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
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Integrated Electrical Services, Inc.
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(Name of Registrant as Specified in Its Charter)
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[INTEGRATED ELECTRICAL SERVICES LOGO]
December 27, 2001
To Our Stockholders:
On behalf of the Board of Directors, I cordially invite all stockholders to
attend the Annual Meeting of Integrated Electrical Services, Inc. to be held on
Wednesday, February 6, 2002, at 10:30 a.m. at the Sheraton Suites Houston, 2400
West Loop South, Houston, TX 77027. Proxy Materials, which include a Notice of
the Meeting, Proxy Statement and proxy card, are enclosed with this letter. The
Company's 2001 Annual Report, which is not a part of the proxy materials, is
also enclosed and provides additional information regarding the financial
results of the Company for its fiscal year ended September 30, 2001.
We hope that you will be able to attend the Annual Meeting. Your vote is
important. Whether you plan to attend or not, please execute and return the
proxy card in the enclosed envelope so that your shares will be represented. If
you are able to attend the meeting in person, you may revoke your proxy and vote
your shares in person. If your shares are not registered in your own name and
you would like to attend the meeting, please ask the broker, trust, bank or
other nominee that holds the shares to provide you with evidence of your share
ownership. We look forward to seeing you at the meeting.
Sincerely,
/S/ HERBERT R. ALLEN
Herbert R. Allen
President and Chief Executive Officer
INTEGRATED ELECTRICAL SERVICES, INC.
1800 WEST LOOP SOUTH, SUITE 500
HOUSTON, TEXAS 77027
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 6, 2002
TO THE STOCKHOLDERS OF INTEGRATED ELECTRICAL SERVICES, INC.
Notice is hereby given that the Annual Meeting of the Stockholders of
Integrated Electrical Services, Inc., a Delaware corporation, will be held at
the Sheraton Suites Houston, 2400 West Loop South, Houston, TX 77027, on
Wednesday, February 6, 2002, at 10:30 a.m. Central Time, for the following
purposes:
1. To elect two directors to the Company's board to serve until the
annual stockholders' meeting held in 2005 or until their successors have
been elected and qualified.
2. To appoint Arthur Andersen LLP, independent certified public
accountants, as the Company's auditors for the fiscal year 2002.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The holders of record of the Company's common stock and of the Company's
restricted voting common stock at the close of business on December 14, 2001 are
entitled to notice of and to vote at the meeting with respect to all proposals,
except that restricted voting common stock shall not be entitled to vote on the
proposal for the election of directors, but shall be entitled to elect one
director to the Company's board. We urge you to sign and date the enclosed proxy
card and return it promptly by mail in the enclosed envelope, whether or not you
plan to attend the meeting in person. No postage is required if mailed in the
United States. If you do attend the meeting in person, you may withdraw your
proxy and vote personally on all matters brought before the meeting.
/s/ JOHN F. WOMBWELL
John F. Wombwell
Executive Vice President -- Legal
and Administration
Houston, Texas
December 27, 2001
INTEGRATED ELECTRICAL SERVICES, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
WHEN AND WHERE IS THE 2002 ANNUAL MEETING OF STOCKHOLDERS BEING HELD?
The 2002 Annual Meeting will be held on Wednesday, February 6, 2002, and
any adjournments thereof. The annual meeting will be held at 10:30 a.m. Central
Time, at the Sheraton Suites Houston, 2400 West Loop South, Houston TX 77027.
WHAT DATE WILL THE PROXY STATEMENT FIRST BE SENT TO THE STOCKHOLDERS?
The approximate date on which this Proxy Statement will first be sent to
stockholders is December 27, 2001.
WHO IS SOLICITING MY VOTE?
The accompanying proxy is solicited by the Board of Directors of Integrated
Electrical Services, Inc. (the "Company") for use at the 2002 Annual Meeting of
Stockholders.
HOW ARE VOTES BEING SOLICITED?
In addition to solicitation of proxies by mail, certain directors,
officers, representatives and employees of the Company may solicit proxies by
telephone and personal interview. Such individuals will not receive additional
compensation from the Company for solicitation of proxies, but may be reimbursed
for reasonable out-of-pocket expenses in connection with such solicitation.
Banks, brokers and other custodians, nominees and fiduciaries also will be
reimbursed by the Company for their reasonable expenses for sending proxy
solicitation materials to the beneficial owners of common stock of the Company.
WHO IS PAYING THE SOLICITATION COST?
The expense of preparing, printing and mailing proxy solicitation materials
will be borne by the Company.
HOW MANY VOTES DO I HAVE?
Each share of Common Stock is entitled to one vote upon each of the matters
to be voted on at the meeting. Each share of Restricted Voting Common Stock is
entitled to one-half of one vote upon each of the matters to be voted on at the
meeting, except for the election of directors, upon which each share of
Restricted Voting Common Stock has no vote, but the Restricted Voting Common
Stock shall be entitled to elect one director to the Company's board. The
holders of Restricted Voting Common Stock are entitled to elect one member of
the board of directors and have nominated C. Byron Snyder to be elected as a
Class I director at the 2002 Annual Meeting to serve until the 2005 Annual
Meeting or until his successor is elected and qualified.
HOW DO I VOTE?
When such proxy is properly executed and returned, the shares it represents
will be voted at the meeting in accordance with the directions noted thereon; or
if no direction is indicated, it will be voted in favor of the proposals set
forth in the notice attached hereto.
1
CAN I CHANGE MY VOTE?
Any stockholder giving a proxy has the power to revoke it by oral or
written notice to the Secretary of the Company at any time before it is voted.
Stockholders submitting proxies may revoke them at any time before they are
voted (i) by notifying John F. Wombwell, Secretary of the Company, in writing of
such revocation, (ii) by execution of a subsequent proxy sent to Mr. Wombwell,
or (iii) by attending the Annual Meeting in person and voting in person. Notices
to Mr. Wombwell referenced in (i) and (ii) should be directed to John F.
