SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
e-Perception, Inc.
-----------------------------------------------
(Name of Registrant as Specified in its Charter)
-------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
e-Perception, Inc.
27555 Ynez Road, Suite 203
Temecula, California 92591
909-587-8773
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD May 15, 2003
TO OUR STOCKHOLDERS:
The Annual Meeting of Stockholders of e-Perception will be held on May 15,
2003, at 11:00 a.m. local time at our headquarters office, located at our remote
sales office, located at 5015 Birch Street, Newport Beach, California for the
following purposes:
1. To elect five directors to the Board of Directors to hold office for
a one-year term;
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to change the name of the Company
to PeopleView, Inc.;
3. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to increase the total authorized
shares of Common Stock of the Company from 25,000,000 to 100,000,000;
4. To consider and vote upon a proposal to approve the Company's 2003
Stock Incentive Plan;
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 18, 2003 are
entitled to notice of, and to vote at, the meeting. All stockholders are
cordially invited to attend the meeting. Our Bylaws require that the holders of
a majority of the outstanding shares of our common stock entitled to vote be
represented in person or by proxy at the meeting in order to constitute a quorum
for the transaction of business. Regardless of whether you expect to attend the
meeting, you are requested to sign, date and return the accompanying proxy card.
You may still attend and vote in person at the annual meeting if you wish, even
though you may have submitted your proxy prior to the meeting. If you attend the
meeting and wish to vote in person, you must revoke your proxy and only your
vote at the meeting will be counted. Thank you in advance for your prompt return
of your proxy.
By Order of the Board of Directors,
James P. Stapleton
Secretary
Temecula, California
April 10, 2003
e-Perception, Inc.
27555 Ynez Road, Suite 203
Temecula, California 92591
____________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
SOLICITATION, EXERCISE AND REVOCATION OF PROXIES
The accompanying proxy is solicited on behalf of our Board of Directors to
be voted at our Annual Meeting of Stockholders to be held at the Company's
remote sales office, located at 5015 Birch Street, Newport Beach, California, on
May 15, 2003, at 11:00 a.m. local time, and any and all adjournments or
postponements thereof. In addition to the original solicitation by mail, certain
of our employees may solicit proxies by telephone or in person. No specially
engaged employees or solicitors will be retained for proxy solicitation
purposes. All expenses of this solicitation, including the costs of preparing
and mailing this proxy statement and the reimbursement of brokerage firms and
other nominees for their reasonable expenses in forwarding proxy materials to
beneficial owners of shares, will be borne by us. You may vote in person at our
annual meeting, if you wish, even though you have previously mailed in your
proxy. This proxy statement and the accompanying proxy are being mailed to
stockholders on or about April 17, 2003. Unless otherwise indicated, "we," "us"
and "our" mean e-Perception.
All duly executed proxies will be voted in accordance with the instructions
thereon. Stockholders who execute proxies, however, retain the right to revoke
them at any time before they are voted. The revocation of a proxy will not be
effective until written notice thereof has been given to our Secretary unless
the stockholder granting such proxy votes in person at our annual meeting.
VOTING OF SECURITIES
The record date for the determination of stockholders entitled to vote at
our annual meeting is March 18, 2003. As of such date, we had outstanding
14,076,554 shares of our common stock, $0.001 par value per share. Our common
stock is the only class of our stock outstanding and entitled to vote at our
annual meeting. Each stockholder is entitled to one vote for each share of our
common stock held. All votes on the proposals set forth below will be taken by
ballot. For purposes of the votes on the proposals set forth below, the holders
of a majority of the shares entitled to vote, represented in person or by proxy,
will constitute a quorum at our meeting. The stockholders present at our annual
meeting may continue to transact business until adjournment, notwithstanding the
subsequent withdrawal of enough stockholders to leave less than a quorum or the
refusal of any stockholder present in person or by proxy to vote or participate
in our annual meeting. Abstentions and broker non-votes (i.e. the submission of
a proxy by a broker or nominee specifically indicating the lack of discretionary
authority to vote on any particular matter) will be counted as present for
purposes of determining the presence or absence of a quorum for the transaction
of business. Directors will be elected by a favorable vote of a plurality of
the shares of voting stock present and entitled to vote, in person or by proxy,
at the Annual Meeting. Proposals 2 and 3 require the approval of a majority of
the outstanding shares and therefore abstentions and broker non-votes will have
the same effect as votes against such proposal. Proposal 4 requires the
approval of a majority of the shares of Common Stock present and entitled to
vote at the Annual Meeting. Therefore, abstentions as to this proposal will
have the same effect as votes against such proposal. Broker non-votes as to
these proposals, however, will be deemed shares not entitled to vote on such
proposals, and will not be counted as votes for or against such proposals, and
will not be included in calculating the number of votes necessary for approval
of such proposals.
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IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE,
WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON.
PROPOSAL 1
ELECTION OF DIRECTORS
Five directors are to be elected at the annual meeting, to hold office for
one year until the next annual meeting of shareholders, and until their
successors are elected and qualified. It is intended that the accompanying proxy
will be voted in favor of the following persons to serve as directors unless the
shareholder indicates to the contrary on the proxy. Management expects that each
of the nominees will be available for election, but if any of them is not a
candidate at the time the election occurs, it is intended that such proxy will
be voted for the election of another nominee to be designated by the Board of
Directors to fill any such vacancy.
Board Recommendation
The board recommends that you vote FOR the following nominees for election
as directors:
Joseph Flynn. Mr. Flynn was hired as the C.E.O. effective January 1, 2003.
Mr. Flynn joined e-Perception, Inc. in January of 2003. From 1998 to through
2002, Mr. Flynn was General Manager of the e-learning, Collaboration and
Telecommunications Group at Advanstar Communications. From 1992-1998, Mr. Flynn
was Vice President for Latin America and the Iberian Peninsula for E. J. Krause,
a privately held, leading international exhibition organizer. Mr. Flynn holds a
BA in International Relations, 1987 from the Catholic University of America in
Washington, DC and completed the Masters at Teaching Post Graduate Program in
Foreign Language Education from the University of Rhode Island in 1989.
Mr. Flynn is 37 years old.
