SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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[ ] Preliminary Proxy Statement
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[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
SONOMAWEST HOLDINGS, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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SONOMAWEST
HOLDINGS INC
2064 HIGHWAY 116 NORTH o SEBASTOPOL, CA 95472
PH: (707) 824-2001 o FAX: (707) 829-4630
--------------------------
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT
October 29, 2003
---------------------------
To the Shareholders of SonomaWest Holdings, Inc.:
Notice is hereby given that the Annual Meeting of the Shareholders of
SonomaWest Holdings, Inc. (the "Company") will be held on Wednesday, October 29,
2003 at 11:00 a.m., local time, at 333 Bush Street, 17th Floor, San Francisco,
California 94104 for the following purposes:
1. To elect four directors to serve until the 2004 Annual Meeting of
Shareholders or until their respective successors are elected and
qualified.
2. To approve the appointment of Grant Thornton LLP as independent
auditors for the fiscal year ending June 30, 2004.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on September 12,
2003 are entitled to notice of and to vote at the meeting and at any
continuation or adjournment thereof.
All shareholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, we urge you to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if such shareholder has returned a proxy.
By Order of the Board of Directors,
Matthew J. Ertman
SECRETARY
Sebastopol, California
September 30, 2003
SONOMAWEST
HOLDINGS INC
2064 HIGHWAY 116 NORTH o SEBASTOPOL, CA 95472
PH: (707) 824-2001 o FAX: (707) 829-4630
--------------------------
PROXY STATEMENT
For Annual Meeting of Shareholders
October 29, 2003, at 11:00 a.m.
INFORMATION CONCERNING VOTING AND SOLICITATION
GENERAL
This Proxy Statement is furnished by the Board of Directors of
SonomaWest Holdings, Inc. (the "Company") to solicit shareholder proxies to be
voted at the Annual Meeting of Shareholders to be held on Wednesday, October 29,
2003, at 11:00 a.m., local time, or at any adjournment or postponement thereof,
for the purposes set forth herein and in the accompanying Notice of Annual
Meeting of Shareholders. The Annual Meeting will be held at 333 Bush Street,
17th Floor, San Francisco, California.
The mailing of these proxy solicitation materials and the Company's
Annual Report to Shareholders for the year ended June 30, 2003 commenced on or
about September 30, 2003.
VOTING
The Board of Directors has fixed the close of business on September 12,
2003 as the Record Date for the determination of shareholders entitled to
receive notice of, and to vote at, the Annual Meeting or any adjournment
thereof. At the Record Date 1,104,783 shares of the Company's common stock were
issued and outstanding, and no shares of any other class of stock were
outstanding.
Each shareholder on the Record Date will be entitled to one vote for
each share held on all matters to be voted upon at the Annual Meeting, except
for the election of Directors. In the election of Directors, shareholders have
cumulative voting rights, which means that each shareholder is entitled to a
number of votes equal to the number of his or her shares multiplied by the
number of Directors to be elected (four). A shareholder may cast all of his or
her votes for a single candidate, or may distribute votes among as many
candidates as he or she may see fit. No shareholder may cumulate votes for a
candidate, however, unless the name(s) of the candidate(s) have been placed in
nomination prior to the voting and the shareholder has given notice at the
Meeting, prior to the voting, of the intention to cumulate votes. If one
shareholder has already given such a notice, all shareholders may cumulate their
votes for candidates in nomination without further notice.
The inspector of election appointed for the meeting will tabulate all
votes and will separately tabulate affirmative and negative votes, abstentions
and broker non-votes. Each proxy received without specific directions indicated
thereon will be voted FOR the election of the nominees named in this proxy
statement, or as many of such nominees as may be elected as directors of the
Company and FOR approval of the appointment of Grant Thornton LLP as the
Company's independent auditors for the fiscal year ending June 30, 2004.
Abstentions will have the same effect as negative votes. Broker non-votes are
counted towards a quorum, but are not counted for any purpose in determining
whether a matter has been approved. "Broker non-votes" are shares held by
brokers or nominees which are present in person or represented by proxy, but
which are not voted on a particular matter
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because instructions have not been received from the beneficial owner. All
properly executed proxies that are not revoked will be voted at the meeting in
accordance with the instructions contained therein.
REVOCABILITY OF PROXIES
Any person giving a proxy in the form accompanying this statement has
the power to revoke such proxy at any time before it is voted. The proxy may be
revoked by filing with the Secretary of the Company at the Company's principal
executive office a written notice of revocation or a duly executed proxy bearing
a later date, or by filing written notice of revocation with the secretary of
the meeting prior to the voting of the proxy, or by attending the meeting and
voting in person.
SOLICITATION
The Company will bear the entire cost of solicitation, including
preparation, assembly, printing, and mailing of this Proxy Statement, the Proxy
card, and any additional material furnished to shareholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names which are beneficially owned by others
to forward to such beneficial owners. In addition, the Company may reimburse
such persons for their costs of forwarding the solicitation material to such
beneficial owners. Original solicitation of proxies by mail may be supplemented
by telephone, telegram, or personal solicitation by directors, officers, or
employees of the Company. No additional compensation will be paid for any such
services. Except as described above, the Company does not intend to solicit
proxies other than by mail.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of shareholders that are intended to be presented at the
Company's 2004 Annual Meeting of shareholders must be received by the Company no
later than June 7, 2004 in order to be included in the proxy statement and proxy
relating to that meeting. Shareholders wishing to present a proposal in person
must give the Company written notice of their proposal no later than August 20,
2004.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, four Directors are to be elected by the
shareholders to serve until the next Annual Meeting or until the election and
qualification of their successors. The Board's proxy holders (named on the
enclosed Proxy card) intend to vote all shares for which proxies are granted to
elect the four nominees selected by the Company's Board of Directors and intend
to vote such shares cumulatively if necessary to elect some or all of such
nominees.
