SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(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(c)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
TANISYS TECHNOLOGY, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
* Set forth amount on which the filing is calculated and state how it was
determined.
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[TANISYS LETTERHEAD]
February 14, 1997
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the 1997
Annual Meeting of the Stockholders of Tanisys Technology, Inc. The Annual
Meeting will be held on Thursday, March 20, 1997 at 1:00 p.m. at the Renaissance
Austin Hotel, located at 9721 Arboretum Boulevard, Austin, Texas 78759. The
formal Notice of the Annual Meeting is set forth in the enclosed material.
The matters expected to be acted upon at the meeting are described in the
attached Proxy Statement. During the meeting, stockholders will have the
opportunity to ask questions and comment on Tanisys Technology's operations.
It is important that your views be represented whether or not you are able to be
present at the Annual Meeting. Please sign and return the enclosed proxy card
promptly.
We are gratified by your continued interest in Tanisys Technology and pleased
that last year so many of you voted your shares either in person or by proxy. We
hope that you will vote again this year, and we urge you to return your proxy
card as soon as possible.
Sincerely,
/s/ MARK C. HOLLIDAY
Mark C. Holliday
Chairman of the Board
Chief Executive Officer
Enclosures
<PAGE>
TANISYS TECHNOLOGY, INC.
12201 TECHNOLOGY BOULEVARD, SUITE 130
AUSTIN, TEXAS 78727
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 20, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of Tanisys Technology, Inc., a Wyoming corporation (the
"Company'), will be held on Thursday, March 20, 1997, at 1:00 p.m. local time at
the Renaissance Austin Hotel, 9721 Arboretum Boulevard, in Austin, Texas, for
the purpose of considering and voting upon the following:
(1) A proposal to elect two directors to hold office until the 2000
Annual Meeting of Stockholders or until the election and
qualification of their respective successors.
(2) A proposal to approve the granting of stock options to certain
directors and executive officers under the Company's 1993 Stock
Option Plan.
(3) A proposal to ratify the appointment of Arthur Andersen LLP as
independent public accountants of the Company for the fiscal year
ending September 30, 1997.
(4) Such other business as may properly come before the Annual Meeting
or any adjournment(s) thereof. The Board of Directors is presently
unaware of any other business to be presented to a vote of the
stockholders at the Annual Meeting.
The items of business are more fully described in the Proxy Statement
accompanying this notice.
The Board of Directors has fixed January 31, 1997, as the record date (the
"Record Date") for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment(s) thereof. Only stockholders
of record at the close of business on the Record Date are entitled to notice of
and to vote at the Annual Meeting. The stock transfer books will not be closed.
A list of stockholders entitled to vote at the Annual Meeting will be available
for examination at the offices of the Company for ten days prior to the Annual
Meeting.
By Order of the Board of Directors
Joe O. Davis
CORPORATE SECRETARY
Austin, Texas
February 14, 1997
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO
PROMPTLY MARK, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED,
SELFADDRESSED, STAMPED ENVELOPE SO THAT YOUR SHARES OF STOCK MAY BE REPRESENTED
AND VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED AT THE ANNUAL MEETING. YOUR PROXY WILL BE RETURNED TO YOU
IF YOU SHOULD BE PRESENT AT THE ANNUAL MEETING AND SHOULD REQUEST SUCH RETURN OR
IF YOU SHOULD REQUEST SUCH RETURN IN THE MANNER PROVIDED FOR REVOCATION OF
PROXIES ON THE INITIAL PAGES OF THE ENCLOSED PROXY STATEMENT. PROMPT RESPONSE BY
OUR STOCKHOLDERS WILL REDUCE THE TIME AND EXPENSE OF SOLICITATION.
<PAGE>
TANISYS TECHNOLOGY, INC.
12201 TECHNOLOGY BOULEVARD, SUITE 130
AUSTIN, TEXAS 78727
--------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 20, 1997
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement and the accompanying proxy are furnished in
connection with the solicitation by the Board of Directors of Tanisys
Technology, Inc. (the "Company") of proxies for the Annual Meeting of
Stockholders of the Company (the "Annual Meeting"), to be held on Thursday,
March 20, 1997, at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders and any adjournment(s)
thereof. This Proxy Statement, the accompanying proxy and the Company's Annual
Report to Stockholders for the fiscal year ended September 30, 1996 are being
first mailed to the Company's stockholders on or about February 14, 1997.
The accompanying proxy is designed to permit each holder of the Company's
common stock, par value $.01 per share (the "Common Stock"), to vote for or
withhold voting for the nominees for election as directors of the Company set
forth under proposal 1, to vote for or against or to abstain from voting on
proposals 2 and 3 and to authorize the proxies to vote in their discretion with
respect to any other proposal brought before the Annual Meeting. When a
stockholder's executed proxy card specifies a choice with respect to a voting
matter, the shares will be voted accordingly. IF NO SUCH SPECIFICATIONS ARE
MADE, THE PROXIES FOR THE COMMON STOCK WILL BE VOTED BY THOSE PERSONS NAMED IN
THE PROXIES AT THE ANNUAL MEETING: FOR THE ELECTION OF THE NOMINEES UNDER THE
CAPTION "ELECTION OF DIRECTORS," FOR THE APPROVAL OF THE GRANTING OF STOCK
OPTIONS TO CERTAIN DIRECTORS AND EXECUTIVE OFFICERS UNDER THE COMPANY'S 1993
STOCK OPTION PLAN AND FOR RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR. If any other
matters properly come before the Annual Meeting, the proxies will vote upon such
matters according to their judgment.
The Company encourages the personal attendance of its stockholders at the
Annual Meeting, and execution of the accompanying proxy will not affect a
stockholder's right to attend the Annual Meeting and to vote his or her shares
in person. Any stockholder giving a proxy has the right to revoke it by giving
written notice of revocation to Joe O. Davis, Senior Vice President, Chief
Financial Officer and Corporate Secretary, Tanisys Technology, Inc., at the
Company's principal executive offices, 12201 Technology Boulevard, Suite 130,
Austin, Texas 78727, at any time before the proxy is voted, by executing and
delivering a later-dated proxy, or by attending the Annual Meeting and voting
his or her shares in person. No such notice of revocation or later-dated proxy
will be effective, however, until received by the Company at or prior to the
Annual Meeting. Such revocation will not affect a vote on any matters taken
prior to the receipt of such revocation. Mere attendance at the Annual Meeting
will not of itself revoke the proxy.
All expenses of the Company in connection with this solicitation will be
borne by the Company. In addition to the solicitation of proxies by use of the
mail, officers, directors and employees of the Company may solicit the return of
proxies by personal interview, mail, telephone and/or facsimile. Such persons
will not be additionally compensated, but will be reimbursed for out-of-pocket
expenses. The Company also will request brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation materials to the beneficial
owners of shares held of record by such persons and will reimburse such persons
and the Company's transfer agent for their reasonable out-of-pocket expenses in
forwarding such materials. Additionally, the Company has elected to retain the
services of D.F. King & Co. for the purpose of soliciting proxies to be voted at
the Annual Meeting at an estimated cost of $2,500, plus out-of-pocket expenses.
