Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Check the appropriate box:
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Ultradata Systems, Incorporated
......................................................................
(Name of Registrant as Specified In Its Charter)
Ultradata Systems, Incorporated
......................................................................
(Name of Person(s) Filing Proxy Statement)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
Exchange Act 0-11.
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2) Aggregate number of securities to which transaction applies:
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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
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PROXY
ULTRADATA SYSTEMS, INCORPORATED
SOLICITED BY THE BOARD OF DIRECTORS
For use at the July 26, 1996 Annual Meeting
The undersigned hereby appoints Monte Ross and Steven H. Akre as Proxies and
each with power of substitution, who shall be present at the meeting to vote
all of the shares of the undersigned as follows regarding the election of
directors:
(1) ELECTION OF DIRECTORS
_____ FOR all nominees listed _____ WITHHOLD AUTHORITY
below (except as indicated to vote for all
to the contrary below) nominees listed
below
Nominees: Monte Ross, Mark L. Peterson, Ernest Clarke, Steven H. Akre, Bruce
L. Miller, John J. Clancy.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.)
________________________________________________________________
(2) PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED CAPITAL STOCK TO INCLUDE FIVE MILLION SHARES OF PREFERRED STOCK.
/ / FOR / / AGAINST / / ABSTAIN
(3) PROPOSAL TO ADOPT THE 1996 INCENTIVE STOCK OPTION PLAN.
/ / FOR / / AGAINST / / ABSTAIN
and in their discretion upon such other business as may be properly brought
before the Annual Meeting of Stockholders of ULTRADATA SYSTEMS, INCORPORATED
to be held at The St. Louis Club, 7701 Forsyth Boulevard, St. Louis, MO at
10:00 a.m. local time, and any adjournments thereof. This proxy revokes all
prior proxies given by the undersigned.
(Continued on the reverse side)
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
THE MANAGEMENT SLATE OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3.
Date:_________________________
Signature:____________________
Print Name:___________________
Signature:____________________
(if jointly held)
IMPORTANT: Please sign exactly as name appears here. Joint owners should
both sign. When signing as executor, trustee, guardian,
attorney or officer of a corporation, give title as such. If a
partnership, please sign in partnership name.
PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
FAILURE TO DO SO WILL NECESSITATE SUBSEQUENT MAILINGS AND THE INCURRENCE OF
ADDITIONAL EXPENSE TO YOUR COMPANY.
ULTRADATA SYSTEMS, INCORPORATED
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On July 26, 1996
____________________
To the Holders of the Common Stock:
PLEASE TAKE NOTICE, that the Annual Meeting of Stockholders of ULTRADATA
SYSTEMS, INCORPORATED will be held on July 26, 1996 at 10:00 a.m., at The
St. Louis Club, 7701 Forsyth Boulevard, St. Louis, Missouri.
The purposes of the meeting are as follows:
1. To elect six directors of the Company to serve until the next annual
meeting of stockholders and until their successors are duly elected and
qualify;
2. To vote upon a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of capital stock by
including 5,000,000 shares of preferred stock, $.01 par value, to be issued
in such series, comprising such number of shares and having the voting
powers, designations, preferences, limitations, restrictions, relative
rights, and distinguishing designations as may be determined by the
Company's Board of Directors.
3. To approve the Company's 1996 Incentive Stock Option Plan.
4. To transact such other business as may properly be brought before the
meeting.
Stockholders of record as of the close of business on June 20, 1996 will be
entitled to vote at said meeting.
Enclosed is the 1995 Annual Report to Shareholders, along with a proxy
statement and proxy. Stockholders who do not expect to attend the Annual
Meeting are requested to sign and return the enclosed proxy in the enclosed
envelope.
