SCHEDULE 14A INFORMATION
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EFTC CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement. if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange
Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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EFTC CORPORATION
9351 GRANT STREET, SIXTH FLOOR
DENVER, COLORADO 80229
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 2, 2000
You are cordially invited to attend the annual meeting of shareholders
(the "Meeting") of EFTC Corporation (the "Company"), which will be held at the
Company's offices at 9351 Grant Street, Sixth Floor, Denver, Colorado 80229 on
October 2, 2000 at 9:00 a.m., local time, for the following purposes:
1. To elect (i) one Class I director to serve until the 2001 annual
meeting of shareholders, (ii) two Class II directors to serve until the
2002 annual meeting of shareholders and (iii) two Class III directors
to serve until the 2003 annual meeting of shareholders;
2. To approve an amendment to the Company's Amended and Restated Articles
of Incorporation eliminating the special shareholder voting
requirements applicable to certain transactions between the Company and
shareholders that beneficially own 10% or more of the Company's voting
stock;
3. To ratify the appointment of KPMG LLP as independent auditors for the
Company for the fiscal year ending December 31, 2000; and
4. To transact such other business as may properly come before the Meeting.
Shareholders of record at the close of business on September 8, 2000
are entitled to vote at the meeting or any postponements or adjournments
thereof. A list of such shareholders will be available for examination by any
shareholder for any purposes germane to the meeting, during normal business
hours, at the offices of the Company, 9351 Grant Street, Sixth Floor, Denver,
Colorado 80229, for a period of ten days prior to the meeting.
Whether or not you intend to be present at the meeting in person, we
urge you to please mark, date and sign the enclosed proxy and return it in the
envelope provided for that purpose, which does not require postage if mailed in
the United States.
August P. Bruehlman
Secretary
Denver, Colorado
September __, 2000
YOU ARE URGED TO MARK, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY. THE PROXY IS
REVOCABLE AT ANY TIME PRIOR TO ITS USE.
<PAGE>
EFTC CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
October 2, 2000
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of EFTC Corporation, a Colorado corporation (the
"Company" or "EFTC"), of proxies for use at the annual meeting of shareholders
of the Company (the "Meeting") to be held at the Company's offices at 9351 Grant
Street, Sixth Floor, Denver, Colorado 80229 at 9:00 a.m., local time, on October
2, 2000, and at any postponement or adjournment thereof.
The Company's executive offices are located at 9351 Grant Street, Sixth
Floor, Denver, Colorado 80229 (telephone (303) 451-8200). The Company is
currently in the process of relocating its executive offices to Phoenix, Arizona
and anticipates that the relocation will be completed during the fourth quarter
of 2000. This Proxy Statement and the accompanying form of proxy are being first
mailed to shareholders on or about September __, 2000.
Shares Outstanding and Voting Rights
The Company's Board of Directors has fixed the close of business on
September 8, 2000 as the record date (the "Record Date") for the determination
of shareholders entitled to notice of and to vote at the Meeting. The only
outstanding voting stock of the Company is its (i) Common Stock, $.01 par value
per share (the "Common Stock"), of which ___________ shares were outstanding as
of the close of business on the Record Date, and (ii) Series B Convertible
Preferred Stock, $.01 par value per share (the "Convertible Preferred Stock"),
of which ________ shares were outstanding as of the close of business on the
Record Date. Each outstanding share of Common Stock is entitled to one vote.
Each outstanding share of Convertible Preferred Stock is entitled to the number
of votes equal at any time to the number of shares of Common Stock into which
each share of Convertible Preferred Stock would then be convertible. As of the
close of business on the Record Date, each share of Convertible Preferred Stock
had the right to _______ votes at the Meeting. The holder of the Convertible
Preferred Stock votes with the holders of the Common Stock as a single class.
The presence, in person or by proxy, of the holders of shares of Common
Stock and Convertible Preferred Stock representing a majority of votes entitled
to be cast at the Meeting is necessary to constitute a quorum. With respect to
the election of directors, shareholders of the Company may vote in favor of the
nominees, may withhold their vote for the nominees, or may withhold their vote
as to specific nominees. Directors will be elected by a plurality of the votes
of the holders of shares present in person or by proxy at the Meeting. A vote
withheld for a nominee in the election of directors will be excluded entirely
from the vote and will have no effect.
Shareholders of the Company may vote in favor of or against the
proposal to amend the Company's Amended and Restated Articles of Incorporation.
Adoption of the amendment requires the approval of a majority of all votes of
the shares of the Common Stock and Convertible Preferred Stock outstanding as of
the Record Date.
Shareholders of the Company may vote in favor of or against the
proposal to ratify the appointment of KPMG LLP as the Company's independent
auditors. A greater number of votes in favor of this proposal than are voted
against this proposal will be required to ratify the appointment of KPMG LLP.
A proxy submitted by a shareholder may indicate that all or a portion
of the shares represented by such proxy are not being voted by such shareholder
with respect to a particular matter. This could occur, for example, when a
broker is not permitted to vote shares held in street name on certain matters in
the absence of instructions from the beneficial owner of the shares ("broker
non-votes"). For shares are registered in the name of a broker or other "street
name" nominee, the shareholder's votes will only be counted as to those matters
actually voted. The shares subject to any such proxy that are not being voted
with respect to a particular proposal may be considered present and entitled to
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vote for other purposes and will count for purposes of determining the presence
of a quorum. Shares not being voted as to a particular matter, and directions to
"withhold authority" to vote for directors, will be considered as abstentions.
As a result, an abstention or broker non-vote will have no effect with respect
to the election of directors or the proposal to ratify the appointment of KPMG
LLP, but will have the same effect as a vote against the proposal to amend the
Company's Amended and Restated Articles of Incorporation.
Votes cast in person or by proxy at the Meeting will be tabulated by
the election inspectors appointed for the Meeting. The Company's transfer agent,
Computershare Investor Services, will act as inspector of election for the
Meeting.
Proxies properly executed and returned in a timely manner will be voted
at the Meeting in accordance with the directions noted thereon. Any shareholder
giving a proxy has the power to revoke it any time before it is voted, either by
delivering to the Secretary of the Company a signed notice of revocation or a
later dated signed proxy or by attending the Meeting and voting in person.
Attendance at the Meeting will not in itself constitute the revocation of a
proxy. Any written notice of revocation or subsequent proxy should be sent so as
to be delivered to the Company, Attention: Secretary, or hand delivered to the
Secretary of the Company at the address of the Company's offices in Denver, at
or before the vote to be taken at the Meeting.
If no specific instructions are given with respect to the matters to be
acted upon at the Meeting, shares of Common Stock represented by a properly
executed proxy will be voted FOR (1) the election of all six nominees listed
under the caption "Election of Directors," (2) the amendment to the Company's
Amended and Restated Articles of Incorporation eliminating the special
shareholder voting requirements applicable to certain transactions between the
Company and shareholders that beneficially own 10% or more of the Company's
voting stock and (3) the ratification of the appointment of KPMG LLP to serve as
independent auditors for the Company for the year ending December 31, 2000.
