SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
TII Industries, Inc.
----------------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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2) Aggregate number of securities to which transaction applies:
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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4) Date Filed:
TII INDUSTRIES, INC.
1385 AKRON STREET
COPIAGUE, NEW YORK 11726
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 7, 1999
------------------
To the Stockholders of
TII Industries, Inc.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
TII Industries, Inc., a Delaware corporation (the "Company"), will be held at
the Huntington Hilton, 598 Broadhollow Road, Melville, New York, on Tuesday,
December 7, 1999 at 3:00 p.m., New York time, at which the following matters are
to be presented for consideration:
1. The election of three Class II directors to serve until the
Annual Meeting of Stockholders to be held in the year 2002 and
until their respective successors are elected and qualified;
2. A proposal to ratify the selection by the Board of Directors of
Arthur Andersen LLP as the Company's independent public
accountants for the fiscal year ending June 30, 2000; and
3. The transaction of such other business as may properly come
before the meeting or any adjournments or postponements thereof.
The close of business on October 15, 1999 has been fixed as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the meeting and any adjournments or postponements thereof. A list of such
stockholders will be open for examination by any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting at the offices of the Company, 1385 Akron Street,
Copiague, New York.
By Order of the Board of Directors,
Dorothy Roach,
Secretary
October 25, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE ENCLOSED ENVELOPE IN THE UNITED STATES.
TII INDUSTRIES, INC.
1385 AKRON STREET
COPIAGUE, NEW YORK 11726
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 7, 1999
------------------------
This Proxy Statement, to be mailed to stockholders of TII Industries,
Inc., a Delaware corporation (the "Company"), on or about October 25, 1999, is
furnished in connection with the solicitation by the Board of Directors of the
Company of proxies in the accompanying form ("Proxy" or "Proxies") to be used at
the Annual Meeting of Stockholders of the Company to be held on Tuesday,
December 7, 1999 at 3:00 p.m., New York time, and at any adjournments or
postponements thereof (the "Meeting"). The Meeting will be held at the
Huntington Hilton, 598 Broadhollow Road, Melville, New York.
The close of business on October 15,1999 has been fixed as the record
date (the "Record Date") for the determination of stockholders entitled to
notice of, and to vote at, the Meeting. On the Record Date, there were
outstanding 8,832,898 shares of the Company's Common Stock ("Common Stock"). The
presence, in person or by proxy, of a majority of all such shares, will
constitute a quorum for the transaction of business at the Meeting. Each
outstanding share of Common Stock on the Record Date is entitled to one vote on
all matters to be voted on at the Meeting. A plurality of the votes of shares
present in person or represented by proxy at the Meeting and entitled to vote
thereon will be required for the election of directors (Proposal 1) and the
affirmative vote of a majority of the shares present in person or represented by
proxy at the Meeting and entitled to vote thereon will be required to ratify the
selection of Arthur Andersen LLP as the Company's independent public accountants
for the fiscal year ending June 30, 2000 (Proposal 2).
Proxies properly executed and received in time for the Meeting will be
voted in accordance with the specifications made thereon or, in the absence of
specification, for all nominees named herein to serve as directors and to ratify
the selection of Arthur Andersen LLP as the Company's independent public
accountants. The Board of Directors does not intend to bring before the Meeting
any matter other than those described above, and has not received notice of and
is not aware of any other matters that are to be presented by stockholders for
formal action at the Meeting. If, however, any other matters or motions come
before the Meeting, it is the intention of the persons named in the accompanying
Proxy to vote such Proxy in accordance with their judgment on such matters or
motions, including any matters dealing with the conduct of the Meeting. Proxies
submitted which contain abstentions or broker non-votes will be deemed present
at the Meeting for determining the presence of a quorum. Abstentions and broker
non-votes will have no effect on the election of directors or the outcome of the
vote concerning the ratification of independent public accountants. Any Proxy
may be revoked by the person giving it at any time prior to the exercise of the
powers conferred thereby by a written notice of revocation to the Secretary of
the Company, 1385 Akron Street, Copiague, New York 11726, by submitting a duly
executed proxy bearing a later date at the foregoing address or at the Meeting,
or by voting in person at the Meeting.
-1-
SECURITY HOLDINGS OF CERTAIN
STOCKHOLDERS, MANAGEMENT AND NOMINEES
The following table sets forth information, as of the Record Date, with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person (including any "group", as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934) known by the Company to beneficially own more
than 5% of the outstanding shares of the Company's Common Stock, (ii) each
director and nominee to serve as a director of the Company, (iii) each executive
officer named in the Summary Compensation Table under the caption "Executive
Compensation", below, and (iv) all executive officers and directors of the
Company as a group. The Company understands that, except as noted below, each
beneficial owner has sole voting and investment power with respect to all shares
attributable to such owner.
PERCENT
SHARES OF
BENEFICIAL OWNER OWNED CLASS (1)
- ---------------- ------- ---------
Alfred J. Roach 811,600 (2) 9.1%
1385 Akron Street
Copiague, NY 11726
Dorothy Roach 53,536 (3) *
1385 Akron Street
Copiague, NY 11726
Timothy J. Roach 577,013 (4) 6.5%
1385 Akron Street
Copiague, NY 11726
George S. Katsarakes 30,000 (5) *
C. Bruce Barksdale 15,798 (6) *
James R. Grover, Jr. 83,600 (7) *
Joseph C. Hogan 89,330 (8) 1.0%
William G. Sharwell 90,000 (9) 1.0%
James A. Roach 31,488 (10) *
Paul G. Sebetic 10,000 (11) *
All executive officers and 1,814,565 (12) 19.5 %
directors as a group
(11 persons)
- ----------------
(1) Asterisk indicates that the percentage is less than one percent.