By Order of the Board of Directors
MARK L. PETERSON,
Secretary
June 28, 1996
ULTRADATA SYSTEMS, INCORPORATED
9375 Dielman Industrial Drive
St. Louis, Missouri, 63132-2201
PROXY STATEMENT FOR HOLDERS OF COMMON STOCK
This Proxy Statement is furnished to shareholders of ULTRADATA SYSTEMS,
INCORPORATED (the "Company") in connection with the solicitation by the
Board of Directors of proxies to be used at the Annual Meeting of
Shareholders of the Company. Such meeting will be held on July 26, 1996, at
10:00 a.m. at The St. Louis Club, 7701 Forsyth Boulevard, St. Louis, Missouri
for the purposes set forth in the Notice of Meeting. It is anticipated that
this Proxy Statement and accompanying material will be mailed to shareholders
on June 28, 1996.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time up until the time when it is voted by the Proxy
Committee. The proxy may be revoked by sending written revocation to the
Proxy Committee or by making a proxy bearing a later date or by appearing and
voting at the Annual Meeting. The proxy is in ballot form and each
shareholder may indicate approval or disapproval as to the proposals
identified in the proxy and accompanying Notice of Annual Meeting and as set
forth and discussed in this Proxy Statement. The proposals will be presented
by the Board of Directors of the Company. Where a choice is specified with
respect to a proposal, the shares represented by the proxy will be voted in
accordance with the specification made. Where a choice is not so specified,
the shares represented by the proxy will be voted in favor of the proposal.
The Proxy Committee appointed by the Board of Directors consists of Monte Ross
and Steven H. Akre, Esq.
VOTING SECURITIES OUTSTANDING
Stockholders of record entitled to vote will be determined as of the close
of business on June 20, 1996. At that date, there were outstanding and
entitled to vote 2,351,171 shares of common stock of the Company
(constituting the only class of stock outstanding and entitled to vote at the
meeting). Each share of common stock entitles the holder thereof to one vote.
The following table sets forth the beneficial ownership of outstanding
shares of Common Stock of the Company as of June 20, 1996 by any person who,
to the knowledge of the Company, owns beneficially more than 5% of the
outstanding Common Stock, by each director of the Company, and by the
directors and officers of the Company as a group. None of the persons
identified below owns any securities of the Company other than the Common
Stock listed below:
Name and Amount and
Address of Nature of Percentage
Beneficial Beneficial of Outstanding
Owner (1) Ownership Shares (6)
Monte Ross(2) 660,364 27.85%
shares of
record
Mark L. Peterson(3) 164,205 6.92%
shares of
record
Ernest Clarke(4) 144,932 6.13%
shares of
record
Steven Akre(5) 3,496 0.15%
shares of
record
Bruce Miller 2,872 0.12%
shares of
record
John Clancy 3,692 0.16%
shares of
record
All officers and 1,039,908 41.36%
directors as a shares of
group (7 persons) record
(1) The address of each of these shareholders is c/o Ultradata Systems,
Incorporated,
9375 Dielman Industrial Drive, St. Louis, Missouri 63132
(2) Includes 640,364 shares owned by the Monte Ross and Harriet J. Ross
Living Trust. Mr. Ross and his wife share investment control over the
trust; they may revoke it or amend it at will; and they receive all
income from the trust during the life of either of them.
(3) Includes 134,387 shares owned by the Mark L. Peterson and Ryia Peterson
Living Trust and 8,318 owned by Ryia Peterson. Mr. Peterson and his wife
share investment control over the trust; they may revoke it or amend it
at will; and they receive all income from the trust during the life of
either of them.
(4) Includes 130,852 shares owned jointly by Mr. Ernest S.Clarke and Carolyn M.
Clarke Living Trust. Mr. Clarke and his wife share investment control over
the trust; they may revoke it or amend it at will; and they receive all
income from the trust during the life of either of them. Also includes
2,080 shares owned by children residing with Mr. Clarke.
(5) Includes 2,080 shares owned by the G. Akre Irrevocable Trust, over which
Mr. Akre's wife has investment control.
(6) In determining the percentage of outstanding shares, all presently
exercisable options owned by the shareholder or the group are treated as
having been exercised.
ELECTION OF DIRECTORS
(Item #1 on the Proxy Card)
Proxies solicited herein will be voted (unless authority is withheld) for
the election, as directors of the Company, of the six nominees named in the
following table, who will hold office until the Annual Meeting to be held in
1997 and until their respective successors are elected and qualify.
Management has no reason to expect that any of the nominees will fail to be a
candidate at the meeting and, therefore, does not at this time have in mind
any substitute for any nominee. In the event that any nominee for director
should be unavailable, it is intended that such shares will be voted for the
substitute nominee or nominees as may be determined by the Board of Directors.