The cost of solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, officers and regular employees of the Company
may solicit proxies in person or by telephone. Brokerage firms, nominees,
fiduciaries and other custodians will be requested to forward soliciting
material to the beneficial owners of shares held of record by them and will be
reimbursed for their reasonable expenses.
Annual Report
A copy of the Company's Annual Report, which includes the consolidated
financial statements of the Company for the year ended December 31, 1999, is
being mailed with this Proxy Statement to all shareholders entitled to vote at
the Meeting. The Annual Report to shareholders does not form any part of the
materials for the solicitation of proxies.
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SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of August 23,
2000 as to the beneficial ownership of common stock by certain beneficial owners
of more than five percent of the common stock, each director, certain executive
officers and by all directors and executive officers as group:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Common Stock
------------------------ ---------------------- ------------
<S> <C> <C>
Val M. Avery 14,000 (1) *
James E. Bass 90,000 (2) *
Allen S. Braswell, Jr. 1,794,381 (3) 11.5%
August P. Bruehlman 72,133 (4) *
Jack Calderon 286,448 (5) 1.5%
James A. Doran 37,950 (6)(7) *
Mike Eblin 30,000 (2) *
Jeffrey W. Goettman 35,735,837 (8) 78.3%
Peter Harper 15,000 (2) *
Charles E. Hewitson 1,597,468 (9) 10.3%
Richard L. Monfort 755,250 (7)(10) 4.9%
Douglas P. McCormick -- 0
Jose S. Medeiros -- 0
John C. Walker -- *
Deltec Asset Management Corporation 1,379,740 (11) 8.9%
Dimensional Fund Advisors 1,112,700 (12) 7.2%
Thayer-BLUM Funding, L.L.C. 35,735,837 (13) 78.3%
All directors and executive officers as a
group (13 persons)
38,830,999 (14) 85.1%
</TABLE>
---------------------
* Less than one percent.
(1) Includes 14,000 shares of common stock subject to currently exercisable
options granted under the Company's Equity Incentive Plan.
(2) Represents shares of common stock subject to currently exercisable options
granted under the Company's 2000 Equity Stock Option Plan.
(3) Mr. Braswell's address is 159 Ranch Road, Evergreen, Colorado 80439.
Includes 369,442 shares held by the Allen S. Braswell, Jr. EFTC Family
Limited Partnership, of which Allen S. Braswell Jr and his spouse, Alma L.
Braswell, are the general partners, 11,000 shares held by the Allen S.
Braswell, Sr. Trust, of which Allen S. Braswell, Sr., Allen S. Braswell,
Jr.'s father, is the trustee, 343,735 shares held by the Allen S. Braswell,
Jr. and Alma L. Braswell as joint tenants with right of survivorship, 4,000
shares held by the Allen S. and Alma L. Braswell Family Limited
Partnership, 35,000 shares held by Circuit Test International, LP, of which
Braswell Investment Corporation (Allen S. Braswell, Jr. is President) is a
general partner and 1,031,204 shares held by Braswell GRIT Limited
Partnership of which Braswell Investment Corporation (Allen S. Braswell,
Jr. is President) is a general partner.
(4) Includes 71,633 shares subject to currently exercisable options granted
under the Company's Equity Incentive Plan.
(5) Includes 117,941 shares of common stock subject to currently exercisable,
non-qualified options granted in connection with the commencement of Mr.
Calderon's employment and 112,307 shares of common stock subject to
currently exercisable options granted pursuant to the Company's Equity
Incentive Plan.
(6) Includes 15,750 shares of common stock that are subject to currently
exercisable options under the Company's Equity Incentive Plan.
(7) Includes 21,875 shares of common stock that are subject to currently
exercisable options under the Company's Stock Option Plan for Non-Employee
Directors. Options for an additional 375 shares vest each month until March
2001 under such plan.
(8) Mr. Goettman's address is 1455 Pennsylvania Avenue, N.W., Suite 350,
Washington D.C. 20004. Includes 22,221,705 shares
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issuable upon conversion of the Company's 8.875% Senior Subordinated
Convertible Note issued to Thayer-BLUM and 7,907,222 shares issuable upon
conversion of the Company's Series B Convertible Preferred Stock issued to
Thayer-BLUM. See Note 14 below.
(9) Mr. Hewitson's address is _____________. Includes 11,875 shares of common
stock that are subject to currently exercisable options under the Company's
Stock Option Plan for Non-Employee Directors. Options held by such director
for an additional 375 shares vest each month until March 2001 under such
plan. Also includes 528,531 shares of common stock owned by Matthew
Hewitson and 528,531 shares of common stock owned by Gregory Hewitson,
brothers of Charles Hewitson. Charles Hewitson disclaims beneficial
ownership of the shares of common stock owned by Matthew Hewitson and
Gregory Hewitson.
(10) Includes 271,500 shares held by the Monfort Family Partnership, 250,000
shares held by Rick Montera and Kay Montera as joint tenants with right of
survivorship, 125,000 shares of common stock owned by a partnership in
which Mr. Monfort is the principal investor and 87,000 shares of Common
Stock owned by three of Mr. Monfort's minor children.
(11) The address of Deltec Asset Management Corporation is 645 Fifth Avenue, New
York, NY 10022. Deltec reported shared dispositive power and shared voting
power with regard to 1,379,740 shares of common stock.
(12) The address of Dimensional Fund Advisors is 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401.
(13) Thayer-BLUM was formed to hold securities of the Company. Includes
22,221,705 shares issuable upon conversion of the Company's 8.875% Senior
Subordinated Convertible Note issued to Thayer-BLUM and 7,907,222 shares
issuable upon conversion of the Company's Series B Convertible Preferred
Stock issued to Thayer-BLUM.
(14) Of such 38,830,999 shares, as of August 23, 2000, __________ represent
shares of common stock subject to options that are currently exercisable
or, within 60 days of August 23, 2000, will become exercisable, 22,221,705
shares represent shares issuable upon conversion of the Company's 8.875%
Senior Subordinated Convertible Note issued to Thayer-BLUM and 7,907,222
shares represent shares issuable upon conversion of the Company's Series B
Convertible Preferred Stock issued to Thayer-BLUM.
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PROPOSAL 1 - ELECTION OF DIRECTORS
The number of members of the Company's Board of Directors is currently
fixed at 9. The Company's Amended and Restated Articles of Incorporation provide
for a classified Board of Directors. For purposes of determining the directors'
terms of office, directors are divided into three classes. Each director serves
until the end of the three-year term of the class to which he or she is elected
and until his or her successor has been elected, or until his or her earlier
resignation or removal. However, an individual elected by the directors to fill
a vacancy in the Board of Directors serves, without regard to the class to which
he or she is elected, until the next succeeding annual meeting of shareholders
and until his or her successor has been elected.