Ray Gerrity. Mr. Gerrity has worked in the computer/software industry for
more than 25 years. He worked initially as a sales representative for IBM and
has since held various sales and sales management positions at ITT Systems,
Tektronix, GE Global Exchange Services, and, most recently, FileNET. He also
spent three years as Western U.S. Sales Director for ANVT, a start-up
engineering software developer. He has a strong knowledge of application and
system solutions in the software industry, with "feet-on-the-street" success
developing business in Fortune 2000 companies. Mr. Gerrity has years of
management experience in developing sales organizations, strategic plans,
compensation plans, sales contests, and marketing campaigns. Mr. Gerrity
is 45 years old.
Robert Miller. Mr. Miller is a private investor and President of The
Trippoak Group, Inc., a New York City based investment advisor and business
consultant. Trippoak assists small capitalization companies, public and
private, in structuring and arranging debt and equity placements. Mr. Miller is
also Co-General Partner of DM Management, LLC, an advisor to a private
multi-manager investment partnership. Mr. Miller is also Co-Managing Director,
NewOak Partners, Ltd., a New York City and Newport, Rhode Island-based joint
venture involved in the distribution of international lumber and
3
lumber products in the Northeastern United States. Mr. Miller has served on the
board of directors of Baynon International Corp. since March 2002. Mr. Miller
holds an A.B. degree from the University of Illinois and a J.D. degree from
Emory University. Mr. Miller is 48 years old.
Shelly Singhal. Mr. Singhal is the Managing Director and Executive Vice
President of SBI E2 Capital (USA), Ltd. Mr. Singhal previously served as the
Managing Director of Technology Investment Banking for BlueStone Capital
Securities, Inc. From July 1995 until August 2000, Mr. Singhal was Managing
Director of Corporate Finance at Roth Capital Partners where he was head of the
E-Commerce Group and Manager of the Roth Capital Partners Bridge Fund. Mr.
Singhal holds an undergraduate degree from Pepperdine University. Mr.
Singhal is 41 years old.
Michael Vanderhoof. Mr. Vanderhoof is a private investor and
President of Avintaquin Capital LLC. Avintaquin Capital is a venture capital
firm with offices in Orange County and Los Angeles organized to invest in
privately held emerging growth companies. Avintaquin makes debt and equity
investments in early stage technology companies in the information technology,
media and energy markets. Mr. Vanderhoof has over eighteen years experience in
the capital markets. From 1998 to present, he has advised various private and
public companies on capital formation, mergers and acquisitions and financing.
From 1993 to 1997, Mr. Vanderhoof was a trader on a trading desk that made
markets in over 200 OTC companies. His career began in 1985 as an Account
Executive for a NASD broker-dealer firm in Salt Lake City, Utah. Mr.
Vanderhoof is 46 years old.
Board Committees and Meetings
The board has appointed from among its members two standing committees:
The Compensation Committee is presently composed of Ray Gerrity, who serves
as chairperson of the committee, and Michael Vanderhoof. No member of the
Compensation Committee is an employee or officer. The principal functions of
this committee are to review and approve our organization structure, review
performance of our officers and establish overall employee compensation
policies. This committee also reviews and approves compensation of directors and
our corporate officers, including salary, bonus, and stock option grants, and
administers our stock plans. The Compensation Committee met two times during the
fiscal year ended December 31, 2002.
The Audit Committee is presently composed of Rob Miller, who serves as
chairperson, Shelly Singhal, and Ray Gerrity. No member of the Audit Committee
is an employee or officer. The functions of the Audit Committee include, among
other things, reviewing our annual and quarterly financial statements, reviewing
the results of each audit and quarterly review by our independent public
accountants, reviewing our internal audit activities and discussing the adequacy
of our accounting and control systems. Our board has adopted a written audit
committee charter. The Audit Committee met four times during the fiscal year
ended December 31, 2002.
During fiscal year 2002, our board held seven meetings in person or by
telephone. Members of our board are provided with information between meetings
regarding our operations and are consulted on an informal basis with respect to
pending business. Each director attended at least 75% of the total number of
meetings of our board and the total number of meetings held by all committees of
our board on which such director served during the year. The Board has
determined that all members of the Audit Committee are "independent directors"
as that term is defined in Rule 4200 of the listing statutes of the National
Association of Securities Dealers.
Director Compensation
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Each non-employee director is entitled to receive a stock option grant for
1,000 shares of our common stock for each board meeting attended, effective
April 2002. Prior to April 2002, no compensation was provided. Directors are
reimbursed for expenses incurred in connection with attendance at board and
committee meetings.
BENEFICIAL OWNERSHIP OF SECURITIES
The following table and the notes thereto set forth certain information
regarding the beneficial ownership of our common stock as of March 31, 2003, by
(i) each current director; (ii) each executive officer named in the summary
compensation table included herein; (iii) all our current directors and
executive officer as a group; and (iv) each person who is known by us to be a
beneficially owner of five percent or more of our common stock.
Shares Beneficially Owned
-------------------------
Name and Address of Beneficial Owner (1) Number (2) Percent
- ---------------------------------------- ---------- --------
San Clemente Capital, LLC
2333 East Pacific Coast Hwy, Suite D
Corona del Mar, CA 92625 1,668,124 11.8%
Avintaquin Capital LLC (3)
880 Apollo Street, Suite 334
El Segundo, CA 90245 1,448,528 10.1%
Joseph Flynn - -
Ray Gerrity (4) 60,000 *
Robert Miller (5) 92,500 *
Shelly Singhal (6) 59,000 *
James P. Stapleton - -
Michael Vanderhoof (7) ) 1,669,666 11.9%
Etienne Weidemann - -
All directors and executive officer, as a group (8) 4,997,818 34.8%
- ---------------------------
* Less than 1% of the outstanding shares of common stock
(1) The address for all officers and directors is 27555 Ynez Road, Suite 203,
Temecula, CA 92591.
(2) Unless otherwise indicated, the named persons possess sole voting and
investment power with respect to the shares listed (except to the extent
such authority is shared with spouses under applicable law). The
percentages are based upon 14,076,554 shares outstanding as of March 31,
2003, except for certain parties who hold options and warrants that are
presently exercisable or exercisable within 60 days, are based upon the sum
of shares outstanding as of March 31, 2003 plus the number of shares
subject to options and warrants that are presently exercisable or
exercisable within 60 days held by them, as indicated in the following
notes.
