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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PS GROUP HOLDINGS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LETTERHEAD OF PS GROUP HOLDINGS] PRELIMINARY COPY
April , 1997
Dear Stockholder:
You are cordially invited to the 1997 Annual Meeting of Stockholders (the
"1997 Annual Meeting") of PS Group Holdings, Inc. (the "Company"), to be held
at the Sheraton Grande Hotel, 333 South Figueroa Street, Los Angeles,
California, on Friday, May 30, 1997, at 9:00 a.m., local time. A copy of the
Notice of Annual Meeting and Proxy Statement for the 1997 Annual Meeting,
together with a proxy card, are enclosed.
At the 1997 Annual Meeting, you will be asked to elect three directors, with
terms expiring in the year 2000, and the Board of Directors of the Company
(the "Board") recommends that you elect the three individuals it has nominated
(all of whom are current directors).
In addition, you will be asked to consider and vote on a proposal to approve
and adopt an amendment to the Company's Restated Certificate of Incorporation,
and a corresponding amendment to the Company's Restated By-Laws, deleting the
"classified Board" provisions under which one-third of the Company's directors
is elected at each Annual Meeting of Stockholders. If these "Board
Unclassification Amendments" (which will be voted upon as a single proposal
and require a favorable vote of two-thirds of the Company's outstanding shares
for approval at the 1997 Annual Meeting) are approved, they will first become
effective for the 1998 Annual Meeting of Stockholders.
Every current member of the Board (including those standing at the 1997
Annual Meeting for re-election to a term expiring in the year 2000) has
committed that, if the Board Unclassification Amendments are approved and
adopted at the 1997 Annual Meeting, he will resign immediately before the vote
on the election of directors is taken at the 1998 Annual Meeting so that all
directors nominated by the Board will stand for re-election in 1998 even if
their classified terms were otherwise scheduled to expire in a later year.
The accompanying Proxy Statement provides further information about this
important change in the Company's governance structure and the reasons why
your Board is proposing it, as well as details regarding an amendment to the
Company's Restated By-Laws that has been adopted by the Board (and is not
conditioned on stockholder approval) relating to the advance notice
requirements for stockholder-proposed business or Board nominations at annual
meetings starting with the 1998 Annual Meeting. The Proxy Statement also
contains information concerning four directors who have been appointed to the
Board since last year's Annual Meeting of Stockholders of PS Group, Inc. and
other important information. Also enclosed is an Annual Report to Stockholders
for the year ended December 31, 1996. Please give these documents your careful
attention.
To save the Company the cost of further proxy solicitation, we request that
you complete, sign and date your proxy and return it promptly in the enclosed
envelope, whether or not you plan to attend the 1997 Annual Meeting. If you
attend the 1997 Annual Meeting, you may vote in person even if you have
previously mailed your proxy.
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Finally, since this is the first Annual Meeting of Stockholders of the
Company (as contrasted with PS Group, Inc., which became a subsidiary of the
Company as a result of last year's holding company reorganization), may I take
the opportunity to remind you that, under Article XI of the Company's Restated
Certificate of Incorporation, your shares of Company Common Stock are subject
to significant transfer restrictions designed to help preserve the Company's
substantial tax benefits. If you have not already surrendered your PS Group
stock certificate and received a new Company stock certificate, please contact
ChaseMellon Shareholder Services, L.L.C. at 800-777-3674 for information as to
the procedure to be followed.
We greatly appreciate your support and continued interest in the Company.
Sincerely,
/s/ Charles E. Rickershauser, Jr.
Charles E. Rickershauser, Jr.
Chairman of the Board and
Chief Executive Officer
IF YOU HAVE ANY QUESTIONS
OR NEED ASSISTANCE
COMPLETING YOUR PROXY CARD
PLEASE CALL:
[LOGO OF MACKENZIE PARTNERS, INC.]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
<PAGE>
PS GROUP HOLDINGS, INC.