Pursuant to the terms of the Company's 8.875% Senior Subordinated
Convertible Note held by Thayer-BLUM Funding, L.L.C. ("Thayer-BLUM"),
Thayer-BLUM has the right to nominate a number of persons for election as
members of the Company's Board of Directors such that the number nominated by
Thayer-BLUM will compose a majority of the total number of directors on the
Board of Directors. Thayer-BLUM also holds shares of Common Stock and Preferred
Stock representing __% of the votes entitled to be cast at the Meeting.
Effective August 22, 2000, James A. Doran, Charles E. Hewitson, Robert K.
McNamara, Robert Monaco, Gerald J. Reid and Masoud S. Shirazi resigned as
directors, and Douglas P. McCormick and Jose S. Medeiros were elected as Class
II directors. Messrs. Goettman and Walker, previously nominated for appointment
to the Company's Board of Directors by Thayer-BLUM, were elected to the
Company's Board of Directors in March 2000. Thayer-BLUM has indicated its
intention to designate an additional person for election as a director, but has
not as yet done so.
James K. Bass was elected to the Board of Directors as a Class I director,
effective upon his joining the Company as its Chief Executive Officer in July
2000. The terms of Messrs. Bass, Goettman, Walker, McCormick and Medeiros.
expire at the Meeting. The other Class I directors, whose terms expire at the
2001 annual meeting of shareholders, are Allen S. Braswell, Jr. and Richard L.
Monfort. The other Class II director, whose term expires at the 2002 annual
meeting of shareholders, is Jack Calderon.
There are no family relationships among any of the directors and executive
officers of the Company.
The Company is soliciting proxies in favor of the reelection of each of the
directors identified above. The Company intends that all properly executed
proxies will be voted for these six nominees unless otherwise specified. If any
of them should be unable to serve as a director, an event that the Company does
not presently anticipate, it is intended that the proxies will be voted for the
election of such other person, if any, as shall be designated by the Board of
Directors.
Information Concerning the Nominees
Class I Directors (Terms Expire in 2001)
James K. Bass, 43, has been the Company's Chief Executive Officer since
July 17, 2000. Prior to joining the Company, since 1996, Mr. Bass was a senior
vice president of Sony Corporation, a company engaged in the development,
design, manufacture and sale of various kinds of electronic equipment,
instruments and devices for consumer and professional markets. Prior to that,
Mr. Bass spent 15 years in various manufacturing management positions at the
aerospace group of General Electric, a company engaged in developing,
manufacturing and marketing a wide variety of products for the generation,
transmission, distribution, control and utilization of electricity .
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Class II Directors (Terms Expire in 2002)
Douglas P. McCormick, 31, has been a Vice President of Thayer Capital
Partners, a private equity investment fund based in Washington D.C., since
January 1999. Prior to joining Thayer Capital Partners, Mr. McCormick was an
Associate at Morgan Stanley, an investment banking firm based in New York City,
from June 1997 until January 1999. Prior to joining Morgan Stanley, Mr.
McCormick was a student at Harvard Business School from September 1995 until
June 1997. Mr. McCormick was an associate at Bankers Trust, an investment and
commercial banking firm based in New York City, from May 1995 until September
1995.
Jose S. Medeiros, 32, has served since August 1998 as a Vice President of
RCBA Strategic Partners, L.P., a member of Thayer-BLUM. Before joining RCBA
Strategic Partners, L.P., Mr. Medeiros was a Vice President in the Technology
M&A group of Robertson Stephens & Company, an investment banking firm based in
San Francisco, from June 1996 to August 1998. Before joining Robertson Stephens,
Mr. Medeiros was an associate at McKinsey & Company, a strategic consulting
firm, focusing on strategy, M&A and turnaround engagements.
Class III Directors (Terms Expire in 2003)
Jeffrey W. Goettman, 41, has served since February 1998 as a Managing
Director for Thayer Capital Partners, a private equity investment fund based in
Washington, D.C. Before joining Thayer Capital Partners, Mr. Goettman was a
Managing Director for Robertson Stephens & Company from February 1997 until
February 1998. Mr. Goettman has been a director of Cosmotronic Corporation, a
printed circuit board fabricator based in Irvine, California, since April 1998,
a director of TTM Technologies, Inc., a printed circuit board fabricator based
in Redmond, Washington, since December 1998 and a director of Cape Success, a
holding company for commercial and professional staffing firms and an e-commerce
consulting firm, since December 1999. Mr. Goettman was elected by the directors
to the Company's board in March 2000 to fill the vacancy created by the increase
of the size of the board from ten to eleven directors.
John C. Walker, 38, has been a Partner with BLUM Capital Partners, L.P., a
San Francisco-based private equity and strategic block investment firm, since
April 1997. Prior to joining BLUM Capital Partners, L.P., Mr. Walker was the
Vice President of PEXCO Holdings, Inc., a custom medical device manufacturer
based in Massachusetts, from 1992 to 1997. Mr. Walker is also a member of the
Board of Directors for Smarte Carte Corporation, a company providing products
and services to travelers to efficiently store or move their belongings. Mr.
Walker was elected to the Company's board in March 2000 by the directors to fill
the vacancy created by the resignation of a director.
As discussed below, the directors nominated by Thayer-BLUM have an interest
in the approval of Proposal 2 because it will facilitate the ability of the
Company to engage in certain transactions with Thayer-BLUM. See "Proposal 2 -
Amendment to the Company's Amended and Restated Articles of Incorporation."
Required Vote
Directors will be elected by a plurality of the votes of the holders of
shares present in person or by proxy at the Meeting.
The Board of Directors recommends a vote FOR each Nominee.
Information Concerning the Directors Continuing in Office
Class I Directors (Terms Expire in 2001)
Richard L. Monfort, 45, served as President and Chief Operating Officer of
ConAgra Red Meat Companies from July 1989 to June 1995. From June 1995 to the
present, Mr. Monfort was engaged in private investing activities. Mr. Monfort
recently joined the board of the University of Colorado Hospital Authority. Mr.
Monfort has been a director of Famous Dave's of America, Inc., an owner and
operator of restaurants, since March 1997. Mr. Monfort has been a director of
the Company since 1993.
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Allen S. Braswell, Jr., 41, currently serves as the President of Jabil
Global Services, a subsidiary of Jabil Circuit, Inc., which acquired EFTC
Services Group from the Company in September 1999. Mr. Braswell was Sr. Vice
President of EFTC Corporation and President of the Company's EFTC Services Group
from September 1997 until September 1999 when EFTC Services Group was acquired
by Jabil Circuit, Inc. Mr. Braswell had been President of Circuit Test, Inc.
("CTI") since October 1993 and Chief Executive Officer of CTI since October 1996
until the acquisition by the Company of CTI and related companies which became
the EFTC Services Group in September 1997. Mr. Braswell served on CTI's Board of
Directors since its founding in 1981. Mr. Braswell has been director of the
Company since September 1997.
Class II Director (Term Expires in 2002)
Jack Calderon, 47, has been the Chairman of the Board since June 1998. From
August 1996 to July 2000, Mr. Calderon was the Company's President and Chief
Executive Officer. From January 1996 to August 1996, Mr. Calderon was President
of Sales Management International, a private consulting firm through which Mr.
