SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
INTERNATIONAL FIBERCOM, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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INTERNATIONAL FIBERCOM, INC.
3410 East University, Suite 180
Phoenix, Arizona 85034
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 16, 2000
The 2000 Annual Meeting of Shareholders of International FiberCom, Inc.
will be held at the Mesa Hilton Pavilion, 1011 West Holmes Avenue, Mesa, Arizona
85202, on June 16, 2000, at 7:30 a.m., Local Time.
MATTERS TO BE VOTED ON:
1. Election of eight directors;
2. Approve the amendment of the 1997 Stock Option Plan;
3. Ratification of the selection of BDO Seidman, LLP as the
independent public accountants for the Company's fiscal year
2000; and
4. Transact such other business as may properly come before the
meeting or any adjournment of the meeting.
The close of business on April 27, 2000 has been fixed as the record
date for the determination of the shareholders of record entitled to notice of,
and to vote at, this meeting or any adjournment thereof. The list of
shareholders entitled to vote at this meeting is available at the offices of
International FiberCom, Inc., 3410 East University Drive, Suite 180, Phoenix,
Arizona 85034, for examination by any shareholder.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THIS MEETING, PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY, WHICH IS SOLICITED BY AND ON BEHALF OF THE
BOARD OF DIRECTORS. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO
REVOKE SUCH PROXY OR TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THIS
MEETING.
By Order of the Board of Directors
Joseph P. Kealy
Chairman of the Board
Phoenix, Arizona
May 12, 2000
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PROXY STATEMENT
TABLE OF CONTENTS
GENERAL INFORMATION.......................................................... 1
Who Can Vote............................................................... 1
Voting by Proxies.......................................................... 1
How You May Revoke Your Proxy Instructions................................. 1
How Votes are Counted...................................................... 2
Cost of this Proxy Solicitation............................................ 2
Attending the Annual Meeting............................................... 2
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?.............................. 2
WHO SHOULD I CALL IF I HAVE QUESTIONS?....................................... 3
PROPOSALS.................................................................... 4
PROPOSAL NO. 1 - ELECT EIGHT DIRECTORS.................................... 4
PROPOSAL NO. 2 - APPROVE THE AMENDMENT OF THE 1997 STOCK OPTION PLAN...... 6
PROPOSAL NO. 3 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS........... 6
INFORMATION ABOUT THE NOMINEES............................................... 5
ABOUT OUR BOARD AND ITS COMMITTEES........................................... 8
ABOUT THE EXECUTIVE OFFICERS................................................. 10
EXECUTIVE COMPENSATION....................................................... 12
STOCK OPTION GRANTS IN 1999.................................................. 13
1999 STOCK OPTION EXERCISES AND YEAR-END OPTION VALUES....................... 15
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE...................... 15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION...................... 15
OWNERSHIP OF OUR COMMON STOCK BY PRINCIPAL STOCKHOLDERS AND
MANAGEMENT................................................................. 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................... 19
STOCK PRICE PERFORMANCE GRAPH................................................ 22
OTHER MATTERS................................................................ 23
SHAREHOLDER PROPOSALS........................................................ 23
ANNUAL REPORT................................................................ 23
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PROXY STATEMENT
Your vote is very important. For this reason, our board of directors is
requesting that you allow your common stock to be represented at the Annual
Meeting by the persons who are named on the enclosed Proxy Card. This Proxy
Statement is being sent to you in connection with this request and has been
prepared for the board of directors by our management. "We," "our," "IFC" and
the "Company" refer to International FiberCom, Inc. The Proxy Statement is first
being sent to our shareholders on or about May 12, 2000.
GENERAL INFORMATION
WHO CAN VOTE
You are entitled to vote your common stock if our records showed that you held
your shares as of April 27, 2000. At the close of business on that date,
30,612,064 shares of common stock were outstanding and entitled to vote. Each
share of common stock has one vote. The enclosed Proxy Card shows the number of
shares that you are entitled to vote. Your individual vote is confidential and
will not be disclosed to third parties.
VOTING BY PROXIES
If your common stock is held by a broker, bank or other nominee (i.e., in
"street name"), you will receive instructions from it that you must follow in
order to have your shares voted. If you hold your shares in your own name as a
holder of record, you may instruct the Proxies how to vote your common stock by
signing, dating and mailing the Proxy Card in the envelope provided. Of course,
you can always come to the meeting and vote your shares in person. If you give
us a proxy without giving specific voting instructions, your shares will be
voted by the Proxies as recommended by the board of directors.
We are not now aware of any other matters to be presented at the Annual Meeting
except for those described in this Proxy Statement. However, if any other
matters not described in the Proxy Statement are properly presented at the
meeting, the Proxies will use their own judgment to determine how to vote your
shares. If the meeting is adjourned, your common stock may be voted by the
Proxies on the new meeting date as well, unless you have revoked your proxy
instructions prior to that time.
HOW YOU MAY REVOKE YOUR PROXY INSTRUCTIONS
You make revoke your proxy instructions by any of the following procedures:
* Send us another signed proxy with a later date;
* Send a letter of our secretary revoking your proxy before your common stock
has been voted by the Proxies at the meeting; or
* Attend the Annual Meeting and vote your shares in person.
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HOW VOTES ARE COUNTED
Inspectors of election will be appointed for the meeting. The inspectors of
election will determine whether or not a quorum is present and will tabulate
votes cast by proxy or in person at the Annual Meeting. If you have returned
valid proxy instructions or attend the meeting in person, your common stock will
be counted for the purpose of determining whether there is a quorum, even if you
wish to abstain from voting on some or all matters introduced at the meeting. If
a broker indicates on the proxy that it does not have discretionary authority as
to certain shares to vote on a particular matter, those shares will be
considered as present to determine whether or not a quorum is present, but will
not be entitled to vote with respect to that matter.
COST OF THIS PROXY SOLICITATION
We will pay the cost of this proxy solicitation. We will, upon request,
reimburse brokers, banks and other nominees for their expenses in sending proxy
material to their principals and obtaining their proxies. We will solicit
proxies by mail, except for any incidental personal solicitation made by our
directors, officers and employees, for which they will not be paid.
ATTENDING THE ANNUAL MEETING
If you are a holder of record and you plan to attend the Annual Meeting, please
indicate this when you vote. If you are a beneficial owner of common stock held
by a broker or bank, you will need proof of ownership to be admitted to the
meeting. A recent brokerage statement or letter from a broker or bank showing
your current ownership and ownership of our shares on the record date are
examples of proof of ownership. Although you may attend the meeting, you will
not be able to vote your common stock held in street name in person at the
meeting and will have to vote through your broker or bank. If you want to vote
in person your common stock held in street name, you will have to get a proxy in
your name from the registered holder.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
PROPOSAL 1: ELECTION OF EIGHT DIRECTORS
The eight nominees for director who receive the most votes will be elected.
Therefore, if you do not vote for a nominee or you indicate "withhold authority
to vote" for any nominee on your proxy card, your vote will not count for or
against any nominee.
PROPOSAL 2: AMENDMENT OF THE 1997 STOCK OPTION PLAN
The affirmative vote of a majority of the outstanding shares of Common stock is
required to approve the increase in shares reserved for issuance. Therefore, if
you do not vote, or you "abstain" from voting, it has the same effect as if you
voted against the proposal.
PROPOSAL 3: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The affirmative vote of a majority of the votes cast at the Annual Meeting is
required to ratify the selection of independent auditors. Therefore, if you
"abstain" from voting, it has the same effect as if you voted "against" this
proposal.
WHO SHOULD I CALL IF I HAVE QUESTIONS?
If you have questions about the Annual Meeting or voting, please call
Terry W. Beiriger, our Corporate Secretary, or Anthony T. Baumann, our Assistant
Corporate Secretary. Messrs. Beiriger and Baumann may be reached at (602)
387-4000.
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PROPOSALS
PROPOSAL NO. 1 - ELECT EIGHT DIRECTORS
NUMBER OF DIRECTORS TO BE ELECTED
An entire board of directors, consisting of eight directors, is to be elected at
the Annual Meeting. Each director elected will hold office until the next annual
meeting and the election of their successors. If any director resigns or
otherwise is unable to complete his or her term of office, the board of
directors will elect another director for the remainder of the resigning
director's term. Our Articles of Incorporation call for a board of directors
consisting of not fewer than three nor more than nine members.
VOTE REQUIRED - CUMULATIVE VOTING
Under Arizona law, when directors are to be elected to office each shareholder
is entitled to cumulate votes. In order to cumulate your votes, you should
multiply the number of shares you own by eight and then cast the product for a
single candidate or distribute the product among two or more candidates. The
eight individuals with the highest number of votes are elected to office.