Percent of Class assumes the issuance of the Common Stock issuable upon
the exercise of options (to the extent exercisable on or within 60 days
after the Record Date) held by such person but (except for the
calculation of beneficial ownership by all executive officers and
directors as a group) by no other person or entity.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
-2-
(2) Includes 100,360 shares subject to options held under the Company's
stock option plans. Excludes the shares owned by Mr. Roach's wife,
Dorothy Roach, reflected below in this table, as to which shares Mr.
Roach disclaims beneficial ownership.
(3) Excludes the shares owned by Mrs. Roach's husband, Alfred J. Roach,
reflected above in this table, as to which shares Mrs. Roach disclaims
beneficial ownership.
(4) Includes 968 shares owned by Mr. Roach's wife (who has sole voting and
dispositive power with respect to the shares owned by her and as to
which Mr. Roach disclaims beneficial ownership) and 66,000 shares
subject to options held under the Company's stock option plans.
(5) Includes 20,000 shares subject as options held under the Company's
stock option plans.
(6) Includes 78 shares owned by Mr. Barksdale's children and 7,800 shares
subject to options held under the Company's stock option plans.
(7) Includes 80,000 shares subject to options held under the Company's
stock option plans.
(8) Includes 89,250 shares subject to options held under the Company's
stock option plans.
(9) Includes 89,400 shares subject to options held under the Company's
stock option plans.
(10) Includes 1,000 shares owned by Mr. Roach's wife (who has sole voting
and dispositive power with respect to the shares owned by her and as to
which Mr. Roach disclaims beneficial ownership) and 13,000 shares
subject to options held under the Company's stock option plans.
(11) Represents 10,000 shares subject to options under the Company's stock
option plans.
(12) Includes 494,802 shares subject to options under the Company's stock
option plans.
-3-
PROPOSAL 1.
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and By-Laws provide
that the Board of Directors shall be divided into three classes, designated
Class I, Class II and Class III. These classes are to be as nearly equal in
number as the then total number of directors constituting the entire Board of
Directors permits, with each class to include not less than two directors. The
term of office of Class II directors continues until the Meeting, the term of
office of Class III directors continues until the next succeeding annual meeting
of stockholders and the term of office of Class I directors continues until the
second succeeding annual meeting of stockholders, and, in each case, until their
respective successors are elected and qualified. At each annual meeting,
directors are chosen to succeed those in the class whose term expires at that
meeting.
The Company's Board of Directors presently consists of eight directors.
Each director was previously elected by the Company's stockholders, except
George S. Katsarakes, who was elected as a Class II director by the Board of
Directors. The terms of James R. Grover, Jr., George S. Katsarakes and Dorothy
Roach, the present Class II directors, will expire at the Meeting. At the
Meeting, holders of Common Stock will elect three Class II directors to serve
until the Annual Meeting of Stockholders to be held in the year 2002 and until
their respective successors are elected and qualified. Unless otherwise
directed, the persons named in the enclosed Proxy intend to cast all votes
pursuant to Proxies received for the election of James R. Grover, Jr., George S.
Katsarakes and Dorothy Roach (the "nominees") to serve as Class II directors.
In the event that any of the nominees should become unavailable or
unable to serve for any reason, the holders of Proxies have discretionary
authority to vote for one or more alternate nominees who will be designated by
the Board of Directors. The Company believes that all of the nominees are
available to serve as directors.
BACKGROUND OF NOMINEES
CLASS II DIRECTORS
James R. Grover, Jr., 80, has been a director of the Company since
1978. Mr. Grover has been engaged in the private practice of law since 1974 and
has been General Counsel to the Company since 1977.
George S. Katsarakes, 62, has been Executive Vice President and Chief
Operating Officer of the Company since he joined the Company in January 1998.
From January 1994 until he joined the Company, Mr. Katsarakes held senior-level
positions, most recently, Executive Vice President, at Eagle Manufacturing
Company, Inc., a manufacturer of high-technology electrical wiring devices. From
December 1978 until January 1994, Mr. Katsarakes held several general management
and plant management positions with Pratt & Whitney and Otis Elevator Company,
subsidiaries of United Technologies Corporation, a provider of a broad range of
products to the commercial and defense industries. Mr. Katsarakes holds an
industrial/mechanical engineering degree from Northeastern University and a
Masters of Business Administration degree from Harvard Business School.
Dorothy Roach, 76, has been Secretary of the Company since 1971, served
as Treasurer of the Company from 1979 to December 1993 and, except for a brief
period, has been a director of the Company since 1964.
-4-
BACKGROUND OF DIRECTORS WHOSE TERMS OF OFFICE CONTINUE AFTER THE MEETING
CLASS I DIRECTORS
C. Bruce Barksdale, 68, has been a Vice President of the Company since
August 1971, serving as Senior Vice President (responsible for customer and
product development) since October 1993, and has been a director of the Company
since 1974. Mr. Barksdale holds a Bachelor of Science degree in Electrical
Engineering from the University of South Carolina.
Joseph C. Hogan, Ph.D., 77, has been a director of the Company since
January 1974. Dr. Hogan served as Dean of the College of Engineering of the
University of Notre Dame from 1967 to 1981, following which he performed various
services for the University of Notre Dame until 1985, where he remains Dean
Emeritus. From 1985 until his retirement in 1987, Dr. Hogan was a Director of
Engineering Research and Resource Development at Georgia Institute of
Technology. He is past President of the American Society of Engineering
Education. Dr. Hogan is a director of American Biogenetic Sciences, Inc.
("ABS").
William G. Sharwell, D.C.S., 79, has been as a director of the Company
since October 1995. Dr. Sharwell was President of Pace University in New York
from 1984 until his retirement in 1990. He was Senior Vice President of American
Telephone & Telegraph Company (now AT&T Corporation) between 1976 and 1984, and
previously served as Executive Vice President of Operations of New York
Telephone Company (now Bell Atlantic Corporation). Dr. Sharwell serves as a
director of ABS.