The Annual Report to Stockholders covering the Company's fiscal year ended
September 30, 1996, including audited financial statements, is enclosed
herewith. The Annual Report does not form any part of the material for the
solicitation of proxies.
<PAGE>
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
GENERAL
The Board of Directors has fixed January 31, 1997, as the record date (the
"Record Date") for the Annual Meeting. Only holders of record of the outstanding
shares of Common Stock at the close of business on the Record Date are entitled
to notice of and to vote at the Annual Meeting and any adjournment(s) thereof.
At the close of business on January 31, 1997, 16,635,155 shares of the Common
Stock were outstanding and entitled to be voted at the Annual Meeting. The
Common Stock is the only class of stock entitled to vote at the Annual Meeting.
Each share of Common Stock is entitled to one vote on each matter presented to
the stockholders.
QUORUM AND VOTE REQUIRED
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are counted in tabulations of the votes cast on proposals presented
to stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved. Assuming the presence of a
quorum, the affirmative vote of the holders on the Record Date of a plurality of
the shares of Common Stock outstanding, represented in person or by proxy at the
Annual Meeting, is required to elect directors for the Company and the
affirmative vote of the holders on the Record Date of a majority of the shares
of Common Stock outstanding, represented in person or by proxy at the Annual
Meeting, is required to approve the granting of options to certain directors and
executive officers under the Company's 1993 Stock Option Plan and ratification
of the appointment of the Company's independent public accountants.
SECURITY OWNERSHIP OF MANAGEMENT
The following table and notes thereto set forth certain information with
respect to the shares of Common Stock beneficially owned by (i) each director
and nominee for director of the Company, (ii) all executive officers of the
Company, including those listed in the Summary Compensation Table set forth
under the caption "Executive Compensation" below, and (iii) all executive
officers and directors of the Company as a group, as of the Record Date.
COMMON STOCK
AMOUNT AND NATURE OF PERCENT OF CLASS
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OWNED BENEFICIALLY (2)
- - ------------------------ ------------------------ ----------------------
Mark C. Holliday ............ 422,578(3) 2.5%
Gary W. Pankonien ........... 1,995,000 12.0%
Joe O. Davis ................ 8,000 *
Chris Efstathiou, Jr ........ 25,000 *
Guy L. Fielder .............. 5,000(4) *
Benjamin S. Marz ............ 71,857(5) *
Bill A. Nabors .............. 8,000 *
Donald R. Turner ............ 25,000 *
Parris H. Holmes, Jr ........ 996,225(6) 5.9%
Gordon H. Matthews .......... 152,000(7) *
Alan H. Portnoy ............. 0 *
James E. Sowell ............. 1,332,648(8) 7.7%
Theodore W. Van Duyn ........ 150,000(9) *
All executive officers and
directors as a group
(13 persons, including the
executive officers and
directors listed above) ... 5,191,308(10) 29.1%
- - ---------------
* Represents less than one percent (1%) of the issued and outstanding shares
of Common Stock.
(1) Unless otherwise noted, each of the persons named has sole voting and
investment power with respect to the shares reported.
2
<PAGE>
(2) The percentages indicated are based on outstanding stock options, Class B,
Class C and other Common Stock Purchase Warrants (collectively, the
"Warrants") exercisable within 60 days for each individual and 16,635,155
shares of Common Stock issued and outstanding on the Record Date.
(3) Includes 14,706 shares that Mr. Holliday has the right to acquire upon the
exercise of Warrants, exercisable within 60 days, and 306,666 shares that
Mr. Holliday has the right to acquire upon exercise of stock options,
exercisable within 60 days.
(4) Represents 5,000 shares owned by Mr. Fielder's wife.
(5) Includes 66,667 shares that Mr. Marz has the right to acquire upon
exercise of stock options, exercisable within 60 days.
(6) Includes 85,000 shares that Mr. Holmes has the right to acquire upon
exercise of stock options, exercisable within 60 days, 42,000 shares that
Mr. Holmes has the right to acquire upon the exercise of Warrants,
exercisable within 60 days, and 13,000 shares owned by his four children.
(7) Includes 55,000 shares that Mr. Matthews has the right to acquire upon
exercise of stock options, exercisable within 60 days, and 1,400 shares
owned by his daughter.
(8) Represents 758,824 shares owned by Jim Sowell Construction Co., Inc., a
private company owned 100% by Mr. Sowell, 15,000 shares that Mr. Sowell
has the right to acquire upon exercise of stock options, exercisable
within 60 days, and 558,824 shares that Mr. Sowell has the right to
acquire upon the exercise of Warrants owned by Jim Sowell Construction
Co., Inc., exercisable within 60 days.
(9) Includes 50,000 shares that Mr. Van Duyn has the right to acquire upon
exercise of stock options, exercisable within 60 days.
(10) Includes 578,333 shares that 13 directors and executive officers have the
right to acquire upon exercise of stock options, exercisable within 60
days, and 615,530 shares that such directors and executive officers have
the right to acquire upon the exercise of Warrants, exercisable within 60
days.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to persons
who are known to the Company to be the beneficial owners of 5% or more of the
outstanding Common Stock as of the Record Date:
AMOUNT AND NATURE OF PERCENT OF CLASS
NAME AND ADDRESS BENEFICIAL OWNERSHIP(1) OWNED BENEFICIALLY(2)
- - ---------------- ----------------------- ---------------------
GARY W. PANKONIEN ..................... 1,995,000 12.0%
12201 Technology Boulevard, Suite 130
Austin, Texas ......................... 78727
PARRIS H. HOLMES, JR .................. 996,225(3) 5.9%
9311 San Pedro, Suite 400
San Antonio, Texas .................... 78216
JAMES E. SOWELL ....................... 1,332,648(4) 7.7%
3131 McKinney Avenue, Suite 200
Dallas, Texas ......................... 75204
- - ------------
(1) Unless otherwise noted, each of the persons named has sole voting and
investment power with respect to the shares reported.
3
<PAGE>
(2) The percentages indicated are based on outstanding stock options, Class B,
Class C and other Common Stock Purchase Warrants (collectively, the
"Warrants") exercisable within 60 days for each individual and 16,635,155
shares of Common Stock issued and outstanding on the Record Date.
(3) Includes 85,000 shares that Mr. Holmes has the right to acquire upon
exercise of stock options, exercisable within 60 days, 42,000 shares that
Mr. Holmes has the right to acquire upon the exercise of Warrants,
exercisable within 60 days, and 13,000 shares owned by his four children.
