SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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[_] Soliciting Material Pursuant to 14a-11(c) or 14a-12
ITRON, INC.
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(Name of Registrant as Specified in Its Charter)
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Your prompt return of the enclosed proxy card will save the postage expense of
additional mailings. Your immediate attention to these materials is greatly
appreciated.
[LOGO OF ITRON INC.]
April 16, 2001
Dear Shareholder:
On behalf of our Board of Directors, I invite you to attend Itron, Inc.'s
2001 Annual Meeting of Shareholders. We hope you can join us. The annual
meeting will be held:
At: Principal Executive Offices of Corporation
Itron, Inc. -- in the Atrium
2818 N. Sullivan Rd.
Spokane, Washington 99216
On: Wednesday, May 16, 2001
Time: 8:00 a.m.
For our shareholders' convenience, we will provide product demonstrations
and a continental breakfast beginning at 7:00 a.m. At this time, shareholders
will also have an opportunity to meet personally with our directors and
officers to discuss any questions they may have. The annual meeting will begin
promptly at 8:00 a.m. The Notice of the Annual Meeting and the proxy statement
accompany this letter.
We know that many of our shareholders will be unable to attend the annual
meeting. We are soliciting proxies so that each shareholder has an opportunity
to vote on all matters that are scheduled to come before the shareholders at
the annual meeting. Whether or not you plan to attend, please take the time
now to read the proxy statement and vote your shares by signing, dating and
returning your proxy card promptly in the enclosed postage-paid envelope. You
may revoke your proxy at any time before it is exercised. Regardless of the
number of Itron shares you own, your presence in person or by proxy is
important for quorum purposes and your vote is important for proper corporate
action.
Thank you for your continuing interest in Itron. We look forward to seeing
you at our annual meeting.
Sincerely,
/s/ LeRoy D. Nosbaum
LeRoy D. Nosbaum
President and Chief Executive
Officer
Itron, Inc., P.O. Box 15288, Spokane, Washington 99215-5288; (509) 924-9900 or
(800) 635-5461
ITRON, INC.
2818 North Sullivan Road
Spokane, Washington 99216
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Itron,
Inc. will be held at the Principal Executive Offices of Itron, Inc., in the
Atrium, at 2818 N. Sullivan Rd., Spokane, Washington, at 8:00 a.m., local time,
on Wednesday, May 16, 2001, for the following purposes:
(1) To elect three directors;
(2) To transact any other business that may come properly before the annual
meeting and any adjournment or postponement of the annual meeting.
The Board of Directors has established the close of business on March 31,
2001, as the record date for the determination of shareholders entitled to
notice of and to vote at the annual meeting.
All shareholders are cordially invited to attend the annual meeting in
person.
To ensure representation at the annual meeting, shareholders are urged to
mark, sign, date and return the enclosed proxy as promptly as possible, even if
they plan to attend the annual meeting. A return envelope, which requires no
postage if mailed in the United States, is enclosed for this purpose. Any
shareholder attending the annual meeting may vote in person even if that
shareholder has returned a proxy.
By order of the Board of Directors,
/s/ MariLyn R. Blair
MariLyn R. Blair
Corporate Secretary
Spokane, Washington
April 16, 2001
[LOGO OF ITRON, INC.]
PROXY STATEMENT
This proxy statement is being furnished to shareholders of Itron, Inc. in
connection with the solicitation by our Board of Directors of proxies for use
at the Annual Meeting of Shareholders. The meeting will be held at the
principal executive offices of Itron, Inc. (the Corporation), in the Atrium, at
2818 N. Sullivan Rd., Spokane, Washington, at 8:00 a.m., local time, on
Wednesday, May 16, 2001, for the purposes listed in the accompanying Notice of
Annual Meeting of Shareholders. We expect to mail this proxy statement and
accompanying proxy to our shareholders on or about April 16, 2001.
Matters to Be Considered at the Annual Meeting
At the annual meeting, shareholders of record of Itron as of the close of
business on March 31, 2001, will consider and vote on the following matters:
(1) the election of three directors for a term of three years (until 2004),
and
(2) such other business that may properly come before the annual meeting
and any adjournment or postponement of the annual meeting.
Record Date and Outstanding Shares
Holders of record of our common stock at the close of business on March 31,
2001, are entitled to notice of, and to vote at, the annual meeting. On the
record date, there were 15,427,483 shares of our common stock outstanding. Each
of our directors and executive officers plans to vote or direct the vote of all
shares of common stock over which he or she has voting control in favor of the
election of the nominees for director.
Revocability of Proxies
Shares represented at the annual meeting by properly signed proxies in the
accompanying form will be voted at the annual meeting in accordance with the
instructions given in the proxy. A shareholder may revoke a proxy given by the
shareholder for use at the annual meeting at any time before the vote. A proxy
may be revoked by:
. submitting a later-dated proxy for the same shares at any time before
the proxy is voted;
. delivering written notice of revocation to the Corporate Secretary of
Itron at any time before the vote; or
. attending the annual meeting and voting in person. Mere attendance at
the annual meeting will not revoke a proxy.
If the annual meeting is postponed or adjourned for any reason at any
subsequent reconvening of the annual meeting, all proxies will be voted in the
same manner as the proxies would have been voted at the original convening of
the annual meeting (except for any proxies that have at that time effectively
been revoked or withdrawn), even if the proxies had been effectively voted on
the same or any other matter at a previous meeting.
Quorum and Voting
Each shareholder will be entitled to one vote per share of common stock held
on each matter to be voted on. The presence at the annual meeting, in person or
represented by proxy, of holders of a majority of the outstanding common stock
on the record date will constitute a quorum.
1
With respect to the election of directors, the nominees receiving the
greatest number of votes duly cast will be elected as directors. Abstentions
from voting on the election of directors have no effect on the outcome of this
proposal because abstentions and broker nonvotes do not represent votes cast by
shareholders.
Proxy Solicitation Costs
We have retained Corporate Investor Communications, Inc., 111 Commerce Road,
Carlstadt, New Jersey, to aid in the solicitation of proxies. We will bear the
cost of soliciting proxies, which we estimate will be approximately $4,500 plus
expenses. Proxies may be solicited by personal interview, mail, telephone or
facsimile. In addition, we may reimburse brokerage firms and other persons
representing beneficial owners of our common stock for their expenses in
forwarding solicitation materials to the beneficial owners. Our directors,
officers and employees may also solicit proxies, without additional
compensation, personally or by telephone.
