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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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 Section 240.14a-11(c) or
Section 240.14a-12
WALL DATA INCORPORATED
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(Name of Registrant as Specified in Its Charter)
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(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
CALCULATION OF FILING FEE
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TITLE OF EACH CLASS OF WHICH WHICH THE FILING FEE IS AGGREGATE
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TRANSACTION APPLIES: APPLIES: WAS DETERMINED): TRANSACTION: PAID
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previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
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[WALL DATA LOGO]
April 8, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of Wall Data Incorporated (the "Annual Meeting") to be held at 10:00 a.m. on
Wednesday, May 20, 1998, at the Sheraton Seattle, 1400 Sixth Avenue, Seattle,
Washington 98101.
At the Annual Meeting, the shareholders will be asked to elect four
Directors and increase the number of shares authorized under the 1993 Stock
Option Plan. The accompanying Notice of 1998 Annual Meeting of Shareholders and
Proxy Statement describe the matters to be presented at the Annual Meeting.
The Board of Directors unanimously recommends that shareholders vote for
the election of the nominated Directors and for the amendment to the 1993 Stock
Option Plan.
Whether or not you plan to attend the Annual Meeting, we hope that you will
have your stock represented by marking, signing, dating and returning your proxy
card in the enclosed envelope as soon as possible. Your stock will be voted in
accordance with the instructions you have given in your proxy card. You may, of
course, attend the Annual Meeting and vote in person even if you have previously
returned your proxy card.
Sincerely,
/s/ JOHN R. WALL
JOHN R. WALL
President and
Chief Executive Officer
IMPORTANT
A proxy card is enclosed. All shareholders are urged to complete and mail the
proxy card promptly. The enclosed envelope for return of the proxy card requires
no postage if mailed in the United States. Any shareholder attending the Annual
Meeting may personally vote on all matters that are considered, in which event
the signed proxy will be revoked.
IT IS IMPORTANT THAT YOUR STOCK BE VOTED
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NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1998
To the Shareholder:
The 1998 Annual Meeting of Shareholders of Wall Data Incorporated (the
"Annual Meeting") will be held at the Sheraton Seattle, 1400 Sixth Avenue,
Seattle, Washington 98101, on Wednesday, May 20, 1998, at 10:00 a.m., for the
following purposes:
1. To elect four Directors, three of whom to hold office until the third
annual meeting of shareholders following their election and one of whom
to hold office until the 1999 annual meeting of shareholders, or until
their respective successors are elected and qualified;
2. To approve an amendment increasing by 475,000 the number of shares of
Common Stock reserved for issuance under the 1993 Stock Option Plan; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The Board of Directors has fixed March 20, 1998 as the record date for
determining shareholders entitled to receive notice of and to vote at the Annual
Meeting or any adjournment or postponement thereof. Only shareholders of record
at the close of business on that date will be entitled to notice of and to vote
at the Annual Meeting.
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON, BUT
EVEN IF YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE REQUESTED TO
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN
THE POSTAGE-PAID ENVELOPE PROVIDED TO ENSURE YOUR REPRESENTATION. SHAREHOLDERS
ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE PREVIOUSLY
SENT IN A PROXY CARD.
By Order of the Board of Directors
/s/ ALEXANDRA A. BROOKSHIRE
ALEXANDRA A. BROOKSHIRE
Vice President and Secretary
Kirkland, Washington
April 8, 1998
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WALL DATA INCORPORATED
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, MAY 20, 1998
GENERAL
The enclosed proxy is solicited by the Board of Directors of Wall Data
Incorporated, a Washington corporation ("Wall Data" or the "Company"), for use
at the Annual Meeting of Shareholders of Wall Data (the "Annual Meeting") to be
held at 10:00 a.m. on Wednesday, May 20, 1998, at the Sheraton Seattle, 1400
Sixth Avenue, Seattle, Washington 98101, and at any adjournment or postponement
thereof.
Wall Data's principal executive offices are located at 11332 N.E. 122nd
Way, Kirkland, Washington 98034-6931.
This Proxy Statement and the accompanying proxy card are being mailed to
the shareholders of Wall Data on or about April 8, 1998.
OUTSTANDING SECURITIES AND VOTING RIGHTS
Only holders of record of Wall Data's common stock, no par value (the
"Common Stock"), at the close of business on March 20, 1998 will be entitled to
vote at the Annual Meeting. On that date, the Company had 9,904,492 shares of
Common Stock outstanding. Each share of Common Stock is entitled to one vote at
the Annual Meeting. Holders of Common Stock are not entitled to cumulate votes
in the election of Directors. Under applicable law and the Company's Articles of
Incorporation and Bylaws, if a quorum is present at the Annual Meeting: (i) the
four nominees for election to the Board of Directors who receive the greatest
number of votes cast for the election of Directors at the Annual Meeting by the
shares present in person or represented by proxy will be elected Directors, and
(ii) the proposed amendment to the Company's 1993 Stock Option Plan (the "1993
Plan") will be approved if a majority of the shares present in person or
represented by proxy vote in favor of the proposal. The presence in person or by
proxy of holders of record of a majority of the outstanding shares of Common
Stock is required to constitute a quorum for the transaction of business at the
Annual Meeting. In the election of Directors, any action other than a vote for
the nominee will have the practical effect of voting against the nominee. With
respect to the proposal to amend the 1993 Plan, abstentions will have the
practical effect of voting against the proposal, and broker nonvotes will have
no effect on the outcome other than to reduce the number of "FOR" votes
necessary to approve the proposal.
PROXY VOTING
Shares for which proxies are properly executed and returned will be voted
at the Annual Meeting in accordance with the directions noted thereon, or, in
the absence of directions to the contrary, will be voted (i) "FOR" the election
of the nominees to the Board of Directors named on the following page and (ii)
"FOR" the amendment to the 1993 Plan. It is not expected that any matters other
than those referred to in this Proxy Statement will be brought before the Annual
Meeting. If, however, other matters are properly presented, the persons named as
proxies will vote in accordance with their discretion with respect to such
matters.
