SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[_] Definitive Additional Materials
EDUCATIONAL VIDEO CONFERENCING, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
________________________________________________________________________________
PRELIMINARY PROXY MATERIAL
EDUCATIONAL VIDEO CONFERENCING, INC.
35 EAST GRASSY SPRAIN ROAD, SUITE 200
YONKERS, NEW YORK 10710
May , 2001
TO OUR STOCKHOLDERS:
Your are cordially invited to attend our 2001 Annual Stockholders' Meeting
to be held at the Tree Tops Restaurant at the Holiday Inn, 125 Tuckahoe Road,
Yonkers, N.Y. 10710 on June 27, 2001 at 11:00 a.m. local time.
We have enclosed a Notice of annual meeting of stockholders and Proxy
Statement that discuss the matters to be presented at the meeting.
In addition to acting on the matters listed in the Notice of annual meeting
of stockholders, we will discuss our progress, and you will be given an
opportunity to ask questions of general interest to all stockholders.
We have also enclosed a copy of a letter to you regarding last year's
results and recent developments and our Form 10-KSB for our fiscal year ended
December 31, 2000. In addition, because we did not hold an annual meeting last
year, we have enclosed a copy of our Form 10-KSB for our fiscal year ended
December 31, 1999. Accordingly, you may want to ask questions at the annual
meeting regarding 1999.
We hope that you will come to the annual meeting in person. Even if you
plan to come, we strongly encourage you to complete the enclosed proxy and
return it to us in the enclosed business reply envelope. Instructions are shown
on your proxy. If you are a stockholder of record and later find you can be
present or, if for any reason you desire to revoke your proxy, you can do so at
any time before the voting. Your vote is important and will be greatly
appreciated.
Dr. Arol I. Buntzman
CHAIRMAN & CHIEF EXECUTIVE OFFICER
EDUCATIONAL VIDEO CONFERENCING, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME....................... 11 a.m., local time, on Wednesday, June 27,
2001.
PLACE...................... Tree Tops Restaurant at the Holiday Inn,
125 Tuckahoe Road, Yonkers, N.Y. 10710.
PURPOSES..................o To elect two members of Class 1 of the
board of directors to serve for two year
terms.
o To elect two members of Class 2 of the
board of directors to serve for three year
terms.
o To ratify the terms and issuance of our
Series B 7% Convertible Preferred Stock and
related warrants.
o To approve an amendment of our
certificate of incorporation to delete a
provision requiring redemption of our
Series B 7% Convertible Preferred Stock.
o To ratify the appointment of Goldstein
Golub Kessler LLP as our independent
auditors for the 2001 fiscal year.
o To transact any other business that
properly comes before the meeting or any
adjournment of the meeting.
RECORD DATE................ You can vote if you were a stockholder of
record at the close of business May 7,
2001.
By order of the board of directors,
Richard Goldenberg
SECRETARY
May , 2001
Yonkers, New York
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE URGE YOU TO VOTE AS SOON AS
POSSIBLE.
EDUCATIONAL VIDEO CONFERENCING, INC.
35 EAST GRASSY SPRAIN ROAD, SUITE 200
YONKERS, NEW YORK 10710
PROXY STATEMENT
GENERAL INFORMATION ABOUT THE SOLICITATION
We are sending you these proxy materials in connection with the
solicitation by the board of directors of Educational Video Conferencing, Inc.
(Nasdaq: EVCI) of proxies to be used at the annual meeting of stockholders to be
held on June 27, 2001, and at any adjournment or postponement of the meeting.
"We", "our", "us" and "EVCI" all refer to Educational Video Conferencing, Inc.
The proxy materials are first being mailed on or about May 21, 2001.
WHO MAY VOTE
You will only be entitled to vote at the annual meeting if our records show
that you held your shares on May 7, 2001. At the close of business on May 7,
2001, a total of 4,492,961 shares of our common stock were outstanding and
entitled to vote. Each share of common stock has one vote.
VOTING BY PROXY
If your shares are held by a broker, bank or other nominee, it will send
you instructions that you must follow to have your shares voted at the annual
meeting. If you hold your shares in your own name as a record holder, you may
instruct the proxy agents how to vote your shares by completing, signing,
dating, and mailing the proxy card in the enclosed postage-paid envelope. Of
course, you can always come to the meeting and vote your shares in person.
The proxy agents will vote your shares as you instruct. If you sign and
return your proxy card without giving instructions, the proxy agents will vote
your shares:
o FOR each person named in this Proxy Statement as a nominee for election
to the board of directors;
o FOR the ratification of the terms of our Series B preferred stock and
related warrants;
o FOR the amendment to our certificate of incorporation deleting a
provision relating to redemption of our Series B preferred ; and
o FOR ratification of the appointment of Goldstein Golub Kessler LLP as our
independent auditors for the fiscal year ending December 31, 2001
HOW TO REVOKE YOUR PROXY
You may revoke your proxy at any time before it is voted. If you are a
record stockholder, you may revoke your proxy in any of the following ways:
o by giving notice of revocation at the annual meeting
o by delivering to the Secretary of the Company, 35 East Grassy Sprain
Road, Suite 200, Yonkers, New York 10710,written instructions revoking
your proxy
o by delivering to the Secretary an executed proxy bearing a later date
o by voting in person at the annual meeting.
HOW VOTES WILL BE COUNTED
The annual meeting will be held if a quorum, consisting of a majority of
the outstanding shares of common stock entitled to vote, is represented at the
meeting. If you have returned a valid proxy or attend the meeting in person,
your shares will be counted for the purpose of determining whether there is a
quorum, even if you wish to abstain from voting on some or all matters
introduced. Abstentions and broker "non-votes" are counted in determining
whether a quorum is present. A "broker non-vote" occurs when a broker, bank or
nominee that holds shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power for that
proposal and has not received voting instructions from the beneficial owner.