4370 LA JOLLA VILLAGE DRIVE, SUITE 1050
SAN DIEGO, CA 92122
(619) 642-2999
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 30, 1997
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "1997
Annual Meeting," which term includes any and all postponements and/or
adjournments) of PS Group Holdings, Inc., a Delaware corporation (the
"Company"), will be held at the Sheraton Grande Hotel, located at 333 South
Figueroa Street, Los Angeles, California, on Friday, May 30, 1997, at 9:00
a.m., Pacific Time, for the following purposes:
1. To elect three directors to the Board of Directors of the Company (the
"Board"), with terms expiring in the year 2000;
2. To consider and vote upon a single proposal to approve and adopt
amendments (the "Board Unclassification Amendments") to the Company's
Restated Certificate of Incorporation (the "Restated Certificate") and the
Company's Restated By-Laws (the "Restated By-Laws") which (i) will replace
(x) the provisions thereof which currently classify the Board into three
classes, with each director serving for a term ending on the date of the
third annual meeting following the annual meeting at which such director
was elected, with (y) provisions whereby every director will be elected at
each annual meeting of stockholders and will serve until such director's
respective successor is elected and qualified or until such director's
earlier resignation or removal, and (ii) will make certain related changes
in the Restated Certificate and the Restated By-Laws. If the Board
Unclassification Amendments are approved and adopted, they will not be
operative for the election of directors at the 1997 Annual Meeting but will
be operative for annual elections of directors commencing at the 1998
Annual Meeting of Stockholders (the "1998 Annual Meeting"). Every current
member of the Board (including those standing for re-election to a new
three-year term under Item 1 above) has committed that, if the Board
Unclassification Amendments are approved and adopted at the 1997 Annual
Meeting, he will resign immediately before the vote on the election of
directors is taken at the 1998 Annual Meeting so that all directors
nominated by the Board will stand for re-election at the 1998 Annual
Meeting even if their respective classified terms were otherwise scheduled
to expire in a later year;
3. To transact such other business as may properly come before the 1997
Annual Meeting.
Additional information regarding the matters to be voted upon at the 1997
Annual Meeting is contained in the Proxy Statement accompanying this Notice
(the "Proxy Statement"). The text of the Board Unclassification Amendments is
attached as Appendix A to the Proxy Statement. The Proxy Statement (including
Appendix A thereto) forms a part of this Notice, and stockholders are urged to
read such information carefully.
The Board has fixed the close of business on April 4, 1997 (the "Record
Date") as the record date for the determination of stockholders entitled to
notice of and to vote at the 1997 Annual Meeting. Only those stockholders of
record as of the Record Date will be entitled to vote at the 1997 Annual
Meeting. A list of such stockholders will be open to examination by any
stockholder at the 1997 Annual Meeting and for a period of ten days prior to
the date of the 1997 Annual Meeting during ordinary business hours at the
offices of the Company's counsel, Irell & Manella LLP, 333 South Hope Street,
Suite 3300, Los Angeles, California 90071-3042.
The affirmative vote of a plurality of the shares of the common stock, par
value $1.00 per share ("Company Common Stock"), of the Company represented in
person or by proxy at the 1997 Annual Meeting is required to elect any of the
nominees for election to the Board. The affirmative vote of 66 2/3% of the
outstanding shares of Company Common Stock is required to approve and adopt
the Board Unclassification Proposal. (The Board is unaware of any person being
a "related person" under the Restated Certificate by reason of beneficial
ownership
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of 20% or more of the outstanding shares of Company Common Stock; if there
were any such "related person," such 66 2/3% vote to approve and adopt the
Board Unclassification Amendments would also have to include at least 50% of
the outstanding shares of Company Common Stock held by stockholders other than
such "related person.")
