<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant [ X ]
Filed by a party other than the registrant [ _ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ _ ] Definitive additional materials
[ _ ] Soliciting material pursuant to Rule 14a-11 or Rule 14a-12
CREATIVE HOST SERVICES, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
------------------------------------------------------------------------
(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) or
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 O-11 (set forth the
amount on which the filing feeis calculated and state how it
was determined):
(4) Proposed aggregate value of transaction:
(5) Total fee paid:
[ _ ] Fee paid previously with preliminary materials.
[ _ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule O-11 (a) (2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration number, or the Form or Schedule and date of
filing.
(1) Amount previously paid:
(2) Form, schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
CREATIVE HOST SERVICES, INC.
6335 Ferris Square, Suites G-H
San Diego, California 92126
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 1999
The Annual Meeting of the Shareholders of Creative Host Services, Inc. (the
"Company") will be held at the offices of Luce, Forward, Hamilton & Scripps LLP
at 600 West Broadway, San Diego, California, at 10:00 a.m. on Thursday, August
19, 1999 for the following purposes:
1. To elect a board of four Directors.
2. To ratify the appointment of Stonefield Josephson, Inc. as the
Company's independent auditors for the fiscal year ended December 31, 1999.
3. To transact such other business as may properly be brought before the
meeting or any adjournments thereof.
Only shareholders of record at the close of business on July 14, 1999 are
entitled to notice of, and to vote at, the meeting and any adjournment thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, YOU ARE URGED TO FILL IN THE
ENCLOSED PROXY AND TO SIGN AND FORWARD IT IN THE ENCLOSED BUSINESS REPLY
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN ORDER THAT THE
PRESENCE OF A QUORUM MAY BE ASSURED. ANY SHAREHOLDER WHO SIGNS AND SENDS IN A
PROXY MAY REVOKE IT BY EXECUTING A NEW PROXY WITH A LATER DATE, BY WRITTEN
NOTICE OF REVOCATION TO THE SECRETARY OF THE COMPANY AT ANY TIME BEFORE IT IS
VOTED, OR BY ATTENDANCE AT THE MEETING AND VOTING IN PERSON.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES OF STOCK THAT YOU
HOLD. YOUR COOPERATION IN PROMPTLY RETURNING YOUR PROXY WILL HELP LIMIT
EXPENSES INCIDENT TO PROXY SOLICITATION.
By Order of the Board of Directors
/s/ Sayed Ali
July 14, 1999 Sayed Ali, President
<PAGE>
CREATIVE HOST SERVICES, INC.
6335 Ferris Square, Suites G-H
San Diego, California 92126
--------------------
PROXY STATEMENT
--------------------
This proxy statement is furnished in connection with solicitation of
proxies by the Board of Directors of Creative Host Services, Inc. (the
"Company") for the Annual Meeting of Shareholders to be held on Thursday,
August 19, 1999. Only shareholders of record at the close of business on
July 14, 1999 are entitled to notice of, and to vote at, the meeting.
Proxies and proxy statements were first given to shareholders on
approximately July 16, 1999. The number of outstanding Common Shares
entitled to be voted at the meeting is 3,349,705.
The expense of soliciting proxies and the cost of preparing, assembling
and mailing material in connection with the solicitation of proxies will be
paid by the Company and is estimated at $7,000. The Company does not
anticipate that any employees of the Company will solicit proxies by
telegraph, telephone and personal interviews.
The Company's Annual Report on Form 10-KSB for the year ended December
31, 1999 is being sent, simultaneously herewith, to each shareholder of
record. The Annual Report on Form 10-KSB is not incorporated in this Proxy
Statement and is not to be considered a part of the proxy soliciting material.
The Company's management knows of no matter to be brought before the
meeting other than those matters mentioned herein. If, however, any other
matters properly come before the meeting, it is intended that the proxies
will be voted in accordance with the judgment of the person or persons voting
such proxies.