If any of the Board's nominees refuses or is unable to serve as a
Director (which is not now anticipated), the Board's proxy holders intend to
nominate and vote for such other person(s) as they believe will best serve the
interests of the Company. Any shareholder may nominate a candidate for Director
from the floor at the Meeting. Such nominee must consent to serve, if elected,
prior to voting on his or her name. The Board of Directors has no reason to
believe that any substitute nominee or nominees will be required.
The four nominees for Director who receive the most affirmative votes
will be elected Directors. Votes withheld shall have no effect on the election
result, though applicable securities laws and regulations may require that the
number of such votes subsequently be disclosed to the Company's shareholders
under certain circumstances.
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MANAGEMENT RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES
FOR DIRECTOR NAMED BELOW
NOMINEES
The table below indicates the respective nominee's position with the
Company, age, and year in which he first became a Director.
NAME AGE POSITION WITH THE COMPANY DIRECTOR SINCE
- ---- --- ------------------------- --------------
David J. Bugatto 39 Director 2001
Gary L. Hess 51 Director 1996
Roger S. Mertz 59 Chairman of the Board 1993
Fredric Selinger 64 Director 1999
Each of the nominees, directors and named current executive officers of
the Company has been engaged in the principal occupations set forth below during
the past five (5) years.
DAVID J. BUGATTO, Director. Mr. Bugatto is President and Chief
Executive Officer of Alleghany Properties, Inc. ("API") and Sacramento
Properties Holdings Inc. ("SPHI") (real estate investments) which are
subsidiaries of Alleghany Corporation, a publicly traded corporation on the
NYSE. Mr. Bugatto is also a Director of both API and SPHI.
GARY L. HESS, Director. Mr. Hess served as President and Chief
Executive Officer of the Company from May 1, 1996 until October 31, 2001, and
Chief Financial Officer from June 14, 1999 until October 31, 2001. Prior thereto
he was a Senior Vice President of Dole Food Company, Inc. (fresh and processed
fruit) (1993-1996); President of Cadace Enterprises, Inc. (water conservation
products) and The Marketing Partnership 1992-1993; and Director of Marketing, E.
& J. Gallo Winery (wine and distilled spirits) (1987-1992).
ROGER S. MERTZ, Chairman of the Board. Mr. Mertz was appointed Chairman
of the Board on October 31, 2001. In accordance with Section 312 of the
California General Corporation Law, since the Company has no individual serving
as President, Mr. Mertz is deemed the Company's Chief Executive Officer and
serves in that capacity. Mr. Mertz is an attorney-at-law. He is a partner of the
California law firm of Allen Matkins Leck Gamble & Mallory LLP. Prior to October
1999, Mr. Mertz was a partner of the San Francisco, California law firm of
Severson & Werson.
FREDRIC SELINGER, Director. Mr. Selinger is Senior Managing Director of
Corporate Finance of Sutter Securities, Incorporated (investment banking and
consulting). Prior to March 1995, Mr. Selinger was Managing Director of Jackson
Square Capital Corp. (private investment banking and consulting).
THOMAS R. EAKIN, Chief Financial Officer. Mr. Eakin, age 49, has served
as the Company's Chief Financial Officer since October 31, 2001 and also served
in such capacity from March 1987 to April 1999. Mr. Eakin served as the
Company's Controller from December 1983 to February 1987. Since July 2000, Mr.
Eakin has also owned, managed and served as a consultant for Eakin Consulting.
From April 1999 to June 2000, Mr. Eakin served as Chief Financial Officer for
Associated Vintage Group, a custom wine producer in Graton, California.
BOARD COMMITTEES AND MEETINGS
The Board of Directors met 9 times during the fiscal year ended June
30, 2003 and no director attended fewer than 75% of the meetings of the Board of
Directors or its committees upon which such Director served. The Company's Board
of Directors has authorized two standing committees.
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COMPENSATION COMMITTEE. The functions of the Compensation Committee are
to develop and recommend to the full Board compensation arrangements, including
bonuses, and stock options for directors, executive officers and other key
employees, and fee arrangements for outsourced management; to advise the chief
executive officer on policy matters concerning officers' compensation; and to
administer the 2002 Stock Incentive Plan and the 1996 Stock Option Plan, as
amended. The members of the committee are Messrs. Bugatto, Hess (Chairman) and
Selinger. The Compensation Committee held one meeting during the last fiscal
year.
AUDIT COMMITTEE. The Audit Committee's function is to provide
assistance to the Company's Board in its oversight of: the integrity of the
Company's financial statements; the Company's compliance with legal and
regulatory requirements; the independent auditors' qualifications and
independence; and the performance of the Company's internal audit function and
independent auditors. The Audit Committee is solely responsible for the
appointment, compensation, and oversight of the independent auditors, and if
deemed necessary, the termination of the independent auditors. The members of
the committee currently are Messrs. Hess, Selinger (Chairman) and Bugatto. The
Audit Committee operates under a written charter which was adopted by the Board,
a copy of which is attached to this proxy statement as Appendix A. The Report of
the Audit Committee for the fiscal year ended June 30, 2003 appears on page 12.
The Audit Committee held three meetings during the last fiscal year.
The full Board acts as the nominating committee for the Directors of
the Company.