NOMINEES OF THE BOARD
The Board has nominated the following individuals to serve on our Board of
Directors until the next annual meeting and the election of their successors:
Joseph P. Kealy
C. James Jensen
John F. Kealy
John P. Morbeck
Richard J. Seminoff
John P. Stephens
Jerry A. Kleven
V. Thompson Brown, Jr.
All of these nominees are currently serving on the board of directors. Each of
the nominees has agreed to be named in this proxy statement and to serve if
elected.
See "Information about the Nominees" on the following page for information
regarding each of the Nominees listed above.
We know of no reason why any of the listed nominees would not be able
to serve. However, if any nominee is unavailable for election, the Proxies would
vote your shares to approve the election of any substitute nominee proposed by
our board of directors. Further, our board of directors may also choose to
reduce the number of directors to be elected, as permitted by our Bylaws.
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INFORMATION ABOUT THE NOMINEES
JOSEPH P. KEALY
(age 50)
Mr. Kealy has been our Chairman since May 1994 and our President and a member of
our board of directors since September 1990. Since 1994, he has been involved in
infrastructure development for the telecommunications industry. From 1972 to
1994 he was involved in the construction business in both field and management
capacities. He attended Hastings College in Nebraska and Northern Arizona
University.
C. JAMES JENSEN
(age 59)
Mr. Jensen has been a member of our board of directors since May 1999. Since
December 1996, Mr. Jensen has been the president of SWD Holdings, Inc., a
privately-held company specializing in the development of master planned
residential and recreational communities in the western United States and Texas.
Since 1985, he also has been president of J. J. Consulting Corporation, a
privately-held company that specializes in the marketing and sales of high-end,
master planned residential communities. Mr. Jensen is an active member of the
World Presidents' Organization, the alumni group of the Young Presidents'
Organization. Mr. Jensen attended the University of Washington.
JOHN F. KEALY
(age 55)
Mr. Kealy has been a member of our board of directors since September 1990. He
was our Executive Vice President and Secretary until March 1995. In 1987, he
formed International Environmental Corp. (IEC), which is involved in asbestos
remediation, with his brother Joseph P. Kealy, our Chairman and President, and
served as its chairman from its inception to May 1994. He has been the president
of IEC since 1995, when he acquired IEC from us in connection with our entry
into the telecommunications service industry. Mr. Kealy has been involved in the
construction business in both field and management capacities since 1967. He
attended Notre Dame University and graduated from Arizona State University with
a bachelor of science in construction management.
JOHN P. MORBECK
(age 56)
Mr. Morbeck became a member of our board of directors in January 2000. Since
1997, he has been an investment manager and registered investment advisor with
Sirach Capital Management, a money management firm. From 1979 to 1997 he was the
president and a founding principal of Olympic Capital Management, which was
acquired by Sirach Capital. Mr. Morbeck received his bachelor of science in
economics and masters in business administration from the University of
Washington.
RICHARD J. SEMINOFF
(age 53)
Mr. Seminoff has been a member of our board of directors since 1994. Since May
1995, he has been vice president of Semco Enterprises, Inc., which is in the
metal processing business. Mr. Seminoff received his bachelor of science in
business administration from Arizona State University.
JOHN P. STEPHENS
(age 58)
Mr. Stephens has been a member of our board of directors since 1998. He has been
vice president and regional manager for J.A. Jones Construction Co., a general
contracting firm, since 1985. He earned his bachelor of science in civil
engineering from the University of Detroit and his masters in business
administration from Adelphi University.
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JERRY A. KLEVEN
(age 46)
Mr. Kleven has been a member of our board of directors since 1994. He is the
President of Kleven Communications, Inc., one of our infrastructure development
subsidiaries. He has been involved in the telecommunications service industry,
including cable television, since 1971.
V. THOMPSON BROWN, JR.
(age 37)
Mr. Brown has been the president of one of our internal communications
subsidiaries, Concepts In Communications, Incorporated, since February 1997. He
joined Concepts in 1986 and from November 1987 to February 1997 he was its
Operations Manager. Mr. Brown has been a member of our board of directors since
1997. Mr. Brown graduated from Vanderbilt University with a bachelor of science
in engineering.
YOUR DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF THE EIGHT NOMINEES UNDER
PROPOSAL NO. 1
PROPOSAL NO. 2 - APPROVE THE AMENDMENT OF THE 1997 STOCK OPTION PLAN
SUMMARY OF THE AMENDMENT
The 1997 Stock Option Plan was approved by the shareholders at the 1997 Annual
Meeting. Our board of directors adopted an Amendment to the Plan that calls for
an increase in the number of shares reserved for issuance upon exercise of
options granted under the Plan by 3,000,000 shares. Accordingly, the number of
shares reserved for issuance under the Plan is proposed to be raised from
3,200,000 to 6,200,000 shares. We desire to take these actions because options
to purchase all of the 3,200,000 shares reserved for issuance under the Stock
Option Plan have been granted. In January 2000 we granted 355,514 options under
the Plan, which options will become effective only upon approval of the
Amendment to the Plan at the Annual Meeting.
The Amendment will not take effect unless it is approved by a vote of
the majority of the outstanding shares of Common stock. It is intended that the
Proxies will vote for adoption of the Amendment unless instructions to the
contrary are indicated on the accompanying proxy form.
YOUR DIRECTORS RECOMMEND A VOTE FOR AMENDMENT OF THE PLAN UNDER PROPOSAL NO. 2
PROPOSAL NO. 3 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Our board of directors, acting upon the recommendation of its Audit
Committee, has selected the firm of BDO Seidman, LLP, 1900 Avenue of the Stars,
11th Floor, Los Angeles, CA, 90067, as independent accountants to examine our
financial statements for the fiscal year ending December 31, 2000, and to
perform other appropriate accounting services. A resolution will be presented to
the Annual Meeting to ratify this selection. The affirmative vote of a majority
of the number of votes entitled to be cast by the common stock represented at
the meeting is needed to ratify the selection. If the shareholders do not ratify
the appointment of BDO Seidman, LLP, the selection of independent accountants
will be reconsidered by our board of directors.
For the year ended December 31, 1999, BDO Seidman, LLP provided our
audit services, which included examination of our annual consolidated financial
statements, review of unaudited quarterly financial information, assistance and
consultation in connection with the filing of our Annual Report on Form 10-K
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and other filings with the Securities and Exchange Commission and consultation
in connection with various audit-related and accounting matters. None of the
financial statements prepared by BDO Seidman, LLP contained any adverse or
disclaimer of opinion, nor were they modified as to uncertainty, audit scope or
accounting principles.
We do not expect that representatives of BDO Seidman, LLP will be
present at the annual meeting.
The Proxies will vote in favor of ratifying the selection of BDO
Seidman, LLP unless instructions to the contrary are indicated on the
accompanying proxy form.
YOUR DIRECTORS RECOMMEND A VOTE FOR PROPOSAL NO. 3
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ABOUT OUR BOARD AND ITS COMMITTEES
OUR BOARD
We are governed by our board of directors and various committees of our board of
directors that meet throughout the year. Our board of directors held four
meetings during 1999. Directors discharge their responsibility throughout the
year at board and committee meetings and also through informal telephonic
conferences and other communications with the Chairman and others regarding our
business. All directors attended all board of directors' meetings during 1999,
except for Messrs. Seminoff and Kleven, each of whom missed one meeting.
COMMITTEES OF OUR BOARD
Our board of directors has two principal committees, the Compensation Committee
and the Audit Committee. The function of each of these Committees is described
below along with the current membership and number of meetings held during 1999.
COMPENSATION COMMITTEE
The Compensation Committee has three primary functions. First, it reviews the
performance of the principal executive officers on an annual basis. The results
of this review are then reported to our board of directors with a recommendation
from the Committee regarding the compensation packages to be awarded to these
officers. Second, the Compensation Committee reviews the compensation paid to
outside directors for service on our Board and for service on committees of our
Board. Finally, the Committee reviews the level and extent of applicable
benefits provided by us with respect to automobiles, travel, insurance, health
and medical coverage, stock options and other stock plans and benefits. The
Compensation Committee held four meetings, at which both members were present
during 1999. John F. Kealy and Richard J. Seminoff served as members of the
Compensation Committee in 1999 and currently serve on the Committee. See
"Compensation Committee Interlocks and Insider Participation" in the following
section.
AUDIT COMMITTEE
Our Audit Committee is composed of John P. Stephens and C. James Jensen. The
charter of our Audit Committee is to review, examine and discuss with our
management and auditors, as the case may be, those matters that primarily relate
to financial controls and audit. Its duties include the review, examination and
discussion of the following:
* the findings of the independent auditors resulting from their audit
and certification of our financial statements;
* our accounting principles, including actual or impending changes in
financial accounting requirements that may materially affect us;
* the adequacy of our financial and accounting controls, including
particular regard for the scope and performance of the internal
auditing function; and
* recommendations by the independent auditors or the internal auditing
staff with respect to changes in our policies or practices.
