SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED BY A PROXY STATEMENT
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:
|X| Preliminary Proxy Statement |_| Confidential For Use of the
Commission Only (as Permit-
ted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12
HYPERDYNAMICS CORPORATION
-------------------------
(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
Rule 14a-6(I)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
<PAGE>
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of the filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
HYPERDYNAMICS CORPORATION
2656 SOUTH LOOP WEST, SUITE 103
HOUSTON, TEXAS 77054
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 26, 1999
The Annual Meeting of Stockholders (the "Annual Meeting") of HyperDynamics
Corporation (the "Company") will be held at 2656 South Loop West, Suite 103,
Houston, Texas 77054 , on August 26, 1999 at 10:00 AM (CST) for the following
purposes:
(1) To elect three (3) directors.
(2) To amend the Articles of Incorporation to authorize 20,000,000
shares of preferred stock.
(3) To ratify the selection of John B. Evans, II CPA as the Company's
independent auditor for the fiscal year ending June 30, 1999.
(4) To act upon such other business as may properly come before the
Annual Meeting.
Only holders of common stock of record at the close of business on July 14,
1999, will be entitled to vote at the Annual Meeting or any adjournment thereof.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend the Annual Meeting, please sign, date and return your proxy to us
promptly. Your cooperation in signing and returning the proxy will help avoid
further solicitation expense.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kent Watts
Chairman of the Board and
President
July 13, 1999
Houston, Texas
<PAGE>
HYPERDYNAMICS CORPORATION
2656 SOUTH LOOP WEST, SUITE 103
HOUSTON, TEXAS 77054
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 26, 1999
This proxy statement (the "Proxy Statement") is being furnished to
stockholders (the "Stockholders") in connection with the solicitation of proxies
by the Board of Directors of HyperDynamics Corporation, a Delaware corporation
(the "Company") for their use at the Annual Meeting (the "Annual Meeting") of
Stockholders of the Company to be held at 2656 South Loop West, Suite 103,
Houston, Texas 77054 on August 26, 1999, at 10:00 AM (CST), and at any
adjournments thereof, for the purpose of considering and voting upon the matters
set forth in the accompanying Notice of Annual Meeting of Stockholders (the
"Notice"). This Proxy Statement and the accompanying form of proxy (the
"Proxy") are first being mailed to Stockholders on or about July 28, 1999. The
cost of solicitation of proxies is being borne by the Company.
The close of business on July 14, 1999, has been fixed as the record date
for the determination of Stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof. As of record date, there were
12,409,503 shares of the Company's common stock, par value of $0.001 per share
(the "Common Stock"), issued and outstanding. The presence, in person or by
proxy, of a majority of the outstanding shares of Common Stock on the record
date is necessary to constitute a quorum at the Annual Meeting. Each share is
entitled to one vote on all issues requiring a Stockholder vote at the Annual
Meeting. Each nominee for Director named in Number 1 must receive a majority of
the votes cast in person or by proxy in order to be elected. Stockholders may
not cumulate their votes for the election of Directors. The affirmative vote of
a majority of the shares of Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting is required for the approval of Number 2
and for the ratification of Number 3 set forth in the accompanying Notice.
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Meeting in accordance
with the directions on the proxies. If no direction is indicated, the shares
will be voted (I) FOR THE ELECTION OF THE NOMINEES NAMED HEREIN, (II) FOR THE
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO AUTHORIZE 20,000,000 SHARES
OF PREFERRED STOCK, AND (III) FOR THE RATIFICATION OF JOHN B. EVANS, II CPA AS
THE COMPANY'S INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING JUNE 30, 1999. The
Board of Directors is not aware of any other matters to be presented for action
at the Annual Meeting. However, if any other matter is properly presented at
the Annual Meeting, it is the intention of the persons named in the enclosed
proxy to vote in accordance with their best judgment on such matters.