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ITEM 1 -- ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes, with each director
generally holding office for a three-year term or until his or her successor
has been elected and qualified. At the annual meeting, three directors are to
be elected for a term of three years (until 2004) or until his or her successor
is duly elected and qualified. Unless authority is withheld, the persons named
as proxies in the accompanying proxy, will vote for the election of the
nominees listed below. The Board of Directors has no reason to believe that any
of these nominees will be unable to serve as a director. If any of the nominees
becomes unavailable, however, the persons named as proxies will have
discretionary authority to vote for a substitute nominee. Paul A. Redmond, who
has served as a director since 1984, is retiring.
Nominees to Serve Until 2004
Thomas S. Glanville, (age 42), is vice president of Technology and New
Ventures for Reliant Energy, Inc. ("Reliant"), one of the world's largest
international energy services companies. Glanville first joined Reliant in 1998
as vice president of Corporate Development. He is also president of Reliant
Energy Ventures, Inc., the company's venture capital unit. In addition to his
leadership responsibilities at Reliant, Glanville serves as a director or
advisory director of a number of technology focused private start-up companies,
venture capital funds, and community entities. Prior to joining Reliant,
Glanville worked for seven years in various executive positions at Enron Corp.,
including president of Enron Capital and Trade Resources Canada Corp. Before
joining Enron in 1991, he was a vice president of Bankers Trust Company.
Michael J. Chesser, (age 52), has been a director of Itron since August
1999. Mr. Chesser is chief executive officer and president of GPU Energy, a
subsidiary of GPU, Inc. From June 1999 to March 2000, he was president and
chief executive officer of Itron. He also served as chairman of Itron's board
from January 2000 to March 2000. From 1994 to 1998, Mr. Chesser was president
and chief operating officer of Atlantic Energy, Inc., the holding company for
Atlantic City Electric and other related companies. Prior to Atlantic Energy,
Mr. Chesser spent 23 years with Baltimore Gas and Electric where he held a
number of executive positions with responsibilities in marketing and customer
service. Mr. Chesser is also a director of Great Bay Casino Corporation and is
on the Board of Advisors of ElecTrade.com, Inc.
LeRoy D. Nosbaum, (age 54), was appointed as a director and was named
president and chief executive officer of Itron in March 2000. Mr. Nosbaum
joined Itron in March 1996 and had executive responsibilities covering
manufacturing, product development, operations and marketing before being
promoted to president and chief executive officer. Before joining Itron, Mr.
Nosbaum was executive vice president and general manager of Metricom, Inc.'s
UtiliNet Divison, and held a variety of positions with Metricom from 1989 to
1996. Prior to joining Metricom, he was employed by Schlumberger, Ltd. and
Sangamo Electric for 20 years.
Continuing Directors
Michael B. Bracy (age 59) has been a director of Itron since 1992. Mr.
Bracy's term as a director expires in 2003. Until his retirement in August
1997, Mr. Bracy was executive vice president, chief financial officer and a
director of NorAm Energy Corp. ("NorAm"), previously known as Arkla, Inc., an
integrated natural gas company. After joining NorAm in 1984, he held various
executive positions, including chief executive officer of the Arkla Pipeline
Group. Before joining NorAm, Mr. Bracy served as executive vice president and
chief financial officer of El Paso Natural Gas Company, which he joined in
1977. Mr. Bracy is also a director of El Paso Energy Partners, L.P., a publicly
traded limited partnership.
Ted C. DeMerritt (age 69) has been a director of Itron since 1994. Mr.
DeMerritt's term as a director expires in 2002. Until his retirement in 1998,
Mr. DeMerritt was chairman of the board and chief executive officer of Olsy
North America (formerly ISC Systems Corporation), which develops and implements
system solutions for the financial services and retail industries. From 1963 to
1980, he was employed at Sacramento Savings and Loan Association, where he
served as controller/senior vice president in charge of the Savings and
Operations division. Mr. DeMerritt is also a trustee of the Washington State
University Foundation.
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Jon E. Eliassen (age 54) has been a director of Itron since 1987. Mr.
Eliassen's term as a director expires in 2002. Mr. Eliassen is senior vice
president and chief financial officer of Avista Corporation ("Avista"),
previously known as The Washington Water Power Company. He joined Avista in
1970 and held numerous positions within the finance department before assuming
his current responsibilities in 1986. He is a director of various subsidiaries
and affiliates of Avista. He also is a director of NVA Holdings, LLC.
Mary Ann Peters (age 57) has been a director of Itron since 1994. Ms.
Peter's term as a director expires in 2003. Ms. Peters is managing director of
McGillicuddy and Peters, a business and marketing consultancy she founded in
1984. She began her marketing career with International Business Machines
Corporation in 1972 and subsequently held a variety of marketing positions
with General Electric Company, Wells Fargo and Company, Inc., Atari Corp. and
Apple Computer, Inc.
S. Edward White (age 50) was named chairman of Itron in March 2000 and has
been a director since 1996. Mr. White's term as a director expires in 2002.
Mr. White was an executive vice president of Itron from March 1996, when Itron
acquired Utility Translation Systems, Inc. (UTS), through December 1999.
Before founding UTS in 1980, Mr. White held numerous engineering and marketing
management positions in the meter division of Westinghouse Electric
Corporation for 12 years.
Graham M. Wilson (age 56) has been a director of Itron since 1990. Mr.
Wilson's term as a director expires in 2003. Mr. Wilson has been employed by
Westcoast Energy Inc., an integrated energy company, since 1988, where he is
currently executive vice president and chief financial officer. From 1983 to
1988, he was vice president, finance and administration of Petro-Canada Inc.
Mr. Wilson is also a director of Union Gas Limited and Centra Gas Inc., both
of which are affiliates of Westcoast Energy Inc.
Our Board of Directors recommends that you vote FOR the election of the
three nominees for director.