REVOCATION
Any shareholder giving a proxy may revoke it at any time before it is voted
by delivering to the Secretary of the Company a written notice of revocation or
a duly executed proxy card bearing a later date, or by attending the Annual
Meeting and electing to vote in person.
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PROPOSAL 1: ELECTION OF DIRECTORS
In accordance with the Company's Bylaws, the Board of Directors has fixed
the number of Directors constituting the Board at eight. Directors generally are
elected for three-year terms, and the Board is divided into three classes, with
one class of Directors elected to a three-year term at each annual meeting of
shareholders. Four of the Directors are serving terms that continue beyond the
1998 Annual Meeting. Of the continuing Directors, one is serving a term that
will not expire until the 1999 Annual Meeting of Shareholders and three are
serving terms that will not expire until the 2000 Annual Meeting of
Shareholders. At the Annual Meeting, three Directors will be elected to hold
office until the 2001 Annual Meeting of Shareholders and one Director will be
elected to hold office until the 1999 Annual Meeting of Shareholders, or until
their respective successors are elected and qualified.
The Board of Directors, based on the recommendation of its Nominating
Committee, has proposed that the following nominees be elected at the Annual
Meeting: David F. Millet, Steve Sarich, Jr., Bettie A. Steiger and Kevin B.
Vitale. Messrs. Millett and Sarich and Ms. Steiger will be elected for a
three-year term; Mr. Vitale will be elected for a one-year term. Unless
otherwise instructed, it is the intention of the persons named on the
accompanying proxy card to vote shares represented by properly executed proxies
for such nominees. Although the Board of Directors anticipates that the four
nominees will be available to serve as Directors of the Company, if any of them
should be unwilling or unable to serve, the holders of the proxies may vote the
proxies for the election of a substitute nominee or nominees as may be
designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH NOMINEE.
NOMINEES FOR THE BOARD OF DIRECTORS
Biographical information regarding each of the nominees for the Board of
Directors is set forth below:
DIRECTORS TO SERVE UNTIL 2001
David F. Millet, age 53, has been a Director of the Company since October
1992. Since 1997, he has served as Managing Director of Gemini Investors, a
private investment firm, and since 1988, he has also served as President of
Chatham Venture Corporation, an investment advisory company. He is also a
director of Thomas Emery & Sons, LLC, a private investment company, and Chairman
of Holographix, Inc., a manufacturer of holographic optical components and
systems. Mr. Millet is also a director of View Tech, Inc., Natural MicroSystems,
Inc. and Mohawk Metal Products.
Steve Sarich, Jr., age 77, has been a Director of the Company since June
1991. He has been President of 321 Investment Co., a venture capital company,
since 1980 and President of C.S.S. Management Co., a management company, since
1986. Mr. Sarich is also a director of Back Technologies, Inc., Cyclopss
Corporation, Flo Scan Instrument Company and Omega Environmental Inc.
Bettie A. Steiger, age 64, has been a Director of the Company since May
1995. Since June 1988, Ms. Steiger has served in various capacities with Xerox
Corporation ("Xerox"). She has been a Principal for Xerox's Market and
Technology Innovation Group ("MTI") since June 1992; MTI sponsors new business
initiatives for Xerox based on emerging technologies invented at Xerox. From
December 1990 to June 1992, Ms. Steiger was Worldwide Marketing Resident at the
Palo Alto Research Center. Formerly, Ms. Steiger was Vice President, Videotex,
of the Gartner Group and the Executive Director of the Association of
Information and Image Management. She is a founding member of Source
Telecomputing Corporation ("The Source"). Ms. Steiger is also a director of
Alumnae Resources, the International School of Information Management, and the
Washington State University President's Associates Foundation.
DIRECTOR TO SERVE UNTIL 1999
Kevin B. Vitale, age 40, has been a Director and Chief Operating Officer of
the Company since July 1997. Mr. Vitale served as Executive Vice President of
the Company from April 1996 to July 1997 and Vice
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President, Operations and Services from July 1993 to April 1996. Prior to
joining the Company, Mr. Vitale was Vice President, Corporate Quality and
Customer Service of NetFRAME Systems Incorporated from July 1989 to July 1993.
Mr. Vitale also serves as a director and the chairman of the Long Range Planning
Committee for the Washington Software Association and as a director of
DataChannel, Inc., an Internet technology company. He is also a founding member
of the Technical Support Alliance Network ("TSANet"), where he served as a board
member and Treasurer for the past four years.
CONTINUING DIRECTORS UNTIL 1999
Henry N. Lewis, age 59, has been a Director of the Company since January
1993 and a director of the Company's United Kingdom subsidiary, Wall Data (U.K.)
Ltd., since its inception in 1990. Since 1976, Mr. Lewis has been a Managing
Director and a principal in Computer Ventures Group Limited, a London-based
investment company investing primarily in the computer industry. Mr. Lewis is
also a director of Action Computer Supplies Limited, Action Computer Supplies
Holdings, p.1.c., AES Limited, and ComputerCall Limited.
CONTINUING DIRECTORS UNTIL 2000
John R. Wall, age 40, has been a Director of the Company since May 1994,
President of the Company since May 1996 and Chief Executive Officer since August
1997. Mr. Wall is the founder of the Company, was its Executive Vice President
from June 1991 to May 1996 and served as Secretary from January 1993 to May
1994. Mr. Wall was a Director of the Company from its inception until May 1991
and Chairman of the Board of Directors from 1985 to 1991. He has been the
Company's chief technologist and an officer of the Company since its inception,
serving as President from 1982 until 1985 and Vice President, Research and
Development from 1985 to 1991. Mr. Wall served as chairman of the Washington
Software Association from January 1994 through December 1995 and is a former
co-chair of the Washington Software Association Education Committee. Mr. Wall
also serves as a founding Trustee and Chairman of the Washington Software
Foundation. He is also on the Board of Trustees of the Corporate Council for the
Arts.