COMPENSATION OF DIRECTORS
DIRECTOR COMPENSATION. Directors receive $900 per quarter for serving
as Directors, $600 for each Board or committee meeting attended, and $400 for
each telephonic Board meeting. Directors' fees paid by the Company during fiscal
year 2003 totaled $40,400. In connection with their services to the Company, on
July 31, 2002, Messrs. Bugatto, Hess and Selinger received a fully vested,
non-qualified stock option grant to purchase 5,000 shares of the Company's
Common Stock at $7.20 per share and Mr. Mertz received a fully vested,
non-qualified stock option grant to purchase 7,500 shares of the Company's
Common Stock at $7.20 per share.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following tables, based in part upon information supplied by
officers, directors and principal shareholders, set forth certain information
known to the Company with respect to beneficial ownership of the Company's
Common Stock as of September 12, 2003, by (i) each beneficial owner of more than
5% of the Company's Common Stock, (ii) the Company's Chief Executive Officer and
each of the four other most highly compensated executive officers whose
aggregate compensation exceeded $100,000 for the fiscal year ended June 30, 2003
(collectively, the "Named Executive Officers"), (iii) each director of the
Company, and (iv) all directors and executive officers of the Company as a
group. Except as otherwise indicated, each person has sole voting and investment
power with respect to all shares shown as beneficially owned, subject to
community property laws where applicable. Voting power is the power to vote or
direct the voting of securities, and investment power is the power to dispose of
or direct the disposition of securities.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Shares of Common Stock
Beneficially Owned (a)
--------------------------
Name and Address of Beneficial Owner Number Percent
- ------------------------------------ ---------- --------
Craig R. Stapleton 343,280(b) 30.79%
135 E. Putnam Avenue
Greenwich, CT 06830
Gary L. Hess 113,617(c) 10.11%
2064 Highway 116, North
Sebastopol, CA 95472
Wendy W. Stapleton 71,165(d) 6.44%
135 E. Putnam Avenue
Greenwich, CT 06830
Roger S. Mertz 57,110(e) 5.05%
333 Bush Street, Suite 1700
San Francisco, CA 94104
(a) Security ownership information for beneficial owners is taken from
statements filed with the Securities and Exchange Commission pursuant to
Sections 13(d), 13(g) and 16(a) and information made known to the Company.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to options that are currently exercisable or exercisable within 60 days of
September 12, 2003 are deemed to be outstanding for the purpose of
computing the percentage ownership of the person holding those options, but
are not treated as outstanding for the purpose of computing the percentage
ownership of any other person. The percentage of beneficial ownership is
based on 1,104,783 shares of common stock outstanding as of September 12,
2003.
(b) Includes 306,587 shares owned directly by Mr. Stapleton or trusts for the
benefit of Mr. Stapleton, 10,000 shares issuable upon the exercise of stock
options and 26,693 shares owned by Mr. Stapleton's wife to which Mr.
Stapleton disclaims any beneficial interest.
(c) Includes 94,143 shares owned directly and 19,474 shares issuable upon the
exercise of stock options.
(d) Wendy W. Stapleton is the daughter of Craig R. Stapleton.
(e) Includes 29,955 shares owned directly, 25,000 shares issuable upon the
exercise of stock options, and 2,155 shares held by Mr. Mertz as trustee
and to which Mr. Mertz disclaims any beneficial interest.
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SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The table below presents the security ownership of the Company's
Directors, Named Executive Officers, and all directors and executive officers as
a group as of September 12, 2003.
Shares Beneficially Owned(a)
----------------------------
Name of Beneficial Owner Number Percent
- ------------------------ ---------- -------
Gary L. Hess 113,617(b) 10.11%
Roger S. Mertz 57,110(c) 5.05%
Fredric Selinger 22,000(d) 1.96%
David J. Bugatto 20,000(e) 1.78%
- ---------------------------
All directors and executive
officers as a group 213,727 17.96%
- ---------------------------
(a) Shares listed in this column include all shares held by the named
individuals and all directors and executive officers as a group in their
own names and in street name. Security ownership information for beneficial
owners is taken from statements filed with the Securities and Exchange
Commission pursuant to Sections 13(d), 13(g) and 16(a) and information made
known to the Company. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of Common
Stock subject to options that are currently exercisable or exercisable
within 60 days of September 12, 2003 are deemed to be outstanding for the
purpose of computing the percentage ownership of the person holding those
options, but are not treated as outstanding for the purpose of computing
the percentage ownership of any other person. The percentage of beneficial
ownership is based on 1,104,783 shares of common stock outstanding as of
September 12, 2003.
(b) Includes 94,143 shares owned directly and 19,474 shares issuable upon the
exercise of stock options.
(c) Includes 29,955 shares owned directly, 25,000 shares issuable upon the
exercise of stock options, and 2,155 shares held by Mr. Mertz as trustee
and to which Mr. Mertz disclaims any beneficial interest.
(d) Includes 2,000 shares owned directly and 20,000 shares issuable upon the
exercise of stock options.
(e) Includes 20,000 shares issuable upon the exercise of stock options.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows certain compensation information
for the Chief Executive Officer and each of the four other most highly
compensated executive officers whose aggregate compensation exceeded $100,000
for the fiscal year ended June 30, 2003 (collectively, the "Named Executive
Officers"). Compensation data is shown for the fiscal years ended June 30, 2003,
2002, and 2001. This information includes the dollar value of base salaries,
bonus awards, the number of SARs granted, and certain other compensation, if
any, whether paid or deferred.
Long Term
Compensation
Annual Compensation(a) Awards
--------------------------- ------ All Other
Name Year Salary($) Bonus($) Options/SARs(#) Compensation($)
- ---- ---- --------- -------- --------------- ---------------
Roger S. Mertz(b) 2003 -- -- 7,500 --
Chief Executive Officer 2002 -- -- 5,000 --
2001 -- -- -- --
(a) Amounts shown include cash and non-cash compensation earned with respect to
the year shown above.