1
<PAGE>
The enclosed Proxy, even though executed and returned, may be revoked at
any time prior to the voting of the Proxy (a) by execution and submission of a
revised proxy, (b) by written notice to the Secretary of the Company, or (c) by
voting in person at the Annual Meeting.
_________________________________________________________
(1) TO ELECT THREE (3) DIRECTORS FOR THE ENSUING YEAR
_________________________________________________________
NOMINEES FOR DIRECTOR
The persons named in the enclosed Proxy have been selected by the Board of
Directors to serve as proxies (the "Proxies") and will vote the shares
represented by valid proxies at the Annual Meeting of Stockholders and
adjournments thereof. They have indicated that, unless otherwise specified in
the Proxy, they intend to elect as Directors the nominees listed below. All the
nominees are presently members of the Board of Directors. Each duly elected
Director will hold office until his successor shall have been elected and
qualified.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed Proxy will be voted for the election of the nominees listed below.
Although the Board of Directors of the Company does not contemplate that any of
the nominees will be unable to serve, if such a situation arises prior to the
Annual Meeting, the persons named in the enclosed Proxy will vote for the
election of such other person(s) as may be nominated by the Board of Directors.
The Board of Directors unanimously recommends a vote FOR the election of
each of the nominees listed below.
Kent Watts, age 41, became Chairman of the Board of Directors and was named
the Company's President and Chief Executive Officer on June 4, 1997. He has
served as a Director, Chief Financial Officer, and Chief Information Officer of
the Company since January 17, 1997. Mr. Watts has been a certified public
accountant in Texas since 1985 and a licensed real estate broker since 1979. He
received a Bachelor of Business Administration Degree from the University of
Houston in 1983. Mr. Watts founded MicroData Systems, Inc., a subsidiary of the
Company, in 1988 and has been MicroData's CEO since that time. He has extensive
experience working with management information systems. Mr. Watts has been
involved in the design, implementation and management of heterogeneous,
multiprotocol networks. He has substantial technical experience with a variety
of operating systems, relational databases, and client-server based software
applications. He brings to the Company an interesting blend of business and
technical experience.
2
<PAGE>
Robert J. Hill, age 43, has served as the Chief Operating Officer of the
Company since June 1996 and as Chief Operating Officer and a Director of the
Company since August 26, 1996. In July, 1997, Mr. Hill was appointed
vice-president of the Company. Before joining the Company, Mr. Hill served for
two years as vice president of HudsonTrinity Incorporated, a privately held
Internet service provider and network engineering company that also contracted
senior network engineers to Loral Space Systems, Inc., the principal civilian
contractor for the design, development and installation of NASA's new manned
space flight control center. Previously, Mr. Hill served for three years as
Acquisition Manager for Loral Space Systems, Inc. Mr. Hill has earned an MBA
degree from South Eastern Institute of Technology and a BA degree from the State
University of New York at Potsdam.
Ted W. Tarver, age 44, was President of Wireless Cable Connection, Inc.
(WCC) until October, 1997 when he became President of Wired & Wireless
Corporation, a wholly-owned subsidiary of HyperDynamics Corporation. Mr.
Tarver played major roles in the development of over 50 wireless TV systems
since 1979. Mr. Tarver has served as a Director of the Company since February,
1998. He will use his wireless technology experience to help the Company's
Wired & Wireless subsidiary establish itself in the international wireless
industry with a unique capability to provide complete end-to-end wireless
systems supporting voice, video, and data applications over wireless
infrastructures.
EXECUTIVE OFFICERS
Messrs. Watts and Hill are directors and executive officers of the Company.
Mr. Tarver is a director of the Company, and an officer of a subsidiary of the
Company. In addition, Lewis E. Ball serves as the Company's corporate secretary.