Calderon provided strategic consulting to executive officers of various
high-technology companies. From 1992 to 1995, Mr. Calderon worked for Group
Technologies, an electronic contract manufacturing company. Mr. Calderon held
several management positions at Group Technologies, most recently as its Vice
President and General Manager of International Operations, before leaving to
form his own consulting firm. Mr. Calderon is a member of the Board of Directors
of Interconnecting and Packaging Electronic Circuits, a trade association for
electronic contract manufacturing companies. Mr. Calderon has been a director of
the Company since August 1996.
Other Executive Officers
Val M. Avery, 50, has been the Company's Chief Information Officer since
June 1998. Prior to joining the Company, from 1997 until June 1998, Mr. Avery
was an independent management consultant. From 1997 to 1996, Mr. Avery was
Director of Enterprise Solutions for Solbourne, Inc., a consulting services
company. Prior to that, from 1992 to 1996, Mr. Avery was a Senior Industry
Consultant for Oracle Corporation, a supplier of software for information
management.
August P. Bruehlman, 44, has been the Company's Chief Administrative
Officer since August 1996 and Secretary of the Company since February 1998. Mr.
Bruehlman joined the Company in 1988 and has held several management positions,
most recently as Director of Human Resources. Mr. Bruehlman's current
responsibilities at the Company include corporate facilities and human
resources.
Peter Harper, 39, joined the Company as Chief Financial Officer on July 24,
2000. Prior to joining the Company, Mr. Harper was Vice President of Finance at
Iomega Corporation, a company which designs, manufactures and markets innovative
personal and professional storage solutions, based on removable-media
technology, for users of personal computers and consumer electronics devices
since 1996. Prior to joining Iomega, Mr. Harper spent twelve years in various
management positions at General Electric.
Mike Eblin, 38, joined the Company as Senior Vice President of Operations
on July 24, 2000. Prior to joining the Company, Mr. Eblin was Director of
Operations of Sony Corporation since 1995. Prior to joining Sony Corporation,
Mr. Eblin held various manufacturing management positions in the Electronics
Controls division of United Technologies and Hughes Electronics, part of General
Motors Corporation, an automobile manufacturer and communications systems and
financial services provider.
James A. Doran, 44, has been Treasurer of the Company since April 2000.
From September 1999 until April 2000, Mr. Doran was Controller of the Company.
From July 1994 until September 1999, Mr. Doran was a senior audit manager with
Hein & Associates, LLP, a public accounting firm. From 1993 to 1994 Mr. Doran
was Vice President and Chief Financial Officer of Gerrity Oil & Gas Corporation,
an independent oil and gas operator in Denver, Colorado, whose stock is listed
on the New York Stock Exchange. Prior to joining Gerrity, Mr. Doran was a
shareholder of
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Williams, Richey & Co., P.C., an accounting and consulting firm in Denver,
Colorado, and before that was a Senior Manager with Coopers & Lybrand. Mr. Doran
was a director of the Company from 1993 until August 2000.
The Company's executive officers are Messrs. Avery, Bass, Bruehlman,
Calderon, Doran, Eblin and Harper.
Committees and Meetings
The Board of Directors has established two standing committees: an Audit
Committee and a Compensation Committee.
Audit Committee. The Audit Committee consists of three directors who are
not employees of the Company: Jeffrey W. Goettman, John C. Walker and Richard L.
Monfort. Charles E. Hewitson, Robert K. McNamara and Masoud S. Shirazi also
served as members of the Audit Committee until they resigned from the Board of
Directors effective August 22, 2000. The Audit Committee met four times during
1999. The functions of the Audit Committee are to recommend to the Board of
Directors the appointment of independent auditors, to review the plan and scope
of any audit of the Company's financial statements and to review the Company's
significant accounting policies and other related matters.
Compensation Committee. The Compensation Committee consists of three
directors who are not employees of the Company: Jeffrey W. Goettman, John C.
Walker and Richard L. Monfort. Charles E. Hewitson, Robert K. McNamara, Masoud
S. Shirazi and Gerald J. Reid also served as members of the Compensation
Committee until they resigned from the Board of Directors effective in August
22, 2000. The Compensation Committee met four times during 1999. The functions
of the Compensation Committee are to make recommendations to the Board of
Directors regarding the compensation of executive officers and to administer the
Company's Equity Incentive Plan, Stock Option Plan for Non-Employee Directors
and the Company's new 2000 Equity Stock Option Plan (as approved by the
Company's shareholders at a special meeting held on August 22, 2000). It also
makes recommendations to the Board of Directors with respect to the compensation
of the Chairman of the Board of Directors and the Chief Executive Officer and
approves the compensation paid to other senior executives.
During 1999, the Board of Directors met eight times and various committees
of the Board of Directors met a total of eight times. Each director attended
more than 75% of the meetings of the Board of Directors and meetings of
committees on which such director served.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16 of the Securities Exchange Act of 1934, the Company's
directors and certain of its officers, and persons holding more than ten percent
of the Company's common stock are required to file forms reporting their
beneficial ownership of the Company's common stock and subsequent changes in
that ownership with the Securities and Exchange Commission. Such persons are
also required to furnish the Company copies of forms so filed. Based upon a
review of copies of such forms filed with the Company: Mr. Calderon was late in
filing a report on Form 4 relating to one transaction and Stuart W. Fuhlendorf,
formerly the Company's chief financial officer, was late in filing a report on
Form 4 relating to one transaction.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Directors
Directors who are not also employees of the Company receive $1,000 for each
quarter in which the director attended a meeting in person and $250 per
additional Board or committee meeting attended in person, unless such committee
meeting is held in conjunction with a meeting of the full Board of Directors.
Directors who are also employees of the Company receive no additional
compensation for serving as directors. The Company reimburses all
8
<PAGE>
of its directors for reasonable travel and out-of-pocket expenses in connection
with their attendance at meetings of the Board of Directors or committees of the
Board of Directors. The Company did not pay or accrue any director fees from
July 1, 1999 through March 31, 2000. The Company has established a Stock Option
Plan for Non-Employee Directors (the "Director Plan"). Options granted under the
Director Plan have an exercise price equal to the fair market value of the
common stock on the date of grant, are subject to certain vesting periods and
expire 10 years following the date of grant.