Wombwell, Secretary, Integrated Electrical Services, Inc., 1800 West Loop South,
Suite 500, Houston, Texas 77027. Stockholders who submit proxies and attend the
meeting to vote in person are requested to notify Mr. Wombwell at the Annual
Meeting of their intention to vote in person at the Annual Meeting.
HOW ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?
Pursuant to the Company's bylaws, shares not voted on matters, including
abstentions and broker non-votes, will not be treated as votes cast with respect
to those matters, and therefore will not affect the outcome of any such matter.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
The presence, in person or by proxy, of at least a majority of the sum of
the outstanding shares of Common Stock and Restricted Voting Common Stock is
required for a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on December 14, 2001, the record date for the
determination of stockholders of the Company entitled to receive notice of, and
to vote at, the Annual Meeting of Stockholders or any adjournments thereof, the
Company had outstanding 37,088,386 shares of common stock, par value $.01 per
share (the "Common Stock") and 2,605,709 shares of restricted voting common
stock, par value $.01 per share (the "Restricted Voting Common Stock").
The following table reflects the beneficial ownership of the Company's
Common Stock as of November 5, 2001, with respect to (i) each person who is
known by the Company to own beneficially more than 5% of the outstanding shares
of the Company's Common Stock; (ii) the directors and nominees for director;
(iii) each named executive officer; and (iv) the Company's directors and
executive officers as a group.
NUMBER OF
SHARES OWNED PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OF CLASS
------------------------ ------------ --------
Herbert R. Allen(a)......................................... 923,000 2.5
Richard China(b)............................................ 70,073 *
C. Byron Snyder(c).......................................... 2,605,709 6.6
Donald Paul Hodel(d)........................................ 26,816 *
Ben L. Mueller(e)........................................... 922,500 2.5
Alan R. Sielbeck(d)......................................... 71,816 *
Richard L. Tucker(d)........................................ 29,519 *
Bob Weik(f)................................................. 1,550,759 4.2
Jim P. Wise(g).............................................. 76,250 *
James D. Woods(h)........................................... 11,375 *
William W. Reynolds(i)...................................... 141,589 *
H. David Ramm(j)............................................ 423,703 1.1
Directors and officers as a group (14 persons)(k)........... 7,511,068 18.6
Dimensional Fund Advisors Inc.(l)........................... 2,970,500 8.0
---------------
* Indicates ownership of less than one percent of the outstanding shares of
Common Stock of the Company.
2
(a) Includes 200,000 shares of Common Stock owned by HRA Investment Group, LP
as to which Mr. Allen disclaims beneficial ownership and 23,000 shares of
Common Stock underlying options which are exercisable within 60 days.
(b) Includes 6,667 shares of Common Stock underlying options which are
exercisable within 60 days.
(c) The shares attributed to Mr. Snyder are as follows (i) 2,585,829 shares are
held in the 1996 Snyder Family Partnership (the "Partnership"), (ii) 699
shares are held in the 1998 Snyder Family Partnership Management Trust,
(iii) 9,599 shares are hold by the Worth Byron Snyder Trust, and (iv) 9,582
shares are held by the Gregg Layton Snyder Trust. This stock consists
entirely of Restricted Voting Common Stock, which represents all of the
Company's outstanding Restricted Voting Common Stock. Such shares may be
converted to Common Stock in certain circumstances. Mr. Snyder disclaims
beneficial ownership as to 1,118,193 of these shares which are attributable
to the interests in the Partnership held by Mr. Snyder's children.
(d) Includes 15,333 shares of Common Stock underlying options which are
exercisable within 60 days by each of Mr. Hodel, Mr. Sielbeck and Dr.
Tucker. Mr. Hodel's address is P.O. Box 23099, Silverthorne, CO 80498. Mr.
Sielbeck's address is 6 Cadillac Drive, #410, Brentwood, TN 37027. Dr.
Tucker's address is Center for Construction Industry Studies, ECJ 5.202,
The University of Texas at Austin, Austin, TX 78712.
(e) Includes 7,000 shares held by a trust for the benefit of Mr. Mueller's
daughter and 22,500 shares of Common Stock underlying options which are
exercisable within 60 days.
(f) Includes 74,536 shares of Common Stock owned by two related trusts, as to
which Mr. Weik disclaims beneficial ownership, 111,829 shares of Common
Stock held by the Virginia Pat Weik Trust of 2000, and 45,519 shares of
Common Stock underlying options which are exercisable within 60 days.
(g) Includes 76,250 shares of Common Stock underlying options which are
exercisable within 60 days.
(h) Includes 6,000 shares of Common Stock underlying options which are
exercisable within 60 days.
(i) Includes 137,668 shares of Common Stock underlying options which are
exercisable within 60 days.
(j) Includes 287,045 shares of Common Stock underlying options which are
exercisable within 60 days.
(k) Includes 2,605,709 shares of Restricted Voting Common Stock described in
Note (c) above and 793,398 shares of Common Stock underlying options which
are exercisable within 60 days.
(l) Includes 2,970,500 shares of which Dimensional Fund Advisors Inc. has sole
voting power and sole dispositive power. The address of Dimensional Fund
Advisors Inc. is 1299 Ocean Avenue, 11(th) Floor, Santa Monica, CA 90401.
Information is as of September 30, 2001 and is derived from filings with
the Securities and Exchange Commission.