If a quorum is not present at the annual meeting, a majority of the shares
present, in person or by proxy, has the power to adjourn the meeting from time
to time until a quorum is present. Other than announcing, at the annual meeting,
the time and place of the adjourned meeting, no notice of the adjournment will
be given to stockholders, unless required because of the length of the
adjournment.
Directors will be elected by a plurality of the votes cast.
The affirmative vote of a majority of the outstanding shares of our common
stock and two-thirds of the outstanding shares of our Series B preferred is
required to approve the amendment to our certificate of incorporation to delete
a provision requiring redemption of our Series B preferred.
The affirmative vote of a majority of the votes cast is required to approve
all other matters voted on at the meeting.
Abstentions and broker "non-votes" are not counted in the election of
directors and the approval of any other matter.
Votes that are withheld or shares that are not voted will have the same
legal effect as a vote against the proposed amendment to our certificate of
incorporation but will have no effect on the outcome of any other matter voted
on.
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COST OF THIS PROXY SOLICITATION
We will pay the cost of the proxy solicitation. We may retain the services
of a proxy solicitor in case we need assistance in the solicitation of proxies
from brokers, bank nominees and other institutional owners. We estimate that we
will pay a solicitor a fee that will not exceed $6,500 for its services and will
reimburse it for certain out-of-pocket expenses estimated to be not more than
$3,500. In addition, we may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. We expect that some of our
officers and regular employees will solicit proxies by telephone, facsimile,
e-mail, or personal contact. None of these officers or employees will receive
any additional or special compensation for doing this.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of EVCI that are intended to be presented by them
at our 2002 annual meeting of Stockholders must be received by EVCI no later
than December 10, 2001 in order to be considered for possible inclusion in the
Proxy Statement and form of Proxy relating to that meeting.
ELECTION OF DIRECTORS
GENERAL
Our board of directors has six members and is divided into three classes,
each with two directors who are normally elected for a three-year term. Classes
1 or 2 will be elected at the 2001 annual meeting. Class 1 directors are being
elected at this meeting because we did not hold an annual meeting last year.
Accordingly, they will serve a two-year term expiring at our 2003 annual
meeting. Class 2 directors will serve a three-year term expiring at our 2004
annual meeting.
Your proxy will be voted FOR the election of the four management nominees
named below who are members of Class 1 and 2, unless you withhold authority to
vote for all or any of the nominees. Management has no reason to believe that a
nominee will be unwilling or unable to serve as a director. However, if a
nominee is unwilling or unable to serve, your proxy will be voted for another
nominee designated by our board of directors.
DIRECTOR NOMINEES
The following table lists management's Class 1 and 2 director nominees.
NAME CLASS DIRECTOR SINCE
Dr. Arol I. Buntzman 1 1997
Philip M. Getter 1 1999
Dr. John J. McGrath 2 1997
Royce N. Flippin, Jr. 2 1999
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DIRECTORS AND EXECUTIVE OFFICERS
The following table lists our directors and executive officers.
NAME AGE POSITIONS WITH EVCI
Dr. Arol I. Buntzman* 57 Chairman of the board and chief executive
officer, compensation committee member
Dr. John J. McGrath* 47 President and director
Richard Goldenberg* 55 Chief financial officer, secretary and
director
Philip M. Getter 64 Consultant and director
Arthur H. Goldberg 59 Director and audit and compensation
committee member
Royce N. Flippin, Jr. 66 Director and audit committee member
-------------------------
*Executive Officer
Biographical information provided to us by our directors and executive
officers follows.
DR. AROL I. BUNTZMAN has served as chairman of the board and chief
executive officer of EVCI since it's inception in March 1997 and as a member of
the compensation committee since February 1999. From October 1996 until he
founded EVCI with Dr. John McGrath, Dr. Buntzman worked with Dr. McGrath on
EVCI's business plan. From August 1995 to October 1996 he was chairman of the
board and chief executive officer and a principal stockholder of Educational
Televideo Communications, Inc. a provider of distance learning services. From
July 1995 through June 1996, he served as director of interactive video
conferencing distance learning of Fordham University. From September 1992
through July 1995 he was an adjunct professor and the director of the weekend
program, a college program for working adults, at Mercy College, Dobbs Ferry,
New York.
Dr. Buntzman received a doctorate in education through the executive
leadership program of Fordham University Graduate School of Education in May
1995, a professional diploma in educational administration from Fordham
University Graduate School of Education in May 1993 and a Masters of Business
Administration from Arizona State University in September 1970. His doctoral
dissertation focused on using live interactive video conferencing as an
educational delivery method and for graduate education programs.
DR. JOHN J. MCGRATH has served as president and a director of EVCI since
it's inception in March 1997. From October 1996 until he founded EVCI with Dr.
Buntzman, he worked with Dr. Buntzman on EVCI's business plan. From August 1995
to October 1996, he was president, a director and a principal stockholder of
Educational Televideo Communications, Inc.
From January 1995 to February 1997, Dr. McGrath served as special assistant
to the president of the Mercy College, Dobbs Ferry, New York. Through December
1994, he served as assistant vice-president for extension Centers of Mercy
College where he was responsible for establishing and managing seven college
extension centers in New York City and Westchester
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County, New York. He also served as the dean of the White Plains Campus of Mercy
College from 1990 through 1993.
Dr. McGrath holds a Ph.D. from the Fordham University Graduate School of
Arts and Sciences, with a specialization in law and criminal justice.
RICHARD GOLDENBERG has served as chief financial officer, secretary and a
director of EVCI since its inception. From October 1996 until October 1997, Mr.
Goldenberg served as chief financial officer, treasurer and secretary of RDX
Acquisition Corp., a company that provides proprietary electronic messaging and
automation software. From 1986 through September 1996, he served as
vice-president, treasurer and secretary of Celadon Group, Inc., a publicly
traded transportation company. He has a B.B.A. in accounting from Baruch
College, CUNY.
