<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
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
PANJA INC.
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
--------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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 its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PANJA INC.
11995 Forestgate Drive
Dallas, Texas 75243
July 26, 2000
To Our Shareholders:
We are pleased to invite you to attend Panja Inc.'s Annual Meeting, which
will be held at the site of our new offices, 3000 Research Drive, Richardson,
Texas 75082 at 10:00 a.m. on August 21, 2000.
The matters to be acted on at the meeting are described in the Proxy
Statement. We hope that you will be able to attend the meeting. However, whether
or not you attend, it is important that you vote. Please mark, date, sign and
return the enclosed proxy card to ensure that your shares will be represented at
the meeting.
The Board of Directors and the management team look forward to seeing you
at the meeting.
Sincerely,
John F. McHale
Chairman of the Board
<PAGE>
PANJA INC.
____________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 21, 2000
____________________________________________
To the Shareholders of Panja Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of
Panja Inc., a Texas corporation (the "Company"), will be held on August 21,
2000, at 10:00 a.m. at the site of our new offices, 3000 Research Drive,
Richardson, Texas 75082 for the following purposes:
1. To elect directors to serve for the following year and until their
successors are duly elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as independent
accountants of the Company for the fiscal year ending March 31, 2001;
and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Shareholders of record at the close of business on June 26, 2000 are
entitled to notice of and to vote at the meeting. Only holders of record of the
Company's common stock on that date are entitled to vote on matters coming
before the meeting and any adjournment or postponement thereof. A complete list
of shareholders entitled to vote at the meeting will be maintained in the
Company's current offices at 11995 Forestgate, Dallas, Texas 75243 for ten days
prior to the meeting and will be open to the examination of any shareholder
during ordinary business hours of the Company.
Please advise the Company's Transfer Agent, ChaseMellon Shareholder
Services L.L.C., Overpeck Centre, 85 Challenger Road, Ridgefield Park, New
Jersey, 07660 of any change in your address.
All shareholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as soon as possible in the envelope
enclosed for that purpose. Any shareholder attending the meeting may vote in
person even if he or she previously returned a Proxy.
By Order of the Board of Directors
Paul D. Fletcher
Secretary
Dallas, Texas
July 26, 2000
<PAGE>
PANJA INC.
11995 Forestgate Drive
Dallas, Texas 75243
___________________________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 21, 2000
___________________________________________
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of Panja
Inc. (the "Company" or "Panja") for the Annual Meeting of Shareholders to be
held on August 21, 2000, at 10:00 a.m. at 3000 Research Drive, Richardson, Texas
75082, or any adjournment or adjournments thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting.
This proxy statement and the enclosed proxy card are being sent beginning
approximately July 26, 2000, to all shareholders entitled to vote at the
meeting. The Company's annual report for the fiscal year ended March 31, 2000 is
being mailed herewith to all shareholders entitled to vote at the Annual
Meeting. The annual report does not constitute a part of the soliciting
materials.
Record Date; Outstanding Shares
Only shareholders of record at the close of business on June 26, 2000 (the
"Record Date") are entitled to receive notice of and to vote at the meeting. The
outstanding voting securities of the Company as of such date consisted of
9,369,587 shares of common stock, par value $.01 per share (the "Common Stock").
The Company has no other class of stock outstanding. For information regarding
holders of more than 5% of the outstanding Common Stock, see "Election of
Directors - Security Ownership of Certain Beneficial Owners and Management."
Revocability of Proxies
The enclosed proxy is revocable at any time before its use by delivering to
the Company a written notice of revocation or a duly executed proxy bearing a
later date. If a person who has executed and returned a proxy is present at the
meeting and wishes to vote in person, he or she may elect to do so and thereby
suspend the power of the proxy holders to vote his or her proxy.
Voting and Solicitation
Every shareholder of record on the Record Date is entitled, for each share
held, to one vote on each proposal or item that comes before the meeting. With
respect to the election of directors, the director nominees receiving the
highest number of affirmative votes of the shares entitled to be voted shall be
elected to the Board of Directors. The affirmative vote of the holders of a
majority of the Company's Common Stock entitled to vote and represented in
person or by proxy at the meeting will be required to approve and ratify the
Board's selection of Ernst & Young LLP as the Company's independent auditors.
The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares in forwarding soliciting materials to beneficial
owners. Proxies may be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, personally, by
telephone, by email, by facsimile or by telegram.
1
<PAGE>
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual Meeting is a
majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR," "AGAINST," or "WITHHELD FROM" a matter are
treated as being present at the Meeting for purposes of establishing a quorum
and are also treated as shares "represented and voting" at the Annual Meeting
(the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in Texas as to
the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of the quorum for the transaction of business, and (ii) the total number of
Votes Cast with respect to a proposal. In the absence of controlling precedent
to the contrary, the Company intends to treat abstentions in this manner.
Accordingly, abstentions will have the same effect as a vote against a proposal.
Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but will not be counted for
purposes of determining the number of Votes Cast with respect to a proposal.