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In 1999 the board elected John P. Stephens and C. James Jensen to the Audit
Committee, which held two meetings during 1999. Both members were present at
all the meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Kealy and Seminoff served as members of the Compensation Committees
during the last fiscal year. Each member of the Compensation Committee has been,
and will be, a non-employee director for purposes of administering our stock
option plans under Rule 16b-3 under the Securities Exchange Act of 1934. Neither
of such individuals had any contractual or other relationships with us during
the last fiscal year except as directors.
DIRECTOR COMPENSATION
Directors currently receive no cash compensation for their services in that
capacity. Reasonable out-of-pocket expenses may be reimbursed to directors in
connection with attendance at meetings. We granted the following options to our
non-employee directors in 1999:
<TABLE>
<CAPTION>
No. of Shares
Underlying Exercise
Options Price
Name Granted Date of Grant ($/share) Expiration Date
---- ------- ------------- --------- ---------------
<S> <C> <C> <C> <C>
John F. Kealy 5,000 October 1, 1999 $5.31 September 30, 2004
30,000 May 20, 1999 6.00 May 19, 2004
30,000 January 6, 1999 6.38 January 5, 2004
Richard J. Seminoff 5,000 October 1, 1999 $5.31 September 30, 2004
30,000 May 20, 1999 6.00 May 19, 2004
30,000 January 6, 1999 6.38 January 5, 2004
John P. Stephens 5,000 October 1, 1999 $5.31 September 30, 2004
30,000 May 20, 1999 6.00 May 19, 2004
20,000 January 6, 1999 6.38 January 5, 2004
C. James Jensen 5,000 October 1, 1999 $5.31 September 30, 2004
150,000(1) May 20, 1999 10.00 May 19, 2004
150,000 May 20, 1999 6.00 May 19, 2004
</TABLE>
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(1) These options become exercisable on May 20, 2000.
LIMITATION OF LIABILITY OF DIRECTORS UNDER ARIZONA LAW
Arizona Law permits the inclusion of a provision in the articles of
incorporation of a corporation limiting or eliminating the potential monetary
liability of directors to a corporation or its shareholders by reason of their
conduct as directors. These sections do not permit any limitation on, or the
elimination of, liability of a director for disloyalty to his corporation or its
shareholders, failing to act in good faith, engaging in intentional misconduct
or a knowing violation of the law, obtaining an improper personal benefit or
paying a dividend or approving a stock repurchase that was illegal under Arizona
law. Accordingly, the provisions limiting or eliminating the potential monetary
liability of directors permitted by the Arizona law apply only to the "duty of
care" of directors, that is, to unintentional errors in their deliberations or
judgments and not to any form of "bad faith" conduct.
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LIMITATION OF LIABILITY FOR OUR DIRECTORS
Our Articles of Incorporation eliminate the personal monetary liability of
directors to the extent allowed under Arizona law. A shareholder is able to
prosecute an action against a director for monetary damages only if he can show
a breach of the duty of loyalty, a failure to act in good faith, intentional
misconduct, a knowing violation of law, an improper personal benefit or an
illegal dividend or stock repurchase, and not "negligence" or "gross negligence"
in satisfying the director's duty of care. This provision in our Articles of
Incorporation applies only to claims against a director arising out of his role
as a director and not in any other capacity or to his responsibilities under any
other law, such as the federal securities laws.
ABOUT THE EXECUTIVE OFFICERS
Joseph P. Kealy, Terry W. Beiriger, Douglas N. Kimball, Anthony T.
Baumann, Kenneth L. Wiltse, II and Gregory B. Hill are our principal executive
officers. For information regarding Mr. Kealy please refer to "Information About
the Nominees" beginning on page 5. All executive officers are appointed by and
serve at the discretion of the board of directors for continuous terms.
TERRY W. BEIRIGER
(age 48)
Mr. Beiriger is our Chief Financial Officer, Treasurer and Secretary. Mr.
Beiriger has served as our Chief Financial Officer since September 1990, as
Treasurer since July 1996, and as Secretary since March 1995. Mr. Beiriger
graduated from Hastings College in Nebraska with a bachelor of science in
business administration.
KENNETH L. WILTSE, II
(age 38)
Mr. Wiltse has served as our Executive Vice President and president of our
Infrastructure Development and Services Group since October 1999. From May 1999
to October 1999 he served as chief executive officer of Compass Communications,
Inc., our subsidiary that provides consulting, design and engineering services.
From May 1997 to May 1999 he served as Chief Operations Officer for Advanced
Broad Band System Services. He worked as a Project Director or Manager for
Lucent Technologies from May 1996 to May 1997; AT&T International from March
1994 to May 1999; Able Telecommunications from August 1990 to February 1994; and
Volt Telecommunications from July 1989 to July 1990. Mr. Wiltse received a
bachelor of science from Dakota State University and a masters degree in project
management from George Washington University.
ANTHONY T. BAUMANN
(age 35)
Mr. Baumann has served as our Chief Operating Officer since November 1999. From
July 1998 to November 1999 he served as our Controller. From 1996 to 1998, Mr.
Baumann owned an automotive consulting business. From 1994 to 1996, Mr. Baumann
served as divisional controller for Old Castle ITS, a publicly traded
multi-national conglomerate. From 1987 to 1994, Mr. Baumann was a certified
public accountant with Ernst & Young where he worked with emerging businesses.
Mr. Baumann graduated from the University of Arizona with a bachelor of science
in public administration.
DOUGLAS N. KIMBALL
(age 45)
Mr. Kimball has served as our Senior Executive Vice President concentrating in
acquisitions since October 1999. He was our Chief Operating Officer from October
1997 to October 1999, when he became Senior Executive Vice President. From 1995
to October 1997 he was vice president-operations at American Environmental
Network, Inc., an environmental testing firm. From 1992 to March 1996 he
provided financial consulting services to emerging businesses. Mr. Kimball
graduated with a bachelor of arts degree from Dartmouth College and earned a
masters of science in accounting/business administration from Northeastern
University.
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GREGORY B. HILL
(age 31)
Mr. Hill served as our Controller from September 1999 to March 2000 and became
our Vice President-Finance in April 2000. From June 1998 until June 1999 he was
employed by All Star Telecom, an infrastructure development subsidiary that we
acquired in April 1999, where he served as chief financial officer and
controller. From June to September 1999, he served as Regional Controller of our
Infrastructure Development Group. Mr. Hill is a certified public accountant and
served in the Technology Industry Group of Price Waterhouse providing audit,
transaction support, and business advisory services to technology companies from
January 1992 through June 1998. He received his bachelor of science in business
administration from California State University - Sacramento.
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EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by us to the
chief executive officer and the four highest compensated executive officers
whose total remuneration exceeded $100,000 for services rendered in all
capacities to us during the last three completed fiscal years.
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
Annual Securities
Compensation/ Underlying All Other
Name and Principal Positions Year Salary & Bonus Options (#)(2) Compensation (3)
- ---------------------------- ---- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Joseph P. Kealy (1) 1999 $210,312 500,000 $10,794
Chairman of the Board 1998 200,000 400,000 9,600
and President 1997 146,680 740,000 9,600
Terry W. Beiriger (1) 1999 154,196 100,000 7,014
Principal Financial Officer, 1998 150,000 55,000 9,600
Secretary and Treasurer 1997 76,997 170,000 9,600
Kenneth L. Wiltse, II 1999 171,071 335,000 13,500
Executive Vice President 1998 -- -- --
1997 -- -- --
Anthony T. Baumann 1999 98,750 180,000 1,500
Chief Operating Officer 1998 -- -- --
1997 -- -- --
Douglas N. Kimball 1999 131,596 90,000 7,054
Senior Executive Vice 1998 104,000 30,000 7,200
President 1997 85,000 60,000 7,200
</TABLE>
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(1) In 1999 we entered into extensions of the employment agreements with Joseph
P. Kealy and Terry W. Beiriger providing for an annual base salaries of
$200,000 and $150,000, respectively. See "Employment and Change of Credit
Agreement."
(2) The exercise prices of all stock options granted were at least equal to the
fair market value of our common stock on the date of grant.
(3) The amounts set forth in this column are the automobile allowances received
by the persons in the table under their respective employment agreements.
(4) In 1999, we entered into an employment agreement with Mr. Wiltse providing
for an annual base salary of $230,000. See "Employment and Change of Credit
Agreement."