(3) Includes 259,264 shares subject to stock warrant agreements.
(4) Includes 4,000 shares subject to stock options exercisable within 60 days,
and 6,000 shares subject to stock warrant agreements.
(5) Includes 5,000 shares subject to stock options exercisable within 60 days.
(6) Includes 4,000 shares subject to stock options exercisable within 60 days.
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(7) Includes 3,000 shares subject to stock options exercisable within 60 days.
(8) Includes 16,000 shares subject to stock options exercisable within 60 days,
and 265,264 shares subject to stock warrant agreements.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under Section 16(a) of the Securities Exchange Act of 1934, directors and
certain officers, and beneficial owners of 10 percent or more of our common
stock, are required from time to time to file with the Securities and Exchange
Commission reports on Forms 3, 4 or 5, relating principally to holdings of and
transactions in our securities by such persons. Based solely upon a review of
Forms 3 and 4 and amendments thereto furnished to us during fiscal 2002 and
thereafter, Forms 5 and amendments thereto furnished to us with respect to
fiscal year 2002, and any written representations received by us from a
director, officer or beneficial owner of 10 percent or more of our common stock
that no Form 4 or 5 is required, we believe that all reporting persons filed on
a timely basis the reports required by Section 16(a) of the Securities Exchange
Act of 1934 during fiscal 2002.
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE COMPANY'S ARTICLES
OF INCORPORATION TO CHANGETHE NAME OF THE COMPANY TO PEOPLEVIEW, Inc.
The Board has approved, subject to stockholder approval, an amendment to
the Company's Articles of Incorporation to change the name of the Company from
e-Perception, Inc. to PeopleView, Inc.
The Board believes that the change of corporate name is desirable in that
the new name better reflects the operations of the Company in developing and
marketing web based assessment and reporting tools that enable companies to
manage their Human Capital Management needs.
The change of the Company's name will not affect, in any way, the validity
or transferability of currently outstanding stock certificates, nor will the
Company's stockholders be required to surrender or exchange any stock
certificates that they currently hold. If the name change is approved, we will
be assigned a new trading symbol which will be announced prior to the name
change becoming effective.
Proposal
At the Annual Meeting, stockholders will be asked to approve the name
change. Such approval will require the affirmative vote of a majority of the
voting power of all outstanding shares of the Company's Common Stock. If the
proposal is approved, a Certificate of Amendment amending the Company's Articles
of Incorporation will be filed in the Office of the Secretary of the State of
Nevada as soon as possible and the name change will then become effective.
The Board of Directors recommends a vote FOR this proposal.
6
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION TO INCREASE
THE TOTAL AUTHORIZED SHARES OF COMMON STOCK
General
On March 31, 2003, the Board of Directors of the Company adopted, subject
to stockholder approval, an amendment to the Company's Amended and Restated
Articles of Incorporation (the "Articles") to increase the total authorized
shares of Common Stock of the Company from 25,000,000 to 100,000,000. Such
increase in the number of authorized shares of Common Stock of the Company would
be effected by restating the current Article IV of the Articles to read as
follows:
"The Corporation shall have the authority to issue a total of
100,000,000 shares of capital stock having a par value of $.001 per
share. All shares of capital stock of the Corporation shall be of the
same class and shall have the same rights and preferences."
The additional shares of Common Stock for which authorization is sought herein
would be part of the existing class of Common Stock and, if and when issued,
would have the same rights and privileges as the shares of Common Stock
presently outstanding. Holders of Common Stock have no preemptive or other
subscription rights.
As of March 31, 2003, 14,076,554 shares of Common Stock were issued and
outstanding; 1,900,000 shares were reserved for issuance pursuant to outstanding
grants under the Company's stock option plans; and 714,914 shares were reserved
for issuance pursuant to the exercise of outstanding warrants. Therefore, of
the 25,000,000 shares currently authorized by the Articles, approximately
8,308,532 shares are presently available for general corporate purposes.
Assuming Proposal 2 is approved by the stockholders, approximately 19,191,468
shares of Common Stock will be outstanding or reserved for issuance on exercise
of options existing or to be granted under the Company's stock option and stock
purchase plans and upon exercise of outstanding warrants and approximately
5,808,532 shares will be available for general corporate purposes.
Purposes and Effects of the Authorized Shares Amendment
The increase in authorized shares of Common Stock is recommended by the
Board of Directors in order to provide a sufficient reserve of such shares for
the present and future needs and growth of the Company. Such additional
authorized shares would be available for issuance at the discretion of the Board
of Directors without further stockholder approval (subject to certain provisions
of state law) to take advantage of future opportunities for equity financing, to
improve the Company's capital structure, in connection with possible
acquisitions, in connection with stock dividends or stock splits, and for other
corporate purposes.
The Board of Directors does not intend to issue any Common Stock or
securities convertible into Common Stock except on terms that the Board deems to
be in the best interests of the Company and its stockholders. The Company's
management has no arrangements, agreements, understandings or plans at the
present time for the issuance or use of the additional shares of Common Stock to
be authorized by the proposed amendment to the Articles.
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Although an increase in the authorized shares of Common Stock could, under
certain circumstances, have an anti takeover effect (for example, by diluting
the
stock of a person seeking to effect a change in the composition of the Board of
Directors or contemplating a tender offer or other transaction for a combination
of the Company with another company), this proposal to amend the Articles is not
in response to any effort of which the Company is aware to accumulate the
Company's stock or obtain control of the Company, nor is it part of a plan by
management to recommend a series of similar amendments to the Board of Directors
and stockholders.
Proposal
At the Annual Meeting, stockholders will be asked to approve the amendment
to the Articles of Incorporation to increase the total authorized shares of
Common Stock of the Company from 25,000,000 shares to 100,000,000 shares. Such
approval will require the affirmative vote of a majority of the voting power of
all outstanding shares of the Company's Common Stock.
The Board of Directors recommends a vote FOR this proposal.
PROPOSAL 4
APPROVAL OF e-Perception, Inc.