(b) In accordance with Section 312 of the California General Corporation Law,
since the Company has no individual serving as President, Mr. Mertz is
deemed the Company's Chief Executive Officer and serves in that capacity.
Mr. Mertz is not compensated for services as an officer. Mr. Mertz receives
only the quarterly and per meeting director fees and option grants that are
granted to Mr. Mertz in connection with his services as Chairman of the
Board. During fiscal year 2003, Mr. Mertz received a total of $9,800 in
director fees and a fully vested non-qualified stock option grant to
purchase 7,500 shares of the Company's Common Stock at $7.20 per share.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to stock
options granted from July 1, 2002 to June 30, 2003 to the Named Executive
Officers under the 2002 Stock Incentive Plan.
Number of Percent of
Securities Total Options
Underlying Granted to Grant Date
Options Employees in Per Share Expiration Present Dollar
Name Granted Fiscal Year Exercise Price Date Value (a)
- ---- ---------- ----------- -------------- ---------- --------------
Roger S. Mertz 7,500 91% $7.20 07/30/12 $54,000
Chief Executive
Officer(b)
(a) Dollar value does not represent potential realizable value to the optionee,
but was computed by multiplying the number of shares by the price of the
last reported sale of the Company's Common Stock on the Nasdaq SmallCap
Market on the date grants were approved by the Board of Directors.
(b) On July 31,2002, Mr. Mertz received a fully vested, non-qualified stock
option grant to purchase 7,500 shares of the Company's Common Stock at an
exercise price of $7.20 per share, for services rendered as a director of
the Company.
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OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to option
exercises from July 1, 2002 to June 30, 2003, by the Named Executive Officers
and the value of such officers' unexercised options at June 30, 2003.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Shares
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Fiscal Year-End (#) Fiscal Year-End ($)(a)
on Exercise Value -------------------------- --------------------------
Name (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ----------- ------------- ----------- -------------
Roger S. Mertz -- -- 17,500 -- $0 --
Chief Executive
Officer
(a) Value of unexercised options was determined by multiplying the number of
unexercised options by the difference between the price of the last
reported sale of the Company's Common Stock on the NASDAQ SmallCap Market
of $4.80 per share on June 30, 2003 (the last trading day for fiscal
2002), and the exercise price of such unexercised options.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes share and exercise information about our
equity compensation plans as of September 12, 2003.
Number of Securities
Number of Securities Remaining Available for
to be Issued Upon Weighted-Average Future Issuance Under
Exercise of Exercise Price of Equity Compensation Plans
Outstanding Options, Outstanding Options, (excluding securities
Plan Category Warrants and Rights Warrants and Rights included in 1st column)
- ------------- -------------------- -------------------- -------------------------
Equity Compensation Plans
Approved by Security Holders (1) 100,674 $6.22 168,626(2)
Equity Compensation Plans Not
Approved by Security Holders 0 -- 0
------- ----- ----------
Total 100,674 $6.22 168,626
(1) Consists of the Company's 2002 Stock Incentive Plan and 1996 Stock Option
Plan, as amended to date.
(2) Includes 26,600 shares available for issuance under the 2002 Stock
Incentive Plan and 142,026 shares available for issuance under the 1996
Stock Option Plan. However, in connection with the adoption of the 2002
Stock Incentive Plan in 2002, no further option grants will be made under
the 1996 Stock Option Plan.
Please see the discussion set forth above under the heading "Incentive
and Remuneration Plans" for a description of the material terms of the 2002
Stock Incentive Plan and the 1996 Stock Option Plan.
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COMPENSATION COMMITTEE REPORT OF THE BOARD OF DIRECTORS
THE FOLLOWING COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH INCLUDED
ELSEWHERE IN THIS PROXY STATEMENT DO NOT CONSTITUTE SOLICITING MATERIAL AND
SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER COMPANY
FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934,
EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY INCORPORATES THIS REPORT OR THE
PERFORMANCE GRAPH BY REFERENCE THEREIN.
This report is provided by the Compensation Committee of the Board of
Directors (the "Committee") to assist shareholders in understanding the
Committee's objectives and procedures in establishing the compensation of the
Company's Chief Executive Officer and other executive officers. The Committee,
made up of non-employee Directors, is responsible for establishing and
administering the Company's executive compensation program.
In accordance with the Company's strategy of reducing operating
expenses, particularly expenses related to being a public reporting company, the
Company has outsourced virtually all of its management functions. As a result,
the Company's current compensation strategy is to make sure that the fees it
pays for outsourced services are fair and reasonable.
CURRENT KEY ELEMENTS OF EXECUTIVE COMPENSATION
Currently, the outsourced management of the Company is compensated
through consulting fees and long term incentives.
CONSULTING FEES
Consulting fees paid to outsourced management are reviewed annually by
the Compensation Committee to determine whether they are fair and reasonable on
the basis of the services provided and whether the fees charged for such
services are consistent with those charged by competitors.
LONG-TERM INCENTIVES
Long-term incentive awards provided by shareholder approved
compensation programs are designed to develop and maintain strong management
through share appreciation awards and to tie compensation to the success of the
Company as reflected in its stock price. The 2002 Stock Incentive Plan provides
for the granting to officers, employees, Board members and consultants of
incentive stock options, which promotes the long-term interests of the Company's
shareholders.