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EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
In 1999 we entered into extensions of the employment agreements of Joseph
P. Kealy, Terry W. Beiriger, Jerry A. Kleven and V. Thompson Brown, Jr. and
entered into an employment agreement with Kenneth L. Wiltse, II. These
agreements automatically renew on August 11 of each year for successive
thirty-five month terms. As a part of the employment agreements, we have entered
into change of control agreements with these individuals. The objectives of the
agreements are to attract and retain qualified executives, encourage key
management personnel to devote full attention to our business if a third party
expresses an intention to acquire or merge with us, and provide compensation in
the event of termination of employment of such an individual upon a change of
control of us. The agreements are effective for the duration of the employee's
employment and terminate only upon the employee's termination of employment with
us. "Change of control" means the occurrence of any of the following events: (i)
when any person acquires, directly or indirectly, beneficial ownership of more
than 20% of our common stock; (ii) a change in the composition of the board of
directors, as a result of which fewer than one half of the incumbent directors
are directors who either had been directors 24 months prior to such change or
were elected, or nominated for election, to the board of directors with the
affirmative votes of at least a majority of the directors who had been directors
24 months prior to such change and who were still in office at the time of the
election or nomination; (iii) a merger or consolidation if more than 50% of the
combined voting power of the continuing or surviving entities securities are
owned by persons who were not shareholders immediately prior to such
transaction; or (iv) the sale, transfer, or other disposition in one or more
transactions, of all or substantially all of our assets. In the event of such a
change of control, covered employees who are terminated by the acquiring person
prior to expiration of the current term of the employment agreement will receive
compensation and benefits, including: (i) a multiple of their then current
annual base salary, plus the equivalent dollar value of all benefits, such
multiple being 2.99; (ii) 299% of covered employees incentive bonus; and (iii)
continued life and health insurance coverage for three years after termination.
STOCK OPTION GRANTS IN 1999
The following key executive officers were granted stock options under
and outside of our option plans in fiscal 1999 in recognition of their past
contributions to us. In each case, the option price was in excess of the fair
market value of the common stock on the date of grant.
<TABLE>
<CAPTION>
Potential Realizable
Percentage of Value at Assumed
Total Options Annual Rates of Stock
No. of Shares and Warrants Price Appreciation for
Underlying Granted to Exercise Option/Warrant Term (2)
Options Employees in Price Per -----------------------
Name Granted 1999 (1) Share Expiration Date 5% 10%
---- ------- -------- ----- --------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Kealy 150,000(3) 4.8 $ 6.31 September 30, 2004 $261,500 $577,848
125,000 4.0 10.00 May 19, 2004 345,352 763,138
125,000 4.0 6.00 May 19, 2004 207,211 457,883
100,000 3.2 6.38 January 5, 2004 186,268 389,505
Terry W. Beiriger 50,000 1.6 6.00 May 19, 2004 82,884 183,153
50,000 1.6 6.38 January 5, 2004 88,134 194,753
Kenneth L. Wiltse, II 150,000(4) 4.8 6.63 November 30, 2004 274,762 607,152
90,000(5) 2.9 5.31 September 30, 2004 132,035 291,763
95,000(6) 3.0 6.00 May 19, 2004 157,480 347,991
Douglas N. Kimball 30,000 1.0 6.38 January 5, 2004 52,880 116,852
30,000 1.0 6.00 May 19, 2004 49,731 109,892
30,000(7) 1.0 5.31 September 30, 2004 44,013 97,254
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Potential Realizable
Percentage of Value at Assumed
Total Options Annual Rates of Stock
No. of Shares and Warrants Price Appreciation for
Underlying Granted to Exercise Option/Warrant Term (3)
Options Employees in Price Per -----------------------
Name Granted 1999 (1) Share Expiration Date 5% 10%
---- ------- -------- ----- --------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Anthony T. Baumann 140,000(8) 1.0 5.31 September 30, 2004 205,388 453,853
30,000 1.0 6.00 May 19, 2004 49,731 109,892
10,000 1.0 6.38 January 5, 2004 17,627 38,951
</TABLE>
- ----------
*Less than 1%
(1) Percentages represent total percentages for fiscal 1999 including all
grants under and outside of our stock option plans listed for each person.
(2) Potential gains are net of the exercise price, but before taxes associated
with the exercise. Amounts represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. The assumed 5% and 10% rates of stock price appreciation are provided
in accordance with the rules of the Securities and Exchange Commission and
do not represent our estimate or projection of the future price of our
common stock. Actual gains, if any, on stock option exercises will depend
upon the future market prices of our common stock.
(3) Of these options 50,000 became exercisable on October 1, 1999; 50,000
become exercisable on October 1, 2000; and 50,000 become exercisable on
October 1, 2001.
(4) Of these options 75,000 became exercisable on December 1, 1999 and 75,000
become exercisable on December 1, 2000.
(5) Of these options 45,000 became exercisable on October 1, 1999 and 45,000
become exercisable on October 1, 2000.
(6) Of these options 47,500 became exercisable on May 20, 1999 and 47,500
become exercisable on May 20, 2000.
(7) Of these options 30,000 became exercisable on October 1, 1999; 40,000
become exercisable on October 1, 2000; 40,000 become exercisable on October
1, 2001; and 30,000 become exercisable on October 1, 2002.
(8) These options become exercisable on October 1, 2002.
13
<PAGE>
1999 STOCK OPTION EXERCISES AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Underlying Value of Unexercised
Shares Unexercised Options/and In-the-Money Options/and
Acquired Warrants at December 31, 1999 Warrants at December 31, 1999
on Value ----------------------------- -----------------------------
Name Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Kealy -- -- 1,489,446 100,000 $5,692,572 $256,500
Terry W. Beiriger 56,397 $497,375 225,000 -- 660,975 --
Kenneth L. Wiltse, II -- -- 167,500 167,500 297,863 297,863
Douglas N. Kimball -- -- 130,000 50,000 302,350 134,450
Anthony T. Baumann -- -- 90,000 110,000 205,650 282,150
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Such officers, directors and shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms that they file.
During the last year Messrs. Beiriger, Brown, Baumann, Wiltse, John F. Kealy,
Joseph P. Kealy and each failed to file one report on Form 4 in a timely
fashion, each of which should have contained disclosure regarding one
transaction. All of such transactions are being reported on Form 5.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee consists of two outside directors and is
responsible for the administration of our compensation programs. These programs
include base salary for executive officers and both annual and long-term
incentive compensation programs. Our compensation programs are designed to
provide a competitive level of total compensation and include incentive and
equity ownership opportunities linked to our performance and stockholder return.
14
<PAGE>
COMPENSATION PHILOSOPHY
The design and implementation of our executive compensation programs are
based on a series of guiding principles derived from our values, business
strategy and management requirements. These principles may be summarized as
follows:
* Align financial interests of the management team with us and our
stockholders;
* Attract, motivate and retain high-caliber individuals necessary to
increase total return to stockholders;
* Provide a compensation program where a significant portion of pay is
linked to individual achievement and our short- and long-term
performance; and
* Emphasize and reward performance at the individual, team and Company
levels.
COMPENSATION PROGRAM
Total compensation for each member of senior management is set by the
Committee at a level that it believes is competitive in relation to companies of
similar size and type. Our executive compensation program has two components
that are intended to attract, retain and motivate executive officers consistent
with the principles set forth above. We consider these components of
compensation individually as well as collectively in determining total
compensation for executive officers. The two major components are as follows:
1. BASE SALARY. Each fiscal year we establish base salaries for
individual executive officers based upon:
* industry and peer group surveys;
* responsibilities, scope and complexity of each position;
* performance judgments as to each individual's past and expected
future contributions; and
* internal equity relative to other executives responsibilities and
base salary levels.
The Compensation Committee reviews with the Chief Executive Officer
and approves, with appropriate modifications, an annual base salary
plan for our executive officers other than the Chief Executive
Officer. The Compensation Committee reviews and fixes the base salary
of the Chief Executive Officer based on similar competitive
compensation data and the Committee's assessment of his past
performance and its expectations as to his future contributions in
leading the Company.
2. EQUITY BASED INCENTIVE COMPENSATION. Long-term incentives for our
employees are provided under our stock option and stock purchase
plans. Each fiscal year, the Committee considers the desirability of
granting to executive officers long-term incentives in the form of
stock options. These option grants are intended to motivate the
executive officers to manage the business to improve our long-term
performance and align the financial interests of the management team
with us and our stockholders. The Committee established the grants of
15
<PAGE>
stock options to executive officers (other than the Chief Executive
Officer) last year, based upon a review with the Chief Executive
Officer of proposed individual awards, taking into account each
officer's scope of responsibility and specific assignments, strategic
and operational goals applicable to the officer, anticipated
performance requirements and contributions of the officer and
competitive data for similar positions. The Committee independently
reviewed these same factors in determining the option grant to Joseph
P. Kealy as our Chief Executive Officer.
Respectfully submitted,
Richard J. Seminoff
John F. Kealy
16
<PAGE>
OWNERSHIP OF OUR COMMON STOCK BY PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth information, as of April 27, 2000 with
respect to the number of shares of our common stock beneficially owned by
individual directors, by all directors and officers as a group, and by persons
who we know own more than 5% of our common stock. We have no other class of
voting stock outstanding. Unless otherwise indicated, the address of our
officers and directors is 3410 East University Drive, Suite 180, Phoenix,
Arizona 85034.
