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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
(AMENDMENT NO. )
Filed by the Registrant [ X ][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))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ X ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] 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 toss.240.14a-11(c) orss.240.14a-12
XETA CORPORATION
- --------------------------------------------------------------------------------TECHNOLOGIES, INC.
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(Name of Registrant as Specified In Its Chapter)Charter)
XETA CORPORATION
- --------------------------------------------------------------------------------TECHNOLOGIES, INC.
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(Name of Person(s) Filing Proxy Statement)
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NEWS RELEASE
Date: April 11, 2000
FOR IMMEDIATE RELEASE
Contact: Jack Ingram Jon Wiese[XETA TECHNOLOGIES LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of XETA
Technologies, Inc. will be held at the Tulsa Marriott Southern Hills located at
1902 East 71st Street, Tulsa, Oklahoma, on March 20, 2001 at 6:30 p.m., local
time, for the following purposes:
1. To elect seven (7) members to the Company's Board of Directors to
serve until the next Annual Meeting of Shareholders and until their
successors have been elected and qualified;
2. To ratify the selection of Arthur Andersen LLP as independent
certified public accountants for the Company for the 2001 fiscal year; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on January 22, 2001, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or adjournments thereof. Only
shareholders of record at such time will be so entitled to vote. The Company's
Proxy Statement is attached. The Proxy Statement and form of proxy will first be
sent to shareholders on or about February 16, 2001.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD. IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN
PERSON, PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE. THE GIVING OF THIS PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
IN THE EVENT YOU ATTEND THE MEETING.
By Order of the Board of Directors
/s/ ROBERT B. WAGNER
Robert B. Wagner
Secretary
February 16, 2001
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[XETA TECHNOLOGIES LOGO]
1814 West Tacoma
Broken Arrow, Oklahoma 74012
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement is being furnished to shareholders of XETA
Technologies, 918.664.8200 918.664.8200
XETA TECHNOLOGIES ANNOUNCES
AUTHORIZATION OF A TWO-FOR-ONE STOCK SPLIT
BROKEN ARROW, OKLA. -- XETA Technologies (NASDAQ: XETA) today announced thatInc. (the "Company") by its Board of Directors approved a two-for-one splitto solicit proxies
for use at the Annual Meeting of Shareholders to be held on March 20, 2001, at
the Tulsa Marriott Southern Hills located at 1902 East 71st Street, Tulsa,
Oklahoma, at 6:30 p.m., local time, or at such other time and place to which the
Annual Meeting may be adjourned.
The purpose of the Company's common shares.
SubjectAnnual Meeting is (i) to shareholder approval of the split and an increaseelect seven members to the
Company's authorized commonBoard of Directors to serve for the ensuing year and until their
successors are elected; (ii) to ratify the selection of Arthur Andersen LLP as
the Company's independent certified public accountants for the fiscal year
ending October 31, 2001; and (iii) at the discretion of the proxy holders, to
transact any other business that may properly come before the Annual Meeting or
any adjournment thereof.
You are urged to promptly complete and return the accompanying proxy card
in the envelope provided, whether or not you intend to be present at the Annual
Meeting. If you are present at the Annual Meeting and wish to vote your shares
in person, the splitaccompanying proxy will, at your request, be returned to you at
the Annual Meeting. Any shareholder giving a proxy has the power to revoke it at
any time before it is exercised by executing a subsequently dated proxy,
submitting a notice of revocation to the Company, or attending the Annual
Meeting and voting in person.
Proxies properly executed and returned will be effectivevoted in accordance with the
specifications marked on the proxy card. Proxies containing no specifications
will be voted in favor of the proposals described in this Proxy Statement.
It is expected that this Proxy Statement and the accompanying form of proxy
will first be mailed to shareholders on or about February 16, 2001. The cost of
soliciting proxies will be borne by the Company. The Company will reimburse
brokerage firms, banks and other nominees, custodians and fiduciaries for alltheir
reasonable expenses incurred in sending proxy materials to beneficial owners of
shares and obtaining their instructions. The Company has retained Computershare
Investor Services ("Computershare") to assist in the distribution of the proxies
and proxy statements for an estimated fee of $1,090.00. Votes will be tabulated
by Computershare.
VOTING SECURITIES
Only shareholders of record at the close of business on June 30, 2000. Shareholders will consider
these actionsJanuary 22, 2001
(the record date) are entitled to vote at a special meeting to be held in June. The distributionthe Annual Meeting and any adjournment
thereof. As of additionalsuch date, there were 8,817,988 shares resulting from the split, if authorized by the shareholders,
is expected to take place on or about July 17, 2000. Upon completion of the
split, the Company will have approximately 8.2 million shares outstanding.
Jack Ingram, chairman and CEO of XETA Technologies, said, "Our aggressive
plan to become the nation's leading voice and data integrator has resulted in
significant increases in the valuation of the company by the financial
community. We believe this two-for-one split will result in enhanced trading
liquidity and a stock price that offers the potential for broader ownership."
ABOUT XETA TECHNOLOGIES
XETA Technologies is a premier voice and data integrator with 21 sales offices
and 30 service centers. Embarking on a strategy to be recognized as the leading
provider of equipment and after-market service for both voice and data
applications, XETA Technologies is continuing to
-more-
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Page 2 - XETA Technologies Announces Authorization of a Two-for-OneCommon Stock Split
build upon its success as the largest dealer of Lucent and Hitachi voice
systems. The Lodging Division of XETA Technologies is the leader in the sales
and service of call accounting systems to the lodging industry, boasting about a
25% share of the market. Further, this division is the leading re-seller of
Hitachi and Lucent PBX systems in the market at 15% market share. The Commercial
Division of XETA Technologies, formerly St. Louis-based US Technologies and
Portland-based Advanced Communication Technologies (ACT), is the largest dealer
of Lucent Technologies' systems and was recognized by Lucent as BusinessPartner
of the Year in 1994, 1998 and 1999.
