<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission only (as
Permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PC SERVICE SOURCE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how is 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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<PAGE> 2
April 12, 1999
Dear Stockholders:
You are cordially invited to attend the 1999 annual meeting of stockholders of
PC Service Source, Inc. which will be held on May 11, 1999, at 10:00 a.m.,
Central Time, at the company's corporate offices located at 2350 Valley View
Lane, Dallas, Texas. The official notice of the meeting together with a proxy
statement and proxy card are enclosed. Please give this information your careful
attention.
Whether or not you expect to attend the meeting in person, it is important that
your shares be voted at the meeting. I urge you to specify your choices by
marking the enclosed proxy card and returning it promptly. Sending in a signed
proxy will not affect your right to attend the annual meeting and vote in
person. You may revoke your proxy at any time before it is voted at the annual
meeting by giving written notice to the secretary of the company.
Sincerely,
/s/ Avery More
Avery More
Chairman of the Board and Chief Executive Officer
YOUR VOTE IS IMPORTANT
Please Sign, Date, and Return Your Proxy Card
<PAGE> 3
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 11, 1999
-------------------------
To Our Stockholders:
The 1999 annual meeting of stockholders of PC Service Source, Inc. will be held
at the company's corporate offices at 2350 Valley View Lane, Dallas, Texas, on
May 11, 1999, at 10:00 a.m., Central Time, for the following purpose as more
fully described in the following pages of the proxy statement, which is made a
part of this Notice:
1. To elect two Class I directors to serve until the annual meeting
of stockholders in 2002 or until their successors are duly
elected and qualified, and to elect one Class III director to
serve until the annual meeting of stockholders in 2001 or until
his successor is duly elected and qualified;
2. To ratify the selection of Ernst & Young LLP as the independent
auditor of the company for the year ending December 31, 1999;
and
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment of the meeting.
The board of directors has fixed the close of business on April 5, 1999, as the
record date for determining stockholders entitled to notice of and to vote at
the meeting. Only stockholders of record at the close of business on that date
will be entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person. Whether or not you
expect to attend the meeting in person, you are urged to sign and date the
enclosed proxy card and return it promptly in the envelope provided for that
purpose. Sending in a signed proxy will not affect your right to attend the
annual meeting and vote in person. You may revoke your proxy at any time before
it is voted at the Annual Meeting by giving written notice to the secretary of
the company.
By Order of the Board of Directors,
/s/ Robert J. Boutin
Robert J. Boutin
Senior Vice President, Chief Financial Officer and Secretary
Dallas, Texas
April 12, 1999
It is important that your stock be represented at the meeting regardless of the
number of shares you hold. Please complete, sign, date and mail the enclosed
proxy card in the accompanying envelope even if you intend to be present at the
meeting. Returning the proxy card will not limit your right to vote in person or
to attend the annual meeting, but will insure your representation if you cannot
attend. If you have shares in more than one name, or if your stock is registered
in more than one way, you may receive more than one copy of the proxy material.
If so, please sign and return each copy of the proxy cards you receive so that
all of your shares may be voted. The proxy is revocable at any time prior to its
use.
<PAGE> 4
PC SERVICE SOURCE, INC.
2350 VALLEY VIEW LANE
DALLAS, TEXAS 75234
----------
PROXY STATEMENT
FOR
ANNUAL MEETING
TO BE HELD ON
MAY 11, 1999
----------
VOTING AT THE MEETING AND PROXIES
Commencing on April 12, 1999, PC Service Source, Inc., a Delaware
corporation, will mail this proxy statement to stockholders entitled to vote at
the company's annual meeting of stockholders on May 11, 1999. Stockholders of
record at the close of business on April 5, 1999, will be entitled to vote at
the meeting and will receive a copy of this proxy statement furnishing
information relating to the business to be transacted at the annual meeting,
including any adjournment or postponement of the annual meeting. At the close of
business on April 5, 1999, the record date for determining stockholders entitled
to receive notice of and to vote at the annual meeting, the company's
outstanding voting securities consisted of 5,773,820 shares of the company's
common stock, $0.01 par value per share. Holders of common stock are entitled to
one vote per share in any matter that may be acted upon at the annual meeting.
The company's certificate of incorporation does not permit cumulative voting.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY TO SIGN, DATE AND RETURN THE PROXY CARD IN
THE ACCOMPANYING ENVELOPE, which is postage-paid if mailed in the United States.
Regarding the election of directors, you have three choices: by checking
the appropriate box on your proxy card you may (a) vote for the director
nominees as a group; (b) withhold authority to vote for the director nominees as
a group; or (c) vote for the director nominees as a group, except the nominee(s)
you identify in the appropriate area. See "Proposal 1. Election of Directors."
For purposes of determining whether a proposal has received a majority
vote, abstentions will be included in the vote totals, with the result that an
abstention will have the same effect as a negative vote for all proposals. If a
broker indicates that it is prohibited from exercising discretionary authority
with respect to shares held of record by such broker, including shares held for
beneficial holders that have not returned proxies (so-called "broker
non-votes"), those shares will not be included in the vote totals and,
therefore, will have no effect on the outcome of the vote with respect to that
matter. Abstentions and broker non-votes will, however, be treated as present
for quorum purposes and may be entitled to vote on other matters.
You may revoke your proxy at any time before it is actually voted at the
annual meeting by (a) delivering written notice of revocation to the Secretary
of the company, (b) submitting a subsequently dated
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<PAGE> 5
proxy, or (c) attending the annual meeting and withdrawing the proxy. You may
also be represented by another person present at the annual meeting through
executing a form of proxy designating such person to act on your behalf. Each
unrevoked proxy card properly executed and received prior to the close of the
voting will be voted as indicated. Where specific instructions are not
indicated, the proxy will be voted for the election of all directors as
nominated and for all proposals recommended by the board.