Name of Beneficial Number Percent of
Owner and Address of Shares (1) Common Stock Owned
----------------- ------------- ------------------
Joseph P. Kealy 1,945,667 (2) 6.0
Terry W. Beiriger 450,120 (3) 1.5
C. James Jensen 369,243 (4) 1.2
101 Wild Oak Court
Danville, California 94506
John P. Morbeck 35,700 (5) *
c/o Sirach Capital
3323 One Union Square
600 University Street
Seattle, Washington 98101
Richard J. Seminoff 179,243 (6) *
475 S. Wilson Way
City of Industry, California 91744
John P. Stephens 165,000 (7) *
5771 Rickenbacker Road
Los Angeles, California 90040
John F. Kealy 456,211 (8) 1.5
Jerry A. Kleven 376,196 (9) 1.2
Anthony T. Baumann 46,079 (10) *
Kenneth L. Wiltse, II 80,055 (11) *
Douglas N. Kimball 130,000 (12) *
V. Thompson Brown, Jr. 185,000 (13) *
Gregory B. Hill 39,828 (14) *
All directors and
officers as a group
(13 persons) 4,448,342 13.1
- ----------
* Less than 1% SEE NOTES ON THE FOLLOWING PAGE
(1) The shareholder listed has sole voting and investment power with respect to
the shares listed.
(2) Includes options to purchase 1,639,446 shares of common stock that are
presently exercisable. Does not include 100,000 options not exercisable
within the next 60 days.
(3) Includes options to purchase 345,000 shares of common stock that are
presently exercisable. Mr. Beiriger disclaims beneficial ownership of an
additional 8,804 shares owned by his immediate family.
(4) Includes options to purchase 315,000 shares of common stock that are
presently exercisable. Mr. Jensen disclaims beneficial ownership of an
additional 1,950 shares held by members of his family.
17
<PAGE>
(5) Includes options to purchase 25,000 shares of common stock that are
presently exercisable. Does not include options to purchase 25,000 shares
of common stock not exercisable within the next 60 days.
(6) Includes options to purchase 125,000 shares of common stock that are
presently exercisable.
(7) Represents options to purchase 160,000 shares of common stock that are
presently exercisable.
(8) Includes options to purchase 165,000 shares of common stock that are
presently exercisable. John F. Kealy disclaims beneficial ownership of an
additional 1,500 shares owned by his immediate family.
(9) Includes options to purchase 235,000 shares of common stock that are
presently exercisable.
(10) Includes options to purchase 20,000 shares of common stock that are
presently exercisable. Does not include options to purchase 110,000 shares
of common stock not exercisable within the next 60 days.
(11) Includes options to purchase 77,500 shares of common stock that are
presently exercisable. Does not include options to purchase 160,000 shares
of common stock not exercisable within the next 60 days.
(12) Includes options to purchase 130,000 shares of common stock that are
presently exercisable. Does not include options to purchase 50,000 shares
of common stock not exercisable within the next 60 days.
(13) Includes options to purchase 185,000 shares of common stock that are
presently exercisable.
(14) Includes options to purchase 31,250 shares of common stock that are
presently exercisable. Does not include options to purchase 112,500 shares
of common stock not exercisable within the next 60 days.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Commencing in 1989 we advanced funds to Wings Limited Partnership
("Wings"), the partners of which included Joseph P. Kealy, John F. Kealy and one
of our former principal shareholders. In 1993, these persons and their spouses
assumed the Wing's obligation by executing a promissory note in the principal
amount of $396,732, plus accrued interest. Such individuals secured the note by
pledging 267,000 shares of common stock to us. In June 1996, the former
principal shareholder paid $108,035 representing his pro-rata share of the
principal and accrued interest on the note. Upon such payment we released him
and his spouse from their obligations under the note and 107,000 shares of
common stock that they had pledged to secure the note. The total principal and
accrued interest due as of December 31, 1999 was $107,751, and the maturity date
of the note has been extended to December 31, 2000.
At December 31, 1994 International FiberCon, Inc., a California corporation
("FiberCon"), in which Jerry A. Kleven, his brother and his brother-in-law owned
a majority interest, owed us $210,000 as the result of loans we made to
FiberCon. Jerry A. Kleven guaranteed the payment of a portion of FiberCon's note
and in 1995 it failed to make the required payments on the note. Mr. Kleven then
issued the promissory note to us in 1995 that included the amount of his
guarantee. At December 31, 1999, the principal and accrued interest on this note
was $40,000.
18
<PAGE>
SUMMARY OF THE 1997 STOCK OPTION PLAN
SUMMARY OF THE 1997 STOCK OPTION PLAN
Our board of directors adopted the 1997 Stock Option Plan in January 1997. There
were originally 1,200,000 shares of common stock for issuance upon exercise of
options granted under the 1997, which we amended in 1998 to add 2,000,000 shares
eligible for issuance upon the exercises of options. Accordingly, there are now
3,200,000 shares of common stock eligible for issuance under the Plan. In
January 2000 we granted 355,514 new options to purchase shares of common stock
under the Plan. These options will become effective only upon approval of the
Amendment of the Plan by the shareholders at the Annual Meeting.
The Plan authorizes us to grant to our key employees (i) incentive stock options
to purchase shares of common stock and (ii) non-qualified stock options to
purchase shares of common stock.
OBJECTIVES
The objective of the Plan is to provide incentives to our key employees and
directors to achieve financial results aimed at increasing shareholder value and
attracting talented individuals to the Company. Persons eligible to be granted
incentive stock options under the Plan will be those employees whose
performance, in the judgment of the Compensation Committee, can have significant
effect on our success.
OVERSIGHT
The Compensation Committee of our board of directors administers the Plan by
making recommendations to the board or determinations regarding the persons to
whom options should be granted and the amount, terms, conditions and
restrictions of the awards. It also has the authority to interpret the
provisions of the Plan and to establish and amend rules for its administration
subject to the Plan's limitations. The Compensation Committee is comprised of
non-employee directors as required by Rule 16b-3 of the Securities and Exchange
Act of 1934, as amended.
TYPES OF GRANTS
Although the Plan does not specify what portion of the awards may be in the form
of incentive stock options or non-statutory options, historically a
substantially greater number of non-statutory stock options have been awarded
under the Plans. We anticipate that, if the Plan is amended as proposed, a
greater number of non-statutory, rather than incentive, options will be granted
in the future. Incentive stock options awarded our to employees are qualified
stock options under the Internal Revenue Code.
STATUTORY CONDITIONS ON STOCK OPTIONS
- - EXERCISE PRICE
Incentive stock options granted under the Plan must have an exercise price at
least equal to 100% of the fair market value of the common stock as of the date
of grant. Incentive stock options granted to any person who owns, immediately
after the grant, stock possessing more than 10% of the combined voting power of
all classes of the our stock, or of any parent or subsidiary corporation, must
have an exercise price at least equal to 110% of the fair market value of the
common stock on the date of grant. Non-statutory stock options may have exercise
prices as determined by the Compensation Committee of our board of directors.
19
<PAGE>
- - DOLLAR LIMIT
The aggregate fair market value, determined as of the time an incentive stock
option is granted, of the common stock with respect to which incentive stock
options are exercisable by an employee for the first time during any calendar
year cannot exceed $100,000. However, there is no aggregate dollar limitation on
the amount of non-statutory stock options that may be exercisable for the first
time during any calendar year.
- EXPIRATION DATE
Any option granted under the Plan will expire at the time fixed by the
Committee, which cannot be more than ten years after the date it is granted or,
in the case of any person who owns more than 10% of the combined voting power of
all classes of our stock or of any subsidiary corporation, not more than five
years after the date of grant.
- - EXERCISEABILITY
The Compensation Committee may also specify when all or part of an option
becomes exercisable, but in the absence of such specification, the option will
ordinarily be exercisable in whole or part at any time during its term. However,
the Compensation Committee may accelerate the exerciseability of any option at
its discretion.
- - ASSIGNABILITY
Options granted under the Plans are not assignable. Incentive stock options may
be exercised only while the optionee is employed by us or within twelve months
after termination by reason of death, within twelve months after the date of
disability, or within three months after termination for any other reason.
PAYMENT UPON EXERCISE OF OPTIONS
Payment of the exercise price for any option may be in cash, by withheld shares
which, upon exercise, have a fair market value at the time the option is
exercised equal to the option price (plus applicable withholding tax) or in the
form of shares of our common stock.
TAX CONSEQUENCES OF OPTIONS
An employee or director will not recognize income on the awarding of incentive
stock options and nonstatutory options under the Plan.
An optionee will recognize ordinary income as the result of the exercise of a
nonstatutory stock option in the amount of the excess of the fair market value
of the stock on the day of exercise over the option exercise price.