2003 STOCK INCENTIVE PLAN
The Company's stockholders are being asked to approve the e-Perception,
Inc. 2003 Stock Incentive Plan (the "2003 Plan"), to serve as the successor to
the Company's existing 2001 Stock Option Plan and 2000 Stock Option Plan
(together, the "Predecessor Plans"). The 2003 Plan will become effective
immediately upon stockholder approval at the Annual Meeting, and all outstanding
options under the Predecessor Plans will be incorporated into the 2003 Plan at
that time. The Predecessor Plans will terminate, and no further option grants
will be made under the Predecessor Plans. However, all outstanding options under
the Predecessor Plans will continue to be governed by the terms and conditions
of the existing option agreements for those grants except to the extent the
Board or Compensation Committee elects to extend one or more features of the
2003 Plan to those options.
The 2003 Plan was adopted by the Board on March 31, 2003 and is designed to
serve as an equity incentive program to attract and retain the services of
individuals essential to the Company's long-term growth and financial success.
Accordingly, officers and other key employees, non-employee board members,
consultants and other advisors in the service of the Company or any parent or
subsidiary corporation will have the opportunity to acquire a meaningful equity
interest in the Company through their participation in the 2003 Plan.
The following is a summary of the principal features of the 2003 Plan. The
summary, however, does not purport to be a complete description of all the
provisions of the 2003 Plan. Any stockholder of the Company who wishes to obtain
a copy of the actual plan document may do so without charge upon written request
to the Corporate Secretary at the Company's principal executive offices in
Temecula, California.
Administration
The 2003 Plan will be administered by the Compensation Committee of the
Board. This committee (the "Plan Administrator") will have complete discretion
(subject to the provisions of the 2003
8
Plan) to authorize option grants under the 2003 Plan, except that the exercise
price of outstanding options may not be reset and new grants may not be made in
exchange for the cancellation of outstanding options without stockholder
approval. The Board may also appoint a secondary committee of one or more Board
members, including employee directors, to authorize option grants to eligible
persons other than executive officers and Board members subject to the
short-swing liability provisions of the federal securities laws.
Share Reserve
A total of 2,698,500 shares of Common Stock have been authorized for
issuance over the term of the 2003 Plan. Such share reserve consists of (i) the
number of shares that remain available for issuance under the Predecessor Plans
(including shares subject to outstanding options) and (ii) an additional
increase of 2,500,000 shares.
As of March 31, 2003, options for 1,701,500 shares of Common Stock were
outstanding under the Predecessor Plans and 198,500 shares of Common Stock
remained available for future option grants.
No participant in the 2003 Plan may receive option grants for more than
250,000 shares of Common Stock in the aggregate per calendar year, subject to
adjustment for subsequent stock splits, stock dividends and similar
transactions. Stockholder approval of this proposal will also constitute
approval of the 250,000 share limitation for purposes of Internal Revenue Code
Section 162(m).
The shares of Common Stock issuable under the 2003 Plan may be drawn from
shares of the Company's authorized but unissued Common Stock or from shares of
Common Stock reacquired by the Company, including shares repurchased on the open
market.
Shares subject to any outstanding options under the 2003 Plan (including
options incorporated from the Predecessor Plans) which expire or otherwise
terminate prior to exercise will be available for subsequent issuance. Unvested
shares issued under the 2003 Plan and subsequently repurchased by the Company
pursuant to its repurchase rights under the 2003 Plan will also be available for
subsequent issuance.
Eligibility
Employees, non-employee Board members and independent advisors and
consultants in the service of the Company or its parent and subsidiaries
(whether now existing or subsequently established) will be eligible to
participate in the 2003 Plan.
As of March 31, 2003, three executive officers, five non-employee Board
members and approximately 13 other employees and consultants were eligible to
participate in the 2003 Plan.
Valuation
The fair market value per share of Common Stock on any relevant date under
the 2003 Plan will be the closing selling price per share on that date on the
Nasdaq OTC Market. On March 31, 2003, the closing selling price per share was
$0.53.
Discretionary Option Grants
The options granted under the 2003 Plan may be either incentive stock
options under the federal tax laws or non-statutory options. Each granted
option will have an exercise price per share not less than the fair market value
per share of Common Stock on the option grant date, and no granted option will
9
have a term in excess of ten years. The shares subject to each option will
generally vest in one or more installments over a specified period of service
measured from the grant date. Historically, the Company has granted options
vesting over three and four year periods from the date of grant.
Upon cessation of service, the optionee will have a limited period of time
in which to exercise any outstanding option to the extent exercisable for vested
shares. The Plan Administrator will have complete discretion to extend the
period following the optionee's cessation of service during which his or her
outstanding options may be exercised and/or to accelerate the exercisability or
vesting of such options in whole or in part. Such discretion may be exercised at
any time while the options remain outstanding, whether before or after the
optionee's actual cessation of service.
General Provisions
In the event of an acquisition of the Company, whether by merger or asset
sale or a sale of stock by the stockholders, each outstanding option under the
2003 Plan which is not to be assumed by the successor corporation or otherwise
continued in effect will automatically accelerate in full, and all unvested
shares will immediately vest, except to the extent the Company's repurchase
rights with respect to those shares are to be assigned to the successor
corporation or otherwise continued in effect. The Plan Administrator will have
the authority to provide that the shares subject to options granted under the
2003 Plan will automatically vest upon an acquisition of the Company, whether or
not those options are assumed or continued.
The acceleration of vesting in the event of a change in the ownership of
the Company may be seen as an anti-takeover provision and may have the effect of
discouraging a merger proposal, a takeover attempt or other efforts to gain
control of the Company.
Financial Assistance
The Plan Administrator may permit one or more participants to pay the
exercise price of outstanding options under the 2003 Plan by delivering a
promissory note payable in installments. The Plan Administrator will determine
the terms of any such promissory note. However, the maximum amount of financing
provided any participant may not exceed the cash consideration payable for the
issued shares plus all applicable taxes incurred in connection with the
acquisition of the shares.
Special Tax Election
The Plan Administrator may provide one or more holders of options or
unvested shares with the right to have the Company withhold a portion of the
shares otherwise issuable to such individuals in satisfaction of the withholding
tax liability incurred by such individuals in connection with the exercise of
those options or the vesting of those shares. Alternatively, the Plan
Administrator may allow such individuals to deliver previously acquired shares
of Common Stock in payment of such tax liability.