ROYCE N. FLIPPIN, JR. has been a director and a member of EVCI's audit
committee since February 1999. He has served, since 1992, as president of
Flippin Associates, a consulting firm focusing on the development of resources,
programs and new markets and human resource management for career planning,
communication and leadership skills. After serving as a tenured professor and
director of athletics at MIT from 1980 to 1992, he was a director of program
advancement at MIT from 1992 to 1999, in which capacity he provided consulting
services to the MIT Office of Individual Giving -Resource Development regarding
projects that include technology transfers, individual gift bequests and the
planned MIT athletic center. In 2000, Mr. F lippin was appointed a senior
managing director and member of the executive committee of Universal Genesis,
LLC, A Privately owned financial services and development company. Mr. Flippin
is a trustee or board member of several profit and non-profit organizations,
including Ariel Capital Management Funds (trustee since 1986), Radkowsky Thorium
Power Corporation, a privately-held company that is developing non-proliferative
nuclear fuels (director since 1994 and chairman from 1995-1997) and The
Princeton Club of New York. Mr. Flippin holds an A.B. degree from Princeton
University and an M.B.A. degree from Harvard University Graduate School of
Business Administration.
ARTHUR H. GOLDBERG has been a director and member of EVCI's audit and
compensation committees since February 1999. He has served as president of
Manhattan Associates, L.L.C., an investment and merchant banking firm, since
1994. From 1990 through 1993, he served as chairman of Reich & Co., a New York
Stock Exchange member firm that specialized in investment banking and corporate
finance for small-cap companies. Mr. Goldberg holds a B.S. degree from New York
University Stern School of Business and a J.D. degree from New York University
School of Law.
PHILIP M. GETTER has been a director since May 1999. Since December 2000,
he has been an independent financial consultant. From March 1996 to December
2000, he served as a managing director and head of corporate finance of Prime
Charter Ltd., the lead underwriter of EVCI's IPO. From 1992 to March 1996, he
was a senior vice president, investment banking, at Josephthal Lyon & Ross. Mr.
Getter has more than 30 years of experience in the securities industry. From
1975 to 1981 he was chairman and chief executive officer of Generics Corporation
of America, a public company that was one of the largest generic drug companies
in the U.S. He is a member of the League of American Theatres and Producers,
serves on the Board of the American Theatre Wing and is a Trustee of the Kurt
Weill Foundation for Music. Mr. Getter has produced events for Broadway, film
and television. Mr. Getter received his B.S. in industrial relations from
Cornell University.
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Executive officers of EVCI are appointed by the board of directors and
serve at the discretion of the Board, subject to the terms of applicable
employment agreements. There are no family relationships among any of the
directors or executive officers of EVCI.
As set forth above, each of Drs. Buntzman and McGrath was an executive
officer, director and principal stockholder of Educational Televideo. From
February 1995 through July 1996, Educational Televideo had delivered courses to
one customer, using video conferencing equipment and dedicated phone lines.
Educational Televideo ceased business operations in September 1996. Drs.
Buntzman and McGrath terminated their affiliation with Educational Televideo in
October 1996 when it became apparent to them that anticipated financing needed
to resume Educational Televideo's business would not be provided. Drs. Buntzman
and McGrath believe that, when they resigned, Educational Televideo's remaining
liabilities consisted solely of approximately $300,000 of accounts payable to
vendors, primarily for equipment and supplies. To the knowledge of Drs. Buntzman
and McGrath, bankruptcy proceedings have not been commenced or threatened by or
against Educational Televideo.
BOARD MEETINGS AND COMMITTEES
During 2000, our board of directors met six times and had an audit
committee and a compensation committee.
AUDIT COMMITTEE. The board of directors has adopted a written charter for
its audit committee, a copy of which is Appendix A to this proxy statement. For
a description of the functions of the audit committee you should read Appendix A
and particularly note the information under the captions "Authority" and
"Responsibilities."
It is the opinion of the board of directors that each of the two audit
committee members is an independent director as defined in Rule 4200 (a)(15) of
the NASD Marketplace Rules.
The audit committee met two times during 2000.
REPORT OF THE AUDIT COMMITTEE
In connection with inclusion of the audited financial statements in our
2000 Annual Report on form 10-K, the audit committee:
o reviewed the audited financial statements with management;
o discussed with our independent auditors the materials required to be
discussed by SAS 61;
o reviewed the written disclosures and the letter from our independent
auditors required by Independent Standards Board Standard No. 1 and
discussed with our independent auditors their independence; and
o based on the foregoing review and discussion, recommended to the board of
directors that the audited financial statements be included in our 2000
Annual Report on form 10-K.
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Royce N. Flippin Jr., audit committee member
Arthur H. Goldberg, audit committee member.
COMPENSATION COMMITTEE. The compensation committee reviews and, as it deems
appropriate, recommends to the board of directors policies, practices and
procedures relating to the compensation of officers and other managerial
employees and the establishment and administration of employee benefit plans.
The compensation committee also administers our 1998 incentive stock plan. The
board of directors determines issues relating to Dr. Buntzman's compensation.
The compensation committee held three meetings during 2000.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows compensation paid for the years ended December
31, 2000, 1999, and 1998 to EVCI's chief executive officer and its other highest
paid executive officers who earned more than $100,000 in 2000.
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------- --------------
AWARDS
COMMON STOCK
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS
--------------------------------------------------------------------------------------------------------------------
Dr. Arol I. Buntzman 2000 332,750 500,000 --- ---
Chairman of the 1999 270,000 293,333 (1) --- 120,000
board and chief 1998 210,000 70,000 --- ---
executive officer
Dr. John J. McGrath 2000 200,000 70,000 --- ---
President 1999 158,666 91,667 (2) --- 40,000
1998 126,500 5,750 --- ---
Richard Goldenberg 2000 125,000 40,000 --- ---
Chief financial officer 1999 117,666 55,000 (3) --- 15,000
1998 102,000 4,750 13,200 (4) ---
James H. Mollitor 2000 120,000 20,000 --- ---
Chief technical officer 1999 120,000 5,000 --- ---
1998 (5) 57,500 2,000 --- 50,000
-------------------------
(1) Includes $43,333 of bonus earned in 1998, payment of which was deferred at
the election of Dr. Buntzman.