(4) Represents 758,824 shares owned by Jim Sowell Construction Co., Inc., a
private company owned 100% by Mr. Sowell, 558,824 shares that Mr. Sowell
has the right to acquire upon the exercise of Warrants owned by Jim Sowell
Construction Co., Inc., exercisable within 60 days, and 15,000 shares that
Mr. Sowell has the right to acquire upon exercise of stock options,
exercisable within 60 days.
ITEM 1 ON PROXY
ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company, as amended, provide that the Board of Directors
shall consist of not fewer than three nor more than fifteen members and that the
number of directors, within such limits, shall be determined by resolution of
the Board of Directors at any meeting or by the stockholders at the Annual
Meeting. The Board of Directors of the Company has set the number of directors
comprising the Board of Directors at seven, with such directors being divided
into three classes.
The Board of Directors has nominated for director the individuals named
below to be elected at the Annual Meeting. The nominees will constitute the
Class I directors whose term will expire at the 2000 Annual Meeting of
Stockholders. The other directors of the Company will continue in office for
their existing terms.
The table below sets forth the names and ages of the nominees for director
and the year each nominee first became a director of the Company. Each of the
nominees is presently serving as a director of the Company. Biographical
information on the nominees is set forth below under "Management - Executive
Officers and Directors."
NOMINEES FOR DIRECTOR
CLASS I - TERM TO EXPIRE AT 2000 ANNUAL MEETING
YEAR FIRST BECAME A
NAME AND AGE DIRECTOR OF THE COMPANY
------------ -----------------------
Gary W. Pankonien (46) 1996
Alan W. Portnoy (51) 1996
Unless otherwise indicated on any duly executed and dated proxy, the
persons named in the enclosed proxy intend to vote the shares that it represents
for the election of the nominees listed in the table above for the term
specified. Although the Company does not anticipate that the above-named
nominees will refuse or be unable to accept or serve as directors of the Company
for the term specified, the persons named in the enclosed form of proxy intend,
if either of such nominees is unable or unwilling to serve as a director, to
vote the shares represented by the proxy for the election of such other person
as may be nominated or designated by management, unless they are directed by the
proxy to do otherwise.
Assuming the presence of a quorum, the affirmative vote of the holders of
a plurality of the shares of Common Stock, represented in person or by proxy at
the Annual Meeting, is required for the election of directors. Assuming the
receipt by each such nominee of the affirmative vote of at least a plurality of
the shares of Common Stock represented at the Annual Meeting, such nominees will
be elected as directors. Proxies will be voted for the nominees in accordance
with the specifications marked thereon, and if no specification is made, will be
voted "FOR" the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE INDIVIDUALS NOMINATED
FOR ELECTION AS DIRECTORS.
4
<PAGE>
CONTINUING DIRECTORS NOT STANDING FOR RE-ELECTION
The following directors serve terms expiring at the 1998 and 1999 Annual
Meetings of the Stockholders:
CLASS II - CONTINUING TO SERVE UNTIL 1998 ANNUAL MEETING
YEAR FIRST BECAME A
NAME AND AGE DIRECTOR OF THE COMPANY
------------ -----------------------
Gordon H. Matthews (60) 1994
James E. Sowell (48) 1995
CLASS III - CONTINUING TO SERVE UNTIL 1999 ANNUAL MEETING
YEAR FIRST BECAME A
NAME AND AGE DIRECTOR OF THE COMPANY
------------ -----------------------
Mark C. Holliday (44) 1994
Parris H. Holmes, Jr. (53) 1993
Theodore W. Van Duyn (47) 1994
Biographical information on these continuing directors is set forth below
under "Management - Executive Officers and Directors."
5
<PAGE>
ITEM 2 ON PROXY
APPROVAL OF GRANTING OF OPTIONS TO
CERTAIN DIRECTORS AND EXECUTIVE OFFICERS
UNDER THE COMPANY'S 1993 STOCK OPTION PLAN
Since the commencement of the Company's last completed fiscal year on
October 1, 1995, the Stock Option Committee of the Board of Directors granted
options to directors and executive officers of the Company, as listed below,
under the Company's 1993 Stock Option Plan to purchase 100,000 shares of Common
Stock at $3.62, 300,000 shares at $3.69, 145,000 shares at $3.13, 260,000 shares
at $4.09 and 100,000 shares at $4.17. All of such options vest over a three-year
period (see "Executive Compensation - Employee Benefit Plans - Stock Option
Plans"):
PRICE DATE
NUMBER PER OPTION EXPIRATION
OPTIONEE OF SHARES SHARE GRANTED DATE
-------- --------- ----- ------- ----------
Mark C. Holliday ........... 100,000 $ 3.62 3/27/96 3/27/01
Gary W. Pankonien .......... 150,000 3.69 5/09/96 5/09/01
Joe O. Davis ............... 120,000 3.13 8/23/96 8/23/01
30,000 4.09 10/10/96 10/10/01
Chris Efstathiou, Jr ....... 60,000 3.69 5/09/96 5/09/01
60,000 4.09 10/10/96 10/10/01
Guy L. Fielder ............. 100,000 4.17 10/18/96 10/18/01
Benjamin S. Marz ........... 60,000 4.09 10/10/96 10/10/01
Bill A. Nabors ............. 30,000 3.69 5/09/96 5/09/01
60,000 4.09 10/10/96 10/10/01
Donald R. Turner ........... 60,000 3.69 5/09/96 5/09/01
50,000 4.09 10/10/96 10/10/01
Alan H. Portnoy ............ 25,000 3.13 8/23/96 8/23/01
Assuming the presence of a quorum, the affirmative vote of the holders of
a majority of the outstanding shares of Common Stock present at the Annual
Meeting in person or by proxy is necessary for approval of the granting of the
foregoing options under the Company's 1993 Stock Option Plan. Proxies will be
voted for or against such approval in accordance with specifications marked
thereon; if no specification is made, the proxies will be voted "FOR" such
approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE PROPOSAL TO APPROVE THE GRANTING OF OPTIONS
UNDER THE COMPANY'S 1993 STOCK OPTION PLAN.
6
<PAGE>
ITEM 3 ON PROXY
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of Arthur
Andersen LLP to serve as independent public accountants of the Company for the
fiscal year ending September 30, 1997. Although stockholder ratification is not
required, the Board of Directors has directed that such appointment be submitted
to the stockholders of the Company for ratification at the Annual Meeting.
Arthur Andersen LLP has served as independent public accountants of the Company
with respect to the Company's consolidated financial statements for fiscal years
1994 through 1996 and is considered by management of the Company to be well
qualified. If the stockholders do not ratify the appointment of Arthur Andersen
LLP, the Board of Directors may reconsider the appointment.
Representatives of Arthur Andersen LLP will be present at the Annual
Meeting. They will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions from stockholders.
Assuming the presence of a quorum, the affirmative vote of the holders of
a majority of the outstanding shares of Common Stock present at the Annual
Meeting in person or by proxy is necessary for the adoption of the proposal.
Proxies will be voted for or against such ratification in accordance with
specifications marked thereon, and if no specification is made, the proxies will
be voted "FOR" such ratification.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1997.