Executive Compensation - Summary Compensation Table
The following table sets forth certain information regarding the
compensation paid in the last three fiscal years to the most highly compensated
executive officers of the Company.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Name and Annual Compensation Compensation
------------------- Awards All Other
Principal Position Year Salary($) Bonus($) Options(#) Compensation($)
------------------ ---- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Jack Calderon 1999 (1) $287,894 -- -- $2,241(2)
Chairman, President 1998 * $240,885 $82,500 175,000(3) $2,218(2)
and Chief Executive 1997 $200,000 $40,000 200,000 $10,147(2)
Officer (4)
Stuart W. Fuhlendorf 1999 (5) $180,019 -- 200,000(6) --
Vice President and Chief 1998 * $178,385 $28,050 24,615(7) --
Financial Officer (8) 1997 $ 85,000 $33,500 110,000(7) --
August P. Bruehlman 1999 (9) $123,317 -- -- --
Chief Administrative 1998 * $120,692 $21,840 14,769(10) --
Officer and Secretary 1997 $ 77,086 $7,800 75,000 --
Allen S. Braswell, Jr. 1999 $122,740 -- -- --
Senior Vice President 1998 * $168,756 $14,438 60,818(11) 16,849 (12)
and President of EFTC 1997 (13) $ 47,115 - 110,000 --
Services (14)
Chuck Tillett 1999 (15) $214,077 -- -- --
Chief Operations 1998 $ 83,970 -- 150,000 --
Officer (16) 1997 -- -- -- --
Val Avery 1999 $130,000 -- 5,000 --
Chief Information Officer 1998 (17) $ 73,018 -- 85,000 --
1997 -- -- --
</TABLE>
--------------------
* These officers voluntarily forfeited their salaries for one pay period
in 1998 to assist the Company's short-term liquidity position. If they
had collected their salaries for that pay period, Mr. Calderon's salary
for 1998 would have been $250,000; Mr. Fuhlendorf's salary for 1998
would have been $185,000; Mr. Bruehlman's salary for 1998 would have
been $125,000; and Mr. Braswell's salary for 1998 would have been
$175,000.
(1) Mr. Calderon voluntarily took a 15% reduction in salary during the period
beginning July 4, 1999 through October 10, 1999 to assist the Company's
short-term liquidity position. If Mr. Calderon had collected his full
salary for that period, his salary for 1999 would have been $300,000.
(2) Represents allocation of income associated with personal use of an
automobile provided by the Company.
9
<PAGE>
(3) Mr. Calderon was granted 350,000 options in June 1998. These options were
canceled and Mr. Calderon was granted 175,000 new options in connection
with a repricing of options by the Company in December 1998.
(4) Mr. Calderon resigned his positions as President and Chief Executive
Officer effective July 17, 2000.
(5) Mr. Fuhlendorf voluntarily took a 10% reduction in salary during the period
beginning July 4, 1999 through October 10, 1999 to assist the Company's
short-term liquidity position. If Mr. Fuhlendorf had collected his full
salary for that period, his salary for 1999 would have been $185,000.
(6) Due to Mr. Fuhlendorf's resignation effective March 27, 2000, 165,000
options expired on March 27, 2000 and 35,000 expired on June 27, 2000.
(7) 50,000 options granted to Mr. Fuhlendorf in 1997 were canceled and 24,615
new options were granted to Mr. Fuhlendorf in connection with a repricing
of options by the Company in December 1998.
(8) Mr. Fuhlendorf resigned from the Company effective March 27, 2000.
(9) Mr. Bruehlman voluntarily took a 5% reduction in salary during the period
beginning July 4, 1999 through October 10, 1999 to assist the Company's
short-term liquidity position. If Mr. Bruehlman had collected his full
salary for that period, his salary for 1999 would have been $125,000.
(10) 30,000 options granted to Mr. Bruehlman in 1997 were canceled and 14,769
new options were granted to Mr. Bruehlman in connection with a repricing of
options by the Company in December 1998.
(11) 110,000 options granted to Mr. Braswell in 1997 were canceled and 60,818
new options were granted to Mr. Braswell in connection with a repricing of
options by the Company in December 1998.
(12) Represents payment to defray moving expenses related to Mr. Braswell's
relocation to Denver, Colorado in connection with his employment with the
Company.
(13) Mr. Braswell was employed by the Company in September 1997.
(14) Mr. Braswell's employment with the Company terminated on August 31, 1999.
(15) Mr. Tillett voluntarily took a 10% reduction in salary during the period
beginning July 4, 1999 through October 10, 1999 to assist the Company's
short-term liquidity position. If Mr. Tillett had collected his full salary
for that period, his salary for 1999 would have been $220,000.
(16) Mr. Tillett became the Company's Chief Operations Officer in October 1998
and resigned his employment with the Company effective July 28, 2000.
(17) Mr. Avery became the Company's Chief Information Officer in June 1998.
Options Granted
The following table sets forth information concerning options granted
in 1999 to the Company's executive officers named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Option Grants in the Last Fiscal Year
Percent (%) Potential Realizable Value at
of Total Assumed Annual Rate of Stock
Options Price Appreciation for Option
Number Granted to Exercise -----------------------------
of Options Employees Price per Expiration
Name Granted During 1999 Share Date 5% 10%
---- ------- ----------- ----- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Jack Calderon 0 -- -- -- -- --
Stuart W. Fuhlendorf 200,000 16.4 $5.00 5/17/09 (1) $110,057 $278,905
August P. Bruehlman 0 -- -- -- -- --
Allen S. Braswell, Jr. 0 -- -- -- -- --
Chuck Tillett 0 -- -- -- -- --
Val Avery 5,000 0.4 $4.00 1/25/09 $12,578 $31,875
---------------
* Less than 0.1%.
</TABLE>
10
<PAGE>
(1) Due to Mr. Fuhlendorf's resignation effective March 27, 2000, 165,000
options expired on March 27, 2000 and 35,000 expired on June 27, 2000.
Option Exercises and Year End Option Values
The following table sets forth information concerning options
exercised in 1999 and outstanding options held by the Company's executive
officers named in the Summary Compensation Table as of December 31, 1999, the
end of the Company's last fiscal year.
<TABLE>
<CAPTION>
Option Exercises in the Last Fiscal Year and Fiscal Year-End Option Values
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired on Value December 31, 1999(#) December 31, 1999($)
Name Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jack Calderon -- -- 230,248 / 211,924 --/--
Stuart W. Fuhlendorf -- -- 124,781 / -- --/--
August P. Bruehlman -- -- 71,633 / 11,077 --/--
Allen S. Braswell, Jr. -- -- -- / -- --/--
Chuck Tillett -- -- 30,000 / 120,000 --/--
Val Avery -- -- 14,000 / 76,000 --/--
</TABLE>
Compensation Committee Report
The report of the Compensation Committee of the Board of Directors shall
not be deemed incorporated by reference into any filing under the Securities Act
of 1933 or under the Securities Exchange Act of 1934 by any general statement
incorporating this information statement by reference, except to the extent that
the Company specifically refers to this report as being incorporated therein by
reference, and shall not otherwise be deemed filed under such Acts.
Compensation Policies. The Company's executive compensation policies are
implemented by the Compensation Committee of the Board of Directors (the
"Committee"). The Company is committed to providing an executive compensation
program that promotes and supports the Company's goals and its long-term
business objectives. The Company's compensation programs are intended to provide
executives with incentives to contribute to the Company's successful financial
performance and to enable the Company to attract, retain and reward highly
skilled executive officers who contribute to the long-term success of the
Company. The Company has designed its executive compensation program to
implement the above policies. The Company's executive compensation program is
comprised of three elements, each of which is determined in part by corporate
performance. These elements consist of base salary, annual bonus and equity
incentive compensation.
