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
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 Rule 14a-11(c) or Rule 14a-12
ULTRADATA SYSTEMS, INCORPORATED
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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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
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(4) Date Filed:
ULTRADATA SYSTEMS, INCORPORATED
1240 DIELMAN INDUSTRIAL COURT
ST. LOUIS, MISSOURI 63132
(314) 997-2250
TO THE STOCKHOLDERS OF ULTRADATA SYSTEMS, INCORPORATED
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of Ultradata Systems, Incorporated, a Delaware corporation (the "Company" or
"ULTR"), will be held at * (St. Louis time), on *, 2005 at *, for the following
purposes:
1. To elect six (6) directors of the Company to serve until the 2005 Annual
Meeting of Stockholders or until their successors have been duly elected and
qualified;
2. To amend the Company's certificate of incorporation to increase the
authorized number of common stock from 10,000,000 shares to 50,000,000 shares
(the text of the amendment to the Certificate of Incorporation of Ultradata
Systems, Incorporated is attached hereto as Appendix A to the accompanying Proxy
Statement);
3. To ratify the selection of Webb & Company, P.A. as our independent registered
public accounting firm for the fiscal year ending December 31, 2005; and
4. To transact such other business as may properly come before the Meeting and
any adjournment or postponement thereof.
Only stockholders who own shares of our common stock at the close of business on
* are entitled to notice of and to vote at the annual meeting. You may vote your
shares by marking, signing and dating the enclosed proxy card as promptly as
possible and returning it in the enclosed postage-paid envelope.
You may also vote in person at the annual meeting, even if you use the option
set forth above.
We have enclosed with this Notice of Annual Meeting, a proxy statement, a form
of proxy and a copy of our annual report to stockholders. Our annual report is
not a part of this proxy statement.
By Order of the Board of Directors,
/s/ MONTE ROSS
----------------------------------------
Monte Ross
Chairman of the Board
St. Louis, Missouri
March 28, 2005
ULTRADATA SYSTEMS, INCORPORATED
1240 DIELMAN INDUSTRIAL COURT
ST. LOUIS, MISSOURI 63132
(TEL) 314-997-2250
(FAX) 314-997-1281
PROXY STATEMENT FOR 2005 ANNUAL MEETING OF STOCKHOLDERS
The board of directors is soliciting proxies to be used at our *, 2005 annual
meeting of stockholders. Please read and carefully consider the information
presented in this proxy statement and vote by completing, dating, signing and
returning the enclosed proxy in the enclosed postage-paid envelope.
This proxy statement, the form of proxy and our annual report will be mailed to
all stockholders on or about *, 2005. Our annual report is not a part of this
proxy statement.
INFORMATION ABOUT THE ANNUAL MEETING
WHEN IS THE ANNUAL MEETING?
*, 2005, * P.M. St. Louis time.
WHERE WILL THE ANNUAL MEETING BE HELD?
The meeting will be held at *.
WHAT ITEMS WILL BE VOTED UPON AT THE ANNUAL MEETING?
You will be voting on the following matters:
1. ELECTION OF DIRECTORS. To elect six directors to serve until the 2006 Annual
Meeting of stockholders or until their successors are duly elected and
qualified;
2. AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED
SHARES OF COMMON STOCK OF THE COMPANY. To consider adopting the amendment to the
Certificate of Incorporation that would increase the authorized number of shares
of common stock from 10,000,000 shares to 50,000,000 shares;
3. RATIFICATION OF AUDITORS. To ratify the selection of Webb & Company, P.A.
("W&C") as the independent registered public accounting firm of the Company for
the fiscal year ending December 31, 2005; and
4. OTHER BUSINESS. To transact such other business as may properly come before
the annual meeting or any adjournment of the annual meeting.
WHO CAN VOTE?
Only holders of record of our common stock at the close of business on *, 2005
will be entitled to notice of and to vote at the annual meeting and any
adjournments of the annual meeting. You are entitled to one vote for each share
of common stock held on that date. On *, 2005, there were * shares of our common
stock outstanding and entitled to vote at the Stockholders Meeting.
YOUR BOARD OF DIRECTORS HAS APPROVED EACH OF THE PROPOSALS SET FORTH HEREIN.
ACCORDINGLY, THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE
DIRECTORS, THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION AND THE
RATIFICATION OF THE APPOINTMENT OF W&C AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.
HOW DO I VOTE BY PROXY?
You may vote your shares by mail by marking, signing and dating the enclosed
proxy card as promptly as possible and returning it in the enclosed postage-paid
envelope. A pre-addressed, postage-paid envelope is provided for this purpose.
If you return your signed proxy card before the annual meeting, we will vote
your shares as you direct. For the election of directors, you may vote for (1)
all of the nominees, (2) none of the nominees or (3) all of the nominees except
those you designate. For each other item of business, you may vote "FOR" or
"AGAINST" or you may "ABSTAIN" from voting.
If you return your signed proxy card but do not specify how you want to vote
your shares, we will vote them:
o "FOR" the election of all of our nominees for directors;
o "FOR" the amendment of the Company's Certificate of Incorporation to
increase the number of shares of common stock authorized from 10,000,000
shares to 50,000,000 shares; and
o "FOR" the ratification of Webb & Company, P.A. as our independent
registered public accounting firm.
If any matters other than those set forth above are properly brought before the
annual meeting, the individuals named in your proxy card may vote your shares in
accordance with their best judgment.
HOW DO I CHANGE OR REVOKE MY PROXY?
You may revoke your Proxy at any time before it is voted either by filing with
the Secretary of the Company, at our principal executive offices, a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and expressing a desire to vote your shares in
person. Our principal executive offices are located at 1240 Dielman Industrial
Court, St. Louis, Missouri 63132.