The holders of a majority of the voting power of the issued and
outstanding stock of the company entitled to vote at the annual meeting, present
in person or represented by proxy, shall constitute a quorum for the transaction
of business at the annual meeting. If a quorum is not present or represented by
proxy at the annual meeting, the stockholders entitled to vote at the meeting,
present in person or represented by proxy, shall have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented by proxy. At such
adjourned meeting at which a quorum shall be present or represented by proxy,
any business may be transacted which might have been transacted at the annual
meeting as originally called. If the adjournment is for more than thirty days,
or, if after the adjournment a new record date is set, a notice of adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
PC Service Source's annual report to stockholders and form 10-K for the
year ended December 31, 1998, including consolidated financial statements, are
being mailed to all stockholders entitled to vote at the annual meeting. These
reports do not constitute a part of the proxy soliciting material.
The expense of preparing, printing and mailing this proxy statement will
be paid by the company. In addition to the use of the mail, proxies may be
solicited personally, or by telephone or facsimile by directors, officers, or
employees of the company and its subsidiaries without additional compensation.
The company will, on request, reimburse stockholders of record who are brokers,
dealers, banks, voting trustees, or their nominees for their reasonable expenses
in sending proxy materials and annual reports to the beneficial owners of the
shares they hold of record.
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<PAGE> 6
OWNERSHIP OF COMMON STOCK BY
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the company's common stock as of April 1, 1999, by (a)
each director and director nominee who beneficially owns common stock and
certain of the company's executive officers, (b) all of the company's directors
and executive officers as a group and (c) each person known by the company to be
the beneficial owner of more than 5% of the company's common stock as of April
1, 1999.
The number of shares of the company's common stock beneficially owned by
each individual set forth below is determined under the rules of the securities
and exchange commission and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which an individual has sole or shared
voting power or investment power and any shares that an individual presently, or
within 60 days, has the right to acquire through the exercise of any stock
option or other right. However, such shares are not deemed to be outstanding for
the purpose of computing the percentage of outstanding shares beneficially owned
by any other person. Unless otherwise indicated, each individual has sole voting
and investment power (or shares such powers with their spouse) with respect to
the shares of the company's common stock set forth in the table below:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER
- ------------------------
DIRECTORS (INCLUDING THOSE WHO ARE ALSO
EXECUTIVE OFFICERS): NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY OWNED OUTSTANDING SHARES
------------------ ------------------
<S> <C> <C>
Avery More .............................. 1,381,300(1) 23.9%
Robert S. Leff .......................... 40,800 *
Robert J. Boutin ........................ 36,700 *
Edward C. Raymund ....................... 17,500(2) *
Jay Haft ................................ 16,500 *
Morti Tenenhaus ......................... 10,000(3) *
EXECUTIVE OFFICERS:
James "Zeke" Zoccoli .................... 4,667(4) *
William Shea ............................ 16,667(5) *
All Directors and Executive Officers as a
Group (8) persons ....................... 1,524,134(6) 26.3%
OTHER:
Wellington Management Company,
LLP ..................................... 565,000(7) 9.8%
Joseph A. Cohen ......................... 432,000(8) 7.5%
Victor Morgenstern ...................... 382,800(9) 6.6%
Dimensional Fund Advisors, Inc. ......... 368,600(10) 6.4%
Katun Corporation ....................... 338,750(11) 5.9%
</TABLE>
- ----------
* Indicates less than 1%.
(1) The business address of Mr. More is 2350 Valley View Lane, Dallas, Texas
75234. The shares of common stock listed in Mr. More's name above are
owned by Eureka Venture Partners I, Ltd. ("Partners I"), the sole
general partner of which is Eureka Venture Management, Inc.
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<PAGE> 7
("Eureka Venture"). Mr. More holds more than a fifty percent (50%)
limited partnership interest in Partners I and more than fifty percent
(50%) of the outstanding common stock of Eureka Venture. Various
parties, including a trust for the benefit of Mr. More's minor children
and Mr. Jay Haft, a director of the company, have made investments in
Partners I, and in connection therewith have been issued options from
Partners I to acquire stock of other companies in which Partners I has
an interest, including PCSS. If all of those options to acquire PCSS
common stock were exercised, a total of 144,284 shares of PCSS common
stock would be acquired by those parties from Partners I. Further, the
shares shown as beneficially owned by Mr. More also include 40,000
shares owned by him individually and 10,000 shares held by Rosetta Stone
Holdings, LLC, the managing member of which is Mr. More.
(2) Includes 6,000 shares held by the Raymund Family Partnership (the
"Partnership"), 2,000 shares held by the Raymund Family Trust and 500
shares owned by Mr. Raymund's wife. Mr. Raymund may be deemed to
beneficially own Partnership shares because he is the Partnership's
general partner. Mr. Raymund disclaims beneficial ownership of the
shares owned by his wife.
(3) Includes 10,000 shares held by trust for the benefit of the minor
children of Mr. Tenenhaus as to which he disclaims beneficial ownership.
(4) All 4,667 shares represent shares Mr. Zoccoli has the right to acquire
within 60 days pursuant to options.
(5) All 16,667 shares represent shares Mr. Shea has the right to acquire
within 60 days pursuant to options.
(6) Includes 21,334 shares that officers and directors have the right to
acquire within 60 days pursuant to options.
(7) The business address of Wellington Management Company, LLP is 75 State
Street, Boston, Massachusetts.