Base Salary Compensation. The Committee evaluates and establishes the base
salary levels of the President and Chief Executive Officer, the Chief Financial
Officer, the Chief Administrative Officer, the Chief Information Officer, the
Chief Operations Officer, and the Senior Vice Presidents of the Company. The
Committee's determinations are based on certain factors, none of which are given
more weight than any other factor, including, a survey of compensation levels
for companies with market valuations, lines of business and/or revenues
comparable to the Company, level of responsibility, performance of the Company,
including its stock price performance, and individual performance of the
executive officer.
Annual Bonus Compensation. The Company has established a Management Bonus
Plan. No bonuses were paid in 2000 to executives from the Management Bonus Plan
for 1999. The Committee has determined that for 2000,
11
<PAGE>
in accordance with the Company's executive compensation policies, a bonus plan
based on achieving specific performance targets, including corporate earnings
per share, and will provide an incentive to executives to enhance the financial
performance of the Company. The 2000 Bonus Plan will provide the President,
Chief Executive Officer, the Chief Financial Officer, the Chief Administrative
Officer, the Chief Information Officer, the Chief Operations Officer, and the
Senior Vice Presidents of the Company with the opportunity to receive cash
bonuses for achieving specific performance targets as determined by the
Committee.
Equity Incentive Compensation. Long-term management incentives are
provided by periodically granting stock options to executives and other
directors and managers under the Company's Equity Incentive Plan. The Committee
uses specific criteria to determine such stock option grants. In granting stock
options, the Committee considers factors that are generally the same as those
used in determining base salaries and annual bonuses. The Committee also
considers the number of options previously awarded to and held by executive
officers in determining current option grants.
Chief Executive Officer Compensation. For 1999, the compensation of the
Company's Chief Executive Officer, Mr. Calderon, was determined by such
officer's employment agreement with the Company. The Compensation Committee
believes that such compensation of Mr. Calderon is justified due to the
Company's financial condition and performance during 1999.
Prior to the date of this Proxy Statement, certain members of the
Committee were replaced. The Company does not expect a significant change in its
present compensation program with the appointment of new members of the
Committee, although a review of compensation policies by the new members could
result in changes to the Company's compensation program. The preceding report is
based upon information available to the current members of the Committee about
the Company's compensation program as it was implemented by the previous members
of the Committee.
COMPENSATION COMMITTEE
Richard L. Monfort
Jeffrey W. Goettman
John C. Walker
Compensation Committee Interlocks and Insider Participation
Director Representation of Personal Electronics. Robert K. McNamara,
formerly the Chairman of the Compensation Committee until he resigned from the
Board of Directors effective August 22, 2000, is a Managing Director of
Broadview International LLC ("Broadview"), an investment banking firm, and in
such capacity represented Personal Electronics in connection with its
acquisition by the Company. Broadview is an investment bank that has represented
numerous companies in connection with mergers and acquisitions in the technology
sector. Broadview received a fee of $642,500 in connection with the consummation
of the acquisition of Personal Electronics in March 1998 and a fee of $500,000
in connection with the sale of the Company's Services Division in September
1999.
Sale/Leaseback Transaction. Richard L. Monfort, currently a member of
the Compensation Committee, entered into a sale/leaseback transaction with the
Company. The Company sold two manufacturing facilities located in Newburg,
Oregon and Tucson, Arizona to Mr. Monfort for $10.5 million. Mr. Monfort leased
these manufacturing facilities back to the Company for a term of five years with
aggregate monthly payments of $90,000. At the end of the lease term, the Company
had the option to repurchase the facilities for approximately $9.4 million. In
May 1999, the lease was amended to eliminate the purchase option, which resulted
in the recharacterization of the lease from a capital lease to an operating
lease. As such, the buildings and the related debt no longer appear on the
Company's balance sheet.
12
<PAGE>
Issuance of Subordinated Notes and Warrants. Mr. Monfort purchased $15
million in aggregate principal amount of subordinated notes issued by the
Company on September 9, 1997. The subordinated notes had a maturity date of
December 31, 2002 and provided for interest at a variable rate (adjusted
monthly) equal to 2.00% over the applicable LIBOR rate. The proceeds of these
notes were used to acquire certain assets from Honeywell (formerly AlliedSignal,
Inc.). In connection with the issuance of these subordinated notes, the Company
issued warrants to purchase 500,000 shares of the Company's common stock at an
exercise price of $8.00 per share to Mr. Monfort. The warrants were exercised on
October 9, 1997 resulting in net proceeds to the Company of $4.0 million. The
Company prepaid $10.0 million of the outstanding principal amount of these notes
early in December 1997 from the proceeds of a loan from the Company's senior
lender. In connection with such prepayment, the Company agreed to pay a fee of
approximately $325,000 to be paid in equal monthly increments until the maturity
of the notes.
In November 1999, Mr. Monfort purchased $5 million in aggregate principal
amount of subordinated notes issued by the Company. These notes had a maturity
date of March 30, 2000 and provided for interest at a rate of 10%. The proceeds
of these notes were used for general operating purposes. In connection with the
Purchase Agreement, the Company repaid $7.0 million in principal amount
outstanding under both subordinated notes. In addition, the Company paid the
remaining outstanding prepayment fee of approximately $150,000 due in connection
with the prepayment of the September 1997 notes and a fee of $100,000 due upon
maturity of the November 1999 note. In addition, the November note agreement now
provides for the $3.0 million in aggregate principal amount of subordinated
notes, with a maturity date of March 30, 2004 and bearing interest at 10%.
Transactions with Shirazi & Associates, P.C. During 1999, third parties
doing business with the Company paid Shirazi & Associates, P.C., an employee
benefit and consulting firm owned by Masoud Shirazi, one of the Company's
directors until he resigned effective August 22, 2000, approximately $230,000 in
commissions.
Recapitalization Transaction. Mr. Goettman and Mr. Walker, each of whom are
members of the Compensation Committee, are partners in Thayer Capital Partners
and BLUM Capital Partners, respectively. Thayer- BLUM Funding, L.L.C., an
affiliate of both Thayer Capital Partners and BLUM Capital Partners has entered
into the Purchase Agreement with the Company which provides for a
recapitalization of the Company.
Hewitson Consulting Agreements. On February 24, 1997, the Company entered
into five-year consulting agreements with Messrs. Charles E. Hewitson (one of
the Company's directors until he resigned effective August 22, 2000), Matthew J.
Hewitson and Gregory C. Hewitson. Each of these consultants is being paid
approximately $160,000 per year and reimbursed his out-of-pocket expenses
associated with the performance of his duties. Each has agreed to devote
sufficient working time, attention and energies to the business of the Company,
but not in excess of 80% of the equivalent of being engaged on a full-time
basis. The Consulting Agreements prohibit the consultant from providing services
to, or owning 5% or more of the outstanding stock of, a competitor of the
Company during the term of his engagement and for two years after the
termination of his engagement.
Stock Price Performance Graph
The stock price performance graph shall not be deemed incorporated by
reference into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 by any general statement incorporating this
information statement by reference, except to the extent that the Company
specifically refers to this information as being incorporated therein by
reference, and shall not otherwise be deemed filed under such Acts.