WHAT CONSTITUTES A "QUORUM" FOR THE ANNUAL MEETING?
The representation, in person or by proxy, of a majority of the outstanding
shares of our common stock entitled to vote is necessary to constitute a quorum
at the Annual Meeting. All Proxies that are returned will be counted by the
Inspector of Elections in determining the presence of a quorum and on each issue
to be voted on, except as noted below. An abstention from voting or a broker
non-vote will be used for the purpose of establishing a quorum, but will not be
counted in the voting process. All Proxies that are properly completed, signed
and returned to the Company before the Annual Meeting, and that have not been
revoked, will be voted in favor of the proposals described in this Proxy
Statement unless otherwise directed.
HOW MANY VOTES ARE REQUIRED?
o Directors nominees are elected by a plurality of the votes cast in person
or by proxy, provided that a quorum is present at the Meeting.
o The proposal to amend the Certificate of Incorporation to increase the
number of authorized shares will require the affirmative vote of at least
a majority of the Company's outstanding shares of Common Stock. Thus, any
abstentions, "broker non-votes" (shares held by brokers or nominees as to
which they have no discretionary authority to vote on a particular matter
and have received no instructions from the beneficial owners or persons
entitled to vote thereon), or other limited proxies will have the effect
of a vote against amending the Company's Certificate of Incorporation.
o The ratification of the director's selection of Webb & Company, P.A. as
the Company's independent registered public accounting firm will require
an affirmative vote of the majority of the votes cast in person or by
proxy, provided that a quorum is present at the annual meeting.
WHO PAYS FOR THE SOLICITATION OF PROXIES?
We will pay the cost of preparing, printing and mailing material in connection
with this solicitation of proxies. We will, upon request, reimburse brokerage
firms, banks and others for their reasonable out-of-pocket expenses in
forwarding proxy material to beneficial owners of stock or otherwise in
connection with this solicitation of proxies.
WHEN ARE STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING DUE?
Any stockholder proposals for the 2006 annual meeting must be received by us,
directed to the attention of the Company's secretary, Mr. Mark L. Peterson,
Ultradata Systems, Incorporated, 1240 Dielman Industrial Court, St. Louis,
Missouri 63132, no later than December 16, 2005. The use of certified mail,
return receipt requested, is advised. To be eligible for inclusion, a proposal
must comply with our bylaws, Rule 14a-8 and all other applicable provisions of
Regulation 14A under the Securities Exchange Act of 1934.
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PROPOSAL 1: ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
At the Meeting, six (6) directors are to be elected. Pursuant to the Company's
By-laws, all directors are elected to serve for the ensuing year and until their
respective successors are elected and qualified. Unless otherwise directed, the
persons named in the enclosed Proxy intend to cast all votes pursuant to proxies
received for the election of Messrs. Ross, Clarke, Peterson, Rattner,
Krollfeifer, Jr. and Klapman (collectively, the "Nominees"). If any of the
Nominees becomes unavailable for any reason, which event is not anticipated, the
shares represented by the enclosed proxy will be voted for such other person
designated by the Board.
Vote required: Directors must be elected by a plurality of all votes cast at the
meeting. Votes withheld for any director will not be counted.
Voting by the Proxies: The Proxies will vote your shares in accordance with your
instructions. If you have not given specific instructions to the contrary, your
shares will be voted to approve the election of the nominees named in the Proxy
Statement. Although the Company knows of no reason why the nominees would not be
able to serve, if a nominee were not available for election, the Proxies would
vote your Common Stock to approve the election of any substitute nominee
proposed by the Board of Directors. The Board may also choose to reduce the
number of directors to be elected as permitted by our Bylaws.
General Information about the Nominees: The following information regarding the
Nominees, their occupations, employment history and directorships in certain
companies is as reported by the respective Nominees.
Monte Ross founded the Company in 1986 and has served as its Chief Executive
Officer and Chairman since inception. He also served as President until April
2001. For over 20 years prior to founding the Company, Mr. Ross was employed by
McDonnell Douglas Corporation (now Boeing) in a variety of positions. When he
left McDonnell Douglas, Mr. Ross was Director of Laser Systems, responsible for
the group of approximately 400 employees, which developed the first space laser
communication system and first space laser radar. Mr. Ross is a Fellow of the
Institute of Electrical and Electronic Engineers and the past President of the
International Laser Communication Society. Mr. Ross was awarded a Master of
Science degree in Electrical Engineering by Northwestern University in 1962. He
is the father-in-law of Mark L. Peterson, the Company's Vice
President-Engineering.
Ernest Clarke has been a Director of the Company since it was founded in 1986.
From August 1990 to June 1999 he served as Vice President - Government Programs.
He then served as Company's Vice President - Controller from June of 1999 until
April 2001. He was elevated to President in April 2001. For over 20 years prior
to joining Ultradata, Mr. Clarke was employed by McDonnell Douglas Corporation
(now Boeing) in a variety of positions. When he left McDonnell Douglas, Mr.
Clarke was its Laser Product Development Manager with responsibility to
supervise over 40 engineers. Mr. Clarke was awarded a Master of Science degree
in Electrical Engineering by Stanford University in 1966.
Mark L. Peterson has been a Director of the Company since it was founded in
1986. He has served as the Company's Vice President of Engineering since 1988.
He is responsible for the design of the Company's hand-held products. During the
four years prior to joining the Company, Mr. Peterson was employed by McDonnell
Douglas Corporation as an electronics engineer for fiber optic products and
satellite laser cross-link programs. Mr. Peterson was awarded a Master of
Science degree in Electrical Engineering by Washington University in 1980. He is
the son-in-law of Monte Ross.
