SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Siena Holdings, Inc.
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(Name of Registrant as Specified In Its Charter)
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SIENA HOLDINGS, INC.
5068 West Plano Parkway, Suite 300
Plano, Texas 75093
NOTICE OF ANNUAL MEETING
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of Siena
Holdings, Inc. will be held on December 14, 2001 at 10 o'clock EST, at The Hotel
DuPont, Wilmington, Delaware, for the following purposes:
1. To elect five directors to serve until the next annual meeting and
until their successors are elected and qualified;
2. To ratify the appointment of KPMG LLP as independent public
accountants for the Company for the fiscal year ending June 30,
2002; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of record of Common Stock as of the close of business on
November 1, 2001 are entitled to receive notice of and vote at the meeting or
any adjournment or adjournments thereof.
By Order of the Board of Directors:
/s/ W. Joseph Dryer
----------------------------------------
Secretary
Dated at Plano, Texas
October 30, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID RETURN ENVELOPE.
SIENA HOLDINGS, INC.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Directors of Siena Holdings, Inc. (together with
its wholly-owned subsidiaries, the "Company") of proxies from the holders of the
Company's common stock for use at the Annual Meeting (the "Meeting") to be held
on December 14, 2001, and any adjournment or adjournments thereof. The giving of
a proxy does not affect your right to vote should you attend the Meeting in
person, and the proxy may be revoked at any time before it is voted by giving
the Secretary of the Company a signed instrument revoking the proxy or a signed
proxy of a later date. Each properly executed proxy not revoked will be voted in
accordance with instructions thereon. If no contrary instructions are specified
in the proxy, it is the intention of the persons named in the accompanying proxy
to vote FOR the election of the nominees named herein as directors of the
Company and FOR the matters described in Items 2 and 3 in the Notice of Annual
Meeting.
The Company's Annual Report to Stockholders for the fiscal year ended June
30, 2001 (the "Annual Report"), containing audited consolidated financial
statements, in the form of the information filed by the Company with the
Securities and Exchange Commission on Form 10-K, is being mailed to Stockholders
along with the Notice of Annual Meeting and Proxy Statement. The consolidated
financial statements and discussion and analysis by management of the Company's
financial condition and results of operations contained in the Annual Report are
incorporated herein by reference.
The mailing address of the Company's principal executive office is: 5068
West Plano Parkway, Suite 300, Plano, Texas 75093, and the approximate date on
which this Proxy Statement and the form of proxy are first being sent to
stockholders is November 14, 2001.
Only holders of record of the Company's Common Stock, par value $.10 per
share (the "Common Stock"), at the close of business on November 1, 2001, are
entitled to vote at the Meeting, one vote for each share of Common Stock so
held. On that date, there were 6 million shares of Common Stock outstanding.
PRINCIPAL STOCKHOLDERS
The following table shows, as of October 30, 2001, the total number of
shares of Common Stock owned beneficially by persons or groups, within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
known to the Company to be the beneficial owners of more than 5% of the Common
Stock:
-2-
Shares Beneficially
Name and Address of Owned Directly or Percent of
Beneficial Owner Indirectly Common Stock
------------------- ------------------- ------------
John P. Kneafsey 2,844,290 47.4%
c/o Pathfinder Advisory Services
9515 Deereco Road, Suite 903
Timonium, MD 21093
Credit Suisse 910,509 15.2%
First Boston Corporation
11 Madison Avenue
New York, NY 10010
ELECTION OF DIRECTORS
The five persons named in the following table have been designated as
nominees for election to the Board of Directors, each to serve for a one-year
term and until his successor is duly elected and qualified. All of the nominees
listed below currently serve as directors of the Company. If any of such
nominees declines or becomes unable to serve, the persons named in the proxy
will vote for the election of any substitute nominee designated by the Board of
Directors. The Company has no reason to believe that any nominee will decline or
be unable to serve.
Name, Age, Principal Occupation During Served as Shares Beneficially Owned
Past Five Years, and Other Corporate Director
Directorships Since Amount Percent
------------- ----- ------ -------
JOHN P. KNEAFSEY - Chairman and Chief Executive 1997 2,844,790 47.4%
Officer of the Company, since October 1996;
President, Pathfinder Advisory Services, Inc., since
1997; Senior Vice President-Investments, Prudential
Securities, Inc., from 1980 to 1997. Age 54.
ERIK M. BODOW - Chief Administrative Officer, GEM 1997 -- --
Capital Management, Inc., since 1998, Senior
Vice-President, Sagner/Marks, Inc., since 1992-1998;
Vice President, First National Bank of Chicago, from
1985 to 1992. Age 58.
-3-
JAMES D. KEMP - Principal, Antaean Solutions, LLC, 1997 -- --
since 1997; President and Chief Executive Officer,
The Trust Company, N.A., from 1996 to 1997;
President and Chief Executive Officer, Kemp
Consulting, from 1992 to 1997; President, Ameritrust
Texas, N.A., from 1980 to 1992. Age 54.
