<PAGE>
SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN 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:
/ / 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 Pursuant to Rule 14a-11(c) or Rule 14a-12
SYS
- --------------------------------------------------------------------------------
(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 transactions applies:
Common Shares
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
2,935,686
- --------------------------------------------------------------------------------
(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 to 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 fee for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SYS
6363 Greenwich Drive, Suite 200
San Diego, California 92122
NOTICE OF THE 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 21, 1997
To the Holders of Common Stock of SYS:
The 1996 Annual Meeting of Shareholders of SYS (the "Company") will be
held at the La Jolla Marriott, 4240 La Jolla Village Drive, La Jolla, CA
92037, on Friday, March 21, 1997, at 1:30 p.m., local time, to consider the
following business:
1. To elect a Board of seven Directors to serve for the ensuing
year and until their respective successors are elected;
2. To approve the SYS 1997 Incentive Stock Plan;
3. To approve the appointment of J.H. Cohn LLP, public
accountants, as independent public auditors to examine the
accounts of the Company for the Fiscal Year 1997; and
4. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed January 27, 1997 as the record date for
the determination of shareholders entitled to notice of and to vote at the 1996
Annual Meeting of Shareholders and at any adjournment thereof.
All Shareholders are cordially invited to attend the 1996 Annual Meeting of
Shareholders in person. Whether or not you plan to attend, please date, sign,
and promptly return the enclosed Proxy in the enclosed self-addressed envelope
in order that your shares are represented at this meeting and to ensure a
quorum. If you are able to attend in person, we will cancel the Proxy at your
request.
By Order of the Board of Directors
/s/ W. Gerald Newmin
------------------------------
San Diego, California W. Gerald Newmin
February 12, 1997 Secretary
<PAGE>
SYS
PROXY STATEMENT
GENERAL INFORMATION
THE ACCOMPANYING PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF
DIRECTORS OF SYS (the "Company") to be used at the 1996 Annual Meeting of
Shareholders to be held at the La Jolla Marriott, 4240 La Jolla
Village Drive, La Jolla, CA 92037 on Friday, March 21, 1997, at 1:30 p.m.,
local time. The approximate mailing date of this proxy statement and the
accompanying proxy and annual report is February 24, 1997.
When the enclosed proxy is properly executed and returned, the shares it
represents will be voted at the 1996 Annual Meeting of Shareholders in
accordance with any directions noted thereon. If no direction is indicated, the
shares it represents will be voted in favor of the proposals set forth in the
notice attached hereto. Any shareholder signing and delivering a proxy may
revoke it at any time before it is voted by filing with the Secretary of the
Company an instrument revoking it, or a duly executed proxy bearing a later
date. Any shareholder attending the meeting in person may withdraw his proxy
and vote his shares.
The cost of the solicitation of proxies will be borne by the Company.
Solicitations will be made only by mail provided, however, that, if necessary,
officers and regular employees of the Company may make solicitations of proxies
personally or by telephone or telegram, but such persons will not be specially
compensated for such services. The Company may also reimburse brokers, banks,
custodians, nominees and fiduciaries holding stock in their names or in the
names of their nominees for their reasonable charges and expenses in forwarding
proxies and proxy material to the beneficial owners of such stock.
VOTING RIGHTS
The only voting securities of the Company consists of Common Stock.
Holders of record of Common Stock on January 27, 1997 will be entitled to vote
at the 1996 Annual Meeting of Shareholders. On that date, there were 2,935,686
shares of Common Stock outstanding. Each share is entitled to one vote on all
matters to come before the meeting, except that cumulative voting may be used in
the election of directors. Under California law, each shareholder may cumulate
his votes for candidates placed in nomination prior to the voting for directors.
Under cumulative voting, each shareholder may vote for a single candidate, or
distribute votes among the candidates as such shareholder chooses, a number of
votes equal to the number of candidates (seven (7) at this meeting) multiplied
by the number of shares held by such shareholder. Cumulative voting will apply
only to those candidates whose names have been placed in nomination prior to
voting. No shareholder shall be entitled to cumulate votes unless the
shareholder has given notice at the meeting, prior to the voting, of the
shareholder's intention to cumulate the shareholder's votes. If any one
shareholder gives such notice, all shareholders must cumulate their votes for
candidates in nomination, except to the extent that a shareholder withholds
votes from the nominees. The proxy holders named in the accompanying form of
proxy, in their sole discretion, will vote such proxy for, and, if necessary,
exercise cumulative voting rights with complete discretion in voting the
shareholder's shares. Directors shall be elected by a plurality of the votes
cast.
ELECTION OF DIRECTORS
At the 1996 Annual Meeting of Shareholders, seven directors are to be
elected. Each director will serve until the next Annual Meeting and until his
successor has been elected and qualified. All of the nominees described in this
Proxy Statement are currently serving as members of the Board of Directors,
except for Mr. Robert D. Mowry. The Company knows of no reason why the nominees
would not be available for election and would not be able to serve.
