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 / /
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/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14A-ll(c) or
Rule 14a-12
/ / Confidential, for use of the the Commission only
mPHASE TECHNOLOGIES, INC.
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(Name of Registrant as Specified In Its Charter)
mPHASE TECHNOLOGIES, INC.
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(Name of Person(s) Filing Proxy Statement)
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and 0-11.
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computed pursuant to Exchange Rule 0-11 (set forth the
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Exchange Act Rule 0-ll(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
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1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
mPHASE TECHNOLOGIES, INC.
587 CONNECTICUT AVENUE
NORWALK, CONNECTICUT 06854-0566
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY MAY 17, 2001
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The Annual Shareholders Meeting of mPhase Technologies, Inc. will be held at
our headquarters at 587 Connecticut Avenue Norwalk, CT 06854 on May 17, 2001, at
10:00 a.m. local time, for the purpose of considering and voting upon:
(1) A proposal to elect nine (9) Directors to hold office until our next
Annual Meeting.
(2) A proposal to approve and adopt an amendment to our Amended Certificate
of Incorporation to change the par value of our shares from no par value
to $.01 par value per share and to authorize a class of 20,000,000 shares
of preferred stock.
(3) A proposal to approve and adopt the 2001 Stock Incentive Plan.
(4) A proposal to ratify the appointment of Arthur Andersen, CPA, as the
independent accountants for our 2001 fiscal year.
(5) Such other business as may properly come before the meeting and any
adjournment thereof.
The above items are more fully described in the attached Proxy Statement.
Only shareholders of record at the close of business on April 6, 2001 are
entitled to notice of and to vote at the meeting or any adjournment or
postponement thereof. A list of stockholders as of the record date will be
available for inspection by stockholders at our corporate headquarters during
business hours for a period of 10 days before the meeting.
By Order of the Board of Directors
/s/ Gustave T. Dotoli
GUSTAVE T. DOTOLI
CORPORATE SECRETARY
April , 2001
IMPORTANT
Whether or not you expect to be present at the meeting, PLEASE FILL IN, SIGN,
DATE AND MAIL THE ENCLOSED PROXY as promptly as possible in order to save us
further solicitation expense. Shareholders of record attending the meeting may
revoke their proxies at that time and personally vote all matters under
consideration. There is an addressed envelope enclosed with the Proxy for which
no postage is required if mailed in the United States.
mPHASE TECHNOLOGIES, INC.
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PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 2001
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This Proxy Statement is furnished to the shareholders of mPhase
Technologies, Inc. in connection with the solicitation of proxies by our Board
of Directors to be voted at the Annual Meeting of Shareholders and at any
adjournments thereof. The Annual Meeting will be held at our headquarters at 587
Connecticut Avenue, Norwalk, CT, at 10:00 a.m. Eastern Time on Thursday,
May 17, 2001.
The approximate date on which this Proxy Statement and the accompanying
Proxy Card are first being sent or given to shareholders is April 21, 2001.
VOTING
GENERAL
The securities that may be voted at the Annual Meeting consist of our common
stock, with each share entitling its owner to one vote on each matter submitted
to the shareholders. The record date for determining the holders of our shares
who are entitled to notice of and to vote at the Annual Meeting is April 6,
2001. On the record date, shares were outstanding and eligible to be
voted at the Annual Meeting.
QUORUM AND VOTE REQUIRED
The presence, in person or by proxy, of a majority of the outstanding shares
of our shares is necessary to constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes shall be counted for purposes of determining a
quorum, but not have the effect of votes for or against any proposal. Therefore,
abstentions and broker non-votes will not affect the outcome of such matter. At
a meeting where a quorum is present, on the proposal for the election of
directors, nominees who receive a plurality of the votes cast will be elected to
serve until the next annual meeting of shareholders, and on each other proposal,
the affirmative vote of a majority of the shares represented at the Annual
Meeting will be required to approve each of the proposals detailed herein.
Brokers holding shares of record for customers generally are not entitled to
vote on certain matters unless they receive voting instructions from their
customers. "Broker non-votes" means the votes that could have been cast on the
matter in question if the brokers had received their customers' instructions,
and as to which the broker has notified us on a proxy form in accordance with
industry practice or has otherwise advised us that it lacks voting authority.
VOTING BY PROXY
Shares represented by properly executed proxies received at or before the
Annual Meeting that have not been revoked will be voted at the Annual Meeting in
accordance with the instructions contained therein. Shares represented by
properly executed proxies for which no instruction is given will be voted "FOR"
approval of the proposals described in this Proxy Statement. If any other
matters properly come before the Annual Meeting, the persons named as proxies
will vote upon such matters according to their judgment. Our shareholders are
requested to complete, sign, date and promptly return the enclosed Proxy Card in
the postage-prepaid envelope provided for this purpose to ensure that their
shares are voted. A shareholder may revoke a proxy at any time before it is
voted by signing and returning a later-dated proxy with respect to the same
shares, by filing with our corporate Secretary, a written revocation bearing a
later date or by attending and voting in person at the Annual Meeting. Mere
attendance at the Annual Meeting will not in and of itself revoke a proxy.
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If the Annual Meeting is postponed or adjourned for any reason, at any
subsequent reconvening of the Annual Meeting, all proxies (except for any
proxies that have theretofore effectively been revoked or withdrawn) will be
voted in the same manner as such proxies would have been voted at the original
convening of the Annual Meeting, notwithstanding that such proxies may have been
effectively voted on the same or any other matter at a previous meeting.
PROPOSAL I
ELECTION OF DIRECTORS
The Board has nominated its nine (9) incumbent directors for re-election,
Necdet F. Ergul, Ronald A. Durando, Gustave T. Dotoli, David Klimek, Craig
Vickers, J. Allen Layman, Anthony Guerino, J. Lee Barton and Abraham Biderman.
Under our By-Laws, directors serve on the Board until the next Annual Meeting or
until their successors shall have been elected and qualified.
Each of the incumbent director nominees has consented to be named a nominee
in this Proxy Statement and to serve as a director if elected. Proxies not
marked to the contrary will be voted "FOR" the election to the Board of each
nominee. Management has no reason to believe that any of the nominees will not
be a candidate or will be unable to serve. However, in the event that any of the
nominees should become unable or unwilling to serve as a director, the proxy
will be voted for the election of such person or persons as shall be designated
by the current directors.
NOMINEES
The Board of Directors recommends that you vote FOR all of the following
nominees:
NAME AGE POSITION(S)
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Necdet F. Ergul................ 76 Chairman of the Board
Ronald A. Durando.............. 43 Chief Executive Officer and Director
Gustave T. Dotoli (2).......... 65 Chief Operating Officer and Director
David Klimek................... 48 Chief Technology Officer and Director
J. Lee Barton.................. 47 Director
J. Allen Layman (1)............ 49 Director
Anthony H. Guerino (1)(2)...... 55 Director
Craig Vickers (2).............. 55 Director
Abraham Biderman (1)........... 52 Director
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(1) Member of Audit Committee.
(2) Member of Compensation Committee.
The following is biographical information about each of the nominees.
NECDET F. ERGUL has served as our Chairman of the Board since October 1996
with the exception of a three-month period in 2000 when he temporarily resigned.
Mr. Ergul also currently serves as the President and Chief Executive Officer of
Microphase Corporation, a leading developer of military electronic defense and
telecommunications technology, which he founded in 1955. In addition to his
management responsibilities at Microphase, he is active in engineering design
and related research and development. Mr. Ergul holds a Masters Degree in
Electrical Engineering from the Polytechnic Institute of Brooklyn, New York.
RONALD A. DURANDO is a co-founder of mPhase Technologies, Inc. and has
served as our President and Chief Executive Officer since its inception in
October 1996. Since 1994, Mr. Durando has been Chief Operating Officer of
Microphase Corporation. From 1986 to 1994, he was President and Chief Executive
Officer of Nutley Securities, Inc., a registered broker-dealer. He is also
Chairman of the Board of Janifast Ltd., a U.S. Holding Corp. for operational and
manufacturing companies in Hong Kong and China and Chairman of the Board and
Chief Executive Officer of Packetport.com, Inc.
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GUSTAVE T. DOTOLI has served as our Chief Operating Officer since
October 1996. Prior to joining us, Mr. Dotoli was President and CEO of State
Industrial Safety, Inc. from 1986-1996. In addition, Mr. Dotoli currently serves
as the Vice President of Corporate Development of Microphase Corporation as well
as a Director and Chief Operating Officer of Packetport.com, Inc. and a Director
and Officer of Janifest Ltd. He is formerly the President and Chief Executive
Officer of the following corporations: Imperial Electro-Plating, Inc., World
Imports USA, Industrial Chemical Supply, Inc., SISCO Beverage, Inc. and Met
Pack, Inc. Mr. Dotoli holds a B.S. in Industrial Engineering from Fairleigh
Dickinson University.
DAVID KLIMEK is a co-founder of mPhase Technologies, Inc. and has served as
our Chief Technology Officer since June 1997 and as Director of Engineering
since its inception in October 1996. From 1990-1996, Mr. Klimek owned and
operated Mashiyach Design, Inc., an engineering consulting firm. He has more
than 18 years of technical engineering and design expertise and presently holds
14 individual or co-authored U.S. patents. From 1982 to 1990, Mr. Klimek was the
R&D manager of Digital Controls, Inc. Mr. Klimek holds a B.S. in Electrical
Engineering from Milwaukee School of Engineering, Milwaukee, Wisconsin.
J. LEE BARTON has served as a director since February 1999. Mr. Barton is
the President and Chief Executive Officer of Lintel, Inc., a holding company
that owns Hart Telephone Company, a 10,000-line local exchange carrier in
northeast Georgia, Hart Communications, an interconnect carriers' carrier and
long distance company, Hart Cellular, a partnership in two RSAs in North
Georgia, and Hart Cable, a recently formed cable television company and Hart
GlobalNet.
J. ALLEN LAYMAN has been a member of the Board since February 23, 2000.
Mr. Layman is the President and Chairman of the Board of NETOLOS, which provides
services in the telecommunications industry, and has been employed by NETOLOS in
various capacities since 1974. Mr. Layman is a member of several boards of
directors, including The Bank of Fincastle, the United States Telephone
Association, the Organization for the Promotion and Advancement of Small
Telecommunications Companies, Virginia Telephone Industry Association, Valley
Network Partnership, Layman Development Corporation, Botetourt County Public
Schools Education Foundation, Inc., Virginia PCS Alliance, West Virginia PCS
Alliance and the Blue Ridge Mountains Council, Boy Scouts of America.
ANTHONY H. GUERINO has been a member of the Board since February 23, 2000.
Since December 1997, Mr. Guerino has been an attorney in private practice in New
Jersey. Prior thereto, Mr. Guerino served as a judge of the Newark Municipal
Courts for over twenty (20) years, periodically sitting in the Essex County
Central Judicial Processing Court at the Essex County Courthouse. Mr. Guerino
has been a chairperson for and member of several judicial committees and
associations in New Jersey, and has been an instructor for the Seton Hall School
of Law's Trial Moot Court Program.
CRAIG VICKERS has been a member of the Board since March 4, 2000. From 1995
to the present, Mr. Vickers has been a principal of Convergence Capital, a firm
that provides advisory services in international and domestic investment
banking, in corporate finance and in the industry sectors of media, information
communications and entertainment. Mr. Vickers is responsible for advising
management of mid-stage companies on strategic relationships, mergers and
acquisition matters. Prior to his position at Convergence Capital, to
Mr. Vickers served as the Director, Business Development, Sports Information
Services at Infotechnology. Mr. Vickers is a member of the Internet Society, the
MIT Enterprise Forum, the New York Media Association, the New York Venture
Group, ABANA and the US/Arab Chamber of Commerce.
ABRAHAM BIDERMAN has been a member of the Board since August 3, 2000. Since
1990, Mr. Biderman has been employed by Lipper & Co. as Executive Vice
President. He is also the Managing Director of Lipper Funds, Inc. and Lipper
Prime Asset Management. Prior to joining Lipper & Co., Mr. Biderman held several
high-level government positions in New York City, including
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Chairman of both the Retirement System and the Housing Development Corporation,
in addition to roles as Commissioner of Housing and Finance. He is also a
certified public accountant in the state of New York.
THE BOARD OF DIRECTORS AND COMMITTEES
During fiscal year ended June 30, 2000, the Board of Directors held ten
meetings. Each director attended at least 70% of the combined number of meetings
of the Board and Board committees of which he was a member.
The Board of Directors created an Audit and Compensation Committee on
February 23, 2000. The Audit Committee is comprised of Messrs. Biderman, Layman
and Guerino who meet the independence criteria established by the National
Association of Securities Dealers, Inc. The report of the Audit Committee
describes the scope of authority of the committee and may be found on page 4.
The committee's charter which was approved by the Board of Directors on
August 3, 2000 is included as Exhibit A.
The Board of Directors also has a Compensation Committee. As more fully
described in the Report of the Compensation Committee set forth on page 15 of
this Proxy Statement, the Compensation Committee is responsible for our
management and employee compensation. Specifically, the Compensation Committee
determines the adequacy of management and employee compensation including the
administration of our Long-Term Stock Incentive Plan and, if approved, the 2001
Stock Incentive Plan. The Compensation Committee is presently comprised of
Messrs. Dotoli, Vickers and Guerino.
DIRECTOR COMPENSATION
We pay each of the directors $15,000 annually for their services as a
Director and for their attendance of Board and Committee meetings. Additionally,
certain of the Directors have been granted options under our Long-Term Stock
Incentive Plan, which grants are included in the table "Security Ownership of
Certain Beneficial Owners and Management" and the notes thereto.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during fiscal 2000 were
Messrs. Dotoli, Vickers and Guerino. Mr. Dotoli is our Chief Operating Officer.
Neither Messrs. Vickers nor Guerino is or has been one of our officers or
employees. None of our directors or executive officers served as a member of the
compensation committee (or other board committee performing equivalent functions
or, in the absence of such committee, the entire board of directors) of another
entity during fiscal 2000 that has a director or executive officer serving on
our Board of Directors except, Mr. Dotoli who is also a member of the Board of
Directors of PacketPort.com, Inc., a company in which Mr. Durando serves as
Chairman of the Board and Chief Executive Officer.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees our financial reporting process on behalf of
the Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process, including the systems of
internal controls. Our audit committee met on September 26, 2000, to review
form 10 KSB, covering the fiscal year of the company ending June 30, 2000.
In fulfilling our oversight responsibilities, we have discussed with our
independent accountants who are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles, their judgments as to the quality, not just the
acceptability, of our accounting principles and such other matters as are
required to be discussed with the committee under generally accepted auditing
standards. We also have discussed with the independent accountants their
independence from management, including the matters in the written disclosures
from the
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independent accountants required by the Independence Standards Board. We further
considered whether the provision by the independent accountants of the non-audit
services described elsewhere in this proxy statement is compatible with
maintaining their independence. Finally, we recommended, and the Board of
Directors approved, the selection of Arthur Andersen, CPAs as our independent
accountants for 2000.
We have also discussed with our internal auditors and independent
accountants the overall scope and plans for their respective audits. We have
spoken with the internal auditors and independent accountants, with and without
management present, to discuss the results of their examinations, their
evaluations of our internal controls, and the overall quality of financial
reporting.
J. Allen Layman
Anthony Guerino
Abraham Biderman
PROPOSAL II
APPROVAL OF AN AMENDMENT TO THE
COMPANY'S AMENDED CERTIFICATE OF INCORPORATION
The Board of Directors has approved, and is recommending to the stockholders
for approval at the Annual Meeting, an amendment to our Amended Certificate of
Incorporation to (a) authorize a new class of 20,000,000 undesignated shares of
preferred stock having a par value of $.01 per share and to (b) change the par
value of our shares from "no par" stock to $.01 par value per share. The Board
of Directors determined that this amendment is advisable and should be
considered at the Annual Meeting. The full text of the proposed amendment to the
Certificate of Incorporation appears as Exhibit B to this Proxy Statement.
PURPOSE AND EFFECT OF THE AMENDMENT TO AUTHORIZE PREFERRED STOCK
Under the present Certificate of Incorporation, we have the authority to
issue 150,000,000 shares of common stock. No preferred shares are authorized for
issuance. As of April 6, 2001, shares of common stock were issued
and outstanding and shares of common stock were reserved for
issuance upon the exercise of our outstanding stock options, warrants and other
securities, which are convertible into common stock. The proposed amendment
would provide for the issuance of 20,000,000 shares of preferred stock available
for issuance. The preferred stock may be issued by resolution of a majority of
our Board of Directors then in office in one or more series with such
designations, rights, preferences, privileges and restrictions, including,
without limitation, dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, and such qualifications and limitations
as our Board may determine. No additional stockholder approval would be required
to set the terms of, or for issuance of, the preferred stock. Authorization of
shares of preferred stock could affect the rights of the holders of common stock
if the preferred stock, when issued, has rights and preferences senior to the
common stock. The holders of common stock do not presently have preemptive
rights to subscribe for the shares of preferred stock proposed to be authorized.