Donald Rattner joined the Company in 1999 to serve as a member of the Board of
Directors. Mr. Rattner is a member/partner in BrookWeiner, LLC, a Chicago-based
accounting firm, and a member of the American Institute of Certified Public
Accountants and the Illinois CPA Society. He has served on the boards of several
corporations.
H. Krollfeifer, Jr. joined the Company in 2000 to serve as a member of the Board
of Directors. Mr. Krollfeifer is retired after 35 years in the equipment leasing
and financing industry. He has worked closely with The American Association of
Equipment Lessors (AAEL), an industry trade group for which he served as a
speaker, lecturer, and teacher for various educational programs starting in
1986. That organization evolved into The Equipment Leasing Association of
America (ELA), and Mr. Krollfeifer was added to their training faculty in
January 2000 where he continues to serve on a part-time basis.
Matthew Klapman joined the Company in 2002 to serve as a member of the Board of
Directors. Mr. Klapman is the CEO of Future Vision Technologies, Inc., which he
co-founded 1990. He has maintained a strong career in technological innovation,
business strategy, negotiation, and team management. He has invented and
developed a myriad of products in the video, 3-D graphics, and communication
fields. As a Director at Motorola, he developed the computer graphics and
marketing strategy for its corporate strategy office and broadband wireless
communications sector. In addition, as Director of Research and Development for
Motorola's Personal Communications Sector, he spearheaded the creation of the
new user interface platform that is the basis for all of Motorola's cellular
phones. He has developed products and designs that have earned several industry
awards. He received a B.S. in Computer Engineering and a J.D. from the
University of Illinois at Urbana. He holds 4 issued and 7 pending patents.
Directors are elected annually and hold office until the next annual meeting of
the stockholders of the Company and until their successors are elected and
qualified. Officers are elected annually and serve at the discretion of the
Board of Directors.
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ROLE OF THE BOARD
Pursuant to Delaware law, our business, property and affairs are managed under
the direction of our board of directors. The board has responsibility for
establishing broad corporate policies and for the overall performance and
direction of ULTR, but is not involved in day-to-day operations. Members of the
board keep informed of our business by participating in board and committee
meetings, by reviewing analyses and reports sent to them regularly, and through
discussions with our executive officers.
2004 BOARD MEETINGS
In 2004, the board met * times. No director attended less than 75% of all of the
combined total meetings of the board and the committees on which they served in
2004.
BOARD COMMITTEES
AUDIT COMMITTEE
The Board of Directors has appointed an Audit Committee of the Board. The
present members of the Audit Committee are Donald Rattner and H. Krollfeifer,
Jr. The Board of Directors has determined that Donald Rattner is qualified to
serve as an "audit committee financial expert", as defined in the Regulations of
the Securities and Exchange Commission. Mr. Rattner is an "independent
director", as defined in the Regulations of the Securities and Exchange
Commission.
ELECTION OF DIRECTORS REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
PLURALITY OF THE SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING.
SHARES OF COMMON STOCK REPRESENTED BY PROXY CARDS RETURNED TO US WILL BE VOTED
FOR THE NOMINEES LISTED ABOVE UNLESS YOU SPECIFY OTHERWISE. THE BOARD OF
DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF DIRECTORS.
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PROPOSAL 2: TO CONSIDER AND VOTE UPON A PROPOSAL TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK FROM 10,000,000 TO 50,000,000
(ITEM 2 ON THE PROXY CARD)
On March 28, 2005, the Board of Directors authorized an amendment to the
Company's Certificate of Incorporation to increase the number of our authorized
shares. Subject to shareholder approval, Article III would be amended to read as
follows and would be filed with the Delaware Secretary of State:
"THIRD: The Corporation is authorized to issue two classes of stock.
One class of stock shall be Common Stock, par value $0.01. The second
class of stock shall be Preferred Stock, par value $0.01. The Preferred
Stock, or any series thereof, shall have such designations, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof as shall be expressed
in the resolution or resolutions providing for the issue of such stock
adopted by the board of directors and may be made dependent upon facts
ascertainable outside such resolution or resolutions of the board of
directors, provided that the matter in which such facts shall operate upon
such designations, preferences, rights and qualifications; limitations or
restrictions of such class or series of stock is clearly and expressly set
forth in the resolution or resolutions providing for the issuance of such
stock by the board of directors.
The total number of shares of stock of each class which the Corporation
shall have authority to issue and the par value of each share of each
class of stock are as follows:
Class Par Value Authorized Shares
----- --------- -----------------
Common $0.01 50,000,000
Preferred $0.01 5,000,000
----------
Totals: 55,000,000"
==========
The terms of the additional shares of common stock will be identical to
those of the currently outstanding shares of common stock. However, because
holders of common stock have no preemptive rights to purchase or subscribe for
any unissued stock of the Company, the issuance of additional shares of common
stock will reduce the current stockholders' percentage ownership interest in the
total outstanding shares of Common Stock. This amendment and the creation of
additional shares of authorized common stock will not alter the current number
of issued shares. The relative rights and limitations of the shares of common
stock will remain unchanged under this amendment.
As of the Record Date, a total of * shares of the Company's currently
authorized 10,000,000 shares of common stock are issued and outstanding. The
increase in the number of authorized but unissued shares of common stock would
enable the Company, without further stockholder approval, to issue shares from
time to time as may be required for proper business purposes, such as raising
additional capital for ongoing operations, business and asset acquisitions,
stock splits and dividends, present and future employee benefit programs and
other corporate purposes.
