) Market value of the underlying Common Stock at fiscal year end ($3.3125 per
share), minus the exercise price.
(2) Does not include shares of Common Stock underlying warrants issued to
Equipment Purchasing L.L.C., or Equipment Purchasing II L.L.C. See "Certain
Relationships and Related Transactions".
Stock Plans
In November 1994, the stockholders of the Company approved the Company's
1994 Employee Stock Option Plan (the "1994 Plan") and the 1994 Director Stock
Option Plan ("Director Plan"), under which options to purchase an aggregate of
360,000 shares and 60,000 shares, respectively, of Common Stock were reserved
for issuance. As of September 30, 1999, options to purchase 135,525 shares and
20,000 shares, respectively, of Common Stock were outstanding under the 1994
Plan and the Director Plan. After the adoption of the Company's 1996 Stock
Incentive Plan, no new options were granted under the 1994 Plan or the Director
Plan.
In August 1996, the Board of Directors adopted the Company's 1996 Incentive
Stock Plan, which was amended effective March 1, 1999 (the "1996 Plan") pursuant
to which 795,127 shares of Common Stock or Common Stock equivalents may be
issued.
The 1996 Plan is administered by the Board of Directors of the Company (the
"Administrator"). The Administrator has the authority, subject to the terms of
the 1996 Plan, to determine when and to whom to make grants under the 1996 Plan,
the number of shares to be covered by the grants, the types and terms of
"Awards" to be granted under the 1996 Plan (which are stock based incentives and
may include incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock, performance shares and deferred stock
purchases), the exercise or purchase price of the shares of Common Stock and
Common Stock equivalents subject to the Awards, and to prescribe, amend and
rescind rules and regulations relating to the 1996 Plan.
As of September 30, 1999, there were outstanding under the 1996 Plan
options to purchase 352,350 shares of Common Stock, all at an exercise price of
$3.81 per share, except for 10,000 shares at an exercise price of $6.875 per
share.
In connection with the employment of Clifton E. Lind as President of the
Company in June 1998, the Company established the President's Plan pursuant to
which options to purchase 338,000 shares of Common Stock at $3.81 per share were
granted to Mr. Lind. The options are intended to qualify as incentive stock
options. Approximately one-third of the options became exercisable in December
1998, with the balance becoming exercisable in substantially equal installments
over the next three years. Vesting of the options accelerate if Mr. Lind is
terminated without cause or upon a change of control of the Company.
In connection with the employment of Mr. Loebig in November, 1998, the
Company established the 1998 Senior Executive Stock Option Plan, pursuant to
which Mr. Loebig was granted options to purchase 50,000 shares of Common Stock
at $3.81 per share. The options are intended to qualify as incentive stock
options. The options generally vest in six substantially equal annual
installments commencing in November 1999.
11
<PAGE> 15
STOCK PRICE PERFORMANCE GRAPH
The following graph compares on a cumulative basis the percentage change,
since September 30, 1994, in the total shareholder return on the Company's
Common Stock, with (a) the total return on the NASDAQ Composite Index, which is
being used as the required broad entity market index, and (b) the total return
for a selected peer group index (the "Peer Group"). The Peer Group consists of
Mikohn Gaming, Silicon Gaming, Stuart Entertainment, and Interlott Technologies.
The graph assumes (i) investment of $100 on September 30, 1994 in the Company's
Common Stock, the NASDAQ Composite Index and the common stock of the Peer Group,
and (ii) the reinvestment of all dividends.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MGAM $100.00 $122.67 $383.33 $891.67 $177.07 $220.87
Peer Group 100.00 71.88 73.21 78.30 38.37 26.71
Nasdaq Composite Index 100.00 136.54 160.53 220.56 221.62 359.31
</TABLE>
12
<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Equipment Purchases
On October 1, 1998, the Company exercised its option to acquire 356
electronic player stations and related equipment (EPS) for $1,448,000 from
Equipment Purchasing LLC ("EP LLC"), a limited liability company owned by an
affiliate of Gordon T. Graves, the Chairman of the Board and Chief Executive
Officer of the Company. The Company had originally sold the EPS to EP LLC in
June and September 1997 at an aggregate sales price of approximately $2,436,000.