An employee will not recognize income on the exercise of an incentive stock
option, unless the option exercise price is paid with stock acquired on the
exercise of an incentive stock option and the following holding period for such
stock has not been satisfied. The employee will recognize long-term capital gain
or loss on a sale of the shares acquired on exercise, provided the shares
acquired are not sold or otherwise disposed of before the earlier of: (i) two
years from the date of award of the option or (ii) one year from the date of
exercise. If the shares are not held for the required period of time, the
employee will recognize ordinary income to the extent the fair market value of
the stock at the time the option is exercised exceeds the option price, but
limited to the gain recognized on sale. The balance of any such gain will be a
short-term capital gain. Exercise of an option with previously owned stock is
not a taxable disposition of such stock.
20
<PAGE>
An employee generally must include in alternative minimum taxable income the
amount by which the price he paid for an incentive stock option is exceeded by
the option's fair market value at the time his rights to the stock are freely
transferrable or are not subject to a substantial risk of forfeiture. The
subsidiaries will be entitled to deductions for federal income tax purposes as a
result of the exercise of a nonstatutory option and the disqualifying sale or
disposition of incentive stock options in the year and the amount that the
employee recognizes ordinary income as a result of such disqualifying
disposition.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative return for our common stock
during the five years commencing December 31, 1994, with the NASDAQ U.S. Stock
Index and its designated Peer Group. The Company has selected Mastec, Inc.,
Arguss Holdings, Inc., Able Telecom Holding Corp. and Dycom Industries, Inc. as
our Peer Group. The graph assumes $100 was invested on December 31, 1994, in our
common stock and assumes $100 was invested in each of the NASDAQ US Stock Index
and the Peer Group. The comparison assumes that all dividends are reinvested.
Comparison of Five Year Cumulative Total Return
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
NASDAQ US 100 141 174 214 300 542
Peer Group 100 218 367 595 1,019 1,096
Company 100 21 18 100 139 150
(The above is the tabular form of the performance graph that appears in the
proxy statement. A paper copy of the performance graph has been submitted to The
Division of Corporation Finance of the Securities and Exchange Commission.)
OTHER MATTERS
Our board of directors is not presently aware of any matters to be
presented at the meeting other than those described above. However, if other
matters properly come before the meeting, it is the intention of the persons
named in the accompanying proxy to vote your proxy on such matters in accordance
with their judgment.
21
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder desiring to have a proposal included in our proxy statement
for our 2000 Annual Meeting must deliver such proposal (which must comply with
the requirements of Rule 14a-8 promulgated under the Securities Exchange Act of
1934) to our principal executive offices not later than January 12, 2001.
ANNUAL REPORT
Our Annual Report on Form 10-K with certified financial statements required
to be filed for the fiscal year ended December 31, 1999, accompanies this Notice
and Proxy Statement and was mailed to all shareholders of record on or about May
12, 2000. Any exhibit to the Annual Report on Form 10-K will be furnished to any
requesting person who sets forth a good faith representation that he or she was
a beneficial owner of our common stock on April 27, 2000. The fee for furnishing
a copy of any exhibit will be 25 cents per page plus $3.00 for postage and
handling.
Supplemental Information
With respect to the Appendix 1, the 1997 Stock Option Plan ("Plan") the
following supplemental information is provided pursuant to Rule 14a-101, Item
10, Instruction 5. If and when the approval of the addition of the shares to the
Plan at the 2000 Annual Meeting of Shareholders is received, the additional
shares will be registered on Form S-8 within 30 days.
22
<PAGE>
Appendix 1
INTERNATIONAL FIBERCOM, INC.
1997 STOCK OPTION PLAN
The following definitions shall be applicable throughout the Plan:
(a) "Board" means the Board of Directors of the Company.
(b) "Articles of Incorporation" means the Company's Articles of
Incorporation, as amended or restated from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. Reference in the Plan to any Section of the Code shall be deemed
to include any amendments or successor provisions to such Section and any rules
or regulations under such Section.
(d) "Committee" means the committee appointed by the Board to
administer the Plan as referred to in Article V.
(e) "Commission" means the Securities and Exchange Commission or any
successor agency.
(f) "Company" means International FiberCom, Inc., an Arizona
corporation.
(g) "Date of Grant" means the date on which the granting of an Option
is authorized by the Board or such later date as may be specified by the Board
in such authorization as referred to in Article V.
(h) "Eligible Employee" means any person regularly employed by the
Company or a Subsidiary on a full-time salaried basis who satisfies all of the
requirements of Article IX.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
(j) "Fair Market Value" is defined in Article IV.
(k) "Holder" means an employee of the Company or a Subsidiary who has
been granted an Option.
(l) "Incentive Stock Option" means any Option intended to be and
designated as an "incentive stock option" within the meaning of ss.422 of the
Code.
(m) "Non-Employee Director" means a member of the Board who qualifies
as a "Non- Employee Director" as defined in Rule 16b-3, as promulgated by the
Commission under the Exchange Act or any successor definition adopted by the
Commission.
<PAGE>
(n) "Non-Incentive Options" means an Option which is not an Incentive
Stock Option
(o) "Normal Termination" means termination at retirement pursuant to
the Company or Subsidiary retirement plan then in effect.
(p) "Option" means an award granted under Article IX of the Plan and
includes both Non-Incentive Options and Incentive Stock Options.
(q) "Plan" means this 1997 Stock Option Plan.
(r) "Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
(s) "Share" means a share of Stock.
(t) "Stock" means common stock of the Company as described in the
Articles of Incorporation.
(u) "Subsidiary" means "subsidiary corporation" as defined in ss.424(f)
of the Code.
(v) "Termination" means separation from employment with the Company or
any of its Subsidiaries for any reason except due to death.
(w) "Treasury" means the Department of the Treasury of the United
States of America.
ARTICLE I.
Designation and Purpose of the Plan
The Plan shall be known as the "International FiberCom, Inc. 1997 Stock
Option Plan." The purpose of the Plan is to provide additional incentives to
Employees and Non-Employee Directors of the Company to achieve financial results
aimed at increasing shareholder value and to attract and retain the best
available personnel for positions of responsibility within the Company through
the grant of options to purchase shares of the Company's Common Stock. The Plan
was approved by the Board and the shareholders in 1997. Subject to the
determination of the Board or a Committee appointed by the Board, Options
granted under this Plan may be Incentive Stock Options or Non-Incentive Options.
- 2 -
<PAGE>
ARTICLE II.
Shares Available for Purchase
A maximum of 6,200,000 authorized but unissued shares of the Company's
common stock may be issued upon the exercise of Options granted pursuant to the
Plan. Such Shares shall be deemed to have been used in the exercise of Options
whether actually delivered or whether the Fair Market Value equivalent of such
Shares is paid in cash. In the event that any Option granted under the Plan
expires or terminates for any reason whatsoever without having been exercised in
full, the Shares subject to, but not delivered under such Option shall become
available for other Options which may be granted under the Plan; or shall be
available for any other lawful corporate purpose.
ARTICLE III.
Limit on Value of Option Shares
In the case of an Incentive Stock Option, the aggregate Fair Market
Value (determined as of the time such Option is granted) of the Shares with
respect to which the Incentive Stock Option is exercisable for the first time by
an individual during any calendar year (under all plans of the Company) shall
not exceed $100,000.
ARTICLE IV.
Determination of Fair Market Value
As used herein the term "Fair Market Value" shall mean, with respect to
the date a given Option is granted or exercised, the value determined by the
Board or any Committee appointed in accordance with Article VI hereof in good
faith using a generally accepted valuation method and, in the case of an
incentive stock option, determined in accordance with applicable Treasury
regulations; provided, however, that where there is a public market for the
common stock of the Company, the Fair Market Value per share shall be the mean
of the final bid and asked prices of the Stock on the date of grant, as reported
in The Wall Street Journal (or, if not so reported, as otherwise reported by the
National Association of Securities Dealers Automated Quotation System) or, in
the event the stock is listed on a stock exchange, the fair market value per
share shall be the closing price on such exchange on the date of grant of the
option, as reported in The Wall Street Journal.
ARTICLE V.
Stock Options and Option Agreements
(a) Stock Options under the Plan may be of two types: Incentive Stock
Options and Non- Incentive Options. Any Stock Option granted under the Plan will
be in such form as the Board may from time to time approve. The Board will have
the authority to grant any optionee Incentive Stock Options, Non-Incentive
Options or both types of Options. The Date of Grant of an Option will be the
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date the Board by resolution selects an individual to be a participant in any
grant of an Option, determines the number of Shares to be subject to such Option
to be granted to such individual and specifies the terms and provisions of the
Option. Incentive Stock Options may only be granted to Eligible Employees. To
the extent that any Option is not designated as an Incentive Stock Option or
even if so designated does not qualify as an Incentive Stock Option, it will be
deemed to be a Non-Incentive Option. The Board may grant Non-Incentive Options
to Non-Employee Directors under the Plan. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options will be
interpreted, amended or altered nor shall any discretion or authority granted
under the Plan be exercised so as to disqualify the Plan under ss.422 of the
Code or, without the consent of the optionee, to disqualify any Incentive Stock
Option under such ss.422.