The proposed increase in the authorized number of shares of common stock
could have a number of effects on the Company's stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but
unissued shares. The increase could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by applicable law)
in one or more transactions that could make a change in control or takeover of
the Company more difficult. For example, additional shares could be issued by
the Company so as to dilute the stock ownership or voting rights of persons
seeking to obtain control of the Company. Similarly, the issuance of additional
shares to certain persons allied with the Company's management could have the
effect of making it more difficult to remove the Company's current management by
diluting the stock ownership or voting rights of persons seeking to cause such
removal. Except as further discussed herein, the Board of Directors is not aware
of any attempt, or contemplated attempt, to acquire control of the Company, and
this proposal is not being presented with the intent that it be utilized as a
type of anti- takeover device.
Stockholders do not have any preemptive or similar rights to subscribe for
or purchase any additional shares of common stock that may be issued in the
future, and therefore, future issuances of common stock may, depending on the
circumstances, have a dilutive effect on the earnings per share, voting power
and other interests of the existing stockholders.
Except for the following, there are currently no plans, arrangements,
commitments or understandings for the issuance of the additional shares of
common stock which are to be authorized.
o Secured Convertible Debenture
To obtain funding for our ongoing operations, we entered into a Securities
Purchase Agreement with an accredited investor on February 14, 2005, which was
amended on February 17, 2005, for the sale of (i) $300,000 in convertible
debentures and (ii) warrants to buy 300,000 shares of our common stock.
5
The investor is obligated to provide us with an aggregate of $300,000 as
follows:
o $100,000 was disbursed to us on February 14, 2005;
o $50,000 has been retained for services provided to our company by
various professionals, which shall be disbursed upon effectiveness
of a registration statement for the shares underlying the secured
convertible debentures and warrants; and
o $150,000 will be released upon effectiveness of a registration
statement for the shares underlying the secured convertible
debentures and warrants.
The debentures bear interest at 4 3/4%, mature two years from the date of
issuance, and are convertible into our common stock, at the investor's option.
The convertible debentures are convertible into the number of our shares of
common stock equal to the principal amount of the debentures being converted
multiplied by 11, less the product of the conversion price multiplied by ten
times the dollar amount of the debenture. The conversion price for the
convertible debenture is the lesser of (i) $1.25 or (ii) eighty percent of the
of the average of the five lowest volume weighted average prices during the
twenty (20) trading days prior to the conversion. If the volume weighted average
price is below $0.50 on a conversion date, we have the right to pre-pay the
amount of the debenture the holder elects to convert, plus accrued and unpaid
interest, at 125% of such amount; however, if we elect to pre-pay in this
situation, the debenture holder has the right to withdraw the notice of
conversion. Also, if the volume weighted average price is below $0.50 at any
point during a month, the holder is not obligated to convert any portion of the
debenture during that month. Accordingly, there is in fact no limit on the
number of shares into which the debenture may be converted. In addition, the
investor is obligated to exercise the warrant concurrently with the submission
of a conversion notice by the investor. The warrant is exercisable into 300,000
shares of common stock at an exercise price of $10.00 per share.
Golden Gate Investors has contractually committed to convert not less than
5% of the original face value of the debenture monthly beginning the month after
the effective date of a registration statement for the shares underlying the
secured convertible debentures and warrants. Golden Gate Investors is required
to exercise warrants concurrently with the exercise of a conversion notice under
the debenture and is committed to exercise at least 5% of the warrants per month
after the effective date of a registration statement for the shares underlying
the secured convertible debentures and warrants. In the event that Golden Gate
Investors breaches the minimum restriction on the debenture and warrant, Golden
Gate will not be entitled to collect interest on the debenture for that month.
If Golden Gate submits a conversion notice and the volume weighted average price
is less then $.50 per share, then we will be entitled to prepay the portion of
the debenture that is being converted at 125% of such amount. If we elect to
prepay, then Golden Gate may withdraw its conversion notice.
Golden Gate has further contractually agreed to restrict its ability to
convert the debenture or exercise their warrants and receive shares of our
common stock such that the number of shares held by the Holder and its
affiliates after such conversion or exercise does not exceed 4.9% of the then
issued and outstanding shares of our common stock.
In the event that the registration statement for the shares underlying the
secured convertible debentures and warrants is not declared effective by the
required deadline, which is 150 days from the date of the Securities Purchase
Agreement, Golden Gate may demand repayment of the Debenture of 150% of the face
amount outstanding, plus all accrued and unpaid interest, in cash. If the
repayment is accelerated, we are also obligated to issue to Golden Gate 50,000
shares of common stock and $15,000 for each 30-day period, or portion thereof,
during which the face amount, including interest thereon, remains unpaid. If
Golden Gate does not elect to accelerate the debenture, we are required to
immediately issue to Golden Gate 50,000 shares of common stock and $15,000 for
each 30-day period, or portion thereof, during which the face amount, including
interest thereon, remains unpaid.
The following are the risks associated with entering into the Securities
Purchase Agreement:
THERE ARE A LARGE NUMBER OF SHARES UNDERLYING OUR CONVERTIBLE DEBENTURES AND
WARRANTS THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES MAY
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.
As of March 21, 2005, we had 6,410,187 shares of common stock issued and
outstanding, convertible debentures outstanding that may be converted into an
estimated 2,524,390 shares of common stock at current market prices and
outstanding warrants to purchase 150,000 shares of common stock. Additionally,
we have an obligation to sell secured convertible debentures that may be
converted into an estimated 2,524,390 shares of common stock at current market
prices and issue warrants to purchase 150,000 shares of common stock in the near
future. In addition, the number of shares of common stock issuable upon
conversion of the outstanding convertible debentures may increase if the market
price of our stock declines. All of the shares, including all of the shares
issuable upon conversion of the debentures and upon exercise of our warrants,
may be sold without restriction. The sale of these shares may adversely affect
the market price of our common stock.