VOTING
Each shareholder of record is entitled to one vote for each share held
on all matters to come before the meeting, except that shareholders may have
cumulative voting rights with respect to the election of Directors. All
proxies which are returned will be counted by the Inspector of Elections in
determining the presence of a quorum and on each issue to be voted on. An
abstention from voting or a broker non-vote will not be counted in the voting
process.
The proxy process does not permit shareholders to cumulate votes. No
shareholder may cumulate votes unless the candidate or candidates' names for
which such votes are to be cast have been placed in nomination prior to
voting and a shareholder has given notice of the shareholder's intention to
cumulate the shareholder's votes at the meeting and prior to the voting. If
any shareholder has given such notice, all shareholders may cumulate their
votes for candidates in nomination. Shareholders who have completed the
enclosed proxy, and who do not revoke such proxy before voting occurs, grant
the proxy holders discretionary authority to cumulate the shareholder's votes
for directors if cumulative voting occurs. Management does not, at this
time, intend to give notice of cumulative voting or to cumulate the votes it
may hold pursuant to the proxies solicited herein unless the required notice
by a shareholder is given in proper format at the meeting, in which instance
management intends to cumulatively vote all of the proxies held by it in
favor of the nominees for office as set forth herein. In the event
cumulative voting shall be utilized, each shareholder may give one candidate
a number of votes equal to the number of directors to be elected multiplied
by the number of shares voted, to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among
as many candidates as the shareholder wishes. The candidates receiving the
highest number of votes of the shares entitled to be voted for them, up to
the number of directors to be elected by such shares, are elected.
Only shareholders of record at the close of business on July 14, 1999
are entitled to notice of, and to vote at, the meeting. Shareholders may
revoke any proxy before it is voted by attendance at the meeting and voting
in person, by executing a new proxy with a later date, or by giving written
notice of revocation to the Secretary of the Company.
<PAGE>
The shares represented by proxies which are returned properly signed
will be voted in accordance with the shareholders' directions. If the proxy
card is signed and returned without direction as to how they are to be voted,
the shares will be voted as recommended by the Board of Directors.
ELECTION OF THE DIRECTORS OF THE COMPANY AND
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF THE COMPANY
The Directors of the Company are elected annually and hold office until
the next annual meeting of shareholders and until their successors shall have
been elected and shall have qualified. In the event any nominee is unable to
or declines to serve as Director at the time of the annual meeting, the proxy
will be voted for a substitute selected by the Board of Directors.
Management has no reason to believe, at this time, that the persons named
will be unable, or will decline, to serve if elected.
During fiscal year 1998, the Board held four meetings. The Company has
standing Audit and Compensation Committees. The Company does not have a
Nominating Committee. The Audit Committee, which oversees the financial
affairs of the Company and meets with the independent auditors, consists of
Paul Karas and John Donohue. The Audit Committee did not meet during fiscal
1998. The Compensation Committee, which sets executive compensation and
bonuses and authorizes the issuance of stock options, consists of John
Donohue and Booker Graves. The Compensation Committee did not meet during
fiscal 1998. During fiscal 1998, each director attended at least 75% of the
meetings of the Board and the Board Committee of which he was a member.
Directors do not receive compensation for their services as directors.
Directors and executive officers are elected annually.
Management's nominees for election to the Board of Directors of the
Company are: Sayed Ali, Booker T. Graves, John P. Donohue and Charles B.
Radloff. Management recommends that the shareholders vote "FOR" all four of
Management's nominees.
NOMINEES
SAYED ALI is the founder, Chairman of the Board of Directors, President
and Chief Financial Officer of the Company. Mr. Ali has served as Chairman of
the Board of Directors and President since 1986. Mr. Ali served as Chief
Financial Officer from December 1986 to February 1997, and since August 1997.
Mr. Ali served as the Secretary of the Company from 1986 to December 1996.