CLASS III DIRECTORS
Alfred J. Roach, 84, has served as Chairman of the Board of Directors
and a director of the Company and its predecessor since its founding in 1964 and
was Chief Executive Officer of the Company from the Company's founding until
January 1995. Since September 1983, Mr. Roach has also served as Chairman of the
Board of Directors of ABS, a biotechnology research company.
Timothy J. Roach, 52, has served the Company in various capacities
since December 1973. He has been President of the Company since July 1980, Vice
Chairman of the Board since October 1993, Chief Executive Officer since January
1995 and a director since January 1978. Mr. Roach also served as Chief Operating
Officer of the Company from May 1987 until January 1998. Mr. Roach was a Captain
in the United States Air Force for four years prior to joining the Company and
is a graduate of Harvard University's Business School Program for Management
Development. Mr. Roach has also served as Treasurer, Secretary and a director of
ABS since September 1983.
Alfred J. Roach and Dorothy Roach are married and the parents of
Timothy J. Roach. There are no other family relationships among the Company's
directors.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During the Company's fiscal year ended June 25, 1999, the Company's
Board of Directors held five meetings. In addition, during that fiscal year, the
Board also acted by unanimous written consent on five occasions following
informal discussions.
The Board of Directors has Audit and Compensation Committees. The Board
does not have a standing nominating committee or committee performing a similar
function.
The principal functions of the Audit Committee are to nominate
independent auditors for appointment by the Board; meet with the independent
auditors to review and approve the scope of their audit engagement and the fees
related to such work; meet with the Company's financial management and
independent auditors to review matters relating to internal accounting controls,
the Company's accounting practices and procedures and other matters relating to
the financial condition of the Company; and report to the Board periodically
with respect to
-5-
such matters. The members of the Audit Committee are James R. Grover, Jr.,
Joseph C. Hogan and William G. Sharwell. The Audit Committee met on one
occasion, and acted by unanimous written consent on one occasion following
informal discussions, during the Company's fiscal year ended June 25, 1999.
The Compensation Committee is authorized to consider and recommend to
the Board of Directors salaries, bonuses and other compensation arrangements
with respect to the executive officers of the Company; grant options under, and
administer, the Company's present and future employee stock option plans;
examine, administer and make recommendations to the full Board of Directors with
respect to other employee benefit plans and arrangements of the Company and its
subsidiaries; and report to the Board periodically with respect to such matters.
The present members of the Compensation Committee are Joseph C. Hogan and
William G. Sharwell. While the Compensation Committee held no formal meeting, it
acted by unanimous written consent on eleven occasions following informal
discussions during the Company's fiscal year ended June 25, 1999.
During the Company's fiscal year ended June 25, 1999, each director
attended at least 75% of the aggregate number of Board of Directors meetings and
meetings of all committees on which such director served that were held during
the portion of the year such person served as a director, except Dorothy Roach
who attended three of the five meetings of the Board held during the year ended
June 25, 1999.
REQUIRED VOTE
A plurality of the votes of the shares present in person or represented
by proxy at the Meeting and entitled to vote for the election of directors will
elect directors.
The Board of Directors recommends that stockholders vote FOR each of
James R. Grover, Jr., George S. Katsarakes and Dorothy Roach to serve as Class
II directors.
EXECUTIVE OFFICERS
In addition to Alfred J. Roach, Timothy J. Roach, George S. Katsarakes,
C. Bruce Barksdale and Dorothy Roach, the following are also executive officers
of the Company:
Virginia M. Hall, 46, has served the Company in various capacities
since February 1976, serving as Vice President-Administration since December
1993 and Vice President-Contract Administration from September 1990 until
December 1993.
James A. Roach, 46, has served the Company in various capacities since
January 1982, serving as Vice President-Marketing and Sales since July 1987.
Paul G. Sebetic, 35, has been Vice President-Finance and Chief
Financial Officer of the Company since October 1996. Mr. Sebetic joined the
Company in April 1996 as Corporate Controller. From November 1992 until joining
the Company, Mr. Sebetic held various financial management positions with V Band
Corporation, a telecommunications equipment manufacturer, serving as Controller
since August 1995. From February 1991 through August 1992, Mr. Sebetic was the
Financial Controller of the European operations of MacDermid Inc., a specialty
chemical manufacturer. Mr. Sebetic is a Certified Public Accountant and holds a
Masters of Business Administration degree in Finance from New York University.
Alfred J. Roach and Dorothy Roach are married. Timothy J. Roach is
their son and James A. Roach is their nephew. There are no other family
relationships among the Company's directors and executive officers.
Officers hold office until their successors are chosen and qualified.
Any officer elected or appointed by the Board of Directors may be removed at any
time by the Board. See "Executive Compensation - Employment Agreements" for
information concerning the Company's Employment Agreements with Timothy J.
Roach, George S. Katsarakes, James A. Roach and Paul G. Sebetic.
-6-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the Company's three fiscal years
ended June 25, 1999, information concerning the compensation paid by the Company
to Timothy J. Roach, who served as the Company's Chief Executive Officer during
all of fiscal 1999, and each of the four other most highly compensated persons
who were serving as executive officers of the Company at the end of fiscal 1999
(the "Named Executive Officers"):
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARD
NAME AND --------------------- STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION
- ------------------ ---- ------ ----- ------------ ------------
Timothy J. Roach 1999 $250,000 $ -- 380,000 (1) $7,782 (2)
President and Chief 1998 243,654 -- 100,000 7,877
Executive Officer 1997 193,985 6,976 50,000 7,521
Alfred J. Roach 1999 150,000 200 (3) 310,000 (1) --
Chairman of the Board 1998 150,000 200 (3) 60,000 --
1997 150,000 200 (3) 50,000 --
George S. Katsarakes 1999 247,577 24,000 (4) 125,000 (1) --
Executive Vice 1998 95,192 (4) 24,000 (4) 100,000 --
President and Chief
Operating Officer
James A. Roach 1999 131,700 -- 65,000 (1) --
Vice President - 1998 130,738 -- 25,000 --
Marketing and Sales 1997 111,564 44,209 (5) -- --
Paul G. Sebetic 1999 120,192 15,000 65,000 (1) --
Chief Financial 1998 113,846 -- 25,000 --
Officer 1997 105,254 3,503 25,000 --
- -------------------------
(1) Includes 380,000, 310,000, 100,000, 65,000 and 50,000 options for
Timothy J. Roach, Alfred J. Roach, George S. Katsarakes, James A.