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Amended and Restated Certificate of Incorporation, as
amended, and bylaws provide that the number of directors on the Board shall be
fixed from time to time by the Board of Directors but shall not be less than one
nor more than fifteen persons. The Certificate of Incorporation divides the
Board of Directors into three classes, designated as Class I, Class II and Class
III. Each class of directors is to be elected to serve a three-year term and is
to consist, so far as possible, of one-third of the number of directors required
at the time to constitute a full Board. If the number of directors is not evenly
divided into thirds, the Board of Directors shall determine which class or
classes shall have one extra director. The Board of Directors presently consists
of ten directors, four in Class I, three in Class II and three in Class III,
whose terms of office expire with the 2002, 2003 and 2004 annual meetings,
respectively, and until their successors are elected and qualified. The holders
of the Restricted Voting Common Stock are entitled to elect one director and are
not entitled to vote on other directors.
3
The term of office of each of the current Class I Directors expires at the
time of the 2002 Annual Meeting of Stockholders, or as soon thereafter as their
successors are elected and qualified. Messrs. China and Sielbeck have been
nominated to serve an additional three-year term as Class I Directors to be
elected by the holders of the Common Stock. The holders of Restricted Voting
Common Stock have indicated that they will elect Mr. Snyder as a Class I
director. Each of Messrs. China, Sielbeck and Snyder has consented to be named
in this Proxy Statement and to serve as a director if elected. Mr. Wise will not
stand for re-election and with the expiration of his term the number of
directors will be set at nine.
It is the intention of the persons named in the accompanying proxy card to
vote for the election of the two nominees named below unless a stockholder has
withheld such authority. The affirmative vote of holders of a plurality of the
Common Stock present in person or by proxy at the 2002 Annual Meeting of
Stockholders and entitled to vote is required for election of the nominees.
If, at the time of or prior to the 2002 Annual Meeting of Stockholders, any
of the nominees should be unable or decline to serve, the discretionary
authority provided in the proxy may be used to vote for a substitute or
substitutes designated by the Board of Directors. The Board of Directors has no
reason to believe that any substitute nominee or nominees will be required. No
proxy will be voted for a greater number of persons than the number of nominees
named herein.
NOMINEES -- CLASS I DIRECTORS (THE TERMS SHALL EXPIRE AT THE 2005 ANNUAL MEETING
OF STOCKHOLDERS)
CLASS I
The Class I Directors, whose present term of office as directors expire at
the 2002 Annual Meeting of Stockholders, and certain additional information with
respect to each of them, are as follows:
RICHARD CHINA DIRECTOR SINCE 2001
Mr. China, 43, has been the Chief Operating Officer of the Company since
October 2001. From May 2001 to October 2001, Mr. China was the Chief Executive
Officer of IES Communications, Inc., one of the Company's subsidiaries. From
August 2000 to May 2001, Mr. China was a Regional Operating Officer for the
Company. Prior to that time, Mr. China was President of Primo Electric Company,
one of the Company's subsidiaries.
ALAN R. SIELBECK DIRECTOR SINCE 1998
Mr. Sielbeck, 48, has served as Chairman of the Board and Chief Executive
Officer of Service Experts, Inc., a publicly traded heating, ventilation and air
conditioning service company, since its inception in March 1996 until January
2000. Mr. Sielbeck has served as Chairman of the Board and President of AC
Service and Installation Co. Inc. and Donelson Air Conditioning Company, Inc.
since 1990 and 1991, respectively. From 1985 to 1990, Mr. Sielbeck served as
President of RC Mathews Contractor, Inc., a commercial building general
contractor and Chief Financial Officer of RCM Interests, Inc. a commercial real
estate development company. Mr. Sielbeck serves as a director for Midsouth Wire
Products and Nashville Wire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF EACH OF THE ABOVE-NAMED NOMINEES.
CLASS I RESTRICTED VOTING COMMON STOCK DIRECTOR (TO BE ELECTED BY HOLDERS OF
RESTRICTED VOTING COMMON STOCK, TERM EXPIRING AT THE 2005 ANNUAL MEETING OF
STOCKHOLDERS)
C. BYRON SNYDER DIRECTOR SINCE 1997
Mr. Snyder, 53, has been Chairman of the Board of Directors of the Company
since its inception. Mr. Snyder is a founding member and Senior Managing
Director of Main Street Equity Ventures II, LP, a Houston-based private equity
investment firm. Mr. Snyder was the President and owner of Sterling City
Capital, L.L.C., a private investment company. Mr. Snyder was owner and
President of Relco Refrigeration Co., a distributor of refrigerator equipment,
from 1992 to 1998. Prior to 1992, Mr. Snyder was the owner and
4
Chief Executive Officer of Southwestern Graphics International, Inc., a
diversified holding company which owned Brandt & Lawson Printing Co., a
Houston-based general printing business, and Acco Waste Paper Company, an
independent recycling business. Brandt & Lawson Printing Co. was sold to Hart
Graphics in 1989, and Acco Waste Paper Company was sold to Browning-Ferris
Industries in 1991. Mr. Snyder is a member of the Board of Directors of United
Glass Corporation, the largest glass fabrication and services company in North
America. Mr. Snyder is Chairman of the Board of Integrated Roofing &
Waterproofing, Inc. a privately held company providing roofing and waterproofing
services.
DIRECTORS CONTINUING IN OFFICE
CLASS II
The Class II Directors, whose present term of office as directors will
continue after the meeting and expire at the 2003 Annual Meeting of
Stockholders, and certain additional information with respect to each of them,
are as follows:
HERBERT R. ALLEN DIRECTOR SINCE 2001
Mr. Allen, 61, has been Chief Executive Officer of the Company since
October 2001. From May 2001 to October 2001, Mr. Allen was Chief Operating
Officer of the Company. From January 2000 to May 2001, Mr. Allen was Senior Vice
President -- East Area of the Company. From June 1998 to January 2000, Mr. Allen
was a Regional Operating Officer of the Company. Prior to that time, Mr. Allen
was the President of H.R. Allen, Inc., one of the Company's subsidiaries.