The graph below compares the cumulative return of the Company's common
stock against the Nasdaq Composite Index and an Electronic Manufacturing Service
Index, which is an index of public electronic manufacturing service providers
selected by the Company as representative of the industry in which the Company
competes. The cumulative return depicted is based upon an initial investment of
$100 over the period March 3, 1994 through December 31, 1999 and the last
reported sale price of the common stock as reported on the Nasdaq National
Market March 3, 1994 ($7.88), the first day on which the common stock was
traded, and on the last trading day of each year ended thereafter, including
December 30, 1994 ($7.63), December 29, 1995 ($4.00), December 30, 1996 ($4.63),
December 31,1997 ($16.25), December 31, 1998 ($5.063) and December 31, 1999
($1.8125).
13
<PAGE>
The Company is using the internally generated Electronic Manufacturing
Service Index (the "EMS Index") for the purpose of presenting relative stock
price performance information in the Company's proxy statements. The EMS Index
represents a smaller group of companies than the Nasdaq Electronic Component
Index and only includes electronic manufacturing service providers engaged in
business similar to the Company's. In contrast, the Nasdaq Electronic Component
Index includes companies engaged in all areas of manufacturing electronic
components, including both parts and assemblies as well as circuit boards and
finished products. Consequently, the Company believes that the electronic
manufacturing service providers that are included within the EMS Index are more
representative of the industry in which the Company competes. The Company also
believes that industry analysts use groups of companies substantially similar to
those included in the Company's EMS Index when analyzing the performance of the
Company and its competitors. In addition to the Company, the EMS Index includes
the following issuers: Benchmark Electronics, Inc., IEC Electronics Corp., Jabil
Circuit, Inc., Plexus Corp., Sanmina Corporation, SCI Systems, Inc. and
Solectron Corporation. DII Group, Inc. had been included in the Company's EMS
index in the past, but was eliminated after it was acquired by Flextronics
International Ltd.
[GRAPHIC_OMITTED]
<TABLE>
<CAPTION>
NAME 3/3/94 12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
----
<S> <C> <C> <C> <C> <C> <C> <C>
Nasdaq Composite
Index 100 95.84 134.10 164.55 200.15 279.47 518.66
Electronic
Manufacturing 100 76.40 95.50 119.10 215.01 309.82 419.92
Service Index
EFTC Corporation 100 101.67 53.33 61.67 216.67 67.50 24.17
</TABLE>
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Employment Agreements
The Company has entered into employment agreements with certain of its
directors and current and former employees, including Messrs. Braswell, Bass,
Calderon, Fuhlendorf and Monaco.
Braswell Employment Agreement. Mr. Braswell's agreement provided for him to
be employed for a term of three years, expiring on September 30, 2000, at a base
salary of $175,000. Mr. Braswell's employment agreement with the Company
terminated on August 31, 1999 in connection with his accepting employment with
Jabil Global Services, a subsidiary of Jabil Circuit, Inc., after the sale of
the Company's EFTC Services Group to Jabil. Mr. Braswell served as President of
EFTC Services Group prior to its acquisition by Jabil.
Bass Employment Agreement. Mr. Bass's agreement provides for him to be
employed as Chief Executive Officer of the Company for a term beginning on July
17, 2000 and ending on December 31, 2003, which term automatically extends for
successive one-year periods until the agreement is terminated. Mr. Bass's
agreement provides for a minimum annual base salary of $300,000 and
incentive-based bonus compensation in an amount determined by the Compensation
Committee. The Company may terminate such employment agreement with or without
cause. In case of a termination without cause, however, the Company must
continue Mr. Bass's base salary and prorated bonus compensation for a period of
one year from the date of termination. Mr. Bass's agreement provided for an
initial award of stock options to purchase 900,000 shares of common stock at an
exercise price of $2.63 per share under the Company's 2000 Equity Stock Option
Plan. Options to purchase 450,000 shares vest over five years (20% of which vest
immediately, the remaining 80% vest incrementally over five years) and options
to purchase the remaining 450,000 shares vest based upon achieving certain
benchmark internal rates of return in the Company.
Calderon Employment Agreement. Mr. Calderon's agreement provides for him to
be employed in his current position for a term of approximately three and
one-half years ending December 31, 2001, which then automatically extends for
90-day periods until terminated. Mr. Calderon's agreement provides for a base
salary of $300,000 for the year ended December 31, 1999 and a base salary of
$350,000 for the remaining term of the employment agreement. The Company may
terminate such employment agreement with or without cause. In case of a
termination without cause, however, the Company must continue the terminated
employee's salary and benefits for a period of one year. Mr. Calderon's
agreement also provides for his salary and benefits to continue for twelve
months after termination of employment if the employment agreement expires and
Mr. Calderon does not remain an employee of the Company. Mr. Calderon's
agreement also provided for the Company to grant to Mr. Calderon non-qualified
stock options to purchase 350,000 shares of common stock at an exercise price of
$16.00. Mr. Calderon elected to reprice such options in December 1998. Such
options vest in 10% increments upon the common stock of the Company achieving
certain trading levels above the exercise price. Mr. Calderon resigned from his
positions as President and Chief Executive Offer of the Company, effective July
17, 2000, but remained Chairman of the Board and an employee of the Company.
Fuhlendorf Employment Agreement. Mr. Fuhlendorf's employment agreement had
provided for him to be employed as Chief Financial Officer, for an initial term
of three years, which ended in March 1997, automatically extended for 90-day
periods until terminated. Mr. Fuhlendorf resigned from his position with the
Company, effective March 27, 2000.
Monaco Employment Agreement. The Company had an employment agreement with
Mr. Monaco which provided for him to be employed in his current capacity as
General Manager of Personal Electronics at a base salary of $125,000 for an
initial term of two years. This contract expired on March 31, 2000 and the
parties are currently in the process of negotiating a new employment agreement.
The Company and Mr. Monaco have agreed in principle that the Company will employ
Mr. Monaco as a general manager of the Company. Mr. Monaco will receive an
annual base salary of $200,000 per year, bonus compensation in an amount based
upon mutually determined performance criteria and bonus compensation contingent
upon Mr. Monaco's continued employment. The Company has agreed to grant Mr.
Monaco options to purchase 300,000 shares of common stock at an exercise price
of $2.63 per share under the Company's 2000 Equity Stock Option Plan, subject to
approval of the plan by the Company's shareholders. Options
15
<PAGE>
to purchase 150,000 shares vest over five years and options to purchase the
remaining 150,000 shares vest based upon achieving certain benchmark internal
rates of return.
Other Transactions
The information set forth above under the caption "Compensation
Committee Interlocks and Insider Participation" is incorporated herein by
reference.