Roach and Paul G. Sebetic, respectively, that were either modified or
granted in exchange for the cancellation of other options. See "Report
on Repricing of Options."
(2) Includes (i) $1,169, representing the dollar value to Mr. Roach of the
portion of the premium paid by the Company under a split dollar life
insurance policy during such year with respect to the deemed term life
insurance portion of the premiums and (ii) $6,613, representing the
annual premium paid by the Company on long-term disability insurance
maintained by the Company for the benefit of Mr. Roach.
(3) Required to be paid under Puerto Rico law.
(4) Mr. Katsarakes joined the Company in January 1998. The bonuses paid to
Mr. Katsarakes in fiscal 1998 and 1999 were paid as an inducement to
him to join the Company.
(5) Commissions based on sales.
-7-
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning options granted
during the Company's fiscal year ended June 25, 1999 to the Named Executive
Officers:
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (4)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -----------------------
NAME GRANTED (1) FISCAL YEAR (2) SHARE (3) DATE (3) 5% 10%
- ---- ----------- --------------- --------- ---------- --------- --------
Timothy J. Roach 100,000 4.4% $1.56 10/08/2008 $ 98,108 $248,624
Timothy J. Roach 230,000 10.2% $2.31 12/07/2008 $334,132 $846,755
Timothy J. Roach 50,000 2.2% $1.59 04/06/2009 $ 49,997 $126,703
Alfred J. Roach 100,000 4.4% $1.56 10/08/2008 $ 98,108 $248,624
Alfred J. Roach 200,000 8.9% $2.31 12/07/2008 $290,549 $736,309
Alfred J. Roach 10,000 0.4% $1.59 04/06/2009 $ 9,999 $ 25,341
George S. Katsarakes 100,000 4.4% $1.56 10/08/2008 $ 98,108 $248,624
George S. Katsarakes 25,000 1.1% $1.75 12/28/2008 $ 27,514 $ 69,726
James A. Roach 25,000 1.1% $1.56 10/08/2008 $ 24,527 $ 62,156
James A. Roach 40,000 1.8% $2.31 12/07/2008 $ 58,110 $147,262
Paul G. Sebetic 50,000 2.2% $1.56 10/08/2008 $ 49,054 $124,312
Paul G. Sebetic 15,000 0.7% $1.69 05/23/2009 $ 15,942 $ 40,401
__________________________
(1) Except for the options to purchase 25,000 and 15,000 shares of Common
Stock granted to George S. Katsarakes and Paul G. Sebetic,
respectively, the options reflected in this column were either granted
in exchange for the cancellation of other options or deemed granted as
a result of the modification of the reflected option. See "Report on
Repricing of Options."
(2) Based on options granted to all employees during fiscal year 1999 and
options that were either modified or granted in exchange for the
cancellation of other options.
(3) The exercise price of each option as granted or modified was equal to
the market value of the Company's Common Stock on the date of grant or
modification and is exercisable during a ten year period ending on the
date set forth under the "Expiration Date" column (subject to early
termination in certain instances). The options vest in five equal
annual installments commencing one year after the date of grant or
modification.
(4) These are hypothetical values using assumed compound growth rates
prescribed by the Securities and Exchange Commission and are not
intended to forecast possible future appreciation, if any, in the
market price of the Company's Common Stock.
-8-
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table contains information with respect to (i) options
exercised by the Named Executive Officers during the Company's fiscal year ended
June 25, 1999 and (ii) the fiscal year-end value of unexercised options held by
the Named Executive Officers:
IN-THE-MONEY
VALUE OF UNEXERCISED
NUMBER OF OPTIONS HELD AT
UNEXERCISED OPTIONS FISCAL
NUMBER OF HELD AT FISCAL YEAR- YEAR-END
SHARES ACQUIRED VALUE END (EXERCISABLE/ (EXERCISABLE/
NAME ON EXERCISE REALIZED(1) UNEXERCISABLE) UNEXERCISABLE) (2)
- ---- --------------- ----------- -------------------- --------------------
Alfred J. Roach -- -- 40,360/310,000 -- /$40,940
Timothy J. Roach 2,275 $5,403 -- /380,000 -- /$54,700
George S. Katsarakes -- -- -- /125,000 -- /$42,200
James A. Roach -- -- -- / 65,000 -- /$ 9,375
Paul G. Sebetic -- -- -- / 65,000 -- /$22,508
____________________________
(1) Represents the number of underlying shares of Common Stock multiplied
by the closing price per share of Common Stock on the date of exercise
of the option less the exercise price of the option.
(2) Represents the number of underlying shares of Common Stock for
in-the-money options multiplied by the difference between the closing
price of the Common Stock at fiscal year-end and the option exercise
price.
REMUNERATION OF DIRECTORS
Non-employee directors receive a fee of $1,000 for each meeting of the
Board attended in person and members of Committees of the Board receive a fee of
$500 for each Board Committee meeting attended. Non-employee directors are also
granted options to purchase 10,000 shares of the Company's Common Stock under
the Company's 1994 Non-Employee Director Stock Option Plan at the time such
person becomes a non-employee director and immediately following each annual
meeting of stockholders at which directors are elected. In addition, during the
year ended June 25, 1999, Messrs. James R. Grover, Jr., Joseph C. Hogan and
William G. Sharwell, the Company's non-employee directors, were granted options
under the Company's 1998 Stock Option Plan to purchase 35,000, 44,250 and 44,400
shares of the Company's Common Stock, respectively. Each option held by
non-employee directors is exercisable for a period of ten years following the
date of grant (subject to earlier termination at specified times following a
non-employee director's cessation of service) at an exercise price equal to 100%
of the fair market value on the date of grant of the shares subject thereto.