RICHARD L. TUCKER DIRECTOR SINCE 1998
Dr. Tucker, 66, is Director of the Center for Construction Industry Studies
and Professor of Civil Engineering at the University of Texas at Austin. Dr.
Tucker has been on the faculty at the University of Texas since 1976. Dr. Tucker
is a registered engineer.
BOB WEIK DIRECTOR SINCE 1998
Mr. Weik, 66, has been President of the Western Area of IES Operations
Group, Inc. since December 2001. From January 2000 to December 2001, Mr. Weik
was Senior Vice President -- West Area of the Company. From May 1998 to December
2001, Mr. Weik was a Regional Operating Officer of the Company. Prior to that
Mr. Weik was President of BW Consolidated, Inc. and related entities, one of the
Company's subsidiaries.
CLASS III
The Class III Directors, whose present term of office as directors will
continue after the meeting and expire at the 2004 Annual Meeting of
Stockholders, and certain additional information with respect to each of them,
are as follows:
DONALD PAUL HODEL DIRECTOR SINCE 1998
Donald Paul Hodel, 66, is Managing Director of Summit Group International,
Ltd. (and related companies), an energy and natural resources consulting firm he
founded in 1989. Mr. Hodel served as United States Secretary of the Interior
from 1985 to 1989 and United States Secretary of Energy from 1982 to 1985. Mr.
Hodel has served as director of both publicly traded and privately held
companies and is the recipient of the Presidential Citizens Medal and honorary
degrees from three universities. Mr. Hodel serves on the boards of directors of:
Salem Communications, Inc. a NASDAQ listed company; and the North American
Electric Reliability Council.
5
BEN L. MUELLER DIRECTOR SINCE 1998
Mr. Mueller, 54, was President of the Company's Electrical Group from May
2001 until October 2001 and was Chief Operating Officer of the Company from its
inception to May 2001. Prior to that time, Mr. Mueller was the Executive Vice
President of Houston-Stafford Electric, Inc. ("Houston-Stafford"), one of the
Company's subsidiaries, since 1993 and served as vice president of
Houston-Stafford since 1975. Mr. Mueller is a past member of the board of the
IEC, Houston Chapter, and has served on the Electrical Board for the City of
Sugar Land, Texas.
JAMES D. WOODS DIRECTOR SINCE 2001
Mr. Woods, 70, is the Chairman Emeritus of, and a consultant to, Baker
Hughes Incorporated. He was Chief Executive Officer of Baker Hughes from April
1987 and Chairman from January 1989 until January 1998. Mr. Woods is a director
of Varco International Inc., ESCO Technologies Inc., OMI Corporation Inc., USEC
Inc. and OMI Corporation.
COMMITTEES
Audit Committee. The Audit Committee is comprised of Messrs. Sielbeck
(Chairman), Hodel, and Tucker. Pursuant to its Board approved written charter,
the Audit Committee's functions include making recommendations concerning the
engagement of independent auditors, reviewing with the independent auditors the
plan and results of the auditing engagement, reviewing the scope and results of
the Company's procedures for internal auditing, reviewing professional services
provided by the independent auditors, reviewing the independence of the
independent auditors, considering the range of audit and non-audit fees and
reviewing the adequacy of the Company's internal accounting controls.
Compensation Committee. The Compensation Committee is comprised of Messrs.
Woods (Chairman), Hodel and Tucker. The functions performed by the Compensation
Committee in accordance with its Board approved Charter include: reviewing
executive salary and bonus structure; reviewing the Company's stock option plan
(and making grants thereunder); setting bonus goals; and approving salary and
bonus awards to key executives.
Governance Committee. The Governance Committee is comprised of Messrs.
Tucker (Chairman), Woods and Sielbeck. The functions performed by the Governance
Committee in accordance with its Board approved charter are to ensure the
efficient performance of the duties and obligations of the Board of Directors,
to recommend the establishment of standard Board Committees and their
composition, to establish performance standards and conduct reviews of Board
members and the Company's Chief Executive Officer, to recommend nominations for
Board memberships including existing members for new terms, additional members
or replacement members, and to periodically review overall Board performance.
Executive Committee. The Executive Committee is comprised of Messrs.
Allen, Snyder and Tucker. The functions performed by the Executive Committee in
accordance with its Board approved charter are to act upon any urgent issues
that arise between regularly scheduled meetings of the Board. In addition, the
Executive Committee may authorize the seal of the Corporation to be affixed to
all papers which may require it but may not approve, adopt or recommend to the
stockholders any action or matter expressly required by the Delaware General
Corporation Law to be submitted to stockholders for approval nor does it have
the power or authority to adopt, amend or repeal any bylaw of the Corporation.
The Executive Committee shall meet upon the call of the Chief Executive Officer
or a majority of its members and shall timely report to the Board any actions
taken by the Executive Committee or the Chief Executive Officer in conjunction
with the Executive Committee.
MEETINGS
During fiscal year 2001, the Audit Committee had five meetings; the
Compensation Committee had eight meetings; and the Board of Directors had nine
meetings. During fiscal year 2001 each member of the Board of
6
Directors attended 75% or more of the meetings of the Board of Directors and the
committees of which he was a member.
DIRECTOR COMPENSATION
Directors of the Company who are not officers or employees of the Company
receive a $12,000 annual retainer paid quarterly, one-half in cash and one-half
in shares of Company Common Stock. Committee chairmen receive an additional
annual retainer of $3,000, paid one-half in cash and one-half in stock. Non-
employee directors are also paid a meeting fee of $1,250 for each regular or
special Board or committee meeting. Board members are paid $500 for telephonic
meetings. In addition, each non-employee director of the Company receives a
grant of an option to purchase 3,000 shares of Company Common Stock upon initial
election as a director and an option to purchase 3,000 additional shares on each
September 30 on which such director remains a non-employee director. The Company
paid aggregate fees of $135,190 to non-employee directors in connection with the
Board of Directors' and Committee meetings in fiscal 2001, and an additional
$16,250 to Mr. Tucker for services performed in connection with ad hoc committee
services. Employee directors receive no additional compensation for attending
Board of Directors or committee meetings.