ITEM 4 ON PROXY
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters, other than
those referred to in the accompanying Notice of Annual Meeting of Stockholders,
which properly may come before the Annual Meeting. However, if any other matter
should be properly presented for consideration and voting at the Annual Meeting
or any adjournment(s) thereof, it is the intention of the persons named as
proxies on the enclosed form of proxy card to vote the proxy cards in accordance
with their judgment.
7
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
On the Record Date, the executive officers and directors of the Company
were as follows:
NAME AGE POSITION
---- --- --------
Mark C. Holliday 44 Chairman of the Board and Chief Executive
Officer
Gary W. Pankonien 46 President, Chief Operating Officer and Director
Joe O. Davis 53 Senior Vice President, Chief Financial Officer
and Corporate Secretary
Chris Efstathiou, Jr. 37 Vice President of Materials
Guy L. Fielder 43 Vice President of Engineering
Benjamin S. Marz 44 Vice President of Sales and Customer Service
Bill A. Nabors 55 Vice President of Manufacturing
Donald R. Turner 41 Corporate Controller
Parris H. Holmes, Jr. 53 Vice Chairman of the Board (1)(2)(3)
Gordon H. Matthews 60 Director (1)
Alan H. Portnoy 51 Director (1)
James E. Sowell 48 Director (2)(3)
Theodore W. Van Duyn 47 Director (2)(3)
- - ------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Stock Option Committee.
The following is a description of the biographies of the Company's
executive officers and directors for the past five years.
MARK C. HOLLIDAY joined the Company as President, Chief Executive Officer
and a director in February 1994 and was elected Chairman of the Board in March
1994. Mr. Holliday has over 20 years of computer industry experience in large
multinational companies as well as new ventures in computer software
development, most recently with BMC Software, Inc., a software development
company, where he served as Director of Research and Development from March 1988
to February 1994.
GARY W. PANKONIEN was appointed President and Chief Operating Officer of
the Company after the acquisition of 1st Tech Corporation ("1st Tech") and
DarkHorse Systems, Inc. ("DarkHorse") in May 1996 and elected a director in July
1996. Prior to 1st Tech's acquisition by the Company, Mr. Pankonien served as
Chairman and Chief Executive Officer of 1st Tech since its inception in January
1993 and as Chairman and Chief Executive Officer of DarkHorse since May 1992. He
was Chief Operations Officer of Stratum Technologies, Inc., a memory module
manufacturer and reseller located in Austin, Texas, from January 1992 until
August 1992, when he purchased Stratum and was appointed Chairman
8
<PAGE>
of the Board and Chief Executive Officer. Stratum was dissolved in June 1995. He
was employed with Compaq Computer Corporation, a personal computer manufacturer,
from February 1984 until October 1991 as Notebook Computer Design and Operations
Manager and co-developed and currently holds the patent for the first notebook
computer.
JOE O. DAVIS, CPA, joined the Company as Senior Vice President, Chief
Financial Officer and Corporate Secretary in July 1996. Prior to joining the
Company, Mr. Davis served from June 1990 to April 1993 as Chief Financial
Officer of San Marcos Telephone Company, which was acquired by Century Telephone
Enterprises, a long distance telephone company listed on the New York Stock
Exchange and located in Monroe, Louisiana, in April 1993. He continued his
employment with Century Telephone Enterprises as Vice President of Finance and
Planning until July 1996. He has 27 years of experience in financial management
and business planning, both domestically and internationally, has served as a
member of the board of directors of various public and private companies in the
United States and Australia, and was a partner with Peat Marwick Mitchell & Co.,
now known as KPMG Peat Marwick, for three years.
CHRIS EFSTATHIOU, JR., Vice President of Materials, has more than 15 years
of experience in the electronics industry in high-tech purchasing. He joined 1st
Tech in December 1994 as Vice President of Materials and the Company in May 1996
upon its acquisition of 1st Tech. Previously, Mr. Efstathiou worked from May
1990 to December 1994 as the Director of Strategic Materials for Dell Computer
Corporation, a personal computer manufacturer. Prior to working with Dell, he
was involved for more than 10 years in high-tech purchasing, including four
years with Advent Corporation and more than two years with Wang Laboratories,
Inc.
GUY L. FIELDER, Vice President of Engineering, joined the Company in
October 1996. Mr. Fielder was self-employed as an engineering consultant from
October 1991 to November 1996. He was employed with Compaq Computer Corporation
from May 1982 to October 1991, where he was the 18th employee, a member of its
start-up team and intimately involved in the formation of Compaq's organization,
structure and culture. As a senior research and development manager at Compaq,
he developed state-of-the-art portable personal computers that won numerous
industry awards and grossed over $2 billion in sales.
BENJAMIN S. MARZ, Vice President of Sales and Customer Service, joined the
Company in April 1994. Prior to joining the Company, Mr. Marz was Vice President
of Sales and Customer Service of Technology Works, Inc., a memory manufacturing
company, from February 1993 to April 1994 after serving two years on their
board. He was President of Computerland in Austin, Texas from July 1990 to
February 1993.
BILL A. NABORS joined the Company as Vice President of Manufacturing
effective upon the acquisition of 1st Tech in May 1996. He had served in the
same capacity with 1st Tech since February 1996. Previously, Mr. Nabors was
President and Chief Operating Officer of Bartco Inc., a printing company serving
small businesses, from December 1992 to February 1996. He was Director of U.S.
Manufacturing for Compaq Computer Corporation from June 1984 to November 1992
and was instrumental in establishing their Houston SMT operations. His
background includes materials management positions with both Texas Instruments
and Rockwell International.
DONALD R. TURNER, CPA, joined the Company as Corporate Controller
effective upon the acquisition of 1st Tech in May 1996. He was a founding
officer and board member of 1st Tech, where he served as Vice President, Chief
Financial Officer and Secretary-Treasurer from January 1993 until the purchase
of 1st Tech by Tanisys in May 1996. He was Controller of Stratum Technologies,
Inc. from September 1992 to January 1993. Prior to joining Stratum, he was
Controller of Phillips Distribution, a San Antonio, Texas based packaging
distribution company, from March 1984 until September 1992.
PARRIS H. HOLMES, JR. has served as a director of the Company since August
1993, having served as Chairman of the Board until March 1994, at which time he
was elected Vice Chairman of the Board. Mr. Holmes is Chairman and Chief
Executive Officer of Billing Information Concepts Corp., a third-party billing
clearinghouse and information management services business; Chairman of U.S.
Long Distance Corp., a telecommunications company which he founded in 1985; and
serves on the Board of Directors of Poore Brothers, Inc., a manufacturer and
distributor of flavored potato chips.