By Order of the Board of Directors
/s/ Johanna Unger
Johanna Unger
Secretary
April , 1997
San Diego, California
IN ORDER TO ASSURE THAT YOUR SHARES OF COMPANY COMMON STOCK ARE REPRESENTED
AT THE 1997 ANNUAL MEETING, PLEASE COMPLETE, DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE ACCOMPANYING RETURN-ADDRESSED ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU LATER DESIRE TO REVOKE OR
CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO AT ANY TIME BEFORE THE
VOTING TAKES PLACE AT THE 1997 ANNUAL MEETING BY DELIVERING TO THE COMPANY A
WRITTEN NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE
OR BY ATTENDING THE 1997 ANNUAL MEETING IN PERSON.
<PAGE>
PS GROUP HOLDINGS, INC.
4370 LA JOLLA VILLAGE DRIVE, SUITE 1050
SAN DIEGO, CALIFORNIA 92122
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PROXY STATEMENT
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GENERAL INFORMATION
This Proxy Statement is being furnished by PS Group Holdings, Inc., a
Delaware corporation (the "Company"), to the holders ("Company Stockholders")
of its common stock, $1.00 par value ("Company Common Stock"), in connection
with the solicitation of proxies by the Board of Directors of the Company (the
"Board") for use at the Annual Meeting of Stockholders to be held on Friday,
May 30, 1997, at 9:00 a.m., Pacific Time, and at any and all postponements
and/or adjournments thereof (the "1997 Annual Meeting"). See, generally, "The
Annual Meeting."
At the 1997 Annual Meeting, the holders of 6,068,313 shares of Company
Common Stock outstanding as of the close of business on April 4, 1997 (the
"Record Date") will be entitled to one vote per share. Such Company
Stockholders will be asked to elect three directors, with terms expiring in
the year 2000, and will vote upon a single proposal to approve and adopt
amendments (the "Board Unclassification Amendments") to the Company's Restated
Certificate of Incorporation (the "Restated Certificate") and the Company's
Restated By-laws (the "Restated By-Laws") which (i) will replace (x) the
provisions thereof which currently classify the Board into three classes, with
each director serving for a term ending on the date of the third annual
meeting following the annual meeting at which such director was elected, with
(y) provisions whereby every director will be elected at each annual meeting
of stockholders and will serve until such director's respective successor is
elected and qualified or until each such director's earlier resignation or
removal, and (ii) will make certain related changes in the Restated
Certificate and the Restated By-Laws. If the Board Unclassification Amendments
are approved and adopted, they will not be operative for the election of
directors at the 1997 Annual Meeting but will be operative for annual
elections of directors commencing at the 1998 Annual Meeting of Company
Stockholders (the "1998 Annual Meeting"). Company Stockholders will also
transact such other business as may properly come before the 1997 Annual
Meeting. See "The Annual Meeting," "Election of Directors," "The Board
Unclassification Amendments" and "Other Matters."
This Proxy Statement and the accompanying proxy cards
are first being mailed to Company Stockholders
on or about April , 1997.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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THE ANNUAL MEETING......................................................... 1
Matters to be Considered................................................. 1
Shares Outstanding and Entitled To Vote; Record Date..................... 1
Votes Required........................................................... 1
Voting, Solicitation and Revocation of Proxies........................... 2
ELECTION OF DIRECTORS...................................................... 2
General.................................................................. 2
Nominees for Director.................................................... 3
Certain Information Concerning Other Directors........................... 3
Information Regarding the Board and its Committees....................... 4
Compensation of Directors................................................ 5
EXECUTIVE COMPENSATION..................................................... 5
Report on Executive Compensation......................................... 5
Compensation Committee Interlocks and Insider Participation.............. 6
Summary Compensation Table............................................... 7
Stock Options............................................................ 7
Retirement Benefits...................................................... 8
Executive Employment Agreements.......................................... 9
Stock Performance Graph.................................................. 9
BENEFICIAL OWNERSHIP OF DIRECTORS AND OFFICERS............................. 11
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS............................. 12
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934....... 13
THE BOARD UNCLASSIFICATION AMENDMENTS...................................... 14
General.................................................................. 14
Background to the Board Unclassification Amendments...................... 14
Reasons for the Board Unclassification Amendments........................ 15
Summary of Board Unclassification Amendments............................. 16
OTHER MATTERS.............................................................. 17
Stockholder Proposals.................................................... 17
Independent Auditors..................................................... 19
Other Matters............................................................ 19
APPENDIX A: The Board Unclassification Amendments.......................... A-1
</TABLE>
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THE ANNUAL MEETING
This Proxy Statement is being furnished to Company Stockholders in
connection with the solicitation of proxies by the Board for use at the 1997
Annual Meeting to be held at the Sheraton Grande Hotel, located at 333 South
Figueroa Street, Los Angeles, California, on Friday, May 30, 1997, at 9:00
a.m., Pacific Time, and at any and all postponements and/or adjournments
thereof.