Prior to founding the Company, Mr. Ali was the Director of Operations of
Steffa Control Systems, a manufacturer of energy management systems from May
1985 to September 1987, which had annual sales of $30 to $35 million. From
March 1980 until May 1985, Mr. Ali was the Director of Operations for Oak
Industries, Inc., a publicly-traded telecommunications equipment manufacturer.
BOOKER T. GRAVES has been a director of the Company since March 1997.
Since 1993, Mr. Graves has been president of Graves Airport Concession
Consultants, a consulting company located in Denver, Colorado, which provides
consulting services to airports and other businesses. From 1993 to 1996, Mr.
Graves was the principal food and beverage consultant to the Denver
International Airport. From 1990 through 1993, Mr. Graves was General
Manager of CA One Services, Inc. (formerly Sky Chefs) at Denver Stapleton
International Airport. From 1980 until 1990, Mr. Graves was the General
Manager of CA One Services, Inc. of Phoenix Sky Harbor Airport.
JOHN P. DONOHUE, JR. has been a director of the Company since March
1997. From 1990 to the present, Mr. Donohue has been a private investor.
Prior to that time for 25 years, Mr. Donohue was employed by Oak Industries,
Inc., a NYSE listed company, in various capacities. From 1985 to 1990, Mr.
Donohue served as President of Oak Communications, Inc., a division of Oak
Industries, Inc. which manufactured communications equipment for the cable
television industry. From 1982 to 1985, he served as Vice President of
Manufacturing overseeing up to 6,000 manufacturing employees. From 1977 to
1982, Mr. Donohue served as Vice President of Operations for the Oak Switch
division of Oak Industries, Inc.
2
<PAGE>
CHARLES B. RADLOFF has served as a business advisor and member of the
board of directors of DB Products, Inc. since 1991, a privately owned company
engaged in the design, manufacture and sale of electronic components for the
communications and aerospace industries. From 1987 to 1991, Mr. Radloff was
President and Chief Executive Officer of AKZO Electronic Materials Company,
an electronics manufacturer and wholly-owned subsidiary of AZKO, which is a
Dutch multi-national corporation with annual sales of approximately $12
billion. From 1965 to 1987, Mr. Radloff served in various executive
positions with Oak Industries, Inc., including his position as President and
Chief Executive Officer of Oak Communications and Chief Executive Officer of
Oak Technology. Mr. Radloff has also served on the board of directors of
Comstream, Inc.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION
------ ----- ----------
<S> <C> <C>
Sayed Ali 51 Chairman of the Board of Directors,
President and Chief Financial Officer
Booker T. Graves 60 Director
John P. Donohue, Jr. 68 Director
Paul A. Karas 46 Director
Tasneem Vakharia 38 Secretary
</TABLE>
SAYED ALI. Information concerning Mr. Ali is set forth under "Nominees."
BOOKER T. GRAVES. Information concerning Mr. Graves is set forth under
"Nominees."
JOHN P. DONOHUE, JR. Information concerning Mr. Donohue is set forth
under "Nominees."
PAUL A. KARAS has been a director of the Company since March 1997. From
1993 to the present, Mr. Karas has been President and Founder of Grove
Management Company, an infrastructure management consulting firm. He has
consulted on the $6 billion airport in Hong Kong, and the $375 million
renovation and expansion of the Cleveland Public Power Electric Distribution
System among other projects. From 1991 to 1993, Mr. Karas was Senior Vice
President and Director of Public Works Sector for Morse-Diesel/Amec whose
business activities included consulting for a proposed third airport for
Chicago, program management for the British Airways terminal at the JFK
Airport, and program management for the United Airlines Terminal at La
Guardia Airport. From 1988 to 1991, Mr. Karas worked for the Port Authority
of New York and New Jersey and was director of the John F. Kennedy
International Airport Redevelopment Program responsible for program
management, design and construction of the $3.2 billion renovation of the JFK
Airport. From 1985 to 1988, Mr. Karas was Commissioner of Public Works for
the City of Chicago with responsibilities for the design and construction of
major public projects including projects affecting O'Hare, Midway and Meigs
Airport. From 1980 to 1985, Mr. Karas was Corporate Development Projects
Manager for Santa Fe Southern Pacific Corporation, a $7 billion enterprise
engaged in the transportation, national resources, real estate, construction
and financial service businesses.