Changes in Capitalization
In the event any change is made to the outstanding shares of Common Stock
by reason of any recapitalization, stock dividend, stock split, combination of
shares, exchange of shares or other change in corporate structure effected
without the Company's receipt of consideration, appropriate adjustments will be
made to (i) the maximum number and/or class of securities issuable under the
2003 Plan, (ii) the number and/or class of securities for which any one person
may be granted stock options under the 2003 Plan per calendar year and (iii) the
number and/or class of securities and the exercise price per share in
10
effect under each outstanding option (including the options incorporated from
the Predecessor Plans) in order to prevent the dilution or enlargement of
benefits thereunder.
Amendment and Termination
The Board may amend or modify the 2003 Plan in any or all respects
whatsoever subject to any required stockholder approval. The Board may
terminate the 2003 Plan at any time, and the 2003 Plan will in all events
terminate on March 31, 2013.
Option Grants
No options have been granted under the 2003 Plan. The table below shows,
as to each of the Company's executive officers named in the Summary Compensation
Table and the various indicated individuals and groups, the number of shares of
Common Stock subject to options granted between January 1, 2002 and December 31,
2002 under the Predecessor Plans, together with the weighted average exercise
price payable per share.
OPTION TRANSACTIONS
Number of Weighted Average
Name Option Shares Exercise Price
- ---- ------------- ----------------
Joseph Flynn(1) - -
Chief Executive Officer
James P. Stapleton(2) - -
Chief Financial Officer
Etienne Weidemann, 100,000 $1.00
Executive Vice President,
Sales and Marketing
William Richardson (3), 4,000 $2.55
Chief Executive Officer
All executive officers and directors
as a group (3 persons) 104,000 $1.16
All nonemployee directors as a group 16,000 $2.55
(4 persons)
All employees, including current officers 1,536,500 $1.27
who are not executive officers as a group
(approximately 13 persons)
(1) Mr. Flynn joined the Company in January 2003 as Chief Executive Officer.
(2) Mr. Stapleton joined the Company in January 2003 as Chief Executive
Officer.
(3) Mr. Richardson resigned as Chief Executive Officer effective December 12,
2002
11
Federal Income Tax Consequences
Option Grants
Options granted under the 2003 Plan may be either incentive stock options
which satisfy the requirements of Section 422 of the Internal Revenue Code or
non-statutory options which are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as follows:
Incentive Options. No taxable income is recognized by the optionee at the
time of the option grant, and no taxable income is generally recognized at the
time the option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise disposed
of. For Federal tax purposes, dispositions are divided into two categories: (i)
qualifying and (ii) disqualifying. A qualifying disposition occurs if the sale
or other disposition is made after the optionee has held the shares for more
than two years after the option grant date and more than one year after the
exercise date. If either of these two holding periods is not satisfied, then a
disqualifying disposition will result.
Upon a qualifying disposition, the optionee will recognize long-term
capital gain in an amount equal to the excess of (i) the amount realized upon
the sale or other disposition of the purchased shares over (ii) the exercise
price paid for the shares. If there is a disqualifying disposition of the
shares, then the excess of (i) the fair market value of those shares on the
exercise date over (ii) the exercise price paid for the shares will be taxable
as ordinary income to the optionee. Any additional gain or loss recognized upon
the disposition will be recognized as a capital gain or loss by the optionee.
If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs, equal to the excess of (i) the fair
market value of such shares on the option exercise date over (ii) the exercise
price paid for the shares. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
Non-Statutory Options. No taxable income is recognized by an optionee upon
the grant of a non-statutory option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares, and the optionee will be required
to satisfy the tax withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal Revenue Code to
include as ordinary income in the year of exercise of the option an amount equal
to the excess of (i) the fair market value of the purchased shares on the
exercise date over (ii) the exercise price paid for such shares. If the Section
83(b) election is made, the optionee will not recognize any additional income as
and when the repurchase right lapses.
12
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised
non-statutory option. The deduction will in general be allowed for the taxable
year of the Company in which such ordinary income is recognized by the optionee.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code disallows a tax deduction to
publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation exceeds $1 million per covered officer
in any fiscal year. The limitation applies only to compensation which is not
considered to be performance-based. Compensation deemed paid by the Company in
connection with disqualifying dispositions of incentive stock option shares or
exercises of non-statutory stock options granted under the 2003 Plan qualifies
as performance-based compensation for purposes of Section 162(m) if such plan is
administered by a committee of "outside directors" as defined under Section
162(m). The Company anticipates that any compensation deemed paid by it in
connection with disqualifying dispositions of incentive stock option shares or
exercises of non-statutory options will qualify as performance-based
compensation for purposes of Code Section 162(m) and will not have to be taken
into account for purposes of the $1 million limitation per covered individual on
the deductibility of the compensation paid to certain executive officers of the
Company. Accordingly, all compensation deemed paid with respect to those
options will remain deductible by the Company without limitation under Code
Section 162(m).
Accounting Treatment
Option grants made to employees under the 2003 Plan will generally not
result in any charge to the Company's earnings. However, the Company must
disclose in footnotes and pro-forma statements to the Company's financial
statements, the impact those options would have upon the Company's reported
earnings were the value of those options at the time of grant treated as a
compensation expense. The number of outstanding options may be a factor in
determining the Company's earnings per share on a fully-diluted basis.
New Plan Benefits
No options may be granted under the 2003 Plan until it has been approved by
the stockholders.
Proposal
At the Annual Meeting, stockholders will be asked to approve the 2003 Plan.
Such approval will require the affirmative vote of a majority of the voting
power of all outstanding shares of the Company's Common stock present or
represented and entitled to vote at the Annual Meeting. Should such stockholder
approval not be obtained, then the 2003 Plan will not be implemented. The
Company's 2000 Stock Option Plan and 2001 Stock Option Plan will, however,
continue to remain in effect, and option grants may be made pursuant to the
provisions of those plans until the available reserve of Common Stock under each
such plan is issued.
The Board of Directors recommends that you vote FOR this proposal.
EXECUTIVE OFFICERS
Our current executive officers are as follows:
13
Name Age Position
- ---- --- --------
Joseph Flynn 37 Chairman, President and Chief Executive Officer
James P. Stapleton 39 Chief Financial Officer
Etienne Weidemann 37 Executive Vice President, Sales and Marketing
For additional information with respect to Mr. Flynn, who is a director of
the Company, see "Other Board of Directors Information".