Lewis E. Ball, age 68, has served as the secretary of the Company since
1997 and as the Chief Financial Officer from June 1996 to January 1997. He has
been a financial consultant to a number of companies since 1993. Mr. Ball has
served as a director of JVWeb, Inc. since 1997 and as secretary and treasurer of
JVWeb, Inc. since 1998. Mr. Ball has many years of industry experience as a
Chief Financial Officer with Stevenson Services, Inc. and Richmond Tank Car
Company (from 1983 to 1993). Mr. Ball is a Certified Public Accountant and a
Certified Management Accountant. Mr. Ball has a B.B.A. in Finance from the
University of Texas, and he did post-graduate work in accounting at the
University of Houston.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company has no compensation committee, no audit committee and no
nominating committee. Decisions concerning executive officer compensation for
1998 were made by the full Board of Directors.
The Board of Directors held regular meetings and took action by unanimous
written consent on 26 occasions during the fiscal year ended June 30, 1998, in
which all Directors took part.
3
<PAGE>
There is no family relationship between or among any of the directors and
executive officers of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Messrs, Watts, Hill, Tarver and Ball failed to timely file Form 3 and Form
4. Subsequently, each of them filed a timely Form 5 which included the
information required to be filed for Form 3 and Form 4. Mr. Watts failed to
timely file one Form 3 and three Forms 4. Mr. Hill failed to timely file one
Form 3 and one Form 4. Mr. Tarver failed to timely file one Form 3 and one Form
4. Mr. Ball failed to timely file one Form 3 and one Form 4.
EXECUTIVE COMPENSATION
The following table reflects all forms of compensation for services to the
Company for the fiscal years ended June 30, 1998, 1997, 1996 of certain
executive officers. No other executive officer of the Company received
compensation which exceeded $100,000 during 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation Long Term Compensation
------------------------- ----------------------
Awards Payouts
-------------------------------
Other Securities All
Annual Restricted Underlying Other
Name and Compens Stock Options/ LTIP Compen-
Position Year Salary Bonus sation (1) Awards SARs Payouts sation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kent Watts 1998 $84,000 0 0 0 0 0 0
CEO, 1997 $60,000 0 0 0 0 0 0
President, 1996 $-0- 0 0 0 0 0 0
CFO
<FN>
No current executive officer of the Company received compensation in excess
of $100,000 for the years shown.
The Company provides certain executive officers certain personal benefits.
Since the value of such benefits does not exceed the lesser of $50,000 or 10% of
annual compensation, the amounts are omitted.
</TABLE>
4
<PAGE>
DIRECTOR COMPENSATION
The Company does not currently pay any cash directors' fees, but it pays
the expenses of its directors in attending board meetings.
EMPLOYEE STOCK OPTION PLAN
The Company has been successful in attracting and retaining qualified
personnel, the Company believes that its future success will depend in part on
its continued ability to attract and retain highly qualified personnel. The
Company pays wages and salaries that it believes are competitive. The Company
also believes that equity ownership is an important factor in its ability to
attract and retain skilled personnel including consultants, and the Board of
Directors of the Company has adopted an employee stock option program. Options
to purchase 1,620,000 shares of registered common stock have been approved
under the Plan. Such options will vest over a five year or other negotiated
period and will have a strike at a price set at the time of grant and based on
the then current market value of the stock. The President of the Company has
the authority as given by the Board of Directors to negotiate stock option
agreements with corporate consultants as well. As of June 8, 1999, options to
purchase 1,517,060 shares have been granted under this plan of which 662,181
options have been exercised. The purpose of the executive stock option program
will be to further the interest of the Company, its subsidiaries and its
stockholders by providing incentives in the form of stock options to key
employees, consultants, and directors who contribute materially to the success
and profitability of the Company. The grants will recognize and reward
outstanding individual performances and contributions and will give such persons
a proprietary interest in the Company, thus enhancing their personal interest in
the Company's continued success and progress. This program will also assist the
Company and its subsidiaries in attracting and retaining key employees and
directors.
EMPLOYMENT AGREEMENT
The Company is currently negotiating an employment agreement with Kent
Watts. The company has no other employment agreements.