If the amendment is adopted, it will become effective upon filing a
Certificate of Amendment to our Certificate of Incorporation with the Secretary
of State of New Jersey. The purpose of the authorization of preferred stock is
to permit the issuance of different classes of preferred stock for corporate
purposes. Our Board believes that it is in the best interests of our
stockholders to have shares of preferred stock authorized at this time to
alleviate the delay of holding a special meeting of stockholders to authorize
additional shares of preferred stock when the need arises. Possible purposes for
additional shares of preferred stock include adopting a shareholder rights plan,
which would be used to defend against unwanted takeover attempts. The Board
intends to adopt such a right's plan if
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the amendment is approved. Other uses of the preferred stock include effecting
acquisitions of other businesses or properties, establishing strategic
relationships with other companies and securing additional financing for our
operations through the issuance of additional shares or other equity-based
securities. We could also use the additional shares of preferred stock to oppose
a hostile takeover attempt or delay or prevent changes of control (whether by
merger, tender offer, proxy contest or assumption of control by a holder of a
large block of our securities) or changes in or removal of our management. For
example, in addition to the approval of a rights plan, without further
stockholder approval, the Board of Directors could strategically sell shares of
common stock or preferred stock in a private transaction to purchasers who would
oppose a takeover or favor the current Board of Directors. Although the Board of
Directors is motivated by business and financial considerations in proposing
this amendment, and not by the threat of any attempt to accumulate shares or
otherwise gain control of our company (and the Board of Directors is not
currently aware of any such attempts), stockholders nevertheless should be aware
that approval of the amendment could facilitate efforts by us to deter or
prevent changes of control of our company in the future, including transactions
in which the stockholders might otherwise receive a premium for their shares
over then-current market prices or benefit in some other manner.
PURPOSE OF THE CHANGE TO PAR VALUE STOCK
The proposed change in the "no par" value designation of the common stock to
a par value of $.01 is being taken in order to facilitate our recordkeeping and
accounting practices.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDED CERTIFICATE OF INCORPORATION AS DESCRIBED ABOVE. THE AFFIRMATIVE VOTE OF
HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK REPRESENTED AT THE MEETING
IS REQUIRED TO APPROVE THE AMENDMENT TO THE AMENDED CERTIFICATE OF
INCORPORATION. SHARES OF COMMON STOCK REPRESENTED AT THE MEETING BY EXECUTED BUT
UNMARKED PROXIES WILL BE VOTED "FOR" APPROVAL OF THE AMENDED CERTIFICATE OF
INCORPORATION.
PROPOSAL III
PROPOSAL TO ADOPT THE 2001 STOCK INCENTIVE PLAN
Our Board of Directors proposes that you approve the adoption of the 2001
Stock Incentive Plan (the "2001 Plan"). For purposes of administrative
efficiency, the Board of Directors has authorized merger of our Long-Term Stock
Incentive Plan (the "Prior Plan") into the 2001 Plan effective upon the adoption
of the 2001 Plan. The following is a fair and complete summary of the 2001 Plan
as proposed. This summary is qualified in its entirety by reference to the full
text of the 2001 Plan, which appears as Exhibit C to this document.
GENERAL
PURPOSE: The purpose of the 2001 Plan as proposed is to promote our
long-term growth and profitability by providing key people with incentives to
improve stockholder value and contribute to our growth and financial success and
by enabling us to attract, retain and reward the best available people.
SHARES AVAILABLE UNDER THE PLAN: The maximum number of shares of common
stock that we may issue with respect to awards under the 2001 Plan is 20,000,000
shares, in addition to the shares previously authorized for issuance under the
Prior Plan, but which were not issued before the Prior Plan is merged into the
2001 Plan. We will reserve such number of shares, and will continue to reserve
the shares remaining under the Prior Plan, for awards under the 2001 Plan. The
maximum number of shares of common stock subject to awards of any combination
that may be granted under the proposed 2001 Plan during any fiscal year to any
one individual is limited to 500,000. These limits will be adjusted to reflect
any stock dividends, split-ups and reverse stock split, unless the Board
determines
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otherwise. If any award, or portion of an award, under the 2001 Plan expires or
terminates unexercised, becomes unexercisable or is forfeited or otherwise
terminated, surrendered or canceled as to any shares, or if any shares of common
stock are surrendered to us in connection with any award (whether or not such
surrendered shares were acquired pursuant to any award), or if any shares are
withheld by the Company, the shares subject to such award and the surrendered or
withheld shares will thereafter be available for further awards under the 2001
Plan. Those shares that are surrendered to or withheld by the Company, or that
are forfeited after issuance, however, will not be available for incentive stock
options. As of March 20, 2001, the fair market value of a share of common stock,
determined by the last reported sale price per share of common stock on such
date as quoted on the Nasdaq-Over-The-Counter Bulletin Board, was $1.37.
ADMINISTRATION: The proposed 2001 Plan will be administered by our Board or
by a committee or committees as the Board may appoint from time to time. The
administrator has full power and authority to take all actions necessary to
carry out the purpose and intent of the 2001 Plan, including, but not limited
to, the authority to: (i) determine who is eligible for awards, and the time or
times at which such awards will be granted; (ii) determine the types of awards
to be granted; (iii) determine the number of shares covered by or used for
reference purposes for each award; (iv) impose such terms, limitations,
restrictions and conditions upon any such award as the administrator deems
appropriate; (v) modify, amend, extend or renew outstanding awards, or accept
the surrender of outstanding awards and substitute new awards (provided however,
that, except as noted below, any modification that would materially adversely
affect any outstanding award may not be made without the consent of the holder);
(vi) accelerate or otherwise change the time in which an award may be exercised
or becomes payable and to waive or accelerate the lapse, in whole or in part, of
any restriction or condition with respect to such award, including, but not
limited to, any restriction or condition with respect to the vesting or
exercisability of an award following termination of any grantee's employment or
consulting relationship; and (vii) establish objectives and conditions, if any,
for earning awards and determining whether awards will be paid after the end of
a performance period.
In the event of changes in our common stock by reason of any stock dividend,
split-up, recapitalization, merger, consolidation, business combination or
exchange of shares and the like, the administrator may make adjustments to the
number and kind of shares reserved for issuance or with respect to which awards
may be granted under the 2001 Plan, in the aggregate or per individual per year,
and to the number, kind and price of shares covered by outstanding award.
The administrator in its discretion is authorized to make adjustments in the
terms and conditions of, and the criteria included in, awards in recognition of
unusual or nonrecurring events affecting us, or our financial statements or
those of any of our affiliates, or of changes in applicable laws, regulations,
or accounting principles, whenever the administrator determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the 2001
Plan.
PARTICIPATION: Participation in the 2001 Plan will be open to all of our
employees, officers, directors and other individuals providing bona fide
services to us or any of our affiliates, as the administrator may select from
time to time. As of July 1, 2001, all 6 non-employee directors, and
approximately 20 employees would be eligible to participate in the 2001 Plan.
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TYPE OF AWARDS
The 2001 Plan as proposed would allow for the grant of stock options, stock
appreciation rights, stock awards, phantom stock awards and performance awards.
The administrator may grant these awards separately or in tandem with other
awards. The administrator will also determine the prices, expiration dates and
other material conditions governing the exercise of the awards. We, or any of
our affiliates, may make or guarantee loans to assist grantees in exercising
awards and satisfying any withholding tax obligations arising from awards.
STOCK OPTIONS: The proposed 2001 Plan allows the administrator to grant
either awards of incentive stock options, as that term is defined in
section 422 of the Internal Revenue Code, or nonqualified stock options;
provided, however, that only our employees or employees of our subsidiaries may
receive incentive stock option awards. Options intended to qualify as incentive
stock must have an exercise price at least equal to fair market value on the
date of grant, but nonqualified stock options may be granted with an exercise
price less than fair market value. The terms of a stock option agreement, as
determined by the administrator with respect to each option, may permit the
option holder to pay the exercise price in cash, by tendering shares of common
stock, by a combination of cash and shares, or by any other means the
administrator approves.
STOCK APPRECIATION RIGHTS: The proposed 2001 Plan allows the administrator
to grant awards of stock appreciation rights which entitle the holder to receive
a payment in cash, in shares of common stock, or in a combination of both,
having an aggregate value equal to the spread on the date of exercise between
the fair market value of the underlying shares on that date and the base price
of the shares specified in the grant agreement.
STOCK AND PHANTOM STOCK AWARDS: The proposed 2001 Plan allows the
administrator to grant restricted or unrestricted stock awards, or awards
denominated in stock-equivalent units to eligible participants with or without
payment of consideration by the grantee. Stock awards and phantom stock awards
may be paid in cash, in shares of common stock, or in a combination of both.
PERFORMANCE AWARDS: The proposed 2001 Plan allows the administrator to
grant performance awards which become payable in cash, in shares of common
stock, or in a combination of both, on account of attainment of one or more
performance goals established by the administrator. The administrator may
establish performance goals based on our operating income, or that of our
affiliates, or one or more other business criteria the administrator may select
that applies to an individual or group of individuals, a business unit, or us or
our affiliate as a whole, over such performance period as the administrator may
designate.
OTHER STOCK-BASED AWARDS: The proposed 2001 Plan allows the administrator
to grant stock-based awards which may be denominated in cash, common stock, or
other securities, stock equivalent units, stock appreciation units, securities
or debentures convertible into common stock, or any combination of the
foregoing. These awards may be paid in common stock or other securities, in
cash, or in a combination of common stock, other securities and cash.
AWARDS UNDER THE PLAN
Because participation and the types of awards available for grant under the
2001 Plan as proposed are subject to the discretion of the administrator, the
benefits or amounts that any participant or groups of participants may receive
if the 2001 Plan is approved are not currently determinable. For this purpose,
the benefits or amounts that participants may receive if the 2001 Plan is
approved do not include awards granted under the Prior Plan that are amended and
restated to become awards covering the same number of shares under the terms of
the 2001 Plan. These amended and restated awards are not contingent on stock
holder approval since the Prior Plan was previously approved by the
stockholders.
8
AMENDMENT AND TERMINATION
Our Board of Directors may terminate, amend or modify all or any provision
of the 2001 Plan at any time.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the current federal income tax
treatment of stock options, which would be authorized for grants under the 2001
Plan as proposed, based upon the current provisions of the Internal Revenue Code
and regulations promulgated thereunder.
INCENTIVE STOCK OPTIONS: Incentive stock options under the 2001 Plan are
intended to meet the requirements of section 422 of the Internal Revenue Code.
No tax consequences result from the grant of the option. If an option holder
acquires stock upon exercise, the option holder will not recognize income for
ordinary income tax purposes (although the difference between the option
exercise price and the fair market value of the stock subject to the option may
result in alternative minimum tax liability to the option holder) and they will
not be allowed a deduction as a result of such exercise, provided that the
following conditions are met: (a) at all times during the period beginning with
the date of the granting of the option and ending on the day three months before
the date of such exercise, the option holder is our employee or an employee of
one of our subsidiaries; and (b) the option holder makes no disposition of the
stock within two years from the date of the option grant nor within one year
after the transfer of the stock to the option holder. The three-month period
extends to one year in the event of disability and is waived in the event of
death of the employee. If an option is modified to give the option holder
additional benefits (including the increase in the exercise price of Prior Plan
options effected in connection with the adoption of the 2001 Plan), the
modification may be deemed to be the granting of a new option for purposes of
determining the two-year holding period. If the option holder sells the stock
after complying with the conditions as discussed above, any gain realized over
the price paid for the stock ordinarily will be treated as capital gain, and any
loss will be treated as capital loss, in the year of the sale.
If the option holder fails to comply with the employment requirement
discussed above, the tax consequences will be substantially the same as for a
nonqualified option, discussed below. If the option holder fails to comply with
the holding period requirements discussed above, the option holder will
recognize ordinary income in an amount equal to the lesser of (i) the excess of
the fair market value of the stock on the date of the exercise of the option
over the exercise price or (ii) the excess of the amount realized upon such
disposition over the adjusted tax basis of the stock. Any additional gain
ordinarily will be recognized by the option holder as capital gain, either
long-term or short-term, depending on the holding period of the shares. If the
option holder is treated as having received ordinary income because of his or
her failure to comply with either condition above, we will be allowed an
equivalent deduction in the same year.
NONQUALIFIED STOCK OPTIONS: No tax consequences result from the grant of
the option. An option holder who exercises a nonqualified stock option with cash
generally will realize compensation taxable as ordinary income in an amount
equal to the difference between the exercise price and the fair market value of
the shares on the date of exercise, and we will be entitled to a deduction from
income in the same amount in the fiscal year in which the exercise occurred. The
option holder's basis in these shares will be the fair market value on the date
income is realized, and when the holder disposes of the shares he or she will
recognize capital gain or loss, either long-term or short-term, depending on the
holding period of the shares.
DISALLOWANCE OF DEDUCTIONS: The Internal Revenue Code disallows deductions
for publicly held corporations with respect to compensation in excess of
$1,000,000 paid to the corporation's chief executive officer and its four other
most highly compensated officers. However, compensation payable
9
solely on account of attainment of one or more performance goals is not subject
to this deduction limitation if the performance goals are objective,
pre-established and determined by a compensation committee comprised solely of
two or more outside directors, the material terms under which the compensation
is to be paid are disclosed to the stockholders and approved by a majority vote,
and the compensation committee certifies that the performance goals and other
material terms were in fact satisfied before the compensation is paid. Under
this exception, the deduction limitation does not apply with respect to
compensation otherwise deductible on account of stock options and stock
appreciation rights granted at fair market value under a plan, such as the
proposed 2001 Plan, that limits the number of shares that may be issued to any
individual and which is approved by the corporation's stockholders.
REQUIRED VOTE
THE AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AT THE MEETING IS REQUIRED TO APPROVE THE ADOPTION OF THE 2001 STOCK
INCENTIVE PLAN. SHARES OF COMMON STOCK REPRESENTED AT THE MEETING BY EXECUTED
BUT UNMARKED PROXIES WILL BE VOTED "FOR" APPROVAL OF THE 2001 STOCK INCENTIVE
PLAN.
RECOMMENDATION OF THE BOARD OF DIRECTORS
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" ADOPTION OF THE 2001 STOCK INCENTIVE PLAN.
PROPOSAL IV
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
We have engaged Arthur Andersen, CPAs, certified public accountants having
offices in Stamford, Connecticut, as our independent auditors for the fiscal
year ending June 30, 2001. Arthur Andersen has audited our financial statements
for the year ended June 30, 2000. It is anticipated that representatives of such
firm will be present at the Annual Meeting, will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
Audit Fees. Fees for the audit for the fiscal year ended June 30, 2000 and
the reviews of Forms 10-Q for such fiscal year, all of which has been billed.
Fees for Financial Information Systems Design and Implementation. None.
All other fees. None
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF
APPOINTMENT OF ARTHUR ANDERSEN, CPAS, AS THE EXTERNAL AUDITORS FOR US FOR THE
FISCAL YEAR ENDING JUNE 30, 2001. THE AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY
OF THE SHARES OF COMMON STOCK REPRESENTED AT THE MEETING IS REQUIRED TO RATIFY
THE APPOINTMENT OF THE AUDITORS. SHARES OF COMMON STOCK REPRESENTED AT THE
MEETING BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" RATIFICATION OF
ARTHUR ANDERSEN, CPAS.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Several of the individuals who have served as our directors or executive
officers have been issued warrants and/or options to purchase shares of our
shares. Further, our directors and officers are eligible to receive options
under the Plan, as amended, and therefore will be eligible for future grants of
options pursuant thereto. Accordingly, if the Plan is not approved as requested
in Proposal III hereof
10
and such directors and officers are unable to exercise such warrants and
options, such directors and officers may have claims against us for breach of
contract or otherwise.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of February 9, 2001 certain information
regarding the beneficial ownership of our shares:
/ / by each person that is known by us to be the beneficial
owner of more than five percent (5%) of its outstanding
common stock;
/ / each of our directors;
/ / by each executive officer named in the Summary Compensation
Table; and
/ / by all of our directors and executive officers as a group.
NUMBER OF SHARES OF PERCENTAGE OWNERSHIP
NAME AND ADDRESS COMMON STOCK OF COMMON STOCK
OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED OUTSTANDING(2)
- ---------------------- ------------------- --------------------
Necdet F. Ergul.......................................... 1,637,500 3.4%
Ronald A. Durando(3)..................................... 4,020,363 5.9%
Gustave T. Dotoli........................................ 2,067,500 2.7%
J. Lee Barton(4)......................................... 3,595,000 10.3%
David Klimek............................................. 1,117,500 1.1%
Craig Vickers............................................ 144,000 *
Lintel, Inc.(5).......................................... 2,445,000 7.0%
All executive officers and directors as A group (nine
people)................................................ 12,482,863 23.6%
J. Allen Layman.......................................... 25,000 *
Anthony Guerino.......................................... 25,000 *
Abraham Biderman......................................... 5,000 *
- ------------------------
* Less than 1%
(1) Unless otherwise indicated, the address of each beneficial owner is 587
Connecticut Avenue, Norwalk, Connecticut 06854-1711.