In 1999, XETA Technologies was selected by Forbes Magazine as one of the
Best 200 Small Companies in America for the fourth time in five years. Business
Week also selected XETA Technologies as one of its Top 100 Hot Growth Companies
for 1999. XETA Technologies has generated six years of record financial results,
with sales and EPS growing at five-year annual compound rates of 38% and 29%.
A proxy statement soliciting votes of the shareholders of the
Company outstanding (excluding 1,018,788 shares held in treasury). Shareholders
are entitled to one vote per share of Common Stock registered in their name on
the record date. A majority of the shares entitled to vote, present in person or
represented by proxy, is necessary to constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes are counted as shares present in determining
whether the quorum requirement is satisfied but are not counted as votes cast in
the tabulation of votes on any matter brought before the Meeting. The
affirmative vote of a majority of the shares of the Company's Common Stock
represented at the Annual Meeting is required for the election of directors.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company as
of December 31, 2000 regarding beneficial ownership of the stock split and the increase in authorized shares will be sentCompany's Common
Stock, par value $.001 per share, by (a) each person known by the Company to own
more than five percent (5%) of the Company's Common Stock, (b) each director and
nominee for election as a director of the Company, (c) each executive officer
named in the Summary Compensation Table, and (d) all directors and executive
officers of the Company as a group.
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER(1) OWNERSHIP(2) CLASS
---------------------- ----------------- ----------
Jack R. Ingram 1,467,200(3) 15.99%
Ronald L. Siegenthaler 1,237,184 13.23%
P.O. Box 571300, Tulsa, OK 74157
Jon A. Wiese 800,000 8.46%
Mark A. Martin 300,000 3.46%
55 Trent Drive, Ladue, MO 63124
Robert B. Wagner 118,600(4) 1.36%
Donald E. Reigel 111,400 1.27%
5350 Manhattan Circle, Suite 210,
Boulder, CO 80303
Thomas A. Luce 106,400(5) 1.22%
Ron B. Barber 105,472 1.22%
525 S. Main Street, Suite 800, Tulsa, OK 74103
Robert D. Hisrich 51,600(6) *
10900 Euclid Avenue, Cleveland, OH 44106
Donald T. Duke 50,000 *
1701 Morningstar, Edmond, OK 73034
All officers and directors as a group 4,279,250 48.31%
(13 persons)
- ----------
*Less than one percent of the shares outstanding.
(1) Address is that of the Company's principal office at 1814 W. Tacoma, Broken
Arrow, Oklahoma 74012 unless otherwise indicated.
(2) Except as indicated in the footnotes to this table, the persons named in the
table have sole voting and investment power with respect to all shares shown
as beneficially owned by them, subject to community property laws where
applicable. The number of shares beneficially owned includes the number of
shares of Common Stock that such persons had the right to acquire within 60
days of December 31, 2000, pursuant to unexercised options under the
Company's stock option plans, as follows: 500,000 shares for Mr. Ingram;
675,000 shares for Mr. Siegenthaler; 780,000 shares for Mr. Wiese; 56,000
shares for Mr. Wagner; 94,064 shares for Mr. Reigel; 66,000 shares for Mr.
Luce; 20,000 shares for Mr. Hisrich; 30,000 shares for Mr. Duke; and
2,281,564 shares for all directors and executive officers as a group (13
persons).
(3) Includes 10,000 shares held by Mr. Ingram's wife.
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(4) Includes 5,200 shares held by Mr. Wagner as custodian for his minor
children.
(5) Includes 400 shares held by Mr. Luce as custodian for his minor child.
(6) Includes 3,600 shares held by Dr. Hisrich as custodian for his minor child.
ELECTION OF DIRECTORS
INFORMATION CONCERNING THE NOMINEES
The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws, both as further amended, provide that the Board of
Directors shall consist of such number of directors as is fixed from time to
time by resolution of the Board of Directors. On January 16, 2001, the Board
fixed the number of directors constituting the entire Board at seven, effective
as of the date of the 2001 Annual Meeting. Members of the Board are elected for
one year terms.
The nominees for election to the Board of Directors are set forth below.
All of the nominees have been recommended by the Board of Directors and all have
indicated a willingness to serve if elected. If any nominee should become
unavailable for election for any presently unforeseen reason, the persons
designated as proxies will have full discretion to cast votes for another person
designated by the Board. All of the nominees are currently directors of the
Company.
NAME POSITIONS WITH COMPANY DIRECTOR SINCE
- ---- ---------------------- --------------
Ron B. Barber Director March, 1987
Donald T. Duke Director March, 1991
Dr. Robert D. Hisrich Director March, 1987
Jack R. Ingram Chairman of the Board and March, 1989
Chief Executive Officer
Ronald L. Siegenthaler Director September, 1981
Robert B. Wagner Chief Financial Officer, March, 1996
Vice President of Finance,
Secretary and Director
Jon A. Wiese President April, 2000
MR. BARBER, age 46, has been a director of the Company since March 1987. He
has been engaged in the private practice of law since October 1980 and is a
shareholder in the law firm of Barber & Bartz, a Professional Corporation, in
Tulsa, Oklahoma, which serves as counsel to the Company. Mr. Barber is also a
Certified Public Accountant licensed in Oklahoma. He received his Bachelor of
Science Degree in Business Administration (Accounting) from the University of
Arkansas and his Juris Doctorate Degree from the University of Tulsa.
MR. DUKE, age 51, has been a director of the Company since March 1991. He
is President of Duke Energy Co. L.L.C., an oil and gas consulting and investment
firm. Mr. Duke has been in senior management in the oil and gas industry since
1980, including time as President and Chief Operating Officer of Hadson
Petroleum (USA), Inc., a domestic oil and gas subsidiary of Hadson Corporation,
where he was responsible for all phases of exploration and production, land,
accounting, operations, product marketing and budgeting and planning. Mr. Duke
has a Bachelor of Science Degree in Petroleum Engineering from the University of
Oklahoma.
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DR. HISRICH, age 56, has been a director of the Company since March 1987.