MATTERS TO BE CONSIDERED
At the 1997 Annual Meeting, Company Stockholders will be asked to: (1) elect
three directors with terms expiring in the year 2000; (2) consider and vote
upon a single proposal to approve and adopt the Board Unclassification
Amendments; and (3) transact such other business as may properly come before
the 1997 Annual Meeting.
SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE
Only the holders of record of the outstanding shares of Company Common Stock
on the Record Date will be entitled to notice of and to vote at the 1997
Annual Meeting. On the Record Date, there were 6,083,313 outstanding shares of
Company Common Stock. Holders of record of shares of Company Common Stock on
the Record Date will be entitled to one vote per share on any matter that may
properly come before the 1997 Annual Meeting.
VOTES REQUIRED
A quorum, consisting of a majority of the shares of Company Common Stock
outstanding on the Record Date, must be present in person or by proxy before
any action may be taken at the 1997 Annual Meeting. The affirmative vote of a
plurality of shares of Company Common Stock represented at the 1997 Annual
Meeting in person or by proxy is required to elect any nominee for director.
Under Article X of the Restated Certificate and Article XIV of the Restated
By-Laws, the affirmative vote of the holders of not less than 66 2/3% of the
outstanding shares of Company Common Stock is required to approve the proposal
to approve and adopt the Board Unclassification Amendments. (The Board is
unaware of any person being a "related person" under Article IX of the
Restated Certificate by reason of beneficial ownership of 20% or more of the
outstanding shares of Company Common Stock; if there were any such "related
person," such 66 2/3% vote to approve and adopt the Board Unclassification
Amendments would also have to include, under Article X of the Restated
Certificate, at least 50% of the outstanding shares of Company Common Stock
held by stockholders other than such "related person.")
Under the rules of the New York Stock Exchange ("NYSE"), the proposal to
approve and adopt the Board Unclassification Amendments is considered a "non-
discretionary item" whereby brokerage firms may not vote in their discretion
on behalf of their clients if such clients have not furnished voting
instructions. Abstentions and such broker "non-votes" will be considered in
determining the presence of a quorum at the 1997 Annual Meeting but will not
be counted as a vote cast for such proposal. Accordingly, such abstentions and
broker "non-votes," while not affecting the election of candidates for
director receiving the plurality of votes, will have the same effect as a vote
against the Board Unclassification Amendments.
As of the Record Date, directors of the Company as a group (9 persons)
beneficially owned 673,627 shares of Company Common Stock, which represented
approximately 11.1% of the aggregate number of votes entitled to be cast at
the 1997 Annual Meeting. Such persons have indicated that they intend to vote
all such shares for approval of the proposals described herein.
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VOTING, SOLICITATION AND REVOCATION OF PROXIES
A proxy for use at the 1997 Annual Meeting accompanies this Proxy Statement
and is solicited by the Board. Any Company Stockholder who has given a proxy
may revoke it at any time prior to its exercise at the 1997 Annual Meeting by
(i) giving written notice of revocation to the Corporate Secretary of the
Company, (ii) properly submitting to the Corporate Secretary a duly-executed
proxy bearing a later date or (iii) attending the 1997 Annual Meeting and
voting in person. Company Stockholders who have executed a proxy but intend to
vote in person are requested to so notify the Corporate Secretary prior to the
time of the 1997 Annual Meeting. All written notices of revocation and other
communications with respect to revocation of proxies should be addressed as
follows: Johanna Unger, Vice President, Controller and Secretary, PS Group
Holdings, Inc., 4370 La Jolla Village Drive, Suite 1050, San Diego, California
92122. Attendance at the 1997 Annual Meeting will not, in and of itself,
constitute revocation of a proxy.