-9-
REPORT ON REPRICING OF OPTIONS
The Compensation Committee and the full Board of Directors of the
Company consider options a useful means of both enabling the Company to provide
long-term incentive to optionees and inducing employees to remain in the employ
of the Company, while enabling the Company to conserve cash for operations and
growth and tying the optionee's interests to the interests of stockholders
through stock ownership and potential stock ownership.
While all outstanding (and exercised) options under each of the
Company's employee stock option plans at October 8, 1998 had been granted at
exercise prices at least equal to 100% of the market value of the Company's
Common Stock on the date of grant, the exercise prices of many of the
outstanding options on October 8, 1998 were well in excess of the market value
of the Company's Common Stock. As a result, the Compensation Committee and the
Board of Directors believed that those options were not providing the
performance and employment retention incentives intended by these plans.
Accordingly, on October 8, 1998, the Board determined that it was in
the best interests of the Company to offer all optionees (other than holders of
options granted under the Company's 1994 Non-Employee Director Stock Option
Plan) the ability to modify their existing options to reduce the exercise prices
thereof to an amount equal to at least 100% of the market value of the Company's
Common Stock on the date of the Board's action with respect to the option and
begin a new ten-year term therefor in exchange for a new vesting schedule
pursuant to which the options would vest in five equal annual installments
commencing one year after the date of the Board's action with respect to the
option.
To implement the Board's determination: (a) the Board and the
Compensation Committee extended an offer, in accordance with the terms of the
Company's 1995 Stock Option Plan (the "1995 Plan"), to each person holding
options under that plan to amend the optionee's existing options under the 1995
Plan to provide for an exercise price equal to $1.563 per share of Common Stock
(the average of the high and low sales prices per share of Common Stock on such
date) and a ten-year term beginning October 8, 1998, but with a vesting schedule
such that the option could only be exercised at the rate of 20% per annum of the
number of shares subject to the option beginning October 8, 1999 (except that,
as a result of certain limitations in the 1995 Plan, similar modifications of
options covering 50,000 and 10,000 shares of Common Stock held by Timothy J.
Roach and Alfred J. Roach, respectively, were made on April 7, 1999 at the
market price of the Company's Common Stock of $1.59 per share at that time after
having been inadvertently modified on October 8, 1998); (b) the Board adopted,
subject to stockholder approval (which approval was obtained at the Company's
1998 Annual Meeting of Stockholders), the Company's 1998 Stock Option Plan (the
"1998 Plan"); and (c) the Compensation Committee extended an offer to holders of
options outstanding under the Company's 1983 Stock Option Incentive Plan and
1996 Stock Option Plan (which plans did not permit the grant of options or
option modifications similar to those implemented under the 1995 Plan) to
exchange their existing options for new options with an exercise price equal to
$2.31 per share of Common Stock (the average of the high and low sales prices
per share of Common Stock on December 8, 1998, the date of the Company's
stockholders approved the 1998 Plan) and a ten-year term commencing on such
date, but with a vesting schedule described above.
Except therefor, no options granted to executive officers have ever
been repriced or substituted by the Company in a manner which reduced the option
exercise price. The following table sets forth information concerning options
held by the Named Executive Officers which were either modified under the 1995
Plan or
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granted under the 1998 Plan to replace options under the 1983 Plan and 1986 Plan
in the manner described above:
DATE FAIR MARKET VALUE LENGTH OF ORIGINAL
OF NUMBER OF AT TIME OF OPTION TERM
ORIGINAL YEAR OF UNDERLYING AMENDMENT EXERCISE PRICE OF NEW EXERCISE REMAINING AT DATE
NAME GRANT OPTION PLAN SHARES OR NEW GRANT OLD OPTION PRICE (1) OF AMENDMENT (2)
- ---- -------- ----------- ---------- ---------------- -----------------
Timothy J. Roach 1/9/92 1986 30,000 $ 2.31 $3.13 $ 2.31 3.1
Timothy J. Roach 9/14/94 1986 100,000 2.31 4.63 2.31 5.8
Timothy J. Roach 5/15/95 1986 100,000 2.31 5.13 2.31 6.4
Timothy J. Roach 7/25/96 1995 50,000 1.56 4.50 1.56 7.8
Timothy J. Roach 12/30/97 1995 50,000 1.56 4.38 1.56 9.2
Timothy J. Roach 12/30/97 1995 50,000 1.59 4.38 1.59 8.7
Alfred J. Roach 9/14/95 1986 100,000 2.31 4.63 2.31 6.8
Alfred J. Roach 5/15/96 1986 100,000 2.31 5.13 2.31 7.4
Alfred J. Roach 7/25/96 1995 50,000 1.56 4.50 1.56 7.8
Alfred J. Roach 12/30/97 1995 50,000 1.56 4.38 1.56 9.2
Alfred J. Roach 12/30/97 1995 10,000 1.59 4.38 1.59 8.7
George S. Katsarakes 1/21/98 1995 100,000 1.56 5.88 1.56 9.3
James A. Roach 9/21/93 1986 10,000 2.31 6.09 2.31 4.8
James A. Roach 9/14/94 1986 20,000 2.31 4.63 2.31 5.8
James A. Roach 7/3/95 1986 10,000 2.31 6.75 2.31 6.6
James A. Roach 12/30/97 1995 25,000 1.56 4.38 1.56 9.2
Paul G. Sebetic 7/25/96 1995 15,000 1.56 4.50 1.56 7.8
Paul G. Sebetic 10/23/96 1995 10,000 1.56 5.25 1.56 8.0
Paul G. Sebetic 12/30/97 1995 25,000 1.56 4.38 1.56 9.2
__________________________
(1) The average of the high and low sales prices of the Company's Common
Stock on the date of grant of the replacement option or modification of
the previously granted option.