(8) The business address of Mr. Cohen is The Garnet Group, 825 Third Avenue,
40th Floor, New York, New York 10022.
(9) The business address of Mr. Morgenstern is Harris Associates L.P., Two
North LaSalle Street, Chicago, Illinois 60602. Includes 193,600 shares
held by various family trusts as to which Mr. Morgenstern disclaims
beneficial ownership.
(10) The business address of Dimensional Fund Advisors, Inc. is 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401.
(11) The business address of Katun Corporation is 10951 Bush Lake Road,
Bloomington, Minnesota 55438.
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<PAGE> 8
MANAGEMENT OF THE COMPANY
The board elects executive officers annually at its first meeting
following the annual meeting of stockholders. The following table sets forth, as
of April 1, 1999, the names of the directors and executive officers of the
company and its subsidiary and their respective positions with the company and
its subsidiary:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Avery More..................... 44 Chairman of the Board and Chief Executive Officer
Morti Tenenhaus................ 44 Vice Chairman of the Board and Senior Vice President
of PCSS Repair Services
Robert J. Boutin............... 41 Director and Senior Vice President, Chief Financial
Officer and Secretary
James "Zeke" Zoccoli........... 42 Senior Vice President, Operations and Chief
Information Officer
William Shea................... 52 Senior Vice President, Customers
Jay Haft....................... 63 Director
Robert S. Leff................. 52 Director
Edward C. Raymund.............. 70 Director
</TABLE>
- --------------------------------------------------------------------------------
AVERY MORE, 44, is Chairman of the Board and Chief Executive Officer of
the company. He is a Class III director whose term expires in 2001. Mr. More is
a member of the executive committee and stock option committee of the company's
board of directors. Prior to joining the company in his current capacity, Mr.
More was the vice chairman of Computer City, Inc., from July 1997 to June 1998.
Since 1994, Mr. More has served as the President of Eureka Venture Management,
Inc., the General Partner of Eureka Venture Partners I, Ltd., a venture capital
and merchant banking company. From 1989 to 1994 Mr. More was the president and
chief executive officer of CompuCom Systems, Inc., and a member of the CompuCom
board of directors from 1989 to 1994. Mr. More also serves on the board of
directors of Micrografx, Inc. Mr. More became a PCSS director and Chairman of
the Board in 1990.
MORTI TENENHAUS, 44, is Vice Chairman of the board of directors and
Senior Vice President of PCSS Repair Services. Mr. Tenenhaus is a Class II
director whose term expires in 2000. Mr. Tenenhaus is a member of the executive
committee and compensation committee of the company's board of directors. Since
1994, Mr. Tenenhaus has served as the executive vice president of Eureka Venture
Management, Inc., the General Partner of Eureka Venture Partners I, Ltd., a
venture capital and merchant banking company. Mr. Tenenhaus was the president
and chief executive officer of TeKnowlogy, Inc. from 1994 to 1997. Mr. Tenenhaus
became a PCSS director in 1990 and Vice Chairman of the Board in 1997.
ROBERT J. BOUTIN, 41, is a director and Senior Vice President, Chief
Financial Officer and Secretary of the company. Mr. Boutin was appointed to the
board in July 1998 and is standing for election as a Class I director at the
annual meeting. He is a member of the executive committee of the company's board
of directors. Prior to joining the company, Mr. Boutin was senior vice president
and chief financial officer of Computer City, Inc., from July 1997 to June 1998.
From 1991 to 1997, Mr. Boutin was senior vice president and chief financial
officer of CompuCom Systems, Inc. After serving on the PCSS board from 1991 to
1995 as a nominee of CompuCom Systems, Inc., Mr. Boutin became a director of the
company in 1998.
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<PAGE> 9
JAMES "ZEKE" ZOCCOLI, 42, is Senior Vice President, Operations and
Chief Information Officer of the company. Prior to serving in his current
capacity, Mr. Zoccoli was Vice President, Information Systems and Chief
Information Officer of the company from August 1996 to January 1998. Prior to
joining the company, Mr. Zoccoli was senior site manager of information systems
for Abbott Laboratories from 1991 to 1996.
WILLIAM SHEA, 52, is Senior Vice President, Customers of the company.
Prior to joining the company, Mr. Shea was vice president of major accounts for
Gateway 2000, Inc. from 1995 to 1998 and held various senior management
positions with Gateway from 1993 to 1995.
JAY HAFT, 63, is a strategic and financial consultant to growth stage
companies, managing general partner of GenAm "1" Venture Fund, and of counsel to
the law firm of Parker Duryee Rosoff & Haft. Mr. Haft was a senior partner in
that law firm from 1989 to 1994. Mr. Haft is a Class I director whose term
expires in 1999 and is a member of the Audit Committee of the company's board.
Mr. Haft will stand for reelection as a Class III director at the annual
meeting. He is chairman of the board of NCT Group, Inc. and DCAP, Inc., and is a
director of Robotic Vision Systems, Inc., DUSA Pharmaceuticals, Inc., Encore
Medical Corporation, Oryx Technology Corp. and Thrift Management, Inc. Mr. Haft
also serves as the treasurer of the Miami City Ballet. Mr. Haft became a PCSS
director in 1996.
ROBERT S. LEFF, 52, is a strategic and financial consultant to early
and growth stage companies in the personal computer industry. Mr. Leff was the
co-founder of Merisel, Inc. (f/k/a Softsel Computer Products, Inc.) and served
as a member of Merisel's board and as an executive officer until his retirement
from Merisel in 1994. Mr. Leff is a Class II director whose term expires in
2000. He is a member of the audit committee, compensation committee and stock
option committee of the company's board of directors. Mr. Leff also serves as a
member of the board of directors of AudioHighway.com, Inc. He became a PCSS
director in 1994.