SHARES OF COMPANY COMMON STOCK REPRESENTED BY PROPERLY EXECUTED PROXIES, IF
SUCH PROXIES ARE RECEIVED IN TIME AND NOT REVOKED, WILL BE VOTED IN ACCORDANCE
WITH THE INSTRUCTIONS INDICATED ON THE PROXIES. IF NO INSTRUCTIONS ARE
INDICATED, THE PROXIES RELATING TO SHARES OF COMPANY COMMON STOCK WILL BE
VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED BELOW AND FOR APPROVAL AND
ADOPTION OF THE BOARD UNCLASSIFICATION AMENDMENTS. IF ANY OTHER MATTERS
PROPERLY COME BEFORE THE 1997 ANNUAL MEETING, THE PERSONS NAMED IN THE
ACCOMPANYING PROXY WILL VOTE THE SHARES REPRESENTED BY ALL PROPERLY EXECUTED
PROXIES ON SUCH MATTERS IN SUCH MANNER AS SHALL BE DETERMINED BY A MAJORITY OF
THE BOARD, EXCEPT THAT SHARES REPRESENTED BY PROXIES WHICH HAVE BEEN VOTED
"AGAINST," OR HAVE ABSTAINED WITH RESPECT TO, THE PROPOSAL TO APPROVE AND
ADOPT THE BOARD UNCLASSIFICATION AMENDMENTS WILL NOT BE USED TO VOTE "FOR"
POSTPONEMENT OR ADJOURNMENT OF THE 1997 ANNUAL MEETING FOR THE PURPOSE OF
ALLOWING ADDITIONAL TIME FOR SOLICITING FURTHER VOTES "FOR" SUCH APPROVAL AND
ADOPTION.
The Company will bear the costs of printing and mailing this Proxy Statement
as well as all other costs incurred in connection with the solicitation of
proxies from Company Stockholders on behalf of the Board. The Company has
retained MacKenzie Partners, Inc. to assist in the solicitation of proxies and
in the distribution of proxies and accompanying materials to brokerage houses
and institutions for an estimated fee of $7,500 plus expenses. In addition,
proxies may be solicited by mail, personal interview, telephone or telegraph
by directors, officers or employees of the Company and its subsidiaries
without additional compensation therefor. Arrangements also will be made with
brokerage houses, voting trustees, banks, associations and other custodians,
nominees and fiduciaries, who are record holders of the Company Common Stock
not beneficially owned by them, for forwarding such solicitation materials to
and obtaining proxies from the beneficial owners of such stock entitled to
vote at the 1997 Annual Meeting, and the Company will reimburse such persons
for their reasonable expenses incurred in doing so.
ELECTION OF DIRECTORS
GENERAL
The Restated Articles and the Restated Bylaws currently provide (the
"Current Classification Provisions") that the Board shall be divided into
three classes, with three-year terms expiring in successive years. There are
currently nine directors on the Board divided among the three classes. The
Board is proposing the repeal of the Current Classification Provision, with
effect at the 1998 Annual Meeting; see "The Board Unclassification
Amendments." At the 1997 Annual Meeting, three directors are expected to be
elected with terms expiring upon the election and qualification of their
successors at the Annual Meeting of Stockholders held in the year 2000. The
three Board nominees, Messrs. Guerin, Mills and Pirinea, are all currently
directors of the Company. These three nominees (as well as all the other
members of the Board) have committed to resign immediately before the vote on
the election of directors is taken at the 1998 Annual Meeting if the Board
Unclassification Amendments are approved and adopted at the 1997 Annual
Meeting; see "The Board Unclassification Amendments--General."