REPORT OF THE AUDIT COMMITTEE
The information contained in this report shall not be deemed to be
"soliciting material" or "filed" or incorporated by reference in future filings
with the SEC, or subject to the liabilities of Section 18 of the Exchange Act,
except to the extent that the Company specifically incorporates it by reference
into a document filed under the Securities Act of 1933, as amended, or the
Exchange Act.
The Audit Committee of the Board of Directors of Integrated Electrical
Services, Inc. (the "Audit Committee") oversees the Company's financial
reporting process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the reporting process
including the systems of internal controls. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the audited financial statements
in the Annual Report with management including a discussion of the quality, not
just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted accounting principles. In
addition, the Audit Committee has discussed with the independent auditors the
auditors' independence from management and the Company including the matters in
the written disclosures required by the Independence Standards Board.
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the Company's internal controls, and the overall quality of the
Company's financial reporting.
In reliance on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2001 for filing with the Securities and Exchange
Commission. The Audit Committee and the board have also recommended, subject to
stockholder approval, the selection of the Company's independent auditors for
fiscal year 2002.
The members of the Audit Committee have been determined to be independent
and financially literate (as independence and financial literacy is defined by
the New York Stock Exchange listing standards) by the Board of Directors.
Alan R. Sielbeck (Chairman)
Donald Paul Hodel
Richard L. Tucker
7
FEES PAID TO ARTHUR ANDERSEN LLP
The following table shows the fees paid or accrued by the Company for the
audit and other services provided by Arthur Andersen LLP for fiscal year 2001.
Audit:...................................................... $ 410,000
Audit-related:(1)........................................... 303,506
Financial information system design and implementation:..... 0
All other fees:(2).......................................... 800,609
----------
Total............................................. $1,514,115
==========
---------------
(1) Audit-related includes services traditionally performed by the auditor such
as review of Forms 10-Q, employee benefit audits, comfort letters and
consents, accounting consultation and other services.
(2) All other fees represent fees for tax advice and preparation of filings.
The Audit Committee has considered whether the provision of the non-audit
services listed as "Other" in the table above is compatible with maintaining the
independence of Arthur Andersen LLP.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of Integrated
Electrical Services, Inc. (the "Compensation Committee") is pleased to present
the 2001 report on executive compensation. This report of the Compensation
Committee documents the components of the Company's executive officer
compensation program and describes the basis on which the compensation program
determinations were made by the Compensation Committee with respect to the
executive officers of the Company. The Compensation Committee meets regularly
and is comprised of Messrs. Woods (Chairman), Hodel and Tucker. The duty of the
Compensation Committee is to review compensation levels of senior members of
management, as well as administer the Company's various incentive plans
including its annual bonus plan and its stock option plan.
EXECUTIVE COMPENSATION PROGRAM PHILOSOPHY
The Company's compensation philosophy and program objectives are directed
by two primary guiding principles. First, the program is intended to provide
levels of compensation sufficient to attract, motivate and retain talented
executives. Second, the program is intended to create an alignment of interests
between the Company's executives and stockholders such that a portion of each
executive's compensation is directly linked to maximizing stockholder value.
In support of this philosophy, the executive compensation program is
designed to reward performance that is directly relevant to the Company's
short-term and long-term success. As such, the Company provides both short-term
and long-term incentives. The Committee has structured the executive
compensation program with three primary underlying components: base salary,
annual incentives, and long-term incentives. The Company's compensation
philosophy is to (i) compensate its executive officers at a base level that is
near the average salaries paid by companies of similar size and nature; (ii)
provide the opportunity for its executive officers to earn additional
compensation in the form of annual bonuses if individual and business
performance goals are met; and (iii) design long-term incentive plans to focus
executive efforts on the long-term goals of the Company and to maximize total
return to the Company's stockholders.
BASE SALARY
The Committee utilizes market compensation data that is reflective of the
markets in which the Company competes for employees. Based on consultations with
compensation consultants, the Committee believes that the salaries paid to the
Company's executive officers are at or below executive officers' compensation in
similar companies. The Committee intends to insure that the executive officer's
compensation is consistent with its stated policies. Therefore, as part of its
responsibilities, the Committee will review the salaries for the Company's
executive officers. Individual salary changes are based on a combination of
8
factors such as the performance of the executive, salary level relative to the
competitive market, level of responsibility, growth of Company operations and
the recommendation of the Chief Executive Officer.
ANNUAL BONUS
The Company's annual bonus is intended to reward key employees based on
Company and individual performance, motivate key employees, and provide
competitive cash compensation opportunities. Target award opportunities vary by
individual position and are expressed as a percent of base salary. The
individual target award opportunities are set at market median levels, but
actual payouts may vary based on performance so that actual awards may fall
below the 50th or above the 75th percentile. The amount a particular executive
may earn is directly dependent on the individual's position, responsibility, and
ability to impact the Company's financial success. During the 2001 fiscal year,
executives were paid bonuses that generally reflected the Company's performance
below expected levels.
LONG-TERM INCENTIVES
The Company's long-term incentive is designed to focus executive efforts on
the long-term goals of the Company and to maximize total return to our
stockholders. The key devices the Committee used during 2001 were stock options.
Stock options align the interests of employees and stockholders by providing
value to the executive through price appreciation. During 2001 the Committee
authorized awards below the market average to its executive officers.