EQUITY BASED COMPENSATION
2002 STOCK INCENTIVE PLAN
The Company's 2002 Stock Incentive Plan ("2002 Plan") provides for the
granting to officers, employees, Board members and consultants of incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, nonstatutory stock options and stock appreciation rights. The
Company may also issue stock directly to participants under the 2002 Plan. The
2002 Plan was approved by the Board of Directors in July 2002 and by the
stockholders in October 2002. The 2002 Plan serves as the successor program to
the Company's 1996 Stock Option Plan and was adopted with the intention of
reducing the number of shares reserved for stock option grants to a number which
better matches the current capitalization of the Company. A total of 75,000
shares of Common Stock have been reserved for grant pursuant to the 2002 Plan.
As of September 12, 2003, 26,600 shares of Common Stock were available for
issuance under the 2002 Plan and options to purchase 48,400 shares were
outstanding.
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The Company periodically grants to its officers, employees, Board
members and consultants stock options under the 2002 Plan in order to provide
additional incentive for such persons. The Board believes that such incentive
benefits the Company and its shareholders by providing incentive based
compensation that will encourage officers, directors, consultants and other key
employees to attain high performance and encourage stock ownership in the
Company. No participant in the 2002 Plan may be granted stock options, direct
stock issuances and share right awards for more than 15,000 shares of common
stock in total in any calendar year. The exercise price of all incentive stock
options granted under the 2002 Plan must be at least equal to the fair market
value of the Common Stock on the date of grant. The exercise price of
nonstatutory stock options must at least be equal to 85% of the fair market
value of the Common Stock on the date of grant.
1996 STOCK OPTION PLAN, AS AMENDED
The Company's 1996 Stock Option Plan, (the "1996 Plan") was approved by
the shareholders at the 1996 Annual Meeting. An amendment to the 1996 Plan
increasing the number of shares available for issuance under the 1996 Plan to
275,000 was approved by the shareholders at the 1999 Annual Meeting. As of
September 12, 2003, options to purchase 268,574 shares had been issued under the
1996 Plan, while options to purchase a total of 52,274 shares remain
outstanding. No further options are being granted under the 1996 Plan after the
adoption of the 2002 Stock Incentive Plan in 2002. All option grants are being
made under the new 2002 Stock Incentive Plan.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In accordance with Section 312 of the California General Corporation
Law, since the Company has no individual serving as President, Mr. Mertz is
deemed the Company's Chief Executive Officer and serves in that capacity. Mr.
Mertz is not compensated for services as Chief Executive Officer. Mr. Mertz
receives only the quarterly and per meeting director fees and option grants that
are granted to Mr. Mertz in connection with his services as Chairman of the
Board.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For the fiscal year ended June 30, 2003, the Compensation Committee
consisted of Messrs. Bugatto, Hess and Selinger. No members of the Compensation
Committee were employees of the Company during the fiscal year ended June 30,
2003. As described in the Section above entitled "Certain Relationships and
Related Transactions," Mr. Hess receives separation payments from the Company
pursuant to a separation agreement and was issued a promissory note by the
Company in connection with the exercise of stock options.
Compensation Committee:
David J. Bugatto
Gary L. Hess
Fredric Selinger
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors, and persons who own more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and greater than ten-percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during fiscal year ended
June 30, 2003 all filing requirements applicable to its executive officers,
directors, and greater than ten-percent beneficial owners were complied with
except that Mr. Stapleton filed late four Form 4s reporting five transactions.
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AUDIT COMMITTEE REPORT TO STOCKHOLDERS
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE
MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY
OTHER COMPANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934, EXCEPT AS TO INFORMATION CONCERNING THE AUDITORS' ALLOCATION OF
TIME AND FEES AND CONSIDERATION OF THEIR IMPACT (IF ANY) ON INDEPENDENCE AND TO
THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS REPORT BY REFERENCE
THEREIN.
To the Board of Directors of SonomaWest Holdings, Inc.:
In accordance with its written charter adopted by the Board of
Directors, the Audit Committee of the Board assists the Board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. In response to the
Sarbanes-Oxley Act adopted in 2002, our Committee has assumed additional
responsibilities, including that the Audit Committee must approve, in advance,
the engagement of the Company's independent auditors for all audit and non-audit
services. Our Committee anticipates additional responsibilities will be
undertaken upon the adoption of final rules by the Nasdaq SmallCap Market,
implementing additional provisions of the Sarbanes-Oxley Act and SEC rules
promulgated thereunder. Our Committee is closely monitoring the developments in
this area.
In discharging its duties, our Committee has reviewed and discussed
with management of the Company and Grant Thornton LLP, the independent auditing
firm of the Company, the audited financial statements of the Company as of June
30, 2003 (the "Audited Financial Statements"). In addition, we have discussed
with Grant Thornton LLP the matters required by Codification of Statements on
Auditing Standards No. 61, COMMUNICATION WITH AUDIT COMMITTEES, as amended.
The Committee also has received and reviewed the written disclosures
and the letter from Grant Thornton LLP required by Independence Standards Board
Standard No. 1, INDEPENDENCE WITH AUDIT COMMITTEES, and we have discussed with
that firm its independence from the Company. We also have discussed with
management of the Company and the auditing firm such other matters and received
such assurances from them as we deemed appropriate.
Management is responsible for the Company's internal controls and the
financial reporting process. Grant Thornton LLP is responsible for performing an
independent audit of the Company's financial statements in accordance with
auditing standards generally accepted in the United States of America and
issuing a report thereon. The Committee's responsibility is to monitor and
oversee these processes.