EDWARD C. RAYMUND, 70, is a director of Tech Data Corporation and
Vision Electronics. Mr. Raymund is a Class I director whose term expires in
1999. He is a member of the audit committee, compensation committee and stock
option committee of the company's board of directors. From 1972 until his
retirement in 1994, Mr. Raymund was the chief executive officer of Tech Data
Corporation, a distributor of computers, peripherals, software and networks. Mr.
Raymund became a PCSS director in 1994.
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<PAGE> 10
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The board of directors has a standing executive committee, audit
committee, compensation committee and stock option committee. The principal
responsibilities and membership of each committee are described in the following
paragraphs.
EXECUTIVE COMMITTEE. The executive committee has the authority to
exercise substantially all of the powers of the board in the management and
business affairs of the company, except it does not have the authority to
declare dividends, authorize the issuance of shares of the company's common
stock, modify the company's certificate of incorporation or its bylaws, adopt
any agreement of merger or consolidation or recommend to the stockholders the
sale, lease or exchange of all or substantially all of the company's assets or
the dissolution of the company. Regularly scheduled meetings of the board are
held periodically each year and special meetings are held from time to time. As
a consequence, the occasions on which this committee is required to take action
are limited. The members of this committee are Messrs. More, Boutin and
Tenenhaus. The committee did not meet separately from the board during 1998.
AUDIT COMMITTEE. The audit committee is responsible for reviewing the
company's accounting and financial practices and policies and the scope and
results of the company's audit. The audit committee is also responsible for
recommending the selection of the company's independent public accountants. This
committee is presently comprised of Messrs. Leff, Raymund and Haft. The
committee met separately from the board on one occasion during 1998.
COMPENSATION COMMITTEE. The compensation committee reviews the
compensation of executive officers, except members of the committee, and makes
recommendations to the board regarding executive compensation. This committee is
presently comprised of Messrs. Leff, Raymund and Haft. The committee met
separately from the board on one occasion during 1998.
STOCK OPTION COMMITTEE. The stock option committee administers the
company's existing stock option plan. This committee is presently comprised of
Messrs. Leff, Raymund and More. The committee met separately from the board on
four occasions during 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Tenenhaus, the Vice Chairman of the Board and Senior Vice President
of PCSS Repair Services, was a member of the compensation committee of the board
until he resigned as a member of that committee in October 1998 in connection
with becoming an officer of PCSS Repair Services.
COMPENSATION OF THE COMPANY'S DIRECTORS
The current policy of the company is to pay each director who is not
also an officer or employee of the company, and who does not beneficially own
more than 5% of the company's outstanding common stock, an annual fee of $2,500,
plus 2,500 shares of common stock of the company pursuant to the company's
director compensation plan. The board met on five occasions during 1998. Each
director attended 100% of (a) the total number of meetings of the board held
during the period in which he was a director and (b) the total number of
meetings held by all committees on which he served.
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<PAGE> 11
REPORT OF COMPENSATION COMMITTEE ON ANNUAL EXECUTIVE COMPENSATION
The compensation committee met informally several times during the year
and met during three of the regular meetings of the board. The policy of the
compensation committee is to provide executive officers of the company and its
repair subsidiary, PC Service Source Repair Services ("PCSS Repair Services;"
formerly known as Cyclix Engineering Corporation), with fair compensation based
on their responsibilities, and on the performance of the company as a whole.
The compensation committee believes generally that performance goals
enhance teamwork and help focus management's attention on the performance of the
companies rather than the performance of particular areas in the companies.
Additionally, particular areas may in the future need separate performance
goals, but the compensation committee does not believe that is currently
required.
The compensation committee sets target earnings levels for the company
and PCSS Repair Services, and provides a bonus target to each executive officer.
The bonus target is a percentage of that executive's base salary. The
compensation committee then sets target levels pursuant to which an executive
who is employed at the time of the bonus award can receive all or a portion of
the designated bonus target based on the company's or PCSS Repair Services'
earnings performance, as the case may be. If the earnings target is not met, an
executive may receive some portion of his bonus based on the percentage of the
earnings target achieved. If the earnings target is exceeded, an executive may
receive an amount in excess of executive's bonus target. The earnings target is
set by the compensation committee prior to the commencement of each fiscal year
and is believed by the compensation committee to be aggressive, but achievable.
Due to the significant decline in the market price of the company's
common stock during 1998, the compensation committee approved in April 1998 the
replacement of 460,500 options with exercise prices ranging from $9.00 to $14.50
per share which were previously issued to employees of the company under its
Stock Option Plan, with 318,205 options with an exercise price of $4.75 per
share, the fair market value of the company's common stock on the grant date.
The new options vest over three years. The compensation committee approved this
exchange of options in connection with its desire to provide the company's
employees with appropriate incentives to encourage them to diligently work
toward improving the company's operating results. See "Options Repriced for the
Company's Executive Officers."
The compensation committee also authorized the adoption of a Stock
Price Appreciation Plan in 1998. Under the terms of that plan, a total of
200,000 shares of the company's common stock will be available for issuance to
certain employees of the company if the closing price per share on the Nasdaq
National Market exceeds $15.00 for twenty consecutive trading days prior to
February 28, 2002. Eligible employees, which will include the company's
executive officers, will be determined by the compensation committee. The
compensation committee did not award any grants under the Stock Price
Appreciation Plan during 1998.