James P. Stapleton was hired as the C.F.O. effective January 1, 2003. From
1996 through 2002 Mr. Stapleton was employed in a variety of positions for
ProsoftTraining (NASDAQ POSO), including Corporate Secretary, Vice President
Investor relations, Chief Financial Officer, and other positions. Mr. Stapleton
was Chief Financial Officer of BioTek Solutions, Inc. from 1995 through February
1996. From 1987 to 1995, Mr. Stapleton was the Chief Financial Officer for
Advantage Life Products, Inc. Mr. Stapleton graduated from the University of
California at Irvine (UCI) with a MBA in 1995, and from the University of
Washington with a BA in Economics in 1985.
Etienne L. Weidemann is the Executive Vice President of Sales and Marketing
for the Company. He joined the Company in November 2002 as Vice President of
Marketing. In March 2003, Mr. Weidemann was promoted to Executive Vice President
of Sales and Marketing. Prior to e-Perception, Mr. Weidemann was Vice President
of Sales and Vendor Marketing for the e-Learning and Collaboration Groups at
Advanstar Communications Inc. From 1996 to 1999, Mr. Weidemann was a Director
and founding member of WildnetAfrica.com where he played a leading strategic
role in determining the company's go-to-market strategy. From 1991 through 1996,
Mr. Weidemann was Managing Director of Elecrep Corporation, an engineering and
automotive manufacturing concern in South Africa. Mr. Weidemann graduated with a
law degree from the University of South Africa and was admitted as an Attorney
of the Supreme Court of South Africa in 1989.
14
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The following table sets forth, for the years ended December 31, the
compensation paid to our chief executive officer and our previous chief
executive officer during the fiscal year.
Long-Term
Compensation
Awards
------------
Shares of
Common
Stock
Underlying All Other
Name and Principal Fiscal Stock Compen-
Position Year Salary Bonus Options sation
- ------------------ ------ ------- ----- ---------- ---------
Joseph Flynn (1) 2002 - - - -
Chairman, and Chief Executive
Officer 2001 - - - -
William Richardson (2) 2002 112,166 - 344,000 -
Former 2001 64,926 - 340,000 -
Chief Executive Officer 2000 - - - -
(1) Mr. Flynn joined the Company in January 2003 as Chief Executive Officer.
(2) Mr. Richardson resigned as Chief Executive Officer effective December 12,
2002.
Option Grants Table
The following table sets forth information concerning options to purchase
shares of our common stock granted to our named executive officers in the fiscal
year ended December 31, 2002.
Shares of % of Total
Common Stock Options
Underlying Granted Exercise Expira- Grant Date
Stock to Company Price Per tion Present
Executive Officer Options (1) Employees Share(2) Date Value (3)
- ----------------- ----------- --------- --------- ------- ----------
Joseph Flynn(4) - - - - -
James P. Stapleton (5) - - - - -
Etienne Weidemann (6). 100,000 18% $1.00 12/20/05 $68,054
William Richardson(7) 4,000 0.7% $2.55 7/15/05 $ 7,052
(1) The options were granted under the e-Perception 2001 and 2000 Stock Option
Plan for a term of no more than ten years, subject to earlier termination
in certain events related to termination of employment. The options begin
to vest on the first anniversary from the grant date. To the extent not
already exercisable, the options generally become exercisable upon a merger
or consolidation of the Company with or into another corporation, or upon
the acquisition by another corporation or person of all or substantially
all of the Company's assets.
(2) All options were granted at fair market value (the last price for the
Company's Common Stock as reported by NASDAQ on the day previous to the
date of grant).
15
(3) As suggested by the SEC's rules on executive compensation disclosure, the
Company used the Black-Scholes model of option valuation to determine grant
date pre-tax present value. The calculation is based on a five-year term
and upon the following assumptions: annual dividend growth of zero percent,
volatility of approximately 204%, and an interest rate of 1.45%. There can
be no assurance that the amounts reflected in this column will be achieved.
(4) Mr. Flynn joined the Company in January 2003 as Chief Executive Officer.
(5) Mr. Stapleton joined the Company in January 2003 as Chief Financial
Officer.
(6) Mr. Weidemann joined the Company in November 2002.
(7) Mr. Richardson resigned as Chief Executive Officer effective December 10,
2002.
Equity Compensation Plan Information
The following table provides certain information as of December 31, 2002
with respect to the Company's equity compensation plans under which equity
securities of the Company are authorized for issuance.
Number of
securities Weighted
to be average Number of
issued upon exercise securities
exercise of price of remaining
outstanding outstanding available
options, options, for future
warrants warrants issuances
Plan Category and rights and rights under plan
------------- ----------- ----------- ----------
Equity compensation plans approved
by security holders (1): 1,536,500 $1.27 363,500
Equity compensation plans not
approved by security holders (2): 714,914 $0.85 0
Total 2,251,414 363,500
(1) These plans consist of the 2000 Stock Option Plan, and the 2001 Stock
Option Plan and the Employee Stock.
(2) Warrants and rights.
16
Aggregated Options Exercised in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information regarding the exercisable and
unexercisable options to acquire our common stock granted to our named executive
officers.
Value of
Unexercised
Number of In-the-Money
Unexercised Options at
Options at December 31,
December 31, 2002 2002 (1)
----------------- ----------------
Shares
Acquired
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- ---- -------- -------- ------- ------- ------- --------
Joseph Flynn(2) - - - - - -
James P. Stapleton(3) - - - - - -
Etienne Weidemann - - 0 100,000 $0 $150,000
William Richardson (4) - - 274,625 69,375 $568,000 $166,500
__________
(1) Represents the difference between the fair market value of the shares
underlying such options at fiscal year- end ($2.50) and the exercise price
of such options.
(2) Mr. Flynn joined the Company in January 2003 as Chief Executive Officer.
(3) Mr. Stapleton joined the Company in January 2003 as Chief Executive
Officer.
(4) Mr. Richardson resigned as Chief Executive Officer effective December 10,
2002.
Employment and Separation Agreements and Change in Control Arrangements
The Company does not have any employment agreements with current executive
officers.