Deadline for Receipt of Shareholder Proposals
Proposals of shareholders of the Company that are intended to be presented by
such shareholders at the Company's 2001 Annual Meeting must be received by the
Company, addressed to Paul D. Fletcher, Secretary, Panja Inc., 3000 Research
Drive, Richardson, Texas, 75082, no later than March 28, 2001 for inclusion in
the proxy statement and form of proxy relating to that meeting. Such proposals
must comply with the Bylaws of the Company and the requirements of Regulation
14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Pursuant to Rule 14a-4 of the Exchange Act, the Company may exercise
discretionary voting authority at the 2001 Annual Meeting under proxies it
solicits to vote on a proposal made by a shareholder, unless the Company is
notified about the proposal no later than June 11, 2001 (assuming that the
Company's 2001 Annual Meeting of Shareholders is held on a date that is within
30 days from the date on which the 2000 Annual Meeting was held).
With respect to business to be brought before the Annual Meeting to be held on
August 21, 2000, the Company has not received any notices from shareholders that
the Company was required to include in this Proxy Statement.
ELECTION OF DIRECTORS
(ITEM 1)
A Board of six directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote all of the proxies received by them for
the Company's six nominees named below. After the 2000 Annual Meeting, there
will be a vacancy on the Board. The Company has not, as of the date of this
Proxy Statement, identified a candidate to fill such vacancy. However, the
Company intends to continue searching for suitable candidates and expects to
fill such vacancy prior to its 2001 Annual Meeting of Shareholders. The proxies
cannot be voted for a greater number of nominees than six nominees. In the
event that any of the nominees shall become unavailable, the proxy holders will
vote in their discretion for a substitute nominee. It is not expected that any
nominee will be unavailable. The term of office of each person elected as a
director will continue until the next Annual Meeting of Shareholders and until
his successor has been elected and qualified.
Vote Required
The six nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum and for purposes of determining the total number of votes
cast for such director, but have no other legal effect under Texas law.
2
<PAGE>
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's six nominees named below. If any nominee of
the Company is unable or declines to serve as a director at the time of the
meeting, the proxies will be voted for any nominee who is designated by the
present Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director.
The Board of Directors recommends that shareholders vote FOR the nominees
listed below.
The names and certain information about the nominees for directors are set
forth below:
<TABLE>
<CAPTION>
Name of Nominee Age Positions/Principal Occupation Director Since
-------------------------- ------ ------------------------------------------------------------- ----------------
<S> <C> <C> <C>
John F. McHale (1)(4)..... 44 Chairman of the Board and Chief Executive Officer, Netpliance 1997
Joe Hardt (3)............. 45 Chief Executive Officer, President and Director 1995
Harvey B. Cash (2)(3)(4).. 61 General Partner in various venture capital funds 1995
J. Otis Winters (1)(2).... 67 Chairman of Pate, Winters & Stone, Inc. 1997
Peter D. York............. 57 Vice Chairman of the Board and Director 1995
Julie Spicer England...... 42 Vice President and General Manager of Texas Instruments' Sun --
Microsystems Business
</TABLE>
___________
(1) Members of the Compensation Committee.
(2) Members of the Audit Committee.
(3) Members of the Nominating Committee.
(4) Mr. Cash has agreed to serve as Chairman of the Board following the Annual
Meeting of Shareholders. Following such meeting, Mr. McHale will remain as
a director of the Company.
Except as set forth below, each of the nominees has been engaged in the
principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.
Set forth below is certain information with respect to each of the nominees
for director and each other executive officer of the Company:
Nominees
John F. McHale has served as a director of the Company since October 1997
and as Chairman of the Board since January 1999. Mr. McHale currently is the
Chairman of the Board and Chief Executive Officer of Netpliance. Mr. McHale was
a founder of NetSpeed, Inc. and served as its president, chief executive
officer, and chairman of the Board from 1996 until its acquisition by Cisco
Systems, Inc. in 1998. Before founding NetSpeed, Mr. McHale was a founder, chief
executive officer, and chairman of the Board of NetWorth, Inc. from 1985 until
its acquisition by Compaq Computer Corporation in 1995. Mr. McHale graduated
from the University of Dayton in 1978 with a bachelor's degree in electrical
engineering. Although Mr. McHale will remain a director, Mr. McHale will step
down as Chairman of the Board immediately after the Annual Meeting and the
Company currently expects that Harvey B. Cash will be elected to serve in such
position.
Joe Hardt, Chief Executive Officer and President, served as Chief Operating
Officer of the Company from 1993 to September 1995, and has been a director
since March 1995. In September 1995, Mr. Hardt was elected President of the
Company, a position which included the duties of chief executive officer.
Effective July 1, 1997, Mr. Hardt was formally elected the Chief Executive
Officer of the Company. Prior to joining the Company, Mr. Hardt was an attorney
in private practice in Dallas, Texas from 1980 to 1993. In 1986, he was one of
the founding shareholders of Munsch Hardt Kopf & Harr, P.C. where he was a
practicing attorney until 1993, and he served as the firm's President from April
1986 to April 1989. Mr. Hardt holds a B.A. in English from Centenary College of
Louisiana and a J.D. from the University of Texas School of Law.
3
<PAGE>
Harvey B. Cash has served as a director of the Company since March 1995. Mr.
Cash has been a general partner of InterWest Partners, a venture capital firm,
since 1986, and is an advisor to Austin Ventures, a venture capital firm. He
also currently serves on the Board of Directors of Ciena Corporation, a designer
and manufacturer of multiplexing systems for fiber optic networks, Liberte
Investors Inc., an investment company, Microtune, Inc., a radio frequency
silicon and systems company, i2 Technologies, Inc., a provider of marketplace
services, Silicon Laboratories Inc., an integrated circuit company, and several
privately held companies. Mr. Cash holds a B.S. in Electrical Engineering from
Texas A&M University and an M.B.A. from Western Michigan University.