He occupies the A. Malachi Mixon III Chair in Entrepreneurial Studies and is
Professor of Marketing and Policy Studies at the Weatherhead School of
Management at Case Western Reserve University in Cleveland, Ohio. Prior to
assuming such positions, he occupied the Boviard Chair of Entrepreneurial
Studies and Private Enterprise and was Professor of Marketing at the College of
Business Administration for the University of Tulsa. He is also a marketing and
management consultant. He is a member of the Board of Directors of Jameson Inn,
Inc. and Noteworthy Medical Systems, Inc., a member of the Editorial Boards of
the Journal of Venturing and the Journal of Small Business Management, and a
member of the Board of Directors of Enterprise Development, Inc. Dr. Hisrich
received his Bachelor of Arts Degree in English and Science from DePaul
University and his Master of Business Administration Degree (Marketing) and
Ph.D. in Business Administration (Marketing, Finance, and Quantitative Methods)
from the University of Cincinnati.
MR. INGRAM, age 57, has been the Company's Chief Executive Officer since
August 1999. He served as the Company's President from July 1990 until August 2,
1999, and has been a director of the Company since March 1989. Mr. Ingram's
business experience prior to joining the Company was concentrated in the oil and
gas industry. Mr. Ingram holds a Bachelor of Science Degree in Petroleum
Engineering from the University of Tulsa.
MR. SIEGENTHALER, age 57, has been a director of the Company since its
incorporation. He also served as the Company's Executive Vice President from
July 1990 until March 1999. Since 1974, through SEDCO Investments, a partnership
in which Mr. Siegenthaler is a partner, and as an individual, Mr. Siegenthaler
has been involved as partner, shareholder, officer, director, or sole proprietor
of a number of business entities with significant involvement in fabrication and
marketing of steel, steel products and other raw material, real estate, oil and
gas, and telecommunications. Mr. Siegenthaler received his Bachelor's Degree in
Liberal Arts from Oklahoma State University.
MR. WAGNER, age 39, has been the Company's Vice President of Finance and
Chief Financial Officer since March 1989. He has been with the Company since
July 1988 and became a member of the Board of Directors in March 1996. Mr.
Wagner is a Certified Public Accountant licensed in Oklahoma and received his
Bachelor of Science Degree in Accounting from Oklahoma State University.
MR. WIESE, age 44, joined the Company on August 2, 1999 as its President
and became a member of its Board of Directors in April 2000. Prior to joining
the Company, Mr. Wiese was employed by Lucent Technologies, Inc. since 1989
where he held various executive offices since 1990, including President and
Corporate Officer of Lucent's International Division based in Brussels. From
1997 until taking the position with the Company, he served as Vice President and
Corporate Officer at Lucent and was responsible for its USA sales and service
division where he had full P&L responsibility and managed twelve Vice Presidents
and 17,000 Lucent employees. His functional responsibilities in this division
included marketing, sales, service, human resources, finance, information
technology, and order and asset management. Mr. Wiese holds a Bachelor of
Science degree in finance and a Master of Business Administration degree in
marketing from Oklahoma State University. He is also a 1994 graduate of the
Cultural Transformation Program at the London School of Business.
None of the foregoing nominees has any family relationship to any other
nominee. There are no arrangements or understandings between any of the named
individuals and any other person or persons pursuant to which any of the named
individuals are to be elected as directors.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held ten meetings during the fiscal
year ended October 31, 2000. All other action taken by the Board of Directors
was consented to in writing by a memorandum of action in lieu of a meeting, to
which all incumbent directors subscribed. Directors meet their responsibilities
not only by attending Board and committee meetings but also through
communication with members of management on matters affecting the Company. The
Board of Directors has an Audit Committee and Compensation Committee. There is
no nominating committee or committee performing the functions of a nominating
committee.
The Audit Committee consists of directors Donald T. Duke, Ronald L.
Siegenthaler, Robert D. Hisrich and Ron B. Barber. This Committee is responsible
for overseeing the Company's accounting and financial reporting functions,
including monitoring the audit process, insuring independent communication and
information flow between and among the Audit Committee itself, the Company's
internal auditor, and the Company's outside auditor,
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and fostering candid discussion among management and the inside and outside
auditors of issues involving judgment and affecting the quality of the audit
process and public financial reporting. The Audit Committee met twice
independently of meetings of the Board of Directors during the 2000 fiscal year.
The Company's Board of Directors has adopted a written charter for the
Audit Committee, a copy of which is attached as Appendix A. With the exception
of Ron B. Barber, each of the members of the Audit Committee is independent, as
defined in Rule 4200(a)(15) of the National Association of Securities Dealers'
("NASD") listing standards. Mr. Barber does not qualify as an independent
director under such definition due to his ownership interest in Barber & Bartz,
the Company's general counsel. The Board of Directors appointed Mr. Barber to
the Audit Committee in accordance with Section 4310(c)(26)(B)(ii) of the NASD's
listing standards, which allows for the appointment of one director to the Audit
Committee who is not independent. In so doing, the Board determined that Mr.
Barber's position as a long-time director and general counsel to the Company,
his former service as Chief Financial Officer and Senior Vice President of the
Company, and his professional training as both a lawyer and a certified public
accountant give him a valuable perspective on the Company's history and
operations and make him uniquely qualified to analyze and understand the
financial and accounting issues which the Company is presented from time to
time, and to advise the other Committee members on the accounting and financial
reporting functions of the Company.
REPORT OF AUDIT COMMITTEE
December 18, 2000
To the Board of Directors of XETA Technologies, Inc.:
We have reviewed and discussed with management the Company's audited financial
statements as of and for the year ended October 31, 2000.
We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from the
independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended October 31, 2000.
Donald T. Duke, Chairman
Ronald L. Siegenthaler
Robert D. Hisrich
Ron B. Barber
The Compensation Committee consists of directors Ron B. Barber, Donald T.