COMPENSATION COMMITTEE REPORT
Overview and Philosophy
The Compensation Committee of the Board of Directors reviews and
establishes compensation strategies and programs to ensure that we attract,
retain, properly compensate, and motivate qualified executives and other key
associates. The Committee consists of Mr. Gerrity, its chairperson, and Mr.
Vanderhoof. No member of this committee is an employee or officer.
The philosophy of the Compensation Committee is (i) to provide competitive
levels of compensation that integrate pay with the individual executive's
performance and the Company's annual and long-term performance goals; (ii) to
motivate key executives to achieve strategic business goals and reward them for
their achievement; (iii) to provide compensation opportunities and benefits that
are comparable to those offered by other companies in the training and education
industry, thereby allowing us to compete for and retain talented executives who
are critical to our long-term success; and (iv) to align the interests of key
executives with the long-term interests of stockholders and the enhancement of
stockholder value through the granting of stock options. The compensation of our
executive officer is currently comprised of annual base salary, a bonus plan
pursuant to certain performance criteria being achieved, and long-term
performance incentives in the form of stock option grants under the stock option
plans.
17
Chief Executive Officer Compensation
The Compensation Committee set the 2002 annual compensation for our former
Chief Executive Officer, Mr. Richardson and our current Chief Executive Officer,
Mr. Flynn.
Mr. Richardson was paid an annual salary of $115,000. Mr. Richardson
resigned as Chief Executive Officer effective December 10, 2002.
Mr. Flynn is being paid an annual salary of $120,000 for the first ninety
days of employment. Starting April 1, 2003, Mr. Flynn will earn an annual salary
of $165,000. Mr. Flynn may earn an annual bonus, at the discretion of the Board
of Directors, with an amount to be determined by the Board of Directors.
By the Compensation Committee,
Ray Gerrity, Chairperson
Michael Vanderhoof
March 31, 2003
AUDIT COMMITTEE REPORT
The Audit Committee's role is to act on behalf of the Board of Directors in
the oversight of all aspects of our financial reporting, internal control and
audit functions. Management has the primary responsibility for the financial
statements and the reporting process, including the systems of internal
controls. In fulfilling its oversight responsibilities, the Audit Committee
reviewed and discussed the audited financial statements in the Annual Report for
fiscal year 2002 with management.
The Audit Committee also reviewed with Stonefield Josephson, Inc., our
independent auditors, 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 Audit Committee under generally accepted
auditing standards (including Statement on Auditing Standards No. 61). In
addition, the Audit Committee has discussed with the independent auditors the
auditors' independence from management and the Company, including the matters in
the written disclosures required by the Independence Standards Board Standard
No. 1. The Audit Committee has also considered whether the provision of
non-audit services by Stonefield Josephson, Inc. is compatible with their
independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee met with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of our internal controls, and
the overall quality our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-KSB for the year ended
December 31, 2002 for filing with the Securities and Exchange Commission.
By the Audit Committee,
18
Bob Miller, Chairperson
Shelly Singhal
Ray Gerrity
March 31, 2003
FEES PAID TO INDEPENDENT AUDITORS
Audit Fees
The aggregate fees billed for professional services rendered by Stonefield
Josephson, Inc. for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2002 and the reviews of the financial
statements included in the Company's Form 10-Q's for such fiscal year were
$87,956.
Financial Information Systems Design and Implementation Fees
No fees were billed for professional services rendered by Stonefield
Josephson, Inc. for financial information systems design and implementation
services for the fiscal year ended December 31, 2002.
All Other Fees
The aggregate fees billed for services rendered by Stonefield Josephson,
Inc., other than the services referred to above, for the fiscal year ended
December 31, 2002 were $0.
CERTAIN TRANSACTIONS
San Clemente Capital, LLC ("SCC"), an affiliate of two of the Company's
shareholders (one who is a past and one who is a current director), has provided
the Company with a revolving loan commitment of up to $400,000 based on eligible
collateral levels. The loan was secured by certain assets of the Company. As of
December 30, 2002, the outstanding balance on such loan (including unpaid
interest which accrued at the rate of 20% per annum) was approximately $417,000.
The loan was originally due and payable in full on June 30, 2002, but SCC agreed
to extend the maturity date until December 31, 2002. Pursuant to the terms of
the loan, the Company is required to pay a monthly fee of $1,000 to SCC for its
services as administrative agent with respect to the loan. On December 30, 2002,
SCC agreed to convert all amounts outstanding under this loan to equity in the
Company. For each dollar of indebtedness discharged by SCC, SCC received one
unit (each, a "Unit") consisting of one-share of the Company's common stock and
the option to convert this share into one share of preferred stock once the
Company has completed the filing of its Amended and Restated Articles of
Incorporation authorizing the issuance of such preferred stock. The preferred
stock has an annual coupon of 10%, is convertible into one share of the
Company's common stock at the holder's discretion, and contains certain
liquidation and anti-dilution protections. Following the Repricing, the Company
issued four Units (instead of one Unit) foe each dollar of indebtedness
discharged by SCC.
19
On April 29, 2002, Avintaquin Capital, LLC ("Avintaquin"), an affiliate of
three of the Company's shareholders (one of whom is a director and one of whom
is a former director), provided the Company with a bridge loan of $60,000, which
matures on April 29, 2003, and which was initiated in anticipation of the
closing of a private placement of the Company's common stock. The bridge loan
has an interest rate of 12% per annum and is secured by a first-priority lien on
the Company's assets. As additional consideration for the bridge loan,
Avintaquin received a warrant to purchase 60,000 shares at a purchase price
equal to 80% of the price per share of the common stock sold in the Company's
next round of financing. The warrant is exercisable for three years from the
date of issuance. On December 30, 2002, Avintaquin agreed to convert $10,000 of
indebtedness under this loan in exchange for 10,000 Units, on the terms and
conditions described above. Following the re-pricing, the Company issued four
Units (instead of one Unit) foe each dollar of indebtedness discharged by
Avintaquin.
Avintaquin served as a member of the selling group in connection with the
private placement of the Company's common stock that terminated on January 15,
2003. Based upon the number of shares issued in this offering upon the
effectiveness of the re-pricing, Avintaquin received 199,264 warrants in
connection with the placement of 1,992,640 shares of the Company's common stock.