The compensation committee believes that its earnings and bonus targets
are confidential and disclosure of those targets would adversely effect the
company. The report of the compensation committee will not be deemed to be
incorporated by reference into any filing by the company under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the extent that
the company specifically incorporates that report by reference.
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<PAGE> 12
EXECUTIVE COMPENSATION
The following table summarizes the compensation earned by the company's
Chief Executive Officer and its four other most highly compensated executive
officers (whose compensation exceeded $100,000 in 1998) and an additional
individual for whom disclosures would have been provided had the individual been
serving as an executive officer as of December 31, 1998, collectively, the
"Named Officers," for services rendered in all capacities to the company during
the fiscal years ended December 31, 1998, 1997, and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Underlying
Options/
Salary Bonus SARs
Name and Principal Positions Year ($) ($) (#)
---------------------------- ---- ------- ------ ----------
<S> <C> <C> <C> <C>
Avery More(A)...................... 1998 120,384 -- 250,000
Chairman of the Board and 1997 125,000 -- --
Chief Executive Officer 1996 144,000 -- --
Morti Tenenhaus(B)................. 1998 75,623 -- 75,000
Vice Chairman of the Board 1997 -- -- --
and Senior Vice President 1996 -- -- --
PCSS Repair Services
Robert J. Boutin(B)................ 1998 68,093 -- 75,000
Senior Vice President, Chief 1997 -- -- --
Financial Officer and Secretary 1996 -- -- --
James "Zeke" Zoccoli(B) 1998 125,617 29,990 --
Senior Vice President, 1997 112,500 15,000 --
Operations and Chief 1996 52,212 -- 20,000
Information Officer
William Shea(B).................... 1998 136,757 16,863 50,000
Senior Vice President, 1997 -- -- --
Customers 1996 -- -- --
Mark T. Hilz(A).................... 1998 183,827 7,180 --
President and 1997 186,369 -- --
Chief Executive Officer 1996 182,018 -- 30,000
Philip Wise(B)..................... 1998 100,962 -- --
President, 1997 149,818 -- --
PCSS Repair Services 1996 153,243 -- --
</TABLE>
- ----------
(A) Mr. Hilz resigned as the Chief Executive Officer of the company in August
1998 and the President of the company in December 1998. Mr. More, the
company's Chairman of the Board, was named Chief Executive Officer in
August 1998.
(B) The 1996 annual compensation for Mr. Zoccoli, the 1998 annual compensation
for Messrs. More, Tenenhaus, Boutin and Shea reflects less than a full
year. Mr. Wise resigned as the President of PCSS Repair Services in August
1998. Mr. Tenenhaus, the Vice Chairman of the Board, was named Senior Vice
President of PCSS Repair Services in October 1998.
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<PAGE> 13
OPTION GRANTS IN 1998 TO THE COMPANY'S EXECUTIVE OFFICERS
The following table provides information regarding the stock options
granted by the company to Named Officers in 1998.
<TABLE>
<CAPTION>
1998 OPTION GRANTS
Individual Grants
----------------------------------------------------------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Exercise Stock Price Appreciation
underlying Options of Base for Option Term (A)
Option/SARs Granted to Price Expiration --------------------------
Name Granted (#) Employees ($/Sh) Date 5%($) 10%($)
---- ----------- ----------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Avery More 250,000(B) 24.4% $8.00 10/21/08 -- --
Morti Tenenhaus 25,000(B) 2.4% $3.00 10/21/08 42,280 111,750
50,000(B) 4.9% $8.00 10/21/08 -- --
Robert J. Boutin 50,000(B) 4.9% $3.00 10/21/08 84,561 223,499
25,000(B) 2.4% $8.00 10/21/08 -- --
James "Zeke" Zoccoli 26,000(B) 2.5% $3.00 10/21/08 43,972 116,219
14,000(C) 1.4% $4.75 04/01/08 33,383 92,548
William Shea 50,000(C) 4.9% $4.75 04/01/08 119,728 330,530
Mark T. Hilz 101,000(C) 9.9% $4.75 03/31/01(D) 240,840 667,670
Philip Wise 20,000(C) 2.0% $4.75 (D) -- --
- -----------
</TABLE>
(A) The potential realizable values set forth under these columns result from
calculations assuming 5% and 10% growth rates as set by the SEC and are not
intended to forecast future price appreciation of the company's common
stock. The amounts reflect potential future value based upon growth at
these prescribed rates. The company did not use an alternative formula for
a grant date valuation, an approach which would state gains at present, and
therefore lower, value. The company is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors. Actual gains, if any, on stock option exercises are
dependent on the future performances of the company's common stock. There
can be no assurance that the amounts reflected in this table will be
achieved.
(B) One-third (1/3) of these options become exercisable on July 1, 1999, and an
additional one-third on each of July 1, 2000 and 2001.
(C) One-third (1/3) of these options become exercisable on April 1, 1999, and
an additional one-third become exercisable on April 1, 2000 and 2001.
(D) Mr. Hilz resigned as the Chief Executive Officer of the company in August
1998 and the President of the company in December 1998. Mr. Wise resigned
as the President of PCSS Repair Services in August 1998. Mr. Wise's stock
options have been cancelled in connection with his resignation. Mr. Hilz
has until March 31, 2001, to exercise his options. See "Termination of
Employment Arrangements."
AGGREGATE OPTION EXERCISES IN 1998 BY THE COMPANY'S EXECUTIVE OFFICERS
The following table provides information as to options exercised, if
any, by each of the Named Officers in 1998 and the value of options held by
those officers at year-end measured in terms of the last reported sale price for
the shares of the company's common stock on December 31, 1998 ($3.44 as reported
on Nasdaq).