(2) In years and tenths of years as of the date of grant of the replacement
option or modification of the previously granted option.
Respectfully submitted,
C. Bruce Barksdale Alfred J. Roach
James R. Grover, Jr. Dorothy Roach
Joseph C. Hogan Timothy J. Roach
George S. Katsarakes William G. Sharwell
EMPLOYMENT AGREEMENTS
The Company and Timothy J. Roach are parties to an Amended and Restated
Employment Agreement, effective as of August 1, 1997, pursuant to which Mr.
Roach is serving as the Company's President and Chief Executive Officer. The
Amended and Restated Employment Agreement replaced Mr. Roach's former Employment
Agreement, which expired on July 31, 1997. The Amended and Restated Employment
Agreement provides for a five-year term presently ending July 31, 2004, with
automatic one-year extensions on each July 31 during the term unless either
party gives notice of termination at least 90 days prior to such July 31. Under
the Amended and Restated Employment Agreement, Mr. Roach is presently entitled
to an annual salary of $250,000 per year, subject to increases and bonuses at
the discretion of the Board of Directors. In addition, the agreement requires
the Company to provide Mr. Roach with an allowance, not to exceed 20% of his
then salary, to reimburse him for the cost of maintaining a secondary residence
in Puerto Rico, where the Company maintains its gas tube manufacturing
facilities. The Company also is to continue to maintain insurance benefits
provided Mr. Roach at levels and terms no less favorable than in effect on
August 1, 1997. Mr. Roach has agreed, among other things, not to disclose
confidential information of the Company and not to directly or indirectly
engage, during the term of the agreement and for two years thereafter, in any
activity which is competitive with the
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Company's business. In consideration for such covenant, Mr. Roach is to receive,
for each year during the two-year period following termination of his
employment, an amount equal to his highest salary rate in effect at any time
during the one-year period preceding the date of such termination unless Mr.
Roach's employment is terminated by reason of his death, voluntary termination
other than for "good reason" (in general, adverse changes in his powers, duties,
position or compensation or certain changes in the location where his duties are
to be performed), or for cause and he is capable of providing day-to-day
services to a competitor. In the event of termination of employment by reason of
death or disability, Mr. Roach or his beneficiary is entitled to receive a
continuation of his compensation for a period of one year and two years,
respectively. In the event Mr. Roach terminates his employment for "good
reason," the Company will also be required to pay him a sum equal to three times
the amount of his highest annual salary and highest bonus for the current or two
preceding fiscal years, subject to reduction as to any amount that would
constitute a "parachute payment" under the Internal Revenue Code of 1986, as
amended, to the maximum amount that would not constitute such a "parachute
payment." In the event of the termination of Mr. Roach's employment other than
for cause, all outstanding stock options then held by Mr. Roach shall fully
vest.
George S. Katsarakes is a party to an Employment Agreement, dated March
9, 1998, with the Company under which Mr. Katsarakes is serving as Executive
Vice President. The Employment Agreement provides for a term expiring March 8,
2001. Under the agreement, Mr. Katsarakes's salary is presently $250,000 and is
subject to review at the end of each year of employment. As an incentive to join
the Company, the Company agreed to pay Mr. Katsarakes a bonus of $48,000 in two
equal installments. In the event of the termination of Mr. Katsarakes's
employment by the Company, other than for cause, death or disability, or by Mr.
Katsarakes following a reduction in rank or authority, Mr. Katsarakes will be
entitled to receive all compensation that he would have received for the
remaining term of his agreement, but not less than one year's compensation, in a
lump sum, and all outstanding options held by Mr. Katsarakes shall fully vest
and be exercisable for the maximum time allowed for the exercise thereof under
the terms of the applicable stock option plan but not less than 90 days
following such termination. Mr. Katsarakes has agreed not to disclose
confidential information of the Company during or after his employment and,
during the term of his employment and for a period of two years thereafter, not
to directly or indirectly engage in certain activities which are competitive to
the Company.
James A. Roach is a party to an Employment Agreement, dated January 21,
1998, with the Company under which Mr. Roach is serving as Vice President-Sales.
The Employment Agreement provides for a term expiring January 20, 2001. Under
the agreement, Mr. Roach's salary is presently $131,700 and is subject to review
at the end of each year of employment. In addition, the agreement requires the
Company to provide Mr. Roach with an allowance, not to exceed 20% of his then
salary, to reimburse him for the cost of maintaining a secondary residence in
Puerto Rico, where the Company maintains its gas tube manufacturing facilities.
In the event of the termination of Mr. Roach 's employment by the Company, other
than for cause, death or disability, or by Mr. Roach following a reduction in
rank or authority, Mr. Roach will be entitled to receive all compensation that
he would have received for the remaining term of his agreement, but not less
than one year's compensation, in a lump sum, and all outstanding options held by
Mr. Roach shall fully vest and be exercisable for the maximum time allowed for
the exercise thereof under the terms of the applicable stock option plan but not
less than 90 days following such termination. Mr. Roach has agreed not to
disclose confidential information of the Company during or after his employment
and, during the term of his employment and for a period of two years thereafter,
not to directly or indirectly engage in certain activities which are competitive
to the Company.
Paul G. Sebetic is a party to an Employment Agreement, dated May 1,
1997, with the Company under which Mr. Sebetic is to serve as Vice
President-Finance. The Agreement provides for a term expiring April 30, 2000.