CEO COMPENSATION
Mr. Ramm's base salary for the fiscal year was adjusted from $350,000 to
$510,000. He also received 675,000 stock options. Mr. Ramm did not receive a
bonus payment for fiscal year 2001.
No member of the Committee is a former or current officer or employee of
the Company or any of its subsidiaries. The following members of the
Compensation Committee have delivered the foregoing report.
James D. Woods (Chairman)
Donald Paul Hodel
Richard L. Tucker
The foregoing report and the performance graph and related description
included in this proxy statement shall not be deemed to be filed with the
Securities and Exchange Commission except to the extent the Company specifically
incorporates such items by reference into a filing under the Securities Act of
1933 or Securities Exchange Act of 1934.
9
EXECUTIVE OFFICERS
The following table summarizes certain information regarding aggregate cash
compensation, stock option and restricted stock awards and other compensation
earned by the Company's Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company for services rendered in
all capacities to the Company for the years ended September 30, 2001, 2000, and
1999:
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
------------------------
ANNUAL COMPENSATION SECURITIES
---------------------------------------------- RESTRICTED UNDERLYING
FISCAL OTHER ANNUAL STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(C) AWARD (NUMBER) COMPENSATION(G)
--------------------------- ------ -------- -------- --------------- ---------- ---------- ---------------
Herbert R. Allen............... 2001 $292,500 $120,000 -- -- 30,000 $ 2,678
President and Chief 2000 229,326 180,000 -- -- 36,000 3,439
Executive Officer 1999 150,000 -- -- -- -- 1,558
Richard L. China............... 2001 $237,211 $175,000 -- -- 30,000 $ 2,808
Chief Operating Officer 2000 164,506 399,002 -- -- 10,000 2,818
1999 109,520 -- -- -- -- 438
William W. Reynolds(a)......... 2001 $275,000 $ 55,000 -- -- 345,000 $ 74,744
Executive Vice President and 2000 84,439 15,000 -- -- 100,000 109,469
Chief Financial Officer
Bob Weik....................... 2001 $325,000 $162,078 -- -- 30,000 $ 3,341
President -- West Area 2000 326,338 180,000 -- $ 72,095(d) 40,000 4,175
IES Operations Group 1999 88,900 -- -- -- 20,519 923
H. David Ramm(b)............... 2001 $453,556 -- -- $ 195,000(e) 675,000 $ 1,894
2000 188,461 $495,000 -- $2,275,000(f) 132,500 --
---------------
(a) Mr. Reynolds was named Executive Vice President and Chief Financial Officer
on June 12, 2000.
(b) Mr. Ramm no longer serves as President and Chief Executive Officer of the
Company.
(c) No executive officer received perquisites or other personal benefits in
excess of 10% of their total annual salary and bonus during the fiscal year
ended September 30, 2001.
(d) The dollar value of the restricted stock appearing in the table is based on
the closing sales price of the Integrated Electrical Services' Common Stock
on December 15, 1999 ($8.8125 ) the date of the award. The restricted stock
vested 50% on May 31, 2000 and 50% on August 31, 2000. As of September 30,
2001, the 8,181 shares had an aggregate value of $44,178.
(e) The dollar value of the restricted stock appearing in the table is based on
the closing sales price of the Integrated Electrical Services' Common Stock
on December 11, 2000 ($5.375) the date of the award. The restricted stock
was immediately vested on the grant date. As of September 30, 2001, the
36,279 shares had an aggregate value of $195,907.
(f) The dollar value of the restricted stock appearing in the table is based on
the closing sales price of the Integrated Electrical Services' Common Stock
on March 20, 2000 ($5.6875) the date of the award. The restricted stock
vests over four years with 100,000 shares vesting on each anniversary of
his date of hire (March 20, 2000). As of September 30, 2001, the 400,000
shares had an aggregate value of $2,160,000.
(g) All other compensation for fiscal year 2001 consists of Company
contributions to the IES Corp. Executive Savings Plan and the IES, Inc.
401(k) Retirement Savings Plan (Mr. Allen $2,678, Mr. China $2,808, Mr.
Reynolds $1,411, Mr. Weik $3,341, and Mr. Ramm $1,894). In addition, for
2001, Mr. Reynolds received $73,333 per his employment agreement (paid 50%
in cash and 50% in IES common stock). For 2000, Mr. Reynolds received a
$40,000 sign-on award, $59,107 which is 70% of his base salary between June
12, 2000 and September 30, 2000, and a payment of $10,562 relating to his
relocation.
10
OPTION GRANTS IN LAST FISCAL YEAR
PERCENTAGE OF
TOTAL OPTIONS
NUMBER OF SHARES GRANTED TO GRANT DATE
UNDERLYING EMPLOYEES IN PRICE PER EXPIRATION PRESENT
NAME OPTIONS GRANTED(A) FISCAL YEAR SHARE DATE VALUE(B)
---- ------------------ ------------- --------- ---------- ----------
Herbert R. Allen.............. 15,000 $5.7000 4/1/2011 $ 45,475
15,000 $6.8750 11/6/2010 58,256
------- ----------
30,000 1.4% $ 103,731
Richard L. China.............. 15,000 $5.7000 4/1/2011 $ 45,475
15,000 $6.8750 11/6/2010 58,256
------- ----------
30,000 1.4% $ 103,731
William W. Reynolds........... 305,000 $4.9900 4/26/2011 $ 781,391
20,000 $5.7000 4/1/2011 60,633
20,000 $6.8750 11/6/2010 77,675
------- ----------
345,000 16.1% $ 919,699
Bob Weik...................... 15,000 $5.7000 4/1/2011 $ 45,475
15,000 $6.8750 11/6/2010 58,256
------- ----------
30,000 1.4% $ 103,731
H. David Ramm................. 610,000 $4.9900 4/26/2011 $1,586,090
32,500 $5.7000 4/1/2011 98,529
32,500 $6.8750 11/6/2010 126,222
------- ----------
675,000 31.5% $1,787,532
---------------
(a) Stock options vest one-third on each anniversary of the grant date until
fully vested (standard vesting), and have a ten year term. Grants for Mr.