Robert J. Frankenberg, age 50, has been Chairman of the Board since August
1997 and a Director of the Company since December 1996. Since June 1997, Mr.
Frankenberg has been President and Chief Executive Officer of Encanto Networks,
Inc., a company that develops and markets Internet products. Mr. Frankenberg was
Chief Executive Officer and President of Novell, Inc. from April 1994 to August
1996, and Chairman of the Board of Novell, Inc. from August 1994 to August 1996.
From February 1991 to April 1994 he was Vice President, General Manager of
Hewlett-Packard Company's ("H-P") Personal Information Products Group. Prior to
February 1991 he led H-P's Information Networks Group and Information Systems
Group. Mr. Frankenberg currently serves on the Board of Directors of America On
line, Caere Corporation, Daw Technologies, Electroglas and Secure Computing
Corporation. Mr. Frankenberg also serves on the advisory boards of the Sundance
Film Festival and Utah Valley State College, as well as the Board of Trustees of
Westminster College.
Jeffrey A. Heimbuck, age 51, has been a Director of the Company since
December 1996. From July 1992 through July 1996, Mr. Heimbuck was President and
Chief Executive Officer of Inmac Corporation, a catalog marketer of personal
computer products and accessories. Prior to Inmac Corporation, he was President
of Quantum Commercial Products, a division of Quantum Corporation, manufacturer
of Winchester disk drives. Mr. Heimbuck also serves on the Board of Directors of
Visioneer, Inc., a company that develops and markets personal imaging hardware
and software.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive any fee for their
services as Directors. Directors who are not employees of the Company are paid a
$10,000 annual retainer plus $1,000 per meeting and $500 per telephonic meeting
of the Board of Directors and are reimbursed for their expenses incurred in
attending meetings. Non-employee Directors who are members of a committee of the
Board are paid $1,000 per committee meeting and $500 per telephonic meeting and
are reimbursed for their expenses incurred in
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attending committee meetings. In addition, Mr. Frankenberg receives an annual
cash retainer of $50,000 per year for his services as Chairman of the Board.
Non-employee Directors are compensated for service on the Boards of
Directors of subsidiaries of the Company. They are paid an annual retainer of
$10,000 and $1,000 per day for attending subsidiary Board or committee meetings
that are not held on the same day as a Company Board or Committee meeting at
which the Director is in attendance. The Company compensates Directors for
services rendered at the request of the Company other than at or in preparation
for Board of Directors meetings or Committee meetings at the rate of $1,000 per
diem. In 1997, the following payments were made for such services: Mr.
Frankenberg, $2,000; Mr. Heimbuck, $1,000; and Ms. Steiger, $1,000.
Non-employee Directors also receive stock option grants under the Company's
1993 Stock Option Plan for Non-Employee Directors (the "Directors Plan"). Each
new non-employee Director upon election or appointment to the Board of Directors
receives an initial option to purchase 10,000 shares of Common Stock at an
exercise price equal to the fair market value per share of Common Stock on the
grant date. In addition, each non-employee Director automatically receives an
annual grant of options to purchase 2,500 shares of Common Stock at each annual
meeting of shareholders at which he or she is reelected or continues as a
Director at an exercise price per share equal to the fair market value per share
of Common Stock on the grant date. Options granted to non-employee Directors
upon their initial appointment or election will become fully vested and
exercisable four years from the date of grant, with 25% of the total option
becoming fully vested and exercisable on the first anniversary date of the grant
and 2.0833% becoming fully vested and exercisable each month thereafter. The
annual options granted as of each annual meeting of shareholders (including the
1998 Annual Meeting) will vest and become exercisable upon the date of the next
annual meeting of shareholders. Options granted under the Directors Plan
generally expire five years from the grant date.
In addition, in consideration of Mr. Frankenberg's assumption of the
position of Chairman of the Board, Mr. Frankenberg received a one-time option
under the Directors Plan to purchase 30,000 shares of Common Stock at an
exercise price equal to the fair market value per share of Common Stock on
October 28, 1997, the grant date. This option vests over three years, one-third
at each anniversary date, so long as Mr. Frankenberg continues serving as
Chairman of the Board. This option terminates six years from the date of grant,
except that early termination shall be based on Mr. Frankenberg's service as the
Company's outside Chairman of the Board rather than on his service as a
director.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During 1997, there were eleven meetings of the Board of Directors. All
Directors attended at least 75% of the meetings of the Board of Directors and
the committees of which they were members.
The Board of Directors has established an Audit Committee, a Compensation
Committee and a Nominating Committee. Each of these committees is responsible to
the full Board of Directors. The functions performed by these committees are
summarized below.
Audit Committee. The Audit Committee reviews the scope and results of the
annual independent audit of the Company's books and records and reviews the
Company's finance and accounting policies. The members of this committee are Mr.
Lewis, Mr. Heimbuck and Mr. Millet. The Audit Committee met five times in 1997.
Compensation Committee. The Compensation Committee administers certain of
the Company's incentive compensation plans and establishes certain policies
relating to such plans and other compensation and benefit matters. This
committee also establishes salaries, incentives and other forms of compensation
for executive officers. The members of this committee are Ms. Steiger, Mr.
Frankenberg, Mr. Millet and Mr. Sarich. The Compensation Committee met five
times in 1997.
Nominating Committee. The Nominating Committee makes recommendations to the
Board of Directors regarding the size and composition of the Board of Directors
and nominees for Director. The members of this committee are Mr. Lewis and Ms.