(2) Unless otherwise indicated, we believe that all persons named in the table
have sole voting and investment power with respect to all shares of our
shares beneficially owned by them. The percentage for each beneficial owner
listed above is based on 34,832,790 shares outstanding on February 9, 2001
and, with respect to each such person holding options or warrants to
purchase shares that are exercisable within 60 days after February 9, 2001,
the number of options and warrants are deemed to be outstanding and
beneficially owned by the person for the purpose of computing such person's
percentage ownership, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person. The number of
shares indicated in the table include the following number of shares
issuable upon the exercise of warrants or options: Necdet F. Ergul--
437,500; Ronald A. Durando--1,970,000; Gustave Dotoli--1,110,000; J. Lee
Barton--110,000; David Klimek--725,000; J. Allen Layman--25,000; Anthony
Guerino and Susan E. Cifelli--0.
(3) Includes 1,567,863 shares held by Durando Investment LLC which Mr. Durando
controls and 50,000 shares held by Nutley Securities, Inc., a company
wholly-owned by Mr. Durando.
(4) Includes 100,000 shares owned by Kim Barton, his wife and 100,000 shares
owned by Betty Barton, his daughter; and 2,445,000 shares owned by
Lintel, Inc., a company in which Mr. Barton is the President and Chief
Executive Officer.
(5) The address for Lintel, Inc. is 196 North Forest Avenue, P.O. Box 388,
Hartwell, GA 30643.
11
EXECUTIVE COMPENSATION
Our executive officers, directors and other significant employees and their
ages and positions as of February 9, 2001 are as follows:
NAME OF INDIVIDUAL AGE POSITION WITH THE COMPANY AND SUBSIDIARIES
- --------------------------------------- -------- ------------------------------------------
Ronald A. Durando...................... 43 Chief Executive Officer
Gustave T. Dotoli...................... 65 Chief Operating Officer
David Klimek........................... 48 Chief Technology Officer
J. Lee Barton.......................... 47 Director
Anthony Guerino(1)(2).................. 55 Director
J. Allen Layman(2)..................... 49 Director
Necdet Ergul........................... 76 Director
Craig Vickers(1)....................... 55 Director
Abraham Biderman(2).................... 52 Director
Martin Smiley.......................... Chief Financial Officer and General
53 Counsel
- ------------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
The following table sets forth, for the fiscal year ended June 30, 2000 and
the two previous fiscal years, the compensation paid by us to, as well as any
other compensation paid to or earned by,
- our Chief Executive Officer; and
- our four most highly compensated executive officers, other than the Chief
Executive Officer, whose compensation during the fiscal year ended
June 30, 2000 was greater than $100,000 for services rendered to us in all
capacities during such year.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------------------
-------------------------------- RESTRICTED STOCK UNDERLYING
NAME OF INDIVIDUAL AWARDS(S) OPTIONS/SARS
& PRINCIPAL POSITION YEAR SALARY BONUS (SHARES) (SHARES)
- -------------------------------------- -------- -------- ---------- ---------------- ------------
Ronald A. Durando(1)(2)............... 2000 $312,920 $2,398,032 157,500 250,000
President and 1999 250,000 275,000 400,000 562,500
Chief Exec. Officer 1998 150,000 -- -- --
Gustave T. Dotoli (1)................. 2000 231,670 362,000 232,500 175,000
Chief Operating Officer 1999 175,000 100,000 175,000 300,000
1998 120,000 -- -- --
David Klimek(1)....................... 2000 106,500 30,000 -- 50,000
Chief Tech. Officer 1999 77,138 35,000 275,000 150,000
1998 68,500 -- -- --
Susan E. Cifelli (3).................. 2000 205,850 30,000 20,000 125,000
1999 45,080 -- -- 130,000
- ------------------------
(1) Includes $15,000 annual stipend as a director.
12
(2) Bonus compensation includes contractual stock bonus award of 226,000 shares
having a value of $1,714,532 on June 30, 2000. For a description of the
bonus formula, see the description of Mr. Durando's Employment Agreement
below.
(3) Susan E. Cifelli is no longer employed with the Company.
No individual named above received pre-requisites or non-cash compensation
during the years indicated which exceeded the lesser of $50,000 or an amount
equal to 10% of such person's salary. No other executive officer received
compensation and bonuses that exceeded $100,000 during any year.
STOCK OPTIONS
The following table sets forth certain information concerning individual
issues of options made during the year ended June 30, 2000 to our executive
officers named in the summary compensation table above. For the fiscal year
ended June 30, 2000, we granted options to acquire up to an aggregate of shares
to employees and directors.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
% OF TOTAL POTENTIAL REALIZABLE VALUE
OPTIONS AT ASSUMED ANNUAL RATES
GRANTED TO OF STOCK PRICE APPRECIATION
OPTION EMPLOYEES EXERCISE OR FOR 10 YEAR OPTION TERM
GRANTED IN FISCAL BASE PRICE ---------------------------
NAME (#) 2000 ($/SHARE) EXPIRATION DATE 5% 10%
- ------------------------------ -------- ---------- ----------- --------------- ------------ ------------
Ronald A. Durando............. 250,000 13.3 4.00 2005 $1,450,725 $2,310,050
Gustave T. Dotoli............. 175,000 9.3 4.00 2005 1,015,507 1,617,035
25,000 1.3 4.00 2005 145,072 231,050
Susan E. Cifelli.............. 100,000 6.53 1.00 2005 997,697 1,588,667
David Klimek.................. 50,000 2.7 4.00 2005 290,145 462,010
The following table sets forth information with respect to the number and
value of outstanding options held by our executive officers named in the Summary
Compensation Table above at June 30, 2000. The value of unexercised in-the-money
options is based upon the difference between closing price of our shares on
June 30, 2000 and the exercise price of the options.
FISCAL YEAR-END OPTION VALUES
SHARES VALUE OF UNEXERCISED
ACQUIRED NUMBER OF AT FISCAL IN-THE-MONEY OPTIONS AT
ON VALUE YEAR-END (#) FISCAL YEAR-END ($)
EXERCISE REALIZED ------------------------------ -------------------------------
NAME (#) $(1) EXERCISABLE UNEXERCISABLE(*) EXERCISABLE UNEXERCISABLE(*)
- ------------------------- -------- -------- ----------- ---------------- ------------ ----------------
Ronald A. Durando........ 0 0 1,750,000 3,000,000 $10,360,375 $18,375,000
Gustave T. Dotoli........ 140,000 $857,500 1,090,000 1,500,000 6,403,125 9,187,500
David Klimek............. 0 0 675,000 4,129,687 --
Susan E. Cifelli......... 0 0 165,000 90,000 962,813 545,625
- --------------------------
* Value of contingent options exercisable only upon a change in control of our
company, not voted for by such person as a stockholder or director.
13
EMPLOYMENT AGREEMENTS
We have an employment agreement with Ronald A. Durando, our President, Chief
Executive Officer and Director. The agreement, executed June 24, 1999, is for a
term of thirty-six months expiring on June 30, 2002. Under the terms of the
agreement, Mr. Durando receives a base annual salary of $275,000, a bonus and a
salary increase based upon a performance review every six months, beginning six
months from the effective date of the agreement, as well as health benefits,
vacation and such other fringe benefits as would be paid to our similarly
situated senior management. In consideration of devoting such time as would be
required of our Chief Executive Officer to our business and specifically to his
duties under the agreement to provide investor relations, Mr. Durando is
entitled to a bonus at the end of each year equal to five percent (5%) of the
increase in the market value of the issued and outstanding shares of our shares,
of which bonus twenty-five percent (25%) shall be payable in cash and the
remaining balance in shares.
Such agreement is terminable upon Mr. Durando's death, permanent disability,
or for "just cause" (defined below) and is renewable within two months of the
expiration date of the agreement upon the mutual terms agreed to by Mr. Durando
and us. Mr. Durando shall be deemed "permanently disabled" under the agreement
if he shall fail to render and perform the executive services required under the
agreement for a continuous period of three consecutive months. "Just cause" is
defined under the agreement as the commission of acts constituting theft,
embezzlement, the receipt of funds or property under false pretenses or similar
acts of gross misconduct with respect to our property, or the conviction of a
felony involving matters not directly related to our business if, in the Board's
discretion, it adversely affects his ability to perform his executive duties.
The agreement also contains work-for-hire, confidentiality and
non-disclosure provisions. In the event that Mr. Durando breaches such
provisions, we are entitled to injunctive relief restraining him from any
further breach, in addition to any other remedies that we may have arising out
of such breach.
14
Additionally, in the event of a change in control that is not approved by
Mr. Durando as one of our Directors or shareholders, he is entitled to exercise
an option to purchase 3,000,000 shares at a price of $1.00 per share.
We also have an employment agreement with Gustave T. Dotoli, our Chief
Operating Officer and Director. The agreement, executed June 24, 1999, is for a
term of thirty-six months expiring June 30, 2002, and Mr. Dotoli receives a base
annual salary of $200,000, a bonus and a salary increase based upon performance
review every six months, beginning six months from the effective date of the
agreement, as well as health benefits, vacation and such other fringe benefits
as would be paid to our similarly situated senior management.
The employment agreement is terminable upon Mr. Dotoli's death, permanent
disability, or for "just cause"(defined below), and is renewable within two
months of the expiration date of the agreement upon the mutual terms agreed to
by Mr. Dotoli and us. Mr. Dotoli shall be deemed "permanently disabled" under
the agreement if he shall fail to render and perform the executive services
required under the agreement for a continuous period of three consecutive
months. "Just cause" is defined under the agreement as the commission of acts
constituting theft, embezzlement, the receipt of funds or property under false
pretenses or similar acts of gross misconduct with respect to our property, or
the conviction of a felony involving matters not directly related to our
business if, in the Board's discretion, it adversely affects his ability to
perform his executive duties. The agreement also contains work-for-hire,
confidentiality and non-disclosure provisions. Additionally, in the event of a
change in control that is not approved by Mr. Dotoli as one of our Directors or
shareholders, he is entitled to exercise an option to purchase 1,500,000 shares
as a price of $1.00 per share.
We also have an employment agreement with Martin Smiley, our Executive Vice
President, Chief Financial Officer and General Counsel. The agreement executed
August 21, 2000, is for a term of twenty-four months expiring on August 20,
2002. Mr. Smiley receives a base annual salary of $175,000, a bonus and a salary
increase based upon performance review every twelve months, beginning twelve
months from the effective date of the agreement, as well as health benefits,
vacation and such other fringe benefits as would be paid to our similarly
situated senior management.
Such agreement is terminable upon Mr. Smiley's death, significant
disability, or for good cause, and is renewable within one month of the
expiration date of the agreement upon the mutual terms agreed to by Mr. Smiley
and us. Mr. Smiley shall be deemed "significantly disabled" under the agreement
for a continuous period of six months. "Good cause" is defined under the
agreement as the commission of acts constituting a felony or crime; fraud or
misappropriation of funds; personal dishonesty, incompetence or, gross
negligence; willful misconduct; repeated use of drugs, alcohol or similar
substance; or breach of the agreement. The agreement also contains
confidentiality and non-disclosure provisions.
None of our other executive officers have an employment agreement with us.
Ms. Cifelli is no longer employed with the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
As indicated above, our Compensation Committee consists of Messrs. Dotoli,
Vickers and Guerino. The committee determines all compensation paid or awarded
to our executive officers and approves our overall compensation policies.
The committee's goals are to attract and retain an executive management team
that is capable of taking full advantage of our opportunities, and to provide
incentives for outstanding performance. In arriving at an initial compensation
offer to an individual, the committee considers determinants of the individual's
market value, including experience, education, accomplishments and reputation,
as well as the level of responsibility to be assumed, in relation to the market
value of such qualifications and
15
industry standards. When determining subsequent adjustments to an individual's
compensation package, the committee also evaluates the importance to
stockholders of that person's continued service. This is a judgment process,
exercised by the committee with the advice of our management and a compensation
consultant.
The executive officers' compensation structure consists of: (i) base salary,
(ii) cash bonus and (iii) stock options.
BASE SALARY. Each individual's base salary is determined by the committee
after considering a variety of factors that make up our market value and
prospective value, including the knowledge, experience and accomplishments of
the individual, the individual's level of responsibility, and the typical
compensation levels for individuals with similar credentials. The committee may
change the salary of an individual on the basis of its judgment for any reason,
including our performance or the performance of the individual, changes in
responsibility, and changes in the market for executives with similar
credentials. Salaries for 2000 were set based on the above factors.
CASH BONUS. Bonuses are awarded for accomplishments during the past year.
Bonuses are determined by the committee with advice from our management, based
upon the committee's assessment of the individual's contributions during the
year, compared to, but not limited to, a list of individualized goals previously
approved by our management and the committee. In determining bonuses for the
fiscal year ended June 30, 2000, the committee considered in addition to the
individualized goals, our raising of approximately $17,622,000 additional
capital to support ongoing research and significant progress in conducting
trials of our system and, and further additions to our intellectual property and
to its capability to convert this to product development programs.
STOCK OPTIONS. Stock options are prospective incentives, aimed at keeping
and motivating key people by letting them share in the value they create for
stockholders. They are awarded at times deemed appropriate by the committee in
amounts calculated to secure the full attention and best efforts of executives
on whose future performance our success will depend. Executive officers other
than the C.E.O. (discussed below) received options covering 350,000 shares of
our common stock in 2000.
CHIEF EXECUTIVE OFFICER'S COMPENSATION. The committee awarded Mr. Durando a
discretional bonus for the fiscal year ended June 30, 2000. Mr. Durando received
a cash bonus and shares of our stock. The bonus is based on the committee's
assessments of Mr. Durando's role in our performance in 2000. Under
Mr. Durando's leadership, our capabilities and opportunities were significantly
enhanced by raising an additional $17,622,000 million to support ongoing
research efforts and product development. At the same time, we have made
significant progress in developing new products. Organizational development is
keeping pace with the expanding opportunities. The committee also reviewed
Mr. Durando's bonus in light of the progress we have made in raising additional
capital, as well as in the testing of the our products. The committee decided to
award Mr. Durando this bonus due to the foregoing achievements.