J. Otis Winters has served as a director of the Company since January 1997.
Mr. Winters was co-founder of Pate, Winters & Stone, Inc., a consulting firm, in
1989 and served as its chairman from 1990 until its acquisition by Glass &
Associates in 2000. Mr. Winters is currently serving on the Board of Directors
of Glass & Associates. Mr. Winters also serves on the Board of Directors of
Dynegy, Inc. and Triton Energy. A registered professional engineer, Mr. Winters
holds a M.B.A. from the Harvard Business School and a B.S. and M.S. in petroleum
engineering from Stanford University.
Peter D. York, Vice Chairman of the Board, served as Senior Vice President
for the Company from 1992 until 1997, has been a director since March 1995, and
has served as Vice Chairman of the Board of Directors since July 2, 1997. Mr.
York joined the Company in 1991 upon the acquisition by the Company of York
Controls, Inc. Mr. York founded York Controls, Inc. in 1978 and served as its
President and Chief Executive Officer until its acquisition by the Company. Mr.
York attended Stanford University.
Julie Spicer England, has been nominated by the Nominating Committee to serve
as a director. Since September 1999, Ms. England has served as Vice President
and General Manager of Texas Instruments' Sun Microsystems Business, and is also
currently a board member of The Federal Reserve Bank of Dallas. Before assuming
her Sun Microsystems Business responsibilities, Ms. England was vice president
of multiple product lines at Texas Instruments from February 1998 to September
1999. In addition, she was the vice president of quality for the Texas
Instruments' semiconductor business from November 1994 to February 1998. Ms.
England is a Senior Member Technical Staff emeritus at Texas Instruments and is
the co-inventor of six patents related to infrared process technology. Ms.
England is a graduate of Texas Tech University with a Bachelor of Science degree
in chemical engineering and post-graduate work towards an MBA.
Other Executive Officers
Paul D. Fletcher, 41, has served as Vice President and Chief Financial Officer
and Treasurer of the Company since January 2000. Prior to joining the Company,
Mr. Fletcher served as the Vice President and Treasurer of Excel Communications,
Inc., a telecommunications and network marketing company, from May 1996 to
January 2000. From February 1987 until May 1996, Mr. Fletcher served as Senior
Vice President for Lomas Financial Corporation, a diversified financial services
company. Mr. Fletcher holds a BA from Albion College and an MBA from
Northwestern University.
R. Randal Riebe, 45, has served as Vice President and General Manager of the
Enterprise Systems Division since May 1997. Prior to joining the Company, Mr.
Riebe served as Vice President, Systems Integration Group of Fairview/AFX
Incorporated from 1994 through 1997. From 1992 to 1994 Mr. Riebe served as
Business Development Manager of Sound Advance Systems, a commercial loudspeaker
manufacturer, and as Vice President of Sales for Ford Audio Video from 1983
through 1992. Mr. Riebe holds an education degree from the University of
Central Oklahoma.
Tom Hite, 37, has served as Vice President-Engineering since August 1997 and
Chief Technology Officer since July 2000. Mr. Hite also served the Company as
General Manager of the Consumer Division from July 1999 to July 2000. Prior to
joining the Company, Mr. Hite served as Vice President, Chief Technology Officer
of AnswerSoft, Inc., a global provider of business process automation solutions,
from 1994 to 1997. From 1991 until 1994 Mr. Hite served as Manager of Software
Development for Micrografx, Inc., a designer and developer of graphics software.
Mr. Hite holds a B.S. and a Master of Science in Mechanical Engineering from the
University of Iowa.
4
<PAGE>
Dave Benesh, 52, has served as Vice President of Operations of the Company
since January 1998. Prior to joining the Company, Mr. Benesh served as
President of Venture Engineering, a robotics manufacturing company, from 1995
through 1997. Prior to 1995, Mr. Benesh managed certain global operations for
various electronic companies, including Texas Instruments, Mostek, and EPI. Mr.
Benesh holds a B.S. in Mathematics and a Master of Statistics degree from Texas
A&M University.
Each director serves until the next annual meeting of shareholders and until
his successor is duly elected and qualified. The Company's Board of Directors is
currently comprised of six directors and the officers serve at the discretion of
the Board of Directors.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of June 30, 2000, certain information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than five percent (5%) of
the outstanding shares of Common Stock, (ii) each current director and director
nominee of the Company, (iii) the executive officers of the Company named in the
table under "Executive Compensation - Summary Compensation Table," and (iv) all
directors and executive officers as a group. Except as otherwise described above
in "Vote Required," the Company does not know of any agreements among its
shareholders that relate to voting or investment power of its shares of Common
Stock.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned(1)
--------------------------------
Percentage
5% Beneficial Owners, Directors and Executive Officers Number Ownership
---------------------------------------------------------------------- ------------- --------------
<S> <C> <C>
John F. McHale (2).................................................... 793,820 8.5%