5
<PAGE>
STOCK OWNERSHIP OF MAJOR STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information at June 1, 1999, with
respect to the beneficial ownership of shares of Common Stock by (i) each person
known to the Company who owns beneficially more than 5% of the outstanding
shares, (ii) each director of the Company, (iii) each executive officer of the
Company and (iv) all executive officers and directors of the Company as a group.
As of June 1, 1999, there were 12,409,503 shares of Common Stock outstanding.
Messrs. Watts, Hill, Tarver and Ball have sole voting and investment power with
respect to the shares shown as beneficially owned by each of them.
<TABLE>
<CAPTION>
Name and Number of Title of Percent of
Address Shares Class Class
- ----------------------------- -------------- -------- -----------
<S> <C> <C> <C>
Kent Watts
2656 South Loop West
Suite 103 Common
Houston, Texas 77054 1,015,000 Stock 8.5%
Robert J. Hill
2656 South Loop West
Suite 103 Common
Houston, Texas 77054 139,600 (1) Stock 1.0%
Ted W. Tarver
2656 South Loop West
Suite 103 Common
Houston, Texas 77054 300,000 (2) Stock 2.5%
Lewis E. Ball
2656 South Loop West
Suite 103 Common
Houston, Texas 77054 54,560 (3) Stock 0.4%
Emerald Bay Interests LTD
Givens Hall Bank & Trust
Third Floor Genesis Building
Georgetown, Grand Cayman
BWI 5,933,333 Stock 47.8%
All directors and
executive officers Common
as a group (3 persons) 1,529,560 Stock 11.9%
Common
Other Group 1,410,900 (4) Stock 11.3%
6
<PAGE>
<FN>
______________________________
(1) This amount includes currently exercisable options to purchase up to
139,600 shares of common stock of the Company at an exercise price of $1.25 per
share.
(2) This amount includes currently exercisable options to purchase up to
100,000 shares of common stock of the Company at an exercise price of $.50 per
share, and currently exercisable warrants to purchase up to 100,000 shares of
common stock of the Company at an exercise price of $.51 per share.
(3) This amount includes currently exercisable options to purchase up to
8,760 shares of common stock of the Company at an exercise price of $.75 per
share, currently exercisable options to purchase up to 33,300 shares of common
stock of the Company at an exercise price of $1.25 per share, and currently
exercisable warrants to purchase up to 12,500 shares of common stock of the
Company at an exercise price of $.51 price share.
(4) On August 15, 1996 the Company went through a reorganization which
resulted in the issuance of 1,410,900 shares of common stock to certain persons.
The Company believes that these persons may be a group. The Company's records
show the following holdings by these persons as of June 1, 1999:
Name Number of Shares Held of Record
---- -------------------------------
Thompson 102,150
Klausmeyer 237,250
Strawn 339,300
Cicero Cinzano 50,000
HuggerMugger 102,200
Segal/Alex Trust 45,000
FYJIGIM 45,000
Nationsbank/
Thompson famil trust 45,000
Flicker 70,000
Q-Marq 115,000
Eurotrade 160,000
Tobem 100,000
---------
Total 1,410,900
=========
</TABLE>
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors of the Company has adopted a policy that Company
affairs will be conducted in all respects by standards applicable to
publicly-held corporations and that the Company will not enter into any future
transactions and/or loans between the Company and its officers, directors and 5%
shareholders unless the terms are no less favorable than could be obtained from
independent, third parties and will be approved by a majority of the
independent, disinterested directors of the Company.
On July 15, 1997, the Company entered into a bridge financing
arrangement with Emerald Bay Interests, LTD. Under the terms of this
arrangement, the Company borrowed a total of $350,000. The borrowed amounts
were to bear interest at the rate of 10% per annum and would have been payable
between August 31, 1997 and November 15, 1997. Pursuant to this arrangement
and as further negotiated by the Company, any amounts that were not repaid by
November 15, 1997, were convertible by Emerald Bay into common stock at a
conversion price of $.06 per share. On January 12, 1998, the Company entered
into a Debt Conversion Agreement with Emerald Bay whereby all of this debt plus
accrued interest would be converted to 5,833,333 shares of common stock of
the Company. Emerald Bay acquired control of the Company through this
transaction.