Ramm and Mr. Reynolds for 610,000 and 305,000 stock options respectively
vest on the earlier of one-sixth when the stock price is $7.00, $8.00,
$9.00, $10.00, $11.00 and $12.00 for ten consecutive trading days, or on
April 26, 2006. One-sixth of the grants vested on May 22, 2001 and on May
23, 2001 such that one-third of the stock options were vested as of
September 30, 2001.
(b) Present value is determined by using the Black-Scholes Option Pricing
Model. The material assumptions and adjustments incorporated into the
Black-Scholes model in making such calculations include the following: (1)
an interest rate representing the treasury strip rate as of the date of
grant, with a term to maturity equal to that of the term of the stock
option grant; (2) volatility representing the annualized standard deviation
of the log normal monthly returns; and (3) a 3% annual adjustment for risk
of forfeiture during vesting. The ultimate values of the options will
depend on the future market prices of the Common Stock, which cannot be
forecasted with reasonable accuracy. The actual value, if any, that an
optionee will recognize upon exercise of an option will depend on the
difference between the market value of the Common Stock on the date the
option is exercised and the applicable exercise price.
11
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning the value of
exercised and unexercised options held by the executive officers of the Company.
Value at September 30, 2001 is measured as the difference between the exercise
price and fair market value on September 30, 2001.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2001 AND OPTION VALUES AT SEPTEMBER
30, 2001
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN THE
OPTIONS HELD AT MONEY OPTIONS HELD AT
SHARES SEPTEMBER 30, 2001 SEPTEMBER 30, 2001
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Herbert R. Allen.......... -- -- 12,000 54,000 $ 900 $ 1,800
Richard L. China.......... -- -- 3,334 36,666 250 500
William W. Reynolds....... -- -- 137,668 307,332 69,584 132,967
Bob Weik.................. -- -- 33,853 56,666 1,000 2,000
H. David Ramm............. -- -- 276,211 531,289 83,368 166,733
EMPLOYMENT AGREEMENTS
On March 20, 2000, the Company entered into a three year employment
agreement with H. David Ramm for the position of President and Chief Executive
Officer. Under this agreement, Mr. Ramm's initial salary was $350,000. Mr. Ramm
also received 132,500 stock options and a restricted stock award of 400,000
shares.
On June 12, 2000, the Company entered into a three year employment
agreement with William W. Reynolds for the position of Executive Vice President
and Chief Financial Officer. Under this agreement, Mr. Reynolds initial salary
was $275,000. Mr. Reynolds also received 100,000 stock options, and $73,333
payable each year for three years in a combination of cash and stock.
The Company entered into employment agreements with Messrs. Allen, Weik,
and China, with the agreements expiring on May 21, 2003, January 29, 2003, and
January 12, 2004 respectively, that initially provided for annual salaries of
$150,000, $85,000, and $150,000 respectively.
Each agreement is subject to annual review by the Compensation Committee.
In addition, the employment agreements generally restrict these individuals from
competing with the Company for a period of two years after the date of the
termination of employment with the Company. In the event of a change of control
of the Company, such employees may be entitled receive a multiple of the then
remaining benefits under the agreements.
12
STOCK PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative total
stockholder return on its Common Stock with the cumulative total return of (i)
the S&P 500 Index, (ii) the Russell 2000, and (iii) a peer group stock index
(the "Peer Group") selected in good faith by the Company made up of the
following publicly traded companies: Comfort Systems USA, Inc., Dycom Industries
Inc., Emcor Group Inc., Encompass Services Corp, Fluor Corp (Massey Energy
Company was distributed as a dividend to Flour Corp shareholders on December 22,
2000 and the value of such dividend is reflected as a reinvestment), Jacobs
Engineering Group, Mastec Inc., Quanta Services Inc., and Washington Group
International (formerly known as Morrison Knudson). The cumulative total return
computations set forth in the Performance Graph assume the investment of $100 in
the Company's Common Stock, the S&P 500 Index, the Russell 2000, and the Peer
Group, on January 27, 1998.
COMPARISON OF 45 MONTH CUMULATIVE TOTAL RETURN*
AMONG INTEGRATED ELECTRICAL SERVICES, INC., THE S & P 500 INDEX,
THE PEER GROUP AND THE RUSSELL 2000 INDEX
[PERFORMANCE GRAPH]
* $100 invested on 1/27/98 in Stock or Index -- including reinvestment of
dividends fiscal year ending September 30.
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------------------------------------------------
1/27/98 3/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99 3/00 6/00 9/00
INTEGRATED ELECTRICAL
SERVICES, INC. 100.00 137.07 138.79 102.59 153.45 110.34 111.21 109.05 69.40 36.21 35.34 47.41
S & P 500 100.00 114.01 117.78 106.06 128.65 135.06 144.58 135.55 155.72 159.29 155.06 153.56
RUSSELL 2000 100.00 113.25 107.97 86.22 100.28 94.84 109.59 102.66 121.60 130.21 125.29 126.67
PEER GROUP 100.00 120.45 122.26 100.36 114.77 98.19 128.58 112.28 122.87 160.07 156.50 130.56
CUMULATIVE TOTAL RETURN
---------------------------------
12/00 3/01 6/01 9/01
INTEGRATED ELECTRICAL
SERVICES, INC. 40.95 39.31 67.24 37.24
S & P 500 141.54 124.76 132.06 112.68
RUSSELL 2000 117.92 110.25 126.11 99.81
PEER GROUP 155.91 129.58 145.65 100.90
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to several 5-year lease agreements effective November 1, 1997,
Bexar Electric Company Ltd. agreed to lease certain facilities owned by Mr. Weik
and his immediate family. Such lease agreements provide for an annual rent of
approximately $182,762, which the Company believes is not in excess of fair
rental value for such facilities. BW Air, Inc. of which Mr. Weik is the owner
received $141,072 from the Company for reimbursed travel related expenses for
rental of an airplane. The Company believes such expenses were not in excess of
fair market value.