Steiger. The Nominating Committee met once in 1997.
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BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 1, 1998 by (i) each person known by
the Company to own beneficially 5% or more of the Common Stock, (ii) each
Director and nominee for Director of the Company, (iii) each executive officer
of the Company for whom compensation information is given in the Summary
Compensation Table in this Proxy Statement, and (iv) all Directors and executive
officers as a group.
OUTSTANDING SHARES
OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
---------------- ------------------ ----------------
State of Wisconsin Investment Board(1)....... 865,000 8.7%
P.O. Box 7842
Madison, WI 53707
George B. Bjurman & Associates,.............. 632,868 6.4%
George Andrew Bjurman
and Owen Thomas Barry III(2)
10100 Santa Monica Boulevard
Los Angeles, CA 90067
Robert J. Frankenberg(3)..................... 3,333 *
Jeffrey A. Heimbuck(3)....................... 3,333 *
Henry N. Lewis(4)............................ 45,334 *
David F. Millet(5)........................... 5,000 *
Steve Sarich, Jr.(6)......................... 145,870 1.5%
Bettie A. Steiger(7)......................... 6,145 *
Kevin B. Vitale(8)........................... 36,648 *
John R. Wall(9).............................. 411,236 4.1%
James Simpson(10)............................ 236,395 2.4%
Richard Van Hoesen(11)....................... 37,401 *
Alexandra A. Brookshire(12).................. 23,088 *
All Directors and executive officers as a
group
(11 persons)(13)........................... 953,783 9.4%
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* Represents less than 1%.
(1) Based on publicly available information as of December 31, 1997.
(2) Based on publicly available information as of December 31, 1997. George B.
Bjurman & Associates, George Andrew Bjurman and Owen Thomas Barry III share
voting and dispositive power of the 632,868 shares reported and are
beneficial owners of those shares.
(3) Represents options for 3,333 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(4) Includes 40,334 shares of Common Stock held of record by ComputerCall
Limited, a substantial majority of the capital stock of which is owned by
Mr. Lewis and members of his family. Also includes options for 5,000 shares
of Common Stock that are exercisable within 60 days of March 1, 1998.
(5) Represents options for 5,000 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(6) Includes options for 5,000 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(7) Represents options for 6,145 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(8) Represents options for 36,648 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
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(9) Includes options for 32,499 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(10) Includes options for 66,045 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(11) Represents options for 32,395 shares of Common Stock that are exercisable
within 60 days of March 1, 1998, and 5,006 shares of Common Stock as to
which Mr. Van Hoesen shares voting and investment power with his wife.
(12) Includes options for 20,936 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
(13) Includes options for 216,334 shares of Common Stock that are exercisable
within 60 days of March 1, 1998.
EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth for each of the last three completed fiscal
years the compensation received by (i) the Company's Chief Executive Officer,
(ii) the Company's Chief Executive Officer until July 1997 and (iii) the
Company's other executive officers, (the "named executive officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
SECURITIES ALL OTHER
NAME AND SALARY BONUS UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(1) OPTIONS(#) ($)(2)
------------------ ---- -------- -------- ------------ ------------
John R. Wall........................... 1997 $218,750 $ 40,689 80,000 $ 306
President and Chief Executive Officer 1996 193,750 55,000 52,500(3) 198
1995 171,250 40,000 -0- 198
James Simpson.......................... 1997 250,000 87,500 30,000 526,755
Former Chief Executive Officer(4) 1996 300,000 100,000 100,000(3) 1,350
1995 300,000 75,000 -0- 1,350
Kevin B. Vitale........................ 1997 203,750 37,976 65,000 306
Chief Operating Officer 1996 175,000 55,000 30,000 198
1995 140,000 40,000 31,500(5) 190
Richard Van Hoesen..................... 1997 182,500 26,764 -0- 306
Vice President and 1996 108,815 30,000 75,000 194
Chief Financial Officer(6)
Alexandra A. Brookshire................ 1997 131,414 23,147 -0- 255
Vice President, General Counsel 1996 146,250 40,000 7,500 306
and Secretary 1995 131,250 32,500 25,000(7) 283
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(1) For all officers, such amounts represent payments under the Company's
Management Incentive Plan, in which certain of the Company's officers and
other employees participate.
(2) For all officers except Mr. Simpson in 1997, amounts represent only group
term life premiums paid by the Company. With respect to Mr. Simpson in 1997,
$525,000 represents a separation payment and $1,755 represents a group term
life premium paid by the Company.
(3) Options granted in 1996 include the repricing of options granted in 1994
that were canceled in connection with an exchange of options with exercise
prices in excess of the then fair market value for new options with exercise
prices equal to the then fair market value.
(4) Mr. Simpson resigned from the Company effective October 31, 1997.
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(5) Options granted in 1995 represent the repricing of options granted in 1993
that were canceled in connection with an exchange of options with exercise
prices in excess of the then fair market value for new options with exercise
prices equal to the then fair market value.
(6) Mr. Van Hoesen's employment with the Company commenced May 20, 1996 and he
resigned from the Company effective March 16, 1998.
(7) Options granted in 1995 represent the repricing of options granted in 1994
that were canceled in connection with an exchange of options with exercise
prices in excess of the then fair market value for new options with exercise
prices equal to the then fair market value.