In accordance with the laws of the State of Delaware and the Company's
Certificate of Incorporation, the election of directors requires a plurality
of the votes cast. Proxies and ballots marked "FOR all nominees," "WITHHOLD
AUTHORITY to vote for all nominees," or specifying that votes be withheld for
one or more designated nominees, or which are executed without specification
of a choice (in which case they will be voted for all nominees), are counted
to determine the total number of votes cast. Broker non-votes are not counted.
The following table sets forth the names, ages, and positions of the
nominees with the Company. Below the table is further information regarding
the nominees for director.
Name Age Position With the Company
Monte Ross 63 President and Chief
Executive Officer, Director
Mark L. Peterson 38 Vice President - Engineer-
ing, Secretary, Director
Ernest Clarke 55 Vice President - Govern-
ment Programs, Director
Steven H. Akre, Esq. 43 Director
Bruce L. Miller 53 Director
John J. Clancy 58 Director
Monte Ross founded the Company in 1986, and has served as its President and
Chief Executive Officer since the founding. In addition to his management
responsibilities, Mr. Ross is responsible for new product development and for
supervision of sales and marketing. Mr. Ross is a Fellow of the Institute of
Electrical and Electronic Engineers, and the past President of the
International Laser Communication Society. Mr. Ross was awarded a Master of
Science degree in Electrical Engineering by Northwestern University in 1962.
He is the father-in-law of Mark L. Peterson, the Company's Vice President -
Engineering.
Mark L. Peterson has been a Director of the Company since it as founded in
1986, and has served as the Company's Vice President of Engineering since
1988. He is responsible for the design of the Company's hand-held products.
Mr. Peterson was awarded a Master of Science degree in Electrical Engineering
by Washington University in 1980. He is the son-in-law of Monte Ross, the
Company's President.
Ernest Clarke has been employed as the Company's Vice President - Government
Programs since 1990. His primary responsibility has been the development of
custom test systems for organizations involved in government laser systems
programs. Mr. Clarke was awarded a Master of Science degree in Electrical
Engineering by Stanford University in 1966.
Steven Akre has served as a member of the Board of Directors and as the
corporate counsel for the Company since it was founded. Mr. Akre is an
attorney at law, whose specialization is in taxation and corporate mergers
and acquisitions.
Bruce L. Miller has been a Director of the Company since 1989. Since 1992
he has been employed as Chairman of the Board of Core Source, Inc., located in
Chicago, Illinois, which is engaged in the business of organizing and
managing health care programs for employees and providers. From 1989 until
1992, Mr. Miller was the President of Crabtree Capital Corp., which was
engaged in the financial services business. Mr. Miller is presently a
Director of Harris Bank Glencoe, which is a subsidiary of Harris Bank Corp.
of Chicago.
John J. Clancy has been a director of the Company since 1995. Mr. Clancy
has served on the Board of Directors at Cimplex Corporation, Inc. in San
Jose, and Engineering Software Research & Development, Inc. in St. Louis.
Previously, Mr. Clancy was employed by McDonnell Douglas in a variety of
positions progressing from Programmer, Salesman to Divisional President. Mr.
Clancy was awarded a Master of Science degree in Chemical Engineering by The
Johns Hopkins University and a Master of Business Administration degree by
Washington University, St. Louis.
The following table sets forth the names, ages, and positions with the
Company of the Company's executive officers who are not nominees for the
Board of Directors.
Name Age Position With the Company
Leonard Missler 49 Vice President - Software
Development
Duane Crofts 59 Vice President - Advanced
Products
Compliance With Section 16(a) Of The Exchange Act
None of the directors, officers or beneficial owners of more than 10% of the
Company's common stock failed to file on a timely basis reports required
during 1995 by Section 16(a) of the Exchange Act, except as follows: each of
the Company's five officers was late in filing two reports on Form 4, each
report containing one transaction, and John Clancy was late in filing a
Form 3.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors has a standing Audit Committee. The
members of the Board who served on the Audit Committee during the Company's
last fiscal year are Steven H. Akre, Bruce L. Miller and John J. Clancy. The
Committee met once during such fiscal year, which ended December 31, 1995.