THE CONTINUOUSLY ADJUSTABLE CONVERSION PRICE FEATURE OF OUR CONVERTIBLE
DEBENTURES COULD REQUIRE US TO ISSUE A SUBSTANTIALLY GREATER NUMBER OF SHARES,
WHICH WILL CAUSE DILUTION TO OUR EXISTING STOCKHOLDERS.
If we are unable to make repayment of the convertible debentures on a
monthly basis, our obligation to issue shares upon conversion of our convertible
debentures is essentially limitless. The following is an example of the amount
of shares of our common stock that are issuable, upon conversion of our
convertible debentures (excluding accrued interest), based on market prices 25%,
50% and 75% below the market price, as of March 24, 2005 of $0.45.
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Number % of
% Below Price Per With Discount of Shares Outstanding
Market Share at 20% Issuable Stock
------ ----- ------ -------- -----
25% $.3375 $.27 9,222,223 58.99%
50% $.225 $.18 15,333,334 70.52%
75% $.1125 $.09 33,666,667 84.01%
As illustrated, the number of shares of common stock issuable upon
conversion of our convertible debentures will increase if the market price of
our stock declines, which will cause dilution to our existing stockholders.
THE CONTINUOUSLY ADJUSTABLE CONVERSION PRICE FEATURE OF OUR CONVERTIBLE
DEBENTURES MAY ENCOURAGE INVESTORS TO MAKE SHORT SALES IN OUR COMMON STOCK,
WHICH COULD HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON STOCK.
The convertible debentures are convertible into shares of our common stock
at a 20% discount to the trading price of the common stock prior to the
conversion. The significant downward pressure on the price of the common stock
as Golden Gate Investors converts and sells material amounts of common stock
could encourage short sales by investors. This could place further downward
pressure on the price of the common stock. Golden Gate Investors could sell
common stock into the market in anticipation of covering the short sale by
converting its securities, which could cause the further downward pressure on
the stock price. In addition, not only the sale of shares issued upon conversion
or exercise of debentures and warrants, but also the mere perception that these
sales could occur, may adversely affect the market price of the common stock.
THE ISSUANCE OF SHARES UPON CONVERSION OF THE CONVERTIBLE DEBENTURES AND
EXERCISE OF OUTSTANDING WARRANTS MAY CAUSE IMMEDIATE AND SUBSTANTIAL DILUTION TO
OUR EXISTING STOCKHOLDERS.
The issuance of shares upon conversion of the convertible debentures and
exercise of warrants may result in substantial dilution to the interests of
other stockholders since the investor may ultimately convert and sell the full
amount issuable on conversion. Although Golden Gate Investors may not convert
their convertible debentures and/or exercise their warrants if such conversion
or exercise would cause them to own more than 9.99% of our outstanding common
stock, this restriction does not prevent Golden Gate Investors from converting
and/or exercising some of their holdings and then converting the rest of their
holdings. In this way, Golden Gate Investors could sell more than this limit
while never holding more than this limit. There is no upper limit on the number
of shares that may be issued which will have the effect of further diluting the
proportionate equity interest and voting power of holders of our common stock,
including investors in this offering.
IN THE EVENT THAT OUR STOCK PRICE DECLINES, THE SHARES OF COMMON STOCK ALLOCATED
FOR CONVERSION OF THE CONVERTIBLE DEBENTURES AND REGISTERED PURSUANT TO A
REGISTRATION STATEMENT MAY NOT BE ADEQUATE AND WE MAY BE REQUIRED TO FILE A
SUBSEQUENT REGISTRATION STATEMENT COVERING ADDITIONAL SHARES. IF THE SHARES WE
HAVE ALLOCATED AND ARE REGISTERING HEREWITH ARE NOT ADEQUATE AND WE ARE REQUIRED
TO FILE AN ADDITIONAL REGISTRATION STATEMENT, WE MAY INCUR SUBSTANTIAL COSTS IN
CONNECTION THEREWITH.
Based on our current market price and the potential decrease in our market
price as a result of the issuance of shares upon conversion of the convertible
debentures, we have made a good faith estimate as to the amount of shares of
common stock that we are required to register and allocate for conversion of the
convertible debentures. Accordingly, we are planning to register 3,000,000
shares to cover the conversion of the convertible debentures. In the event that
our stock price decreases, the shares of common stock we have allocated for
conversion of the convertible debentures and are registering hereunder may not
be adequate. If the shares we plan to allocate to the registration statement for
the shares underlying the secured convertible debentures and warrants are not
adequate and we are required to file an additional registration statement, we
may incur substantial costs in connection with the preparation and filing of
such additional registration statement.
IF WE ARE REQUIRED FOR ANY REASON TO REPAY OUR OUTSTANDING CONVERTIBLE
DEBENTURES, WE WOULD BE REQUIRED TO DEPLETE OUR WORKING CAPITAL, IF AVAILABLE,
OR RAISE ADDITIONAL FUNDS. OUR FAILURE TO REPAY THE CONVERTIBLE DEBENTURES, IF
REQUIRED, COULD RESULT IN LEGAL ACTION AGAINST US, WHICH COULD REQUIRE THE SALE
OF SUBSTANTIAL ASSETS.
In February 2005, we entered into a Securities Purchase Agreement for the
sale of an aggregate of $300,000 principal amount of convertible debentures. The
convertible debentures are due and payable, with 6 3/4% interest, two years from
the date of issuance, unless sooner converted into shares of our common stock.