Duke, Robert D. Hisrich and Ronald L. Siegenthaler. This Committee works with
Company management and provides advice and assistance to the Board regarding
establishment of the Company's compensation philosophy, objectives and strategy;
administration of executive and management compensation programs; significant
changes in employee benefit plans; executive employment and severance
agreements; and appointments to the Committee. The Committee is also responsible
for recommending for full Board approval the compensation of the Chairman and
Chief Executive Officer, President and directors of the Company, and for
providing an annual report on executive compensation to the Board. The
Compensation Committee met five times independently of meetings of the Board of
Directors during the 2000 fiscal year.
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DIRECTOR COMPENSATION
Effective May 1, 2000, the Company began compensating its directors who are
not officers of the Company $12,000 per year for Board membership. In addition,
Board members serving on a Committee receive $10,000 per year and Board members
serving as Chairman of a Committee receive an additional $20,000 per year.
During the fiscal year, the Company also granted stock options to all of its
outside directors. These options were for 5,000 shares, with a vesting period of
three years and an exercise period of ten years. No other compensation was paid
to directors for their services as such during the Company's 2000 fiscal year.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE ELECTION OF ALL OF THE NOMINEES LISTED ABOVE AS DIRECTORS OF THE COMPANY.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen, LLP ("AA") as the
independent public accountants to audit the Company's financial statements for
the fiscal year ending October 31, 2001. Representatives of AA are expected to
be present at the Annual Meeting with the opportunity to make a statement if
they desire to do so and to respond to appropriate questions. While ratification
of the Company's selection of accountants by the Company's shareholders is not
required, in the event of a negative vote on such ratification, the Company's
Board of Directors will reconsider its selection. AA audited the Company's
financial statements for the year ended October 31, 2000.
FEES AND INDEPENDENCE
Audit Fees. AA billed the Company an aggregate of $72,500 for professional
services rendered for the audit of the Company's financial statements for fiscal
year ended October 31, 2000 and its reviews of the Company's financial
statements included in the Company's Forms 10-Q during the 2000 fiscal year.
Financial Information Systems Design and Implementation Fees. During the
fiscal year ended October 31, 2000, AA provided no services and therefore billed
no fees to the Company in connection with financial information systems design
and implementation.
All Other Fees. During the fiscal year ended October 31, 2000, AA billed
the Company an aggregate of $133,000 for services rendered in connection with
acquisition due diligence assistance and tax consulting.
The Audit Committee of the Board of Directors has determined that the
provision of services by AA described in the preceding two paragraphs are
compatible with maintaining AA's independence as the Company's principal
accountant.
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EXECUTIVE OFFICERS
The executive officers and significant employees of the Company, their
ages, positions held with the Company and length of time in such positions are
set forth below. There are no family relationships between or among any of the
named individuals. There are no arrangements or understandings between any of
the named individuals and any other person or persons pursuant to which any of
the named individuals are to be elected as officers.
NAME AND AGE POSITIONS WITH COMPANY OFFICER SINCE
------------ ---------------------- -------------
Jack R. Ingram Chairman of the Board and Chief July, 1990
Age 57 Executive Officer
Jon A. Wiese President and Director August, 1999
Age 44
Robert B. Wagner Chief Financial Officer, March, 1989
Age 39 Vice President of Finance,
Secretary, Treasurer and Director
Larry N. Patterson Senior Vice President of Operations March, 2000
Age 44
Donald E. Reigel Regional Vice President of Sales June, 1995
Age 46
James J. Burke Regional Vice President of Sales September, 2000
Age 56
Sandra J. Connor Regional Vice President of Sales September, 2000
Age 36
Brief descriptions of the business experience of Messrs. Ingram, Wiese and
Wagner are set forth under the section of this Proxy Statement entitled
"Election of Directors."
MR. PATTERSON joined the Company in March 2000 as Senior Vice President,
Operations. Prior to his employment with the Company, Mr. Patterson worked for
Exxon Corporation and held various executive positions in Europe, Asia and Latin
America with Exxon Company, International. He is a member of the American
Management Association and is active in Organizational Development, Leadership
Development and Investment Management activities. Mr. Patterson received his
Bachelor of Science Degree in Engineering from Oklahoma State University.
MR. REIGEL joined the Company in June 1993 as PBX Product Sales Manager. He
was promoted to Vice President of Marketing and Sales in June 1995; became Vice
President of Hospitality Sales in December 1999; and is currently the Regional
Vice President of Sales with responsibility over the Northwest region and
lodging. Prior to his employment with the Company, Mr. Reigel served as a
national accounts sales manager for WilTel Communications Systems. Mr. Reigel
received his Bachelor of Science Degree in Business from the University of
Colorado.
MR. BURKE joined the Company in November 1999 in conjunction with the
acquisition of USTI and is currently the Regional Vice President of Sales with
responsibility over the Southwest region. Prior to his employment with the
Company, he had been employed by USTI since August 1990 and served as the
Western Region Sales Director and National Sales Director. Mr. Burke received
his Bachelor of Science Degree in Business from Niagara University.
MS. CONNOR joined the Company in September 2000 as the Regional Vice
President of Sales with responsibility over the Eastern region and government
sales. Prior to her employment with the Company, Ms. Connor served in various
sales and sales operations assignments at Lucent Technologies, most recently as
Area
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Sales Vice President for the New England Region - Enterprise Networks Division.
Ms. Connor received her Bachelor of Science Degree in Management from the
University of Massachusetts, Lowell.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION COMMITTEE REPORT
The Compensation Committee is the focal point for senior management and the
Board of Directors to address corporate compensation issues. The Committee's
primary responsibility is to make recommendations to the Board regarding
remuneration of executive officers and to evaluate the design and
competitiveness of the Company's compensation plans. The Committee consists of
three outside directors and the Company's independent outside counsel.
Compensation Philosophy. The heart of the Company's compensation philosophy
is the enhancement of shareholder value. Consequently, the interests of
shareholders and the need to be competitive in recruiting and retaining quality
leaders and to motivate management to improve shareholder value drive the design
of executive compensation programs. A primary component of the Company's
compensation philosophy is to structure compensation programs so that a high
percentage of remuneration is "at risk". Near term cash compensation reflects
corporate performance and larger long-term incentives are tied directly to share
value.