GORDON H. MATTHEWS has served as a director of the Company since September
1994. Since June 1992, Mr. Matthews has owned and operated Matthews Voice Mail
Management, Inc., which provides voice mailboxes on a monthly rental basis for
specialized applications. He has owned and operated Matthews Communications
Systems, Inc., which
9
<PAGE>
tracks the pace of golf course play and increases efficiency and net
profitability of golf courses, since May 1989. In June 1996, Mr. Matthews
started a new company, Matthews Communications Management, Inc., which offers
advanced telephone control products. He serves on the Board of Directors of
V-Tel Corporation, an Austin, Texas company specializing in teleconferencing
services.
ALAN H. PORTNOY has served as a director of the Company since July 1996.
Since October 1996, Mr. Portnoy has served as President of Macronix America
Inc., a semiconductor manufacturing company. From January 1994 to October 1996,
he was President of Galactic Enterprises, Inc., which provides corporate
development and strategic marketing services for high technology start-up
companies and multinational corporations in the semiconductor, computer and
communications fields. From September 1987 to January 1994, he was Executive
Vice President and Chief Operating Officer of Goldstar America, Inc., a
subsidiary of the Lucky-Goldstar Group, a Korean conglomerate.
JAMES E. SOWELL has served as a director of the Company since May 1995 and
is the founder of Jim Sowell Construction Co., Inc., which began in 1972
primarily for single-family home construction. Since 1972, the company has
expanded its scope of operations and ownership to include land development,
income property development, financial institutions, country club and golf
course operations and ownership, hotel and restaurant ownership and operations,
as well as interests in major corporations. Mr. Sowell is a director of Billing
Information Concepts Corp. He was Chairman of the Board of Business Capital
Corporation ("BCC"), Arlington Golf Club, Inc. ("AGC") and Sable Homes, Inc.
("SHI") and a general partner of SBS Venture ("SBS"). All of these entities
filed petitions for relief under the U.S. Bankruptcy Code-BCC in March 1991
(emerged in January 1992), AGC in April 1992 (dismissed in January 1993), SHI in
September 1993 (liquidated in December 1993) and SBS in September 1991 (petition
withdrawn in December 1991).
THEODORE W. VAN DUYN has served as a director since March 1994. Mr. Van
Duyn has been Chief Technology Officer for BMC Software, Inc. since February
1993. He joined BMC Software, Inc. in 1985 as Director of Research and served as
Senior Vice President, Research and Development, from 1986 until assuming his
current position.
All directors hold office for their elected term or until their successors
are duly elected and qualified. If a director should be disqualified or unable
to serve as a director, the vacancy so arising may be filled by the Board of
Directors for the unexpired portion of his term. All officers serve at the
discretion of the Board of Directors. There are no family relationships between
members of the Board of Directors or any executive officers of the Company.
COMMITTEES, MEETINGS AND BOARD COMPENSATION
The Board of Directors conducts its business through meetings of the Board
of Directors and through its committees. In accordance with the Bylaws of the
Company, the Board of Directors has established a Compensation Committee, an
Audit Committee and a Stock Option Committee. The Board of Directors does not
currently utilize a nominating committee or committee performing similar
functions.
COMPENSATION COMMITTEE
The Compensation Committee reviews and makes recommendations to the Board
of Directors concerning major compensation policies and compensation of officers
and executive employees. This committee is comprised of Directors Holmes, Sowell
and Van Duyn.
AUDIT COMMITTEE
The Audit Committee acts on behalf of the Board of Directors with respect
to the Company's financial statements, record-keeping, auditing practices and
matters relating to the Company's independent public accountants, including
recommending to the Board of Directors the firm to be engaged as independent
public accountants for the next fiscal year; reviewing with the Company's
independent public accountants the scope and results of the audit and any
related management letter; consulting with the independent public accountants
and management with regard to the Company's accounting methods and the adequacy
of its internal accounting controls; approving professional services by the
independent public accountants; and reviewing the independence of the
independent public accountants. The Audit Committee is comprised of Directors
Holmes, Matthews and Portnoy.
10
<PAGE>
BOARD OF DIRECTOR AND COMMITTEE MEETINGS
During the fiscal year ended September 30, 1996, the Board of Directors
met 11 times and took actions on 15 other occasions by unanimous written
consents. During the year, the Compensation Committee of the Board of Directors
met on two occasions and the Stock Option Committee met on two occasions. The
Audit Committee did not meet during fiscal 1996.
DIRECTORS' COMPENSATION
Directors are not paid a fee for attending Board of Director or committee
meetings, but are reimbursed for their travel expenses to and from the meetings.
Outside directors were granted stock options under the Company's 1993
Stock Option Plan at the time of their election or appointment to the Board of
Directors from April 1994 until January 1997, when the Board of Directors
approved the Company's 1997 Stock Option Plan for Non-Employee Directors. See
"Executive Compensation - Employee Benefit Plans - Stock Option Plans."
STOCK OPTIONS. Each outside director has been granted an option or options
to purchase certain shares of Common Stock pursuant to the Company's 1993 Stock
Option Plan. See "Executive Compensation - Employee Benefit Plans - Stock Option
Plans." At September 30, 1996, the outside directors of the Company held the
following number and value of options granted under the Company's 1993 Stock
Option Plan and outside such plan:
<TABLE>
<CAPTION>
SECURITIES UNDERLYING UNREALIZED VALUE OF OPTIONS
OPTIONS AT SEPTEMBER 30, 1996 ($)(1)
------------------------------- EXERCISE PRICE ------------------------------
DIRECTOR EXERCISABLE UNEXERCISABLE PER SHARE EXERCISABLE UNEXERCISABLE
-------- ----------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
PARRIS H. HOLMES, JR .............. 85,000 20,000 $1.71 - $2.72 $144,950 $44,800
GORDON H. MATTHEWS ................ 27,500 55,000 $2.94 27,775 55,550
ALAN H. PORTNOY ................... 0 25,000 $3.13 0 20,500
JAMES E. SOWELL ................... 15,000 30,000 $3.32 9,450 18,900
THEODORE W. VAN DUYN .............. 50,000 25,000 $1.71 112,000 56,000
</TABLE>
- - ---------------
(1) Reflects the aggregate market value of the underlying securities as
determined by reference to the closing price of the Common Stock on the
Vancouver Stock Exchange (the "VSE") on September 30, 1996 ($3.95 per
share) minus the aggregate exercise price for each option.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of the Company (the
"Committee") has furnished the following report on the Company's executive
compensation policies. The report describes the Committee's compensation
policies applicable to the Company's executive officers and provides specific
information regarding the compensation of the Company's Chief Executive Officer.
(The information contained in the report shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission (the
"SEC"), nor shall such information be incorporated by reference into any future
filings under the Securities Act of 1933, as amended (the "Securities Act"), or
the Exchange Act, except to the extent that the Company specifically
incorporates it by reference into such filing.)