In addition, any event of default could require the early repayment of the
convertible debentures at a price equal to 125% of the amount due under the
debentures. We anticipate that the full amount of the convertible debentures,
together with accrued interest, will be converted into shares of our common
stock, in accordance with the terms of the convertible debentures. If we are
required to repay the convertible debentures, we would be required to use our
limited working capital and raise additional funds. If we were unable to repay
the debentures when required, the debenture holders could commence legal action
against us and foreclose on all of our assets to recover the amounts due. Any
such action would require us to curtail or cease operations.
7
RECOMMENDATION OF THE BOARD:
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF THE COMPANY'S COMMON STOCK FROM 10,000,000 TO 50,000,000.
8
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 3 ON THE PROXY CARD)
The Audit Committee of the Board of Directors has appointed the firm of
Webb & Company, P.A. as the independent registered public accounting firm of the
Company for the year ending December 31, 2005, subject to ratification of the
appointment by the Company's stockholders. A representative of Webb & Company,
P.A. is expected to attend the annual meeting to respond to appropriate
questions and will have an opportunity to make a statement if he or she so
desires.
REVIEW OF THE COMPANY'S AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2004
The Audit Committee met and held discussions with management and the
independent auditors. Management represented to the Audit Committee that the
Company's consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States, and the Audit
Committee reviewed and discussed the consolidated financial statements with
management and the independent auditors. The Audit Committee also discussed with
the independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU
380), as amended.
In addition, the Audit Committee discussed with the independent auditors
the auditors' independence from the Company and its management, and the
independent auditors provided to the Audit Committee the written disclosures and
letter required by the Independence Standards Board Standard No. 1 (Independence
Discussions With Audit Committees).
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee met with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, the evaluation
of the Company's internal controls, and the overall quality of the Company's
financial reporting.
Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board approved the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2004, for filing with the Securities and
Exchange Commission.
AUDIT FEES
Webb & Company, P.A. billed $15,117.00 to the Company for professional
services rendered for the audit of our 2004 financial statements and review of
the financial statements included in our 2004 10-QSB filings. Webb & Company,
P.A. billed $8,900.00 to the Company for professional services rendered for the
audit of our 2003 financial statements and review of the financial statements
included in our 3rd quarter 10-QSB.
AUDIT-RELATED FEES
Webb & Company, P.A. billed $397.00 to the Company in 2004 for assurance
and related services that are reasonably related to the performance of the 2004
audit or review of the quarterly financial statements. Webb & Company, P.A.
billed $0.00 to the Company in 2003 for assurance and related services that are
reasonably related to the performance of the 2003 audit or review of the
quarterly financial statements.
TAX FEES
Webb & Company, P.A. billed $700.00 to the Company in 2004 for
professional services rendered for tax compliance, tax advice and tax planning.
Webb & Company, P.A. billed $0.00 to the Company in 2003 for professional
services rendered for tax compliance, tax advice and tax planning.
ALL OTHER FEES
Webb & Company, P.A. billed $0.00 to the Company in 2003 for services not
described above.
It is the policy of the Company's Audit Committee that all services other
than audit, review or attest services, must be pre-approved by the Audit
Committee. All of the services described above were approved by the Audit
Committee.
RECOMMENDATION OF THE BOARD:
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF WEBB & COMPANY, P.A. AS THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2005.
9
BENEFICIAL OWNERSHIP OF ULTR COMMON STOCK OF PRINCIPAL
STOCKHOLDERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of March 21, 2005
o by each person who is known by us to beneficially own more than 5% of our
common stock;
o by each of our officers and directors; and
o by all of our officers and directors as a group.
Name and Address Amount and Nature Percent Prior Percent After
Of Beneficial Holder of Beneficial Ownership(1) to Offering(2) Offering (3)
-------------------- ----------------------- ------------- ----------
Monte Ross 485,813 (4) 7.41% 5.03%
1240 Dielman Industrial Court
St. Louis, MO 63132
Ernest Clarke 222,275 (5) 3.42% 2.31%
1240 Dielman Industrial Court
St. Louis, MO 63132
Mark Peterson 254,893 (6) 3.94% 2.66%
1240 Dielman Industrial Court
St. Louis, MO 63132
Donald Rattner 66,000 (7) 1.02% *
1240 Dielman Industrial Court
St. Louis, MO 63132
K. Krollfeifer, Jr. 32,000 (8) * *
1240 Dielman Industrial Court
St. Louis, MO 63132
Matthew Klapman 16,500 (9) * *
1240 Dielman Industrial Court
St. Louis, MO 63132
Executive Officers and Directors 1,077,481 (10) 15.89% 10.90%
As A Group (6 persons)
Harley Brixey 1,350,000 (11) 21.06% 14.20%
4389 Winding Oaks Drive
Mulberry, FL 33860
* Less then one percent.
(1) Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options or
warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of March 21, 2005 are deemed outstanding for computing the
percentage of the person holding such option or warrant but are not deemed
outstanding for computing the percentage of any other person.
(2) Percentage based on 6,410,187 shares of common stock outstanding.
(3) Percentage based on 9,510,187 shares of common stock outstanding.
(4) Includes 100,000 shares owned by the Harriet Ross Revocable Trust, and
174,000 shares owned by the Monte Ross Revocable Trust. Also includes options to
purchase 146,813 shares.
(5) All shares are owned jointly with Mr. Clarke's spouse. Also includes options
for 91,423 shares.
(6) Includes options for 62,000 shares.
(7) Includes options for 29,000 shares.
(8) Includes 24,000 shares owned by D&H Enterprises, Inc., of which Mr.
Krollfeifer is a principal. Also includes options for 4,000 shares.
(9) Includes options for 4,000 shares.