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It is intended that all proxies received from Company Stockholders will be
voted for the nominees named below, unless authority to do so is withheld. It
is not contemplated that any of the nominees will be unable to serve as a
director, but if that contingency should occur prior to the 1997 Annual
Meeting, the holders of proxies reserve the right to substitute and vote the
shares represented by the proxies in favor of such nominee for another person
nominated by the Board. Information follows with respect to each nominee and
each other current director of the Company.
NOMINEES FOR DIRECTOR
The following persons are nominees for director with terms expiring in the
year 2000:
J.P. GUERIN: Mr. Guerin, 67, has been Vice Chairman of the Board since March
12, 1997 (on which date the Board amended the Restated By-Laws to create such
position and appoint Mr. Guerin to it), having previously served as Chairman
of the Board of Directors (the "PSG Board") of PS Group, Inc. ("PSG"), from
1985 until 1991 and Vice Chairman of the PSG Board from 1991 to 1993. Mr.
Guerin is an investor. From 1965 to 1992, he was managing partner of Pacific
Partners, a limited partnership holding long-term investments. Mr. Guerin is
also a director of Lee Enterprises, Incorporated (newspaper publishing and
television broadcasting) and is a director and Vice Chairman of the Daily
Journal Corporation (newspaper publishing). Mr. Guerin has been a director of
the Company since January 30, 1996, prior to the time that the Company became
a publicly-traded corporation on June 5, 1996, in succession to PSG, pursuant
to a holding company reorganization (the "1996 Reorganization") in which PSG
became a wholly-owned subsidiary of the Company. He was a director of PSG from
1978 until the 1996 Reorganization was consummated.
CHRISTOPHER H. B. MILLS: Mr. Mills, 44, has been Chief Executive Officer of
North Atlantic Smaller Companies Investment Trust ("NASCIT"), a United Kingdom
publicly-traded investment company, since 1982. He is also the Chief
Investment Officer of J O Hambro Partners Limited, which manages various
investment funds and performs certain administrative services for NASCIT. Mr.
Mills is also a director of the following companies: Oak Industries Inc.
(electronics); Horace Small Apparel p.l.c. (textiles); and Mid-States p.l.c.
(autoparts distribution). Mr. Mills has been a director of the Company since
the 1996 Reorganization was consummated on June 5, 1996.
JOSEPH S. PIRINEA: Mr. Pirinea, 42, is President, Chief Executive Officer
and a director of Pirinea, Cozzolino & Kelly, Certified Public Accountants,
P.C., with which he has been associated since 1987. His clients primarily
consist of private corporations engaged in the construction industry and non-
profit organizations. Mr. Pirinea has been a director of the Company since the
1996 Reorganization was consummated on June 5, 1996.
CERTAIN INFORMATION CONCERNING OTHER DIRECTORS
The following persons serve as directors with terms expiring in 1998:
WILLIAM H. BORTHWICK: Mr. Borthwick, 48, has been with the law firm of Hill,
Farrer & Burrill LLP since 1974 focusing on commercial real estate matters. He
has been a partner of that firm since 1984 and was its managing partner from
1987 to 1992. Mr. Borthwick has been a director of the Company since December
10, 1996.
ROBERT M. FOMON: Mr. Fomon, 72, is, and has been since 1987, President of
Robert M. Fomon and Company Inc., a private investment company. Previously,
Mr. Fomon served as Chief Executive Officer and a director (from 1970 to 1987)
of E.F. Hutton Group Inc., a holding company for the investment banking firm
of E.F. Hutton & Company Inc. Mr. Fomon was associated with E.F. Hutton and
Company Inc. for approximately 35 years. Mr. Fomon has been a director of the
Company since January 30, 1996 and a director of PSG since 1963.