Pursuant to agreements entered into at the time of the June and September 1997
sale transactions, the Company had an option to repurchase the EPS from EP LLC
at fair market value. While the purchase price paid by the Company was not the
result of an arms-length negotiation with an unaffiliated third party, the
Company believes that such purchase price is comparable to what the Company
would have paid to an unaffiliated third party. The purchase price was paid by
(i) cancellation by the Company of $992,000 in notes receivable due from EP LLC,
(ii) the assumption by the Company of $77,800 in debt owed by the affiliate of
Mr. Graves to a financial institution, (iii) the payment by the Company of
$133,000 to EP LLC, (iv) the delivery to EP LLC of a 6% promissory note of the
Company in the principal amount of $133,000 due on April 1, 1999 (which was
later extended to and paid on September 30, 1999), (v) the issuance of 50,000
warrants to purchase shares of common stock of the Company at $3.81 per share
expiring on June 30, 2002, and (vi) the issuance of 50,000 warrants to purchase
shares of common stock of the Company at $3.81 per share expiring on September
30, 2002. On October 1, 1998, the closing price of the Company's common stock as
quoted on the NASDAQ SmallCap market was $2.50 per share. The warrants, which
were valued by the Company and EP LLC at $112,000, were issued in cancellation
of warrants to purchase the same number of shares that had been granted to EP
LLC in connection with the June and September 1997 sale transactions at exercise
prices of $11.00 and $13.38 per share. The $133,000 paid to EP LLC was applied
by the affiliate of Mr. Graves to pay a portion of outstanding notes due the
Company by such affiliate.
On July 31, 1999 the Company exercised its option to acquire 663 EPS for
$2,373,623 from Equipment Purchasing II LLC ("EP LLC II"), a limited liability
company controlled by an affiliate of Gordon T. Graves, the Chairman of the
Board and Chief Executive Officer of the Company, and of which an affiliate of
Mr. Graves and Clifton E. Lind, the Company's President and Chief Operating
Officer, each owned 6.36%. The Company had originally sold the EPS to EP LLC II
in March and June 1998 at an aggregate sales price of approximately $3,750,000.
Pursuant to agreements entered into at the time of the March and June 1998 sale
transactions, the Company had an option to repurchase the EPS from EP LLC II at
fair market value if, after giving effect to the repayment and the income
previously received by EP LLC II, EP LLC II would receive at least a 20% return
on its net investment. While the purchase price paid by the Company was not the
result of an arms-length negotiation, the Company believes that such purchase
price is comparable to what the Company would have paid to an unaffiliated third
party.
Consulting Agreement
On April 15, 1998, the Company entered into a Consulting Agreement, as
later amended, with Larry D. Montgomery, a director of the Company. Mr.
Montgomery was the President and COO of the Company until December 1997. The
Consulting Agreement had a term of five years, but could be terminated by either
party with six months notice given at any time after January 1, 1999. The
Company gave notice of termination of the agreement on September 30, 1999, but
has continued to use the services of Mr. Montgomery on a month to month basis
after the agreement expired in March 2000. Mr. Montgomery is compensated at the
rate of $126,000 annually. The Company has also agreed to pay the cost of all
premiums on life, health and disability insurance for Mr. Montgomery and his
family through 2003 and pays Mr. Montgomery rent of $1,000 per month for the use
of office space in Topeka, Kansas.
Engagement of Jefferies & Company
On September 1, 1999, the Company engaged Jefferies & Company, Inc.
("Jefferies"), an investment banking firm located in Santa Monica, California,
to act as the exclusive financial advisor to the Company in
13
<PAGE> 17
connection with financing and acquisition related activities. Mr. Ali P.
Alizadeh, a director of the Company, is an officer and employee of Jefferies.
Pursuant to the agreement, the Company agreed to pay Jefferies a fee of $120,000
(at the rate of $10,000 per month for 12 months). In addition, the Company
agreed to pay Jefferies a "success fee" for any financing or acquisition
transaction consummated by the Company during the term of the agreement which
may be terminated by either party upon notice.
Gamebay.com
During fiscal 1999, the Company established Gamebay.com, Inc. ("Gamebay")
as a wholly-owned subsidiary to pursue non-gaming activities on the Internet. In
July 1999, Gamebay granted options to Gordon T. Graves, the Chairman of the
Board and Chief Executive Officer of the Company, and to Daniel J. Sarnoff, the
President of Gamebay and the son of Thomas W. Sarnoff, a director of the
Company, to purchase 29,800 shares and 59,600 shares, respectively, of the
common stock of Gamebay at $1.00 per share. The Company determined the fair
value of these options as of the date of grant and recognized a minimal
compensation expense. In December 1999, Gamebay completed the private placement
of approximately 70% of its common stock (including preferred stock convertible
into common stock) to a group of investors at $5.00 per share. The options
granted to Mr. Graves have been valued at $2,980, which has been reflected in
the Summary Compensation Table as compensation paid to Mr. Graves in 1999.