(10) Includes options for 371,747 shares.
(11) As reflected by Mr. Brixey's Form 4, filed March 18, 2005.
10
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more then 10 percent of
the Company's Common Stock, to file with the SEC the initial reports of
ownership and reports of changes in ownership of common stock. Officers,
directors and greater than 10 percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Specific due dates for such reports have been established by the Commission and
the Company is required to disclose in this Proxy Statement any failure to file
reports by such dates during fiscal 2004. Based solely on its review of the
copies of such reports received by it, or written representations from certain
reporting persons that no Forms 5 were required for such persons, the Company
believes that during the fiscal year ended December 31, 2004, there was no
failure to comply with Section 16(a) filing requirements applicable to its
officers, directors and ten percent stockholders.
POLICY WITH RESPECT TO SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, unless an appropriate exemption applies, a tax deduction for the
Company for compensation of certain executive officers named in the Summary
Compensation Table will not be allowed to the extent such compensation in any
taxable year exceeds $1 million. As no executive officer of the Company received
compensation during 2004 approaching $1 million, and the Company does not
believe that any executive officer's compensation is likely to exceed $1 million
in 2005, the Company has not developed an executive compensation policy with
respect to qualifying compensation paid to its executive officers for
deductibility under Section 162(m) of the Code.
EXECUTIVE COMPENSATION
The following tables set forth certain information regarding our CEO and
each of our most highly-compensated executive officers whose total annual salary
and bonus for the fiscal years ending December 31, 2004, 2003 and 2002 exceeded
$100,000:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Other
Annual Restricted Options LTIP
Name & Principal Salary Bonus Compen- Stock SARs Payouts All Other
Position Year ($) ($) sation ($) Awards($) (#) ($) Compensation
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
Monte Ross 2004 167,880 0 -- -- 25,000 -- --
Chief Executive 2003 157,367 0 -- -- -- -- --
Officer 2002 152,938 0 -- -- 121,813 -- --
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
Ernest Clarke 2004 111,040 0 -- -- 25,000 -- --
President 2003 103,695 0 -- -- -- -- --
2002 103,783 0 -- -- 66,423 -- --
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
Mark Peterson 2004 101,152 0 -- -- 30,000 -- --
Vice President - 2003 93,101 0 -- -- -- -- --
Engineering 2002 97,877 0 -- -- 87,511 -- --
EMPLOYMENT AGREEMENT S
Messrs. Ross, Peterson, and Clarke have individual employment agreements
with Ultradata beginning September 1, 1994. Except as noted herein, the terms of
the employment agreements are substantially identical. The agreements were
extended in 1997 by action of the Board of Directors to October 31, 2000, again
in 2000 to October 31, 2003, and again in 2003 to October 1, 2005. The
agreements provide for base salaries, which are adjusted annually by the Board
of Directors. If the majority of the Board cannot agree as to a level of salary
adjustment, the salary will increase by 10% for Mr. Clarke and Mr. Peterson and
5% for Mr. Ross. The employment agreements restrict each officer from competing
with Ultradata for one year after the termination of his employment unless that
employee establishes that his employment by a competitor will not involve the
use of any information considered confidential by Ultradata.
STOCK OPTION AWARDS
The following tables set forth certain information regarding the stock
options acquired by the Company's Chief Executive Officer and Chief Financial
Officer during the year ended December 31, 2004 and those options held by each
of them on December 31, 2004.
11
Option Grants in the Last Fiscal Year
Percent
of total
Number of options
securities granted to
underlying employees Exercise
option in fiscal Price Expiration
Name granted year ($/share) Date
---- ------------ ----------- --------- ------------
M. Ross 25,000 25 $.72 12/11/2014
E. Clarke 25,000 25 $.72 12/11/2014
Aggregated Fiscal Year-End Option Values
Number of securities underlying Value of unexercised in-the-money
unexercised options at fiscal options at fiscal year-end ($)
Name year-end (#) (All exercisable) (All exercisable)
--------- ------------------------------ --------------------------------
M. Ross 146,813 $43,853
E. Clarke 91,423 $23,912
REMUNERATION OF DIRECTORS
Outside Directors receive $500 per meeting and are reimbursed for out-of-pocket
expenses incurred on the Company's behalf. From time to time they are granted
stock and options as recommended and approved by the inside directors. During
2004, the outside directors each received 4,000 options for Ultradata common
stock with a strike price of $.72 that are exercisable within ten years.
STOCK OPTION PLANS
The information set forth in the table below regarding equity compensation plans
(which includes individual compensation arrangements) was determined as of
December 31, 2004.
EQUITY COMPENSATION PLAN INFORMATION
Number of Weighted Number of securities
securities to be issued average exercise remaining available
upon exercise of price of outstanding for future issuance
outstanding options, options, warrants under equity
warrants and rights and rights compensation plans
------------------- -------------------- --------------------
Equity compensation plans approved by security
holders......................................... 280,747 $.14 0
Equity compensation plans not approved by
security holders.................................. 116,000* $.72 --
Total............................. 427,663 $.17 0
* Represents non-qualified stock options given to the Company's outside
directors and employees in 2004. The options expire on December 11, 2014.
We have two stock option plans: the 1994 Incentive Stock Option Plan and
the 1996 Incentive Stock Option Plan, both of which were approved by our
shareholders. The material terms of the Plans are identical. In aggregate, the
Plan authorize the issuance of options for 500,000 shares, all of which have
been issued. Of those, options have been exercised to purchase 94,523 shares of
common stock. These plans have now expired.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ANNUAL REPORT ON FORM 10-KSB
The Company will provide upon request and without charge to each
stockholder receiving this Proxy Statement a copy of the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2004, including the
financial statements and financial statement schedule information included
therein, as filed with the SEC.