(b) Each Option granted under the Plan shall be evidenced by an option
agreement ("Option Agreement"), which shall indicate on its face whether it is
an agreement for an Incentive Stock Option or a Non-Incentive Option, or both
and shall be signed by an officer of the Company on behalf of the Company and by
the employee who was granted the Option and which shall contain such provisions
as may be approved by the Board or any Committee appointed by the Board
according to Article VI. The provisions shall be subject to the following terms
and conditions:
(i) Any Option or portion thereof that is exercisable shall be
exercisable as to such number of Shares and at such times as set forth
in the Stock Option Agreement, except as limited by the terms of the
Plan heretofore;
(ii) Every Share purchased through the exercise of an Option
shall be paid for in full at the time of the exercise. Each Option
shall cease to be exercisable, as to any Share, when the Holder
purchases the Share, or when the Option lapses;
(iii) Options shall not be transferable by the Holder except
by will or the laws of descent and distribution and shall be
exercisable during the Holder's lifetime only by the Holder; and
(iv) An unexpired Option shall become immediately exercisable
(1) automatically on the Holder's Normal Termination, (2) at the
discretion of the Board, in whole or in part, on the date the Holder
becomes eligible to receive early retirement benefits, as defined under
the retirement plan of the Company then in effect, (3) upon any change
in control of the Company, and (4) under such other circumstances as
the Board may direct.
(c) The Option Agreements shall constitute binding contracts between
the Company and the employee. Every employee, upon acceptance and execution of
such option agreement, shall be bound by the terms and conditions of this Plan
and of the Option Agreement.
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(d) The terms and conditions of the Option Agreement shall be in
accordance with this Plan, but may include additional provisions and
restrictions, provided that the same are not inconsistent with the Plan.
ARTICLE VI.
Compensation and Stock Option Committee
The Plan shall be administered by the Board or a Committee appointed by
the Board in accordance with Rule 16b-3 of the Exchange Act ("Rule 16b-3"). Any
Committee which has been delegated the duty of administering the Plan by the
Board shall be composed of two or more persons each of whom (i) is a
Non-Employee Director and (ii) is an "outside director" as defined in
ss.162(m)(4) of the Code. To the extent reasonable and practicable, the Plan
shall be consistent with the provisions of Rule 16b-3 to the degree necessary to
ensure that transactions authorized pursuant to the Plan are exempt from the
operation of Section 16(b) of the Exchange Act. If such a Committee is
appointed, the Committee shall have the same power and authority to construe,
interpret and administer the Plan and from time to time adopt such rules and
regulations for carrying out this Plan as it may deem proper and in the best
interests of the Company as does the Board. Any reference herein to the Board
shall, where appropriate, encompass a Committee appointed to administer the Plan
in accordance with this Article VI.
The Board shall, from time to time, in its discretion, determine which
of the Eligible Employees are to be granted Options and the form, amount and
timing of such Options and, unless otherwise provided herein, the terms and
provisions thereof and the form of payment of an Option, if applicable, and such
other matters specifically delegated to It under this Plan. Subject to the
express provisions of the Plan, the Board shall have authority to interpret the
Plan and Options granted hereunder, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to make all other determinations necessary
or advisable in administering the Plan, all of which determinations shall be
final and binding upon all persons. A quorum of the Board shall consist of a
majority of its members and the Board may act by vote of a majority of its
members at a meeting at which a quorum is present, or without a meeting by a
written consent to the action taken signed by all members of the Board. No
member of the Board shall be liable for any action, interpretation or
construction made in good faith with respect to the Plan or any Option granted
hereunder.
ARTICLE VII.
Option Price
The Option price at which Shares may be purchased under an Option
granted pursuant to this Plan shall be set by the Board, but shall in no
instance be less than the Fair Market Value of such Shares on the Date of Grant
in the case of Incentive Stock Options. Such Fair Market Value shall be
determined by the criteria set forth in Article IV hereof. The Option price will
be subject to adjustments in accordance with provisions of Article X herein.
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In the event that an employee granted an Incentive Stock Option
hereunder owns, directly or indirectly, immediately after such grant, more than
10% of the total combined voting power of all classes of the issued and
outstanding stock of the company, the option price shall be at least 110% of the
Fair Market Value of the stock subject to the Option and such Option by its
terms shall not be exercisable after the expiration of five (5) years from the
date such Option is granted.
ARTICLE VIII.
Exercise of Option
(a) Subject to the provisions of Articles VII and IX the period during
which each Option may be exercised shall be fixed by the Board at the time such
Option is granted, subject to the following rules:
(i) such Option is granted within ten (10) years from the date
the Plan is adopted, or the date such Plan is approved by the
stockholders, whichever is earlier;
(ii) such Option by its terms is not exercisable after the
expiration of ten (10) years (in the case if Incentive Stock Options,
not to exceed five years for Eligible Employees owning 10% or more of
the combined voting power of all classes of stock of the Company) from
the Date of Grant as shall be set forth in the Stock Option Agreement
relating to such grant; and,
(iii) such Option by its terms states that a person's rights
and interests under the Plan, including amounts payable, may not be
assigned, pledged, or transferred except, in the event of an employee's
death, to a designated beneficiary as provided in the Plan, or in the
absence of such designation, by will or the laws of descent and
distribution.
(b) An Option shall lapse under the following circumstances:
(i) Ten (10) years after it is granted, three months after
Normal Termination, twelve months after the date of Termination if due
to permanent disability, three months after any other Termination or
any earlier time set by the grant.
(ii) If the Holder dies within the Option period, the Option
shall lapse unless it is exercised within the Option period and in no
event later than twelve months after the date of his death by the
Holder's legal representative or representatives or by the person or
persons entitled to do so under the Holder's last will and testament
or, if the Holder shall fail to make testamentary disposition of such
Option or shall die intestate, by the person or persons entitled to
receive said Option under the applicable laws of descent and
distribution.
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(iii) Notwithstanding the foregoing, in no event shall the
period of exercise be less than thirty days after Normal Termination or
the death of the Holder; provided, however, that in no event shall an
Incentive Stock Option be exercised more than ten years after the Date
of Grant.
(c) No Shares shall be delivered pursuant to any exercise of an Option
until the requirements of such laws and regulations, as may be deemed by the
Board to be applicable, are satisfied and until payment in full of the option
price specified in the applicable Stock Option Agreement is received by the
Company. No employee shall be deemed to be an owner of any Shares subject to any
Option unless and until the certificate or certificates for them have been
issued, as reflected on the stock record and transfer books of the Company.
ARTICLE IX.
Eligibility
All employees of the Company, including officers and directors who are
salaried employees, shall be Eligible Employees eligible to participate under
this Plan. The fact that an employee has been granted an Option under this Plan
shall not in any way affect or qualify the right of the employee to terminate
his employment at any time. Nothing contained in this Plan shall be construed to
limit the right of the Company to grant Options otherwise than under the Plan
for any proper and lawful corporate purpose, including but not limited to
Options granted to employees. Employees to whom Options may be granted under the
Plan will be those selected by the Committee from time to time who, in the sole
discretion of the Committee, have contributed in the past or who may be expected
to contribute materially in the future to the successful performance of the
Company.
ARTICLE X.
Capital Adjustments Affecting Stock
(a) If the outstanding Stock of the Company shall at any time be
changed or exchanged by declaration of a stock dividend, split-up, combination
of Shares, recapitalization, merger, consolidation, or other corporate
reorganization in which the Company is the surviving corporation, the number and
kind of Shares subject to the Plan or subject to any Options theretofore
granted, and the Option prices, shall be appropriately and equitably adjusted so
as to maintain the proportionate number of Shares without changing the aggregate
Option price and the Board may make any other adjustments as the Board deems
appropriate for purposes of the Plan. The determination of the Board as to the
terms of any adjustment shall be conclusive except to the extent governed by
Treasury regulations applicable to Incentive Stock Options.
(b) In the event of a liquidation or dissolution of the Company, sale
of all or substantially all of its assets, or a merger, consolidation or other
corporate reorganization in which the Company is not the surviving corporation,
or any merger or other reorganization in which the Company is the surviving
corporation but the holders of its Stock receive securities of another
corporation, or in the event a person makes a tender offer to the stockholders
of the Company, the Board may, but need not, accelerate the time at which
unexercised Options may be exercised. Nothing herein contained shall prevent the
substitution of a new Option by the surviving or acquiring corporation.
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ARTICLE XI.