(2) Includes $21,667 of bonus earned in 1998, payment of which was deferred at
the election of Dr. McGrath.
(3) Includes $15,000 of bonus earned in 1998, payment of which was deferred at
the election of Mr. Goldenberg.
(4) Consulting fees earned prior to Mr. Goldenberg's full-time employment by
EVCI, the payment of which was deferred at the election of Mr. Goldenberg.
(5) Was employed from July 1998 to March 2001.
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Aggregated option exercises in 2000 and 2000 year-end option values
NUMBER OF SHARES OF COMMON STOCK VALUE OF UNEXERCISED IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT OPTIONS AT
DECEMBER 31, 2000 DECEMBER 31, 2000 (1)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE(2) UNEXERCISABLE(2)
---- ----------- ------------- ----------- ----------------
Dr. Arol I. Buntzman 30,000 90,000 0 0
Dr. John J. McGrath 10,000 30,000 0 0
Dr. Richard Goldenberg 3,750 11,250 0 0
James H. Mollitor 10,000 40,000 0 0
----------------------
(1) Based on $3.75 per share, the December 29, 2000 last sale price reported on
Nasdaq. (2) Based on exercise prices ranging from $7.00 to $40.00 per share.
DIRECTOR COMPENSATION
Directors who are not officers or employees of EVCI are paid $1,000 for
attending each meeting of the board of directors or any committee thereof and
travel expenses.
In addition, our 1998 incentive plan authorizes the automatic grant of an
option to purchase 5,000 shares of common stock to non-employee directors on the
date on which he or she first becomes a non-employee director. Each non-employee
director is automatically granted an option to purchase 5,000 shares of common
stock on March 1 of each year, provided he or she is then a non-employee
director and, as of such date, he or she has served on the board of directors
for at least the preceding six months. Options granted to non-employee directors
vest in three annual installments commencing on the first anniversary of the
date of grant and have a term of ten years. The exercise price of options
granted to non-employee directors is 100% of the fair market value per share of
common stock on the date of grant. A non-employee director who has been granted
stock or options by EVCI under a consulting or other arrangement is ineligible
to receive any subsequent automatic grants unless the compensation committee
determines otherwise.
EMPLOYMENT AGREEMENTS
Each of Dr. Buntzman, Dr. McGrath, and Mr. Goldenberg has an employment
agreement with EVCI.
The employment agreement with Dr. Buntzman provides for his employment as
chairman and chief executive officer at an annual salary of $346,500 since
November 15, 2000.
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The employment agreement with Dr. McGrath provides for his employment as
president at an annual salary of $210,000 since January 1, 2001. Effective April
15, 2001, Dr. McGrath agreed to a reduction of his annual salary to $150,000,
subject to review in three months.
The employment agreement with Mr. Goldenberg provides for his employment as
chief financial officer at an annual salary of $150,000 since January 1, 2001.
Effective April 15, 2001, Mr. Goldenberg agreed to a reduction of his annual
salary to $130,000, subject to review in three months.
Each of the employment agreements expires December 31, 2001. Dr. Buntzman's
and Dr. McGrath's agreements expressly permit salary increases and bonuses as
the Board determines. Each employment agreement entitles the officer to
participate in the health, insurance, pension and other benefits, if any,
generally provided to our employees. Dr. Buntzman's and Dr. McGrath's agreements
entitle them to additional life insurance equal to three times their respective
salaries. Each employment agreement also provides that, with certain exceptions,
until 18 months after the termination of employment with EVCI, the officer may
not induce employees to leave the employ of EVCI or participate in any capacity
in any business activities that compete with the business conducted by EVCI
during the term of the employment agreement.
EVCI can terminate the employment of an officer upon extended disability or
for cause (as defined in his agreement). If employment is terminated by EVCI
without cause, the agreements generally provide EVCI must pay the officer's
salary and health and insurance benefits until the earlier of a specified date
or the scheduled termination date of the employment agreement or, in the case of
each of Dr. Buntzman and Dr. McGrath, until 36 months after termination of his
employment.
CHANGE OF CONTROL AGREEMENT
EVCI entered has an agreement with Dr. Buntzman providing for payments to
him, in the event his employment with EVCI is terminated after a change in
control of EVCI during the term of the agreement. A change of control means any
of the following:
o any person becomes the beneficial owner of 25% or more of our voting
securities; or
o during any consecutive three years, EVCI's directors at the beginning of
such three year period and any new director whose election was approved
by at least 662/3% of the directors, cease to constitute a majority of
the Board; or
o our stockholders approve a merger or consolidation other than one where
our outstanding voting securities before the transaction constitute 50%
or more of the outstanding securities of the entity surviving the
transaction or where a recapitalization is effected in which no person
acquires 25% or more of EVCI's voting securities; or
o our stockholders approve a total liquidation of EVCI or sale of all or
substantially all of EVCI's assets.
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The agreement expires September 30, 2001, but is subject to automatic
extension to December 31, 2001, and, thereafter, for successive one-year terms,
unless otherwise terminated by either party. The agreement requires severance
payments to Dr. Buntzman of 2.99 times the sum of his base salary and the
highest annual bonus, if any, paid to him during the three previous years and
the continuation of his medical and dental insurance benefits. The agreement
requires these payments to be made in equal installments over a 36-month period
and for the insurance benefits to continue for 36 months.