12
OTHER BUSINESS
The Board of Directors is not aware of any matter other than the matters
described above to be presented for action at the Meeting. However, if any other
proper items of business should come before the Meeting, it is the intention of
the individuals named on your proxy card as the proxy holders to vote in
accordance with their best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ MONTE ROSS
----------------------------------------
Monte Ross
Chairman of the Board
Dated: March 28, 2005
St. Louis, Missouri
13
EXHIBIT A
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF
ULTRADATA SYSTEMS, INCORPORATED
Under Section 245 of the General Corporation Law
The undersigned, Chief Executive Officer of Ultradata Systems,
Incorporated (the "Corporation"), does hereby certify as follows:
FIRST: The name of the corporation is:
ULTRADATA SYSTEMS, INCORPORATED
SECOND: The certificate of incorporation of the Corporation is hereby
amended by replacing Article Fourth, in its entirety, with the following:
"FOURTH: The Corporation is authorized to issue two classes of
stock. One class of stock shall be Common Stock, par value $0.01. The
second class of stock shall be Preferred Stock, par value $0.01. The
Preferred Stock, or any series thereof, shall have such designations,
preferences and relative, participating, optional or other special rights
and qualifications, limitations or restrictions thereof as shall be
expressed in the resolution or resolutions providing for the issue of such
stock adopted by the board of directors and may be made dependent upon
facts ascertainable outside such resolution or resolutions of the board of
directors, provided that the matter in which such facts shall operate upon
such designations, preferences, rights and qualifications; limitations or
restrictions of such class or series of stock is clearly and expressly set
forth in the resolution or resolutions providing for the issuance of such
stock by the board of directors.
The total number of shares of stock of each class which the Corporation
shall have authority to issue and the par value of each share of each
class of stock are as follows:
Class Par Value Authorized Shares
----- --------- -----------------
Common $0.01 50,000,000
Preferred $0.01 5,000,000
----------
Totals: 55,000,000"
==========
THIRD: The amendment of the certificate of incorporation herein certified
has been duly adopted at a meeting of the Corporation's Board of Directors and
stockholders holding a majority of the outstanding shares of common stock of the
Corporation in accordance with the provisions of Sections 141(f), 228 and 242 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate of Amendment of the Corporation's
Certificate of Incorporation, as amended, to be signed by Monte Ross, its Chief
Executive Officer, this ___ day of ________, 2005.
ULTRADATA SYSTEMS, INCORPORATED
----------------------------------------
Monte Ross
Chief Executive Officer
PROXY
ULTRADATA SYSTEMS, INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS - TO BE HELD
*, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints MONTE ROSS and
EARNEST CLARKE and each of them, with full power of substitution in each, as
proxies for the undersigned, to represent the undersigned and to vote all the
shares of Common Stock of the Company which the undersigned would be entitled to
vote, as fully as the undersigned could vote and act if personally present, at
the Annual Meeting of Stockholders (the "Meeting") to be held on *, 2005, at *,
local time, at *, or at any adjournments or postponements thereof.
Should the undersigned be present and elect to vote at the Meeting or at any
adjournments or postponements thereof, and after notification to the Secretary
of the Company at the Meeting of the stockholder's decision to terminate this
proxy, then the power of such attorneys or proxies shall be deemed terminated
and of no further force and effect. This proxy may also be revoked by filing a
written notice of revocation with the Secretary of the Company or by duly
executing a proxy bearing a later date.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR AND
EACH OF THE LISTED PROPOSALS.
Proposal (1) The election as directors of all nominees listed below to serve
until the 2006 Annual Meeting of Stockholders or until their successors have
been duly elected and qualified (except as marked to the contrary).
Nominees:
01) Monte Ross 02) Earnest Clarke 03) Mark L. Peterson
04) Donald Rattner 05) H. Krollfeifer, Jr. 06) Matthew Klapman
FOR ALL [_] WITHHOLD ALL [_] FOR ALL EXCEPT [_]
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
Proposal (2) Amending the Certificate of Incorporation to increase the Company's
authorized shares of common stock from 10,000,000 shares to 50,000,000 shares.
FOR |_| AGAINST |_| ABSTAIN |_|
Proposal (3) Ratification of the appointment of WEBB & COMPANY, P.A. as the
independent registered public accounting firm of the Company for the fiscal year
ending December 31, 2005.
FOR |_| AGAINST |_| ABSTAIN |_|
The shares represented by this proxy will be voted as directed by the
stockholder, but if no instructions are specified, this proxy will be voted for
the election of the Board nominees and for proposals (2) and (3). If any other
business is 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.
The undersigned acknowledges receipt from the Company, prior to the execution of
this proxy, of the Notice of Annual Meeting and accompanying Proxy Statement
relating to the Meeting and an Annual Report to Stockholders for fiscal year
ended December 31, 2004.
NOTE: PLEASE MARK, DATE AND SIGN AS YOUR NAME(S) APPEAR(S) HEREON AND RETURN IN
THE ENCLOSED ENVELOPE. IF ACTING AS AN EXECUTORS, ADMINISTRATORS, TRUSTEES,
GUARDIANS, ETC., YOU SHOULD SO INDICATE WHEN SIGNING. IF THE SIGNER IS
CORPORATION, PLEASE SIGN THE FULL CORPORATE NAME, BY DULY AUTHORIZED OFFICER. IF
SHARES ARE HELD JOINTLY, EACH SHAREHOLDER SHOULD SIGN.
Signature (Please sign within the box) [ ________ ]
DATE: _______, 2005 Signature (Joint owners) [_________ ]
DATE: _______, 2005