16
PERFORMANCE GRAPH
As part of the proxy statement disclosure requirements mandated by the
Securities and Exchange Commission, we are required to provide a comparison of
the cumulative total stockholder return on our shares with that of a broad
equity market index and either a published industry index or a
company-constructed peer group index. The following graph compares the
performance of our shares, the Nasdaq Composite Index (the "CCMP") and the
Russell 2000 Index (the "RTY). The comparison assumes $100 was invested on
June 3, 1997 (date of our shares first became publicly traded) in our shares and
in each of the foregoing indices and assumes no dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
XDSL EQUITY CCMP INDEX NASDAQ COMPOSITE INDEX
6/4/01 $100.00 $100.00 $100.00
6/5/01 $122.22 $99.62 $99.84
6/6/01 $111.11 $100.37 $100.45
6/7/01 $111.11 $101.44 $101.01
6/10/01 $111.11 $101.96 $101.21
6/11/01 $111.11 $101.21 $101.05
6/12/01 $111.11 $101.66 $101.13
6/13/01 $88.89 $101.91 $101.63
6/14/01 $88.89 $102.75 $102.29
6/17/01 $94.44 $103.40 $102.33
6/18/01 $94.44 $104.20 $102.42
6/19/01 $100.00 $103.43 $102.40
6/20/01 $100.00 $104.49 $103.45
6/21/01 $100.00 $104.49 $102.69
6/24/01 $100.00 $103.57 $101.97
6/25/01 $88.89 $104.88 $102.61
6/26/01 $91.67 $104.43 $102.07
6/27/01 $88.89 $103.72 $101.82
6/28/01 $88.89 $103.84 $102.41
7/1/01 $88.89 $104.13 $103.42
7/2/01 $88.89 $103.85 $102.83
7/3/01 $88.89 $105.11 $102.98
7/4/01 $88.89 $105.97 $103.36
7/5/01 $88.89 $105.97 $103.36
7/8/01 $88.89 $106.20 $103.39
7/9/01 $88.89 $107.23 $103.91
7/10/01 $88.89 $107.34 $103.68
7/11/01 $88.89 $107.66 $104.14
7/12/01 $88.89 $108.50 $104.95
7/15/01 $94.44 $110.03 $105.37
7/16/01 $88.89 $111.35 $106.03
7/17/01 $88.89 $114.13 $107.03
7/18/01 $88.89 $113.28 $106.48
7/19/01 $100.00 $111.78 $105.90
7/22/01 $100.00 $110.93 $105.26
7/23/01 $88.89 $112.92 $105.97
7/24/01 $88.89 $113.20 $106.36
7/25/01 $88.89 $113.30 $106.50
7/26/01 $88.89 $113.33 $106.59
7/29/01 $88.89 $112.90 $106.63
7/30/01 $88.89 $113.53 $106.94
7/31/01 $88.89 $114.67 $107.87
8/1/01 $88.89 $115.08 $108.14
8/2/01 $88.89 $115.12 $108.07
8/5/01 $88.89 $115.92 $108.44
8/6/01 $88.89 $117.09 $109.14
8/7/01 $88.89 $117.73 $109.77
8/8/01 $100.00 $117.28 $109.61
8/9/01 $100.00 $115.42 $108.06
8/12/01 $88.89 $114.57 $107.66
8/13/01 $88.89 $113.82 $107.34
8/14/01 $88.89 $114.33 $107.40
8/15/01 $88.89 $114.57 $107.46
8/16/01 $88.89 $112.79 $106.60
8/19/01 $88.89 $113.33 $106.64
8/20/01 $88.89 $115.58 $107.96
8/21/01 $94.44 $117.60 $109.34
8/22/01 $88.89 $116.06 $108.81
8/23/01 $94.44 $115.44 $108.47
8/26/01 $94.44 $115.64 $109.08
8/27/01 $88.89 $114.90 $109.14
8/28/01 $91.67 $115.21 $109.80
8/29/01 $91.67 $114.18 $110.00
8/30/01 $91.67 $114.62 $110.48
9/2/01 $91.67 $114.62 $110.48
9/3/01 $104.17 $116.84 $111.68
9/4/01 $104.17 $116.85 $111.87
9/5/01 $94.44 $117.31 $112.11
9/6/01 $88.89 $118.11 $112.98
9/9/01 $104.17 $118.81 $113.75
9/10/01 $104.17 $119.59 $114.21
9/11/01 $104.17 $118.37 $113.99
9/12/01 $104.17 $118.41 $113.74
9/13/01 $91.67 $119.09 $114.82
9/16/01 $86.11 $118.05 $114.84
9/17/01 $86.11 $120.48 $116.15
9/18/01 $88.89 $120.33 $116.40
9/19/01 $88.89 $120.59 $116.49
9/20/01 $86.11 $121.33 $116.67
9/23/01 $86.11 $121.99 $117.14
9/24/01 $91.67 $122.56 $117.26
9/25/01 $83.33 $121.84 $117.04
9/26/01 $75.00 $121.23 $116.86
9/27/01 $75.00 $121.47 $117.12
9/30/01 $63.89 $122.39 $117.75
10/1/01 $61.11 $121.72 $118.40
10/2/01 $61.11 $122.05 $118.63
10/3/01 $61.11 $122.93 $119.22
10/4/01 $83.33 $123.90 $119.89
10/7/01 $83.33 $124.33 $120.46
10/8/01 $83.33 $125.44 $121.00
10/9/01 $83.33 $125.77 $120.97
10/10/01 $83.33 $126.06 $121.20
10/11/01 $83.33 $125.57 $121.33
10/14/01 $55.56 $125.79 $121.38
10/15/01 $55.56 $125.12 $121.05
10/16/01 $61.11 $124.44 $120.73
10/17/01 $66.67 $122.73 $119.28
10/18/01 $47.22 $120.36 $117.22
10/21/01 $61.11 $121.70 $118.41
10/22/01 $61.11 $123.66 $119.74
10/23/01 $55.56 $123.34 $119.56
10/24/01 $55.56 $120.68 $117.24
10/25/01 $55.56 $119.21 $116.76
10/28/01 $47.22 $110.84 $109.61
10/29/01 $47.22 $115.75 $112.02
10/30/01 $47.22 $115.73 $113.46
10/31/01 $52.78 $113.39 $111.84
11/1/01 $51.39 $115.07 $113.04
11/4/01 $50.00 $117.70 $115.05
11/5/01 $52.78 $117.78 $115.40
11/6/01 $58.33 $118.23 $116.04
11/7/01 $61.11 $117.22 $115.54
11/8/01 $58.33 $115.70 $113.55
11/11/01 $55.56 $114.86 $113.60
11/12/01 $55.56 $114.44 $113.08
11/13/01 $55.56 $111.32 $110.48
11/14/01 $55.56 $112.59 $110.46
11/15/01 $58.33 $114.34 $111.77
11/18/01 $66.67 $116.55 $113.66
11/19/01 $50.00 $115.56 $112.75
11/20/01 $50.00 $115.62 $112.37
11/21/01 $55.56 $117.45 $113.68
11/22/01 $55.56 $117.03 $113.51
11/25/01 $55.56 $114.59 $111.62
11/26/01 $50.00 $114.74 $111.38
11/27/01 $47.22 $115.13 $111.71
11/28/01 $47.22 $115.13 $111.71
11/29/01 $47.22 $115.57 $112.17
12/2/01 $47.22 $117.75 $113.27
12/3/01 $47.22 $115.99 $112.84
12/4/01 $47.22 $116.62 $113.18
12/5/01 $52.78 $116.50 $113.47
12/6/01 $52.78 $117.98 $114.29
12/9/01 $52.78 $119.25 $115.33
12/10/01 $52.78 $117.01 $114.32
12/11/01 $43.56 $115.29 $112.92
12/12/01 $47.22 $112.54 $110.81
12/13/01 $47.22 $110.95 $110.27
12/16/01 $47.22 $110.95 $109.78
12/17/01 $47.22 $112.14 $110.97
12/18/01 $33.33 $111.73 $111.26
12/19/01 $41.67 $109.98 $109.67
12/20/01 $41.67 $110.10 $109.59
12/23/01 $33.33 $110.63 $110.33
12/24/01 $33.33 $109.03 $110.11
12/25/01 $33.33 $108.28 $109.85
12/26/01 $33.33 $108.28 $109.85
12/27/01 $44.44 $109.13 $109.97
12/30/01 $52.44 $111.01 $111.32
12/31/01 $47.22 $113.01 $113.24
1/1/02 $45.83 $113.39 $114.02
1/2/02 $45.83 $113.39 $114.02
1/3/02 $52.78 $114.20 $113.89
1/6/02 $52.78 $115.11 $114.03
1/7/02 $52.78 $114.10 $113.00
1/8/02 $47.22 $112.77 $112.13
1/9/02 $47.22 $112.32 $111.07
1/10/02 $47.22 $108.54 $107.74
1/13/02 $47.22 $108.86 $107.20
1/14/02 $44.44 $111.32 $109.17
1/15/02 $44.44 $111.83 $110.08
1/16/02 $44.44 $111.71 $110.04
1/17/02 $44.44 $112.85 $111.21
1/20/02 $44.44 $112.85 $111.21
1/21/02 $44.44 $114.82 $112.53
1/22/02 $52.78 $114.66 $112.16
1/23/02 $47.22 $113.83 $111.20
1/24/02 $47.22 $113.79 $110.84
1/27/02 $55.56 $112.75 $109.84
1/28/02 $55.56 $114.01 $110.24
1/29/02 $47.22 $116.31 $111.82
1/30/02 $47.22 $116.94 $112.71
1/31/02 $47.22 $116.93 $112.20
2/3/02 $52.78 $119.35 $113.34
2/4/02 $52.78 $120.32 $114.22
2/5/02 $52.78 $121.34 $115.28
2/6/02 $47.22 $121.08 $115.86
2/7/02 $50.00 $122.34 $116.23
2/10/02 $55.56 $122.06 $116.70
2/11/02 $61.11 $123.40 $117.72
2/12/02 $69.44 $123.37 $117.93
2/13/02 $69.44 $123.79 $118.03
2/14/02 $77.78 $123.50 $118.53
2/17/02 $77.78 $123.50 $118.53
2/18/02 $69.44 $123.00 $118.24
2/19/02 $83.33 $123.89 $118.63
2/20/02 $77.78 $124.70 $118.51
2/21/02 $77.78 $124.78 $118.45
2/24/02 $77.78 $126.49 $119.05
2/25/02 $75.00 $125.55 $118.53
2/26/02 $66.67 $127.55 $119.62
2/27/02 $61.11 $128.32 $120.42
2/28/02 $61.11 $127.84 $120.49
3/3/02 $65.28 $126.98 $120.42
3/4/02 $65.28 $126.88 $120.65
3/5/02 $65.28 $127.06 $120.57
3/6/02 $65.28 $123.61 $119.19
3/7/02 $66.67 $126.61 $120.99
3/10/02 $66.67 $124.57 $120.31
3/11/02 $66.67 $126.25 $121.22
3/12/02 $61.11 $126.86 $121.87
3/13/02 $61.11 $127.38 $122.04
3/14/02 $63.89 $127.93 $122.30
3/17/02 $61.11 $129.12 $123.08
3/18/02 $72.22 $128.48 $122.92
3/19/02 $61.11 $129.13 $123.19
3/20/02 $63.89 $129.97 $123.75
3/21/02 $61.11 $129.19 $123.73
3/24/02 $69.44 $129.43 $123.66
3/25/02 $69.44 $130.87 $124.26
3/26/02 $55.56 $131.74 $124.49
3/27/02 $66.67 $132.03 $124.66
3/28/02 $69.44 $131.68 $124.49
3/31/02 $69.44 $131.32 $124.25
4/1/02 $66.67 $132.55 $125.41
4/2/02 $72.22 $133.41 $126.52
4/3/02 $62.22 $133.80 $126.91
4/4/02 $69.44 $133.97 $126.75
4/7/02 $77.78 $132.08 $125.73
4/8/02 $77.78 $129.88 $123.97
4/9/02 $80.00 $130.48 $124.02
4/10/02 $86.11 $131.43 $125.25
4/11/02 $86.11 $131.43 $125.25
4/14/02 $97.22 $131.77 $125.12
4/15/02 $98.61 $133.08 $126.50
4/16/02 $102.78 $134.54 $127.09
4/17/02 $100.00 $134.18 $126.39
4/18/02 $108.33 $134.78 $127.06
4/21/02 $108.33 $136.26 $127.53
4/22/02 $94.44 $137.47 $128.21
4/23/02 $94.44 $138.46 $128.14
4/24/02 $88.89 $135.85 $126.53
4/25/02 $98.61 $134.95 $125.32
4/28/02 $86.11 $131.44 $122.23
4/29/02 $94.44 $132.27 $123.29
4/30/02 $102.78 $133.70 $124.45
5/1/02 $102.78 $134.91 $125.99
5/2/02 $90.28 $135.28 $126.52
5/5/02 $90.97 $135.67 $126.66
5/6/02 $88.89 $134.66 $125.69
5/7/02 $94.44 $134.07 $125.07
5/8/02 $88.89 $132.51 $124.18
5/9/02 $88.89 $134.62 $125.11
5/12/02 $91.67 $133.44 $124.43
5/13/02 $91.67 $134.32 $124.23
5/14/02 $94.44 $134.75 $124.58
5/15/02 $91.67 $134.69 $124.07
5/16/02 $88.89 $133.35 $123.26
5/19/02 $83.33 $132.26 $122.00
5/20/02 $91.67 $133.28 $122.85
5/21/02 $87.50 $132.26 $122.24
5/22/02 $83.33 $131.49 $121.89
5/23/02 $91.67 $130.33 $120.80
5/26/02 $91.67 $130.33 $120.80
5/27/02 $84.72 $128.39 $118.73
5/28/02 $84.72 $128.61 $117.48
5/29/02 $88.89 $129.58 $118.92
5/30/02 $93.06 $128.45 $119.13
6/2/02 $94.44 $126.13 $117.71
6/3/02 $97.22 $127.21 $117.33
6/4/02 $94.44 $125.81 $117.19
6/5/02 $88.89 $127.80 $117.86
6/6/02 $88.89 $128.74 $118.51
6/9/02 $91.67 $129.09 $119.06
6/10/02 $87.50 $130.03 $119.17
6/11/02 $94.44 $128.04 $117.69
6/12/02 $88.89 $126.34 $115.93
6/13/02 $88.89 $126.00 $115.21
6/16/02 $86.11 $123.89 $113.20
6/17/02 $88.89 $126.59 $114.37
6/18/02 $77.78 $128.27 $115.86
6/19/02 $66.67 $128.00 $114.74
6/20/02 $61.11 $128.62 $114.40
6/23/02 $66.67 $130.39 $115.23
6/24/02 $61.11 $133.19 $116.73
6/25/02 $55.56 $135.59 $117.75
6/26/02 $56.94 $134.54 $117.45
6/27/02 $52.78 $134.99 $117.48
6/30/02 $59.72 $136.55 $118.41
7/1/02 $63.89 $136.81 $119.34
7/2/02 $47.22 $138.24 $119.98
7/3/02 $47.22 $136.76 $119.58
7/4/02 $47.22 $136.76 $119.58
7/7/02 $47.22 $137.88 $120.01
7/8/02 $46.22 $137.78 $119.77
7/9/02 $44.44 $139.75 $120.01
7/10/02 $44.89 $140.07 $120.02
7/11/02 $44.44 $140.30 $119.61
7/14/02 $37.50 $141.92 $119.69
7/15/02 $43.06 $142.13 $119.87
7/16/02 $36.11 $144.02 $120.53
7/17/02 $41.64 $144.45 $120.97
7/18/02 $41.67 $145.05 $120.63
7/21/02 $44.44 $145.44 $120.52
7/22/02 $47.11 $142.91 $119.01
7/23/02 $45.83 $142.23 $117.65
7/24/02 $44.44 $139.74 $115.41
7/25/02 $47.22 $139.43 $114.43
7/28/02 $52.78 $139.59 $113.01
7/29/02 $48.89 $136.94 $111.55
7/30/02 $59.72 $135.86 $111.20
7/31/02 $70.83 $138.61 $112.06
8/1/02 $91.67 $135.20 $109.52
8/4/02 $119.44 $133.66 $107.85
8/5/02 $122.22 $128.94 $104.79
8/6/02 $116.67 $129.12 $104.02
8/7/02 $116.67 $132.10 $106.09
8/8/02 $119.44 $133.35 $108.48
8/11/02 $127.78 $132.80 $107.40
8/12/02 $126.39 $129.45 $104.52
8/13/02 $113.89 $131.82 $106.59
8/14/02 $115.56 $130.16 $105.36
8/15/02 $105.56 $129.26 $105.09
8/18/02 $108.33 $131.27 $105.40
8/19/02 $111.11 $133.95 $107.31
8/20/02 $120.83 $133.05 $105.89
8/21/02 $133.33 $132.32 $104.81
8/22/02 $125.00 $129.80 $103.22
8/25/02 $130.22 $129.31 $102.72
8/26/02 $133.33 $129.84 $101.69
8/27/02 $130.56 $127.67 $99.25
8/28/02 $134.72 $121.77 $95.52
8/29/02 $144.44 $118.40 $93.55
9/1/02 $197.22 $108.26 $88.17
9/2/02 $169.44 $113.73 $90.82
9/3/02 $166.67 $115.01 $92.01
9/4/02 $133.33 $113.50 $90.35
9/5/02 $130.56 $113.11 $90.55
9/8/02 $130.56 $113.11 $90.55
9/9/02 $136.11 $119.93 $94.43
9/10/02 $136.11 $117.30 $92.02
9/11/02 $119.44 $114.47 $90.00
9/12/02 $127.78 $118.54 $92.26
9/15/02 $130.56 $120.27 $93.33
9/16/02 $130.56 $121.17 $93.33
9/17/02 $131.94 $122.02 $93.89
9/18/02 $125.00 $118.87 $92.70
9/19/02 $133.33 $120.14 $94.78
9/22/02 $130.56 $121.34 $94.61
9/23/02 $122.22 $122.59 $96.08
9/24/02 $125.00 $127.10 $98.10
9/25/02 $116.67 $124.22 $96.60
9/26/02 $111.11 $125.90 $96.28
9/29/02 $111.11 $125.58 $96.02
9/30/02 $133.33 $125.21 $95.44
10/1/02 $130.56 $122.31 $94.86
10/2/02 $125.00 $116.42 $91.33
10/3/02 $155.56 $116.61 $91.24
10/6/02 $162.50 $110.96 $87.87
10/7/02 $144.44 $109.10 $86.76
10/8/02 $119.44 $105.61 $84.07
10/9/02 $105.56 $102.47 $80.95
10/10/02 $111.11 $107.77 $83.07
10/13/02 $113.89 $111.64 $84.96
10/14/02 $116.67 $108.99 $83.58
10/15/02 $105.56 $111.27 $84.79
10/16/02 $111.11 $116.33 $87.35
10/17/02 $108.33 $117.04 $89.46
10/20/02 $111.11 $119.05 $91.96
10/21/02 $109.72 $118.36 $93.49
10/22/02 $97.22 $120.93 $93.91
10/23/02 $94.44 $122.94 $95.60
10/24/02 $94.44 $122.31 $95.77
10/27/02 $100.00 $124.56 $97.08
10/28/02 $94.44 $124.02 $96.93