The functions of the Committee include the recommendation to the Board of
independent auditors for the annual audit of the Company, and the discussion
and review of the audit work with the auditors so appointed. The Company has
no Nominating Committee or Compensation Committee.
The Board of Directors met five (5) times during the last fiscal year.
No director failed to attend at least 75% of the meetings.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth all compensation awarded to, earned by, or
paid by the Company to the following persons for services rendered in all
capacities to the Company during each of the fiscal years ended December 31,
1995, 1994, and 1993: (1) the Registrant's Chief Executive Officer, and (2)
each of the other executive officers whose total salary and bonus for the
fiscal year ended December 31, 1995 exceeded $100,000.
Summary Compensation Table
Annual Compensation Long-Term Comp.
Name and
Position Year Salary Bonus Other(1) Options
Monte Ross, 1995 $105,000 $2,000 $22,200 (2)
President 1994 $100,000 - $22,200 (3)
1993 $100,000 $5,000 $22,200 -
(1) Includes annual payments, for five years beginning in 1991, of $12,800 to
a Rabbi trust for the benefit of Mr. Ross. The trust was established in
1991 as deferred compensation for services rendered prior to 1991, for
which he received $50,000 less than his base salary.
Also included are premiums of $6,400 per year which the Company pays to
maintain a $1 Million term life insurance policy on Mr. Ross's life. The
Company had agreed with Mr. Ross that in the event of his death, the
Company would place the proceeds of the policy in an investment fund and
for ten years make annual payments to Mr. Ross's designee totalling the
greater of $50,000 or the income earned from the fund. On September 30,
1994 that arrangement was terminated, and replaced by a $250,000 Company-
paid life insurance policy purchased on October 18, 1994 for the benefit
of Mr. Ross' beneficiaries. The Company is now the sole beneficiary of
the $1 Million life insurance policy.
Also included are contributions of $3,000 per year which the Company
makes to its Pension Plan for the benefit of Mr. Ross.
(2) During 1995 the Board's Stock Option Committee awarded Mr. Ross options
to purchase a total of 30,000 shares of Common Stock at an average price
per share of $5.75. None of the options have been exercised.
(3) In March 1994 Mr. Ross was awarded as a bonus an option to purchase up to
4,159 shares of common stock at a price of $1.20 for a period expiring
in March, 1999. He exercised the option on August 31, 1994.
Employment Agreements
Messrs. Ross, Peterson and Clarke have individual employment agreements
with the Company beginning September 1, 1994. Except as noted herein, the
terms of the three agreements are substantially identical. The agreements
terminate on October 31, 1997, unless earlier terminated by the Company for
cause. The agreements provide for base salaries, which are adjusted annually
by the Board of Directors (currently, Ross - $111,000, Peterson - $81,162,
Clarke - $89,500). If the majority of the Board cannot agree as to a level of
salary adjustment, the salary will increase by 10% (5% for Monte Ross). The
agreements restrict each officer from competing with the Company for one year
after the termination of his employment unless that employee establishes that
his employment by a competitor will not involve the use of any information
which is confidential to the company.
Compensation of Directors.
The Directors of the Company who are not officers receive $250 per meeting
and are reimbursed for out-of-pocket expenses incurred on the Company's behalf.
Stock Option Awards
The following tables set forth certain information regarding the stock
options or warrants acquired by the Company's Chief Executive Officer during
the year ended December 31, 1995 and those options or warrants held by him on
December 31, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Percent Potential Realizable
of Total Value at Assumed
Options Annual Rates of
Number of Granted Stock Price
Securities to Appreciation
underlying Employees Exercise For Option Term
option in Fiscal Price Expiration
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
Monte Ross 30,000 18.4% $5.75 11/06/00 $47,659 $105,313
AGGREGATED FISCAL YEAR OPTION VALUES
Number of Securities Underlying Value of Unexercised in-
Unexercised Options at Fiscal the-Money Options at
Name Year-End (#) Fiscal Year-End ($)
Monte Ross 30,000 Exercisable $191,250
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has an agreement with Leonard Missler, its Vice President -
Software Development, under which, through September 13, 2009, it pays Mr.