The Committee is comprised of three outside directors and administers and
oversees, all aspects of the Company's executive compensation policy and reports
its determinations to the Board of Directors. See "Management - Committees,
11
<PAGE>
Meetings and Board Compensation - Compensation Committee." The Committee's
overall goal is to develop executive compensation policies that are consistent
with, and linked to, strategic business objectives and Company values. The
Committee approves the design of, assesses the effectiveness of, and administers
executive compensation programs in support of, the Company's compensation
policies. The Committee also reviews and approves all salary arrangements and
other remuneration for executives, evaluates executive performance and considers
related matters.
COMPENSATION PHILOSOPHY
The Company's executive compensation policies have four primary
objectives: to attract and retain highly competent executives to manage the
Company's business, to offer executives appropriate incentives for
accomplishment of the Company's business objectives and strategy, to encourage
stock ownership by executives to enhance mutuality of interest with stockholders
and to maximize long-term stockholder value. The Committee believes that the
compensation policies should operate in support of these objectives and should
emphasize the following: a long-term and at-risk focus, a pay-forperformance
culture, an equity orientation and management development.
ELEMENTS OF COMPENSATION
Each element of compensation considers median compensation levels paid
within the competitive market. Competitive market data compares the Company's
compensation practices to a group of comparator companies that tend to have
similar sales volumes, market capitalizations, employment levels and lines of
business. The Committee reviews and approves the selection of companies used for
compensation comparison purposes.
The key elements of the Company's executive compensation are base salary,
annual incentive and long-term incentive. These key elements are addressed
separately below. In determining compensation, the Committee considers all
elements of an executive's total compensation package.
BASE SALARIES. Base salaries for executives are initially determined by
evaluating executives' levels of responsibility, prior experience, breadth of
knowledge, internal equity issues and external pay practices. Base salaries are
below the size-adjusted medians of the competitive market.
Increases to base salaries are driven primarily by individual performance.
Individual performance is evaluated based on sustained levels of individual
contribution to the Company. When evaluating individual performance, the
Committee considers the executive's efforts in promoting Company values,
continuing educational and management training, improving product quality,
developing relationships with customers, suppliers and employees, and
demonstrating leadership abilities among co-workers.
As reflected in the Summary Compensation Table below, the base salary for
Mr. Holliday was increased in fiscal 1996 by approximately $2,300. In
determining the base salary for Mr. Holliday for fiscal 1996, the Committee,
without his participation in the process and in its subjective determination,
considered the Company's overall performance, his individual performance and his
long-term contributions to the success of the Company. The Committee also
compared Mr. Holliday's base salary to those of chief executive officers at
comparator companies.
ANNUAL INCENTIVE. Each year, the Committee evaluates the performance of
the Company as a whole, as well as the performance of each individual executive.
Factors considered include revenue growth, net profitability and cost control.
The Committee does not utilize formalized mathematical formulae, nor does it
assign weightings to these factors. The Committee, in its sole discretion,
determines the amount, if any, of incentive payments to each executive. The
Committee believes that the Company's growth in revenue and profitability
requires subjectivity on the part of the Committee when determining incentive
payments. The Committee believes that specific formulae restrict flexibility and
are too rigid at this stage of the Company's development. No cash bonus was paid
to Mr. Holliday or any other executive officers in fiscal 1996, although bonuses
may be paid to Mr. Holliday and other executive officers in the future.
LONG-TERM INCENTIVES. The Company's long-term compensation philosophy
provides that long-term incentives should relate to improvement in stockholder
value, thereby creating a mutuality of interests between executives and
12
<PAGE>
stockholders. Additionally, the Committee believes that the long-term security
of executives is critical for the perpetuation of the Company. Long-term
incentives are provided to executives through the Company's 1993 Stock Option
Plan.
In keeping with the Company's commitment to provide a total compensation
package that favors at-risk components of pay, long-term incentives comprise an
appreciable portion of an executive's total compensation package. When awarding
long-term incentives, the Committee considers executives' respective levels of
responsibility, prior experience, historical award data, various performance
criteria and compensation practices at comparator companies. Again, the
Committee does not utilize formal mathematical formulae when determining the
number of options/shares granted to executives.
STOCK OPTIONS. Under the terms of the Company's 1993 Stock Option Plan,
stock options were granted at an option price representing the average closing
price of the Common Stock as quoted on the VSE for the previous two weeks.
Accordingly, stock options have value only if the price of the Common Stock
appreciates after the date the options are granted. This design focuses
executives on the creation of stockholder value over the long term and
encourages equity ownership in the Company.
As detailed in the table entitled "Stock Option Grants in Fiscal 1996"
below, in fiscal 1996 Mr. Holliday received an option to purchase 100,000 shares
of the Common Stock at an exercise price of $3.62 per share, exercisable for
five years. In determining the number of shares subject to the option granted to
Mr. Holliday, the Committee considered the number of options previously granted
to him, the level of total stockholder return and numerous subjective factors
indicative of Mr. Holliday's dedication to the success of the Company. At
December 31, 1996, Mr. Holliday owned 101,206 shares of the Company's Common
Stock and, including his fiscal 1996 grant, held options to purchase an
additional 410,000 shares. The Committee believes that this equity interest
provides an appropriate link to the interests of stockholders.
CONCLUSION. The Committee believes these executive compensation policies
serve the interests of the stockholders and the Company effectively. The
Committee believes that the various pay vehicles offered are appropriately
balanced to provide increased motivation for executives to contribute to the
Company's overall future successes, thereby enhancing the value of the Company
for the stockholders' benefit.
Parris H. Holmes, Jr. James E. Sowell Theodore W. Van Duyn
13
<PAGE>
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth information concerning
compensation paid during each of the Company's last three fiscal years ended
September 30, 1996, 1995 and 1994 to its Chief Executive Officer and each of its
two other most highly compensated officers whose base salary and bonus exceeded
$100,000 for fiscal 1996:
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------
------------------- SECURITIES UNDER
FISCAL OPTIONS/SARS
PRINCIPAL POSITION YEAR SALARY($) BONUS GRANTED (#)
- - ------------------ ------ --------- ----- ---------------
MARK C. HOLLIDAY ............ 1996 $127,341 $0 100,000
CHAIRMAN OF THE BOARD ....... 1995 125,000 0 110,000
AND CHIEF EXECUTIVE OFFICER . 1994 62,500(1) 0 200,000
GARY W. PANKONIEN ........... 1996 95,336 66,664 150,000
PRESIDENT AND CHIEF ......... 1995 N/A N/A N/A
OPERATING OFFICER ........... 1994 N/A N/A N/A
BENJAMIN S. MARZ ............ 1996 103,262 0 0
VICE PRESIDENT OF SALES ..... 1995 102,000 0 0
AND CUSTOMER SERVICE ........ 1994 40,625(2) 0 100,000
- - ---------------
(1) Amount shown reflects Mr. Holliday's salary from February 14, 1994, the
beginning date of his employment with the Company, through the end of
fiscal 1994.
(2) Amount shown reflects Mr. Marz's salary from April 18, 1994, the beginning
date of his employment with the Company, through the end of fiscal 1994.