GORDON C. LUCE: Mr. Luce, 71, is an independent investment advisor. Mr. Luce
joined Great American First Savings Bank in San Diego, California in 1969 as
its President and Chief Executive Officer and served as its Chairman of the
Board from 1979 until his retirement in July 1990. During 1982, he was an
Alternate
3
<PAGE>
Delegate to the United Nations and has served as member of three Presidential
Commissions. He is a former Chairman of Scripps Clinic and Research Foundation
and is a director of the Scripps Institutes of Medicine and Science. He is also
a director of All American Communications, Inc. (entertainment) and Molecular
Biosystems, Inc. (medical research). Mr. Luce has been a director of the
Company since January 30, 1996 and a director of PSG since 1973.
The following persons serve as directors with terms expiring in 1999:
STEVEN D. BROIDY: Mr. Broidy, 58, has had a career in the banking industry
since 1963 and currently serves on the board of directors of Sanwa Bank
California. He previously (from 1992 to 1995) served as Vice Chairman and a
director of City National Corp. (and its principal subsidiary, City National
Bank) Bank. Prior thereto (from 1988 to 1992) he was a partner at the law firm
of Loeb & Loeb. Mr. Broidy has been a director of the Company since December
10, 1996.
DONALD W. KILLIAN, JR.: Mr. Killian, 67, was in the private practice of law
from 1955 until his retirement effective January 1, 1997. From 1984 he had been
a sole practitioner in Newport Beach, California. Mr. Killian is also a
director of the Daily Journal Corporation (newspaper publishing). Mr. Killian
has been a director of the Company since January 30, 1996 and a director of PSG
since 1993.
CHARLES E. RICKERSHAUSER, JR.: Mr. Rickershauser, 68, has been Chairman of
the Board, Chief Executive Officer and a director of the Company since January
15, 1996, Chairman of the PSG Board since 1991, a director of PSG since 1984
and Chief Executive Officer of PSG since October 1994. From 1980 until 1986 he
was Chairman of the Board and Chief Executive Officer of the Pacific Stock
Exchange Incorporated. From 1986 until his retirement in 1990 he was a partner
in the law firm of Fried, Frank, Harris, Shriver & Jacobson. Mr. Rickershauser
also serves as a director of City National Corp. (and its principal subsidiary,
City National Bank), Lee Enterprises, Incorporated (newspaper publishing and
television broadcasting) and The Vons Companies, Inc. (retail grocery stores).
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
The Board (or, in the case of the period before the consummation of the 1996
Reorganization on June 5, 1996, the PSG Board) met ten times during 1996 and
all of its members attended all of these meetings except that Mr. Fomon was
unable to attend one special meeting and Mr. Killian was unable to attend three
special meetings (Messrs. Mills and Pirinea, who were elected to the Board on
June 5, 1996, attended no meetings prior to that date).
The Board has standing Executive and Audit Committees. The Board sitting as a
committee of the whole acts as the Compensation Committee (see "Executive
Compensation"). The Company has no nominating committee.
The Executive Committee is comprised of Messrs. Guerin (Chairman),
Rickershauser and Luce. Subject to certain limitations, the Executive Committee
exercises the powers of the Board in the management of the business and affairs
of the Company in the absence of the full Board. The Executive Committee did
not meet in 1996.
The Audit Committee is comprised of Messrs. Guerin (Chairman), Killian and
Luce. The Audit Committee recommends to the Board for its nomination
independent auditors to audit the consolidated financial statements of the
Company, and reviews and approves the overall scope and adequacy of the
independent and internal audit programs and the proposed form of the Company's
consolidated financial statements. The Audit Committee also reviews the
results, findings and recommendations of audits performed by the independent
auditors and the internal audit department, the system of internal accounting
controls, the significant accounting policies of the Company as they apply to
its consolidated financial statements, the audit fees to be paid to the
independent auditors and the nature of non-audit services performed by the
independent auditors. The Audit Committee met twice during 1996 and all of its
members attended both of those meetings.
From June 5, 1996 until March 12, 1997, the Board had a Strategic Planning
Committee comprised of Messrs. Guerin (Chairman), Pirinea and Rickershauser.