Missler a 1% royalty on all net sales of ROAD WHIZ products and 1/2% on net
sales of other products incorporating the ROAD WHIZ database. During the
years ended December 31, 1995 and 1994, the Company paid royalties to Mr.
Missler of $66,477 and $56,235, respectively.
Steven H. Akre, Esquire, a member of the Company's Board of Directors, has
performed legal services as general counsel for the Company since its
inception. During 1995 and 1994, Mr. Akre was paid $21,453 and $24,423,
respectively, for legal services.
AMENDMENT TO THE ARTICLES OF
INCORPORATION AUTHORIZING 5 MILLION SHARES
OF PREFERRED STOCK
(Item #2 on the Proxy Card)
As of the date of this Proxy Statement, the authorized capital stock of the
Company consisted of 10,000,000 shares of Common Stock, par value $.01 per
share. The Company's Board of Directors has determined that the availability
of only one class of authorized capital stock may hamper the Company's
ability to engage in equity financing and acquisitions. Therefore, on May
21, 1996 the Board of Directors adopted a resolution approving an amendment
to the Company's Certificate of Incorporation. The effect of the amendment is
to increase the number of authorized shares of capital stock from 10,000,000 to
15,000,000, consisting of 10,000,000 shares of Common Stock, $.01 par value,
and 5,000,000 shares of Preferred Stock, $.01 par value, to be issued with such
voting powers, designations, preferences, rights, qualifications, limitations
and restrictions as may be fixed by the Company's Board of Directors. Pursuant
to the requirements of the Delaware General Corporation Law, if and at such time
as the Board of Directors exercises its authority as thereby granted to it,
then prior to the issuance of the Preferred Stock in any series so defined, the
Board must adopt a resolution describing the aforesaid characteristics of said
series, and the Company must file with the Delaware Secretary of State a
certificate setting forth such description.
Pursuant to the aforesaid authority granted to the Board of Directors,
authorized but unissued shares of the Common Stock may be issued at such
times, for such purposes and for such consideration as the Board of Directors
may deem appropriate, without further authority from the Company's
shareholders. Likewise, pursuant to the aforesaid authority granted to the
Board of Directors, authorized but unissued shares of the Preferred Stock may
be issued in such series, at such times, for such purposes and for such
consideration as the Board of Directors may deem appropriate, without further
authority from the Company's shareholders. The Shareholders (whether Preferred
or Common) do not have preemptive rights.
If the amendment to the Certificate of Incorporation proposed herein is
approved by the shareholders, Article III of the Certificate of Incorporation
will be amended to read as follows:
III. The aggregate number of shares of stock which the Corporation shall
have the authority to issue is fifteen million (15,000,000) shares,
consisting of ten million (10,000,000) shares of Common Stock having a par
value of $.01 per share and five million (5,000,000) shares of Preferred
Stock having a par value of $.01 per share. The Board of Directors of the
Corporation shall have full power and authority, subject to limitations
prescribed by law, to provide for the issuance from time to time of any unissued
Preferred Stock in one or more series, and by filing a certificate pursuant
to Sections 103 and 151 of the Delaware General Corporation Law, as amended
from time to time, to establish the number of shares to be included in such
series, and to set the voting powers, designations, preferences, conversions or
other rights, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of such shares of stock for each such
series not fixed hereby. The aforesaid authorization of the Board shall
include, but not be limited to, the power to provide for the issuance of the
shares of any series of Preferred Stock convertible, at the option of the
holder or of the Corporation or both, into shares of any other class or
classes or of any series of the same or any other class or classes. All shares
of stock of a series shall represent the same interest in the Corporation and
shall have the same voting powers, designations, preferences, rights and
qualifications, limitations, or restrictions as the other shares of stock of
such series, except to the extent the Board of Directors provides otherwise,
as is filed with the Delaware Secretary of State, or as otherwise determined
in accordance with law.
The Board of Directors has recommended the authorization of the Preferred
Stock in order to provide the Company with additional flexibility in pursuing
its long-term business objectives. Management believes that it will be
useful to have a reserve of both Common and Preferred Shares available for
issuance from time-to-time in connection with the acquisition of other
businesses, to raise additional capital for the Company or for other
corporate purposes not now determinable. From time to time the Company reviews
proposals for equity financing of the Company's operations. However, the
Company has no plans at the present time to issue the additional Preferred
Stock.