The warrants have an exercise price equal to 110% of the 5-day trailing average
of the public market price of the Company's stock following the final closing of
the offering, subject to adjustment, and have a term of three years. In
addition, Avintaquin agreed to accept 199,264 shares of the Company's common
stock in connection with this offering in lieu of a cash placement fee of
$49,264.
David Belcher, a former member of the Company's Board of Directors and a
former employee of the Company, is the owner of Rhino Media, Inc. ("Rhino").
During the fiscal year ended December 31, 2002, the Company licensed certain
software from Rhino, and as consideration for such license, paid Mr. Belcher
approximately $850 per month. Management believes that this amount is equal to
or less than the amount that other firms would charge to license similar
software to the Company. This license arrangement was terminated in February
2003.
The Company believes that the foregoing transaction was in its best
interests. As a matter of policy, this transaction was and all future
transactions between the Company and its officers, directors, principal
shareholders or their affiliates will be, approved by a majority of the
independent and disinterested members of the Board of Directors, on terms no
less favorable than could be obtained from unaffiliated third parties and in
connection with bona fide business purposes of the Company.
APPOINTMENT OF INDEPENDENT AUDITORS
The Company has appointed the firm of Stonefield Josephson, Inc.
independent public auditors for the Company during the 2002 fiscal year, to
serve in the same capacity for the year ending December 31, 2003.
Representatives of Stonefield Josephson, Inc., are expected to be present at the
Annual Meeting and will be available to respond to appropriate questions and to
make such statements as they may desire.
NOMINATIONS AND STOCKHOLDER PROPOSALS
The Bylaws of the Company require that all nominations for persons to be
elected to the Board of Directors, other than those made by or at the direction
of the Board of Directors, be made pursuant to written notice to the Secretary
of the Company. The notice must be received not less than 35 days prior to the
meeting at which the election will take place (or not later than 10 days after
public disclosure of such meeting date is given or made to stockholders if such
disclosure occurs less than 50 days prior to the date
20
of such meeting). Notice must set forth the name, age, business address and
residence address of each nominee, their principal occupation or employment, the
class and number of shares of stock which they beneficially own, their
citizenship and any other information that is required to be disclosed in
solicitations for proxies for election of directors pursuant to the Securities
Exchange Act of 1934, as amended. The notice must also include the nominating
stockholder's name and address as they appear on the Company's books and the
class and number of shares of stock beneficially owned by such stockholder.
In addition, the Bylaws require that for business to be properly brought
before an annual meeting by a stockholder, the Secretary of the Company must
have received written notice thereof (i) in the case of an annual meeting that
is called for a date that is within 30 days before or after the anniversary date
of the immediately preceding annual meeting, not less than 120 days in advance
of the anniversary date of the Company's proxy statement for the previous year's
annual meeting, nor more than 150 days prior to such anniversary date and (ii)
in the case of an annual meeting that is called for a date that is not within 30
days before or after the anniversary date of the immediately preceding annual
meeting, not later than the close of business on the 10th day following the day
on which notice of the date of the meeting was mailed or public disclosure of
the date of the meeting was made, whichever occurs first. The notice must set
forth the name and address of the stockholder who intends to bring business
before the meeting, the general nature of the business which he or she seeks to
bring before the meeting and a representation that the stockholder is a holder
of record of shares entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to bring the business specified in the notice
before the meeting.
Any proposal of a stockholder intended to be presented at the Company's
2003 Annual Meeting of Stockholders and included in the proxy statement and form
of proxy for that meeting is required to be received by the Company no later
than February 9, 2004. Management proxies will have discretionary voting
authority as to any proposal not received by that date if it is raised at that
annual meeting, without any discussion of the matter in the proxy statement.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB, including financial statements
and schedules thereto, for the fiscal year ended December 31, 2002, accompanies
this Proxy Statement.
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Board of
Directors knows of no other matter that will be acted upon at the Annual
Meeting. If any other matter is presented properly for action at the Annual
Meeting or at any adjournment or postponement thereof, it is intended that the
proxies will be voted with respect thereto in accordance with the best judgment
and in the discretion of the proxy holders.
By Order of the Board of Directors,
ProsoftTraining
Joseph Flynn
Chairman of the Board
21
Temecula, California
March 31, 2003
22
e-Perception, Inc
27555 Ynez Road, Suite 203
Temecula, California 92591
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates, constitutes and appoints each of Joseph
Flynn and James P. Stapleton the attorney, agent and proxy of the undersigned,
with full power of substitution, to vote all stock of e-Perception, Inc. which
the undersigned is entitled to represent and vote at the Annual Meeting of
Stockholders of the Company to be held at the Company's sales office at 5015
Birch Street, Newport Beach, California on March 15, 2003, at 11:00 a.m., and at
any and all adjournments or postponements thereof, as fully as if the
undersigned were present and voting at the meeting, as follows:
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1, 2, 3, AND 4.
1. Election of Directors:
FOR ALL nominees listed below WITHHOLD AUTHORITY to vote for
(except as indicated to nominees listed below
the contrary below)
Joseph Flynn Ray Gerrity Robert Miller
Shelly Singhal Michael Vanderhoof
INSTRUCTION: To withhold authority to vote for an individual nominee, write
that nominee's name in the space provided below.
________________________________________________________________________________
2. Approval for amendment to the Company's Articles of Incorporation to change
the name of the Company to PeopleView, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval for amendment to the Company's Articles of Incorporation to
increase the total authorized shares of Common Stock of the Company from
25,000,000 to 100,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval of the Company's 2003 Stock Incentive Plan described in the
accompanying proxy statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment
or postponement thereof .
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1, PROPOSAL 2, PROPOSAL 3, AND PROPOSAL 4.
IMPORTANT - PLEASE SIGN, DATE AND RETURN PROMPTLY
DATED: ________________________________, 2003
_____________________________________________
(Signature)
Please sign exactly as name appears hereon.
Executors, administrators, guardians,
officers of corporations and others signing
in a fiduciary capacity should state their
full titles as such.
23
PLEASE SIGN THIS CARD AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE. IF YOUR
ADDRESS IS INCORRECTLY SHOWN, PLEASE PRINT CHANGES. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN THIS PROXY, WHICH MAY BE
REVOKED AT ANY TIME PRIOR TO ITS USE.
24