MATTHEW S. METCALFE - Chairman and President, 1997 7,129 0.1%
Airland Corporation; Director Emeritus, Amsouth
Bankcorporation; Member, State of Alabama Oil and
Gas Board; Chairman, Mobile Airport Authority. Age
70.
FRANK B. RYAN - Professor of Mathematics at Rice 1997 -- --
University (currently on leave); Director, Danielson
Holding Corporation; Director, Texas Micro, Inc.;
Director, America West Airlines, Inc. Age 65.
The Board of Directors recommends a vote "FOR" the election of the above
nominees as directors of the Company.
BOARD ORGANIZATION AND COMPENSATION
The Board of Directors held three meetings during the fiscal year ended
June 30, 2001.All directors attended all three meetings. In addition, the
Company has an Audit Committee and a Compensation Committee, but does not have a
Nominating Committee.
The Audit Committee of the Board of Directors is composed of all four
independent members of the Board. The Audit Committee reviews with KPMG LLP, the
Company's independent auditors, the audit plan and the internal accounting
controls for the Company and its subsidiaries, as well as the Company's
consolidated financial statements and management letter. The Audit Committee
reports to the full Board of Directors. It also recommends to the Board of
Directors the selection of independent auditors for the Company. The Audit
Committee held one meeting during the fiscal year ended June 30, 2001. The
report of the Audit Committee appears at the end of this Proxy Statement.
-4-
Consistent with the directives of the US Securities & Exchange Commission
and with the intent stated in the Company's proxy statement for the previous
year, the Company has adopted a charter that will govern the activities of the
Audit Committee. The text of such charter appears as Exhibit A to this Proxy
Statement.
The Compensation Committee of the Board of Directors, composed of all four
independent members of the Board of Directors, did not meet during the fiscal
year ended June 30, 2001. This Committee periodically reviews the Company's
management compensation and reports its actions or recommendations to the Board
of Directors. The Committee also approves the general salary scale for employees
of the Company. There were no changes to management compensation during this
period.
Compensation of Directors
Directors of the Company receive annual compensation at the rate of $5,000
and fees of $1,000 for each directors' meeting attended, plus reimbursement for
all reasonable expenses. In addition, at the Annual Meeting of Shareholders on
December 16, 1998, the Directors were granted options to purchase certain shares
of the Company's common stock, while additional compensation was provided to the
non-officer members of the Board, including success-based financial incentives
contingent on the sale or liquidation of certain assets of the Company.
EXECUTIVE MANAGEMENT COMPENSATION
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of June 30, 2001 and related
information are as follows:
John P. Kneafsey, Chairman and Chief Executive Officer (See information under
"Election of Directors" above.)
W. Joseph Dryer, President and Chief Accounting Officer since October 4, 1996,
prior thereto, Senior Vice-President from January 1995; Secretary/Treasurer of
Worldcorp, Inc. from February 1999 to March 2000, President since March 2000;
also, President and Director of Russian River Energy Co. from 1992 to 1994; and
President and Director of Geothermal Resources International, Inc. since 1994;
prior thereto, an Officer since 1984. Age 46.
-5-
Compensation of Executive Officers
The following table sets forth all compensation paid by the Company for
the year ended June 30, 2001 and the year June 30, 2000, and for services
rendered in all capacities to the two executive officers of the Company during
fiscal year 2001.
Base Other Cash Total Cash
Officer Period Compensation Compensation Compensation
John P. Kneafsey Year Ended 6/30/01 $128,000 -- $128,000
Year Ended 6/30/00 $128,000 -- $128,000
W. Joseph Dryer Year Ended 6/30/01 $144,000 $46,118.18 $190,118.18
Year Ended 6/30/00 $144,000 $144,000
Security Ownership of Executive Officers
The stock ownership by executive officers of SHI as of October 30, 2001 is as
follows:
Amount and
Nature of
Beneficial
Class Title of Beneficial Owner Ownership Percent of Class
SHI Common John P. Kneafsey 2,844,290 47.4%
Stock
W. Joseph Dryer 85,100 1.4%
-6-
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors appointed the firm of KPMG LLP ("KPMG") to act as
independent auditors for the Company for the fiscal year ended June 30, 2001. On
May 25, 2001, the Company entered into an agreement with KPMG, which sets forth
the aggregate fee at approximately $46,000 for the audit of the consolidated
financial statements for the fiscal year ended June 30, 2001 and for the review
of the consolidated financial statements included in the quarterly reports on
Forms 10-Q for that fiscal year, as well as September 30, 2001, December 30,
2001 and March 30, 2002. The Company paid $9600 to KPMG for tax services
rendered. No additional fees were billed by KPMG for professional services
rendered during fiscal year 2001.