Gregory N. Stern, a former director of the Company who resigned in June
1999, was involved with establishing Gamebay while he was a director of the
Company. In connection with his resignation, the Company agreed to pay Mr. Stern
two percent (2%) of whatever interest the Company retained or received in
Gamebay, including two percent (2%) of the 490,000 shares of common stock of
Gamebay held by the Company and two percent (2%) of any royalties received by
the Company from Gamebay pursuant to a license to use the Company's intellectual
property.
Indebtedness of Certain Officers And Directors
During fiscal 1999, Mr. Graves was indebted to the Company in the amount of
$755,169, of which $117,066 was repaid during the year, leaving a balance of
$638,103 owed the Company at September 30, 1999. Substantially all of the amount
owed by Mr. Graves bears interest at 6% per annum, which is accrued and payable
upon the maturity of the note in February 2001.
During fiscal 1999, Mr. Montgomery was indebted to the Company in the
amount of $153,000, of which $52,500 was repaid during the year, leaving a
balance of $100,500 at September 30, 1999. The obligation is evidenced by a note
due in April 2001, that bears interest at 6% per annum, payable annually.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended September 30, 1999, two officers, Gary L.
Loebig and Frank W. Rehanek, Jr., and one director, Ali P. Alizadeh, were
delinquent in making filings under Section 16(a) of the Securities Exchange Act
of 1934, as amended. Each was delinquent in timely filing Form 3's upon becoming
an officer and a director, respectively, of the Company.
DEADLINE FOR RECEIPT OF SHAREHOLDER
PROPOSALS -- 2000 ANNUAL MEETING
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's annual meeting following its fiscal year
ending September 30, 2000 must be received by the Company no later than December
31, 2000. Such proposals must also meet the other requirements of the rules of
the Securities and Exchange Commission relating to shareholders' proposals.
14
<PAGE> 18
OTHER MATTERS
The Company knows of no other matters to be submitted to the shareholders
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 proxy to vote
the shares they represent as the Board of Directors may recommend, or, in the
absence of a recommendation, as such persons deem advisable.
BY ORDER OF THE BOARD OF DIRECTORS
Gordon T. Graves
Chairman of the Board
and Chief Executive Officer
Austin, Texas
May 4, 2000
15
<PAGE> 19
MULTIMEDIA GAMES, INC.
8900 SHOAL CREEK BLVD., SUITE 300
AUSTIN, TEXAS 78757
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS MAY 31, 2000
The undersigned shareholder(s) of Multimedia Games, Inc., a Texas
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated May 4, 2000, and hereby appoints
Gordon T. Graves and Clifton E. Lind, and each of them, Proxies and
Attorneys-in-Fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 2000 Annual Meeting
of Shareholders of Multimedia Games, Inc. to be held on May 31, 2000 at 10:00
a.m., local time, at the Holiday Inn Northwest, located at 8901 Business Park
Drive, Austin, Texas 78759, and at any adjournment or postponement thereof, and
to vote all shares of Common Stock and Preferred Stock which the undersigned
would be entitled to vote if personally present on any of the following matters
and with discretionary authority as to any and all other matters that may
properly come before the meeting.
1. Election of Directors:
[ ] FOR all the nominees listed below (except as indicated).
[ ] WITHHOLD authority to vote for all nominees listed below.
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
Gordon T. Graves, Larry D. Montgomery, Thomas W. Sarnoff, Ali P. Alizadeh and
Clifton E. Lind
2. To ratify and approve the appointment of BDO Seidman, LLP as the independent
public accountants of the Company for the fiscal year ending September 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the meeting or
any postponements or adjournments thereof.
(Continued and to be signed and dated on the other side.)
<PAGE> 20
(Continued from other side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR EACH OF THE ABOVE PERSONS AND PROPOSALS, AND FOR SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE BOARD OF DIRECTORS
MAY RECOMMEND OR, IN THE ABSENCE OF A RECOMMENDATION, AS THE PROXY HOLDERS DEEM
ADVISABLE.
Dated: , 2000
---------------------------
----------------------------------------
Signature
----------------------------------------
Signature (if held jointly)
I plan to attend the meeting: [ ]
(This proxy should be marked, dated and
signed by each shareholder exactly as
such shareholder's name appears hereon,
and returned promptly in the enclosed
envelope. Persons signing in a fiduciary
capacity should so indicate. A
corporation is requested to sign its
name by its president or other
authorized officer, with the office held
designated. If shares are held by joint
tenants or as community property, both
holders should sign.)
TO ENSURE YOUR REPRESENTATION AT THE
ANNUAL MEETING, PLEASE MARK, SIGN AND
DATE THIS PROXY AND RETURN IT AS
PROMPTLY AS POSSIBLE.