Compensation of Directors
Prior to March 2000, our nonemployee directors received $800 for each board
meeting and $800 for each committee meeting they attended (or $900 for each
committee meeting in which they served as chairperson). Nonemployee directors
who participated on behalf of Itron in business activities, such as meetings
with investors, meetings with customers and other third-party meeting
activities received $800 for each business activity. In March 2000, the amount
paid for meeting attendance was increased to $1,000 per meeting. In March
2000, the amount of the annual retainer was increased from $8,000 to $12,000
effective January 1, 2001, with 50% to be paid with Itron common stock.
Under our 2000 Stock Incentive Compensation Plan we grant our nonemployee
directors an option to purchase 10,000 shares of our common stock when they
are initially appointed or elected as a director, and an option to purchase
4,000 shares of our common stock in each subsequent year. The exercise price
of the options is the fair market value of the common stock on the date of
grant. These options are fully vested and immediately exercisable on the date
of grant.
Information on Committees of the Board of Directors and Meetings
Our Board of Directors has established an Audit/Finance Committee and a
Compensation Committee.
The Audit/Finance Committee reviews our accounting practices, internal
accounting controls and financial results and oversees the engagement of our
independent auditors. The Audit/Finance Committee members include Ted C.
DeMerritt, Graham M. Wilson, and Jon E. Eliassen who serves as chairman. The
Audit/Finance Committee held ten meetings during 2000.
The Compensation Committee is responsible for setting compensation levels
for our executive officers, overseeing the administration of various incentive
compensation and benefit plans and performing any other
4
functions regarding compensation that the Board may delegate. The Compensation
Committee, whose members are Michael B. Bracy, Mary Ann Peters, Paul A.
Redmond, and S. Edward White, held six meetings in 2000. Mr. Bracy serves as
chairman. Following the Annual Meeting of Shareholders, Mr. Redmond will no
longer be a member of the Board of Directors and the Compensation Committee.
There were eight board meetings in 2000. Each of the directors attended at
least 75 percent of the meetings of the board and of each committee on which
they were a member.
5
EXECUTIVE COMPENSATION
Compensation Summary
The following table provides information regarding the compensation paid for
services rendered to Itron in all capacities during 2000, 1999, and 1998 to (a)
our chief executive officer at December 31, 2000 (b) each of our four other
most highly compensated executive officers during 2000 who were serving as such
as of the end of the year, and (c) a former chief executive officer, Mr.
Chesser (who is no longer serving as CEO).
Summary Compensation Table
Long-Term
Annual Compensation
Compensation ------------
----------------- Securities
Name and Principal Bonus underlying All Other
Position Year Salary (1) Options # Compensation (2)
------------------ ---- -------- -------- ------------ ----------------
LeRoy D. Nosbaum......... 2000 $350,000 $270,920 100,000 $ 11,878
President and Chief 1999 221,981 75,000 -- 5,000
Executive Officer 1998 212,300 -- 60,000 23,239
David G. Remington....... 2000 $275,000 $120,351 20,000 $ 7,365
Vice President and Chief 1999 265,375 -- -- 11,760
Financial Officer 1998 265,375 -- 70,000 11,362
Robert D. Neilson........ 2000 $240,385 $130,250 50,000 $ 12,651
Chief Operating Officer 1999 183,350 50,000 -- 3,886
1998 183,350 -- 55,000 5,936
Russell N. Fairbanks,
Jr. ..................... 2000 $225,962 $109,410 55,000 $155,585
Vice President and General 1999 -- -- -- --
Counsel 1998 -- -- -- --
Dennis A. Shepherd....... 2000 $210,000 $ 84,452 30,000 $ 11,400
Vice President and General 1999 173,700 50,000 -- 10,400
Mgr., EIS Systems 1998 169,869 -- 40,000 5,000
Michael J. Chesser (3).... 2000 $107,692 $ -- --(4) $ 9,385
Former President and Chief 1999 223,077 125,000 --(5) 201,964
Executive Officer 1998 -- -- -- --
--------
(1) Includes annual incentive amounts earned under the Corporation's Executive
Compensation Plan and other special incentive bonuses.
(2) For the year ended December 31, 2000 consists of matching contributions to
a 401(k) savings plan ($5,100 for Messrs. Nosbaum, Remington, Neilson,
Shepherd and Fairbanks, respectively, and $3,231 for Mr. Chesser), and
matching contributions to a deferred compensation plan ($2,265 and $6,154
for Messrs. Remington and Chesser, respectively. Also includes $6,778,
$7,551, $6,300 and $4,340 of reimbursed medical and other expenses for
Messrs. Nosbaum, Neilson, Shepherd and Fairbanks, respectively. Includes
$146,145 of reimbursed relocation expenses for Mr. Fairbanks.
(3) Mr. Chesser was no longer an officer of the Corporation effective April 1,
2000.
(4) This table does not include the 4,000 share option grant made to Mr.
Chesser as a nonemployee director.
(5) Mr. Chesser's 200,000 share option grant, made when he was CEO, was
subsequently reduced to 10,000 shares, which represents his initial
appointment as a nonemployee director. This table does not include the
remaining 10,000 shares of that option grant made to Mr. Chesser as a
nonemployee director.
6
Option Grants
The following table sets forth certain information regarding options granted
during the year ended December 31, 2000 to the Corporation's executive officers
for whom compensation is reported in this Proxy Statement.
Option Grants in 2000(1)
Individual Grants
-------------------------------------------------- Potential
Percent of Realizable Value at
Options Assumed Annual
Number of Granted Total Rates of Stock
Shares to Employees Price Appreciation
Underlying in Last for Option Term (3)
Options Fiscal Exercise Price Expiration -------------------
Name Granted Year (2) ($/Share) Date 5%($) 10%($)
---- ---------- ------------- -------------- ---------- -------- ----------
LeRoy D. Nosbaum........ 100,000 11.0% $6.75 3/7/10 $424,504 $1,075,777
David G. Remington...... 20,000 2.2% $6.75 3/7/10 $ 84,901 $ 215,156
Robert D. Neilson....... 50,000 5.5% $6.75 3/7/10 $212,252 $ 537,889
Russell N. Fairbanks,
Jr. ................... 55,000 6.1% $6.75 3/7/10 $233,478 $ 591,677
Dennis A. Shepherd...... 30,000 3.3% $6.75 3/7/10 $127,352 $ 322,733
--------
(1) We did not grant any Stock Appreciation Rights in fiscal year 2000.