The Board of Directors, upon recommendation of the Audit Committee, has
selected the firm of KPMG LLP to audit the consolidated financial statements of
the Company for the fiscal year ending June 30, 2002. A representative of KPMG
LLP is expected to be present at the Meeting, have an opportunity to make a
statement, and be available to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" the proposal to ratify the
appointment of KPMG LLP as independent auditors for the fiscal year ending June
30, 2002.
VOTING PROCEDURES
Each proposal submitted to the Company's stockholders for a vote is deemed
approved if a majority of the shares of Common Stock of the Company present in
person or by proxy at a meeting at which a quorum is present votes in favor of
the proposal. The presence in person or by proxy of stockholders entitled to
cast a majority of all the votes entitled to be cast at the meeting constitutes
a quorum. A stockholder is entitled to one vote for each share owned.
Stockholder votes are tabulated by the Company's Registrar and Transfer
Agent. Proxies received by the Registrar, if such proxy is properly executed and
delivered, will be voted in accordance with the voting specifications made on
such Proxy. Proxies received by the Registrar on which no voting specification
has been made by the stockholder will be voted FOR all items discussed in the
Proxy Statement, in the manner stated on the proxy card. Stockholders who
execute and deliver proxies retain the right to evoke them by notice in writing
delivered to the Company's Secretary at any time before such proxies are voted.
Under applicable Delaware corporate law and the Charter and By-Laws of the
Company, proxies received by the Registrar specifying an abstention as to any
proposal will cause the shares so represented to be counted toward a quorum, but
are not counted as favorable votes and, therefore, have the same effect as a
vote against the proposal. To the extent holders or brokers having the right to
vote shares do not attend the meeting or return a proxy, such shares will not
count toward a quorum, and if a quorum is otherwise achieved, will have no
effect on the vote of the proposals considered at the meeting which shall be
based solely upon the vote of the shares represented at the meeting.
-7-
2002 ANNUAL MEETING OF STOCKHOLDERS
If any stockholder intends to present a proposal for consideration at the
2002 Annual Meeting of Stockholders, such proposal must be received by the
Company on or before September 1, 2002, in order to be included in the Company's
Proxy Statement and form of proxy for such meeting. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement and
form of proxy relating to the 2002 Annual Meeting of Stockholders any
stockholder proposal which does not meet all of the requirements for such
inclusion established by the Securities and Exchange Commission at that time in
effect.
As of the date of this Proxy Statement, the Board of Directors knows of no
matters, other than those stated above, that may be brought before the Meeting.
However, if other matters do properly come before the Meeting, the persons named
in the enclosed proxy will vote upon them in their discretion and in accordance
with their best judgment.
AUDIT COMMITTEE REPORT
The Audit Committee reviews and supervises the Company's procedures for
recording and reporting the financial results of its operations on behalf of the
Board of Directors. The Company's management has primary responsibility for the
consolidated financial statements and the reporting process, including the
systems of internal controls.
The Audit Committee, or its Chair, has reviewed the Company's audited
financial statements for the fiscal year ended June 30, 2001 and has discussed
those financial statements with the Company's management and the independent
auditors.
The Audit Committee, or its Chair, has also discussed with the Company's
independent auditors their opinions on the conformity of the Company's financial
statements with generally accepted accounting principles. In addition, the Audit
Committee received from the independent auditors the written disclosures
required by the Independence Standards Board and has discussed with the
independent auditors the independence of the Audit Committee from the Company's
management.
Based on the reviews and discussion described above, the Audit Committee
recommended to the Company's Board of Directors that the audited financial
statements for the fiscal year ended June 30, 2001 be included in the Company's
Annual Report on Form 10-K for the year then ended to be filed with the
Securities and Exchange Commission.
-8-
A copy of the Company's Form 10-K Annual Report as filed with the
Securities and Exchange Commission, Washington, D.C., has been provided to each
Stockholder of record in connection with the Notice of the Annual Meeting.
The cost of preparing and mailing the Notice of Meeting, Proxy Statement
and form of proxy will be paid by the Company. The Company will request banks,
brokers, fiduciaries, and similar persons to forward copies of such material to
beneficial owners of the Company's common stock in a timely manner and to
request authority for execution of proxies, and the Company will reimburse such
persons and institutions for their reasonable out-of-pocket expenses incurred in
connection therewith. To the extent necessary to assure sufficient
representation, officers and regular employees of the Company may solicit the
return of the proxies by telephone, telegram, or personal interview. The extent
of this solicitation by personal contact will depend upon the response to the
initial solicitation by mail. It is anticipated that the costs of such
solicitation, if undertaken, will not exceed $4000.
By the Order of the Board of Directors.