Executive Compensation Program. Compensation for executive officers is
comprised of base salary, competitive employee benefits, annual incentive
compensation opportunity, and long term incentive compensation in the form of
stock options. Under the Company's incentive compensation program, the higher an
executive's level of responsibility, the greater the portion of his compensation
that will be dependent on performance.
The Compensation Committee reviews executive compensation levels with
respect to corporate and individual performance, as well as competitive pay
practices. To assist in this analysis, the Committee retained the services of
Villareal and Associates Incorporated, a compensation-consulting firm. As part
of those services the Committee was provided executive compensation survey
information on similar companies. These surveys indicated the Company's
executive compensation program to be generally competitive with similarly
successful, high growth companies.
The Committee reviews annually the base salaries of XETA's executive
officers and recommends any adjustments it may deem appropriate, for approval by
the full Board of Directors. In its review the Committee takes into account
individual factors such as: experience, performance, both during the preceding
twelve months and future potential, retention considerations and others issues
particular to the executive and XETA. Additionally, the Committee considers the
growth and performance of the Company as it assesses the market basis for
executive salaries. The Committee believes the base salaries for the Company's
executive officers are conservative in relation to industry norms.
During fiscal year 2000 the Company restructured its incentive compensation
program. Two new plans were instituted effective December 1, 1999: one for sales
professionals and one for all other employees. The Employee Bonus Plan (EBP)
provides an annual incentive compensation opportunity for all employees, except
those in sales. The purpose of the EBP, in regard to executives, is to provide
an incentive to help XETA achieve its targeted financial objectives. Award
levels under the plan are set so as to be competitive with annual incentives of
other similarly successful high growth companies. However, since the Company did
not achieve its threshold financial goals for the 2000 fiscal year, no EBP
awards were made to executives. With XETA's 40 percent year-over-year growth in
earnings, the Committee believes the EBP's effectiveness for the stated purpose
can be improved.
The Company's three sales executives are provided an annual incentive
compensation opportunity under the compensation plan for all sales
professionals. The purpose of this incentive compensation plan is to provide an
incentive to the Company's sales force to help XETA achieve its targeted
strategic and margin sales objectives. Award levels under the plan are set so as
to be competitive with the market and are paid on a prorated basis. The awards
paid to the Company's sales executives during fiscal year 2000 are tabulated in
the Summary Compensation Table.
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As a long-term incentive, the Company grants options to purchase shares of
Common Stock to executive officers and other key employees. These stock options
have been awarded in two ways under plans approved by the Board of Directors.
The first is under the shareholder approved qualified stock option plans, and
the second is through special grants of non-qualified options. Additionally,
most grants are subject to a vesting period.
2000 CEO Compensation. The compensation package for the Company's CEO, Mr.
Jack Ingram, is consistent in all material aspects with the program in place for
the Company's other executive officers. Effective in fiscal 2000 the Committee
approved an increase in Mr. Ingram's annual base salary to $200,000. In
determining to raise Mr. Ingram's salary, the Committee considered such factors
as XETA's financial performance, his pay in relation to that of chief executive
officers of other similarly successful high growth companies, the impact on his
compensation package of the previously described change in the Company's
incentive compensation program, and XETA's overall executive compensation
philosophy. The Committee believes his current base salary is conservative in
relation to the market.
Mr. Ingram was provided an incentive compensation opportunity for fiscal
2000 under the Employee Bonus Plan. His award level in the plan was set so as to
be competitive with annual incentives of other surveyed companies and the
Company's overall executive compensation philosophy. However, as discussed above
no executive awards were made under the EBP for fiscal 2000.
As part of his original compensation package with the Company at the time
of his employment in 1990, Mr. Ingram was granted options to purchase an
aggregate of 200,000 shares of Common Stock at a later date.price slightly above the market
price. These options, which have been proportionately adjusted in number and
exercise price in accordance with subsequent stock splits, were a special
non-qualified grant approved by the Board of Directors with a 10-year exercise
period. At this time these options are fully vested and Mr. Ingram has exercised
a portion of the shares, the bulk of which he currently holds. He has received
no additional option grants since 1990. He has purchased the balance of his
stock holdings in the Company on the open market.
Conclusion. The proxy statement will contain
importantCompensation Committee believes the Company's executive
compensation program has been consistent with the philosophy outlined in this
report and has been effective overall in achieving its objectives during fiscal
2000. The Committee hereby submits this report to XETA's Board of Directors for
approval.
The Compensation Committee,
Donald T. Duke, Chairman
Ron B. Barber
Robert D. Hisrich
Ronald L. Siegenthaler
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are those named above in the
Compensation Committee Report. There are no "interlocks" (as defined by the
rules of the Securities and Exchange Commission) with respect to any member of
the Compensation Committee of the Board of Directors. No member of this
Committee was at any time during the 2000 fiscal year an officer or employee of
the Company.
Mr. Barber served as Senior Vice President of the Company from August 17,
1987 to March 1991, and is a shareholder in the law firm of Barber & Bartz, a
Professional Corporation, which serves as outside general counsel to the
Company. Mr. Siegenthaler served as Executive Vice President of the Company from
July 1990 to March 1999. No other member of the Committee is a former officer or
employee of the Company.