COMPENSATION AND BENEFITS
The compensation and benefits program of the Company is designed to
attract, retain and motivate employees to operate and manage the Company for
the best interests of its constituents.
Executive compensation is designed to provide incentives for those
senior members of management who bear responsibility for the Company's goals
and achievements. The compensation philosophy is based on a base salary,
with opportunity for significant bonuses to reward outstanding performance,
and a stock option program.
3
<PAGE>
DIRECTOR COMPENSATION
Directors receive no cash compensation for their services to the Company
as directors, but are reimbursed for expenses actually incurred in connection
with attending meetings of the Board of Directors. In addition, each outside
director is entitled to receive options as approved by the Board of Directors
under the Company's 1997 Stock Option Plan. During Fiscal 1997, each outside
director was issued an aggregate of 15,000 options, of which 10,000 are now
vested and the balance of 5,000 will vest over the next year, provided the
director remains a director of the Company.
EXECUTIVE OFFICER COMPENSATION
The following table and notes set forth the annual cash compensation
paid to Sayed Ali, Chairman of the Board and President of the Company. No
other person's compensation exceeded $100,000 per annum during the Company's
fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------------------------------------------------------------
AWARDS PAYOUTS
----------------------------------------------------------------
SECURITIES
OTHER RESTRICTED UNDERLYING ALL OTHER
ANNUAL STOCK OPTIONS/ LTIP COMPEN-
NAME/TITLE SALARY BONUS COMP. AWARDS SARS PAYOUTS SATION
YEAR $ $ $ $ #(1) $ $
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sayed Ali
President 108,000 -- -- -- -- -- --
1998 96,000 -- -- -- 75,000 -- --
1997 71,000 -- -- -- -- -- --
1996
</TABLE>
- -----------------------
(1) Consists of 60,000 options granted under the Company's 1997 Stock Option
Plan and 15,000 options granted by the Compensation Committee in 1997.
The following table sets forth the options granted to Mr. Ali during the
Company's fiscal year ended December 31, 1998.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
4
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS/SARS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES IN OR BASE OPTION TERM
OPTIONS/SARS FISCAL PRICE EXPIRATION ------------------------------------
NAME GRANTED (#) YEAR(%) ($/SH) DATE 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sayed Ali -- -- -- -- -- --
</TABLE>
The following table summarizes the number and value of all unexercised
options granted to and held by Mr. Ali at the end of 1998. No options were
exercised by Mr. Ali during 1998.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTION AT FY-END (#) AT FY-END ($)(1)
------------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sayed Ali 50,000 25,000 0 0
</TABLE>
- ---------------------
(1) Based on the closing price for the Company's Common Stock at the close of
market on December 31, 1998.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for setting base compensation,
awarding bonuses and setting the number and terms of options for the
executive officers. None of the current Committee members are employees of
the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
Committee currently consists of John P. Donohue and Booker T. Graves.
EMPLOYMENT AGREEMENT. The Company has entered into a five year
employment agreement with Sayed Ali, the Company's President. The term of
the agreement commenced January 1, 1997 and provides for annual base
compensation of $96,000 and $108,000 over each of the calendar years 1997 and
1998 and $120,000 thereafter. The agreement also calls for Mr. Ali to
receive 60,000 options to purchase Common Stock under the Company's 1996
Stock Option Plan, exercisable at $3.30 per share, which vest 20,000 per year
over the first three anniversaries of the date of grant. In addition, Mr.