In the absence of instructions to the contrary, the shares represented by
the proxies delivered to the Board of Directors will be voted for the seven
nominees for election as Directors of the Company. If any such nominee should
decline or become unable to serve as a director for any reason, votes will be
cast instead for a substitute nominee, if any, designated by the Board of
Directors or, if none is so designated, will be cast according to the judgment
in such matters of the person or persons voting the Proxy.
<PAGE>
Proxies solicited by the Board of Directors cannot be voted for more than
seven nominees for directors.
The table immediately below contains pertinent information concerning the
nominees and is followed by a brief biography of each nominee:
<TABLE>
<CAPTION>
Date Elected Other
Name Age Principal Occupation Director Directorships
- ---- --- -------------------- -------- -------------
<S> <C> <C> <C> <C>
Paul I. Anderson 61 President and CEO of Strategic Oct. 4, 1996 Strategic Catalysts, Inc.
(2) (3) Catalysts, Inc.
Robert E. Carroll 74 Executive Consultant Oct. 19, 1993 Sedona Cultural Park, Inc.
(1) (4)
Zoltan A "Walt" Harasty 66 Principal, Boardroom Apr. 14, 1994 Island Boy Italian Faster Foods,
(2) (3) Consultants Inc., Pavilion, Inc., Slender
Lady, Inc.
Lawrence L. Kavanau 70 Chairman and CEO of the Sept. 7, 1966 None
(1) (3) Company
Robert D. Mowry 40 President of UniPrise, President Nominee Big Canyon Investments, Inc.,
of North American Timeshare, Inc. North American Timeshare, Inc.,
dba United Computer Systems Photonics Laboratories, Inc.
W. Gerald Newmin 59 Chairman and CEO of Exten Oct. 19, 1993 Exten Industries, Inc., Occu-
(1) (2) (3) Industries, Inc. Med, Inc., Greene International,
Inc., Caldwell Industries, Inc.,
Int'l Forum of Corporate
Directors
Charles H. Werner 70 Consultant Mar. 6, 1989 None
(2) (4)
</TABLE>
(1) Member of Nomination and Compensation Committee
(2) Member of Audit and Finance Committee
(3) Member of Planning and Acquisition Committee
(4) Member of Contracts and Legal Committee
Mr. Paul I. Anderson is President and CEO of Strategic Catalysts, Inc., an
international strategic consulting organization. In 1983 and 1984, Mr. Anderson
was Division Vice President of RCA Video Disc Operations. From 1979 to 1983 he
was Senior Vice President and General Manager of Rayovac Corporation, a
manufacturer of primary power sources and lighting devices. In this capacity,
Mr. Anderson was responsible for the restructuring of North American Operations
which included product development, eight manufacturing facilities, ten
distribution centers, and a direct sales force. From 1956 to 1979 he was with
the 3M Company in various management capacities including engineering,
marketing, business development, and general management. These responsibilities
included four years as General Manager, 3M Europe, where he was responsible for
the manufacture and sales of 3M's optical and magnetic systems and media
throughout Western Europe, Eastern Europe, and the Middle East. Mr. Anderson's
educational background includes an engineering degree from Oregon State
University and graduate business studies at Boston University.
Mr. Robert E. Carroll is a Consultant on Corporate and Program Management,
Professional Seminar Leader on Government Contracting and Chairman and CEO of
Sedona Cultural Park, Inc. He was President, Chief Executive Officer, Chief
Financial Officer and a Director of the Company from March 1984 to March 1989.
Prior to joining the Company, he served as President of the Systems Management
and Engineering Corporation (SMEC), a Burroughs company. In 1978, he formed
that organization as the Energy and Environment Division of the System
Development Corporation (SDC). From 1962 to 1978, he had been Vice President
and President of other SDC operations. Mr. Carroll has over 40 years of
industrial and government management experience, including a number of
successive Vice President assignments at North American Rockwell, Space
Division; and procurement, pricing and other management executive positions with
Sperry Utah Company (Sperry-Rand) and the Hughes Aircraft Company. Prior to
that, he served as the Civilian Executive Officer and Principal
<PAGE>
Contracting Officer of the Pittsburgh Ordnance District of the United States
Army. He received his Bachelors degree from Duquesne University and his Doctor
of Jurisprudence degree from the University of Pittsburgh and was a practicing
attorney in the Commonwealth of Pennsylvania.
Mr. Zoltan A. "Walt" Harasty is a Corporate Counsel with in-depth
experience of over 40 years in securities transactions, SEC filings, stock
exchanges listings, corporate financing and in almost every area of security
law. His experience was gained both as a Corporate General Counsel and as a
partner in Tremaine and Shenk and Managing Partner of McDonald, Halsted &
Laybourne. He has been general counsel to Carrows Restaurants. He was General
Counsel of Malibu Grand Prix Corporation with 42 subsidiaries operating
nationwide amusement centers featuring miniature racing cars, video games and
miniature golf. Malibu also acquired Pioneer Chicken as a turnaround situation.