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SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information concerning the compensation of
the Company's Chief Executive Officer and the next four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------- ----------------------
(a) (b) (c) (d) (e) (g) (i)
NAME AND COMMON STOCK ALL
PRINCIPAL UNDERLYING OTHER
POSITION YEAR SALARY BONUS OTHER OPTIONS(#)(1) COMPENSATION(2)
- --------- ---- ---------- ---------- ------------- ------------- ---------------
Jack R. Ingram 2000 $ 190,580 $ -- $ 648,750(3) -- $ 12,800
Chief Executive 1999 90,000 320,679 510,000(3) -- 6,400
Officer 1998 90,000 277,419 487,500(3) -- 6,400
Jon A. Wiese 2000 190,580 -- 176,250(3) -- 3,385
President 1999 20,769 52,440 -- -- --
1998 -- -- -- -- --
Donald E. Reigel 2000 98,009 53,596 1,744,459(5) 12,000 696
Vice President, 1999 75,000 354,475 93,158(4) -- 6,400
Sales 1998 75,000 200,603 63,618(4) 13,000 6,400
Mark A. Martin(6) 2000 116,150 -- 115,598(4) -- 3,956
President, 1999 -- -- -- -- --
Commercial Channel 1998 -- -- -- -- --
Thomas A. Luce(7) 2000 99,368 8,000 575,000(3) 12,000 4,968
Vice President of 1999 89,650 47,589 -- -- 3,587
Service 1998 86,285 33,917 228,375(3) 13,000 3,172
- ----------
(1) Amounts shown reflect the 2-for-1 stock split effected in July 2000.
(2) Represents the Company's contributions to the employee's account under the
Company's 401(k) plan.
(3) Represents the dollar value of the difference between the price paid for
shares of the Company's common stock upon exercise of stock options and the
market value of such stock on the date of exercise.
(4) Represents sales commissions paid.
(5) $1,716,703 represents amount under footnote 3 above and $27,756 represents
amount under footnote 4 above.
(6) Mr. Martin served as an executive officer of the Company from November 30,
1999 until November 1, 2000.
(7) Mr. Luce ceased to be an executive officer on June 1, 2000.
STOCK OPTIONS
The following table sets forth certain information regarding stock options
granted during the transactions,2000 fiscal year to persons named in the Summary Compensation
Table. No stock appreciation rights were granted during fiscal 2000.
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OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES IN
UNDERLYING OPTIONS FISCAL EXERCISE OR BASE EXPIRATION
NAME GRANTED (#) (1) YEAR PRICE ($/SH)(2) DATE(3)
--------------- ------------------ ------------ ---------------- ----------
Jack R. Ingram -- -- -- --
Jon A. Wiese -- -- -- --
Donald E. Reigel 12,000 4.02% 18.1250 4/16/10
Mark A. Martin -- -- -- --
Thomas A. Luce 12,000 4.02% 18.1250 4/16/10
- ----------
(1) Amounts shown reflect the 2-for-1 Stock Split effected in July
2000.
(2) Prices shown reflect the 2-for-1 Stock Split effected in July
2000.
(3) These options become exercisable on the third anniversary of the
date of grant and shareholders are advisedmay be exercised at any time from and after such
date until the tenth anniversary of the date of grant.
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OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information regarding stock options
exercised during the 2000 fiscal year by persons named in the Summary
Compensation Table and the number and value of unexercised options held by such
persons as of the fiscal year-end. The Company has not granted stock
appreciation rights.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION VALUES
(a) (b) (c) (d) (e)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END (#) AT FY-END ($)(3)
SHARES ACQUIRED VALUE REALIZED --------------------------- ---------------------------
NAME ON EXERCISE (#)(1) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------------ -------------- ----------- ------------- ----------- -------------
Jack R. Ingram 60,000 648,750 500,000 -- 5,281,250 --
Jon A. Wiese 20,000 176,250 780,000 -- 3,802,500 --
Donald E. Reigel 64,600 1,716,703 111,400 12,000 1,058,097 --
Mark A. Martin -- -- -- -- -- --
Thomas A. Luce 40,000 575,000 66,000 12,000 589,875 --
- ----------
(1) Amounts shown reflect 2-for-1 stock split effected in July 2000.
(2) Value is based upon the difference between the fair market value
of the securities underlying the options on the date of exercise
and the exercise price.
(3) Based upon the difference between the fair market value of the
securities underlying the options at fiscal year-end ($10.8125 per
share) and the exercise price.
EMPLOYMENT AGREEMENTS
Following is a description of employment agreements which the Company has
with certain officers named in the Summary Compensation Table.
The Company entered into a letter agreement with Mr. Reigel upon his
employment with the Company in June 1995, which set forth his compensation and
certain other terms of his employment. Under the current terms of Mr. Reigel's
compensation agreement, as amended, his base salary (commencing December 1,
1999) is $100,000 and his incentive bonus compensation is set pursuant to read it carefully when it becomes available.the
incentive compensation plan adopted by the Company for its sales professionals
(as described in the Compensation Committee Report). The proxy statementletter agreement also
imposes certain non-solicitation restrictions upon Mr. Reigel.
The Company entered into an employment agreement with Mr. Martin dated
November 30, 1999. The agreement provided for a base salary of $120,000 per
year; a quarterly commission equal to a percentage of the gross profit of the
Company's Commercial Channel Division ("CCD"); an annual "Base Bonus" equal to a
percentage of each year's growth in the CCD gross profit; and an annual "Extra
Bonus" equal to a percentage of the amount, if any, by which the CCD's gross
profit for a given fiscal year should exceed the gross profit projected for the
CCD under the Commercial Channel Plan established by the Company for that year.
The agreement also imposed certain restrictions upon Mr. Martin with regard to
competition and solicitation activities following the termination of his
employment with the Company. Mr. Martin's employment was terminated by his
resignation effective November 1, 2000.
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RELATED TRANSACTIONS
Mr. Barber is a shareholder in the law firm of Barber & Bartz, a
Professional Corporation, which serves as outside general counsel to the
Company. During the fiscal year ended October 31, 2000, the Company paid or
accrued legal fees to Barber & Bartz in the approximate amount of $302,400.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of (i) Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, (ii) Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and (iii) written representations made to the Company by its
directors and officers, the Company knows of no director, officer, or beneficial
owner of more than ten percent of the Company's Common Stock who has failed to
file on a timely basis reports of beneficial ownership of the Company's Common
Stock as required by Section 16(a) of the Securities Exchange Act of 1934, as
amended, except as follows: Mr. Burke and Ms. Connor were late in filing their
Initial Statement of Beneficial Ownership of Securities on Form 3.