CERTAIN TRANSACTIONS
In November 2000, EVCI engaged Prime Charter Ltd. to value warrants to
purchase 722,223 shares of our common stock issued in September 2000 in the
private placement of 130,000 shares of our 7% Series B, Convertible Preferred
Stock described below. For this services, we paid Prime Charter $75,000 plus
accountable expenses not exceeding $500. Philip M. Getter, who is a Class 1
director and nominee, was a managing director and head of corporate finance of
Prime Charter when we received and paid for this valuation. Effective January 1,
2001, Mr. Getter became a consultant to EVCI, on a month to month basis. For his
consulting services, we paid him $10,000 per month to April 15, 2001 and
since April 15, 2001, we have been paying him $5,000 per month.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and beneficial owners of more than 10% of our
common stock to file with the SEC reports of their holdings of, and transactions
in, our common stock. Based solely upon our review of copies of such reports and
written representations from reporting persons that were provided to us, we
believe that our officers, directors and 10% stockholders complied with these
reporting requirements, except that DEWI Investments Limited filed a Form 5 in
lieu of one Form 4 that was not filed by the applicable deadline.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 9, 2001, the beneficial
ownership of common stock by each person (or group of affiliated persons) known
by EVCI to own beneficially more than 5% of the outstanding shares of common
stock, each director and executive officer of EVCI, and all directors and
executive officers as a group. Except as indicated in the footnotes to the
table, the persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them.
SHARES OF
COMMON STOCK PERCENTAGE OF
NAME OF BENEFICIAL OWNER* BENEFICIALLY OWNED TOTAL SHARES
Dr. Arol I. Buntzman 965,754 (1) 21.3
Dr. John J. McGrath 200,146 (2) 4.4
Richard Goldenberg (3) 66,627 1.5
Tayside Trading Ltd. (4) 417,705 (5) 9.0
125/5 Sanhedria Murchevet, Jerusalem, Israel
DEWI Investments Limited (6) 507,334 11.3
37 Bar Ilan Street, Jerusalem, Israel
B&H Investments Ltd (7) 239,409 (8) 4.2
50 Town Range, Gibraltar
Amananth Trading LLC 493,669 (9) 9.9
2 American Lane, Greenwich, CT
Royce N. Flippin, Jr. 5,000 (10) 0.1
Arthur H. Goldberg 114,000 (11) 2.5
Philip M. Getter 38,333 (12) .7
All directors and executive officers as a group
(6 persons) 1,120,820 (13) 23.4
----------------------
*Unless otherwise indicated, the address for each stockholder is c/o
Educational Video Conferencing, Inc., 35 East Grassy Sprain Road, Suite
200, Yonkers, New York 10710.
(1) Includes 60,000 shares underlying currently exercisable options. Also
includes the 200,146 and 66,627 shares beneficially owned, respectively,
by Dr. McGrath and Mr. and Mrs. Goldenberg. An agreement between Drs.
Buntzman and McGrath gives Dr. Buntzman the right to direct the vote of
the shares owned by Dr. McGrath as Dr. Buntzman directs until December
31, 2001. Additionally, Dr. Buntzman has the right to direct the vote of
the shares owned by Mr. and Mrs. Goldenberg until December 31, 2001
pursuant to an agreement with them.
(2) Includes 20,000 shares underlying currently exercisable options.
(3) Includes 7,500 shares underlying currently exercisable options. The
remaining shares are owned jointly by Mr. Goldenberg and his wife.
Excludes 5,000 shares owned by Mr. Goldenberg's adult children, as to
which Mr. and Mrs. Goldenberg disclaim beneficial ownership.
(4) The ultimate beneficial owner is Mr. Esriel Pines.
(5) Includes 167,705 shares underlying currently exercisable warrants.
(FOOTNOTES CONTINUE ON NEXT PAGE.)
12
(6) The ultimate beneficial owner is Mr. Aron Gee.
(7) The ultimate beneficial owners are Mr. Chaim Segal and Mr. Simcha
Senerovitch.
(8) Includes 46,545 shares underlying currently exercisable warrants.
(9) Also owned beneficially by Amaranth Advisors, L.L.C., the managing
member of Amaranth Trading, and Nicholas M. Maounis, the managing member
of Amaranth Advisors. Includes 45,000 shares owned by Amaranth
Securities LLC, an affiliate of Amaranth Trading, and 20,000 shares are
owned by Mr. Maounis. The remaining 428,669 shares underlie a portion of
the 100,000 shares of Series B preferred and related warrants issued
initially to Paloma Strategic Fund L.P. and subsequently transferred to
its affiliate, Amaranth Trading. Except for the ownership limitation
described below, the 100,000 shares of Series B preferred stock would be
convertible into 740,741 shares of common stock, based on the initial
conversion price of $13.50 per share, and the related warrants would be
exercisable for 555,556 shares of common stock, or the total of
1,296,297 shares. However, the number of shares of common stock into
which the shares of Series B preferred and related warrants are
convertible and exercisable is limited to the number which would result
in Amaranth Trading and its affiliates beneficially owning, together,
not more than 9.99% of all the outstanding shares of our common stock.
Amaranth Trading and its affiliates expressly disclaim beneficial
ownership of any shares of our common stock in excess of this
limitation. Amaranth Trading, Amaranth Advisors and Amaranth Securities
also disclaim any beneficial ownership of the 20,000 shares owned by Mr.
Maounis.
(10) Shares underlying currently exercisable options.
(11) Includes currently exercisable options and warrants to purchase 79,000
shares.
(12) Includes 3,750 shares owned by Mr. Getter's wife, as to which Mr. Getter
disclaims beneficial ownership, 3,333 shares underlying currently
exercisable options and 24,000 shares underlying currently exercisable
warrants.
(13) Includes 203,833 shares underlying currently exercisable options and
warrants.
RATIFICATION OF THE TERMS AND ISSUANCE OF OUR SERIES B PREFERRED
STOCK AND RELATED WARRANTS
REASONS FOR RATIFICATION
Unless we obtain stockholder ratification of the terms and issuance of our
Series B preferred and related warrants, EVCI would be required, by the
provisions of the Series B preferred, to redeem at 120% of their stated value
plus accrued dividends all shares of Series B preferred that, upon their
conversion, would result in the issuance of more than 898,142 shares of our
common stock. This calculation would give effect to all prior issuances of our
common stock upon conversion of, or in payment of dividends on, Series B
preferred and exercise of the related warrants.