10/29/02 $83.33 $125.45 $96.92
10/30/02 $86.11 $126.88 $97.70
10/31/02 $88.89 $127.91 $98.66
11/3/02 $94.44 $130.04 $100.92
11/4/02 $93.56 $129.14 $101.12
11/5/02 $94.44 $131.67 $102.53
11/6/02 $91.67 $132.65 $103.52
11/7/02 $95.83 $134.06 $104.45
11/10/02 $91.67 $134.38 $103.95
11/11/02 $91.67 $134.71 $103.54
11/12/02 $100.00 $134.46 $102.66
11/13/02 $104.17 $133.66 $102.33
11/14/02 $111.11 $133.44 $101.59
11/17/02 $108.31 $134.43 $101.86
11/18/02 $106.94 $135.64 $101.60
11/19/02 $108.33 $137.01 $102.31
11/20/02 $102.78 $138.61 $102.89
11/21/02 $108.33 $139.23 $102.87
11/24/02 $105.56 $142.78 $103.88
11/25/02 $94.44 $141.95 $103.48
11/26/02 $97.22 $143.35 $104.18
11/27/02 $97.22 $143.35 $104.18
11/28/02 $100.00 $145.60 $104.91
12/1/02 $97.22 $140.77 $103.78
12/2/02 $91.67 $144.68 $104.03
12/3/02 $97.22 $144.07 $103.71
12/4/02 $97.22 $141.12 $103.06
12/5/02 $102.22 $144.64 $103.94
12/8/02 $88.89 $147.35 $104.67
12/9/02 $93.06 $146.92 $104.75
12/10/02 $86.11 $148.05 $104.87
12/11/02 $88.89 $145.57 $103.45
12/12/02 $86.11 $146.53 $103.15
12/15/02 $75.00 $142.03 $101.22
12/16/02 $91.67 $145.32 $101.64
12/17/02 $88.89 $145.09 $101.71
12/18/02 $86.11 $147.58 $102.74
12/19/02 $86.11 $150.63 $103.69
12/22/02 $83.33 $154.38 $104.84
12/23/02 $79.17 $153.15 $104.42
12/24/02 $94.44 $156.87 $105.61
12/25/02 $94.44 $156.19 $105.81
12/26/02 $94.44 $156.19 $105.81
12/29/02 $91.67 $157.43 $106.52
12/30/02 $90.28 $157.54 $107.08
12/31/02 $88.89 $156.47 $107.47
1/1/03 $94.44 $158.33 $110.09
1/2/03 $94.44 $158.33 $110.09
1/5/03 $90.28 $159.44 $109.91
1/6/03 $88.89 $162.56 $110.13
1/7/03 $88.89 $167.58 $111.61
1/8/03 $88.89 $167.96 $111.62
1/9/03 $88.89 $169.28 $112.51
1/12/03 $97.22 $172.18 $113.01
1/13/03 $88.89 $167.57 $111.50
1/14/03 $88.89 $167.29 $110.85
1/15/03 $88.89 $164.40 $109.61
1/16/03 $88.89 $169.56 $111.42
1/19/03 $88.89 $169.56 $111.42
1/20/03 $91.67 $173.89 $112.42
1/21/03 $88.89 $174.41 $112.35
1/22/03 $88.89 $169.30 $110.64
1/23/03 $91.67 $168.88 $110.22
1/26/03 $83.33 $171.08 $110.13
1/27/03 $87.50 $175.71 $110.97
1/28/03 $86.11 $173.81 $109.87
1/29/03 $102.78 $178.88 $110.62
1/30/03 $127.78 $180.94 $111.46
2/2/03 $108.33 $181.25 $111.17
2/3/03 $122.22 $177.88 $110.03
2/4/03 $136.11 $180.04 $110.56
2/5/03 $140.28 $174.02 $109.00
2/6/03 $222.22 $171.39 $107.68
2/9/03 $255.56 $173.65 $107.32
2/10/03 $200.00 $166.85 $105.18
2/11/03 $208.33 $166.76 $103.83
2/12/03 $233.33 $173.70 $105.97
2/13/03 $244.44 $167.66 $103.96
2/16/03 $244.44 $167.66 $103.96
2/17/03 $223.61 $167.08 $103.42
2/18/03 $194.44 $162.39 $101.63
2/19/03 $188.89 $163.23 $102.04
2/20/03 $183.33 $164.89 $102.35
2/23/03 $175.00 $169.11 $103.79
2/24/03 $175.00 $171.59 $104.10
2/25/03 $165.28 $168.92 $103.13
2/26/03 $162.50 $168.01 $102.46
2/27/03 $166.67 $165.21 $102.34
3/2/03 $211.11 $165.73 $102.90
3/3/03 $202.78 $163.12 $102.91
3/4/03 $191.67 $163.56 $102.26
3/5/03 $191.67 $165.56 $102.80
3/6/03 $208.33 $168.76 $103.84
3/9/03 $205.56 $173.12 $104.38
3/10/03 $188.89 $172.79 $104.15
3/11/03 $179.17 $173.73 $104.65
3/12/03 $179.17 $174.18 $104.64
3/13/03 $175.00 $171.96 $103.94
3/16/03 $176.39 $175.57 $104.58
3/17/03 $172.22 $176.13 $104.15
3/18/03 $172.22 $175.39 $103.95
3/19/03 $175.00 $177.84 $104.24
3/20/03 $172.22 $174.83 $103.47
3/23/03 $166.67 $173.00 $102.59
3/24/03 $163.89 $167.72 $100.02
3/25/03 $155.56 $170.79 $100.29
3/26/03 $158.33 $175.81 $102.53
3/27/03 $155.56 $174.68 $102.78
3/30/03 $144.44 $180.00 $104.30
3/31/03 $144.44 $179.09 $104.04
4/1/03 $152.78 $177.73 $103.74
4/2/03 $144.44 $180.04 $104.03
4/3/03 $144.44 $180.04 $104.03
4/6/03 $134.72 $184.85 $104.96
4/7/03 $131.94 $185.08 $104.64
4/8/03 $130.56 $183.73 $103.78
4/9/03 $148.61 $185.82 $104.33
4/10/03 $152.78 $187.24 $105.89
4/13/03 $166.67 $187.65 $107.58
4/14/03 $168.06 $186.55 $108.86
4/15/03 $183.33 $181.04 $108.90
4/16/03 $197.22 $182.09 $109.00
4/17/03 $180.56 $179.36 $109.99
4/20/03 $180.56 $169.39 $107.61
4/21/03 $166.67 $173.99 $108.36
4/22/03 $155.56 $179.73 $111.29
4/23/03 $166.67 $184.97 $111.89
4/24/03 $163.89 $187.07 $112.64
4/27/03 $158.33 $191.50 $113.49
4/28/03 $166.67 $187.91 $113.54
4/29/03 $155.56 $184.15 $113.11
4/30/03 $150.00 $182.57 $112.93
5/1/03 $166.67 $183.61 $112.92
5/4/03 $169.44 $183.09 $113.05
5/5/03 $166.67 $179.44 $112.87
5/6/03 $154.17 $183.00 $113.30
5/7/03 $152.78 $178.52 $113.07
5/8/03 $154.17 $180.78 $113.78
5/11/03 $155.56 $182.42 $115.28
5/12/03 $152.78 $185.33 $116.58
5/13/03 $173.61 $188.21 $117.21
5/14/03 $186.11 $186.44 $117.63
5/15/03 $175.00 $182.53 $115.62
5/18/03 $166.67 $184.98 $115.15
5/19/03 $166.67 $184.73 $115.44
5/20/03 $163.89 $186.11 $116.40
5/21/03 $202.78 $183.57 $116.89
5/22/03 $222.22 $181.97 $117.18
5/25/03 $216.67 $177.17 $114.90
5/26/03 $205.56 $171.92 $113.35
5/27/03 $202.78 $175.26 $113.60
5/28/03 $194.44 $174.68 $112.95
5/29/03 $194.44 $178.39 $114.45
6/1/03 $194.44 $178.39 $114.45
6/2/03 $205.56 $174.17 $114.14
6/3/03 $211.11 $175.64 $113.95
6/4/03 $212.50 $173.54 $113.75
6/5/03 $216.67 $178.95 $115.41
6/8/03 $216.67 $182.27 $116.53
6/9/03 $216.67 $178.68 $115.78
6/10/03 $338.89 $181.91 $116.15
6/11/03 $391.67 $179.41 $115.39
6/12/03 $322.22 $176.75 $114.28
6/15/03 $275.00 $173.17 $112.59
6/16/03 $288.89 $174.36 $113.24
6/17/03 $294.44 $181.80 $115.11
6/18/03 $280.56 $183.71 $115.68
6/19/03 $268.06 $185.10 $116.12
6/22/03 $287.50 $189.92 $117.26
6/23/03 $294.44 $186.31 $116.71
6/24/03 $309.72 $187.60 $116.64
6/25/03 $300.00 $184.42 $115.62
6/26/03 $340.28 $184.32 $115.61
6/29/03 $352.78 $187.91 $117.04
6/30/03 $344.44 $190.78 $118.47
7/1/03 $355.56 $193.96 $119.41
7/2/03 $397.22 $195.40 $118.56
7/3/03 $398.61 $197.92 $119.11
7/6/03 $398.61 $197.92 $119.11
7/7/03 $402.78 $197.61 $119.12
7/8/03 $358.33 $198.07 $118.11
7/9/03 $341.67 $200.15 $118.65
7/10/03 $394.44 $201.68 $119.49
7/13/03 $408.33 $201.49 $119.83
7/14/03 $411.11 $200.61 $119.52
7/15/03 $406.94 $203.49 $120.40
7/16/03 $383.33 $205.02 $121.53
7/17/03 $408.33 $206.84 $121.39
7/20/03 $393.06 $204.37 $120.37
7/21/03 $361.11 $197.28 $118.33
7/22/03 $384.72 $199.42 $118.62
7/23/03 $372.22 $193.83 $117.80
7/24/03 $383.33 $194.41 $116.98
7/27/03 $372.22 $189.12 $115.55
7/28/03 $361.11 $193.47 $116.49
7/29/03 $355.56 $195.38 $116.52
7/30/03 $333.33 $190.63 $115.21
7/31/03 $356.94 $190.52 $116.04
8/3/03 $333.33 $189.44 $115.48
8/4/03 $305.56 $186.87 $113.83
8/5/03 $283.33 $183.41 $112.11
8/6/03 $286.11 $185.27 $112.12
8/7/03 $294.44 $183.98 $111.68
8/10/03 $286.11 $181.89 $111.12
8/11/03 $269.44 $179.80 $110.32
8/12/03 $269.44 $185.21 $111.72
8/13/03 $266.67 $184.09 $111.88
8/14/03 $272.22 $190.47 $113.25
8/17/03 $261.11 $191.01 $113.19
8/18/03 $252.78 $192.88 $113.75
8/19/03 $241.67 $191.91 $113.00
8/20/03 $230.56 $189.29 $112.91
8/21/03 $244.44 $191.23 $113.33
8/24/03 $233.33 $196.37 $114.08
8/25/03 $231.94 $198.74 $114.05
8/26/03 $216.67 $202.58 $114.24
8/27/03 $177.78 $200.35 $113.76
8/28/03 $233.33 $199.21 $112.83
8/31/03 $208.33 $195.87 $111.50
9/1/03 $216.67 $197.80 $111.62
9/2/03 $202.78 $198.63 $112.45
9/3/03 $222.22 $197.43 $111.52
9/4/03 $213.89 $205.29 $113.75
9/7/03 $213.89 $205.29 $113.75
9/8/03 $200.00 $204.87 $114.34
9/9/03 $195.83 $202.81 $113.73
9/10/03 $187.50 $205.94 $114.22
9/11/03 $183.33 $208.47 $115.11
9/14/03 $186.11 $205.41 $114.71
9/15/03 $183.33 $207.11 $114.34
9/16/03 $179.17 $203.20 $113.84
9/17/03 $177.78 $202.66 $112.25
9/18/03 $184.72 $207.21 $113.35
9/21/03 $187.50 $208.40 $113.02
9/22/03 $179.17 $203.70 $111.28
9/23/03 $177.78 $206.38 $111.55
9/24/03 $176.39 $198.56 $109.64
9/25/03 $133.33 $197.88 $108.82
9/28/03 $135.42 $199.42 $110.07
9/29/03 $172.22 $199.02 $109.19
9/30/03 $155.56 $197.14 $109.98
10/1/03 $163.89 $198.29 $111.49
10/2/03 $152.78 $197.62 $110.50
10/5/03 $147.22 $201.89 $111.31
10/6/03 $147.22 $202.16 $111.15
10/7/03 $140.28 $206.31 $112.13
10/8/03 $145.83 $206.56 $111.70
10/9/03 $147.22 $208.43 $111.59
10/12/03 $145.83 $210.55 $112.24
10/13/03 $145.83 $207.41 $110.80
10/14/03 $140.28 $202.27 $109.40
10/15/03 $137.50 $202.67 $109.40
10/16/03 $150.00 $197.26 $108.20
10/19/03 $144.44 $194.18 $106.68
10/20/03 $147.22 $194.11 $107.21
10/21/03 $140.28 $201.32 $108.00
10/22/03 $141.67 $202.32 $108.09
10/23/03 $136.11 $203.37 $109.24
10/26/03 $141.67 $203.33 $109.00
10/27/03 $138.89 $203.01 $108.48
10/28/03 $127.78 $202.36 $108.74
10/29/03 $126.39 $207.61 $110.31
10/30/03 $118.06 $214.20 $111.83
11/2/03 $125.00 $214.28 $112.66
11/3/03 $115.28 $215.29 $112.81
11/4/03 $113.89 $218.68 $114.40
11/5/03 $113.89 $220.66 $114.77
11/6/03 $111.11 $224.01 $115.43
11/9/03 $112.50 $227.02 $116.12
11/10/03 $113.89 $225.65 $116.44
11/11/03 $113.89 $227.88 $117.07
11/12/03 $113.89 $230.87 $116.75
11/13/03 $109.72 $232.59 $117.33
11/16/03 $111.11 $232.47 $118.18
11/17/03 $105.56 $237.96 $119.20
11/18/03 $144.44 $236.07 $119.25
11/19/03 $136.11 $241.68 $120.55
11/20/03 $133.33 $243.28 $120.35
11/23/03 $151.39 $244.97 $120.22
11/24/03 $161.11 $241.38 $118.57
11/25/03 $222.22 $246.98 $118.95
11/26/03 $222.22 $246.98 $118.95
11/27/03 $275.00 $248.96 $119.74
11/30/03 $233.33 $247.05 $119.22
12/1/03 $202.78 $240.89 $118.47
12/2/03 $222.22 $242.16 $118.37
12/3/03 $220.83 $249.31 $120.13
12/4/03 $200.00 $254.21 $121.21
12/7/03 $222.22 $256.05 $121.52
12/8/03 $204.17 $259.00 $121.50
12/9/03 $213.89 $258.94 $122.32
12/10/03 $211.11 $259.52 $121.30
12/11/03 $211.11 $261.41 $121.77
12/14/03 $219.44 $264.14 $122.72
12/15/03 $244.44 $257.90 $120.73
12/16/03 $244.44 $261.53 $120.36
12/17/03 $252.78 $268.25 $121.39
12/18/03 $236.11 $271.00 $121.64
12/21/03 $222.22 $273.22 $121.89
12/22/03 $238.89 $282.41 $124.14
12/23/03 $233.33 $284.30 $124.70
12/24/03 $241.67 $286.62 $125.87
12/25/03 $241.67 $286.62 $125.87
12/28/03 $244.44 $287.05 $126.40
12/29/03 $236.11 $286.81 $127.45
12/30/03 $225.00 $291.82 $129.67
12/31/03 $222.22 $291.49 $129.56
1/1/04 $238.89 $293.83 $131.69
1/4/04 $312.50 $298.30 $129.52
1/5/04 $351.39 $281.73 $124.81
1/6/04 $313.89 $279.98 $124.93
1/7/04 $311.11 $269.12 $124.02
1/8/04 $312.50 $280.35 $127.40
1/11/04 $325.00 $292.41 $130.95
1/12/04 $338.89 $283.14 $128.52
1/13/04 $355.56 $278.00 $127.85
1/14/04 $338.89 $285.74 $130.76
1/15/04 $333.33 $293.47 $132.43
1/18/04 $333.33 $293.47 $132.43
1/19/04 $319.44 $298.27 $133.96
1/20/04 $336.11 $299.75 $135.68
1/21/04 $325.00 $302.51 $137.57
1/22/04 $355.56 $305.82 $139.31
1/25/04 $416.67 $295.77 $136.44
1/26/04 $436.11 $300.92 $136.09
1/27/04 $411.11 $293.88 $135.94
1/28/04 $361.11 $291.68 $134.89
1/29/04 $352.78 $280.67 $131.66
2/1/04 $365.28 $284.52 $129.47
2/2/04 $377.78 $292.58 $131.43
2/3/04 $366.67 $294.17 $133.03
2/4/04 $376.39 $304.06 $136.10
2/5/04 $416.67 $306.46 $137.11
2/8/04 $463.89 $312.06 $138.90
2/9/04 $530.56 $319.70 $140.23
2/10/04 $572.22 $315.06 $139.85
2/11/04 $716.67 $323.89 $141.47
2/12/04 $795.83 $317.38 $140.13
2/15/04 $894.44 $319.05 $140.87
2/16/04 $795.83 $319.21 $140.95
2/17/04 $713.89 $319.71 $142.91
2/18/04 $779.17 $328.46 $145.70
2/19/04 $800.00 $318.56 $142.37
2/22/04 $800.00 $318.56 $142.37
2/23/04 $811.11 $316.42 $141.14
2/24/04 $727.78 $328.57 $143.47
2/25/04 $677.78 $333.43 $144.55
2/26/04 $597.22 $331.47 $145.26
2/29/04 $494.44 $330.55 $145.50
3/1/04 $555.56 $339.13 $150.73
3/2/04 $700.00 $345.44 $153.50
3/3/04 $672.22 $343.31 $152.38
3/4/04 $650.00 $354.88 $155.99
3/7/04 $722.22 $354.16 $156.97
3/8/04 $691.67 $350.05 $155.36
3/9/04 $688.89 $353.61 $155.16
3/10/04 $700.00 $364.42 $158.12
3/11/04 $666.67 $364.54 $157.54
3/14/04 $627.78 $354.34 $153.97
3/15/04 $583.33 $339.85 $149.50
3/16/04 $611.11 $330.90 $145.81
3/17/04 $655.56 $340.63 $149.82
3/18/04 $647.22 $346.46 $149.96
3/21/04 $622.22 $332.87 $143.29
3/22/04 $677.78 $340.22 $144.23
3/23/04 $697.22 $351.27 $149.03
3/24/04 $708.33 $356.75 $149.71
3/25/04 $733.33 $358.36 $149.76
3/28/04 $741.67 $358.04 $149.67
3/29/04 $755.56 $349.04 $145.86
3/30/04 $702.78 $335.38 $141.67
3/31/04 $608.33 $321.89 $138.69
4/1/04 $688.89 $330.19 $140.65
4/4/04 $627.78 $304.98 $134.64
4/5/04 $555.56 $299.58 $132.05
4/6/04 $577.78 $301.05 $135.16
4/7/04 $547.22 $308.15 $138.93
4/8/04 $536.11 $321.06 $141.67
4/11/04 $494.44 $302.42 $135.32
4/12/04 $477.78 $292.86 $133.10
4/13/04 $400.00 $272.19 $128.74