With his knowledge of NASD, SEC, security dealers, financing, public offerings,
registrations, real estate, 10K(s), 10Q(s) and private placements, Mr. Harasty
brings significant expertise to the Company's Board of Directors and helps in
its growth.
Dr. Lawrence L. Kavanau is the Founder and served as President of the
Company from the Company's formation in 1966 until June 1975. He has been a
Director of the Company continuously since 1966. He was elected Chairman of the
Board, Chief Executive Officer and Chief Financial Officer by the Board of
Directors on November 19, 1993. From June 1975 to November 1993, he was a
business and management consultant and Principal Associate of Kavanau &
Associates. He served as Corporate Secretary for the Company from June 25, 1992
to November 19, 1993. From January 1989 to December 1992, he was President of
Golf Lake Development, Inc. He was Chairman and Chief Executive Officer of Team
Austin, Inc., a computer software and contract programming company located in
San Diego, until December 1988. From February 1978 to February 1980, Dr.
Kavanau also was Executive Vice President and Chief Financial Officer of
Spatial, Inc., a manufacturer of pre-amplifiers. From August 1978 to January
1985, Dr. Kavanau was President of SKC Research, Inc., a company engaged in
contracted research. Dr. Kavanau was a member of the Board of Directors of SKC
Research, Inc. from August 1978 to February 1986. He was a member of the group
which, in 1956, formed Aeronutronics Division of Ford Motor Company. He
subsequently served in the Department of Defense responsible for DOD's interests
in space research and development activities and was the Department's principal
liaison with NASA. Prior to his founding of the Company, he was Executive Vice
President - Technical of the North American Aviation (now Rockwell
International) Space and Information Systems Division, and Assistant to the
President, North American Aviation.
Mr. Robert D. Mowry is Chief Executive Officer of UniPrise Systems, Inc.,
which is engaged in the development and marketing of proprietary software
products. Mr. Mowry is the founder of Big Canyon Investments, Inc., which was
formed for investment and management of investments and which was sold to
UniPrise Systems, Inc. in December, 1996. He is also President of North
American Timeshare, Inc., dba United Computer Systems, a computer hardware and
software company. In 1983, Mr. Mowry was founder and President of Personal
Computer Centre, which was a retail outlet for Compaq, IBM and Apple Computers.
He sold his interest in this company in 1985. Prior to this, in 1974, Mr.
Mowry founded California Minicomputer Systems, Inc. (CMS), which installed on-
line distributed computer systems to large corporations. In 1982, he sold CMS
to a computer electronics manufacturer and remained President of CMS, overseeing
operations of the subsidiary company including new business activities with the
Federal Aviation Administration until 1984.
Mr. W. Gerald Newmin is the principal of Newmin Associates specializing in
mergers and acquisitions and the operational management of turnaround companies.
Mr. Newmin is currently Chairman and Chief Executive Officer of Exten
Industries, Inc., a publicly held bio-medical company and serves on the Board of
Directors of Occu-Med, Inc., a managed health care company, Greene International
West, Inc., and Caldwell Industries, Inc., both industrial manufacturing
companies. Mr. Newmin is also currently Chairman of International Forum of
Corporate Directors, a non-profit organization. He was President of
HealthAmerica Corp. which grew to over $500 million annually and the company was
the first in its industry to be listed on the New York Stock Exchange. Mr.
Newmin was President of the International Silver Company, a diversified multi-
national manufacturing company which he restructured. He was Vice President and
Regional Director for American Medicorp, Inc. In this capacity Mr. Newmin was
responsible for the management of 23 acute care hospitals located throughout the
Western United States. Mr. Newmin was instrumental in Whittaker Corporation's
entry into both the United States and International health care markets. At
Whittaker, Mr. Newmin has held various other senior executive positions,
including those of Chief Executive Officer of Whittaker's Production Steel
Company, Whittaker Textiles Corporation, Trojan Yacht Corporation and Anson
Automotive Corporation. Mr. Newmin holds a Bachelors degree in Accounting from
Michigan State University.
Mr. Charles H. Werner has been an independent consultant since August 1995
when he resigned his position with
<PAGE>
the Company as President - Administration, which position he held since November
1993. From August 1992 to November 1993 he was President and Chief Operating
Officer. From January 1992 to August 1992 Mr. Werner was President, and from
March 1989 to January 1991 he served as the Company's President, Chief Executive
Officer and Chief Financial Officer. Prior to joining the Company, he served as
Executive Vice President of Arrowsmith Industries, Inc., a wholly owned
subsidiary of KDT Industries, Inc., of Austin, Texas. In 1986 and 1987, Mr.
Werner served as a consultant to the Strategic Defense Initiative Organization
in Washington, D.C. Previously, he had been a management consultant; Vice
President of Marketing and Advanced Programs for Convair, San Diego, California;
Executive Vice President, Defense Systems, Emerson Electric Company; and Vice
President and Chief Operating Officer of SSP Industries, Inc., Burbank,
California. He received his engineering degrees from Washington University in
St. Louis, Missouri and Ohio State University in Columbus, Ohio.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT SHAREHOLDERS VOTE FOR
ALL SEVEN (7) NOMINEES NAMED ABOVE.