Amendments, Suspension or Termination
(a) The Board shall have the right, at any time, to amend, suspend or
terminate the Plan, and if suspended, reinstate the Plan in whole or in part in
any respect which it may deem to be in the best interests of the Company,
provided, however, no amendments shall be made in the Plan which:
(i) Increase the total number of Shares for which Options may
be granted under this Plan for all employees or for any one of them
except as provided in Article X;
(ii) Change the minimum purchase price for the optioned
Shares, except as provided in Article X;
(iii) Affect outstanding Options or any unexercised rights
thereunder, except as provided in Article VIII;
(iv) Extend the option period provided in Article VIII or make
an Option exercisable earlier than as specified in Article VIII; or
(v) Extend the termination date of the Plan.
(b) The Board shall also have the right, with the express written
consent of an individual participant, to cancel, reduce or otherwise alter such
participant's outstanding Options under the Plan.
(c) Any such amendment, termination, suspension, cancellation,
reduction or alteration shall be further approved by the shareholders of the
Company if such approval is required to preserve or comply with any exemption,
whether under Rule 16b-3 or otherwise, from Section 16(b) of the Exchange Act or
to preserve the status of Incentive Stock Options within the meaning of ss.422
of the Code.
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ARTICLE XII.
Repurchase of Shares
Any time during an Optionee's employment with the Company, an Optionee
who has purchased shares of Common Stock upon exercise of Options granted
pursuant to this Plan, may, in writing, offer for sale to the Company such
Common Stock at the purchase price determined under the respective Stock Option
Agreement. If the Company does not acquire such Common Stock, the Optionee may
not, while he is in the employ of the Company, sell, transfer, gift, pledge,
encumber, burden or otherwise dispose of all or any portion of such Common Stock
to any other person or entity.
In the event that the employment of an employee is terminated or does
terminate, for any reason, including death, then in that event, to the extent
that Options have been exercised in whole or in part prior to the date of such
termination, the employee (or, if applicable, his assigns, heirs, successors,
administrators or executors) shall be required to sell back his Shares to the
Company upon such terms and conditions as determined by the Committee and as
reflected in the Option Agreement.
ARTICLE XIII.
Effective Date, Term and Approval
The effective date for this Plan shall be upon approval by the
stockholders. Options may be granted as provided herein for a period of ten
years after such date unless an earlier termination date after which no Options
may be granted under the Plan is fixed by action of the Board, but any Option
granted prior thereto may be exercised in accordance with its terms. The grant
of any Options under the Plan is effective only upon approval of the Plan by the
stockholders. The Plan and all Options granted pursuant to it are subject to all
laws, approvals, requirements, and regulations of any governmental authority or
securities exchange which may be applicable thereto and, notwithstanding any
provisions of the Plan or option agreement, the Holder of an Option shall not be
entitled to exercise his Option nor shall the Company be obligated to issue any
Shares to the Holder if such exercise or issuance shall constitute a violation
by the Holder or the Company of any provisions of any such laws, approvals,
requirements, or regulations. The Plan shall continue in effect until all
matters relating to the payment of Options granted under the Plan and
administration of the Plan have been settled.
ARTICLE XIV
General
(a) Government and Other Regulations. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, and the requirements of any stock exchange upon which the
Shares may then be listed and shall be further subject to the approval of
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<PAGE>
counsel for the Company with respect to such compliance. Inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(c) Tax Withholding. The employee or other person receiving Stock upon
exercise of an Option may be required to pay to the Company or to a Subsidiary,
as appropriate, the amount of any such taxes which the Company or Subsidiary is
required to withhold with respect to such Stock. In connection with such
obligation to withhold tax, the Company may defer making delivery of such Stock
unless and until indemnified on such withholding liability to its satisfaction.
(d) Claim to Options and Employment Rights. No employee or other person
shall have any claim or right to be granted an Option under the Plan. Neither
this Plan nor any action taken hereunder shall be construed as giving any
employee any right to be retained in the employ of the Company or a Subsidiary.
(e) Beneficiaries. Any payment of Options due under this Plan to a
deceased participant shall be paid to the beneficiary designated by the
participant and filed with the Board. If no such beneficiary has been designated
or survives the participant, payment shall be made to the participant's legal
representative. A beneficiary designation may be aged or revoked by a
participant at any time provided the change or revocation is filed with the
Board. The designation by a married participant of one or more persons other
than the participant's spouse must be consented to by the spouse.
(f) Nontransferability. A person's rights and interests under the Plan,
including amounts payable, may not be assigned, pledged, or transferred except,
in the event of an employee's death, to a designated beneficiary as provided in
the Plan, or in the absence of such designation, by will or the laws of descent
and distribution.
(g) Indemnification. Each person who is or shall have been a member of
the Board shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may be involved by reason
of any action or failure to act under the Plan and against and from any and all
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amounts paid by him in satisfaction of judgment in such action, suit, or
proceeding against him. He shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to handle and defend
it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Bylaws or Articles of Incorporation, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
(h) Reliance on Reports. Each member of the Board shall be fully
justified in relying or acting in good faith upon any report made by the
independent public accountants of the Company and its Subsidiaries and upon any
other information furnished in connection with the Plan by any person or persons
other than himself. In no event shall any person who is or shall have been a
member of the Board be liable for any determination made or other action taken,
including the furnishing of information, or failure to act, if in good faith.
(i) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
(j) Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.
(k) Pronouns. Masculine pronouns and other words of masculine gender
shall refer to both men and women.
(l) Titles and Headings. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
(m) Fractional Shares. No fractional Shares shall be issued and the
Board shall determine whether cash shall be given in lieu of fractional Shares
or whether such fractional Shares shall be eliminated by rounding up or rounding
down unless otherwise provided in the Plan.
(n) Construction of Plan. The place of administration of the Plan shall
be in the State of Arizona, and the validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined in accordance with the laws of
the State of Arizona.
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INTERNATIONAL FIBERCOM, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S
BOARD OF DIRECTORS FOR THE 2000 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD JUNE 16, 2000
The undersigned hereby constitutes and appoints JOSEPH P. KEALY, TERRY W.
BEIRIGER and JERRY A. KLEVEN, and each of them acting in the absence of the
others, with full power of substitution, the true and lawful attorneys and
proxies of the undersigned, to attend the Annual Meeting of the Stockholders of
INTERNATIONAL FIBERCOM, INC. (the "Company") to be held at the Mesa Hilton
Pavilion, 1011 West Holmes Avenue, Mesa, Arizona 85202, Mesa, Arizona on Friday,
June 16, 2000, at 7:30 a.m. local time, and any adjournments thereof, and to
vote all shares of the Company's Common Stock standing in the name of the
undersigned on the matters set forth below and upon any other matters that may
properly come before the meeting of any adjournment thereof, with all the powers
the undersigned would possess if personally present at the meeting, as follows:
PROPOSAL NO. 1
ELECTION OF EIGHT DIRECTORS
Joseph P. Kealy
Jerry A. Kleven
V. Thompson Brown, Jr.
John F. Kealy
Richard J. Seminoff
John P. Stephens
C. James Jensen
James P. Morbeck
VOTE FOR all nominees listed above
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VOTE FOR all nominees listed above, except
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------------------------------------------------------------------------
CUMULATIVE VOTES for one or more of the nominees as follows:
- -------
Joseph P. Kealy ;
-------------------------------------------------------
Jerry A. Kleven ;
-------------------------------------------------------
V. Thompson Brown, Jr. ;
------------------------------------------------
John F. Kealy ;
---------------------------------------------------------
Richard J. Seminoff ;
---------------------------------------------------
John P. Stephens ;
------------------------------------------------------
C. James Jensen ; and
---------------------------------------------------
James P. Morbeck .
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WITHHOLD AUTHORITY to vote for all nominees listed above.
- -------
PROPOSAL NO. 2
APPROVAL OF THE AMENDMENT TO THE 1997 STOCK OPTION PLAN
VOTE FOR AMENDMENT OF THE 1997 STOCK OPTION PLAN
- -------
VOTE AGAINST THE AMENDMENT OF THE 1997 STOCK OPTION PLAN
- -------
ABSTAIN
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1
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT ACCOUNTANTS
VOTE FOR RATIFICATION OF BDO SEIDMAN, LLP as the independent
public accountants for the Company's fiscal year 2000
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VOTE AGAINST RATIFICATION
- -------
ABSTAIN
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PLEASE PROMPTLY DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE.
This proxy will be voted in accordance with the directions indicated herein. If
no specific directions are given, this proxy will be voted for approval of all
nominees listed herein, for approval of the proposals listed herein and, with
respect to any other business as may properly come before the meeting, in
accordance with the discretion of the proxies.
DATED: , 2000
-----------------------
----------------------------------------
(Signature)
----------------------------------------
(Signature)
When signing as executor, administrator,
attorney, 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. If a joint tenancy,
please have both joint tenants sign.
2