STOCK OPTION GRANTS IN FISCAL 1996
The following table provides information related to stock options granted
to the named executive officers during fiscal 1996:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) 1996 ($/SH) DATE 5%($) 10%($)
- - ---------------- ------------- ---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Mark C. Holliday 100,000 12.3% $3.62 3/27/01 $100,014 $221,005
Gary W. Pankonien 150,000 18.5% 3.69 5/09/01 152,922 337,917
</TABLE>
- - ---------------
(1) For each named executive officer, the option listed represents a grant
under the Company's 1993 Stock Option Plan. See "Executive Compensation -
Employee Benefit Plans." The options granted in 1996 are exercisable
one-third on each of the three anniversaries following the date of grant.
(2) Calculation based on stock option exercise price over period of option
assuming annual compounding. The columns present estimates of potential
values based on certain mathematical assumptions. The actual value, if
any, that an executive officer may realize is dependent upon the market
price on the date of option exercise.
14
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION
VALUES
The following table provides information related to stock options
exercised by the named executive officers during the 1996 fiscal year and the
number and value of options held at fiscal year end. The Company does not have
any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------ NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE(1) OF UNEXERCISED
ACQUIRED OPTIONS AT FY END(#) IN-THE-MONEY
UPON OPTION VALUE ----------------------------- OPTIONS AT FY END($)
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark C. Holliday 0 N/A 169,999 240,001 $329,032 $253,068
Gary W. Pankonien 0 N/A 0 150,000 N/A 39,000
Benjamin S. Marz 0 N/A 66,666 33,334 189,998 95,002
</TABLE>
- - ---------------
(1) Market value of the underlying securities at September 30, 1996 ($3.95),
minus the exercise price.
EMPLOYEE BENEFIT PLANS
401(K) RETIREMENT PLAN
On May 20, 1996, the Company adopted the 401(k) Plan of 1st Tech
Corporation, a Texas corporation acquired by the Company effective May 20, 1996
(the "Retirement Plan"). Participation in the Retirement Plan is offered to
eligible employees of the Company or its subsidiaries (collectively, the
"Participants"). Generally, all employees of the Company or its subsidiaries who
are 21 years of age and who have completed six months of service during which
they worked at least 500 hours are eligible for participation in the Retirement
Plan.
The Retirement Plan is a 401(k) plan, a form of defined contribution plan
that provides that Participants generally may make voluntary salary deferral
contributions, on a pre-tax basis, of between 1% and 15% of their base
compensation in the form of voluntary payroll deductions up to a maximum amount
as indexed for cost-of-living adjustments. Since its adoption of the Retirement
Plan, the Company has not made any matching contributions, but may elect in the
future to make matching contributions of up to 100% of the first 6% of a
Participant's compensation contributed as salary deferral.
STOCK OPTION PLANS
1993 STOCK OPTION PLAN. On March 31, 1994, the stockholders of the Company
approved the Company's 1993 Stock Option Plan (as thereafter amended, the
"Option Plan"), which was adopted by the Board of Directors on October 25, 1993.
The Option Plan provides for the grant of incentive stock options ("ISOs") under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
stock options that do not qualify under Section 422 of the Code ("NQSOs"). Under
the terms of the Option Plan, 2,600,000 shares of Common Stock have been
reserved for the granting of options. At December 31, 1996, options to purchase
1,909,900 shares had been granted. In addition, at December 31, 1996, options to
purchase 151,000 shares ("compensation contract options") had been granted
outside the Option Plan, prior to its adoption. If any option granted under the
Option Plan terminates, expires or is surrendered, new options may thereafter be
granted covering such shares.
The Option Plan is administered by a committee (the "Stock Option
Committee") of three members of the Board of Directors. The Stock Option
Committee currently consists of three non-employee members of the Board of
Directors, Parris H. Holmes, Jr., James E. Sowell and Theodore W. Van Duyn. The
Option Plan grants broad authority to the Stock Option Committee to grant
options to key employees, directors and consultants selected by the Stock Option
Committee; to determine the number of shares subject to options; the exercise or
purchase price per share, subject to VSE requirements; the appropriate
15
<PAGE>
periods and methods of exercise and requirements regarding the vesting of
options; whether each option granted shall be an ISO or a NQSO and whether
restrictions such as repurchase options are to be imposed on shares subject to
options and the nature of such restrictions, if any. In making such
determinations, the Stock Option Committee may take into account the nature and
period of service of eligible participants, their level of compensation, their
past, present and potential contributions to the Company and such other factors
as the Stock Option Committee in its discretion deems relevant. The option price
for ISOs may not be less than 100% of the fair market value of the Common Stock
on the date of grant, or 100% of fair market value with respect to any ISO
issued to a holder of 10% or more of the Company's shares. The exercise price of
NQSOs also is limited to the fair market value of the Common Stock on the date
of grant. Common Stock issued under the Option Plan may be newly issued or
treasury shares. The Option Plan does not permit the use of already owned Common
Stock as payment for the exercise price of options.
The options have certain anti-dilution provisions and are not assignable
or transferable, other than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order. During the lifetime of an
optionee, the options granted under the Option Plan are exercisable only by the
optionee or his or her guardian or legal representative. The Company or its
subsidiaries may not make or guarantee loans to individuals to finance the
exercise of options under the Option Plan. The duration of options granted under
the Option Plan cannot exceed ten years (five years with respect to a holder of
10% or more of the Company's shares in the case of an ISO).
1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS. On January 15, 1997,
the Board of Directors adopted the Company's 1997 Stock Option Plan for
Non-Employee Directors (the "Director Plan"). Prior to this date, non-employee
directors were granted options under the Option Plan. A total of 800,000 shares
of Common Stock (subject to certain adjustments) have been reserved for issuance
upon exercise of Director Options and Discretionary Options, including options
for 287,500 shares previously granted to current outside directors under the
Option Plan. At the Record Date, no options had been granted under the Director
Plan.
The Director Plan authorizes the granting to non-employee directors
(totaling five eligible individuals at December 31, 1996) of nonqualified
options ("Director Options") exercisable for the purchase of 25,000 shares of
Common Stock on the date they are elected or appointed to the Board of
Directors, whether at the annual meeting of stockholders or otherwise, at an
exercise price equal to the fair market value of the Common Stock on the date
such non-employee director is elected or appointed. In addition, upon their
re-election, each non-employee director receives, on the first business day
after the date of each annual meeting of stockholders of the Company, commencing
with the annual meeting of stockholders immediately following the full vesting
of any previously granted Director Option, a Director Option to purchase an
additional 25,000 shares of Common Stock at an exercise price per share equal to
the fair market value of the Common Stock on the date of grant. In each case,
such Director Options vest in three equal portions over three years from the
first date of the individual's service to the Company as a director or date of
grant, as the case may be, and are exercisable for a period of five years from
the date of grant.