There is no family relationship between any of the directors and executive
officers of the Company.
AFFILIATE TRANSACTIONS AND RELATIONSHIPS
Robert D. Mowry (Mowry) is an affiliate of SYS based on SYS common stock
ownership and beneficial voting rights of about 16.6 percent. His relationship
with the company started in 1989, when SYS purchased United Computer Systems,
Inc. (UCSI) from Mowry. Subsequently, SYS financed certain computer
programming and support services for North American Timeshare, Inc., which was
owned by Mowry. About September 1994, Mowry paid off outstanding obligations to
SYS amounting to about $98,000, at the same time, Mowry repurchased UCSI from
SYS for approximately $50,000.
In January 1995, the SEI asset loan which SYS had with its Bank and the
proceeds from the SEI accounts receivable and claims were assumed, without
recourse to the Company, by KRW Contracts & Financial Management, Inc. (KRW), an
unrelated third party. SYS introduced Mowry to its bank and, in April 1995, Big
Canyon Investments, Inc. (BCI), a company owned by Mowry, consummated the
purchase of the KRW loan from the bank. SYS had previously contracted with the
Bank to collect proceeds from these assets for the Bank on a cost reimbursable
basis.
In August 1995, Mowry (BCI) took over the direct financing and management
of the collection work utilizing two SYS employees under a cost reimbursable
basis. In September 1995, Mr. Werner, the former President-Administration and
Director of SYS, went to work as a consultant for Mowry and BCI. At the present
time BCI owes $70,710 to SYS for unpaid collections expenses.
In October 1995, Mowry advanced funds to finance certain SYS trial expenses
in return for possible future proceeds. These expenses by Mowry were guaranteed
by SYS to the extent that SYS would in the future receive funds from SEI assets
being collected by BCI. In August 1996, Photonics Laboratories, Inc., a company
in which Mr. Mowry is a Director, Officer and part owner, purchased KRW which
had previously assumed the bank loan from SYS and to whom the SEI related assets
and proceeds were pledged.
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, the Company's executive officers and directors are
required to file with the SEC reports of ownership and changes in ownership of
the Common Stock. Based solely on its review of the copies of such reports
furnished to the Company, or written representations that no reports were
required, the Company believes that, during Fiscal year 1996, its executive
officers and directors complied with Section 16(a) requirements with the
following exceptions: Director Kavanau was delinquent in filing Form 4; the
appropriate Form 4 has since been submitted. Director nominee Robert Mowry was
delinquent in filing Forms 3 and 4, however is now also in compliance with
Section 16(a). Charles E. Vandeveer, Vice-President of the Oxnard location,
was delinquent in filing Forms 3, 4 and 5 but is now in compliance with Section
16(a).
Pursuant to the reporting requirements of Item 404(c) of Regulation S-K,
Mr. Mowry (BCI) is indebted to the Company in the amount of $70,710, and no
other officer or director of the Company is indebted to the Company.
The term of office for a director runs until the next annual meeting of
shareholders and until a successor has been elected and qualified. The term of
office for each executive officer runs until removal by the Board of Directors
or election
<PAGE>
and qualification of his successors.
SYS 1997 INCENTIVE STOCK OPTION AND RESTRICTED STOCK PLAN
Management recommends approval of the SYS 1997 Incentive Stock Option and
Restricted Stock Plan. The Plan has been prepared for the purpose of attracting
and retaining the best available personnel for positions of substantial
responsibility, and to provide additional incentive to Employees and Consultants
of the Company and its subsidiaries. Benefits and amounts are not currently
determinable. Reference is made to Attachment 1 for details of the Plan.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT SHAREHOLDERS APPROVE
THE SYS 1997 INCENTIVE STOCK OPTION AND RESTRICTED STOCK PLAN.
SELECTION OF INDEPENDENT AUDITORS
Management recommends appointment of J.H. Cohn LLP as the Company's
independent auditors for the Company's 1997 fiscal year (commencing July 1,
1996) and nominates that firm for selection at the 1996 Annual Meeting of
Shareholders. A representative of the firm is expected to be at the meeting.
GENERAL
The Board of Directors held fourteen scheduled meetings during the fiscal
year ended June 30, 1996; July 5, 1995, July 19, 1995, August 16, 1995,
September 21, 1995, October 25, 1995, November 15, 1995, December 20, 1995,
January 17, 1996, February 4, 1996, February 21, 1996, March 20, 1996, April 17,
1996, May 15, 1996 and June 19, 1996. A quorum was reached at each of these
meetings.