STOCK PERFORMANCE GRAPH
The graph depicted below shows the Company's stock price as an index
assuming $100 invested on November 1, 1995, along with the composite prices of
companies listed in the SIC Code (Telephone, Telegraph Apparatus) Index and the
NASDAQ Market Index.
[GRAPH]
October 31 1995 1996 1997 1998 1999 2000
---------- ------ ------ ------ ------ ------ -------
XETA 100.00 111.11 281.48 262.96 575.93 640.77
SIC Code Index 100.00 140.69 186.66 165.55 334.16 379.36
NASDAQ Market Index 100.00 117.43 153.90 174.02 287.23 337.82
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings made by the Company
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under those statutes, the preceding Compensation Committee Report on Executive
Compensation and the Stock Performance Graph will not be filed withincorporated by
reference into any of those prior filings, nor will such report or graph be
incorporated by reference into any future filings made by the Company under
those statutes.
SHAREHOLDER PROPOSALS
Under regulations of the Securities and Exchange Commission, and copiesshareholders
are entitled to submit proposals on matters appropriate for shareholder action
at subsequent annual meetings of the Company in accordance with those
regulations. In order for shareholder proposals for the Company's next annual
meeting to be eligible for consideration for inclusion in the proxy statement
and proxy relating to such meeting, they must be received by the Company no
later than October 1, 2001. Such proposals should be directed to XETA
Technologies, Inc., 1814 West Tacoma, Broken Arrow, Oklahoma 74012, Attention:
CEO.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matter other than those described herein that will be presented for
consideration at the Annual Meeting. However, should any other relevant proxy materials canmatters properly
come before the Annual Meeting or any adjournment thereof, it is the intention
of the persons named in the accompanying Proxy to vote in accordance with their
best judgment in the interest of the Company.
By Order of the Board of Directors
/s/ ROBERT B. WAGNER
Robert B. Wagner
Secretary
Broken Arrow, Oklahoma
February 16, 2001
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Appendix A
XETA TECHNOLOGIES, INC.
AUDIT COMMITTEE CHARTER
In order to improve the effectiveness of the Board of Directors'
oversight of the corporate audit process of XETA Technologies, Inc. (the
"Corporation"), to strengthen the independence and involvement of those
Directors charged with such oversight, and to enhance mechanisms for
accountability among the Corporation's inside auditor, its outside auditors, and
its management, the Board of Directors hereby adopts this formal written charter
for the XETA Technologies, Inc. Audit Committee of the Board of Directors.
I. CONSTITUTION OF AUDIT COMMITTEE
There is hereby created a committee of the Corporation's Board
of Directors to be obtainedknown as the Audit Committee.
II. PURPOSE
The Audit Committee shall be responsible for overseeing the
Corporation's accounting and financial reporting functions, including monitoring
the audit process, insuring independent communication and information flow
between and among the Audit Committee itself, the Corporation's internal
auditor, and the Corporation's outside auditor, and fostering candid discussion
among management and the inside and outside auditors of issues involving
judgment and affecting the quality of the audit process and public financial
reporting.
III. COMPOSITION
A. Number
The membership of the Audit Committee shall be composed of no
fewer than three (3) directors.
B. Qualifications
Except as set forth in Section III.C. below, each Audit Committee
member shall qualify as an "independent director," and shall be able to read and
understand fundamental financial statements, including a corporation's Statement
of Financial Condition, Income Statement, Reconciliation of Retained Earnings,
and its Statement of Changes in Financial Position and Cash Flows. In addition,
at least one (1) member of the Audit Committee shall have had past employment
experience in finance or accounting, requisite professional certification in
accounting or other comparable experience or background validating such member's
financial sophistication, such as his being or having been a chief executive
officer, chief financial officer or other senior officer with financial
oversight responsibilities.
For purposes of this Charter, "independent director" means a person
other than (i) an officer or employee of the Corporation or any subsidiary of
the Corporation, or (ii) any other person having a relationship which, in the
opinion of the Board of Directors, would interfere with the exercise of his
independent judgment in carrying out his responsibilities as a Director and
member of the Audit Committee. The following persons shall not be considered
"independent":
(a) a person who is employed by the Corporation or any
affiliate of the Corporation or who has been so employed within the
past three (3) years;
(b) a person who, in the past fiscal year, has accepted
compensation in excess of $60,000 from the CommissionCorporation or any affiliate
or affiliates of the Corporation (other than compensation for freeboard
service, benefits under a tax-qualified retirement plan, or
non-discretionary compensation);
(c) a person who is a member of the immediate family of a
person who is, or has been in any of the past three (3) years, employed
as an executive officer by logging onto its web site at http://www.sec.gov. Shareholdersthe Corporation or any affiliate of the
Corporation (where "immediate family" shall be deemed to mean and
include the person's spouse, parents,
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children, siblings, father-, mother-, brother-, sister-, son-, or
daughter-in-law, and anyone residing in such person's home;
(d) a person who is a partner in, or a controlling shareholder
or executive officer of, any for-profit business organization (an
"Interested Business Organization") to which the Corporation made, or
from which the Corporation received, during any of the past three
fiscal years, payments (other than those arising solely from
investments in the Corporation's securities) exceeding the greater of
(i) $200,000 or (ii) 5% of the Corporation's or the Interested Business
Organization's consolidated gross revenues for such year;
(e) a person who is employed as an executive of another entity
the compensation committee of which includes any executive of the
Corporation.
C. Exception.
Notwithstanding the requirement of "independence" outlined in Section
III.B. above, the Corporation's Board of Directors may also
obtain copies of other documents,under exceptional and
limited circumstances appoint one (1), but not more than one (1), director who
is not otherwise "independent," to membership on the Audit Committee provided
that (i) the Board determines that such as reports, registration statements and
other information filed electronically withdirector's membership on the Commission, from this web site.