The Director Plan also provides for the granting of discretionary options
("Discretionary Options") from time to time by the Board of Directors to any
non-employee director of the Company. The Discretionary Options will vest
according to the vesting schedule determined by the Board of Directors and will
expire five years from the date of grant. At least six months must elapse from
the date of the acquisition of the Discretionary Option to the date of
disposition of the Director Fee Option (other than upon exercise or conversion)
or its underlying Common Stock.
Options, once granted and to the extent vested and exercisable, will
remain exercisable throughout their term, except that the unexercised portion of
a Director Option will terminate 30 days after the date an optionee ceases to be
a Director for any reason other than death, in which case the Director Option
will terminate one year after the optionee's death or six months after the
optionee's death if the death occurs during the 30-day period referenced above.
EMPLOYMENT AGREEMENTS AND CHANGE-OF-CONTROL ARRANGEMENTS
Effective February 15, 1994 and April 18, 1994, the Company entered into
employment agreements with Mr. Holliday and Mr. Marz, respectively, with a term
of one year, after which they continue on a month-to-month basis until
terminated by the Company or the employee upon 120 days' notice as provided
therein. Pursuant to the terms of the employment agreements, annual base
salaries are $127,341 for Mr. Holliday and $103,262 for Mr. Marz.
16
<PAGE>
The Company entered into an employment agreement with Gary W. Pankonien
effective May 20, 1996 with a term of two years and automatic annual renewals if
mutually agreed upon by the Company and the employee. The Company or the
employee may terminate the agreement upon giving notice at least 30 days prior
to the expiration of the then current term. Pursuant to the terms of the
employment agreement, Mr. Pankonien's annual base salary is $125,000. In
addition, he will be paid minimum bonuses of $200,000 and $150,000 payable pro
rata on a monthly basis during the first and second years of employment,
respectively. In the event the employment relationship is terminated by the
Company during the initial two-year term, other than for "cause" as defined
therein, the employee is entitled to receive, within 45 days of such
termination, salary, bonus and other benefits which would have been payable for
a 24-month period based on amounts in effect on the termination date, but in no
event less than a total of $300,000. The agreement also provides that in the
event his employment is terminated, Mr. Pankonien will continue to be a Director
of the Company as long as he beneficially owns at least 1,000,000 shares of
Common Stock he received as consideration for the acquisition by the Company of
1st Tech.
Effective July 11, 1996, the Company entered into an employment agreement
with Joe Davis with a term of one year, after which the agreement continues on a
month-to-month basis until terminated by the Company or the employee upon 120
days' notice as provided therein. Pursuant to the terms of the employment
agreement, Mr. Davis' annual base salary is $115,000 and he was granted a stock
option under the Option Plan, exercisable over a five-year period, for the
purchase of an aggregate of 120,000 shares of Common Stock at $3.13 per share.
The shares underlying the option vest one-third on each of the first three
anniversaries of the grant date.
The Company entered into an employment agreement with Guy Fielder
effective October 11, 1996. The employment agreement has a one-year term after
which it continues on a month-to-month basis until terminated by the Company or
the employee upon 120 days' notice as provided therein. Pursuant to the terms of
the employment agreement, Mr. Fielder's annual base salary is $96,000 and he was
granted a stock option under the Option Plan, exercisable over a five-year
period, for the purchase of an aggregate of 100,000 shares of Common Stock at
$4.17 per share. The shares underlying the option vest one-third on each of the
first three anniversaries of the grant date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Holmes, Sowell and Van Duyn comprise the Compensation Committee
of the Board of Directors of the Company.
Parris H. Holmes, Jr., Vice Chairman of the Board and a member of the
Audit, Compensation and Stock Option Committees, is Chairman of the Board and
Chief Executive Officer of Billing Information Concepts Corp. and is Chairman of
the Board and a member of the Audit and Compensation Committees of U.S. Long
Distance Corp.
James E. Sowell, a Director of the Company and a member of the
Compensation and Stock Option Committees, is a director and serves on the Audit
and Compensation Committees of Billing Information Concepts Corp.
SECTION 16(A) REPORTING
Paragraph Section 16(a) of the Exchange Act requires the Company's
directors and executive officers, and persons who own more than 10% of the
Company's Common Stock, to file with the SEC initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than 10% stockholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
reports they file. The Company was not subject to the reporting requirements of
Section 16(a) of the Exchange Act during fiscal 1996.
17
<PAGE>
STOCKHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders should be submitted by certified mail, return receipt
requested, and must be received by the Company at its principal executive
offices in Austin, Texas on or before October 17, 1997, to be eligible for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
By Order of the Board of Directors
Joe O. Davis, Corporate Secretary
Austin, Texas
February 14, 1997
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING AND DESIRE THEIR STOCK TO BE VOTED ARE URGED
TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
18
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[FRONT SIDE OF PROXY]
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TANISYS TECHNOLOGY, INC.
12201 TECHNOLOGY BOULEVARD, SUITE 130
AUSTIN, TEXAS 78727
The undersigned hereby appoints Mark C. Holliday, Joe O. Davis and each of
them, as Proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and vote, as designated below, all of the
shares of the Common Stock, no par value, of Tanisys Technology, Inc. (the
"Company") held of record by the undersigned at the close of business on
January 31, 1997, at the Annual Meeting of Stockholders to be held on March 20,
1997, or any adjournment(s) thereof.
1. PROPOSAL TO ELECT TWO DIRECTORS TO HOLD OFFICE UNTIL THE 2000 ANNUAL MEETING
OF STOCKHOLDERS OR UNTIL THE ELECTION AND QUALIFICATION OF THEIR RESPECTIVE
SUCCESSORS.
[ ] FOR both the nominees listed below [ ] WITHHOLD AUTHORITY to vote for both
(except as marked to the contrary below) nominees listed below
2000 CLASS -- TERM EXPIRING AT 2000 ANNUAL MEETING: GARY W. PANKONIEN
ALAN W. PORTNOY
INSTRUCTION: To withhold authority to vote for either individual nominee, write
that nominee's name on the line provided:
_______________________________________________________________
2. PROPOSAL TO APPROVE THE GRANTING OF STOCK OPTIONS TO CERTAIN DIRECTORS AND
EXECUTIVE OFFICERS UNDER THE COMPANY'S 1993 STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(PLEASE SIGN ON OTHER SIDE)
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[BACK SIDE OF PROXY]
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(CONTINUED FROM FRONT)
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES UNDER PROPOSAL 1, "FOR" THE
PROPOSAL TO APPROVE THE GRANTING OF STOCK OPTIONS UNDER THE 1993 STOCK OPTION
PLAN UNDER PROPOSAL 2, "FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR
ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY UNDER PROPOSAL 3,
and in the discretion of the Proxies with respect to any other matter that is
properly presented at the meeting.
Please execute this proxy as your name appears hereon. 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 the president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
DATED: _________________________, 1997
______________________________________
Signature
______________________________________
Signature If Held Jointly
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