Ali is eligible to receive annual cash bonuses as well as additional option
grants at the discretion of the Board of Directors. Finally, the agreement
provides that upon a termination of employment, Mr. Ali will be entitled to a
severance payment equal to his annual base compensation.
DISCUSSION. At present, the Company has only one executive officer, Mr.
Ali, who has an Employment Agreement with the Company as discussed above.
The Company's compensation structure is designed with the fundamental
philosophy of providing executives with an interest in both the Company's
short and long term profitability. The Company's executive officer
compensation program consists of three components, (i) a base salary
component, (ii) an annual bonus component, and (iii) an equity component.
The Committee intends to establish base salaries for executive officers at a
modest level sufficient to attract and retain additional executives. The
annual bonus components may be paid in cash or options. Presently annual
bonus awards are made in the discretion of the Committee. The Committee
believes that the dynamic nature of the Company in its current stage may
render formula
5
<PAGE>
based bonuses inequitable from either the Company's or the employees
perspective, depending on circumstances outside of the employee's control.
In making such awards, the Committee will review the Company's overall
performance but also the individual's contribution to overall success.
Annual bonus awards may be given in instances where the Committee feels the
contribution of long-term benefit to the Company, even if it did not result
in directly accountable revenues or income. The Company's stock option
awards are designed to compliment the annual incentive program, by providing
an interest in long-term profitability. Option Grants may also be awarded at
the inception of employment as an inducement to attract key employees.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
March 25, 1999 by (i) each person who is known by the Company to own
beneficially more than 5% of the Company's Common Stock, (ii) each of the
Company's directors and executive officers, and (iii) all officers and
directors of the Company as a group. Except as otherwise listed below, the
address of each person is c/o Creative Host Services, Inc. 6335 Ferris
Square, Suites G-H, San Diego, California 92126.
<TABLE>
<CAPTION>
Name and Address of Owner Shares Beneficially Owned(1)
- -------------------------------------------------------------------------------------------------
Number Percent(2)
---------------------------------------------
<S> <C> <C>
Sayed Ali 985,000(3) 29.6%
David H. Sugerman 155,000 4.7%
17408 Superior Avenue
Northridge, CA 91325
Booker T. Graves 11,025(4) *
John P. Donahue, Jr. 10,000(4) *
Paul A. Karas 10,000(4) *
Tasneem Vakharia 35,000(5) 1.0%
All officers and directors as a group (6 persons) 1,051,025(6) 31.6%
</TABLE>
- ---------------------------
* Less than one percent.
(1) Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to options warrants currently exercisable or convertible, or
exercisable or convertible within 60 days of March 25, 1999, are deemed
outstanding for computing the percentage of the person holding such option
or warrant but are not deemed outstanding for computing the percentage of
any other person. Except as pursuant to applicable community property
laws, the persons named in the table having sole voting and investment
power with respect to all shares of Common Stock beneficially owned.
(2) Does not include 1,228,093 shares of Common Stock issuable upon exercise of
outstanding warrants or 1,142,857 shares of Common Stock issuable upon
conversion of long term debt.
(3) Includes 50,000 shares issuable upon the exercise of options outstanding
under the Company's 1997 Stock Option Plan. Does not include 25,000 shares
issuable upon exercise of options which vest in January 2000.
(4) Includes 10,000 shares issuable upon the exercise of options outstanding
under the Company's 1997 Stock Option Plan. Does not include 5,000 shares
issuable upon exercise of options which vest in January 2000.
(5) Consists solely of shares issuable upon the exercise of options outstanding
under the Company's 1997 Stock Option Plan.
6
<PAGE>
(6) Includes 115,000 shares issuable upon the exercise of options outstanding
under the Company's 1997 Stock Option Plan. Does not include 40,000 shares
issuable upon exercise of stock options which vest over the one year period
subsequent to January 15, 1999.
RATIFICATION OF SELECTION OF AUDITORS
Based upon the recommendation of the Audit Committee, the Board of
Directors has authorized the firm of Stonefield Josephson, Inc. independent
certified public accountants, to serve as independent auditors for the fiscal
year ended December 31, 1999.