4/14/04 $443.06 $265.49 $127.64
4/15/04 $350.00 $239.82 $118.38
4/18/04 $294.44 $255.55 $119.82
4/19/04 $383.33 $273.92 $126.82
4/20/04 $441.67 $267.63 $126.86
4/21/04 $477.78 $263.11 $125.71
4/22/04 $477.78 $263.11 $125.71
4/25/04 $400.00 $251.46 $122.24
4/26/04 $443.06 $267.98 $127.59
4/27/04 $419.44 $262.12 $126.34
4/28/04 $397.22 $272.51 $129.04
4/29/04 $408.33 $278.77 $132.08
5/2/04 $425.00 $285.80 $135.39
5/3/04 $397.22 $273.34 $131.85
5/4/04 $400.00 $267.69 $129.29
5/5/04 $415.28 $268.63 $130.95
5/6/04 $386.11 $275.60 $133.80
5/9/04 $333.33 $264.95 $130.47
5/10/04 $333.33 $258.86 $128.07
5/11/04 $311.11 $244.40 $123.74
5/12/04 $377.78 $252.69 $127.68
5/13/04 $377.78 $254.82 $128.09
5/16/04 $341.67 $260.50 $129.88
5/17/04 $355.56 $268.43 $132.01
5/18/04 $344.44 $263.19 $130.36
5/19/04 $344.44 $255.52 $128.09
5/20/04 $330.56 $244.81 $125.16
5/23/04 $313.89 $242.92 $123.06
5/24/04 $313.89 $228.50 $119.76
5/25/04 $294.44 $236.16 $120.47
5/26/04 $288.89 $231.45 $119.02
5/27/04 $280.56 $231.43 $119.33
5/30/04 $280.56 $231.43 $119.33
5/31/04 $269.44 $249.80 $124.37
6/1/04 $302.78 $245.57 $124.24
6/2/04 $422.22 $258.68 $128.49
6/3/04 $433.33 $275.35 $133.85
6/6/04 $463.89 $275.96 $133.92
6/7/04 $491.67 $271.24 $133.49
6/8/04 $416.67 $277.22 $134.77
6/9/04 $394.44 $276.23 $134.25
6/10/04 $375.00 $279.79 $136.47
6/13/04 $375.00 $272.07 $132.67
6/14/04 $397.22 $278.07 $134.04
6/15/04 $375.00 $274.20 $132.98
6/16/04 $372.22 $277.69 $133.65
6/17/04 $355.56 $278.76 $134.04
6/20/04 $338.89 $288.09 $136.40
6/21/04 $322.22 $289.79 $137.16
6/22/04 $347.22 $293.45 $137.66
6/23/04 $322.22 $284.27 $134.37
6/24/04 $316.67 $277.66 $133.17
6/27/04 $315.97 $282.48 $134.72
6/28/04 $313.89 $278.64 $132.56
6/29/04 $334.03 $284.52 $135.93
6/30/04 $322.22 $279.96 $133.74
7/1/04 $336.11 $286.38 $134.95
7/4/04 $338.89 $288.24 $136.73
7/5/04 $338.89 $288.24 $136.73
7/6/04 $330.56 $278.94 $135.21
7/7/04 $319.44 $285.98 $136.54
7/8/04 $316.67 $290.50 $137.82
7/11/04 $308.33 $287.40 $138.50
7/12/04 $302.78 $285.68 $138.21
7/13/04 $405.56 $296.02 $140.95
7/14/04 $386.11 $301.45 $141.61
7/15/04 $444.44 $306.60 $141.58
7/18/04 $400.00 $308.66 $142.24
7/19/04 $366.67 $301.62 $139.92
7/20/04 $391.67 $292.84 $137.72
7/21/04 $401.39 $302.15 $139.52
7/22/04 $388.89 $295.65 $136.38
7/25/04 $375.00 $287.50 $134.17
7/26/04 $369.44 $290.96 $134.19
7/27/04 $350.00 $287.94 $134.06
7/28/04 $341.67 $277.44 $130.87
7/29/04 $344.44 $264.49 $127.90
8/1/04 $344.44 $272.00 $130.62
8/2/04 $333.33 $266.12 $129.87
8/3/04 $324.89 $264.17 $130.51
8/4/04 $344.44 $271.49 $130.31
8/5/04 $313.89 $273.47 $131.40
8/8/04 $313.89 $278.93 $133.03
8/9/04 $313.89 $277.89 $132.73
8/10/04 $305.56 $278.25 $132.41
8/11/04 $311.11 $271.50 $130.88
8/12/04 $313.89 $273.63 $133.13
8/15/04 $305.56 $277.97 $134.23
8/16/04 $305.56 $278.12 $133.04
8/17/04 $294.44 $278.81 $133.78
8/18/04 $294.44 $284.56 $134.75
8/19/04 $294.44 $283.80 $134.50
8/22/04 $319.44 $285.44 $134.74
8/23/04 $350.00 $285.81 $135.01
8/24/04 $327.78 $289.62 $135.12
8/25/04 $302.78 $292.67 $136.53
8/26/04 $302.78 $291.91 $137.00
8/29/04 $319.44 $293.92 $137.36
8/30/04 $316.67 $294.76 $138.18
8/31/04 $313.89 $296.32 $138.89
9/1/04 $313.89 $303.73 $140.34
9/2/04 $319.44 $305.75 $141.39
9/5/04 $319.44 $305.75 $141.39
9/6/04 $304.17 $299.17 $140.63
9/7/04 $308.33 $289.79 $139.93
9/8/04 $297.22 $295.93 $141.62
9/9/04 $281.94 $287.27 $139.77
9/12/04 $276.39 $281.34 $139.22
9/13/04 $269.44 $277.96 $138.91
9/14/04 $277.78 $281.17 $139.32
9/15/04 $272.22 $282.61 $140.68
9/16/04 $277.78 $276.93 $138.51
9/19/04 $283.33 $269.08 $134.80
9/20/04 $275.00 $279.13 $136.53
9/21/04 $290.28 $281.42 $136.04
9/22/04 $275.00 $276.47 $134.20
9/23/04 $268.06 $274.66 $135.36
9/26/04 $288.89 $270.14 $134.47
9/27/04 $284.72 $266.38 $133.03
9/28/04 $277.78 $264.01 $132.57
9/29/04 $276.39 $272.82 $136.67
9/30/04 $273.61 $265.20 $136.03
10/3/04 $263.89 $257.70 $133.50
10/4/04 $227.78 $249.53 $131.67
10/5/04 $234.72 $254.39 $132.41
10/6/04 $227.78 $250.71 $131.15
10/7/04 $225.00 $242.69 $128.11
10/10/04 $225.00 $242.29 $127.72
10/11/04 $225.00 $233.99 $125.66
10/12/04 $227.78 $228.79 $123.86
10/13/04 $244.44 $222.01 $120.79
10/14/04 $225.00 $239.49 $125.34
10/17/04 $225.00 $237.58 $125.69
10/18/04 $225.00 $232.07 $122.86
10/19/04 $225.00 $229.01 $121.64
10/20/04 $227.78 $246.85 $125.57
10/21/04 $227.78 $251.51 $127.18
10/24/04 $225.00 $250.46 $127.83
10/25/04 $226.39 $246.93 $127.28
10/26/04 $222.22 $233.20 $123.99
10/27/04 $219.44 $236.27 $125.17
10/28/04 $213.89 $236.72 $125.20
10/31/04 $205.56 $230.44 $125.94
11/1/04 $173.61 $243.31 $129.85
11/2/04 $157.78 $240.69 $129.20
11/3/04 $152.78 $247.60 $132.27
11/4/04 $220.83 $249.23 $132.47
11/7/04 $209.72 $246.67 $131.49
11/8/04 $195.14 $246.64 $132.02
11/9/04 $194.44 $233.35 $130.63
11/10/04 $186.11 $231.09 $129.23
11/11/04 $179.17 $218.71 $125.47
11/14/04 $172.22 $214.22 $124.33
11/15/04 $179.17 $226.60 $127.04
11/16/04 $169.44 $228.57 $128.31
11/17/04 $166.67 $218.92 $125.66
11/18/04 $148.61 $218.58 $125.92
11/21/04 $133.33 $207.64 $122.69
11/22/04 $138.89 $207.34 $121.79
11/23/04 $116.67 $198.95 $119.47
11/24/04 $116.67 $198.95 $119.47
11/25/04 $136.11 $209.72 $123.11
11/28/04 $132.89 $207.99 $123.07
11/29/04 $125.00 $197.48 $119.76
11/30/04 $106.94 $195.46 $118.61
12/1/04 $86.11 $187.59 $116.35
12/2/04 $98.61 $191.01 $119.19
12/5/04 $97.22 $188.88 $117.51
12/6/04 $97.22 $208.66 $122.93
12/7/04 $105.56 $201.93 $120.94
12/8/04 $140.28 $198.76 $120.30
12/9/04 $155.56 $210.66 $124.99
12/12/04 $138.89 $217.71 $127.12
12/13/04 $120.83 $211.69 $124.65
12/14/04 $112.50 $203.82 $122.60
12/15/04 $111.11 $197.02 $120.49
12/16/04 $116.67 $191.58 $119.50
12/19/04 $105.56 $189.51 $120.86
12/20/04 $104.17 $181.36 $119.70
12/21/04 $97.22 $168.44 $115.79
12/22/04 $90.28 $168.97 $116.63
12/23/04 $94.44 $181.75 $120.80
12/26/04 $94.44 $181.75 $120.80
12/27/04 $88.89 $180.05 $121.75
12/28/04 $83.33 $183.36 $125.05
12/29/04 $76.39 $184.69 $128.90
12/30/04 $65.28 $178.39 $126.16
1/2/05 $65.28 $178.39 $126.16
1/3/05 $79.17 $165.49 $120.67
1/4/05 $102.78 $188.94 $126.38
1/5/05 $90.28 $185.34 $124.50
1/6/05 $95.83 $173.85 $120.84
1/9/05 $86.11 $173.00 $120.44
1/10/05 $94.44 $176.28 $121.05
1/11/05 $91.67 $182.26 $124.05
1/12/05 $102.78 $190.67 $126.24
1/13/05 $130.56 $189.65 $126.74
1/16/05 $130.56 $189.65 $126.74
1/17/05 $140.28 $189.08 $128.70
1/18/05 $126.39 $193.72 $128.75
1/19/05 $122.22 $199.90 $129.05
1/20/05 $122.22 $200.04 $127.35
1/23/05 $130.56 $199.14 $127.88
1/24/05 $125.00 $205.10 $130.99
1/25/05 $115.28 $206.45 $131.04
1/26/05 $115.28 $198.88 $130.19
1/27/05 $109.72 $200.83 $130.11
1/30/05 $105.56 $204.95 $132.52
1/31/05 $108.33 $204.95 $133.50
2/1/05 $105.56 $200.21 $132.63
2/2/05 $102.78 $200.94 $132.79
2/3/05 $104.17 $192.11 $130.84
2/6/05 $101.39 $190.86 $130.65
2/7/05 $100.00 $192.39 $131.96
2/8/05 $93.06 $188.30 $132.30
2/9/05 $90.28 $185.00 $131.21
2/10/05 $87.50 $178.42 $129.68
2/13/05 $90.28 $179.77 $131.85
2/14/05 $88.89 $175.30 $131.12
2/15/05 $87.50 $179.90 $131.36
2/16/05 $84.72 $184.34 $132.76
2/17/05 $86.11 $175.13 $130.27
2/20/05 $86.11 $175.13 $130.27
2/21/05 $86.11 $167.40 $128.14
2/22/05 $77.78 $163.83 $126.15
2/23/05 $73.61 $162.10 $124.52
2/24/05 $68.06 $163.37 $124.57
2/27/05 $65.28 $166.69 $127.40
2/28/05 $68.06 $159.42 $124.91
3/1/05 $66.67 $155.38 $123.77
3/2/05 $65.28 $157.65 $123.49
3/3/05 $63.89 $152.91 $124.42
3/6/05 $65.28 $154.73 $124.14
3/7/05 $70.83 $159.17 $125.53
3/8/05 $74.67 $160.58 $126.50
ADDITIONAL INFORMATION COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires our executive officers and
directors, and persons who own more than ten percent of a registered class of
our equity securities, to file reports of ownership and changes in ownership
with the SEC and to provide us with copies of such reports. We have reviewed
such reports received by it and written representations from its directors and
executive officers. Based solely on such review, there were no Form 4s filed
late.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our management is affiliated by employment at and/or ownership of a related
group of companies, including Microphase Corporation, Complete
Telecommunications, Inc. (which was dissolved subject to a settlement dated
August 16, 1999), Packet Port, Inc. and PacketPort.com and Janifast
Holdings, Ltd., which may record material transactions with us. As a result of
such affiliations, our management in the future may have conflicting interests
with these affiliated companies.
Necdet F. Ergul, Ronald A. Durando and Gustave T. Dotoli, our Chairman,
Chief Executive Officer and Chief Operating Officer, respectively, are executive
officers and shareholders of Microphase and Ronald Durando and Gustave T. Dotoli
are president and vice-president of PacketPort.com., respectively.
17
We reimburse Microphase $50,000 per month for research and development
services and administrative expenses incurred for the use of Microphase's office
space, lab facilities and administrative staff.
Ronald A. Durando is the owner/sole shareholder of Nutley Securities, Inc.,
a former registered broker-dealer, which is not a private investment company
under the Investment Advisors Act of 1940.
One of our directors, J. Lee Barton, is the president and chief executive
officer of Lintel, Inc. Lintel is the parent corporation of Hart Telephone
Company, our beta customer located in Hartwell, Georgia, where we installed our
prototype product and commenced beta testing. In December 1998, we issued
3,115,000 shares in a private placement to J. Lee Barton, several members of his
family, Lintel, several employees of Lintel and two employees of Microphase for
a purchase price of approximately $1.03 per share, or an aggregate purchase
price of $3,197,416. In fiscal year 1999, we awarded J. Lee Barton 75,000 shares
and an option for 100,000 shares. In fiscal year 2000, we awarded J. Lee Barton
a $285,000 bonus, a stock award of 140,000 shares and options for 225,000
shares, which includes options to Hart Telephone.
Janifast Holdings, Ltd., a Delaware corporation, is the parent corporation
of the manufacturer which has produced pots splitter shelves, test access
shelves and CPE filters as well as other components for our prototype Traverser
DVDDS product, and may produce such components for us in the future. Necdet F.
Ergul, Ronald A. Durando and Gustave T. Dotoli are controlling shareholders of
Janifast with an aggregate ownership interest of greater than 75% of Janifast.
Mr. Durando is chairman of the board of directors and each of Messrs. Dotoli and
Ergul are directors of Janifast.
On November 26, 1999, Packet Port, Inc. a company owned 100% by
Mr. Durando, acquired controlling interest in Linkon Corp., which subsequently
changed its name to PacketPort.com, Inc. In connection with this transaction,
Mr. Durando transferred 350,000 shares of our shares owned by him to Packet
Port, Inc. Mr. Durando was elected president and Mr. Dotoli vice president of
PacketPort.com, Inc.
SHAREHOLDERS PROPOSALS FOR THE 2002 ANNUAL MEETING
Shareholders who may wish to present proposals for inclusion in our proxy
materials and for consideration at the 2002 Annual Meeting of Shareholders must
submit such proposals in writing to our corporate Secretary in accordance with
all applicable rules and regulations of the SEC for receipt by us no later than
December 1, 2001. A signed proxy shall confer discretionary authority upon us to
vote on all shareholder proposals that are not received by us on or before
December 1, 2001.
COST OF SOLICITATION
The accompanying proxy is solicited by and on behalf of our Board of
Directors. We will bear the cost of soliciting proxies from its shareholders. In
addition to solicitation by mail, our directors, officers and employees may
solicit proxies by telephone, telegram or otherwise. Such directors, officers
and employees will not receive additional compensation for such solicitation.
Brokerage firms, nominees, custodians and fiduciaries also will be requested to
forward proxy materials to beneficial owners of shares held of record by them.