Option Grants in 1997
The following table sets forth information concerning the grant of stock
options during 1997 to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS(1)
---------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS FAIR ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO MARKET PRICE APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE VALUE OPTION TERM(2)(3)
GRANTED IN FISCAL PRICE ON DATE EXPIRATION -----------------------
NAME (#) YEAR ($/SH) OF GRANT DATE 5%($) 10%($)
---- ---------- ---------- -------- -------- ---------- --------- -----------
John R. Wall............... 80,000 11.9% $13.56 $13.56 12/16/07 $682,225 $1,728,892
James Simpson(4)........... 14,999 2.2% 15.50 15.50 1/31/98 11,624 23,248
15,001 2.2% 15.50 15.50 10/31/99 21,364 43,682
Kevin B. Vitale............ 65,000 9.7% 13.56 13.56 12/16/07 554,308 1,404,724
Richard Van Hoesen......... -- -- -- -- -- -- --
Alexandra A. Brookshire.... -- -- -- -- -- -- --
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(1) Options become fully vested and exercisable four years from the date of
grant, with 25% of the total option becoming fully vested and exercisable on
the first anniversary date of the grant and 2.0833% becoming fully vested
and exercisable each month thereafter so long as employment with the Company
continues. Upon the occurrence of certain business combination transactions,
the exercisability of the options is accelerated.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates required by applicable regulations of the Securities and
Exchange Commission (the "SEC") and, therefore, are not intended to forecast
possible future appreciation, if any, of the Common Stock price. Assumes all
options are exercised at the end of their respective 10-year terms. Actual
gains, if any, on stock option exercises depend on the future performance of
the Common Stock and overall stock market conditions, as well as the option
holders' continued employment through the vesting period. The amounts
reflected in this table may not be achieved.
(3) The increase in the market value of the holdings of all of the Company's
shareholders, over a 10-year period based on 9,312,480 shares of Common
Stock outstanding as of December 31, 1997, at assumed annual rates of
appreciation of 5% and 10% from a base price of $13.625 per share (the
closing market price as of December 31, 1997), would be $79,795,748 and
$202,218,091, respectively.
(4) Expiration dates and potential realizable values reflect options as amended
by the Separation Agreement and General Release. See "Employment Contract,
Termination of Employment and Change of Control Arrangements." As originally
granted, these options expired on January 20, 2007. The potential realizable
value of the option to purchase 14,999 shares was $146,208 at an assumed
annual rate of appreciation of 5% and $370,520 at an assumed annual rate of
appreciation of 10%. The potential realizable value of the
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option to purchase 15,001 shares was $146,228 at an assumed annual rate of
appreciation of 5% and $370,570 at an assumed annual rate of appreciation of
10%.
Option Exercises in 1997 and Fiscal Year-End Option Values
The following table sets forth information concerning the exercise of stock
options during 1997 by the named executive officers, and their options
outstanding at fiscal year-end.
AGGREGATED OPTION EXERCISES IN 1997 AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE YEAR-END(#) FISCAL YEAR-END($)(1)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- ----------- ------------- ----------- -------------
John R. Wall................ -0- -0- 246,666 110,834 $3,020,625 $4,960
James Simpson............... -0- -0- 394,900 0 3,556,283 --
Kevin B. Vitale............. -0- -0- 31,524 94,976 -- 4,030
Richard Van Hoesen.......... 3,541 $34,967 26,146 48,854 3,597 52,112
Alexandra A. Brookshire..... -0- -0- 18,229 14,271 -- --
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(1) Amounts equal the closing price of the Common Stock on December 31, 1997
($13.625 per share), less the option exercise price, multiplied by the
number of shares exercisable or unexercisable.
Compensation Committee Report on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee, which is comprised of four non-employee Directors. The
Compensation Committee works with management to develop compensation plans for
the Company and is responsible for determining the compensation of each
executive officer and reporting such compensation to the Board of Directors.
The Company's executive compensation program is designed to align executive
compensation with the Company's business objectives and the executive's
individual performance, and to enable the Company to attract, retain and reward
executive officers who contribute, and are expected to continue to contribute,
to the Company's long-term success. In establishing executive compensation, the
Compensation Committee is guided by the following principles: (i) the total
compensation for executive officers should be sufficiently competitive with the
compensation paid by other high-growth companies in the software industry for
officers in comparable positions so that the Company can attract and retain
qualified executives and (ii) individual compensation should include components
that reflect the financial performance of the Company and the performance of the
individual.
The compensation of the Company's executive officers consists of a
combination of base salary, bonuses and equity-based compensation. In general,
the Company's compensation program favors bonuses based on operating profit and
individual merit as opposed to salary increases. The Compensation Committee
believes that executive compensation should be designed to motivate executives
to increase shareholder value, and further believes that executive officers can
best increase shareholder value through the Company's operating profit by
conceiving, developing and positioning the best products in the Company's chosen
markets.
Compensation payments in excess of $1 million to the Chief Executive
Officer or the other four most highly compensated executive officers are subject
to a limitation on deductibility for the Company under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Certain performance-
based compensation is not subject to the limitation on deductibility. The
Compensation Committee does not expect cash compensation in 1998 to its Chief
Executive Officer or any other executive officer to be in excess of $1 million.
The Company's 1993 Plan is designed to qualify for the performance-based
exception to the $1 million limitation on deductibility of compensation
payments.
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Base Salary. The Compensation Committee sets the base salary for executive
officers by reviewing the salaries for comparable positions in high-growth
companies in the Company's industry, the historical compensation levels of the
Company's executives and the executive's individual performance in the preceding
year (based on the factors discussed under "Merit Bonus Program" below). The
Compensation Committee utilizes salary surveys for reference purposes, but its
salary determinations are not subject to specific criteria. For 1995 and 1996,
base salary for Mr. Wall also reflected the Company's obligations under his
employment agreement. See "Employment Contracts, Termination of Employment and
Change of Control Arrangements." In 1997, the base salaries of the executive
officers as a group were increased, based in part on the individual
contributions of the executives, at an average rate of approximately 6.9%.
Merit Bonus Program. Each year the Compensation Committee adopts a
management incentive plan that reflects the Compensation Committee's belief that
a portion of each executive officer's and other manager-level participant's
compensation should be tied to the achievement by the Company of its profit
goals and by each executive officer of his or her individual performance. The
1997 Management Incentive Plan (the "1997 Incentive Plan"), as revised in the
second half of the year, set operating profit goals and a merit bonus pool. In
addition, the 1997 Incentive Plan provided for both an increase and a decrease
in the merit bonus pool as a function of the Company's actual operating profit.