Under the agreement, Mr. Sebetic's salary is presently $125,000 and is subject
to review at the end of each year of employment, with Mr. Sebetic to receive a
salary increase of 10% per year but not less than the increase in a consumer
price index. Mr. Sebetic is also to receive $6,000 per year as an allowance to
reimburse him for the cost of maintaining a place of abode in Puerto Rico, where
the Company maintains its gas tube manufacturing facilities. In the event of the
termination of Mr. Sebetic's employment by the Company, other than for cause,
-12-
death or disability, or by Mr. Sebetic following a reduction in rank or
authority, Mr. Sebetic will be entitled to receive all compensation that he
would have received for the remaining term of his Agreement, but not less than
six months' compensation, in a lump sum, and all outstanding options held by Mr.
Sebetic shall fully vest. Mr. Sebetic has agreed not to disclose confidential
information of the Company during or after his employment and, during the term
of his employment and for a period of two years thereafter, not to directly or
indirectly engage in certain activities which are competitive to the Company.
REPORT OF BOARD OF DIRECTORS AND COMPENSATION COMMITTEE
CONCERNING EXECUTIVE COMPENSATION
The following report is submitted by the Compensation Committee of the
Board of Directors which, among other things, considers and recommends to the
Board of Directors salaries, bonuses and other compensation arrangements with
respect to the Company's executive officers. While both the full Board of
Directors and the Compensation Committee have authority with respect to granting
stock options under the Company's 1995 Stock Option Plan and 1998 Stock Option
Plan, all options granted under these plans during the Company's fiscal year
ended June 25, 1999 (including options modified or granted in exchange for the
cancellation of other options in conjunction with action taken by the full
Board) were granted by the Compensation Committee.
The Compensation Committee has viewed salaries for the Company's
executive officers as a means of providing basic compensation at levels
sufficient to attract and retain qualified executives. Levels of base salary
have been determined, on a subjective basis, in light of the executive's level
of responsibility, performance and expertise, as well as prevailing economic
conditions, the Company's performance, competitive factors and contractual
obligations.
Bonuses, if awarded, have been to provide short-term incentive and to
reward the executive's personal performance and contribution to the Company's
recent overall performance or as an inducement to join the Company. Performance
bonuses have been determined by reference to specific pre-established
performance targets, on a subjective basis by examining the executive's
achievements, or, at times, pursuant to agreements entered into as an inducement
for an executive to join the Company. During fiscal 1999, no performance bonuses
were granted. The bonus paid to George S. Katsarakes in fiscal 1999 was the last
of two installments of a bonus granted to him in fiscal 1998 as an inducement to
join the Company as Chief Operating Officer.
The Compensation Committee has considered options a useful means of
enabling the Company to provide long-term incentive to executives in a manner
that enables the Company to conserve cash for operations and growth while tying
the executive's interest to the interests of stockholders through stock
ownership and potential stock ownership. Option grants have been made, based
upon the executive's performance and expected contribution to the long-term
goals of the Company. Because the exercise prices of many options were in excess
of the market price of the Company's Common Stock, the Committee believed
outstanding options were not providing the performance and employment retention
incentives intended by the Company's employee stock option plans. Accordingly,
on October 8, 1998, the Committee and the full Board of Directors determined to
make offers to the holders of all employee options (including those held by
executive officers) to modify existing options or substitute new options, with
an exercise price based on the market price of the Company's Common Stock at the
time of modification or substitution, a new term and an increased vesting
schedule. See "-- Report on Repricing of Options," above. The only other stock
options granted during fiscal 1999 to the Named Executive Officers were granted
to Messrs. Katsarakes and Sebetic (see "-- Option Grants in Last Fiscal Year,"
above).
Timothy J. Roach's compensation is determined pursuant to the terms of
his Amended and Restated Employment Agreement which became effective August 1,
1997. Mr. Roach's salary has been $250,000 since that agreement was entered into
and he has received no bonuses during that time. Except for the modification
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of options and the grant of stock options in exchange for the cancellation of
other stock options, which was offered to all employees holding stock options,
no options were granted to Timothy J. Roach during fiscal 1999. See
"--Employment Agreements," above, for a description of Mr. Roach's Amended and
Restated Employment Agreement.
Section 162(m) of the Internal Revenue Code of 1986, as amended
("Section 162(m)"), precludes a public company from taking a Federal income tax
deduction for annual compensation paid to its chief executive officer or any of
its four other most highly compensated executive officers in excess of
$1,000,000 for any such person. Certain "performance based compensation" is
excluded from the deduction limitation. Cash compensation being paid by the
Company does not, and is not expected to, reach the threshold at which the
deduction limitation would be imposed. The Company's stock option plans have
been structured in a manner designed to enable any amount which is considered
compensation as a result of the exercise of stock options or the disposition of
the shares underlying an exercised option to be excluded from the deduction
limitation. Accordingly, in light of the Company's current compensation levels,
Section 162(m) is not expected to affect the Company's ability to deduct items
treated as compensation for Federal income tax purposes.
Respectfully submitted,
Joseph C. Hogan
William G. Sharwell
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock for the five years ended June 30, 1999 with (i) the
Nasdaq Stock Market-US Index (the Company's Common Stock has been quoted on the
Nasdaq National Market System since August 3, 1994 prior to which it was traded
on the American Stock Exchange) and (ii) the Nasdaq Telecommunications Index.