Michael Watts, the brother of Kent Watts, has conducted certain securities
brokerage business with Emerald Bay Interests, LTD. Michael Watts was retained
by the Company in April, 1996 as a consultant in the area of acquisitions.
Under that agreement the Company granted 275,000 stock options to Michael Watts.
The Board of Directors has renewed the consulting agreement with Michael Watts
through March, 2000. In December, 1997, the Company adjusted the original
consulting agreement to include a total of 375,000 currently exercisable options
exercisable 1/3 at $.625, 1/3 at $1.00, and 1/3 at $1.375 per share expiring on
June 30, 2000. In April 1, 1999, pursuant to the consulting agreement, the
Company granted to Michael Watts 350,000 currently exercisable options
exercisable at $.50 per share expiring in March, 2001. Some of these options
have been exercised.
In December, 1998, Kent Watts purchase a convertible promissory note of the
Company from a note holder. The Company had not made any payments of principal
or interest on the note. This promissory note was paid off to Kent Watts by the
Company at a 50% discount to the principal balance remaining and without any
accrued interest, to Kent Watts in May, 1999. The Company paid $12,500 to Mr.
Watts. This transaction extinguished the debt.
8
<PAGE>
_______________________________________________________________________
(2) TO AMEND THE ARTICLES OF INCORPORATION TO AUTHORIZE 20,000,000 SHARES OF
PREFERRED STOCK.
________________________________________________________________________
DESCRIPTION AND EFFECT OF THE AMENDMENT
The Board of Directors of the Company recommends the approval of the
proposed amendment (the "Amendment") to authorize 20,000,000 shares of preferred
stock.
The proposed Amendment would amend Article IV of the Articles of
Incorporation as amended of HyperDynamics Corporation to authorize 20,000,000
shares of preferred stock. Such an Amendment requires the affirmative vote of a
majority of the shares of Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting.
PRINCIPAL REASONS FOR THE AMENDMENT
The Board of Directors believes it is desirable to authorize 20,000,000
shares of preferred stock. Currently, the Company has no shares of preferred
shares authorized. The purpose of the proposed amendment is to make available
for issuance shares of preferred stock which will be available in the event the
Board of Directors determines that it is necessary and appropriate to raise
additional capital through the sale of preferred stock in the public or private
market, or otherwise issue shares of preferred stock for acquisitions or other
appropriate corporate purposes. The Board of Directors has no present
agreement, arrangement or plan to issue any shares of preferred stock.
AMENDMENT TO ARTICLES OF INCORPORATION
The Article IV of the Company's Articles of Incorporation would be amended
to add new sections (b) and (c) as follows:
ARTICLE IV
"(b) The aggregate number of shares of preferred stock which the
corporation shall have authority to issue is twenty million (20,000,000) shares
of preferred stock, par value of $0.001. No share of preferred stock shall be
issued until it has been paid for and it shall thereafter be non-assessable
9
<PAGE>
(c) The Preferred Stock may be divided into and issued in one or more
series. The preferences, limitations, and relative rights of the Preferred
Stock may vary between series in any and all respects, but shall not vary within
a series. The Board of Directors may establish one or more series of unissued
shares of the Preferred Stock and fix and determine the preferences,
limitations, and relative rights of any series to the fullest extent set forth
herein and permitted by Delaware law, as now or hereafter in force. The Board
of Directors may increase or decrease the number of shares within each such
series; provided, however, that the Board of Directors may not decrease the
number of shares within a series below the number of shares within such series
that is then issued. The preferences, limitations, and relative rights of any
Preferred Stock to be issued shall be fixed by the Board of Directors adopting a
resolution or resolutions to such effect and filing a statement with respect
thereto as required by Delaware law."
The Board of Directors unanimously recommends a vote FOR amending the
Company's Articles of Incorporation to authorize 20,000,000 shares of preferred
stock.