12303 Technology Blvd.
Austin, Tx 78727
J. Otis Winters (3)................................................... 27,500 *
5956 Sherry Lane Suite 2001
Dallas, Tx 75225
Harvey B. Cash (4).................................................... 33,594 *
c/o InterWest Partners
13355 Noel Road
Suite 1375, LB #65
Dallas, Texas 75240
Scott D. Miller (5)................................................... 531,100 5.7%
11515 Hillcrest
Dallas, Texas 75230
Peter D. York......................................................... 647,984 6.9%
Joe Hardt (6)......................................................... 593,516 6.1%
Julie Spicer England.................................................. -- --
R. Randal Riebe (7)................................................... 41,250 *
Dave Benesh (8)....................................................... 32,500 *
Tom Hite (9)......................................................... 62,500 *
Paul D. Fletcher...................................................... -- --
All directors and executive officers as a group
(ten persons)(10)................................................ 2,763,764 27.6%
</TABLE>
-----------
* Less than 1%
5
<PAGE>
(1) The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as defined in Rule 13d-3 under
the Exchange Act. All information with respect to the beneficial ownership
of any principal shareholder was supplied in a Schedule 13D or 13G filed
with the Securities and Exchange Commission (the "SEC") by or on behalf of
such principal shareholder under the Exchange Act and/or was furnished by
such principal shareholder to the Company and, except as otherwise
indicated or pursuant to community property laws, each shareholder has sole
voting and investment power with respect to shares listed as beneficially
owned by such shareholder. Shares subject to options exercisable within 60
days of June 30, 2000 are deemed outstanding for computing the percentage
of the person holding such options, but are not deemed outstanding for
computing the percentage of any other person. The address of Peter York and
each executive officer of the Company is currently as follows: c/o Panja
Inc., 11995 Forestgate Drive, Dallas, Texas 75243. Effective September 4,
2000, the address of Peter York and each executive officer of the Company
will be as follows: c/o Panja Inc., 3000 Research Drive, Richardson, Texas
75082.
(2) Includes 27,500 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(3) Represents 27,500 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(4) Includes 15,000 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(5) Includes 12,500 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(6) Includes 415,740 shares of Common Stock issuable upon exercise of
outstanding options, which are presently exercisable or are exercisable
within 60 days after June 30, 2000 and 26,600 shares held by Mr. Hardt as
custodian for minor children.
(7) Represents 41,250 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(8) Represents 32,500 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(9) Represents 62,500 shares of Common Stock issuable upon exercise of
outstanding options that are presently exercisable or are exercisable
within 60 days after June 30, 2000.
(10) Includes an aggregate of 634,490 shares of Common Stock issuable upon
exercise of outstanding options granted to the executive officers of the
Company that are presently exercisable or are exercisable within 60 days
after June 30, 2000.
Board Meetings and Committees
The Board of Directors of the Company held a total of seven meetings during
the fiscal year ended March 31, 2000. In addition, the Board of Directors acted
one time by unanimous consent during the fiscal year ended March 31, 2000.
During the fiscal year ended March 31, 2000, each director attended at least 75%
of the meetings of the Board of Directors held during the period for which he
was a director.
The Audit Committee, currently consisting of directors J. Otis Winters and
Harvey B. Cash, met four times during the last fiscal year. This Committee
recommends engagement of the Company's independent auditors and reviews with
management and the independent auditors the Company's financial statements,
basic accounting and financial policies and practices, audit scope and
competency of control personnel.
6
<PAGE>
The Compensation Committee, currently consisting of directors J. Otis Winters
and Harvey B. Cash, met one time during the last fiscal year. This Committee
reviews and recommends to the Board of Directors the compensation of executive
officers of the Company and administers and makes awards and takes all other
action as is provided under the employee benefit plans of the Company,
including, but not limited to, the 1995 Stock Option Plan, the 1999 Equity
Incentive Plan and the 1996 Employee Stock Purchase Plan, excluding, however,
the 1995 Director Stock Option Plan.
The Nominating Committee, currently consisting of directors Joe Hardt and
Harvey B. Cash, was established in September 1999 and did not meet during the
fiscal year ended March 31, 2000. The Nominating Committee is responsible for
developing a policy on the size and composition of the Board of Directors,
reviewing possible candidates for membership on the Board of Directors, and
recommending a slate of nominees. The Nominating Committee will consider
shareholder proposals of persons to be nominated for election to the Board of
Directors. See "Deadlines for Receipt of Shareholder Proposals."
Board Compensation
Currently, the Company's directors do not receive any cash compensation for
serving on the Board of Directors or any Committees, but are reimbursed by the
Company for expenses incurred in attending meetings of the Board of Directors or
any Committees. The Company's non-employee directors, Mr. Winters, Mr. McHale,
Mr. Miller, and Mr. Cash, each received option grants from the Company's 1999
Equity Incentive Plan in lieu of a cash payment for their director's fees. Such
option grants were approved by the entire Board of Directors. All nonemployee
directors also participate in the Company's 1995 Director Stock Option Plan and
will receive non-statutory stock options thereunder.
Generally, options to purchase 5,000 shares of Common Stock will be granted
from the 1995 Director Stock Option Plan to each new nonemployee director at the
time such person is first elected or appointed to the Board. In addition,
immediately following the Company's annual meeting of shareholders each year,
commencing with the Company's Annual Meeting on August 16, 1996, each
nonemployee director has been granted options to purchase 2,500 shares of Common
Stock, which grant will be approved by the entire Board of Directors.
Additionally, each director will receive an annual grant of 7,500 options from
the 1999 Equity Incentive Plan. The Chairman of the Board will receive an
additional 10,000 options from the 1999 Equity Incentive Plan and the Chairman
of each of the Audit Committee and the Compensation Committee will also receive
an additional grant of 2,500 options, respectively.