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of Unexercised
Securities Underlying In-The-Money
Unexercised Options Options at
at December 31, 1998(#) December 31, 1998(A)($)
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Avery More -- 250,000 -- --
Morti Tenenhaus -- 75,000 -- --
Robert J. Boutin -- 75,000 -- --
James "Zeke" Zoccoli -- 40,000 -- --
William Shea -- 50,000 -- --
Mark T. Hilz 145,500 101,000 224,145 --
Philip Wise (B) (B) -- --
</TABLE>
- ----------
(A) There were no options exercised by Named Officers in 1998. Market value of
shares covered by in-the-money options on December 31, 1998, less option
exercise price. Options are in-the-money if the market value of the shares
covered thereby is greater than the option exercise price.
(B) Mr. Hilz resigned as the Chief Executive Officer of the company in August
1998 and the President of the company in December 1998. Mr. Wise resigned
as the President of PCSS Repair Services in August 1998. Mr. Wise's stock
options were cancelled in connection with his resignation. Mr. Hilz has
until March 31, 2001, to exercise his options. See "Termination of
Employment Arrangements."
-10-
<PAGE> 14
OPTIONS REPRICED FOR THE COMPANY'S EXECUTIVE OFFICERS
The following table provides information as to options repriced during
1998.
TEN-YEAR OPTION/SAR REPRICINGS(A)
<TABLE>
<CAPTION>
Length of
Number of Market Price Exercise Original
Securities of Stock At Price At Option Term
Underlying Time of Time of New Remaining At
Options/SARs Repricing Or Repricing Or Exercise Date Of
Repriced or Amendment Amendment Price Repricing Or
Name Date Amended ($) ($) ($) Amendment
---- ------ ------------ ------------ ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
James "Zeke" Zoccoli 4/1/98 14,000 4.75 $ 9.00 4.75 8 years
Mark T. Hilz(B) 4/1/98 101,000 4.75 $ 9.00- 4.75 8 years
$14.50
Philip Wise(B) 4/1/98 20,000 4.75 $ 9.00 4.75 7 years
</TABLE>
- -----------------------
(A) See "Report of Compensation Committee on Annual Executive Compensation."
(B) Mr. Hilz resigned as the Chief Executive Officer of the company in August
1998 and the President of the company in December 1998. Mr. Wise resigned
as the President of PCSS Repair Services in August 1998. Mr. Wise's stock
options were cancelled in connection with his resignation. Mr. Hilz has
until March 31, 2001 to exercise his options. See "Termination of
Employment Arrangements."
TERMINATION OF EMPLOYMENT ARRANGEMENTS
In connection with Mr. Hilz's resignation as the company's President in
December 1998, the company entered into a non-compete agreement, as well as a
salary continuation agreement. Under the terms of the salary continuation
agreement, Mr. Hilz will receive his salary through March 31, 2000, less any
salary received by Mr. Hilz from another employer. Further, Mr. Hilz will
receive one-half his salary from April 1, 2000 to December 31, 2000. Regarding
Mr. Hilz's options to acquire shares of the company's common stock, all options
will remain in effect, will become fully vested on April 1, 2000, and will
expire if unexercised on March 31, 2001. See "Aggregate Option Exercises in 1998
by the Company's Executive Officers." In exchange for the foregoing, Mr. Hilz
agreed not to compete with the company or solicit any employee or customer of
the company until December 31, 2000.
Mr. Wise resigned as the President of PCSS Repair Services in August
1998. When Mr. Wise was originally hired by the company, he purchased 15% of the
outstanding common stock of PCSS Repair Services for $30,000, the adjusted book
value of the stock as of July 1, 1995. In connection with that purchase and
loans made to him by the company while an employee, Mr. Wise was indebted to the
company in the total amount of $140,000. At the time of his resignation, Mr.
Wise sold his interest in PCSS Repair Services for $455,000 payable over several
months. Mr. Wise also repaid all loans outstanding to the company at the time of
his resignation. The purchase price was based on the determination by the
company's board of directors of the fair value of Mr. Wise's minority interest
in PCSS Repair Services as of August 1998, and was subject to adjustment under
certain conditions, none of which the company believes have occurred. In
connection with the buyback of his stock, Mr. Wise agreed not to compete with
PCSS Repair Services or to solicit any employee of the company for employment
until August 15, 1999.
-11-
<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to serving in his current capacity as the company's Chairman of
the Board and Chief Executive Officer, Mr. More served as a director and
executive officer of Computer City, Inc. from July 1997 to June 1998. Prior to
serving in his current capacity as a director and the company's Senior Vice
President, Chief Financial Officer and Secretary, Mr. Boutin served as a
director and an executive officer of Computer City, Inc. from July 1997 to June
1998. Computer City is also a customer of the company. During 1998, Computer
City (now CompUSA, Inc.) purchased approximately $3,950,000 of products and
services from the company on the same terms as sales to independent parties.
CompUSA continues to be a customer of the company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the company's directors,
executive officers and 10% owners of common stock of the company to file reports
of beneficial ownership of the company's common stock and changes in such
beneficial ownership with the SEC. Directors, executive officers and 10% owners
are also required by rules promulgated by the SEC to furnish the company with
copies of all forms they file pursuant to Section 16(a). Based solely upon a
review of the copies of the forms filed pursuant to Section 16(a) furnished to
the company, or written representation that no year-end Form 5 filings were
required for transactions occurring during 1998, the company believes that its
directors, officers and 10% owners of common stock of the company complied with
the Section 16(a) filing requirements applicable to them during 1998, except for
Mr. Leff who filed a Form 5 by February 15, 1999, reporting a purchase of 3,800
shares of the company's common stock in August 1998.