Under the 1997 Incentive Plan, executive officers are entitled to receive a
bonus of between 40 and 50% of base salary if the Company achieved its profit
goals for 1997 and the individual executive met or exceeded his or her
performance expectations. Based on the Company's 1997 operating profit, the
bonus pool was funded for executive officers at approximately 21% of base
salary, and the executive officers received bonuses equal to approximately 21%
of their base salaries.
Stock-Based Compensation. Awards of stock options under the Company's stock
option plans are designed to more closely tie the long-term interests of the
Company's executives with those of its shareholders and to assist in the
retention of executives. The Compensation Committee selects the executive
officers, if any, to receive stock options and determines the number of shares
subject to each option. The Compensation Committee's determination of the size
of option grants is generally intended to reflect an executive's position with
the Company and his or her contributions to the Company. Options generally have
a four-year vesting period to encourage key employees to continue in the
Company's employ. The Compensation Committee reviews the outstanding unvested
options of the key executives from time to time and may grant additional options
to encourage the retention of key executives. In 1997, a total of 175,000
options were granted to the executive officers.
Chief Executive Officer Compensation. The compensation for Mr. Wall, the
Company's Chief Executive Officer beginning August 1997, was determined based on
the same policies and criteria as the compensation for the other executive
officers. The Compensation Committee reviewed Mr. Wall's base salary and
increased it to $219,000 from its 1996 level of $194,000. The Compensation
Committee continued to utilize the 1997 Incentive Plan to tie Mr. Wall's
compensation to shareholder value by encouraging him to meet and exceed the
goals set forth in the Company's operating profit plan. The Compensation
Committee also granted to Mr. Wall options to purchase 80,000 shares in 1997.
The compensation for Mr. Simpson, the Company's Chief Executive Officer
through July 1997, also was determined based on the same policies and criteria
as the compensation for the other executive officers. The Compensation Committee
reviewed Mr. Simpson's annual base salary and did not increase it from its 1995
and 1996 level of $300,000. The Compensation Committee continued to utilize the
1997 Incentive Plan to tie Mr. Simpson's compensation to shareholder value by
encouraging him to meet and exceed the goals set forth in the Company's
operating profit plan. The Compensation Committee granted to Mr. Simpson an
option to purchase 30,000 shares. The Company also entered into a separation
agreement with Mr. Simpson. See "Employment Contracts, Termination of Employment
and Change of Control Arrangements."
The Compensation Committee
Bettie A. Steiger
Robert J. Frankenberg
David F. Millet
Steve Sarich, Jr.
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STOCK PRICE PERFORMANCE
The graph set forth below compares cumulative total return on the Common
Stock with the cumulative total return of the Nasdaq Total U.S. Index and the
Nasdaq Computer and Data Processing Index, resulting from an initial assumed
investment of $100 in each and assuming the reinvestment of any dividends, for
the period beginning on the date of the Company's initial public offering on
March 15, 1993 and ending on December 31, 1997. Stock price performance shown in
the Performance Graph for the Common Stock is historical and not necessarily
indicative of future price performance.
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
WALL DATA, NASDAQ TOTAL U.S. INDEX AND
NASDAQ COMPUTER AND DATA PROCESSING INDEX
NASDAQ COMPUTER
MEASUREMENT PERIOD AND DATA NASDAQ TOTAL U.S.
(FISCAL YEAR COVERED) PROCESSING INDEX INDEX WALL DATA
3/15/93 100 100 100
12/31/93 100 112 176
12/31/94 122 109 175
12/31/95 185 155 73
12/31/96 229 190 66
12/31/97 281 233 60
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
Separation Agreement
On June 30, 1997, the Company entered into a Separation Agreement and
General Release with Mr. Simpson in connection with his retirement from the
Company effective October 31, 1997. Under this agreement, the Company paid Mr.
Simpson a lump sum payment of $612,500 consisting of a separation payment and
partial bonus for the year. The Company also agreed to accelerate vesting of
options to purchase 67,501 shares held by Mr. Simpson and to extend the
post-termination exercise period for those options until October 31, 1999.
Option Plans
Upon a merger (other than a merger of the Company in which the holders of
Common Stock immediately prior to the merger have the same proportionate
ownership of common stock in the surviving
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corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the Company's shareholders receive cash, stock or other property in
exchange for or in connection with their shares of Common Stock, options granted
under the 1983 and the 1993 Amended and Restated Stock Option Plans will
terminate (with certain exceptions), but the optionee would have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation to exercise his or her option
in whole or in part whether or not the vesting requirements set forth in the
option agreement have been satisfied.
CERTAIN TRANSACTIONS
The Company and its subsidiaries purchased certain software, supplies and
services from Action Computer Supplies Limited ("Action Computer"), in which
Henry N. Lewis and members of his family hold controlling interests. Payments in
1997 for such purchases aggregated approximately $84,659. The Company believes
that these purchases and sales were on terms no less favorable to the Company
than could have been obtained from unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's Directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, Directors and greater-than-10% shareholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, the Company believes that, during the year ended December
31, 1997, its officers, Directors and greater-than-10% shareholders complied
with all Section 16(a) filing requirements, with the exception of Steve Sarich,
Jr., whose Form 4 for October 1997 was inadvertently filed late.
PROPOSAL 2: AMENDMENT OF THE 1993 PLAN
General. The 1993 Plan was originally adopted by the Board of Directors and
approved by the shareholders in January 1993. A restated 1993 Plan was adopted
by the Board of Directors in March 1994 and approved by shareholders in May
1994. An amended and restated 1993 Plan, incorporating changes under Section 16
of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") was
adopted by the Board of Directors in October 1996. Under the 1993 Plan, the
Company is presently authorized to issue 891,789 shares of Common Stock pursuant
to awards of incentive stock options and nonqualified stock options.