(2) We granted options to purchase 906,950 shares of common stock to our
employees in 2000.
(3) Future value of current year grants assuming appreciation of 5% and 10%
per year over the ten-year option period. The actual value realized may be
greater than or less than the potential realizable values set forth in the
table.
Option Exercises in 2000 and Year-End Option Values
The following table provides information regarding options exercised in 2000
and options held as of December 31, 2000 by each of our executive officers for
whom compensation is reported in this proxy statement.
Aggregated 2000 Option Exercises and Fiscal Year-End Option Values
Total Number of Value of Unexercised
Shares Unexercised Options at In-the-Money Options
Acquired Fiscal Year-End at Fiscal Year-End (1)
On Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
LeRoy D. Nosbaum........ 79,167 130,833 -- --
David G. Remington...... 118,334 56,666 -- --
Robert D. Neilson....... 2,500 $2,938 122,167 73,833 -- --
Russell N. Fairbanks,
Jr..................... 0 55,000 -- --
Dennis A. Shepherd...... 41,417 50,583 -- --
Michael J. Chesser...... 14,000 0 -- --
--------
(1) Calculated based on a price of $3.63 per share (the closing price of our
common stock on December 31, 2000, as reported by the Nasdaq National
Market), less the exercise price.
Change of Control Agreements
We have entered into change-of-control agreements with our executive
officers to provide compensation and benefits in the event of a change of
control of Itron. Under these agreements, our executive officers have agreed to
remain employed by Itron on an annual basis and are compensated by an annual
salary and bonus as determined by the Compensation Committee of our Board of
Directors. If we terminate the employment
7
relationship other than for cause or if the executive officer terminates his or
her employment for good reason within a specified period following a change of
control, (the "Change of Control Period," which is three years for Mr. Nosbaum,
Mr. Neilson, Mr. Remington and Mr. Fairbanks, and is two years or one year for
other executive officers), the executive officer will receive any salary or
bonus due to the executive officer, group insurance benefits and severance pay
equal to the executive's annual base salary and bonus for the fiscal year in
which the termination occurs, multiplied by the Change of Control Period.
Severance amounts are partially offset if the executive officer realizes a
benefit from the acceleration of stock options in connection with the change of
control. The executive officer will also receive a bonus equal to his or her
annual salary plus annual bonus if his or her employment continues for a full
one-year period following a change of control.
Employment Agreements
David G. Remington, our vice president and chief financial officer since
February 1996, is party to an employment agreement with us. This agreement
provides for an initial base salary of $250,000, which may be increased
annually by our chief executive officer, subject to the approval of the
Compensation Committee. The agreement also provides for annual incentive bonus
payments to the extent they are earned in accordance with the Corporation's
executive incentive compensation plan. Either party under certain conditions
may terminate the agreement. If we terminate the agreement other than for
cause, we are required to pay Mr. Remington an amount equal to his then-current
annual base salary. Under the agreement, we granted Mr. Remington options to
purchase 45,000 shares of our common stock at the fair market value of our
common stock on the date of the grant. These options are now fully vested.
Compensation Committee Report on Executive Compensation
The Compensation Committee of our Board of Directors (the "Committee")
annually reviews and recommends to the full board the compensation levels for
our executive officers. The Committee is comprised of board members who are not
employees of Itron.
The Committee's primary objective in establishing compensation opportunities
for our executive officers is to support our goal of maximizing the value of
our shareholders' interests in Itron. To achieve this objective, the Committee
believes it is critical to:
. Pay competitively to attract, retain and motivate a highly competent
executive team;
. Provide incentive opportunities that link corporate performance and
executive pay and pay executives competitive levels of incentive
compensation when corporate financial and other performance expectations
are achieved; and
. Align executives' financial interests with the creation of shareholder
value by providing long-term incentives in the form of options to
acquire common stock and performance-based restricted stock.
The Committee makes recommendations to the board regarding our executive
compensation plans, which promote the objectives detailed above. The Committee
periodically engages outside consultants to determine approximate compensation
levels among executives in comparable jobs in comparable high-tech companies.
The Committee believes that our current compensation plans support our business
mission and contribute to our financial success.
Section 162(m) of the Internal Revenue Code limits the tax deduction
available to public companies for compensation paid to individual executive
officers to $1 million in any taxable year, unless certain performance,
disclosure and shareholder approval requirements are met. Under Section 162(m),
however, compensation above $1,000,000 may be deducted if it is "performance-
based compensation" within the meaning of the Code. When consistent with our
compensation philosophy, the Committee intends to structure our compensation
program so that compensation expense is deductible by Itron for tax purposes.
8
Base Salary
The Committee annually reviews each executive officer's base salary. The
factors that the Committee considers in making recommendations regarding base
salary include levels of pay among executives in similar jobs within similar
high-tech companies, level of responsibility, prior experience, breadth of
knowledge, as well as Corporation performance and job performance. The
Committee targets base salaries at the 50th percentile of the market and at
approximately the 75th percentile for annual and long-term incentive
compensation. The market is defined as similar high-tech companies, nationwide,
the annual revenues of which are approximately $250 million and that have
similar executive-level jobs, which the Committee believes is a highly
competitive job market. These companies are not necessarily the same as the
companies included in our peer reference group used in the performance graph.
In general, for 2000, base salaries for the executive officers are near the
50th percentile of the market.
With respect to the Chief Executive Officer's compensation, the Committee
determined in March 2000 that a $350,000 base salary for Mr. Nosbaum was
appropriate and consistent with the Corporation's overall salary plan. The
Committee believes that it is important that Mr. Nosbaum's base salary be
competitive with those of other chief executive officers with similar
responsibilities and broad leadership experience in the market defined. The
Committee recognizes and highly values Mr. Nosbaum's visionary leadership,
breadth of knowledge, business and utility experience, and highly values his
contributions to the Corporation since becoming CEO. The Committee increased
Mr. Nosbaum's base salary to $400,000 on October 1, 2000 in light of the
Corporation's significantly improved financial performance and progress toward
long-term goals achieved under Mr. Nosbaum's stewardship.