The Audit Committee has adopted a charter. The Audit Committee Charter
is attached to this Proxy Statement as Appendix A. Our securities are quoted on
the Nasdaq SmallCap Market and are governed by its listing standards. All
members of the Audit Committee, with the exception of Mr. Hess, meet the
independence standards under Rule 4200(a)(14) of the Marketplace Rules contained
in the National Association of Securities Dealers Manual. Because Mr. Hess
served as the Company's President, Chief Executive Officer and Chief Financial
Officer until October 31, 2001 and because he received approximately $60,000 in
commission payments for sales of the Company's Perma-Pak inventory pursuant to
his separation agreement, Mr. Hess is not considered independent under Rule
4200(a)(14). However, in accordance with Rule 4350, the Board of Directors
determined that the appointment of Mr. Hess to the Audit Committee was in the
best interests of the Company and the shareholders based on his knowledge of the
Company's operations and financial expertise.
The Audit Committee of the Board of Directors has considered the effect
that provision of the services described under "All Other Fees" may have on the
independence of Grant Thornton LLP. These fees related primarily to privacy
attestation and tax compliance. The Audit Committee has determined that
provision of
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those services is compatible with maintaining the independence of Grant Thornton
LLP as the Company's principal auditors.
Based on the foregoing review and discussions and a review of the
report of Grant Thornton LLP with respect to the Audited Financial Statements,
and relying thereon, we have recommended to the Company's Board of Directors the
inclusion of the Audited Financial Statements in the Company's Annual Report on
Form 10-K for the year ended June 30, 2003.
Members of the Audit Committee:
Gary L. Hess
Fredric Selinger
David J. Bugatto
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SEPARATION AGREEMENT BETWEEN THE COMPANY AND GARY L. HESS
On July 17, 2001 the Company entered into a separation agreement in
principle, which was thereafter executed, with Gary Hess, replacing his existing
employment agreement. Pursuant to the separation agreement, Gary Hess continued
as President and Chief Executive Officer, first on a full-time basis and then on
a part-time basis, through October 31, 2001. Effective September 2001, the
Company began paying separation payments to Gary Hess in the amount of $12,500
monthly for 29 months, replacing all payment obligations under his prior
employment agreement. The Company's obligation under this agreement of $362,500
was recorded in operating expenses in the first quarter of fiscal 2002. As of
June 30, 2003, the remaining obligation under this agreement is $75,000.
Pursuant to this separation agreement, the Company also designated Gary
Hess for the period beginning July 17, 2001 and ending December 31, 2002, as the
Company's exclusive sales representative to sell any and all remaining Perma-Pak
finished goods inventory and other Perma-Pak property (inventory and property
related to discontinued operations). Under the agreement, Gary Hess was entitled
to a commission of 7% on the net purchase price received by the Company from
sales above the initial $250,000. As of October 3, 2002, the Company entered
into an agreement to sell all of the remaining Perma-Pak finished goods
inventory and other Perma-Pak property. As of June 30, 2003 the Company received
$225,000 of the $240,000 total purchase price. The Company has paid commissions
to Gary Hess of $59,329 pursuant to this sale and $68,173 in total pursuant to
this agreement. During fiscal 2003, the Company incurred $60,194 in commissions
under this agreement and $7,979 during fiscal 2002. As of June 30, 2003, the
Company did not owe Gary Hess any commissions under this agreement. Upon receipt
of the balance of the total purchase price of $15,000, the Company will owe a
commission to Gary Hess of $7,500. As part of the separation agreement, Gary
Hess was given until January 29, 2002 to decide whether to extend the period in
which he was eligible to exercise the stock options previously granted to him.
On January 28, 2002, Gary Hess elected to exercise his option to purchase 80,000
shares of his total outstanding options of 89,474 shares. Gary Hess elected to
extend the termination date on his option to purchase the remaining 9,474
shares, through the last date of the severance period (January 31, 2004). The
Company agreed to loan Gary Hess up to $447,370 to allow Gary Hess to exercise
the aforementioned options. Gary Hess elected to borrow $400,000 to exercise
80,000 stock options at $5 per share. The note dated January 28, 2002 in the
amount of $400,000, bears interest at the Applicable Federal Rate (AFR) for
loans of three years or less on the date of the note (the AFR at January 28,
2002 was 2.73%), payable quarterly. The Note is payable in full on August 1,
2004. The Note is full recourse and specifically secured by the stock
certificates and evidenced in the form of a loan and security agreement. The
largest aggregate amount of principal and interest owing under the note since
issuance was $403,650 on July 31, 2002. The aggregate principal and interest
owing under the note as of September 12, 2003 was $402,214.
RELATIONSHIP BETWEEN THE COMPANY, ALLEN MATKINS AND ROGER S. MERTZ
During fiscal year 2003 the Company engaged Allen Matkins Leck Gamble &
Mallory LLP ("Allen Matkins") as its legal counsel. Roger S. Mertz, Chairman of
the Board, is a partner at Allen Matkins. During 2003, 2002, and 2001, the
Company incurred $204,000, $186,000 and $214,000 respectively, for legal
services from Allen Matkins.
-14-
CONSULTING AGREEMENT BETWEEN THE COMPANY AND THOMAS R. EAKIN
On August 1, 2003, the Company entered into a Consulting Agreement with
Thomas R. Eakin, Chief Financial Officer. The agreement replaced the former
consulting agreement between Mr. Eakin and the Company which terminated by its
terms on July 31, 2003. Under the new agreement, Mr. Eakin provides financial
management and accounting services to the Company for which he is compensated at
an hourly billing rate of $110 per hour, plus expenses. During fiscal 2003, the
Company incurred $65,000 for financial management and accounting consulting
services provided by Mr. Eakin.