During the fiscal year ended March 31, 2000, Mr. McHale, Mr. Winters, Mr.
Cash, and Mr. Miller received options to purchase 30,000 shares, 22,500 shares,
10,000 shares, and 15,000 shares, respectively. Such option grants represented
both options ordinarily granted to directors under the 1995 Director Stock
Option Plan and options granted to directors in lieu of Board or Committee fees.
Report of the Compensation Committee
The following is the Report of the Compensation Committee of the Company,
describing the compensation policies and rationale applicable to the Company's
officers with respect to the compensation paid to the officers for the fiscal
year ended March 31, 2000. The information contained in the Report of the
Compensation Committee shall not be deemed to be "soliciting material" or to be
"filed" with the SEC, nor shall such information be incorporated by reference
into any future filing under the Securities Act or the Exchange Act except to
the extent that the Company specifically incorporates it by reference into such
filing.
7
<PAGE>
To the Board of Directors:
As members of the Compensation Committee, it is our duty to administer the
executive compensation program for the Company. The Compensation Committee is
responsible for establishing appropriate compensation goals for the executive
officers of the Company and evaluating the performance of such executive
officers in meeting such goals. The elements of the executive compensation
program described below are implemented and periodically reviewed and adjusted
by the Compensation Committee.
The goals of the Compensation Committee in establishing the Company's
executive compensation program are as follows:
(1) To fairly compensate the executive officers of the Company for their
contributions to the Company's short-term and long-term performance. The
elements of the Company's compensation program are (i) annual base
salaries, (ii) annual cash bonuses and (iii) equity incentives.
(2) To allow the Company to attract, motivate and retain the management
personnel necessary to the Company's success by providing an executive
compensation program comparable to that offered by similar companies.
(3) To provide an executive compensation program with incentives linked to the
financial performance of the Company. Under such program, incentive
compensation for executive officers is linked to the general financial
performance of the Company as measured by such items as revenues and
income from operations.
Base Salaries. The annual base salary of Joe Hardt, the Chief Executive
Officer and President of the Company, was paid pursuant to an employment
agreement that was entered into by the Company and Mr. Hardt in October 1998 and
was approved by the Compensation Committee. The Compensation Committee has
reviewed the base salaries for all executive officers of the Company in light of
corporate performance, individual performance, experience and a comparison with
salary ranges and midpoints reflecting similar positions, duties and levels of
responsibility of other companies in similar industries and with comparable
revenues and has found them to be reasonable. Each executive officer's base
salary is reviewed annually by the Compensation Committee and is subject to
upward adjustment on the basis of individual and corporate performance. The
Compensation Committee has set new base salaries for those individuals for
fiscal year 2001.
Annual and Other Bonuses. The bonuses available to the executive officers,
which for the 2000 fiscal year included Joe Hardt, R. Randal Riebe, Dave Benesh,
and Tom Hite, are based upon the achievement of specific performance targets.
Such bonuses are designed to maximize the shareholder value.
Equity Incentives. Equity incentives, including grants of stock options, are
determined based on the Compensation Committee's assessment of the ability of
such officers to positively impact the Company's future performance and enhance
shareholder value as determined by their individual performances. Stock option
grants and other equity incentives are not awarded annually but as the
individual performance and experience of each executive officer warrants.
Option awards generally vest in cumulative installments of 25% per year. Other
option awards vest in cumulative installments of 50% after the second
anniversary of the date of grant and 25% after the third and fourth anniversary
dates, respectively. Option awards for directors generally vest immediately or
twelve months from the date of grant. The amount and vesting of stock options
are not contingent on achievement of any specific performance targets. All
options granted will benefit the executive only to the extent that there is
appreciation in the market price of the Common Stock during the option period.
Equity and cash incentives are not limited to executive officers. Grants of
stock options are made to employees upon joining the Company in amounts
determined by the Compensation Committee and are also made to selected employees
as performance related awards and as awards for certain promotions. The amounts
of such grants are determined based on the individual employee's position with
the Company and his or her potential ability to beneficially impact the
performance of the Company. By giving all employees a stake in the financial
performance of the Company, the Compensation Committee's goal is to provide
incentives to all employees of the Company to enhance the financial performance
of the Company and, thus, shareholder value.
8
<PAGE>
Chief Executive Officer Compensation. The compensation for the fiscal year
ended March 31, 2000 of the Chief Executive Officer of the Company principally
consisted of a base salary and an annual bonus. Mr. Hardt's base salary was
established by contract in October 1998 at an amount of $200,000 per annum
subject to annual review and upward adjustment by the Compensation Committee.
Mr. Hardt's base salary was approved by the Compensation Committee in light of
corporate performance, individual performance, experience and a comparison with
salary ranges and midpoints reflecting similar positions, duties and levels of
responsibility of other companies in similar industries and with comparable
revenues. As a result of performance of the Company last year, Mr. Hardt
received a bonus of $120,000. Mr. Hardt received other compensation in the
fiscal year ended March 31, 2000 in the amount of $11,025 consisting of the
Company's matching contribution of $4,788 under the Company's Retirement and
Savings Plan (the "401(k) Plan") and an allocation of $6,237 under the Panja
Inc. Profit Sharing Plan, and was granted options to purchase 180,000 shares of
the Common Stock at $8.625 per share.
COMPENSATION COMMITTEE
J. Otis Winters
Harvey B. Cash
Compensation Committee Interlocks and Insider Participation
Messrs. Winters and Cash are the current members of the Compensation
Committee.