_________________________________________________________
(3) TO RATIFY THE SELECTION OF JOHN B. EVANS, II
AS THE COMPANY'S INDEPENDENT AUDITOR
FOR THE FISCAL YEAR ENDING JUNE 30, 1999.
_________________________________________________________
The Board of Directors has selected John B. Evans, II as the Company's
independent audit or for the current fiscal year. Although not required by law
or otherwise, the selection is being submitted to the Stockholders of the
Company as a matter of corporate policy for their approval.
The Board of Directors wishes to obtain from the Stockholders a
ratification of their action in appointing their existing certified public
accountant, John B. Evans, II, independent auditor of the Company for the
fiscal year ending June 30, 1999. Such ratification requires the affirmative
vote of a majority of the shares of Common Stock present or represented by proxy
and entitled to vote at the Annual Meeting.
In the event the appointment of John B. Evans, II as independent auditor is
not ratified by the Stockholders, the adverse vote will be considered as a
direction to the Board of Directors to select other independent auditors for the
fiscal year ending June 30, 1999.
A representative of John B. Evans, II is expected to be present at the
Annual Meeting with the opportunity to make a statement if he so desires and to
respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR the ratification
of John B. Evans, II as independent auditor for fiscal year ending June 30,
1999.
10
<PAGE>
_________________________________________________________
(4) OTHER MATTERS
_________________________________________________________
The Board of Directors is not aware of any other matters to be presented
for action at the Annual Meeting. However, if any other matter is properly
presented at the Annual Meeting, it is the intention of the persons named in the
enclosed proxy to vote in accordance with their best judgement on such matters.
FUTURE PROPOSALS OF STOCKHOLDERS
The deadline for stockholders to submit proposals to be considered for
inclusion in the Proxy Statement for the Annual Meeting of Stockholders for the
fiscal year ended June 30, 1999 is September 15, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kent Watts
Chairman of the Board and
President
Houston, Texas
11
<PAGE>
PROXY
HYPERDYNAMICS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 26, 1999
The undersigned hereby appoints Kent Watts and Robert J. Hill, and each of
them as the true and lawful attorneys, agents and proxies of the undersigned,
with full power of substitution, to represent and to vote all shares of Common
Stock of HyperDynamics Corporation held of record by the undersigned on July 14,
1999, at the Annual Meeting of Stockholders to be held on August 26, 1999, at
10:00 AM (CST) at 2656 South Loop West, Suite 103, Houston, Texas 77054 and at
any adjournments thereof. Any and all proxies heretofore given are hereby
revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR THE NOMINEES
LISTED IN NUMBER 1, FOR THE PROPOSAL OF NUMBER 2, AND, FOR THE RATIFICATION OF
NUMBER 3.
1. ELECTION OF DIRECTORS OF THE COMPANY. (INSTRUCTION: TO WITHHOLD
--------------------------
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH, OR
- --------------------------------------------------------------------------------
OTHERWISE STRIKE, THAT NOMINEE'S NAME IN THE LIST BELOW.)
- ----------------------------------------------------------------
o FOR all nominees listed o WITHHOLD authority to
below except as marked vote for all nominees
to the contrary below
Kent Watts Robert J. Hill Ted W. Tarver
2. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO AUTHORIZE 20,000,000
SHARES OF PREFERRED STOCK.
o FOR o AGAINST o ABSTAIN
<PAGE>
3. PROPOSAL TO RATIFY THE SELECTION OF JOHN B. EVANS, II AS THE COMPANY'S
INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING JUNE 30, 1999.
o FOR o AGAINST o ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
o FOR o AGAINST o ABSTAIN
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
_____________________ ___________________________________
Number of Signature
Shares Owned
___________________________________
(Typed or Printed Name)
___________________________________
Signature if held jointly
___________________________________
(Typed or Printed Name)
DATED: ___________________________
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED
AT THE MEETING. PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY.
<PAGE>