CONSULTING AGREEMENT BETWEEN THE COMPANY AND DAVID J. BUGATTO
On July 17, 2001, the Company entered into a Consulting Agreement with
David J. Bugatto, a Director. Pursuant to the agreement Mr. Bugatto provides
consulting services to the Company in connection with its real estate business
for a monthly fee of $2,500. The agreement is retroactive to April 1, 2001. In
addition, in the event that either of the Company's Sonoma County properties are
sold during the term of the agreement, Mr. Bugatto would be paid a fee of 2-1/2%
of the sales price if no broker commission is involved and 1-1/4% of the sales
price if a broker is involved in the sale. In the event that either property is
refinanced during the term of the agreement, Mr. Bugatto will be paid a fee
equal to 1% of the amount of the proceeds received by the Company in excess of
its current debt. The agreement is effective until the earlier of its
termination by either party or December 31, 2003. During fiscal 2003, the
Company paid Mr. Bugatto $32,000 for real estate consulting services.
-15-
PERFORMANCE GRAPH
The following graph compares the total return performance of the
Company for the periods indicated with the performance of the Russell 2000 Index
and the performance of a Peer Index comprised of the publicly traded stocks of
Indigenous Global Development Corp., Crescent Operating Inc., Monmouth Capital
Corp., National Properties Corp., Regency Equities Corp., Tower Properties Co.,
and SonomaWest Holdings, Inc. The Company's shares are traded over-the-counter
on the NASDAQ SmallCap Market under the symbol "SWHI". Three of the companies in
the Peer Group have market capitalizations greater than the Company and three
have market capitalizations less than the Company. The Russell 2000 Index is
comprised of the publicly traded stocks of the 2,000 smallest companies included
in the Russell 3,000 Index, which includes the publicly traded stocks of the
3,000 largest companies. The total return indices reflect reinvested dividends
and are weighted on a market capitalization basis at the time of each reported
data point.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG SONOMAWEST HOLDINGS, INC., THE RUSSELL 2000 INDEX
AND A PEER GROUP
[GRAPHIC OMITTED]
[Data below represents a chart in the printed document.]
Year (June 30) 1998 1999 2000 2001 2002 2003
- -------------- ---- ---- ---- ---- ---- ----
SonomaWest Holdings, Inc. 100 121.88 76.56 82.75 93.44 65.63
Russell 2000 100 101.50 116.04 116.80 106.67 104.92
Peer Group 100 55.60 29.76 30.54 23.35 22.34
*$100 invested on 6/30/98 in stock or index-including reinvestment of dividends.
Fiscal year ending June 30.
-16-
AUDITOR INDEPENDENCE
AUDIT FEES
The aggregate fees billed to the Company during the fiscal year ended
June 30, 2003, for professional services rendered by Grant Thornton LLP for its
audit of the Company's annual financial statements and its review of the
financial statements included in the Company's Forms 10-Q were $65,656.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Grant Thornton LLP billed no fees to the Company for financial
information systems design and implementation services during the most recent
fiscal year.
ALL OTHER FEES
The aggregate fees billed to the Company for all other services
rendered by Grant Thornton LLP for the most recent fiscal year were $35,012.
These fees related primarily to tax compliance and tax consulting.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has selected Grant Thornton LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending June 30, 2004. Representatives of Grant Thornton LLP are expected to be
present at the Annual Meeting and will have the opportunity to make a statement
if they so desire. The representatives also are expected to be available to
respond to appropriate questions from shareholders.
The affirmative vote of the holders of a majority of the shares of
common stock voting in person or by proxy on this proposal is required to ratify
the appointment of the independent auditors.
In the event the stockholders fail to ratify the appointment, it will
be considered as a direction to the Audit Committee to select another
independent accounting firm. It is understood that even if the selection is
ratified, the Audit Committee at its discretion, may direct the appointment of a
new independent accounting firm at any time during the year if the Audit
Committee feels that such a change would be in the best interests of the Company
and its stockholders.
THE AUDIT COMMITTEE UNANIMOUSLY RECOMMENDS A VOTE
"FOR" THIS PROPOSAL
-17-
AVAILABILITY OF 10-K REPORT
THE COMPANY FILED ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30,
2003 WITH THE SECURITIES EXCHANGE COMMISSION ON SEPTEMBER 12, 2003. A COPY OF
THE REPORT, INCLUDING ANY FINANCIAL STATEMENTS AND SCHEDULES, AND A LIST
DESCRIBING ANY EXHIBITS NOT CONTAINED THEREIN, MAY BE OBTAINED WITHOUT CHARGE BY
ANY SHAREHOLDER. THE EXHIBITS ARE AVAILABLE UPON PAYMENT OF CHARGES WHICH
APPROXIMATE THE COMPANY'S COST OF REPRODUCTION OF THE EXHIBITS. REQUESTS FOR
COPIES OF THE REPORT SHOULD BE SENT TO THE OFFICE OF THE CORPORATE SECRETARY AT
THE MAILING ADDRESS OF THE COMPANY LISTED ON PAGE ONE OF THIS PROXY STATEMENT.
OTHER MATTERS
The Board of Directors presently knows of no other matter that may come
before the Annual Meeting. If any other matters should properly come before the
Meeting, however, the Board's proxy holders intend to vote on such matters in
accordance with their best judgment.