Mr. Mueller received $69,666 from Classic Lighting, Inc., a supplier of one
of the Company's subsidiaries, based on an agreement established prior to the
inception of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2001, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors) of another entity, one of whose executive officers served on the
Board of Directors of the Company, or (ii) a director of another entity, one of
whose executive officers served on the compensation committee (or other board
committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors) of the Company or its subsidiaries.
During fiscal 2001, no member of the compensation committee (or board
committee performing equivalent functions) (i) was an officer or employee of the
Company or (ii) was formerly an officer of the Company or (iii) had any business
relationship or conducted any business with the Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons holding more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission ("SEC") and any stock exchange or automated quotation
system on which the Common Stock may then be listed or quoted (i) initial
reports of ownership, (ii) reports of changes in ownership and (iii) annual
reports of ownership of Common Stock and other equity securities of the Company.
Such directors, officers and ten-percent stockholders are also required to
furnish the Company with copies of all such filed reports.
Based solely upon review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
2001, the Company believes that, other than a Form 5 filing for Mr. Reynolds
that was timely filed but failed to reflect one exempt transaction, all Section
16(a) reporting requirements related to the Company's directors and executive
officers were timely fulfilled during 2001.
PROPOSAL TWO
APPROVAL OF AUDITORS
The Board of Directors has appointed Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending September 30, 2002,
subject to ratification by the Company's stockholders. Arthur Andersen LLP has
served as the Company's independent public accountants since the Company's
inception.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors determines that such a change would be in the Company's and its
stockholders' best interests.
14
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting of Stockholders and will have an opportunity to make a statement,
if they desire to do so, and to respond to appropriate questions from those
attending the meeting.
The affirmative vote of holders of a majority of the shares of Common Stock
voted at the 2002 Annual Meeting of Stockholders is required to ratify the
appointment of Arthur Andersen LLP as the Company's independent public
accountants for fiscal 2002.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF ARTHUR ANDERSEN LLP'S APPOINTMENT, AND PROXIES EXECUTED AND RETURNED WILL BE
SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
OTHER BUSINESS
The Board knows of no business that will come before the meeting except
that indicated above. However, if any other matters are properly brought before
the meeting, it is intended that the persons acting under the proxy will vote
hereunder in accordance with their best judgment.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to the Company's bylaws, stockholder proposals submitted for
consideration at the Company's 2002 Annual Meeting of Stockholders must be
delivered to the Corporate Secretary no later than 80 days before the date of
the 2002 Annual Meeting of Stockholders; provided, however, that in the event
that less than 90 days notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be timely
must be received no later than the close of business on the tenth day following
the date of which such notice was mailed or such public disclosure made. If such
timely notice of a stockholder proposal is not given, the proposal may not be
brought before the Annual Meeting. If timely notice is given but is not
accompanied by a written statement to the extent required by applicable
securities laws, the Company may exercise discretionary voting authority over
proxies with respect to such proposal if presented at the Company's 2002 Annual
Meeting of Stockholders.
A proposal of a stockholder intended to be presented at the next annual
meeting must be received at the Company's principal executive offices no later
than August 29, 2002 if the stockholder making the proposal desires such
proposal to be considered for inclusion in the Company's proxy statement and
form of proxy relating to such meeting.
By Order of the Board of Directors
/s/ JOHN F. WOMBWELL
John F. Wombwell
Executive Vice President -- Legal and
Administration
15
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INTEGRATED ELECTRICAL SERVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF INTEGRATED ELECTRICAL SERVICES, INC.
The undersigned hereby appoints C. Byron Snyder, Herbert R. Allen and
John F. Wombwell, and each of them individually, as proxies with full power of
substitution, to vote all shares of Common Stock of Integrated Electrical
Services, Inc. that the undersigned is entitled to vote at the Annual Meeting of
Stockholders thereof to be held on Wednesday, February 6, 2002, at 10:30 a.m. at
the Sheraton Suites Houston, 2400 West Loop South, Houston, Texas 77027 or at
any adjournment or postponement thereof, as follows:
Any executed proxy which does not designate a vote shall be deemed to
grant authority for any item not designated.
PROPOSAL 1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY for all nominees
listed below
01-Richard China and 02-Alan R. Sielbeck to hold office until the 2005
Annual Meeting and until their successors are elected and qualified.
INSTRUCTION: to withhold authority to vote for any individual nominee or
nominees, write the appropriate name or names in the space provided here.
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PROPOSAL 2. APPOINTMENT OF ARTHUR ANDERSEN LLP AS AUDITORS FOR THE COMPANY
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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Please check the following box if you plan to attend the Annual Meeting of
Stockholders in person. [ ]
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P
R
O
X
Y
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ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE
DIRECTED, WILL BE VOTED "FOR" PROPOSAL 1 (ALL NOMINEES), AND "FOR" PROPOSAL 2,
AND IN ACCORDANCE WITH THE DISCRETION OF THE PERSON VOTING THE PROXY WITH
RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE MEETING.
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO A VOTE THEREON.
Dated: ,
------------------ ------
Signature(s)
----------------------
Please sign exactly as name
appears on this card. Joint
owners should each sign.
Executors, administrators,
trustees, etc., should give their
full titles.
PLEASE COMPLETE, SIGN AND
PROMPTLY MAIL THIS PROXY IN THE
ENCLOSED ENVELOPE.
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