Executive Incentive Compensation Plan ("EIC Plan")
The EIC plan provides the opportunity for our executive officers to earn
both annual and long-term incentives in addition to their base salaries. The
Committee believes that having as much as or more than 50% of an executive
officer's total compensation at risk fosters achievement of our short-term and
long-term financial performance goals.
Annual Incentives: Each year, the Compensation Committee establishes annual
financial and other goals that relate to one or more indicators of corporate
performance and targets amounts as a specified percentage of the executive
officer's salary. For 2000, these percentages ranged from 42% to 65% of base
salary. Incentive awards, which are made in cash, are paid to participating
executives under the EIC Plan only when the established financial and other
goals are achieved. For 2000, depending on the extent to which corporate goals
were achieved, an executive officer was entitled to receive from zero to 200%
of the targeted award. Targets are established for the chief executive officer
in the same manner as for other officers. For 2000, the annual incentive award
opportunity was contingent upon attaining established levels of net profit
after tax along with other strategic goals. These goals were met at
approximately 101% level of achievement in 2000. Annual incentive payments
earned in 2000 were paid in February 2001 and are included in the Summary
Compensation Table under the column entitled "Bonus."
Long-Term Incentives: In 2000, our long-term incentives consisted of stock
options. The number of stock options granted is determined by the recipient's
position and amount of options currently held, and is intended to recognize
different levels of responsibility. All options are granted with an option
exercise price equal to the fair market value of our common stock on the date
of grant. This closely links a significant portion of executive compensation to
benefits produced for all shareholders. The Committee approved normal stock
option grants for key employees, including executive officers, based on the
above criteria during its regular meetings in 2000.
Michael B. Bracy, Chairman
Mary Ann Peters Paul A. Redmond S. Edward White
9
Audit/Finance Committee Report
The Audit/Finance Committee is composed of independent directors as defined
by the rules of the Nasdaq Exchange and acts under a written charter developed
by the Committee in 2000. The charter is attached as Appendix A.
Management is responsible for the Corporation's internal controls and the
financial reporting process. Deloitte & Touche LLP, the Corporation's
independent accountants, is responsible for performing an independent audit of
the Corporation's consolidated financial statements in accordance with auditing
standards generally accepted in the United States of America, and to issuing a
report thereon. The Committee's responsibility is to monitor and oversee these
processes on behalf of the Board of Directors.
In connection with the December 31, 2000 financial statements, the
Audit/Finance Committee (1) reviewed and discussed the audited financial
statements with management; (2) discussed with the auditors the matters
required by Statement on Auditing Standards No. 61; and (3) received and
discussed with the auditors the matters required by Independence Standards
Board Statement No. 1 and considered the compatibility of non-audit services
with the auditor's independence. Based upon these reviews and discussions, the
Audit/Finance Committee has recommended to the Board of Directors, and the
Board of Directors has approved, that the Corporation's audited financial
statements be included in the Securities and Exchange Commission Annual Report
on Form 10-K for the fiscal year ended December 31, 2000.
Audit Fees: The aggregate fees billed by Deloitte & Touche LLP, the member
firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, "Deloitte") for professional services rendered for the audit of
the Company's annual financial statements for the fiscal year ended December
31, 2000 and for the reviews of the financial statements included in the
Corporation's Quarterly Reports on Form 10-Q for that fiscal year were
$203,000.
All Other Fees: The aggregate fees billed for services rendered to the
Corporation, other than the services described above under "Audit Fees", for
the fiscal year ended December 31, 2000, were $56,000.
Jon E. Eliassen, Chairman
Ted C. DeMerritt Graham M. Wilson
10
PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareholders on
our common stock with the cumulative total return of the Nasdaq Stock Market
U.S. Index the peer group of companies used in our proxy statement last year
(the "Old Peer Group"), and a new group of companies (the "New Peer Group").
[PERFORMANCE GRAPH APPEARS HERE]
Cumulative Total Return
---------------------------------------------------
12/95 12/96 12/97 12/98 12/99 12/00
ITRON, INC. 100.00 52.59 53.33 21.30 18.15 10.74
NASDAQ STOCK MARKET (U.S) 100.00 123.04 150.69 212.51 394.94 237.68
NEW PEER GROUP 100.00 107.69 103.46 116.37 270.68 120.57
OLD PEER GROUP 100.00 79.24 120.58 86.90 214.52 129.45
We believe that, prior to this year, the Old Peer Group included those
publicly traded companies that had operating characteristics most comparable to
us. However, we believe that the business activities of certain other companies
are closer to us than some of the companies in the Old Peer Group, and that as
a result, the Old Peer Group does not include all of those companies with which
a comparison would be meaningful, and includes certain companies with which a
comparison is now less meaningful. In addition, certain companies in the Old
Peer Group have been consolidated. We have replaced the Old Peer Group with the
New Peer Group to provide a more meaningful basis for comparison with our stock
performance. Companies in our peer groups include companies that provide data
collection, analysis and management solutions, consulting and communications
services, and radio manufacturing.
The above presentation assumes $100 invested on December 31, 1995 in the
common stock of Itron, our Old Peer Group and our New Peer Group, and the
Nasdaq Stock Market U.S. Index, with all dividends reinvested. With respect to
companies in our peer groups, the returns of each such Corporation have been
weighted to reflect relative stock market capitalization. The stock prices
shown above for our common stock are historical and not necessarily indicative
of future price performance.
The Old Peer Group includes the following companies: Aerial Communications,
Inc., CellNet Data Systems, Inc., Corsair Communications, Kronos, Inc., LCC
International, Lightbridge, Inc., Metrocall, Inc., Metricom, Inc., PageMart
Wireless, Inc., Tekelec, Telxon Corp., T-Netix, Inc., and Trimble Navigation,
Ltd.
The New Peer Group includes the following companies: Badger Meter, EMS
Technologies, ESCO Technologies, Interlogix, LCC International, Motorola,
Symbol Technologies and Trimble Navigation, Ltd.
11
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than 10% of a registered class of our
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. SEC regulations require our officers,
directors and greater-than-10% shareholders to provide us with copies of all
Section 16(a) forms they file.
Based solely on our review of the copies of these forms we have received, or
written representations from reporting persons that no such forms were required
for those persons, we believe that during 2000 all of our officers, directors
and greater-than-10% beneficial owners complied with all applicable filing
requirements.