The proxy statement will also describe any materialAudit
Committee is required by the best interests of the Company's
officersCorporation and directorsits
shareholders, and (ii) the Board discloses the nature of the relationship and
the reasons for that determination in the transactions describednext annual proxy statement subsequent
to such determination; provided, further, however, that no such director shall
be a current employee of the Corporation nor an immediate family member of such
an employee.
IV. RESPONSIBILITIES AND DUTIES
The Audit Committee shall carry out the following responsibilities and
duties.
A. Review of Reports and Documents
(1) Review the Corporation's annual financial statements
and any reports or other financial information
submitted to any governmental body or the public,
including any certification, report, opinion, or
review rendered by the Corporation's independent
accountants.
(2) Review with management and the Corporation's
independent accountants the 10-Q prior to its filing.
B. Independent Accountants
(1) Periodically consult privately with the Corporation's
independent accountants about internal controls and
the fullness and accuracy of the Corporation's
financial statements.
(2) Review with the Corporation's independent auditors
and management the scope of annual audit and the
audit procedures and approve the fees and other
compensation to be paid to the Corporation's
independent accountants. At the conclusion of the
audit, review the results of the audit including all
matters required to be discussed in accordance with
generally accepted auditing standards.
(3) Review the performance of the Corporation's
independent accountants and approve their discharge
when circumstances warrant.
C. Financial Reporting Processes
(1) Review the integrity of the Corporation's financial
reporting processes with its independent accountants.
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(2) Discuss with the independent accountants their
judgments about the quality and appropriateness of
the Corporation's accounting principles as applied in
its financial reporting, covering such dimensions as
relevance, reliability, comparability and
understandability.
(3) Consider and approve major changes to the
Corporation's accounting principles and practices as
suggested by its independent accountants.
D. Compliance
(1) Review management's monitoring of the Corporation's
compliance with laws, regulations and corporate
policies to assure that the Corporation's financial
statements, reports and other financial information
satisfy legal requirements.
(2) Perform any other activities consistent with this
charter, the Corporation's Bylaws and governing law
as the Audit Committee or the Board of Directors
deems necessary or appropriate related to the
financial affairs of the Corporation or its external
audit.
E. Reporting
(1) Present a report in the annual proxy statement.
Forward-looking statements contained herein are based upon current expectations,statement
reflecting the Audit Committee's findings resulting
from its financial reporting oversight
responsibilities.
V. STRUCTURE AND AUTHORITY
The Audit Committee shall designate one (1) of its members to
serve as chairman and one (1) of its members to serve as secretary to keep a
record of its meetings which shall be held not less than four (4) times a year,
and shall report the results of its meetings to the full board at the next
regularly scheduled board meeting. Each member of the Audit Committee shall have
complete access during normal business hours to such business records and
information, and shall be authorized to discuss corporate matters with the
Corporation's employees and officers, as may be necessary and appropriate to
carry out his responsibilities as a member of the Audit Committee and
representative of the shareholders.
VI. ACCOUNTABILITY
The Audit Committee shall annually obtain a formal written
statement from the Corporation's outside auditor (i) acknowledging the outside
auditor's ultimate accountability to the Corporation's Board of Directors and
the Audit Committee as representatives of the Corporation's shareholders and the
Audit Committee's and Board of Directors' ultimate authority and responsibility
to select, evaluate and, where appropriate, replace the outside auditor (or to
nominate and propose in any proxy statement the outside auditor to be
recommended for shareholder approval ) and (ii) delineating all relationships
between said auditors and the Corporation, consistent with Independence
Standards Board Standard No. 1 and shall investigate and engage in serious
dialogue with said auditors regarding any disclosed relationships or services
that could reasonably impact the auditors' objectivity or independence and, when
necessary, shall recommend that the full board take appropriate action to
oversee and ensure the independence of the outside auditors.
VII. IMPLEMENTATION
This Charter shall be effective from and after June 1, 2000,
with the exception that the provisions of Section III hereof regarding
composition of the Audit Committee shall be effective from and after June 1,
2001, prior to which time the Audit Committee may be composed of two (2) or more
directors only a majority of whom need be "independent" within the meaning of
this Charter.
VIII. EFFECTIVE DATE
This Audit Charter shall become effective as of the 1st day of
June, 2000, and shall be subject to review by the full Board of Directors
annually thereafter.
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Appendix B
XETA TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
March 20, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jack R. Ingram and Jon A. Wiese, or either of
them, as proxies and attorneys for the undersigned (with full power to act alone
and to designate substitutions), hereby revoking any prior Proxy, and hereby
authorizes them to represent the undersigned and to vote as designated below,
all the shares of Common Stock of XETA Technologies, believesInc. held of record by the
undersigned on January 22, 2001 at the Annual Meeting of Shareholders to be reasonable. Actual results may differ
significantly fromheld
March 20, 2001, or any adjournment or postponement thereof.
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
RON B. BARBER, DONALD T. DUKE, ROBERT D. HISRICH, JACK R. INGRAM,
RONALD L. SIEGENTHALER, ROBERT B. WAGNER AND JON A. WIESE
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE COMPANY FOR THE 2001 FISCAL YEAR.
[ ] For [ ] Against [ ] Abstain
(continued on other side)
3. IN THEIR DISCRETION ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING.
This Proxy, when properly executed, will be voted in the results discussed in forward-looking statements. Certain
factors that might causemanner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE TWO FOREGOING PROPOSALS.
- ---------------------------------- --------------------------------
(Signature) (Print Name)
- ---------------------------------- --------------------------------
(Signature) (Print Name)
NOTE: Signature(s) should follow exactly as your name appears on your
stock certificate. In case of joint ownership each owner should sign. Executors,
administrators, guardians, trustees, etc. should add their title as such differences include, but are not limited to,and
where more than one executor, etc. is named, a majority must sign. If the risk factors describedsigner
is a corporation, please sign full corporate name by XETA Technologies in its 10-K for its most recently
completed fiscal year and in other public reports previously filed by XETA
Technologies.
# # #a duly authorized officer.
Dated: , 2001.
-----------------------