-12-
<PAGE> 16
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Under the terms of the company's certificate of incorporation, the
company's board is divided into three classes of directors, with the total
number of directors to be allocated among the three classes as equally as
possible. The board presently consists of six members, two of whom are Class I
directors whose term expires at the 1999 annual meeting of stockholders, two of
whom are Class II directors whose term expires in 2000, and one of whom is a
Class III director whose term expires in 2001. Mr. Hilz, who was a Class III
director, resigned from the company's board in April 1999. Mr. Boutin, who was
appointed to the board in July 1998, is standing for election by the
stockholders at the 1999 annual meeting as a Class I director. Mr. Haft, whose
term as a Class I director expires at the 1999 annual meeting, will stand for
reelection as a Class III director.
The board proposes the election of the following Class I directors for
a term of three years expiring in 2002 and the following Class III director for
a term of two years expiring in 2001. Should one or more of these nominees
become unavailable to accept nomination for election as a director, the
individuals named as Proxies on the enclosed proxy card will vote the shares
that they represent for the election of such other persons as the board may
recommend, unless the board reduces the number of directors.
CLASS I - TERM EXPIRING IN 2002
ROBERT J. BOUTIN, 41, is a director and Senior Vice President, Chief
Financial Officer and Secretary of the company. Mr. Boutin was appointed to the
board in July 1998 and is standing for election as a Class I director at the
annual meeting. He is a member of the executive committee of the company's board
of directors. Prior to joining the company, Mr. Boutin was senior vice president
and chief financial officer of Computer City, Inc., from July 1997 to June 1998.
From 1991 to 1997, Mr. Boutin was senior vice president and chief financial
officer of CompuCom Systems, Inc. After serving on the PCSS board from 1991 to
1995 as a nominee of CompuCom Systems, Inc., Mr. Boutin became a director of the
company in 1998.
EDWARD C. RAYMUND, 70, is a director of Tech Data Corporation and
Vision Electronics. Mr. Raymund is a Class I director whose term expires in
1999. He is a member of the audit committee, compensation committee and stock
option committee of the company's board of directors. From 1972 until his
retirement in 1994, Mr. Raymund was the chief executive officer of Tech Data
Corporation, a distributor of computers, peripherals, software and networks. Mr.
Raymund became a PCSS director in 1994.
CLASS III - TERM EXPIRING IN 2001
JAY HAFT, 63, is a strategic and financial consultant to growth stage
companies, managing general partner of GenAm "1" Venture Fund, and of counsel to
the law firm of Parker Duryee Rosoff & Haft. Mr. Haft was a senior partner in
that law firm from 1989 to 1994. Mr. Haft is a Class I director whose term
expires in 1999 and is a member of the Audit Committee of the company's board.
Mr. Haft will stand for reelection as a Class III director at the annual
meeting. He is chairman of the board of NCT Group, Inc. and DCAP, Inc., and is a
director of Robotic Vision Systems, Inc., DUSA Pharmaceuticals, Inc., Encore
Medical Corporation, Oryx Technology Corp. and Thrift Management, Inc. Mr. Haft
also serves as the treasurer of the Miami City Ballet. Mr. Haft became a PCSS
director in 1996.
Unless contrary instructions are set forth in the proxy, it is intended
that the persons named in the proxy will vote all shares of common stock
represented by the proxy for the election as directors of Messrs. Raymund,
-13-
<PAGE> 17
Boutin and Haft each of whom are presently members of the company's board of
directors. A stockholder may, in the manner set forth in the enclosed proxy
card, instruct the proxy holder not to vote that stockholder's shares of common
stock for one or more of the named nominees. The proxies solicited hereby cannot
be voted for a number of persons greater than the number of nominees named
therein. The Restated Certificate of Incorporation of the company does not
permit cumulative voting. A plurality of the votes of the holders of the
outstanding shares of common stock of the company represented at a meeting at
which a quorum is present may elect directors.
THE BOARD OF DIRECTORS URGES YOU TO VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR
SET FORTH ABOVE.
-14-
<PAGE> 18
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The board of directors has approved and recommends the appointment of
Ernst & Young LLP, certified public accountants, to serve as independent auditor
for the company for the fiscal year ending December 31, 1999. Approval of the
appointment of the accountants is being sought in order to give stockholders the
opportunity to express their opinion on the matter. Approval will require the
affirmative vote of the holders of a majority of the shares of common stock
which are represented and entitled to vote at the meeting. Should approval not
be obtained, the board of directors would expect to reconsider the appointment.
Members of Ernst & Young LLP are expected to attend the annual meeting
and, if present, will be available to answer appropriate questions which may be
asked by stockholders. Such members will also have an opportunity to make a
statement at the annual meeting if they desire to do so.
During May and June 1998, the company requested several independent
accounting firms, including its existing independent auditor, to submit a
proposal for providing audit and tax services to the company. KPMG LLP, the
company's independent auditor at that time, advised the company that it would
not be participating in the request for proposal and resigned as the company's
independent auditor. At a meeting held on June 17, 1998, the audit committee of
the board of directors approved the engagement of Ernst & Young LLP, as its
independent auditor for the fiscal year ending December 31, 1998, to replace the
firm of KPMG LLP.