NASD Marketplace Rule 4350(i)(D)(ii), requires as to obtain stockholder
approval of a private placement involving the sale, issuance or potential
issuance by us of common stock (or securities convertible into or exercisable
for our common stock) equal to 20% or more of our common stock outstanding
before the initial issuance of such securities, where the issuance is for less
than the greater of book or market value of our common stock at the time of
initial issuance. The initial conversion price of the Series B preferred and
initial exercise price of the warrants was not less than the greater of book or
market value of our common stock. However, as a result of reset and antidilution
provisions they could become less.
Accordingly, management strongly recommends that stockholders vote FOR
ratification of the terms of the Series B preferred and related warrants.
13
PRIVATE PLACEMENT
In order to obtain needed additional financing for our business, on
September 22, 2000, we created a new series of preferred stock designated Series
B 7% Convertible Preferred Stock. The Series B preferred consists of 200,000
shares, each having a stated value of $100 per share. The Series B preferred has
been offered privately, together with warrants to purchase our common stock, to
selected investment entities at $100 per share.
To date, we have received gross proceeds of $13,000,000 from issuances of
Series B preferred and warrants as follows:
Shares of Series B Shares of Common Stock Issue
Buyer Preferred Underlying Warrants Date
Amaranth Trading LLC 100,000 555,556 9/22/00
Seneca Capital 13,080 72,667 9/27/00
International, Ltd.
Seneca Capital, L.P. 6,920 38,444 9/27/00
Merced Partners Limited 5,000 27,778 9/29/00
Partnership
Lakeshore International, Ltd. 5,000 27,778 9/29/00
------- -------
130,000 722,223
======= =======
The terms of the Series B preferred permitted us to continue to sell the
remaining 70,000 shares and related warrants, until March 22, 2001, on the same
terms as those specified below. No additional shares or warrants were sold and
none are expected to be sold.
After paying offering expenses, we received net proceeds of approximately
$12,850,000 from the sale of 130,000 shares of Series B preferred and warrants.
Of these proceeds, $3,220,000 was used to redeem all outstanding shares of our
Series A 7.5% Convertible Preferred Stock and the balance of approximately
$9,630,000 is being used for capital expenditures and general corporate
purposes.
A brief summary of the terms of the Series B preferred and warrants
follows. This summary is qualified by reference to the exhibits to our form 8-K
dated September 22, 2000 and filed with the SEC on October 5, 2000.
SERIES B PREFERRED
RANK. The Series B preferred ranks senior, as to dividends, liquidation and
voting rights, to all capital stock of EVCI.
14
DIVIDENDS. Holders of Series B preferred are entitled to receive
semi-annual cumulative cash dividends as and when declared by our board of
directors, at an annual rate of 7% of the stated value, in preference to any
dividend on EVCI's common stock or any other series of junior preferred stock,
and pari passu with any parity preferred stock. Our board has not declared any
dividend on the Series B preferred and it does not expect to declare any Series
B preferred dividend for the foreseeable future. Cumulative dividends are
payable upon the conversion of the Series B preferred, subject to applicable
law.
LIQUIDATION PREFERENCE. In the event of the liquidation, merger, where we
are not the survivor, or sale of all or substantially all of the assets of EVCI,
Series B preferred holders will be entitled to receive 100% of the stated value
of their shares plus accrued and unpaid dividends, in preference to the holders
of EVCI's common stock and any series of junior preferred stock and pari passu
with any parity preferred stock.
VOTING RIGHTS. Except as permitted by Delaware law, and with respect to the
protective provisions referred to below, the Series B preferred has no voting
rights.
OPTIONAL CONVERSION. Prior to the September 22, 2003, the Series B
preferred will be convertible at any time at the option of the holder, in whole
or in part, into shares of our common stock. The initial conversion price is
$13.50 per share of common stock, subject to adjustment. In addition to the
antidilution adjustments discussed below, on September 22, 2001, the conversion
price will be reset to the lower of :
o $13.50 and
o the 10-day average closing bid price for our common stock for the period
ending on September 22, 2001, but to not lower than $6.75.
AUTOMATIC CONVERSION. On September 22, 2003, any outstanding Series B
preferred will automatically convert into our common stock at a conversion price
equal to the lower of:
o the reset conversion price as of September 22, 2001 and
o the 10-day average closing bid price for our common stock for the period
ending on September 22, 2003, but to not lower than 50% of such reset
conversion price.
ANTIDILUTION ADJUSTMENTS. The conversion price is subject to customary
antidilution adjustments for stock splits and stock dividends. The conversion
price is also subject to a customary, weighted average adjustment as a result of
issuances in private placements of our common stock, or securities exercisable
for or convertible into our common stock, in each case at a price below the
conversion price, other than issuances of Excluded Shares, as defined in the
Series B preferred Certificate of Designations.
REDEMPTION. The Series B preferred is not redeemable at our option.
If EVCI, at its sole option, issues its securities for cash and/or
indebtedness, for a price below the conversion price and the result is a change
of control that is reportable pursuant to Schedule 14A of the proxy rules,
holders of Series B preferred will have a one-time option to require EVCI to
redeem the Series B preferred at a price of 105% of the stated value, plus
accrued dividends.
We would be required to redeem the Series B preferred as described above
under the caption "Reason for Ratification."
15
We are seeking stockholder approval at the annual meeting to amend our
certificate of incorporation to delete another provision that requires us to
redeem shares of Series B Preferred.
REGISTRATION OF COMMON STOCK UNDERLYING SERIES B PREFERRED AND WARRANTS. We
have registered under applicable securities laws, for resale by the purchases to
date of our Series B preferred, all of the shares of our common stock that they
acquire upon conversion of the Series B preferred and exercise of related
warrants.
CO-SALE RIGHTS OF SERIES B PREFERRED. Holders of Series B Preferred have
certain co-sale rights in connection with sales of common stock in private
transactions by Dr. Arol I. Buntzman, our chairman and chief executive officer.