During the last fiscal year, no executive officer of the Company served as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.
Certain Relationships and Related Transactions
XTG, Inc., one of the Company's dealers, is wholly owned by Scott D. Miller, a
member of the Company's Board of Directors. During the fiscal year ended March
31, 2000, XTG, Inc. purchased approximately $117,000 of products from the
Company at the same prices charged to other dealers for similar items in similar
quantities.
On January 2, 1998, Joe Hardt, Chief Executive Officer, President and a
director of the Company, exercised an option to acquire 25,000 shares of Common
Stock for an aggregate purchase price of $22,375 with $250 paid in cash and
$22,125 paid to the Company by delivery of his promissory note in the original
principal amount of $22,125 bearing interest at the rate of 7.5% per annum with
all principal and interest due on January 2, 2001. As of June 1, 2000, principal
in the amount of $22,125, together with interest thereon of $4,411, remained
outstanding.
On January 3, 2000, Joe Hardt, Chief Executive Officer, President and a
director of the Company, exercised an option to acquire 7,776 shares of Common
Stock for an aggregate purchase price of $6,960 with $70 paid in cash and $6,890
paid to the Company by delivery of his promissory note in the original principal
amount of $6,890 bearing interest at the rate of 8.25% per annum with all
principal and interest due on January 3, 2003. As of June 1, 2000, principal in
the amount of $6,890, together with interest thereon of $237, remained
outstanding.
On January 5, 2000, Peter D. York, Vice Chairman of the Board, Assistant
Secretary and a director of the Company, exercised options to acquire 164,864
shares of Common Stock for an aggregate purchase price of $321,768 with $221,768
paid in cash and $100,000 paid to the Company by delivery of his promissory note
in the original principal amount of $100,000 bearing interest at the rate of
8.25% per annum, with all principal and interest due on January 5, 2003. As of
June 1, 2000, principal in the amount of $100,000, together with interest
thereon of $3,348 remained outstanding.
9
<PAGE>
Performance Graph
The following graph compares the cumulative total shareholder return on an
investment of $100 on November 16, 1995 (the date of the Company's initial
public offering) in (i) the Company's Common Stock, (ii) the CRSP Total Return
Index for the Nasdaq Stock Market (U.S. Companies) Index (the "Nasdaq Composite
Index"), and (iii) the Total Return Index of the Nasdaq Stock Market -
Electronic Components. The values with each investment as of the date of the
Company's initial public offering are based on share price appreciation and the
reinvestment of dividends.
The information contained in the Performance Graph shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act or
the Exchange Act except to the extent that the Company specifically incorporates
it by reference into such filing.
The graph above assumes $100 invested on November 16, 1995 (the date of the
Company's initial public offering), and was plotted using the following data:
Performance Graph
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Nasdaq Nasdaq
Panja US Electronic Comp.
----------------- -------------------- ---------------------
<S> <C> <C> <C>
11/16/95 $100.00 $100.00 $100.00
3/31/96 $101.43 $105.60 $ 89.64
3/31/97 $ 80.00 $117.39 $157.43
3/31/98 $100.00 $177.98 $180.21
3/31/99 $105.71 $240.44 $259.99
3/31/00 $262.86 $446.89 $756.29
</TABLE>
Executive Compensation
Summary Compensation Table. The following table summarizes information with
respect to the compensation of the Company's President and Chief Executive
Officer and the other most highly compensated executive officers of the Company
(the "Executive Group"), whose total compensation exceeded $100,000 during the
fiscal year ended March 31, 2000.
10
<PAGE>
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
--------------------------------- ---------------------
Number of Securities All Other
Name and Principal Position Year Salary Bonus Underlying Options Compensation (2)
------------------------------------ ------------ ----------------- -------------- --------------------- ----------------
<S> <C> <C> <C> <C> <C>
Joe Hardt.......................... 2000 $300,217(1) $120,000 180,000 $11,025
Chief Executive Officer and 1999 194,350(1) -- 25,000 6,809
President 1998 193,201(1) 75,000 -- 10,705
Paul D. Fletcher................... 2000 $ 36,289(3) $ 50,000 100,000 --
Vice President and Chief Financial 1999 -- -- -- --
Officer 1998 -- -- --
Tom Hite........................... 2000 $165,000 $ 49,500 100,000 $ 5,349
Vice President and Chief 1999 150,650 -- -- 5,380
Technology Officer 1998 133,556 20,000 -- --
R. Randal Riebe.................... 2000 $165,216 $ 49,500 100,000 $ 3,969
Vice President - General Manager, 1999 120,650 -- -- 3,949
Enterprise Division 1998 84,776 12,500 30,000 --
Dave Benesh........................ 2000 $165,217 $ 49,500 50,000 $ 5,363
Vice President - Operations 1999 135,731 -- -- 3,685
1998 23,440(5) -- 40,000 --
David E. Chisum.................... 2000 $150,000(4) $ -- 25,000 $ 5,835
Chief Accounting Officer 1999 125,520 -- 25,000 5,635
1998 124,802 20,000 15,000 6,983
</TABLE>
_______
(1) Base salary determined under the terms of the October 1998 employment
agreement, as amended, for Mr. Hardt. See "Employment Agreement" below.