The comparison assumes $100 was invested on June 30, 1994 in the Company's
Common Stock and in each of the comparison groups and assumes reinvestment of
dividends (the Company paid no dividends during the periods):
[GRAPHIC OMITTED]
6/94 6/95 6/96 6/97 6/98 6/99
TII Industries Inc. $100 $ 96 $ 98 $ 84 $ 68 $ 27
Nasdaq Stock Market-US Index $100 $133 $171 $208 $274 $392
Nasdaq Telecommunications Index $100 $115 $143 $157 $226 $430
-14-
CERTAIN TRANSACTIONS
Since fiscal 1982, the Company has leased equipment from PRC Leasing,
Inc. ("PRC"), a corporation wholly-owned by Alfred J. Roach, Chairman of the
Board of Directors and a director of the Company. On July 18, 1991, as an
inducement to the Company's then bank lenders to restructure the Company's
long-term bank loan, among other things, the Company acquired certain equipment
from PRC and replaced its leases with PRC for other equipment with a new lease
with PRC. The equipment lease, as subsequently amended, has a term expiring July
17, 2001, and provides for rentals at the rate of $200,000 per year. The Company
believes that the rentals charged by PRC are comparable to the rentals which
would have been charged by unrelated leasing companies for similar equipment.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who
beneficially own more than 10% of the Company's Common Stock, to timely file
initial statements of stock ownership and statements of changes of beneficial
ownership with the Securities and Exchange Commission and furnish copies of
those statements to the Company. Based solely on a review of the copies of the
statements furnished to the Company to date, or written representations that no
statements were required, the Company believes that all statements required to
be filed by such persons with respect to the Company's fiscal year ended June
25, 1999 were timely filed, except that George S. Katsarakes filed three reports
late concerning purchases of Common Stock on five dates during the year.
PROPOSAL 2.
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of Arthur Andersen LLP as
the independent public accountants of the Company for the year ending June 30,
2000. The Board proposes that the stockholders ratify such selection at the
Meeting.
Representatives of Arthur Andersen LLP are expected to be present at
the Meeting and will be afforded the opportunity to make a statement if they so
desire and to respond to appropriate questions.
REQUIRED VOTE
The affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy at the Meeting and entitled to vote on
this proposal is required to approve this proposal. The Board of Directors
recommends a vote FOR Proposal 2.
MISCELLANEOUS
STOCKHOLDER PROPOSALS
From time to time stockholders may present proposals which may be
proper subjects for inclusion in the proxy statement and form of proxy related
to that meeting. In order to be considered, such proposals must be submitted in
writing on a timely basis. Stockholder proposals intended to be included in the
Company's proxy statement and form of proxy relating to the Company's Annual
Meeting of Stockholders to be held in the year 2000 must be received by June 27,
2000. Any such proposals, as well as any questions relating thereto, should
-15-
be directed to the Secretary of the Company, 1385 Akron Street, Copiague, New
York 11726. As to any proposals intended to be presented by a stockholder,
without inclusion in the Management's proxy statement and form of proxy for the
Company's next Annual Meeting, the proxies named in the Management's form of
proxy for that meeting will be entitled to exercise discretionary authority on
that proposal unless the Company receives notice of the matter on or before
September 10, 2000. However, even if such notice is timely received, such
proxies may nevertheless be entitled to exercise discretionary authority on that
matter to the extent permitted by Securities and Exchange Commission
regulations.
ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the year ended
June 25, 1999, which has been filed with the Securities and Exchange Commission,
is also available, without charge, to stockholders who are interested in more
detailed information about the Company. Requests for a copy of that report
should be addressed to Ms. Virginia M. Hall, Vice President-Administration, 1385
Akron Street, Copiague, New York 11726, telephone number (631) 789-5000.
SOLICITATION OF PROXIES
The cost of solicitation of Proxies, including the cost of reimbursing
banks, brokers and other nominees for forwarding proxy solicitation material to
the beneficial owners of shares held of record by them and seeking instructions
from such beneficial owners, will be borne by the Company. Proxies may be
solicited without extra compensation by certain officers, directors and regular
employees of the Company by mail and, if determined to be necessary, by
telephone, telecopy, telegraph or personal interview.
OTHER MATTERS
The Board of Directors does not intend to bring before the Meeting any
matter other than those specifically described above and knows of no matters
other than the foregoing to come before the Meeting. If any other matters or
motions properly come before the Meeting, it is the intention of the persons
named in the accompanying Proxy to vote the Proxy in accordance with their
judgment on such matter or motions, including any matters dealing with the
conduct of the Meeting.
By Order of the Board of Directors,
Dorothy Roach,
Secretary
October 25, 1999
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PROXY TII INDUSTRIES, INC. PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 7, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints, as proxies for the undersigned,
TIMOTHY J. ROACH and VIRGINIA M. HALL, or either of them, with full power of
substitution, to vote all shares of the capital stock of TII Industries, Inc.
(the "Company") which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of the Company to be held on Tuesday, December 7, 1999, at 3:00
p.m., New York time, at the Huntington Hilton, 598 Broadhollow Road, Melville,
New York, receipt of Notice of which meeting and the Proxy Statement
accompanying the same being hereby acknowledged by the undersigned, and at any
adjournments or postponements thereof, upon the matters described in the Notice
of Meeting and Proxy Statement and upon such other business as may properly come
before the meeting or any adjournments or postponements thereof, hereby revoking
any proxies heretofore given.
EACH PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE ON THE REVERSE SIDE HEREOF. WHERE NO DIRECTION TO VOTE ON A
SPECIFIC MATTER IS GIVEN, THE PROXIES WILL BE DEEMED AUTHORIZED TO VOTE FOR EACH
LISTED NOMINEE TO SERVE AS A DIRECTOR AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
TII INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE
FOLLOWING MANNER USING DARK INK ONLY. |X|
A vote FOR each nominee and FOR proposal 2 is recommended by the Board of
Directors.
1. ELECTION OF DIRECTORS - For Withhold For All
Nominees: James R. Grover, Jr., George S. All All Except
Katsarakes and Dorothy Roach |_| |_| |_|
__________________________________________
(Except Nominee(s) written above)
FOR AGAINST ABSTAIN
2. To ratify the selection of Arthur Andersen LLP |_| |_| |_|
as independentpublic accountants for the
Company.
Dated ____________________________, 1999
Signature(s) ___________________________
________________________________________
NOTE: Please sign your name or names
exactly as set forth hereon. If signing
as attorney, executor, administrator,
trustee or guardian, please indicate the
capacity in which you are acting.
Proxies executed by corporations should
be signed by a duly authorized officer
and should bear the corporate seal.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.