PROPOSAL 2 - AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED ARTICLES OF INCORPORATION
The Company's Board of Directors has determined that amending the
Company's Amended and Restated Articles of Incorporation in the manner described
below is advisable and in the best interest of the Company's shareholders and
recommends that the shareholders approve and adopt the proposed amendment. The
proposed amendment would delete Article Eight of the Company's Amended and
Restated Articles of Incorporation in its entirety, thereby eliminating the
special shareholder voting requirements applicable to certain transactions
("Interested Transactions") between the Company and shareholders that own 10% or
more of the Company's voting stock (the "Interested Shareholder"). Pursuant to
the provisions of the Company's Articles, the proposed amendment received
Continuing Director Approval (as defined below) at a meeting of the Company's
Board of Directors held on ______, 2000 and was submitted to the Company's
shareholders for approval at the Meeting.
Article Eight currently provides that any Interested Transaction must
be approved by (i) shareholders owning 80% or more of the Company's voting stock
and (ii) at least a majority of the Company's voting stock not beneficially
owned by the Interested Shareholder, unless such Interested Transaction has been
approved either by Continuing Director Approval or the Board of Directors before
the Interested Shareholder became an Interested Shareholder. A "Continuing
Director" is any member of the Company's Board of Directors who is not an
Interested Shareholder, or an affiliate or associate of an Interested
Shareholder, involved in an Interested Transaction and (i) who was a member of
the Board of Directors before the Interested Shareholder became an Interested
Shareholder or (ii) is a successor of such a member who was nominated to succeed
such member or to fill a newly created position on the Board of Directors by
Continuing Director Approval. "Continuing Director Approval" means approval by
at least two-thirds of the Continuing Directors at a time when the number of
Continuing Directors is at least equal to two-thirds of the number of Continuing
Directors immediately before the Interested Shareholder became an Interested
Shareholder.
Currently, a majority of the Company's Board of Directors are not
Continuing Directors. Thus, pursuant to the requirements of Article Eight, there
are not a number of Continuing Directors sufficient to approve any Interested
Transaction. Therefore, any Interested Transaction would need to be approved by
the Company's shareholders. Calling a special shareholders meeting to approve an
Interested Transaction would be expensive and time-consuming. By removing the
special shareholder voting requirements that would otherwise be applicable, the
proposed amendment would permit the Company greater flexibility in pursuing
certain transactions that may be advantageous and may improve the Company's
ability to meet its capital needs in the future. Any transaction involving an
affiliate of Thayer- BLUM would require the approval of shareholders owning 80%
or more of the Company's voting stock and at least a majority of the Company's
voting stock not beneficially owned by Thayer-BLUM.
The directors nominated by Thayer-BLUM have an interest in the approval
of this proposal because it will enhance the ability of the Company to engage in
Interested Transactions with Thayer-BLUM.
If this proposal is approved, Article Eight of the Amended and Restated
Articles of Incorporation will be amended in its entirety to read as follows:
16
<PAGE>
ARTICLE EIGHT
[INTENTIONALLY OMITTED]
Required Vote
Adoption of the amendment requires the approval of a majority of all
votes of the shares of the Common Stock and Convertible Preferred Stock
outstanding as of the Record Date.
The Board of Directors recommends a vote FOR this proposal to amend the
Company's Amended and Restated Articles of Incorporation to delete Article Eight
in its entirety.
PROPOSAL 3 - APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG LLP as
independent auditors to audit the financial statements of the Company for the
year ending December 31, 2000.
Representatives from KPMG LLP are expected to be present at the Meeting
and shall have the opportunity to make a statement, if they desire to do so, and
will be available to respond to appropriate questions.
Required Vote
A greater number of votes in favor of this proposal than are voted
against this proposal will be required to ratify the appointment of KPMG LLP.
The Board of Directors recommends a vote FOR this proposal to ratify
the appointment of KPMG LLP as the Company's independent auditors.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be presented at the 2001
annual meeting of shareholders must be received by the Company on or before
January 31, 2001 to be included in the proxy materials of the Company relating
to such meeting.
OTHER BUSINESS
The Company does not anticipate that any other matters will be brought
before the Meeting. However, if any additional matters shall properly come
before the Meeting, it is intended that the persons authorized under proxies
may, in the absence of instructions to the contrary, vote or act thereon in
accordance with their best judgment.
BY THE BOARD OF DIRECTORS
August P. Bruehlman
Secretary
Denver, Colorado
September ___, 2000
<PAGE>
EFTC CORPORATION
9351 Grant Street, Suite 600
Denver, CO 80229
Proxy for Annual Meeting of Shareholders to be held on October 2, 2000
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Jack Calderon and Peter Harper, or either
of them, with full power of substitution, as a proxy or proxies to represent the
undersigned at the Annual Meeting of Shareholders to be held on October 2, 2000
or any adjournment thereof (the "Annual Meeting") and to vote thereat, as
designated below, all the shares of common stock of EFTC Corporation held of
record by the undersigned at the close of business on September 8, 2000, with
all the power that the undersigned would possess if personally present, in
accordance with the instructions noted hereon, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE
LISTED NOMINEES AND APPROVAL OF ITEM 2. IF NOT OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED PURSUANT TO THE BOARD OF DIRECTORS RECOMMENDATIONS.
1. PROPOSAL TO ELECT (i) one Class I director to serve until the 2001 annual
meeting of shareholders, (ii) two Class II directors to serve until the 2002
annual meeting of shareholders and (iii) two Class III directors to serve until
the 2003 annual meeting of shareholders. To withhold authority for any
individual, strike through his name below.
o For all nominees listed (except as marked to the contrary)
o WITHHOLD AUTHORITY to vote for all nominees listed
Nominees: CLASS I DIRECTOR:
James K. Bass
CLASS II DIRECTORS:
Douglas P. McCormick; Jose S. Medeiros
CLASS III DIRECTORS:
Jeffrey W. Goettman; John C. Walker
2. PROPOSAL TO APPROVE AN AMENDMENT to the Company's Amended and Restated
Articles of Incorporation eliminating the special shareholder voting
requirements applicable to certain transactions between the Company and
shareholders that beneficially own 10% or more of the Company's voting stock.
o FOR o AGAINST o ABSTAIN
3. PROPOSAL TO RATIFY THE SELECTION OF KPMG LLP as the independent auditors to
audit the financial statements of the Company for the fiscal year ending
December 31, 2000.
o FOR o AGAINST o ABSTAIN
PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
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The shares represented by this proxy will be voted as directed by the
shareholder. In his discretion, either named proxy may vote on such other
business as may properly come before the Annual Meeting or any adjournments or
postponements thereof.
This proxy revokes all prior proxies with respect to the Annual Meeting and
may be revoked prior to exercise. Receipt of the Notice of Annual Meeting of
Shareholders and the Proxy Statement relating to the Annual Meeting is hereby
acknowledged.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS RECOMMENDATION, MERELY
SIGN BELOW; NO BOXES NEED TO BE CHECKED
Please mark, sign, date and
return the proxy card
promptly, using the
enclosed envelope.
Date , 2000
Signature
Signature (if held jointly)
Title
Please sign exactly as name
appears hereon. When shares
are held by joint tenants,
both should sign. When
signing as attorney, as
executor, administrator,
trustee or guardian, please
give full title as such. If
a corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign in
partnership name by
authorized person.