<PAGE>
REMUNERATION
The following is a table showing the remuneration paid by the Company
during its fiscal year ended June 30, 1996 for services in all capacities to
each officer, the sum of whose cash-equivalent forms of remuneration during such
year exceeded $100,000, and the remuneration paid during each year to all
officers as a group:
Cash and Cash-Equivalent
Forms of Remunerations
----------------------
- --------------------------------------------------------------------------------
Securities or
Name of Property,
Individual Salaries, Insurance Aggregate of
or Number of Fees, Com- Benefits or Contingent
Persons in Capacities In missions, Reimbursement Forms of
Group Which Served & Bonuses Remuneration
- --------------------------------------------------------------------------------
Lawrence L. Chairman and $84,817.00 $6,000.00 --
Kavanau Chief Executive
Officer
- --------------------------------------------------------------------------------
All $229,397.00 $17,300.00 --
Executive
Officers as
a Group (4)
- --------------------------------------------------------------------------------
Each outside director of the Company receives a fee in the amount of
$500.00 plus approved expenses per month. The Board of Directors of the Company
generally meets every month. Directors serve as chairmen or members of standing
committees of the Board of Directors and may meet in these capacities at times
other than those designated for meetings of the Board.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following information is furnished as of January 27, 1997 for each
director, all directors and officers as a group, and each stockholder who is
known to the Company to be the beneficial owner of more than five percent of the
Company's Common Stock:
<TABLE>
<CAPTION>
Amount & Nature
Name & Address of Office, of Beneficial Percent
Title Of Class Beneficial Owner If Any Owner (1) Class (2)
- -------------- ---------------- ------ --------- ---------
<S> <C> <C> <C> <C>
Common Stock Lawrence L. Kavanau Chairman, 324,703 (Direct) 16.6%
Without Par 3320-140 Caminito East Bluff CEO 162,333 (As Trustee or
Value La Jolla, CA 92037 Executor, With Voting Rights)
Robert D. Mowry (3) 17,000 (Direct) 16.6%
19 Cherry Hills Lane 469,457 (Control, with
Newport Beach, CA 92660 Voting Rights)
Robert E. Carroll Director 310,000 10.6%
110 Painted Cliffs Dr.
Sedona, AZ 86336
W. Gerald Newmin Director 246,679 8.4%
3223-18 Caminito East Bluff
La Jolla, CA 92037
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Charles H. Werner (3) Director 199,125 6.8%
P.O. Box 1966
Rancho Santa Fe, CA 92067
Zoltan A. (Walt) Harasty Director 1,907 0.1%
4620 Via Vistosa
Santa Barbara, CA 93110
Paul I. Anderson Director 0 0.0%
6418 Cayenne Lane
La Costa, CA 92009
All Directors and 1,244,747 42.4%
Officers as a Group (4)
___________ _______________________ ____________ _____________ ______________
Series B Charles E. Vandeveer VP, Director of 9,758 7.0%
Non-Voting 8203 Tiara Street Operations
Convertable Ventura, CA 993004
Preference
Stock $1.00 Lawrence L. Kavanau Chairman, CEO 4,243 3.0%
Par Value 3320-140 Caminito East Bluff
La Jolla, CA 92037
Michael W. Fink VP Admin. 2,697 1.9%
1150 Akron Street
San Diego, CA 92106
All Directors and Officers as a Group 16,698 11.9%
</TABLE>
(1) To the best knowledge of the Company, each of the beneficial owners listed
herein has direct ownership of and sole voting power and sole investment
power with respect to the shares of the Company's Common Stock, except as
set forth herein.
(2) A total of 2,935,686 shares of Common Stock of the Company have been
considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) for purposes
of this Proxy Statement.
(3) Robert D. Mowry and Charles H. Werner have filed a Schedule 13D/A
which discloses their intent to vote their shares as an aggregate,
and discloses Mr. Mowry's intent to acquire additional shares with the
goal of obtaining a possible presence on the Board of Directors,
possibly changing the Board of Directors and possible control over the
management and policies of SYS. Mr. Mowry intends, through control of
SYS shares of common stock, to influence and develop SYS's future
direction and growth in the high-tech governmental and non-defense
related markets. Mr. Mowry and Mr. Werner have an informal
understanding to vote their shares of common stock in a manner which
will achieve the purposes described above.
(4) These figures do not include shares owned by Robert D. Mowry.
(5) No officer or director or nominee for director is the holder of any shares
of Preferred Stock.
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth pertinent information concerning the persons
who are the current executive officers (who are not Directors) of the Company.
Name Age Capacity
- ---- --- --------
Charles E. Vandeveer 55 Vice President, Director of
Operations
Michael W. Fink 39 Vice President - Administration
Mr. Charles E. Vandeveer is Vice President, Director of Operations of the
Company's contractual endeavors with the United States Navy. Mr. Vandeveer has
held various management, supervisory, administrative and project positions since
he joined the Company is 1987. He is a retired Commander, United States Navy,
Supply Corps. Mr. Vandeveer served as a Director of Naval Supply Centers and
Supply Annexes, managing material operations and ship repairable programs. He
was also a Ship Superintendent/Type Desk Officer, responsible for coordinating
Naval Shipyard repairs and overhauls. Mr. Vandeveer has brought his valuable
Navy experience to the Company and has put it to work expanding the Company's
presence in the Oxnard area. He has organized and directed large scale
management studies and supervised subcontractors with various firms. Mr.