The audit reports of KPMG LLP on the company's financial statements for
the past two fiscal years did not contain an adverse opinion or a disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles. In connection with the audit of the company's financial
statements for each of the two fiscal years ended December 31, 1997, and
December 31, 1996, and the subsequent interim period through June 11, 1998,
there were no disagreements with KPMG LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope and procedures
which, if not resolved to the satisfaction of KPMG LLP would have caused KPMG
LLP to make reference to the subject matter in its reports. KPMG LLP furnished
the company with a letter addressed to the SEC stating it agreed with the
foregoing statements. A copy of that letter dated June 18, 1998, was filed as an
exhibit to the company's report on Form 8-K filed with the SEC in June 1998.
REQUIRED AFFIRMATIVE VOTE
The affirmative vote of a majority of the outstanding voting power of
the common stock is required to ratify Ernst & Young as independent auditor for
the company.
THE BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE RATIFICATION OF ERNST & YOUNG
LLP AS INDEPENDENT AUDITOR OF THE COMPANY.
-15-
<PAGE> 19
STOCK PERFORMANCE GRAPH
The following performance graph compares the performance of the
company's common stock, the Nasdaq Composite and an index of peer companies
selected by the Company (the "Company's Peer Group Index") since March 1994
(which is when the company's common stock first traded publicly on the National
Association of Securities Dealers, Inc. Automated Quotation System). The graph
assumes that the value of the investment in the shares of the company's common
stock and in each index was $100 on April 1, 1994, and that all dividends were
reinvested.
The company's Peer Group Index shown on the performance graph (which is
weighted on the basis of market capitalization) consists of the company and the
following companies which are engaged primarily in the service logistics
business: The Cerplex Group, Inc. and EFTC Corporation.
The stock price performance depicted in the graph above is not
necessarily indicative of future price performance. The graph will not be deemed
to be incorporated by reference in any filing by the company under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the company specifically incorporates same by reference.
-16-
<PAGE> 20
COSTS OF SOLICITATION
The cost of soliciting proxies, which also includes the preparation,
printing, and mailing of this proxy statement, will be borne by the company.
Solicitation will be made by the company primarily through the mail, but certain
employees of the company, who will receive no compensation for their services
other than their regular remuneration, may also solicit proxies by telephone,
telecopy, or personal interview. The company will request brokers and nominees
to obtain voting instructions of beneficial owners of stock registered in the
names of such brokers and nominees and other "street names" and will reimburse
them for any expenses incurred in connection therewith. The company's transfer
agent, Harris Trust and Savings Bank, will assist the company in the
solicitation of proxies from brokers and nominees. The fees for the services of
the transfer agent are included in the monthly fees paid by the company.
However, the company will reimburse the transfer agent for its reasonable
out-of-pocket expenses incurred in connection with providing solicitation
services.
OTHER MATTERS
As of the date of this proxy statement, the company knows of no other
business that will be presented for consideration at the annual meeting.
However, the enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the meeting: (a)
matters that the company's board of directors does not know, a reasonable time
before proxy solicitation, are to be presented for approval at the meeting; (b)
approval of the minutes of a prior meeting of stockholders, if such approval
does not constitute ratification of the action at the meeting; (c) the election
of any person to any office for which a bona fide nominee is unable to serve or
for good cause will not serve; (d) any proposal omitted from this proxy
statement and the form of proxy pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended; and (v) matters incidental to the conduct of
the meeting. If any such matters come before the meeting, then the proxy agents
named in the accompanying proxy card will vote in accordance with their
judgment.
EACH PERSON FROM WHOM A PROXY IS SOLICITED CAN OBTAIN A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998, AS
FILED WITH THE SEC BY DOWNLOADING THE REPORT FROM THE COMPANY'S WEB SITE
(www.pcservice.com) OR BY SENDING A WRITTEN REQUEST TO THE COMPANY, ATTENTION:
INVESTOR RELATIONS, 2350 VALLEY VIEW LANE, DALLAS, TEXAS 75234, AND A COPY WILL
BE SENT TO YOU AT NO CHARGE, EXCEPT FOR EXHIBITS TO THE REPORT.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholders proposals intended to be present at the company's annual
meeting of stockholders in 2000, must be submitted to the company no later than
December 9, 1999, to be included in the company's proxy materials for 2000.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT
WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
By Order of the Board of Directors,
/s/ Robert J. Boutin
Dallas, Texas Robert J. Boutin,
April 12, 1999 Senior Vice President, Chief Financial
Officer and Secretary
-17-
<PAGE> 21
PROXY
PC SERVICE SOURCE, INC.
SOLICITED ON BEHALF OF THE COMPANY AND APPROVED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Avery More and Robert J. Boutin,
and each of them, as attorneys-in-fact and proxies of the undersigned, with full
power of substitution, for and in the name, place and stead of the undersigned,
to appear at the annual meeting of stockholders of PC Service Source, Inc. to be
held on the 11th day of May, 1999 (pursuant to the notice of annual meeting
dated April 1999, and accompanying proxy statement) and at any postponement or
adjournment thereof, and to vote all of the shares of PC Service Source, Inc.
that the undersigned is entitled to vote with all the powers and authority the
undersigned would possess if personally present in accordance with the following
instructions.
When properly executed, this proxy will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted for Proposals 1, 2 and 3.
1. ELECTION OF DIRECTORS NOMINEES: Class I -- Edward C. Raymund and
Robert J. Boutin; Class III -- Jay Haft
[ ] FOR all nominees listed above (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
SUCH INDIVIDUAL'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(Continued, and to be marked, dated and signed, on the other side.)
2. Ratification of Ernst & Young LLP as independent auditor of the company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please sign exactly as name appears
below. When shares are held by
joint tenants, both should sign.
When signing as attorney, 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.
Dated: , 1999
-----------------------------------
(Signature)
-----------------------------------
(Signature if held jointly)