/s/ W. Joseph Dryer
--------------------------------------
Secretary
Dated at Plano, Texas
October 30, 2001
-9-
Exhibit A
Charter of the Audit Committee of
Siena Holdings, Inc.
I. Audit Committee Purpose
The Audit Committee (the "Committee") shall be appointed by the Board of
Directors (the "Board") to assist the Board in fulfilling its oversight
responsibilities. The Committee's primary duties and responsibilities
shall include:
Monitoring the integrity of the Company's financial reporting
process and systems of internal controls pertaining to finance,
accounting, and legal compliance.
Monitoring the independence and performance of such professional
services firm as may from time to time be engaged to serve as the
Company's independent auditors (the "Auditors")
Facilitating communication among the Auditors, management and the
Board.
In connection with the performance of its duties, the Audit Committee
shall possess the authority to conduct any investigation, as it, in its
sole discretion, shall from time to time deem necessary. In connection
with any such investigation, as well as in connection with the performance
of its other duties provided for herein, the Committee shall at all times
have full and direct access to the Auditors. Should at any time the
Committee deem the same to be necessary and in the best interests of the
Company, the Committee may retain, at the Company's expense, special
legal, accounting, or other consultants or experts, without the need for
further approval from either management of the Board
II. Committee Composition and Meetings
Committee members shall at all times meet the requirements for Audit
Committee members which may be set by such securities exchange or
exchanges on which the Company's stock may from time to time be listed.
The Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent non-executive directors.
All members of the Committee shall possess a fundamental understanding of
finance and accounting methods and practices, and shall be able to
interpret basic financial statements. At least one member of the Committee
shall possess accounting or related financial management expertise, by
virtue of formal training or education and/or professional experience.
Members of the Committee shall be appointed by the Board. (Should a chair
of the Committee (the "Chair") not be present, the members of the
Committee may designate a chair by majority vote of the Committee
membership.)
The Committee, or at least its Chair, shall meet at least four times a
year, and may meet more frequently should circumstances dictate. The
Committee chair shall prepare and/or approve an agenda in advance of each
meeting. The Committee should meet privately in executive session at least
annually with management, the Auditors, and as a committee to discuss any
matters that the Committee believes should be discussed. In addition, the
Committee, or at least its Chair, should communicate with management and
the Auditors quarterly to review the Company's financial statements and
any significant findings based upon the Auditors' limited review
procedures.
III. Committee Responsibilities and Duties
Review Procedures
Review and reassess the adequacy of this Charter at least annually. Submit
the Charter to the Board of Directors for approval and have the document
published at least every three years in accordance with the regulations of
the Securities & Exchange Commission.
Review the Company's annual audited financial statements prior to their
filing or distribution.
In consultation with management, and the Auditors, periodically review the
adequacy of the Company's financial reporting processes and controls.
Should the Committee determine the same to exist, discuss significant
financial risk exposures, which may from time to time arise, and the steps
management has taken to monitor, control, and report such exposures. The
Committee may also review any significant findings prepared by the
Auditors together with management's responses, and shall review with
management and the Auditors the Company's quarterly financial results
prior to the release of earnings and/or the Company's quarterly financial
statements prior to filing or distribution. The Committee shall discuss
any significant changes to the Company's accounting principles and any
items required to be communicated by the Auditors in accordance with SAS
61. The chair of the Committee may represent the entire Committee for
purposes of this review.
Approve the fees and other significant compensation to be paid to the
Auditors.
On an annual basis, review and discuss with the Auditors any significant
relationships the Auditors may have with the Company that could impair the
Auditors' ability to perform their professional duties to the Company.
Review the Auditors' audit plan--discuss scope, staffing, locations,
reliance upon management, and internal audit and general audit approach.
Prior to releasing the year-end earnings, discuss the results of the audit
with the Auditors. Discuss certain matters required to be communicated to
audit committees in accordance with AICPA SAS 61.
Consider the Auditor's judgments about the quality and appropriateness of
the Company's accounting principles as applied in its financial reporting.
Other Audit Committee Responsibilities
Annually prepare a report to shareholders as required by the Securities &
Exchange Commission. The report should be included in the Company's annual
proxy statement.
Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems necessary
or appropriate.
Maintain minutes of meetings and periodically report to the Board on
significant results of the foregoing activities.
Legal Compliance
On at least an annual basis, review with the Company's counsel, any legal
matters that could have a significant impact on the Company' financial
statements, the Company's compliance with applicable laws and regulations,
and inquiries received from regulators or governmental agencies.
Independent Auditors
Nothing in this Charter shall relieve the Auditors of their professional
responsibility to the Company, under which they shall be fully and
ultimately accountable to the Committee, the Board and the Company. The
Committee shall review the performance of the Auditors and annually
recommend to the Board either the appointment of the Auditors or, should
in the Committee's discretion, circumstances warrant, recommend the
discharge of the Auditors