Vandeveer received his Bachelors degree in Agricultural Industries from Southern
Illinois University in 1963.
Mr. Michael W. Fink is Vice President - Administration. Mr. Fink joined
the Company in July of 1995. He is responsible for the administrative functions
of the Company, including finance, accounting, human resources, contracts and
other management areas. He was President of SANDAIRE before being hired by the
Company. SANDAIRE is an engineering firm specializing in the aerospace
industry. Mr. Fink received a Bachelor of Science degree in Business
Administration (Accounting) from San Diego State University (SDSU). He has also
attended Graduate School at SDSU where he studied mechanical engineering.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to present at the next Annual
Shareholders Meeting for Fiscal Year 1997 must be received at the Company's
office at 6363 Greenwich Drive, Suite 200, San Diego, California 92122, no
later than August 15, 1997 in order to be included in the Company's proxy
statement and proxy relating to that meeting.
ANNUAL REPORT
THE COMPANY'S 1996 ANNUAL REPORT FOR SHAREHOLDERS IS BEING MAILED HEREWITH.
Upon written request to Shareholder Relations Department at 6363 Greenwich
Drive, Suite 200, San Diego, CA 92122, and at no charge, a copy of the Company's
annual report on Form 10-KSB, including the financial statements and the
financial statement schedules, will be forwarded.
OTHER BUSINESS
Management does not know of any other business to be presented at the
meeting and does not intend to bring any other matters before the meeting.
However, if any other matters properly come before the meeting, or any
adjournments thereof, it is intended that the persons named in the accompanying
proxy will vote therein according to their best judgement in the interest of the
Company.
By Order of the Board of Directors
/s/ W. Gerald Newmin
W. Gerald Newmin
Secretary
San Diego, California
February 12, 1997
<PAGE>
PROXY NOTICE - ATTACHMENT 1
SYS 1997 INCENTIVE STOCK OPTION AND RESTRICTED STOCK PLAN
1. PURPOSES OF THE PLAN. The purposes of the SYS 1997 Incentive Stock
Option and Restricted Stock Plan (the "Plan") are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants of the Company and its
Subsidiaries and to promote the success of the Company's business. Options
granted under the Plan may be incentive stock options (as defined under Section
422 of the Code) or non-statutory stock options, as determined by the
Administrator at the time of grant of an option and subject to the applicable
provisions of Section 422 of the Code, as amended, and the regulations
promulgated thereunder. Stock purchase rights may also be granted under the
Plan.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board of Directors
in accordance with Section 4 of the Plan.
(e) "COMMON STOCK" means the Common Stock of the Company.
(f) "COMPANY" means SYS, a California corporation.
(g) "CONSULTANT" means any person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the Company whether
compensated for such services or not, provided if and in the event the Company
registers any class of any equity security pursuant to the Exchange Act, the
term Consultant shall thereafter not include directors who are not compensated
for their services or are paid only a director's fee by the Company.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means that the
employee or consulting relationship with the Company or any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Company, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive Stock
Options, no such leave may exceed ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract (including certain Company
policies) or statute; provided, further, that on the ninety-first (91st) day of
any such leave (where employment is not guaranteed by contract or statute) the
Optionee's Incentive Stock Option shall cease to be treated as an Incentive
Stock Option and will be treated for tax purposes as a Nonstatutory Stock
Option; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor.
(i) "EMPLOYEE" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitations the Nasdaq
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, as quoted
on such exchange or system for the last market trading day prior to the time of
determination) as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but
not in the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked priced for the Common
Stock on the last market trading day prior to the day of determination, or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be
<PAGE>
determined in good faith by the Administrator in accordance with Section
260.140.40, Title 10 of the California Code of Regulation ("California Code").
(k) "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(l) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(m) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(n) "OPTION" means a stock option granted pursuant to the Plan.
(o) "OPTIONED STOCK" means the Common Stock subject to an Option or a
Stock Purchase Right.
(p) "OPTIONEE" means an Employee or Consultant who receives an Option
or Stock Purchase Right.
(q) "PARENT" means a "parent corporation" whether now or hereafter
existing, as defined in Section 424(e) of the code.
(r) "PLAN" means this 1997 Incentive Stock Plan.
(s) "RESTRICTED STOCK" means shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under Section 11 below.
(t) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(u) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 11 below.
(v) "SUBSIDIARY" means a "subsidiary corporation" whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares which may be issued pursuant to
the exercise of options under the Plan shall not exceed 100,000 common shares
for non-employee directors and consultants, and 300,000 common shares for
employees of the Company and its subsidiaries. The shares may be authorized,
but unissued, or reacquired Common Stock.
If an Option or Stock Purchase right should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) INITIAL PLAN PROCEDURE. Prior to the date, if any, upon which
the Company becomes subject to the Exchange Act,the Plan shall be administered
by the Board or a committee appointed by the Board.
(b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE COMPANY
BECOMES SUBJECT TO THE EXCHANGE ACT.