Proposed Amendment. The Board of Directors approved a proposed amendment to
the 1993 Plan on March 11, 1998 to reserve an additional 475,000 shares of
Common Stock for issuance pursuant to options granted under the 1993 Plan. The
Company's shareholders will be asked at the Annual Meeting to consider and
approve the amendment to the 1993 Plan. The Board of Directors believes that the
increase in the number of shares available under the 1993 Plan is necessary to
attract and retain the services of experienced and knowledgeable employees in
the competitive high-technology industry and to align the interests and efforts
of the Company's officers and employees to the long-term interest of the
Company's shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
Description of the 1993 Plan. Options may be granted under the 1993 Plan as
incentive stock options ("ISOs") or nonqualified stock options ("NSOs") to any
employee, officer, agent, consultant or independent contractor of the Company.
As of February 28, 1998, 47 of the Company's employees were participating in the
1993 Plan. As of February 28, 1998, options to purchase an aggregate of 676,749
shares of Common Stock
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were outstanding under the 1993 Plan (net of forfeitures by such employees who
subsequently terminated their employment with the Company) at exercise prices
ranging from $5.00 to $35.25 per share, with a weighted average exercise price
of $16.14 per share. As of February 28, 1998, options with respect to 33,336
shares of Common Stock remained available for grant under the 1993 Plan. In
1997, options to purchase an aggregate of 250,000 shares of Common Stock were
granted under the 1993 Plan to employees of the Company at exercise prices
ranging from $13.56 to $16.44 per share. In 1997, the following named executive
officers were granted options to purchase Common Stock under the 1993 Plan at
the fair market value on the date of grant: Mr. Wall, 80,000 shares; Mr.
Simpson, 30,000 shares; and Mr. Vitale 65,000 shares.
Administration. The 1993 Plan is currently administered by the Compensation
Committee of the Board of Directors (the "Plan Administrator"), which determines
the persons to whom options are granted, the number of shares subject to each
option, the exercise price per share, the vesting schedule and the option term.
The Plan Administrator has full authority to construe and interpret the 1993
Plan, to administer the 1993 Plan and to make all determinations in connection
with the 1993 Plan and options granted thereunder as it may deem necessary or
advisable.
Term. The 1993 Plan was effective as of January 7, 1993. Grants under the
1993 Plan may be made from time to time until January 7, 2003. Options granted
under the 1993 Plan may extend beyond that date and the terms and conditions of
the 1993 Plan will continue to apply to such options. With respect to all
incentive stock options granted under the 1993 Plan exercisable for the first
time by a participant during any calendar year that exceed $100,000, such
options shall be treated as nonqualified stock options. Options generally vest
25% after one year and at a rate of 2.0833% monthly thereafter from the date of
grant for existing employees and from the date of hire for a new employee's
initial grant. In addition, outstanding options vest upon the occurrence of
certain events, including certain mergers and business combinations and other
changes in control of the Company. Options are nontransferable except by will or
the laws of descent and distribution; however, to the extent permitted by
Section 422 of the Code, the Plan Administrator may permit a transfer. Options
granted under the 1993 Plan are typically exercisable until ten years after the
date of grant (five years in the case of incentive stock options granted to
employees who hold more than 10% of the voting power of the Common Stock).
Options generally terminate within 12 months of the optionee's termination of
employment with the Company for death or disability and within three months of
the optionee's termination of employment with the Company for most other
reasons.
Exercise of Options. The exercise prices of ISOs must be equal to or
greater than the fair market value of the Common Stock on the date of grant
(110% of the fair market value in the case of employees who hold 10% or more of
the voting power of the Common Stock). The exercise prices of NSOs may be less
than the fair market value of the Common Stock on the date of grant. The
exercise price may be paid to the Company in cash, check or, at the discretion
of the Plan Administrator, by delivering Common Stock already owned by the
optionee for a period of at least six months (valued at its fair market at the
time of exercise), a full-recourse promissory note, or an exercise notice
accompanied by irrevocable instructions to a broker to deliver sale or loan
proceeds to the Company. Upon exercise, the tax withholding obligations may be
satisfied by paying cash, having shares withheld or transferring shares to the
Company.
Federal Income Tax Consequences. The following discussion summarizes the
material federal income tax consequences of participation in the 1993 Plan. The
discussion is general in nature and does not address issues related to the tax
circumstances of any particular optionee. The discussion is based on federal
income tax laws in effect on the date hereof and is, therefore, subject to
possible future changes in law. The discussion does not address state, local or
foreign consequences. There are no tax consequences to the Company or the
optionee upon the grant of an NSO under the 1993 Plan. Upon the exercise of an
NSO, an optionee recognizes ordinary income (subject to tax withholding) equal
to the difference between the exercise price for the shares and the fair market
value of the shares on the date of exercise. The Company is entitled to a
corresponding tax deduction equal to the amount of income recognized by the
optionee at the time of exercise, provided that the deduction is not otherwise
subject to any limitation under the Code, including the limitation on
deductibility of certain compensation payments in excess of $1 million.
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An optionee does not recognize income upon the grant or exercise of an ISO,
except that the excess of the fair market value of the shares at the time of
exercise over the option price will generally be included in income for purposes
of calculating the optionee's alternative minimum tax, if any. An option loses
its status as an ISO if the optionee exercised the ISO (i) more than three
months after the optionee terminates employment or retires for reasons other
than death or disability or (ii) more than one year after the optionee
terminates employment because of disability. If an optionee does not make a
"disqualifying disposition" (defined below) of an ISO, the gain, if any, upon a
subsequent sale (i.e., the excess of the proceeds received over the optionee
price) will be "mid-term" capital gain if the shares are sold more than twelve
months but not more than eighteen months after exercise, and "long-term capital
gain" if the shares are sold more than eighteen months after exercise.