12
SECURITY OWNERSHIP OF PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The following table provides information with respect to the beneficial
ownership of our common stock as of February 28, 2001 by:
. each of our directors;
. each of our current and former executive officers for whom compensation
is reported in this proxy statement;
. each person that we know beneficially owns more than 5% of our common
stock; and
. all of our directors and executive officers as of February 28, 2000 as a
group.
The percentage ownership data is based on 15,386,061 shares of our common
stock outstanding as of February 28, 2001. Under SEC rules, beneficial
ownership includes shares over which the indicated beneficial owner exercises
voting and/or investment power. Shares of common stock subject to options that
are currently exercisable or will become exercisable within 60 days are deemed
outstanding for computing the number of shares and the percentage ownership of
the person holding the option, but are not deemed outstanding for purposes of
computing the percentage ownership of any other person. Except as otherwise
noted, we believe that the beneficial owners of the shares of common stock
listed below have sole voting and investment power with respect to all shares
beneficially owned, subject to applicable community property laws.
Shares
Beneficially Owned
--------------------
Name Number Percent
---- ---------- ---------
Directors and Executive Officers:
LeRoy D. Nosbaum (1)................................... 116,981 *
David G. Remington (2)................................. 145,784 *
Robert D. Neilson (3).................................. 145,152 *
Russell N. Fairbanks, Jr. (4).......................... 18,238 *
Dennis A. Shepherd (5)................................. 118,786 *
Michael B. Bracy (6)................................... 53,278 *
Michael J. Chesser (7)................................. 31,300 *
Ted C. DeMerritt (8)................................... 34,428 *
Jon E. Eliassen (9).................................... 37,278 *
Mary Ann Peters (10)................................... 30,278 *
Paul A. Redmond (11)................................... 40,278 *
S. Edward White (12)................................... 530,640 3.45%
Graham M. Wilson (13).................................. 31,000 *
All directors and executive officers as a group (21
persons) (14)......................................... 1,431,222 9.30%
Greater-than-5% Shareholders:
Kopp Investment Advisors, Inc. (15)...................
7701 France Ave. So., Suite 500
Edina, MN 55435 2,933,782 19.07%
Reliant Energy (16)....................................
P.O. Box 2628
Houston, TX 77252 1,502,547 9.77%
Dimensional Fund Advisors, Inc. (17)..................
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401 1,161,300 7.55%
The State of Wisconsin Investment Board (18)...........
121 East Wilson Street
Madison, WI 53707 1,038,000 6.75%
13
--------
* Less than 1%.
1. Includes 111,667 shares issuable on exercise of outstanding options
exercisable by Mr. Nosbaum within 60 days at a weighted average exercise
price of $12.95 per share. Also includes 1,802 shares of common stock held
for Mr. Nosbaum's individual account under our 401(k) employee savings
plan.
2. Includes 133,334 shares issuable on exercise of outstanding options
exercisable by Mr. Remington within 60 days at a weighted average exercise
price of $15.20 per share. Also includes 1,731 shares of common stock held
for Mr. Remington's individual account under our 401(k) employee savings
plan and 4,219 shares of common stock issuable on conversation of $100,000
of Itron's convertible subordinated debentures owned by Mr. Remington.
3. Includes 137,667 shares issuable on exercise of outstanding options
exercisable by Mr. Neilson within 60 days at a weighted average exercise
price of $13.91 per share. Also includes 3,696 shares of common stock held
for Mr. Neilson's individual account under our 401(k) employee savings
plan, and 20,551 shares held by Mr. Neilson's wife.
4. Includes 17,917 shares issuable on exercise of outstanding options
exercisable by Mr. Fairbanks within 60 days at a weighted average exercise
price of $6.75 per share. Also includes 321 shares of common stock held for
Mr. Fairbank's individual account under out 401(k) employee savings plan.
5. Includes 50,167 shares issuable on exercise of outstanding options
exercisable by Mr. Shepherd within 60 days at a weighted average exercise
price of $9.45 per share. Also includes 2,033 shares of common stock held
for Mr. Shepherd's individual account under out 401(k) employee savings
plan.
6. Includes 31,000 shares issuable on exercise of outstanding options
exercisable by Mr. Bracy within 60 days at a weighted average exercise
price of $18.81 per share.
7. Includes 14,000 shares issuable on exercise of outstanding options
exercisable by Mr. Chesser within 60 days at a weighted average exercise
price of $7.51 per share
8. Includes 30,000 shares issuable on exercise of outstanding options
exercisable by Mr. DeMerritt within 60 days at a weighted average exercise
price of $18.94 per share.
9. Includes 30,000 shares issuable on exercise of outstanding options
exercisable by Mr. Eliassen within 60 days at a weighted average exercise
price of $18.99 per share. Excludes 291,788 shares held by Avista
Corporation, as to which Mr. Eliassen disclaims beneficial ownership. Mr.
Eliassen is an officer of Avista.
10. Includes 28,000 shares issuable on exercise of outstanding options
exercisable by Ms. Peters within 60 days at a weighted average exercise
price of $19.08 per share.
11. Includes 31,000 shares issuable on exercise of outstanding options
exercisable by Mr. Redmond within 60 days at a weighted average exercise
price of $18.81 per share.
12. Includes 62,334 shares issuable on exercise of outstanding options
exercisable by Mr. White within 60 days at a weighted average exercise
price of $10.34 per share. Also includes 1,204 shares of common stock held
for Mr. White's individual account under our 401(k) employee savings plan.
13. Includes 31,000 shares issuable on exercise of outstanding options
exercisable by Mr. Wilson within 60 days at a weighted average exercise
price of $18.81 per share. Excludes 610,618 shares held by Centra Gas Inc.,
as to which Mr. Wilson disclaims beneficial ownership. Mr. Wilson is a
director of Centra Gas.
14. Includes 782,416 shares issuable on exercise of outstanding options that
are held by all directors and executive officers and are exercisable within
60 days. Also includes 21,627 shares of common stock held for Mr. White's
and such officers' individual accounts under our 401(k) employee savings
plan, 61 shares held for such officers' individual accounts under our
employee stock ownership plan, and 4,219 shares of common stock issuable on
conversion of $100,000 of Itron's convertible subordinated debentures.