By Order of the Board of Directors
Matthew J. Ertman
SECRETARY
Dated: September 30, 2003
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APPENDIX A
SONOMAWEST HOLDINGS, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
(AMENDED AND RESTATED SEPTEMBER 25, 2003)
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
o Monitor the integrity of the Company's financial reporting process
and systems of internal controls regarding finance, accounting, and
legal compliance.
o Monitor the independence and performance of the Company's
independent auditors and internal auditing department.
o Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access
to the independent auditors as well as anyone in the organization. The
Audit Committee has the ability to retain, at the Company's expense,
special legal, accounting, or other consultants or experts it deems
necessary in the performance of its duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
The Audit Committee is a committee of the Board of Directors. The Audit
Committee shall be composed of Directors who are independent of the
management of the Company and are free of any relationship that, in the
opinion of the Board of Directors, would interfere with their exercise of
independent judgment as a committee member. The membership of the Audit
Committee shall consist of at least three independent (subject to
exceptions provided in the NASD Marketplace Rules), financially literate,
members of the Board of Directors who shall serve at the pleasure of the
Board of Directors. In addition, at least one of the Committee members
must have employment experience in finance or accounting, professional
certification in accounting, or other comparable experience or background
resulting in the individual's financial sophistication, including being or
having been a chief executive, chief financial or other senior officer
with oversight responsibilities. Committee members and the Committee
chairman shall be designated by the full Board of Directors. If an audit
committee Chair is not designated
or present, the members of the Committee may designate a Chair by majority
vote of the Committee membership.
The Committee shall meet at least two times annually, or more frequently
as circumstances dictate. The Committee should meet privately in executive
session at least annually with management, the director of the internal
auditing department, the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups believe
should be discussed. In addition, the Committee, or at least its Chair,
should communicate with management and the independent auditors quarterly
to review the Company's financial statements and significant findings
based upon the auditors limited review procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
REVIEW PROCEDURES
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have
the document published at least every three years in accordance with
SEC regulations.
2. Review the Company's annual audited financial statements, including
the disclosure in Management's Discussion and Analysis of Financial
Condition and Results of Operations, prior to filing or
distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting
principles, practices, and judgments.
3. In consultation with the management, the independent auditors, and
the internal auditors, consider the integrity of the Company's
financial reporting processes and controls. Discuss significant
financial risk exposures and the steps management has taken to
monitor, control, and report such exposures. Review significant
findings prepared by the independent auditors and the internal
auditing department together with management's responses.
4. Review with financial management and the independent auditors the
Company's quarterly financial results prior to the release of
earnings and/or the Company's quarterly financial statements prior
to filing or distribution. Discuss any significant changes to the
Company's accounting principles and any items required to be
communicated by the independent auditors in accordance with SAS 61
(see item 10). The Chair of the Committee may represent the entire
Audit Committee for purposes of this review.
INDEPENDENT AUDITORS
5. The Audit Committee is responsible for the appointment,
compensation, and oversight of the independent auditors, and if
deemed necessary, the termination of the independent auditors. The
Audit Committee shall review the independence and performance of the
auditors and annually recommend to the Board of
-2-
Directors the appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
6. Approve the engagement of the independent auditors, including the
fees and other significant compensation to be paid to the
independent auditors.
7. On a quarterly basis, the Committee should review the independence
of the independent auditors. The Committee should receive a
statement from the independent auditors acknowledging their
independence on a quarterly basis.
8. Review the independent auditors audit plan - discuss scope,
staffing, locations, reliance upon management, and internal audit
and general audit approach.
9. Approve, in advance, the provision of all permissible non-audit
services, as set forth in Section 202 of the Sarbanes-Oxley Act of
2002, as well as all related-party transactions.
10. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters
required to be communicated to audit committees in accordance with
AICPA SAS 61.
11. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
INTERNAL AUDIT DEPARTMENT AND LEGAL COMPLIANCE
12. Review the budget, plan, changes in plan, activities, organizational
structure, and qualifications of the internal audit department, as
needed.
13. Review the appointment, performance, and replacement of the senior
internal audit executive.
14. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
15. On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from
regulators or governmental agencies.
OTHER AUDIT COMMITTEE RESPONSIBILITIES
16. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be included in
the Company's annual proxy statement.
-3-
17. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
18. Maintain minutes of meetings and regularly report to the Board of
Directors on significant results of the foregoing activities.
19. Conduct an annual performance review of the Committee.
20. Review financial and accounting personnel succession planning within
the Company.
21. Annually review policies and procedures as well as audit results
associated with directors' and officers expense accounts and
perquisites.
-4-
SONOMAWEST HOLDINGS, INC.
2064 Highway 116 North
Sebastopol, California 95472
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The
undersigned hereby appoints Roger S. Mertz and David J. Bugatto, or either of
them, with full power of substitution, as Proxies of the undersigned to attend
the Annual Meeting of Shareholders of SonomaWest Holdings, Inc. to be held on
Wednesday, October 29, 2003 at 11:00 a.m., local time, at 333 Bush Street, 17th
Floor, San Francisco, California 94104, and any adjournment thereof, and to vote
the number of shares the undersigned would be entitled to vote if personally
present as indicated below.
1. Election of four directors to serve until the 2004 Annual Meeting of
Shareholders or until their respective successors are elected and
qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
(Instructions: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.)
Roger S. Mertz; Gary L. Hess; Fredric Selinger; David J. Bugatto
2. Approval of appointment of Grant Thornton LLP as independent auditors
for the fiscal year ending June 30, 2004.
[ ] FOR the appointment [ ] AGAINST the appointment
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
The undersigned hereby acknowledge receipt of (a) the Notice of Annual
Meeting of Shareholders to be held October 29, 2003, (b) the accompanying Proxy
Statement, and (c) the Annual Report of the Company for the fiscal year ended
June 30, 2003.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, the
Proxy will be voted FOR proposals one, two and three.
Please sign exactly as signature appears on this proxy card. Executors,
administrators, traders, guardians, attorneys-in-fact, etc. should give their
full titles. If signer is a corporation, please give full corporate name and
have a duly authorized officer sign, stating title. If a partnership, please
sign in partnership name by authorized person. If stock is registered in two
names, both should sign.
Dated: _______________, 2003
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Signature
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Signature