The Board of Directors recommends that shareholders vote "FOR" this
proposal.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Shareholders who intend to have a proposal considered for inclusion in
the Company's proxy materials for presentation at the 2000 Annual Meeting of
Shareholders must submit the proposal to the Company no later than February
15, 2000. Shareholders who intend to present a proposal at the 2000 Annual
Meeting of Shareholders without inclusion of such proposal in the Company's
proxy materials are required to provide notice of such proposal to the
Company no later than March 15, 2000 The Company reserves the right to
reject, rule out of order, or take other appropriate action with respect to
any proposal that does not comply with these and other applicable
requirements.
OTHER ITEMS
THE COMPANY, ON WRITTEN REQUEST OF ANY PERSON BEING SOLICITED BY THIS
PROXY STATEMENT, SHALL PROVIDE, WITHOUT CHARGE TO SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB (INCLUDING THE FINANCIAL STATEMENTS
AND THE SCHEDULES THERETO), REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED, FOR THE COMPANY'S MOST RECENT FISCAL YEAR. WRITTEN
REQUESTS SHOULD BE DIRECTED TO:
CREATIVE HOST SERVICES, INC.
6335 FERRIS SQUARE, SUITES G-H
SAN DIEGO, CALIFORNIA 92126
ATTENTION: SAYED ALI
By Order of the Board of Directors
/s/ Sayed Ali
----------------------------------
San Diego, California Sayed Ali, President
July 14, 1999
7
<PAGE>
PROXY - CREATIVE HOST SERVICES, INC.
ANNUAL MEETING OF SHAREHOLDERS - August 19, 1999
The undersigned shareholder(s) of Creative Host Services, Inc. (the
"Company") hereby appoints Sayed Ali and William Smyth, and each of them, the
attorney, agent and proxy of the undersigned, with full power of substitution,
to vote all shares of the Company which the undersigned is entitled to vote at
the Annual Meeting of Shareholders to be held at 600 West Broadway, San Diego,
California, on August 19, 1999 at 10:00 a.m. local time, and any and all
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present thereat, as follows:
1. ELECTION OF DIRECTORS. To elect the following four (4) persons to the Board
of Directors of the Company to serve until the 2000 Annual Meeting of
Shareholders and until their successors are elected and have qualified:
Sayed Ali Booker T. Graves John P. Donohue, Jr. Charles Radloff
/ / FOR ALL NOMINEES LISTED ABOVE (EXCEPT AS MARKED TO THE CONTRARY)
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE. A SHAREHOLDER
MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY DRAWING A LINE THROUGH
OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE.
IF NO SPECIFICATION IS MADE, THE VOTES REPRESENTED BY THIS PROXY WILL BE
CAST FOR THE ELECTION OF THE NOMINEES LISTED ABOVE. THIS PROXY VESTS
DISCRETIONARY AUTHORITY TO CUMULATE VOTES FOR DIRECTORS.
2. TO RATIFY THE SELECTION OF STONEFIELD JOSEPHSON, INC. TO SERVE AS AUDITORS OF
THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
/ / FOR / / AGAINST / / ABSTAIN
UNLESS OTHERWISE SPECIFIED, THE VOTES REPRESENTED BY THIS PROXY WILL BE
CAST FOR RATIFICATION AND APPROVAL OF THE ABOVE PROPOSAL.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment(s)
thereof.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. Shareholders who are present at the meeting may
withdraw their proxy and vote in person if they so desire. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Please sign exactly as your name appears on your stock certificates. When shares
are held by joint tenants, both should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: , 1999
-------------------------------
-------------------------------------------------
Signature
-------------------------------------------------
Signature if held jointly
-------------------------------------------------
Printed Name(s)
I (We) will / / will not / / attend the Annual
Meeting in person.
NO POSTAGE IS REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