14
15. Information is based on a Schedule 13G filed with the SEC on January 30,
2001 by Kopp Investment Advisors, Inc. and LeRoy Kopp. This filing
indicates that Kopp Investment Advisors, Inc. has shared investment
discretion over 1,898,782 of these shares, sole investment discretion over
725,000 of these shares, and sole voting power over 1,035,000 of these
shares. In addition, the filing indicates that Mr. Kopp has sole investment
and voting power over 224,700 of these shares.
16. Information is based on a Schedule 13G filed with the SEC on March 9, 1999
by Houston Industries Incorporated (d/b/a Reliant Energy, Incorporated),
Reliant Energy Resources Corp. (formerly NorAm Energy Corp.) and Arkla
Finance Corporation. This filing indicates that these three entities share
investment and voting power over these shares.
17. Information is based on a Schedule 13G filed with the SEC on February 2,
2001 by Dimensional Fund Advisors, Inc.
18. Information is based on a Schedule 13G filed with the SEC on February 9,
2001, by State of Wisconsin Investment Board.
RELATED-PARTY TRANSACTIONS
In July 1995, we purchased our principal office and manufacturing facilities
in Spokane, Washington, from Pentzer Development Corporation, a subsidiary of
Avista Corporation, for $8 million. A member of our Board of Directors is an
employee of Avista Corporation. We have a long-term note for $5.6 million
payable to Avista, related to the purchase. The note bears interest at a rate
of 9%, and monthly payments of principal and interest are due through maturity
in August 2015.
In May 1996, we purchased an additional facility from Pentzer Development
Corporation for some of our manufacturing and engineering operations. We paid
$210,000 of the total purchase price at closing, with the remaining $840,000
due under a note payable. During 2000, this facility was sold to an unrelated
third party. A portion of the proceeds was utilized to satisfy the remaining
balance on the note payable to Pentzer Development Corporation.
On March 23, 2001, Itron loaned $750,000 to its Chairman of the Board, S.
Edward White, to facilitate Mr. White's continued ownership of our common
shares. In connection with the loan, Mr. White executed a promissory note in
favor of Itron in the amount of $750,000, the entire amount of which is
outstanding. The note is secured by a pledge of 300,000 of Mr. White's shares
of Itron common stock. The note has a term of one year, which Mr. White can
choose to extend for one additional year. The note bears interest at a rate of
7%, and all interest is due and payable on March 22, 2002. If Mr. White extends
the term of the note, additional interest will be payable monthly during the
second year.
Rob Neilson's wife was employed by us during the fiscal year 2000 at an
annual salary of $160,000.
15
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of our 2000 Annual Report to Shareholders and our Form 10K, which
includes our financial statements, accompanies this proxy statement.
SHAREHOLDER PROPOSALS
Under the SEC's proxy rules, shareholder proposals that meet specified
conditions may be included in our proxy statement and proxy for the 2002 annual
meeting. Under Rules 14a-5(e) and 14a-7(e), shareholders that intend to present
a proposal at our 2002 annual meeting must give us notice of the proposal not
later than December 17, 2001 for the proposal to be considered for inclusion in
our proxy materials for that meeting. In addition, shareholders desiring to
bring proposals before the annual meeting that will not be included in the
proxy materials must do so in accordance with the advance notice provisions and
other applicable requirements set forth in our bylaws. Our bylaws provide,
among other things, that notice of the proposed business must be received by
Itron at least 90 days prior to the anniversary date of the prior year's annual
meeting. Accordingly, shareholders who intend to present proposals at the 2002
annual meeting that will not be included in our proxy materials must provide to
our Corporate Secretary written notice of the business they wish to propose no
later than February 20, 2002. However, our timely receipt of a proposal by a
qualified shareholder will not guarantee the proposal's inclusion in our proxy
materials or presentation at the 2002 annual meeting, because there are other
requirements in the proxy rules. We reserve the right to reject, rule out of
order or take other appropriate action with respect to any proposal that does
not comply with all applicable requirements of the SEC's proxy rules, state law
and our bylaws.
Shareholder proposals should be directed to our Corporate Secretary, Itron,
Inc., P.O. Box 15288, Spokane, Washington 99215-5288.
INDEPENDENT AUDITORS
Deloitte & Touche LLP has audited our books and records for the fiscal years
ended December 31, 2000, 1999 and 1998. We anticipate that representatives of
Deloitte & Touche LLP will be present at the annual meeting. The
representatives will have the opportunity to make a statement, if they so
desire, and are expected to be available to respond to appropriate questions
from shareholders.
OTHER BUSINESS
We do not intend to present any business at the annual meeting other than
the matters described in the accompanying Notice of Annual Meeting of
Shareholders, and we have no present knowledge that any other person intends to
present business at the meeting. If other matters requiring the vote of the
shareholders properly come before the annual meeting or if there is any
adjournment or postponement of the meeting, the persons named in the
accompanying proxy will have discretionary authority to vote the proxies held
by them in accordance with their judgment as to those matters.
16
Appendix A
ITRON, INC.
AUDIT/FINANCE COMMITTEE CHARTER
Purpose
The purpose of the Audit/Finance Committee is to assist the Board of
Directors in fulfilling its responsibilities to shareholders and the investment
community by serving as an independent and objective party in monitoring the
quality and integrity of: (a) the financial reports and other financial
information provided by the Corporation to governmental bodies and the public;
and (b) the Corporation's auditing, accounting and financial reporting
processes.
Composition
The Audit/Finance Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee
shall have accounting or related financial management expertise.
The members of the Committee shall be elected by the Board annually or until
their successors shall be duly elected and qualified. Unless a Chair is elected
by the full Board, the members of the Committee may designate a Chair by
majority vote of the full Committee membership.
Meetings
The Committee shall meet at least four times annually and more frequently as
circumstances dictate. A secretary shall be designated to record meeting
minutes. As part of its job to foster open communications, the Committee should
meet at least annually with management and the independent accountants in
separate executive sessions to discuss any matter that the Audit/Finance
Committee believes should be discussed privately.
Any two members of the Committee shall be sufficient to constitute a quorum
and sufficient to adopt any resolution or take any action, including the
approval of reports and documents. Meetings may be held telephonically or in
person. The independent accountants shall receive notice of meetings in advance
to allow them the opportunity to attend.