PROTECTIVE PROVISIONS. Without the vote or consent of the holders of
two-thirds of the then-outstanding shares of Series B preferred (determined on
an as converted basis) EVCI cannot take certain action, including the following:
o issue shares of Series B preferred;
o increase or decrease the total authorized shares of any series of our
preferred or common stock;
o effect a merger or sale of all or substantially all the assets of EVCI or
any of its subsidiaries;
o declare or pay any dividends to our common stockholders;
o incur indebtedness of more than $15,000,000; or o issue any additional
shares of EVCI's capital stock at a discount to the average closing bid
price of our common stock for the 10 trading days prior to such issuance,
except for issuances of certain shares.
RELATED WARRANTS
AMOUNT. Warrants were issued with the Series B preferred to purchase the
number of shares of EVCI's common stock as equals 75% of the total stated value
of Series B preferred issued to a holder divided by $13.50.
TERM. Warrants expire on the third anniversary of their issue date.
EXERCISE PRICE. Initially, warrants are exercisable at $20.25 per share.
Warrants permit customary cashless exercise.
ANTIDILUTION ADJUSTMENTS. The warrant exercise price is subject to
customary antidilution adjustments for stock splits and stock dividends. The
exercise price is also subject to a customary weighted average adjustment as a
result of issuances of our common stock, or securities convertible into or
exercisable for our common stock, below fair market value (as determined in good
faith by our board of directors), other than issuances of Excluded Shares.
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO DELETE A PROVISION
REQUIRING REDEMPTIONOFOUR SERIES B PREFERRED
REASONS FOR THE AMENDMENT
We recently receive a letter from Nasdaq advising that we are no longer in
compliance with Marketplace Rule 4310(c) (2)(B) because we do not currently have
at least one of the following:
16
o net tangible assets of $2,000,000, or
o market capitalization of $35,000,000, or
o $500,000 of net income for our most recently completed fiscal year or for
two of our three most recently completed fiscal years
If we cannot comply with this rule, our common stock, will be delisted from
The Nasdaq SmallCap Market. We can become compliant again if we can reclassify
our Series B preferred as permanent equity, thereby increasing our net tangible
assets by approximately $12,350,000.
In calculating our net tangible assets, Nasdaq requires us to deduct
approximately $12,350,000 book value of our Series B preferred from our total
assets. This deduction is required because our Series B preferred is deemed to
be redeemable stock that cannot be classified as permanent equity under
applicable SEC accounting rules. It cannot be permanent equity as long as it is
redeemable upon the occurrence of an event that is not solely within our
control. As a result, at December 31, 2000, we had a net tangible asset
deficiency of approximately $(455,000).
At March 31, 2001 our net tangible assets would have been approximately
$10,000,000 if the book value of our Series B preferred was not deducted from
our total assets in computing our net tangible assets.
If we are unsuccessful in persuading Nasdaq that we can achieve and sustain
compliance with this and all other listing requirements, Nasdaq will delist our
common stock from The Nasdaq SmallCap Market.
If our common stock is delisted, subsequent trading, if any, in our common
stock would likely be conducted on the OTC Bulletin Board. An investor could
find it more difficult to dispose of or to obtain accurate quotations for our
common stock if it is delisted. In addition, delisting may cause a decline in
our common stock price, the loss of news coverage about us and difficulty for us
in obtaining future financing. Consequently, the liquidity of our common stock
could be impaired, not only as to the volume of shares which could be bought and
sold during specific time intervals, but also by delays in the timing of
transactions.
REDEMPTION PROVISION
A provision in our certificate of incorporation requires us to redeem
Series B preferred shares at the option of the holders in the event a federal
court having jurisdiction holds that a "blocker" provision is ineffective. This
provision prohibits a Series B preferred holder from converting shares of Series
B preferred into shares of our common stock if the conversion would result in
the holder being deemed a beneficial owner of more than 9.99% of our outstanding
common stock. We believe that current case law and the SEC's position regarding
similar blocker provisions makes it highly unlikely that a redemption right
would accrue to the Series B preferred holders under this provision.
Accordingly, at the annual meeting, we are proposing an amendment to our
certificate of incorporation that deletes the redemption right but does not
change the blocker provision.
Our board of directors can take all action it deems necessary or
appropriate, under Delaware law, to obtain the consent of the Series B preferred
holders.
The board believes the detriment to the Series B preferred holders from a
delisting of our common stock is much greater than the benefit to them of the
extremely remote possibility that a
17
redemption will be triggered under the provision we are seeking to delete. The
Series B preferred holders say they do not agree and have made demands for their
consent that are unacceptable to our board.
Management strongly recommends that stockholders vote FOR the amendment.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
With the approval of the audit committee, the board of directors has
appointed Goldstein Golub Kessler LLP, independent auditors, to audit our
consolidated financial statements for our fiscal year ending December 31, 2001.
GGK has served as our independent auditors since 1997. You are being asked to
ratify this appointment at the annual meeting. Notwithstanding this appointment,
the board of directors, in its discretion, may appoint of new independent
auditors at any time during the year, if the board of directors feels that such
a change would be in the best interests of EVCI and its stockholders.
AUDIT FEES. We were billed a total of approximately $74,000 by GGK for its
services rendered for the audit of our fiscal year 2000 financial statements for
reviewing our financial statements included in our forms 10-QSB during 2000 and
for other services relating to our filings with the SEC.
GGK has a continuing relationship with American Express Tax and Business
Services, Inc. GGK leases auditing staff from Amex TBS who are full-time,
permanent employees of Amex TBS. GGK partners provide non-audit services through
Amex TBS. Accordingly, GGK has no full-time employees and none of the audit
services performed for us were provided by permanent full-time employees of GGK.
GGK manages and supervises the audit and audit staff, and is exclusively
responsible for the opinion rendered in connection with its examination.