We may reimburse brokerage firms, nominees, custodians, fiduciaries and other
record holders for their reasonable out of pocket expenses in forwarding proxy
materials to the beneficial owners and obtaining their proxies.
ADDITIONAL INFORMATION
A copy of our Annual Report on Form 10-KSB for the fiscal year ended
June 30, 2000, is being provided to all shareholders with this Proxy Statement.
In addition, our Annual Report on Form 10-KSB with exhibits is available via the
internet at the website http://www.freeedgar.com.
18
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters which will be presented for consideration at the Annual Meeting other
than the proposals set forth in this Proxy Statement. If any other matters
properly come before the meeting, it is intended that the persons named in the
Proxy will act in respect thereof in accordance with their best judgment.
By Order of the Board of Directors
/s/ Gustave T. Dotoli
GUSTAVE T. DOTOLI
CORPORATE SECRETARY
Norwalk, Connecticut
April , 2001
19
EXHIBIT A
mPHASE TECHNOLOGIES, INC
AUDIT COMMITTEE CHARTER
The Audit Committee ("the Committee"), of the Board of Directors ("the
Board") of mPhase Technologies, Inc.("the Company"), will have the oversight
responsibility, authority and specific duties described below.
COMPOSITION
The Committee will be comprised of three or more directors as determined by
the Board. The members of the Committee will meet the independence and
experience requirements of the National Association of Securities Dealers, Inc.
("NASD") and its wholly owned subsidiary, The NASDAQ Stock Market, Inc
("NASDAQ") Audit Committee requirements. The members of the Committee will be
selected annually at the organizational meeting of the full Board held in May
and will be listed in the Annual report to shareholders, One of the members of
the Committee will be elected Committee Chair by Board.
RESPONSIBILITY
The Committee is a part of the Board. It's primary function is to assist the
Board in fulfilling its oversight responsibilities with respect to (i) the
annual financial information to be provided to shareholders and the Securities
and Exchange Commission (SEC); (ii) the system of internal controls that
management has established; and (iii) the internal and external audit process.
In addition, the Committee provides an avenue for communication between internal
audit, the independent accountants, financial management and the Board. The
Committee should have a clear understanding with the independent accountants
that they must maintain an open and transparent relationship with the Committee,
and that the ultimate accountability of the independent accountants is to the
Board and the Committee. The Committee will make regular reports to the Board
concerning its activities.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's business conduct
guidelines.
AUTHORITY
Subject to the prior approval of the Board, the Committee is granted the
authority to investigate any matter or activity involving financial accounting
and financial reporting, as well as the internal controls of the Company. In
that regard, the Committee will have the authority to approve the retention of
external professionals to render advice and counsel in such matters. All
employees will be directed to cooperate with respect thereto as requested by
members of the Committee.
MEETINGS
The Committee is to meet at least four times annually and as many additional
times as the Committee seems necessary. Content of the agenda for each meeting
should be cleared by the Committee Chair. The Committee is to meet in separate
executive sessions with the chief financial officer, independent accountants and
internal audit at least once each year and at other times when considered
appropriate.
A-1
ATTENDANCE
Committee members will strive to be present at all meetings. As necessary or
desirable, the Committee Chair may request that members of management and
representatives of the independent accountants and internal audit be present at
Committee meetings.
SPECIFIC DUTIES
In carrying out its oversight responsibilities, the Committee will:
1. Review and reassess the adequacy of this charter annually and recommend
any proposed changes to the Board for approval. This should be done in
compliance with applicable NASDAQ Audit Committee Requirements.
2. Review with the Company's management, internal audit and independent
accountants the Company's accounting and financial reporting controls.
Obtain annually in writing from the independent accountants their letter
as to the adequacy of such controls.
3. Review with the Company's managements internal audit and independent
accountants significant accounting and reporting principles, practices
and procedures applied by the Company in preparing its financial
statements. Discuss with the independent accountants their judgements
about the quality, not just the acceptability, of the Company's
accounting principles used in financial reporting.
4. Review the scope of internal audit's work plan for the year and receive
a summary report of major findings by internal auditors and how
management is addressing the conditions reported.
5. Review the scope and general extent of the independent accountants'
annual audit. The Committee's review should include an explanation from
the independent accountants of the factors considered by the accountants
in determining the audit scope, including the major risk factors. The
independent accountants should confirm to the Committee that no
limitations have been placed on the scope or nature of their audit
procedures. The Committee will review annually with management the fee
arrangement with the independent accountants.
6. Inquire as to the independence of the independent accountants and obtain
from the independent accountants, at least annually, a formal written
statement delineating all relationships between the independent
accountants and the Company as contemplated by independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees.
Have a predetermined arrangement with the independent accountants
that they will advise the Committee through its Chair and management of
the Company of any matters identified through procedures followed for
interim quarterly financial statements, and that such notification is to
be made prior to the related press release or, if not practicable, prior
to filing Forms 1O-Q. Also receive a written confirmation provided by the
independent accountants at the end of each of the first three quarters of
the year that they have nothing to report to the Committee, if that is
the case, or the written enumeration of required reporting issues.
7. At the completion of the annual audit, review with management, internal
audit and the independent accountants the following:
The annual financial statements and related footnotes and financial
information to be included in the Company annual report to shareholders
and on Form 1O-K.
Results of the audit of the financial statements and the related
report thereon and, if applicable, a report on changes during the year in
accounting principles and their application.
A-2
Significant changes to the audit plan, if any, and any serious
disputes or difficulties with management encountered during the audit.
Inquire about the cooperation received by the independent accountants
during their audit, including access to all requested records, data and
information. Inquire of the independent accountants whether there have
been any disagreements with management which, if not satisfactorily
resolved, would have caused them to issue a nonstandard report on the
Company's financial statements.
8. Other communications as required to be communicated by the independent
accountants by Statement of Auditing Standards ("SAS") 61 as amended by
SAS 90 relating to the conduct of the audit. Further, receive a written
communication provided by the independent accountants concerning their
judgment about the quality of the Company's accounting principles, as
outlined in SAS 61 as amended by SAS 90, and that they concur with
management's representation concerning audit adjustments.
If deemed appropriate after such review and discussion, recommend to
the Board that the financial statements be included in the Company's
annual report on Form 10-K.
9. After preparation by management and review by internal audit and
independent accountants, approve the report required under SEC rules to
be included in the Company's annual proxy statement. The charter is to be
published as an appendix to the proxy statement every three years.
10. Discuss with the independent accountants the quality of the Company's
financial and accounting personnel. Also, elicit the comments of
management regarding the responsiveness of the independent accountants to
the Company's needs.
11. Meet with management, internal audit and the independent accountants to
discuss any relevant significant recommendations that the independent
accountants may have, particularly those characterized as "material' or
"serious'. Typically, such recommendations will be presented by the
independent accountants in the form of a Letter of Comments and
Recommendations to the Committee. The Committee should review responses
of management to the Letter of Comments and Recommendations from the
independent accountants and receive follow-up reports on action taken
concerning the aforementioned recommendations.
12. Recommend to, the Board the selection, retention or termination of the
Company's Independent accountants.
13. Review the appointment and replacement of the senior internal audit
executive.
14. Review with management, internal audit and the independent accountants
the methods used to establish and monitor the Company's policies with
respect to unethical or illegal activities by Company employees that may
have a material impact on the financial statements.
15. Generally as part of the review of the annual financial statements,
receive an oral report(s), at least annually, from the Company's general
counsel concerning legal and regulatory matters that may have a material
impact on the financial statements.
16. As the Committee may deem appropriate, obtain, weigh and consider expert
advice as to Audit Committee related rules of The NASDAQ Stock
Market, Inc., Statements on Auditing Standards and other accounting,
legal and regulatory provisions.
17. Subject to the prior approval of the Board, arrange for and monitor
special investigations as the need may arise.
A-3
EXHIBIT B
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
mPHASE TECHNOLOGIES, INC.
Pursuant to Section 14A:9-4(3) of Title 14A, Corporations, General, of the
New Jersey Statutes, on behalf of mPhase Technologies, Inc. (the "Corporation"),
the undersigned executes this Certificate of Amendment to the Corporation's
Certificate of Incorporation.
1. AMENDMENT TO AUTHORIZED SHARES OF CAPITAL STOCK.
Paragraph 4 of the Certificate of Incorporation which reads as follows,
"4. The aggregate number of shares which the corporation shall have
authority to issue is 150,000,000 shares, no par value."
shall deleted in its entirety and replaced by the following:
"4. AUTHORIZED SHARES. The aggregate number of shares which the
Corporation shall have authority to issue is One Hundred and Fifty Million
(150,000,000) shares, of which One Hundred and Thirty Million (130,000,000)
shares, par value $.01 per share, shall be initially classified as "Common
Stock," and Twenty Million (20,000,000) shares, par value $.01 per share, shall
be initially classified as "Preferred Stock." A statement of the designations
and the powers, preferences and rights of such classes of stock and the
qualifications, limitations or restrictions thereof, the fixing of which by the
Certificate of Incorporation is desired, and the authority of the Board of
Directors to fix, by resolution or resolutions, the designations and the powers,
preferences and rights of such classes of stock or the qualifications,
limitations or restrictions thereof, which are not fixed hereby, are as follows:
A. PROVISIONS APPLICABLE TO ALL SERIES OF PREFERRED STOCK.
(1) The Board of Directors is expressly authorized, subject to the
limitations prescribed by law and the provisions of this Paragraph, at any
time, and from time to time, to provide for the issuance of shares of
Preferred Stock on one or more series, of any number of shares of Preferred
Stock, and by filing a certificate pursuant to the applicable law under the
New Jersey Business Corporations Act, to establish the number of shares to
be included in each series of Preferred Stock and to fix the powers,
designations, preferences, relative rights, qualifications and restrictions
thereof. The authority of the Board of Directors with respect to each series
of Preferred Stock shall include, but not be limited to, a determination of
the following:
(a) The number of shares of Preferred Stock constituting that series
and the distinctive designation of that series;
(b) The dividend rate on the shares of Preferred Stock of that
series, whether dividends shall be cumulative, and if so, from which date
or dates, and whether they shall be payable in preference to, or in such
relation to, the dividends payable on any other class or classes or of
any other series of the capital stock of the Corporation;
(c) Whether that series shall have any voting rights in addition to
those provided by law, and if so, the terms of such additional voting
rights;
B-1
(d) Whether that series shall have conversion or exchange privileges,
and if so, the terms and conditions of such conversion or exchange,
including provision for adjustment of the conversion or exchange rate in
such events as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable, and
if so, the terms and conditions of such redemption, including the manner
of selecting shares for redemption if less than all of the shares are to
be redeemed, the date or dates upon or after which they shall be
redeemable and the type and amount of consideration payable per share in
case of redemption, which amount may vary under different conditions and
at different redemption dates;
(f) Whether that series shall be entitled to the benefit of a sinking
fund to be applied to the purchase or redemption of shares of that
series, and if so, the terms and amount of such sinking fund;
(g) The right of shares of that series to the benefit of conditions
and restrictions upon the creation of indebtedness of the Corporation or
any subsidiary, upon the issuance of any additional stock (including
additional shares of such series or of any other series) and upon the
payment of dividends or the making of other distributions on, and the
purchase or redemption or other acquisition by the Corporation or any
subsidiary of, any outstanding stock of the Corporation;
(h) The rights of the shares of that series in the event of a
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and whether such rights shall be in preference to, or in
another relation to, the comparable rights or any other class or classes
or series of capital stock; and
(i) Any other relative, participating, optional or other special
rights, qualifications, limitations or restrictions of that series.
(2) All shares of each series of Preferred Stock shall be identical in
all respects to the other shares of such series. The rights of the Common
Stock of the Corporation shall be subject to the preferences and relative
participating, optional and other special rights of the Preferred Stock of
each series as fixed herein and from time to time by the Board of Directors
as aforesaid.
B. PROVISIONS APPLICABLE TO COMMON STOCK.
(1) After the requirements with respect to preferential dividends upon
the Preference Stock of all classes and series thereof shall have been met
and after the Corporation shall have complied with all requirements, if any,
with respect to the setting aside of sums as a sinking fund or redemption or
purchase account for the benefit of any class or series thereof, then, and
not otherwise, the holders of Common Stock shall be entitled to receive such
dividends in prorata proportion to their share holdings as may be declared
from time to time by the Board of Directors.
(2) After distribution in full of the preferential amounts to be
distributed to the holders of all classes and series thereof of Preferred
Stock then outstanding in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of
the Common Stock shall be entitled to receive all the remaining assets of
the Corporation available for distribution to its shareholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
B-2
2. RECLASSIFICATION OF ISSUED SHARES.
All shares of common stock of the Corporation, no par value per share, which
are issued and outstanding as of the date hereof are hereby deemed to have a par
value of $.01 per share without any further action required by the Corporation.
3. DATE OF ADOPTION.
The date of adoption of this Amendment to the Certificate of Incorporation
by the Stockholders was April , 2001.
4. NUMBER OF SHARES OUTSTANDING AND ENTITLED TO VOTE.
The number of shares of the capital stock of the Corporation entitled to
vote on the adoption of this Amendment to the Certificate of Incorporation was
.
5. NUMBER OF SHARES VOTED.
The number of shares of Common Stock of the Corporation which voted for the
adoption of this Amendment was shares and the number of shares voted
against the adoption of this Amendment was shares. Shares not voting
were shares.
The undersigned as President and Chief Executive Officer of the Corporation
has executed this Certificate of Amendment to the Certificate of Incorporation
of the Corporation on this day of April, 2001.
mPHASE TECHNOLOGIES, INC.
By:
-----------------------------------------
Ronald A. Durando
PRESIDENT & CHIEF EXECUTIVE OFFICER
B-3
EXHIBIT C
mPHASE TECHNOLOGIES, INC.
2001 STOCK INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
mPhase Technologies, Inc., a New Jersey corporation (the "COMPANY"), hereby
establishes the mPhase Technologies, Inc. 2001 Stock Incentive Plan (the
"PLAN"). The purpose of the Plan is to promote the long-term growth and
profitability of the Company by (i) providing key people with incentives to
improve stockholder value and to contribute to the growth and financial success
of the Company, and (ii) enabling the Company to attract, retain and reward the
best-available persons.
The Plan is the continuation of the mPhase Technologies, Inc. Amended
Long-Term Stock Incentive Plan (the "PRIOR PLAN"), which is hereby merged and
restated as set forth herein. The provisions of the Prior Plan shall continue to
control with respect to any options granted and outstanding thereunder that are
intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code to the extent necessary to preserve
such status.
The Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 and nonqualified stock options), stock
appreciation rights, restricted or unrestricted stock awards, phantom stock,
performance awards, other stock-based awards, or any combination of the
foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the following
definitions apply:
(a) "AFFILIATE" shall mean any entity, whether now or hereafter existing,
which controls, is controlled by, or is under common control with, the Company
(including, but not limited to, joint ventures, limited liability companies, and
partnerships). For this purpose, "control" shall mean ownership of 50% or more
of the total combined voting power or value of all classes of stock or interests
of the entity.
(b) "AWARD" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, performance award, or other stock-based award
granted under the Plan or the Prior Plan.
(c) "BOARD" shall mean the Board of Directors of the Company.
(d) "CHANGE IN CONTROL" means: (i) the acquisition (other than from the
Company) by any Person, as defined in this Section 2(d), of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of 50% or more of (A) the then outstanding
shares of the securities of the Company, or (B) the combined voting power of the
then outstanding securities of the Company entitled to vote generally in the
election of directors (the "COMPANY VOTING STOCK"); (ii) the closing of a sale
or other conveyance of all or substantially all of the assets of the Company; or
(iii) the effective time of any merger, share exchange, consolidation, or other
business combination of the Company if immediately after such transaction
persons who hold a majority of the outstanding voting securities entitled to
vote generally in the election of directors of the surviving entity (or the
entity owning 100% of such surviving entity) are not persons who, immediately
prior to such transaction, held the Company Voting Stock; provided, however,
that a Change in Control shall not include a public offering of capital stock of
the Company. For purposes of this Section 2(d), a "PERSON" means any individual,
entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended, other than employee benefit plans
sponsored or maintained by the Company and corporations controlled by the
Company.
C-1
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
(f) "COMMON STOCK" shall mean shares of common stock of the Company, par
value of $0.01 per share.
(g) "FAIR MARKET VALUE" shall mean, with respect to a share of the Company's
Common Stock for any purpose on a particular date, the value determined by the
Administrator in good faith. However, if the Common Stock is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
listed for trading on a national exchange or market, "FAIR MARKET VALUE" shall
mean, as applicable, (i) either the closing price or the average of the high and
low sale price on the relevant date, as determined in the Administrator's
discretion, quoted on the New York Stock Exchange, the American Stock Exchange,
or the Nasdaq National Market; (ii) the last sale price on the relevant date
quoted on the Nasdaq Small Cap Market; (iii) the average of the high bid and low
asked prices on the relevant date quoted on the Nasdaq OTC Bulletin Board
Service or by the National Quotation Bureau, Inc. or a comparable service as
determined in the Administrator's discretion; or (iv) if the Common Stock is not
quoted by any of the above, the average of the closing bid and asked prices on
the relevant date furnished by a professional market maker for the Common Stock,
or by such other source, selected by the Administrator. If no public trading of
the Common Stock occurs on the relevant date, then Fair Market Value shall be
determined as of the next preceding date on which trading of the Common Stock
does occur. For all purposes under this Plan, the term "relevant date" as used
in this Section 2(g) shall mean either the date as of which Fair Market Value is
to be determined or the next preceding date on which public trading of the
Common Stock occurs, as determined in the Administrator's discretion.