For shares acquired through exercise of an ISO, a "disqualifying
disposition" is a transfer of the shares (i) within two years after the grant of
the ISO or (ii) within one year after the transfer of the shares to the optionee
pursuant to the ISO's exercise. If the optionee makes a disqualifying
disposition, the optionee generally will recognize income in the year of the
disqualifying disposition equal to the excess of the amount received for the
shares over the option price. Of that income, the portion equal to the excess of
the fair market value of the shares at the time the ISO was exercised (or,
generally, the proceeds from the sale, if less) over the option price will be
ordinary income and the balance, if any, will be long-term, mid-term or
short-term capital gain, depending on how long the shares were held before the
sale.
The Company is entitled to a deduction with respect to an ISO only in the
taxable year of the Company in which a disqualifying disposition occurs. In that
event, the deduction would be equal to the ordinary income, if any, recognized
by the optionee upon disposition of the shares, provided that the deduction is
not otherwise subject to any limitation under the Code, including the limitation
on deductibility of certain compensation payments in excess of $1 million.
As of March 20, 1998, the last reported sale price per share of Common
Stock on the Nasdaq National Market was $15.38.
AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent
public accountants for the fiscal year ending December 31, 1998. Representatives
of Ernst & Young LLP are expected to attend the Annual Meeting and will have an
opportunity to make a statement or to respond to appropriate questions from
shareholders.
EXPENSES OF SOLICITATION
The accompanying proxy is solicited by and on behalf of the Board of
Directors, and the entire cost of such solicitation will be borne by the
Company. Georgeson & Company, Inc., New York, New York, will distribute proxy
materials to beneficial owners and may solicit proxies by personal interview,
mail, telephone and telegram, and will request brokerage houses and other
custodians, nominees and fiduciaries to forward soliciting material to the
beneficial owners of the Common Stock held on the record date by such persons.
The Company will pay Georgeson & Company, Inc. a fee of approximately $10,000,
plus reasonable expenses, to cover its services and will reimburse Georgeson &
Company, Inc. for payments made to brokers and other nominees for their expenses
in forwarding solicitation materials. Solicitation may be by personal interview,
telephone and telegram by Directors, officers and other employees of the Company
without special compensation.
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OTHER MATTERS
The Company knows of no other matters that are likely to be brought before
the Annual Meeting. If, however, other matters not now known or determined
properly come before the Annual Meeting, the persons named in the enclosed proxy
card or their substitutes will vote such proxy in accordance with their
discretion with respect to such matters.
PROPOSALS OF SHAREHOLDERS
For proposals of shareholders to be considered for inclusion in the Proxy
Statement and proxy for the 1999 Annual Meeting of Shareholders, such proposals
must be received by the Secretary of Wall Data by December 9, 1998.
ANNUAL REPORT
Copies of the Company's 1997 Summary Annual Report and Form 10-K for the
fiscal year ended December 31, 1997 are being mailed with this Proxy Statement
to each shareholder of record. Shareholders not receiving such documents may
obtain them without charge by writing or calling Investor Relations, Wall Data
Incorporated, 11332 N.E. 122nd Way, Kirkland, Washington 98034-6931, telephone
(800) 755-9255.
By Order of the Board of Directors
/s/ ALEXANDRA A. BROOKSHIRE
ALEXANDRA A. BROOKSHIRE
Vice President and Secretary
Kirkland, Washington
April 8, 1998
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PROXY
WALL DATA INCORPORATED
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS -- MAY 20, 1998
The undesigned hereby appoint(s) John R. Wall, Kevin B. Vitale and Alexandra A.
Brookshire and each of them as proxies, with full power of substitution, to
represent and vote as designated all shares of Common Stock of Wall Data
Incorporated held of record by the undersigned on March 20, 1998 at the Annual
Meeting of Shareholders of the Company to be held at the Sheraton Seattle, 1400
Sixth Avenue, Seattle, Washington, at 10:00 a.m. on Wednesday, May 20, 1998, or
any adjournment or postponement thereof, with authority to vote upon the matters
listed on the other side of this proxy card and with discretionary authority as
to any other matters that may properly come before the meeting.
IMPORTANT -- PLEASE DATE AND SIGN ON THE OTHER SIDE.
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FOLD AND DETACH HERE
19
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE. / X /
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR THE NOMINEES" IN ITEM 1 AND "FOR" ITEM 2.
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FOR WITHHOLD AUTHORITY
1. ELECTION OF DIRECTORS ALL NOMINEES TO VOTE FOR ALL NOMINEES 2. APPROVAL OF AMENDMENT TO FOR AGAINST ABSTAIN
/ / / / 1993 STOCK OPTION PLAN / / / / / /
NOMINEES: DAVID F. MILLET
STEVE SARICH, JR.
BETTIE A. STEIGER
KEVIN B. VITALE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE SHAREHOLDER IN THE SPACE PROVIDED. IF NO DIRECTON IS GIVEN, THIS
PROXY WILL BE VOTED "FOR THE NOMINEES" IN ITEM 1 AND "FOR" ITEM 2.
INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL
NOMINEE, PRINT THE NOMINEE'S NAME IN THE FOLLOWING SPACE:
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Signature(s) Date
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Please sign exactly as your name appears hereon. Attorneys, trustees, executors and the other fiduciaries acting in a
representative capacity should sign their names and give their titles. An authorized person should sign on behalf of corporations,
partnerships, associations, etc., and give his or her title. If your shares are held by two or more persons, each person must sign.
Receipt of the notice of meeting and proxy statement is hereby acknowledged.
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FOLD AND DETACH HERE