(2) Represents the amounts of matching contributions and allocations made by the
Company for participating officers under the 401(k) Plan (which was
established in January 1995) and the Profit Sharing Plan (which was
established in 1989). For fiscal 2000, the Company (a) made matching
contributions under the 401(k) Plan of $4,788 for Joe Hardt, $2,560 for
David Chisum, $1,670 for Tom Hite, $444 for R. Randal Riebe, and $1,777 for
Dave Benesh and (b) allocated $6,237 under the Profit Sharing Plan for Joe
Hardt, $3,275 for David Chisum, $3,679 for Tom Hite, $3,525 for R. Randal
Riebe, and $3,586 for Dave Benesh.
(3) Represents the portion of Mr. Fletcher's $185,000 annual salary for the
fiscal year ended March 31, 2000 since his employment commenced in January
2000. Mr. Fletcher was granted options to acquire 100,000 shares of common
stock at an exercise price of $16.88 per share in January 2000.
(4) Mr. Chisum served as Chief Financial Officer for the Company from May 1996
to January 2000 and then served as Chief Accounting Officer and a consultant
to the Company prior to leaving the Company in June 2000.
(5) Represents the portion of Mr. Benesh's $130,000 annual salary for the fiscal
year ended March 31, 1998 since his employment commenced in January 1998.
Mr. Benesh was granted options to acquire 40,000 shares of common stock at
an exercise price of $6.50 per share in January 1998.
11
<PAGE>
Option Grants in Last Fiscal Year. The following table provides information
on stock options granted to the Executive Group during the fiscal year ended
March 31, 2000.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------
Number of Percent of Potential Realizable
Securities Total Options Value at Assumed
Underlying Granted to Per Share Annual Rates of Stock Price
Options Employees in Exercise Expiration Appreciation for Option Term(3)
Name Granted Fiscal Year Price Date 5% 10%
------------------------- -------------- --------------- -------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joe Hardt (1) 180,000 14.0% $8.625 5/3/09 $ 976,359 $2,474,285
Paul D. Fletcher (2) 100,000 7.8% $16.88 1/13/10 $1,061,574 $2,690,237
Tom Hite (1) 100,000 7.8% $8.625 5/3/09 $ 542,422 $1,374,603
R. Randal Riebe (1) 100,000 7.8% $8.625 5/3/09 $ 542,422 $1,374,603
Dave Benesh (1) 50,000 3.9% $8.625 5/3/09 $ 271,211 $ 687,301
David E. Chisum (1) 25,000 1.9% $8.625 5/3/09 $ 135,605 $ 343,651
</TABLE>
___________
(1) 25% of such options granted are exercisable after the first, second, third,
and fourth anniversaries of the date of grant, respectively.
(2) 50% of such options granted are exercisable after the second anniversary of
the date of grant, and 25% of such options are exercisable after the third
and fourth anniversary dates, respectively.
(3) The dollar amounts under these columns represent the realizable value of
each grant of options assuming that the market price of the Common Stock
appreciates in value from the date of grant at the 5% and 10% assumed
annual rates of compounded stock price appreciation mandated by the rules
of the SEC. Actual gains, if any, on stock option exercises are dependent
on many factors, including the future financial performance of the Company
and overall market conditions, and there can be no assurance provided to
the Executive Group or any other holder of the Company's securities that
the actual stock price will appreciate at the assumed 5% or 10% levels or
at any other defined level.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values. The following options were exercised during the fiscal year ended March
31, 2000, by the Executive Group:
<TABLE>
<CAPTION>
Number of Shares Underlying Value of Unexercised In-the-Money
Shares Acquired Value Unexercised Options at March 31, 2000 Options at March 31, 2000 (3)
------------------------------------- ------------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---------------------- --------------- ------------ --------------- -------------------- --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Joe Hardt (1) 7,776 $179,664 370,740 192,500 $7,888,800 $2,732,325
Paul D. Fletcher (2) -- -- -- 100,000 $ -- $ 612,000
Tom Hite (1) -- -- 37,500 112,500 $ 604,688 $1,625,250
R. Randal Riebe (1) -- -- 15,000 115,000 $ 248,900 $1,667,600
Dave Benesh (1) -- -- 20,000 70,000 $ 330,000 $1,039,500
David E. Chisum (1) 14,300 $260,263 5,700 57,500 $ 91,763 $ 862,325
</TABLE>
___________
(1) 25% of such options are exercisable after the first, second, third, and
fourth anniversaries of the date of grant, respectively.
12
<PAGE>
(2) 50% of such options granted are exercisable after the second anniversary of
the date of grant, and 25% of such options are exercisable after the third
and fourth anniversary dates, respectively.
(3) Based on the fair market value of the Common Stock of $23.00 per share as
reported on the Nasdaq National Market on March 31, 2000
Employment Agreement
In October 1998, the Company entered into an employment agreement with Joe
Hardt (the "Employment Agreement"). The following is a summary of the principal
terms of the Employment Agreement. The Employment Agreement is for an initial
term of three years. In general, the Company may terminate Mr. Hardt's
employment for "cause," death or "disability," or "without cause," and Mr. Hardt
may terminate employment for "good reason." Pursuant to the Employment
Agreement, Mr. Hardt agreed to serve as President and Chief Executive Officer of
the Company. The Employment Agreement provides for Mr. Hardt to receive an
annual base salary of $200,000, which is subject to review and adjustment on an
annual basis by the Compensation Committee of the Board of Directors (provided
that such base salary may not be decreased). The Employment Agreement provides
that Mr. Hardt shall be eligible to participate in such bonus plan as may be
approved by the Compensation Committee of the Board of Directors and permits Mr.