ALL OTHER FEES. For tax preparation services rendered by Amex TBS during
2000, we were billed a total of approximately $15,000. The audit committee has
considered whether the provision of these non-audit services by Amex TBS is
compatible with maintaining the independence of GGK.
Representatives of GGK are expected to be present at the annual meeting
with the opportunity to make a statement if they desire to do so, and are
expected to be available to respond to appropriate questions.
OTHER MATTERS
We know no other matters to be submitted to the annual meeting. If any
other matters properly come before the annual meeting, it is the intention of
the persons named in the enclosed form of proxy to vote the shares they
represent as the board of directors recommends.
By order of the board of directors,
Richard Goldenberg
May , 2001 SECRETARY
18
EDUCATIONAL VIDEO CONFERENCING, INC.
AUDIT COMMITTEE CHARTER
(Effective September 30, 1999)
FORMATION
The board of directors hereby establishes a committee of the board to be known
as the audit committee.
MEMBERSHIP
The committee shall be appointed by the board from among the nonexecutive
directors of the corporation and shall consist of not less than two members. A
quorum shall be a majority of the members. Each committee member shall be free
of any relationship that, in the opinion of the board of directors, could
interfere with his or her exercise of independent judgment as a committee
member.
The chairman, if any of the committee shall be appointed by the board.
ATTENDANCE AT MEETINGS
The corporation's principal financial and accounting officer(s) and a
representative of the independent auditors shall normally attend audit committee
meetings. Other board members shall also have the right to attend. However, at
least once a year the committee shall meet with the external auditors without
members of management present.
The corporation's secretary or a person selected by the committee, shall be the
secretary of the committee.
FREQUENCY OF MEETINGS
Regular meetings shall be held not less than twice a year. The independent
auditors may request a special meeting if they consider that one is necessary.
Participants may attend meetings by means of communications equipment that
permits all participants to hear each other.
AUTHORITY
The committee is authorized by the board to investigate any activity within the
scope of its duties. It is authorized to seek any information it requires from
any employee and all employees are directed to co-operate with any request made
by the committee.
The committee is authorized by the board to obtain outside legal or other
independent professional advice and to secure the attendance of outsiders with
relevant experience and expertise if it considers this necessary.
RESPONSIBILITIES
In carrying out its duties, the audit committee's policies and procedures should
remain flexible, in order to best react to changing conditions and to ensure to
the directors and stockholders that
A-1
the corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee shall:
o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the corporation.
o Meet with the independent auditors and principal financial and accounting
officer(s) of the corporation to review the scope of the proposed audit for
the current year and the audit procedures to be utilized, and review such
audit, including any comments or recommendations of the independent
auditors.
o Review with the independent auditors and the corporation's financial and
accounting personnel, the adequacy and effectiveness of the accounting and
financial controls of the corporation, and elicit any recommendations for
the improvement of such internal control procedures or particular areas
where new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that might be deemed
illegal or otherwise improper.
o Review the 10-Q, prior to its filing, with the principal financial and
accounting officer(s) and the independent accountants. One member of the
committee, designated by the committee, may represent the full committee
for the purposes of this review.
o Review the financial statements contained in the 10-K, prior to its filing,
with management and the independent auditors to determine that the
independent auditors are satisfied with the disclosure and content of these
financial statements. Any changes in accounting principles should be
reviewed.
o Without members of management present, discuss with the independent
auditors' their evaluation of the corporation's financial, accounting, and
auditing personnel, and the cooperation that the independent auditors
received during the course of the audit.
o Investigate any matter brought to its attention within the scope of its
duties.
o Review and, if appropriate, recommend to the board amendments to, this
charter at least annually.
REPORTING PROCEDURES
The secretary shall circulate the minutes of meetings of the committee to all
members of the board.
A-2
PROXY
EDUCATIONAL VIDEO CONFERENCING, INC.
2001 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned
hereby appoints Dr. Arol I. Buntzman, John J. McGrath and Richard Goldenberg, or
any of them, as proxy, with full power of substitution, to represent the
undersigned at the 2001 annual meeting of Stockholders to be held at Tree Tops
Restaurant at the Holiday Inn, on June 27, 2001 at 11:00 a.m., local time, and
at any adjournments thereof, and to vote the shares of undersigned would be
entitled to vote if personally presented, as indicated below.
1. Election of Class 1 and Class 2 directors.
FOR all nominees listed below [ ] WITHOLDING AUTHORITY [ ]
(except as marked to the to vote for all nominees listed
contrary below) below
Class 1: Dr. Arol I. Buntzman and Philip M. Getter.
Class 2: Dr. John J. McGrath and Royce N. Flippin Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
print that nominee's name on the below.)
--------------------------------------------------------------------------
2. Ratification of the terms and issuance of Series B preferred Stock and
related warrants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Amending certificate of incorporation to delete a provision requiring
redemption of Series B preferred stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Ratification of appointment of Goldstein Golub Kessler LLP as independent
auditors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The shares of common stock represented by this proxy will be voted as
directed. However, if no direction is given, the shares of common stock will be
voted FOR the election of the nominees, FOR ratification of the terms and
issuance of the Series B preferred Stock and related warrants, FOR amending our
certification of incorporation to delete a Series B preferred redemption
provision and FOR the ratification of the appointment of Goldstein Golub Kessler
LLP as our independent auditors.
If any other business is properly presented at the meeting, this proxy will
be voted by those named in this proxy in their best judgment. At the present
time, the board of directors knows of no other business to be presented at the
meeting.
Dated ___________________, 2001
---------------------------------
Signature
---------------------------------
Signature if held jointly
(PLEASE DATE, SIGN AS NAME APPEARS AT THE LEFT , AND RETURN PROMPTLY. IF THE
SHARES ARE REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH PERSON SHOULD
SIGN. WHEN SIGNING AS CORPORATE OFFICER, PARTNER, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. PLEASE NOTE ANY CHANGES IN YOUR
ADDRESS ALONGSIDE THE ADDRESS AS IT APPEARS IN THE PROXY.)