(i) ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS.
With respect to grants of Options or Stock Purchase Rights to Employees who are
also officers or directors of the Company, the Plan shall be administered by (A)
the Board if the Board may administer the Plan in compliance with Rule 16b-3
promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") with
respect to a plan intended to qualify thereunder as a discretionary plan, or (B)
a committee designated by the Board to administer the Plan, which committee
shall be constituted in such a manner as to permit the Plan to comply with Rule
16b-3 with respect to a plan intended to qualify thereunder as a discretionary
plan. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time
the Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members of
the Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.
(ii) MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3, the Plan may be administered by different
<PAGE>
bodies with respect to directors, non-directors, officers and Employees who are
neither directors nor officers.
(iii) ADMINISTRATION WITH RESPECT TO CONSULTANTS AND OTHER
EMPLOYEES. With respect to grants of Options or Stock Purchase rights to
Employees or Consultants who are neither directors nor officers of the Company,
the Plan shall be administered by (A) the Board or (B) a committee designed by
the Board, which committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the administration of incentive stock option
plans, if any, of California corporate and securities laws, of the Code, and of
any applicable stock exchange (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
(c) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator, on behalf of the Committee, shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom Options
and Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to implement "reload options" as may be specified in an
option agreement which reduces the exercise price of any Option to then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option shall have declined since the date the Option was granted;
(ix) to determine the terms and restrictions applicable to
Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights; and
(x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(d) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options or Stock Purchase
Rights.
5. ELIGIBILITY.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option or
Stock Purchase Right may, if otherwise eligible, be granted additional Options
or Stock Purchase Rights.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value:
(i) of Shares subject to an Optionee's Incentive Stock Option
granted by the Company, any Parent or Subsidiary, which
<PAGE>
(ii) Become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Option shall be treated as Nonstatutory Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares shall be determined as of the time the
Option with respect to such Shares is granted.
(c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment relationship with the Company, not shall
it interfere in any way with his or her right or the Company's right to
terminate his or her employment relationship at any time, with or without cause.
(d) Upon the Company or a successor corporation issuing any class of
common equity securities required to be registered under Section 12 of the
Exchange Act or upon the Plan being assumed by a corporation having a class of
common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options and
Stock Purchase Rights to Employees:
(i) The foregoing limitation shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 12(a).
(ii) If an Option or Stock Purchase Right is cancelled (other
than in connection with a transaction described in Section 12), the cancelled
Option or Stock Purchase Right will be counted against the as limit set forth by
the Board of Directors. For this purpose, if the exercise price of an Option or
Stock Purchase Right is reduced, the transaction will be treated as a
cancellation of the Option or Stock Purchase Right and the grant of a new Option
or Stock Purchase Right.
6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors and its approval by the
shareholders of the Company, as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant to an Optionee, and the term of the Option
shall be five (5) years from the date of grant thereof or such shorter term as
may be provided in the Option Agreement.
8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to an Employee other than an Employee described
in the preceding paragraph, the per Share exercise shall be no less than 100% of
the Fair Market Value per Share on the date of grant.
(ii) In case of a Nonstatutory Stock Option granted to any
person, the per Share exercise shall be no less than the amount stated in the
option agreement of the Fair Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
<PAGE>
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant with the Company (but not in the event of an Optionee's change of
status from Employee to Consultant (in which case an Employee's Incentive Stock
Option shall automatically convert to a Nonstatutory Stock Option on the ninety-
first (91st) day following such change of status) or from Consultant to
Employee), such Optionee may, but only within such period of time as is
determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, of it Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. In the event of termination of an
Optionee's consulting relationship or Continuous Status as an Employee as a
result of his or her disability, Optionee may, but only within six (6) months
from the date of such termination (and in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent otherwise entitled to exercise it at the date of such
termination; provided, however, that if such disability is not a "disability" as
such term is defined in Section 22(e)(3) of the Code, in the case of an
Incentive Stock Option such Incentive Stock Option shall automatically convert
to a Nonstatutory stock Option on the day three months and one day following
such termination. To the extent that Optionee was not entitled to exercise the
Option at the date of termination, or if Optionee does not exercise such Option
to the extent so entitled within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death,
the Optionee's estate or a person who acquired the right to exercise the Option
by bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) RULE 16B-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) BUYOUT PROVISIONS. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10.NON-TRANSFERABILITY OF OPTION AND STOCK PURCHASE RIGHTS. Options and
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
<PAGE>
11. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon which the Administrator made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator. Shares purchased
pursuant to the grant of a Stock Purchase Right shall be referred to herein as
"Restricted Stock."
(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable within 90 days of the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or Disability). The purchase price for Shares repurchase
pursuant to the Restricted Stock purchase agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine, but at a minimum rate of 20% per year.
(c) OTHER PROVISIONS. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.
(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 12
of the Plan.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock
which have been authorized for issuance under the Plan but as to which no
Options or Stock Purchase Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent this
has not been previously exercised, the Option or Stock Purchase Right will
terminate immediately prior to the consummation of such proposed action.