Hardt to participate in any and all benefit plans and incentive plans maintained
by or on behalf of the Company. In addition, the Employment Agreement provides
for certain payments and benefits in the event that Mr. Hardt is terminated
without cause or due to death or disability.
The Employment Agreement also generally provides that Mr. Hardt will keep
confidential certain non-public information regarding the Company and further
provides that, during Mr. Hardt's employment and for two years following
termination of the Employment Agreement, Mr. Hardt, will not, subject to certain
exceptions, engage or have a financial interest in any business located anywhere
in the restricted area which competes with the Company or any affiliate of the
Company. The restricted area under the Employment Agreement is the entire
world. Mr. Hardt further agrees under the Employment Agreement, that during the
non-competition period he will not solicit or otherwise contact any of the
Company's or its affiliates' customers, distributors, dealers or
representatives.
Indebtedness of Management
See "Certain Relationships and Related Transactions" above.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership on Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such officers, directors
and ten percent stockholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that, during the fiscal year ended March 31, 2000, the
Company's officers, directors and ten percent shareholders complied with all
applicable Section 16(a) filing requirements, except that Joe Hardt reported a
gift late in a Form 5 filed on February 9, 2000 and Scott Miller reported a sale
late in a Form 4 filed on February 10, 2000.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2)
The Board of Directors has selected Ernst & Young LLP, independent
accountants, to audit the books, records and accounts of the Company for the
fiscal year ending March 31, 2001. Ernst & Young LLP has audited the Company's
financial statements since the fiscal year ended March 31, 1993.
13
<PAGE>
The affirmative vote of the holders of a majority of the Company's Common
Stock represented and voting at the meeting will be required to approve and
ratify the Board's selection of Ernst & Young LLP. The Board of Directors
recommends voting "FOR" approval and ratification of such selection. In the
event of a negative vote on such ratification, the Board of Directors will
reconsider its selection.
A representative of Ernst & Young LLP is expected to be available at the
Annual Meeting to make a statement if such representative desires to do so and
to respond to appropriate questions.
OTHER MATTERS
Management does not intend to bring before the meeting any matters other than
those set forth herein, and has no present knowledge that any other matters will
or may be brought before the meeting by others. However, if any other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed form of Proxy to vote the Proxies in accordance with their judgment
and in accordance with Rule 14a-4 promulgated under the Exchange Act.
The Company has borne the cost of preparing, assembling and mailing this proxy
solicitation material. The Company will provide without charge a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000,
including the financial statements, to each shareholder upon written request to
Paul D. Fletcher, Panja Inc., 11995 Forestgate Drive, Dallas, Texas 75243.
Effective September 4, 2000, such request should be submitted to Paul D.
Fletcher, Panja Inc., 3000 Research Drive, Richardson, Texas 75082.
By Order Of The Board of Directors
Paul D. Fletcher
Secretary
14
<PAGE>
PANJA INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
2000 ANNUAL MEETING OF SHAREHOLDERS - AUGUST 21, 2000
The undersigned shareholder(s) of Panja Inc., a Texas corporation, hereby
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement and hereby appoints John F. McHale and Joe Hardt, and each of them,
Proxies and Attorneys-in-Fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Shareholders of Panja Inc. to be held at the site of the
future offices of the Company at 3000 Research Drive, Richardson, Texas, 75082,
at 10:00 a.m. on August 21, 2000, and any adjournments thereof, and to vote all
shares of Common Stock that the undersigned is entitled to vote on the matters
set forth on the reverse side.
(Continued on other side)
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<CAPTION>
(Continued from reverse side)
___
Please mark your | |
votes as indicated | X |
in this example |___|
<S> <C>
1. ELECTION OF DIRECTORS: (If you wish to withhold authority to vote for any individual
nominee, strike a line through the nominee's name below)
FOR all WITHHOLD Julie Spicer England, Joe Hardt, Peter D. York, John F. McHale,
nominees AUTHORITY Harvey B. Cash and J. Otis Winters.
listed to to vote for
the right all nominees
(except as listed to
indicated) the right
[ ] [ ]
</TABLE>
<TABLE>
<S> <C> <C>
2. PROPOSAL TO RATIFY THE 3. IF YOU PLAN TO ATTEND THE In their discretion, the Proxies are authorized to vote upon
APPOINTMENT OF ERNST & MEETING IN PERSON, PLEASE such other business as may properly come before the meeting.
YOUNG LLP AS INDEPENDENT CHECK THIS BOX: [ ]
ACCOUNTANTS OF THE THIS BALLOT WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
COMPANY FOR THE FISCAL DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL
YEAR ENDING MARCH 31, 2001. NOMINEES NAMED ABOVE, FOR RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND AS SAID PROXIES
FOR AGAINST ABSTAIN DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING.
[ ] [ ] [ ]
-------------------------------------------------------------
Signature
-------------------------------------------------------------
Signature (To be signed if shares are held by joint tenants
as community property.)
-------------------------------------------------------------
Title, if applicable
Dated: , 2000
-------------------------------------------------
This proxy should be dated and signed by the Shareholder(s)
exactly as his or her name appears thereon and returned
promptly in the enclosed envelope. Persons signing in a
fiduciary capacity should so indicate. If shares are held by
joint tenants as community property, both should sign.
-----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