(h) "GRANT AGREEMENT" shall mean a written document memorializing the terms
and conditions of an Award granted pursuant to the Plan and shall incorporate
the terms of the Plan.
3. ADMINISTRATION
(a) ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board or by such committee or committees as may be appointed by the Board from
time to time (the Board, committee or committees hereinafter referred to as the
"Administrator").
(b) POWERS OF THE ADMINISTRATOR. The Administrator shall have all the
powers vested in it by the terms of the Plan, such powers to include authority,
in its sole and absolute discretion, to grant Awards under the Plan, prescribe
Grant Agreements evidencing such Awards and establish programs for granting
Awards.
The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (i) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (ii) determine the
types of Awards to be granted; (iii) determine the number of shares to be
covered by or used for reference purposes for each Award; (iv) impose such
terms, limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and substitute
new Awards (provided however, that, except as provided in Section 7(d) of the
Plan, any modification that would materially adversely affect any outstanding
Award shall not be made without the consent of the holder); (vi) accelerate or
otherwise change the time in which an Award may be exercised or becomes payable
and to waive or accelerate the lapse, in whole or in part, of any restriction or
condition with respect to such Award, including, but not limited to, any
restriction or condition with respect to the vesting or exercisability of an
Award following termination of any grantee's employment or other
C-2
relationship with the Company; and (vii) establish objectives and conditions, if
any, for earning Awards and determining whether Awards will be paid after the
end of a performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) NON-UNIFORM DETERMINATIONS. The Administrator's determinations under
the Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Grant Agreements evidencing such Awards) need not be uniform
and may be made by the Administrator selectively among persons who receive, or
are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.
(d) LIMITED LIABILITY. To the maximum extent permitted by law, no member
of the Administrator shall be liable for any action taken or decision made in
good faith relating to the Plan or any Award thereunder.
(e) INDEMNIFICATION. To the maximum extent permitted by law and by the
Company's charter and by-laws, the members of the Administrator shall be
indemnified by the Company in respect of all their activities under the Plan.
(f) EFFECT OF ADMINISTRATOR'S DECISION. All actions taken and decisions
and determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the Plan
and any other employee, consultant, or director of the Company, and their
respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN
Subject to adjustments as provided in Section 7(d) of the Plan, the shares
of Common Stock that may be issued with respect to Awards granted under the Plan
shall not exceed an aggregate of 20,000,000 shares of Common Stock, in addition
to the shares authorized for issuance under the Prior Plan but not issued
thereunder before the Prior Plan is merged into this Plan. The Company shall
reserve such number of shares, and shall continue to reserve the number of
shares remaining under the Prior Plan, for Awards under the Plan, subject to
adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of
an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Company in connection with any Award (whether or not such surrendered shares
were acquired pursuant to any Award), or if any shares are withheld by the
Company, the shares subject to such Award and the surrendered and withheld
shares shall thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to or withheld by
the Company in connection with any Award or that are otherwise forfeited after
issuance shall not be available for purchase pursuant to incentive stock options
intended to qualify under Code section 422.
Subject to adjustments as provided in Section 7(d) of the Plan, the maximum
number of shares of Common Stock subject to Awards of any combination that may
be gamed during any one fiscal year of the Company to any one individual under
this Plan shall be limited to 500,000 shares. Such per-individual limit shall
not be adjusted to effect a restoration of shares of Common Stock with respect
to which the related Award is terminated, surrendered or cancelled.
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5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers, and
directors of, and other individuals providing bona fide services to or for, the
Company, or of any Affiliate of the Company, as may be selected by the
Administrator from time to time.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement. The Administrator may permit or require a
recipient of an Award to defer such individual's receipt of the payment of cash
or the delivery of Common Stock that would otherwise be due to such individual
by virtue of the exercise of, payment of, or lapse or waiver of restrictions
respecting, any Award. If any such payment deferral is required or permitted,
the Administrator shall, in its sole discretion, establish rules and procedures
for such payment deferrals.
(a) STOCK OPTIONS. The Administrator may from time to time grant to
eligible participants Awards of incentive stock options as that term is defined
in Code section 422 or nonqualified stock options; provided, however, that
Awards of incentive stock options shall be limited to employees of the Company
or of any current or hereafter existing "parent corporation" or "subsidiary
corporation," as defined in Code sections 424(e) and (f), respectively, of the
Company. Options intended to qualify as incentive stock options under Code
section 422 must have an exercise price at least equal to Fair Market Value as
of the date of grant, but nonqualified stock options may be granted with an
exercise price less than Fair Market Value. No stock option shall be an
incentive stock option unless so designated by the Administrator at the time of
grant or in the Grant Agreement evidencing such stock option.
(b) STOCK APPRECIATION RIGHTS. The Administrator may from time to time
grant to eligible participants Awards of Stock Appreciation Rights ("SAR"). An
SAR entitles the grantee to receive, subject to the provisions of the Plan and
the Grant Agreement, a payment having an aggregate value equal to the product of
(i) the excess of (A) the Fair Market Value on the exercise date of one share of
Common Stock over (B) the base price per share specified in the Grant Agreement,
times (ii) the number of shares specified by the SAR, or portion thereof, which
is exercised. Payment by the Company of the amount receivable upon any exercise
of an SAR may be made by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator. If upon settlement of the exercise of an SAR a grantee is to
receive a portion of such payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the Fair Market Value of
a share of Common Stock on the exercise date. No fractional shares shall be used
for such payment and the Administrator shall determine whether cash shall be
given in lieu of such fractional shares or whether such fractional shares shall
be eliminated.
(c) STOCK AWARDS. The Administrator may from time to time grant restricted
or unrestricted stock Awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall determine. A
stock Award may be paid in Common Stock, in cash, or in a combination of Common
Stock and cash, as determined in the sole discretion of the Administrator.
(d) PHANTOM STOCK. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units ("PHANTOM STOCK") in
such amounts and on such terms and conditions as it shall determine. Phantom
stock units granted to a participant shall be credited to a bookkeeping reserve
account solely for accounting purposes and shall not require a segregation of
any of the Company's assets. An Award of phantom stock may be settled in Common
Stock, in cash, or in a combination of Common Stock and cash, as determined in
the sole discretion of
C-4
the Administrator. Except as otherwise provided in the applicable Grant
Agreement, the grantee shall not have the rights of a stockholder with respect
to any shares of Common Stock represented by a phantom stock unit solely as a
result of the grant of a phantom stock unit to the grantee.
(e) PERFORMANCE AWARDS. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or more
performance goals established by the Administrator. Performance awards may be
paid by the delivery of Common Stock or cash, or any combination of Common Stock
and cash, as determined in the sole discretion of the Administrator. Performance
goals established by the Administrator may be based on the Company's or an
Affiliate's operating income or one or more other business criteria selected by
the Administrator that apply to an individual or group of individuals, a
business unit, or the Company or an Affiliate as a whole, over such performance
period as the Administrator may designate.
(f) OTHER STOCK-BASED AWARDS. The Administrator may from time to time
grant other stock-based awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall determine.
Other stock-based awards may be denominated in cash, in Common Stock or other
securities, in stock-equivalent units, in stock appreciation units, in
securities or debentures convertible into Common Stock, or in any combination of
the foregoing and may be paid in Common Stock or other securities, in cash, or
in a combination of Common Stock or other securities and cash, all as determined
in the sole discretion of the Administrator.
7. MISCELLANEOUS
(a) WITHHOLDING OF TAXES. Grantees and holders of Awards shall pay to the
Company or its Affiliate, or make provision satisfactory to the Administrator
for payment of, any taxes required to be withheld in respect of Awards under the
Plan no later than the date of the event creating the tax liability. The Company
or its Affiliate may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the grantee or holder
of an Award. In the event that payment to the Company or its Affiliate of such
tax obligations is made in shares of Common Stock, such shares shall be valued
at Fair Market Value on the applicable date for such purposes.
(b) LOANS. The Company or its Affiliate may make or guarantee loans to
grantees to assist grantees in exercising Awards and satisfying any withholding
tax obligations.
(c) TRANSFERABILITY. Except as otherwise determined by the Administrator,
and in any event in the case of an incentive stock option or a stock
appreciation right granted with respect to an incentive stock option, no Award
granted under the Plan shall be transferable by a grantee otherwise than by will
or the laws of descent and distribution. Unless otherwise determined by the
Administrator in accord with the provisions of the immediately preceding
sentence, an Award may be exercised during the lifetime of the grantee, only by
the grantee or, during the period the grantee is under a legal disability, by
the grantee's guardian or legal representative.
(d) ADJUSTMENTS FOR CORPORATE TRANSACTIONS AND OTHER EVENTS.
(i) STOCK DIVIDEND, STOCK SPLIT AND REVERSE STOCK SPLIT. In the event
of a stock dividend of, or stock split or reverse stock split affecting, the
Common Stock, (A) the maximum number of shares of such Common Stock as to
which Awards may be granted under this Plan, as provided in Section 4 of the
Plan and the maximum number of shares with respect to which Awards may be
granted during any one fiscal year of the Company to any individual, and
(B) the number of shares covered by and the exercise price and other terms
of outstanding Awards, shall, without further action of the Board, be
adjusted to reflect such event. The Administrator may make adjustments,
C-5
in its discretion, to address the treatment of fractional shares and
fractional cents that arise with respect to outstanding Awards as a result
of the stock dividend, stock split or reverse stock split.
(ii) NON-CHANGES IN CONTROL TRANSACTIONS. Except with respect to the
transactions set forth in Section 7(d)(i), in the event of any change
affecting the Common Stock, the Company or its capitalization, by reason of
a spin-off, split-up, dividend, recapitalization, merger, consolidation or
share exchange, the Administrator, shall make (A) appropriate adjustments to
the maximum number and kind of shares reserved for issuance or with respect
to which Awards may be granted under the Plan, in the aggregate and with
respect to any individual during any one fiscal year of the Company, as
provided in Section 4 of the Plan; and (B) appropriate adjustments in
outstanding Awards, including but not limited to modifying the number, kind
and price of securities subject to Awards.
(iii) CHANGE IN CONTROL TRANSACTIONS. In the event of any transaction
resulting in a Change of Control of the Company, outstanding stock options
and SARs under this Plan will vest immediately upon the effective time of
such Change of Control unless provision is made in connection with the
transaction for the continuation or assumption of such Awards by, or for the
substitution of the equivalent awards of, the surviving or successor entity
or a parent thereof.
(iv) POOLING OF INTEREST TRANSACTIONS. In connection with any business
combination authorized by the Board, the Administrator may, to the extent
not in contravention with any other provision hereof, make necessary
adjustments to the Plan to facilitate the compliance of such transaction
with requirements for treatment as a pooling of interests for accounting
purposes under generally accepted accounting principles.
(v) UNUSUAL OR NONRECURRING EVENTS. The Administrator is authorized to
make, in its discretion and without the consent of holders of Awards,
adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events affecting the
Company, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever
the Administrator determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.
(e) SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS. Awards maybe
granted under the Plan from time to time in substitution for awards held by
employees, officers, consultants or directors of entities who become or are
about to become employees, officers, consultants or directors of the Company or
an Affiliate as the result of a merger or consolidation of the employing entity
with the Company or an Affiliate, or the acquisition by the Company or an
Affiliate of the assets or stock of the employing entity. The terms and
conditions of any substitute Awards so granted may vary from the terms and
conditions set forth herein to the extent that the Administrator deems
appropriate at the time of grant to conform the substitute Awards to the
provisions of the awards for which they are substituted.
(f) OTHER AGREEMENTS. As a condition precedent to the grant of any Award
under the Plan, the exercise pursuant to such an Award, or to the delivery of
certificates for shares issued pursuant to any Award, the Administrator may
require the grantee or the grantee's successor or permitted transferee, as the
case may be, to become a party to a stock restriction agreement, shareholders'
agreement, voting trust agreement or other agreements regarding the Common Stock
of the Company in such forms) as the Administrator may determine from time to
time.
(g) TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN. The Board may
terminate, amend or modify the Plan or any portion thereof at any time.
(h) NON-GUARANTEE OF EMPLOYMENT OR SERVICE. Nothing in the Plan or in any
Grant Agreement thereunder shall confer any right on an individual to continue
in the service of the Company or shall
C-6
interfere in any way with the right of the Company to terminate such service at
any time with or without cause or notice and whether or not such termination
results in (i) the failure of any Award to vest; (ii) the forfeiture of any
unvested or vested portion of any Award; and/or (iii) any other adverse effect
on the individual's interests under the Plan.
(i) COMPLIANCE WITH SECURITIES LAWS; LISTING AND REGISTRATION. If at any
time the Administrator determines that the delivery of Common Stock under the
Plan is or may be unlawful under the laws of any applicable jurisdiction, or
federal or state securities laws, the right to exercise an Award or receive
shares of Common Stock pursuant to an Award shall be suspended until the
Administrator determines that such delivery is lawful. The Company shall have no
obligation to effect any registration or qualification of the Common Stock under
federal or state laws.
The Company may require that a grantee, as a condition to exercise of an
Award, and as a condition to the delivery of any share certificate, make such
written representations (including representations to the effect that such
person will not dispose of the Common Stock so acquired in violation of federal
or state securities laws) and furnish such information as may, in the opinion of
counsel for the Company, be appropriate to permit the Company to issue the
Common Stock in compliance with applicable federal and state securities laws.
The stock certificates for any shares of Common Stock issued pursuant to this
Plan may bear a legend restricting transferability of the shares of Common Stock
unless such shares are registered or an exemption from registration is available
under the Securities Act of 1933, as amended, and applicable state securities
laws.
(j) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a grantee or any other person. To the
extent that any grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(k) GOVERNING LAW. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, and the rights of any and all persons having
or claiming to have any interest therein or thereunder, shall be determined
exclusively in accordance with applicable federal laws and the laws of the State
of New Jersey, without regard to its conflict of laws principles.
(1) EFFECTIVE DATE; TERMINATION DATE. The Plan is effective as of the date
on which the Plan is adopted by the Board, subject to approval of the
stockholders within twelve months before or after such date. No Award shall be
granted under the Plan after the close of business on the day immediately
preceding the tenth anniversary of the effective date of the Plan, or if
earlier, the tenth anniversary of the date this Plan is approved by the
stockholders. Subject to other applicable provisions of the Plan, all Awards
made under the Plan prior to such termination of the Plan shall remain in effect
until such Awards have been satisfied or terminated in accordance with the Plan
and the terms of such Awards.
Date Approved by the Board:
-----------------------------------
Date Approved by the Stockholders:
-----------------------------
C-7
ANNUAL MEETING OF SHAREHOLDERS
MPHASE TECHNOLOGIES, INC.
THURSDAY, MAY 17, 2001
10:00 A.M.
--------------------------
PROXY
The undersigned hereby appoints Gustave T. Dotoli and Martin Smiley or
either of them individually, with full power of substitution, to act as proxy
and to represent the undersigned at the Annual Meeting of Shareholders and to
vote all shares of mPhase Technologies, Inc. which the undersigned is entitled
to vote and would possess if personally present at said meeting to be held at
our headquarters at 587 Connecticut Avenue, Norwalk, CT 06854, on Thursday,
May 17, 2001 at 10:00 a.m. and at all postponements or adjournments upon the
following matters:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY,
WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4 LISTED
ON THE REVERSE SIDE. PROXIES ARE ALSO GRANTED THE DISCRETION TO VOTE UPON ALL
OTHER MATTERS THAT MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY
POSTPONEMENT OR ADJOURNMENT THEREOF.
(Continued, and to be signed on next page)
/X/ Please mark your votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS AT RIGHT.
1. Election of Necdet F. Ergul, Ronald A. Durando, Gustave T. Dotoli, David
Klimek, J. Lee Barton, J. Allen Layman, Anthony H. Guerino, Esq., Abraham
Biderman and Craig Vickers as Directors of the Board of Directors until the
next annual meeting.
/ / FOR / / AGAINST / / ABSTAIN
2. Approval of an amendment to the Amended Certificate of Incorporation whereby
(a) the par value of the common stock of the Company is changed from "no
par" to $.01 par value and (b) authorizing the issuance of up to
20,000,000 shares of preferred stock.
/ / FOR / / AGAINST / / ABSTAIN
3. Authorization, approval and adoption of our 2001 Stock Incentive Plan
/ / FOR / / AGAINST / / ABSTAIN
4. Approval of our independent accountants, Arthur Andersen, CPAs, for the
fiscal year ended June 30, 2001.
/ / FOR / / AGAINST / / ABSTAIN
Change of Address / /
I plan to attend the meeting / / I do not plan to attend the
meeting / /
SIGNATURE(S) ______________________
Note: Please sign exactly as your
name appears hereon. Joint
owners should each sign. When
signing as attorney,
executor, administrator,
trustee, or guardian, please
give full titles as such.
DATE ______________________________