Effect of Preferred Stock on Holders of Common Stock
If the shareholders authorize the Preferred Stock, the Board of Directors
will be authorized to issue the Preferred Stock in series having such rights
and preferences as the Board of Directors determines. There is no way at the
present time to predict what rights and preferences would be allocated to an
issue of Preferred Stock, which could include voting rights, rights to
convert the Preferred Stock to Common Stock, and other rights, preferences
and limitations that could have a negative effect on the holders of the Common
Stock.
If the Preferred Stock is issued, it is likely that it would be issued in a
series carrying the right to a fixed annual dividend, which would be payable
before any dividends were paid to the holders of Common Stock. It is also
likely that the Preferred Stock, if issued, would carry a right to a
preference over the Common Stock in the event of liquidation. The existence
of outstanding Preferred Stock, therefore, could prevent the Company from
paying dividends on its Common Stock and could have an adverse effect on the
holders of Common Stock in the event of the liquidation of the Company.
Effect on Possible Takeovers
The proposal to amend the Certificate of Incorporation to authorize the
Preferred Stock is not being offered for the purpose of impeding any takeover
attempt, and the Company is not aware of any person who is acquiring or plans
to acquire control of the Company. Nevertheless, the power of the Board of
Directors to provide for the issuance of shares of Preferred Stock has
potential utility as a device to discourage or impede a takeover of the
Company. In the event that a non-negotiated takeover were attempted, the
private placement of stock into "freindly" hands, for example, could make the
Company unattractive to the party seeking control of the Company. This would
have a detrimental effect on the interests of any stockholder who would want
to tender his or her shares to the party seeking control or who would favor a
change in control.
Vote Required
Approval of the proposal to amend the Certificate of Incorporation to
increase the authorized shares will require the affirmative vote of the
holders of a majority of the Company's outstanding Common Stock entitled to
vote thereon. Abstentions will have the same effect as negative votes since
the percentage requirement for approval is based on all shares outstanding
and not only on those shares casting votes. Broker non-votes, if any, will
not be counted and will have the same effect as a negative vote.
If adopted, the amendment would become effective upon the filing with the
Delaware Secretary of State of a Certificate of Amendment to the Certificate
of Incorporation, which filing is expected to take place shortly after the
Annual Meeting.
The Board of Directors recommends a vote FOR this proposal.
PROPOSAL TO ADOPT THE
1996 INCENTIVE STOCK OPTION PLAN
(Item #3 on the Proxy Card)
In 1994, the Company adopted the 1994 Incentive Stock Option Plan (the "1994
Plan") under which a total of 175,000 shares of Common Stock were reserved
for issuance. Options for 162,992 of the 175,000 shares which were reserved
were granted to employees of the Company and remain outstanding. The average
exercise price of the options which are outstanding is $5.91. The following
officers and directors were recipients of options under the 1994 Plan.
Number of Average
Officer Shares Exercise Price
Monte Ross 30,000 $5.75
Mark Peterson 21,500 5.45
Ernest Clarke 12,000 5.81
John J. Clancy 3,692 6.50
Bruce L. Miller 1,000 6.25
Steven H. Akre 1,000 6.25
Leonard Missler 11,000 5.27
Duane Crofts 12,000 5.65
There remain in the 1994 Plan options for only 12,008 shares of stock. The
Company's Board of Directors has determined, therefore, that it is in the
best interest of the Company to have an additional vehicle by which further
incentives can be offered to key employees. Accordingly, the Board has
adopted a resolution approving a 1996 Incentive Stock Option Plan (the "1996
Plan"). The 1996 Plan provides for the reservation of 175,000 shares of
Common Stock for issuance thereunder. The Board of Directors believes that the
1996 Plan will be sufficient for its purposes for the next three years, and
does not anticipate authorizing any additional option plans prior to 1999.