(c) MERGER. In the event of a merger of the Company with or into
another corporation, the Option or Stock Purchase Right shall be assumed or an
equivalent option or right shall be substituted by such successor corporation or
a parent or subsidiary of such successor corporation. If, in such event, the
Option or Stock Purchase Right is not assumed or substituted, the Option or
Stock Purchase Right shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option of Stock Purchase Right
shall be considered assumed if, following the merger, the option or right
confers the right to purchase, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger, the
consideration (whether stock, cash, or other securities or property) received in
the merger by holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger
was not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely fair market value to the per share consideration
received by holders of Common Stock in the merger.
13.TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of grant
of an Option or Stock Purchase Right shall , for all
<PAGE>
purposes, be the date on which the Administrator makes the determination
granting such Option or Stock Purchase Right, or such other date as is
determined by the Board. Notice of the determination shall be given to each
Employee or Consultant to whom an Option or Stock Purchase Right is so granted
within a reasonable time after the date of such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made theretofore, without Optionee or Stock Purchase
Right holder consent. In addition, to the extent necessary and desirable to
comply with Rule 16b-3 under the Exchange Act or with Section 422 of the Code
(or any other applicable law or regulation, including the requirements of the
NASD or an established stock exchange), the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.
15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitations, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option or Stock Purchase Right,
the Company may require the person exercising such Option or Stock Purchase
Right to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.
16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
17. AGREEMENTS. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Board shall approve from time to time.
18. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
19. INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall provide to
each Optionee and to each individual who acquired Shares pursuant to the Plan,
not less frequently than annually during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights outstanding, and, in the case
of an individual who acquired Shares pursuant to the Plan, during the period
such individual owns such Shares, copies of annual financial statements. The
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.
*****
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SHAREHOLDERS ARE REQUESTED TO DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED SELF-ADDRESSED ENVELOPE. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION
WILL BE APPRECIATED
-------------------------------------------
<PAGE>
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
MARCH 21, 1997
The undersigned hereby appoints Zoltan A. (Walt) Harasty and W. Gerald
Newmin, or either of them, proxies of the undersigned, to vote and represent all
shares of the Common Stock, without Par Value, registered in the name of the
undersigned, at the 1996 ANNUAL MEETING OF SHAREHOLDERS OF SYS TO BE HELD AT
1:30 P.M. ON FRIDAY, MARCH 21, 1997 AT THE LA JOLLA MARRIOTT, 4240 LA JOLLA
VILLAGE DRIVE, LA JOLLA, CA 92037.
THE SHARES REPRESENTED BY THIS PROXY CAN BE VOTED AS MARKED BY THE SYS
COMMON SHAREHOLDER OF RECORD ON JANUARY 27, 1997, WHOSE PRINTED NAME AND
SIGNATURE IS PLACED ON THE OPPOSITE SIDE. PLEASE MARK THE APPROPRIATE BOX.
Item 1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below). nominees listed below.
Nominees: Paul I. Anderson Robert D. Mowry
Robert E. Carroll W. Gerald Newmin
Zoltan A. (Walt) Harasty Charles H. Werner
Lawrence L. Kavanau
To withhold authority for any individual nominee, write the nominee's
name in the space provided:_________________________________________
Item 2. Proposal to approve the SYS 1997 Incentive Stock Option and Restricted
Stock Plan. See PROXY STATEMENT - ATTACHMENT 1 for plan details.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Item 3. Proposal to approve the appointment of J.H. Cohn LLP as the
independent certified public accountants for the Corporation for its 1997
fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Item 4. Other Matters: In their discretion, on any other business which may
properly come before the meeting.
(NOTE: DATE AND SIGN PROXY ON OPPOSITE SIDE.)
<PAGE>
IF CUMULATIVE VOTING FOR DIRECTORS IS REQUESTED, THE PROXY HOLDER WILL HAVE
COMPLETE DISCRETION IN VOTING YOUR SHARES. IF NO INDICATION IS MADE ABOVE ON
HOW YOU DESIRE YOUR SHARES TO BE VOTED, THE PROXY HOLDER WILL HAVE COMPLETE
DISCRETION IN VOTING YOUR SHARES.
IN WITNESS WHEREOF, the undersigned has signed this proxy on _________________,
1997. (month and day)
The undersigned [ ] PLANS [ ] DOES NOT PLAN to attend the meeting.
Shareholders who are present at the meeting may withdraw their proxy by
contacting the Secretary in order to vote in person if they so desire.
________________________________________ _______________________________________
(Print Name) (Signature)
________________________________________ _______________________________________
(Print Name) (Signature)
NOTE: PLEASE DATE THE PROXY AND SIGN YOUR NAME AS IT APPEARS ON THE LABEL. If
shares are registered in the name of two or more persons, each should sign.
Executors, administrators, trustees, guardians, attorneys, and corporation
officers should show their full titles.
PLEASE DATE, SIGN AND RETURN PROXY PROMPTLY