Responsibilities
General
1. Provide an open and candid avenue of communication between the
independent accountants, any internal audit personnel, and the Board of
Directors.
2. Inquire of management, the independent accountants, and any internal
audit personnel about significant risks or exposures that exist in the
Corporation's financial reporting and internal control systems, and
assess the steps that management has taken to correct or manage such
risks.
3. Report periodically, and no less frequently than quarterly, to the Board
concerning the Audit/Finance Committee's various responsibilities.
4. Maintain an awareness of the financial condition of the Corporation and
its progress in achieving its goals and objectives.
A-1
Documents/Reports Review
1. Review this Charter at least annually and update as appropriate.
2. Review the Corporation's annual financial statements, including
accompanying footnotes and the independent accountants' report thereon,
quarterly financial statements, and any other reports or other financial
information submitted to the public, including any certification,
report, opinion, or review rendered by the independent accountants.
3. Review with management and the independent accountants 10-Qs and 10-Ks
prior to their filing with the SEC. Review, at the Audit/Finance
Committee's discretion, any other filings with the SEC (e.g., 8-Ks,
S-1s) before they are filed. At the Audit/Finance Committee's
discretion, the Chair of the Committee may represent the entire
Committee for purposes of these reviews.
4. At the discretion of the Audit/Finance Committee, review any other
reports filed with any entity or governmental body.
Independent Accountants
1. Inform the independent accountants that the Board of Directors, as the
Corporation's representative, is the independent accountants' client.
2. Recommend to the Board of Directors the selection and approval of the
independent accountants, considering independence and effectiveness, and
approve fees and other compensation to be paid to the independent
accountants.
3. Confirm and assure the independence of the independent accountants. On
an annual basis, review and discuss with the independent accountants all
significant relationships the independent accountants have with the
Corporation to determine their independence.
4. On an annual basis review and approve, in consultation with the
independent accountants and management, the scope of the annual audit
plan of the independent accountants.
5. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
6. Periodically consult with the independent accountants out of the
presence of management about internal controls and the fullness and
accuracy of the organization's financial statements.
Financial Reporting Processes
1. In consultation with the independent accountants, review the integrity,
quality and appropriateness of the Corporation's financial reporting
processes, both internal and external, accounting policies and
disclosure practices.
2. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants or management.
3. Review significant management estimates and judgments made in
management's preparation of the financial statements and the view of
management and the independent accountants as to appropriateness of such
judgments and related disclosures.
4. Inquire of management concerning material business risks so that it can
assess the quality and adequacy of disclosures.
5. Following completion of the annual audit, review any significant
difficulties encountered during the course of the audit, including any
restrictions on the scope of work or access to required information.
6. Review any significant disagreement among management and the independent
accountants in connection with the preparation of financial statements.
A-2
Internal Processes
1. Review with the independent accountants and management the results of
any benchmarking and process improvement reports (e.g., but not limited
to management letters), whether or not containing recommendations,
concerning process and organizational performance, efficiency, and
improvements.
2. Review with the independent accountants and management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit/Finance Committee, have been implemented.
3. Consider and review with the independent accountants the adequacy of the
Corporation's internal controls, including computerized information
system controls and security.
4. Consider and review the adequacy of the Corporation's risk management
policies and procedures, including insurance and bonding, derivatives
and foreign currency exchange risk mitigation and hedging.
5. Summarize for the Board management's recommendations on dividend policy,
financing activities, capital investment, and cash management and
investments.
Legal Compliance
1. Ensure that management has a legal review system in place to ensure that
Corporation's financial statements, reports and other financial
information disseminated to governmental organizations and the public
satisfy legal requirements.
2. Review, with the Corporation's counsel, legal compliance matters
including corporate securities trading policies and any legal matter
that could have a significant impact on the organization's financial
statements.
Other
1. Conduct or authorize investigations into any matters within the
Audit/Finance Committee's scope of responsibilities, retaining
independent legal counsel and other professionals to assist in the
conduct of any investigation as the Audit/Finance Committee deems
appropriate or necessary.
2. Perform any other activities consistent with this Charter, the
Corporation's by-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
A-3
--------------------------------------------------------------------------------
ITRON, INC.
This Proxy is solicited by Itron's Board of Directors for the Annual Meeting
of Shareholders to be held on May 16, 2001.
The undersigned hereby appoint(s) LeRoy D. Nosbaum and S. Edward White and
each of them, as proxies, with full power of substitution, to represent and vote
as designated all shares of common stock of Itron, Inc. held of record by the
undersigned on March 31, 2001 at the Annual Meeting of Shareholders of Itron to
be held at the principal executive offices of Itron, Inc. (the Corporation) - in
the Atrium, 2818 N. Sullivan Road, Spokane, Washington, 99216, at 8:00 a.m.,
local time, on Wednesday, May 16, 2001, with authority to vote upon the matters
listed below and with discretionary authority as to any other matters that may
properly come before the meeting or any adjournment or postponement thereof.
IMPORTANT-PLEASE DATE AND SIGN ON THE OTHER SIDE
--------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
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Please mark
your votes X
as indicated
WITHHOLD
AUTHORITY
FOR the to Vote for the
Nominees Nominees
1. ELECTION OF DIRECTORS Shares represented by this proxy will be voted as directed by the
Nominees: [_] [_] shareholder in the space provided. If no direction is given, this
Thomas S. Glanville proxy will be voted "FOR the Nominees."
Michael J. Chesser The Board of Directors recommends a vote "FOR the Nominees."
LeRoy D. Nosbaum
WITHHOLD for the following nominee only (write [_] I plan to attend the Annual Meeting
the name of the nominee in the space below):
_________________________________
Signature(s)_________________________________________________________________________________ Date _____________________________
Please sign exactly as your name appears on your stock certificate. Attorneys, trustees, executors and other fiduciaries acting
in a representative capacity should sign their names and give their titles. An authorized person should sign on behalf of
Corporations, partnerships, associations, etc. and give his or her title. If your shares are held by two or more persons, each
person must sign. Receipt of the notice of meeting and proxy statement is hereby acknowledged.
------------------------------------------------------------------------------------------------------------------------------------
. FOLD AND DETACH HERE .