No options have been granted under the 1996 Plan, and Management has no
plans at the present time to grant options under either the 1994 Plan or the
1996 Plan.
The 1996 Stock Option Plan
The 1996 Plan is designed to permit the Company to grant either incentive
stock options under Section 422A of the Internal revenue Code (the "Code")
or nonqualified stock options. Under the 1996 Plan, a Stock Option Committee
(the "Option Committee") of the Board is authorized to grant options to purchase
up to 175,000 shares of stock to key employees, officers, directors and
consultants of the Company. The Option Committee administers the 1996 Plan and
desigmates the optionees, the type of options to be granted (i.e., nonqualified
or incentive stock options), the number of shares subject to the options, and
the terms and conditions of each option. The terms and conditions include the
exercise price, date of grant, and date of exercise of each option. An employee
may, at the discretion of the Option Committee, be permitted to exercise an
option by giving a personal note.
Incentive stock options may only be granted to employees of the Company and
not to directors or consultants who are not so employed. The exercise price for
incentive stock options must be at least one hundred percent (100%) of the fair
market value of the Common Stock as determined by the Option Committee on the
date of grant. All incentive stock options under the 1996 Plan must be granted
within ten (10) years from the date of adoption of the Option Plan and each
option must be exercised, if at all, within ten (10) years of the date of grant.
In no event may any employee be given incentive stock options whereby more than
$200,000 of options become exercisable for the first time in a single calendar
year. All incentive stock options must be exercised by an optionee within
thirty (30) days after termination of optionee's employment, unless such
termination is as a result of death, disability or retirement. In the event an
optionee's employment is terminated as a result of death or disability, such
optionee or his designated beneficiary shall be entitled to exercise any and all
options for a period of six (6) months after such termination. If an optionee's
employment is terminated as a result of retirement, the optionee shall be
entitled to exercise his options for a period of three (3) months following such
termination.
Nonqualified stock options under the 1996 Plan are generally subject to the
same rules as discussed above. Nonqualified stock options may, however, also
be granted to directors and consultants, whether or not such individuals are
employees of the Company. The exercise price for nonqualified stock options
may not be granted at less than eighty-five percent (85%) of the fair market
value of the shares on the date of grant.
Vote Required
The affirmative vote of the majority of the shares present in person or
represented by proxy at the Meeting and entitled to vote will be required for
approval of the 1996 Incentive Stock Option Plan. Abstentions will have the
same effect as negative votes since the percentage requirement for approval is
based on all shares present at the Meeting and not only on those shares casting
votes. Broker non-votes, if any, will not be counted and will have no effect
on the vote.
The Board of Directors believes that the adoption of the 1996 Plan is
important to the Company in that it will help the Company to attract and retain
qualified personnel.
The Board of Directors recommends a vote FOR this proposal.
MISCELLANEOUS
Independent Certified Public Accountants
KPMG Peat Marwick LLP are the independent certified public accountants who
audited the Company's financial statements for the fiscal year ended December
31, 1995, and are expected to audit the Company's financial statements for the
fiscal year ended December 31, 1996. It is expected that representatives of
KPMG Peat Marwick will be present at the Annual Meeting of Shareholders, and
will have the opportunity to make a statement should they so desire and to
answer appropriate questions of shareholders.
Transaction of Other Business
As of the date of this Proxy Statement, Management has no knowledge of any
business which will be presented for consideration at the meeting other than
that described above. Should any other matter come before the meeting, it is
the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their best judgment.
Shareholder Proposals.
In order for shareholder proposals intended to be presented at the 1997
Annual Meeting of Shareholders to be eligible for inclusion in the Company's
Proxy Statement and the form of proxy for such meeting, they must be received
by the Company at its principal offices in St. Louis prior to March 1, 1997.
Solicitation of Proxies
The entire expense of preparing, assembling and mailing this Proxy
Statement, the form of proxy and other material used in the solicitation of
proxies will be paid by the Company. In addition to the solicitation of
proxies by mail, arrangements may be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxy material to their
principals, and the Company will reimburse them for expenses in so doing. To
the extent necessary in order to insure sufficient representation, officers and
other regular employees of the Company, who will not be additionally compensated
therefor, may request the return of proxies personally, by telephone or
telegram. The extent to which this will be necessary depends on how promptly
proxies are received, and shareholders are urged to send their proxies
without delay.
By Order of the Board of Directors
MONTE ROSS
Chairman
Dated: St. Louis, Missouri
June 28, 1996