The purpose of the Strategic Planning Committee was to
4
<PAGE>
explore (as a deliberative, but not a decision-making, committee) alternatives
for enhancing stockholder value. The Strategic Planning Committee was formed
pursuant to an "Agreement relating to 1996 Annual Meeting" dated as of May 19,
1996 among the Company, PSG and Mr. Pirinea, pursuant to which Mr. Pirinea,
was added to the Board on June 5, 1996, following the consummation of the 1996
Reorganization. Pursuant to an amendment to such Agreement, the functions of
the Strategic Planning Committee were assumed by the Board, and the Strategic
Planning Committee was disbanded, on March 12, 1997. The Strategic Planning
Committee met twice between its formation and its disbandment and all of its
members attended both meetings.
COMPENSATION OF DIRECTORS
Directors are paid an annual fee of $12,500 plus a fee of $1,000 for each
meeting of the Board attended or $350 for attendance by telephone. For
attendance at each meeting of a committee of the Board which is not held on a
day on which the Board meets, member directors or those attending by
invitation are also paid $1,000 for attendance in person or $350 for
attendance by telephone. The Chairman of the Board and Chief Executive Officer
is paid an additional annual salary of $115,000 and certain other amounts (see
"Executive Compensation") and the Chairman of the Executive and Audit
Committees is paid an additional annual fee of $25,000.
EXECUTIVE COMPENSATION
REPORT ON EXECUTIVE COMPENSATION
General. Under rules established by the Securities and Exchange Commission
(the "SEC"), the Company is required to provide certain data and information
regarding the compensation and benefits provided to the Chief Executive
Officer and the other executive officers of the Company. The disclosure
mandated by the SEC requires the use of certain tables along with this Report
explaining the underlying reasons for certain compensation decisions affecting
those individuals. The Company's executive compensation program is
administered by the Board sitting as a committee of the whole./1/ In
compliance with SEC requirements, the Compensation Committee has prepared this
report for inclusion in this Proxy Statement. For purposes of this Report and
the balance of the information in this Proxy Statement relating to executive
compensation, the term "Company" includes PSG to the extent appropriate to
reflect the fact that PSG, not the Company, pays all compensation to, and is
the sponsor of all benefit plans covering, the Company's executive officers,
each of whom is an employee of PSG, and that PSG is the party to the
agreements referred to under "Executive Employment Agreements."
Commencing in 1994, the maximum amount for which an employer may claim a
compensation deduction pursuant to Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Tax Code"), is $1 million per person, unless certain
performance-related compensation exemptions are met. Since it is unlikely that
any officers of the Company will receive in excess of $1 million in aggregate
compensation a year in the near future, the Compensation Committee has
deferred consideration of this provision.
Compensation Philosophy. This Report reflects the Company's compensation
philosophy and also reflects the underlying reasoning for the information set
forth in the compensation tables accompanying this Report. Mr. Rickershauser,
Chairman of the Board, also provides part-time services as Chief Executive
Officer of the Company. Mr. Rickershauser's compensation is established by the
Compensation Committee as reflective of the value of the part-time services he
provides to the Company and is not tied to the criteria set forth herein for
determining the compensation to be paid to full-time officer employees of the
Company.
The Company's executive compensation program is designed to retain its key
executive officers. The package consists of a base salary and an annual
discretionary bonus. The Company's goal is to provide base
- - --------
/1/ Mr. Rickershauser, Chairman of the Board and Chief Executive Officer of the
Company, was not present during discussions relating to his compensation and
abstained from voting on any matters relating to himself.
5
<PAGE>
compensation commensurate with an individual's level of experience,
responsibility and past performance yet at a conservative level so that a
significant portion of an executive officer's compensation opportunities can
be based on individual performance in a fiscal year. Each of the Company's two
full-time officers also has an employment contract prohibiting reductions in
base pay from that last established. Discretionary bonuses are awarded
annually if the Board believes an individual officer's performance in his or
her particular area of responsibility so merits. Individual officer
performance is measured primarily by how effectively the individual officer
performed his or her assigned job. Compensation for 1996 was not tied to the
Company's operating results. It is anticipated that unless the Company's
performance were to deviate substantially from the Company's internally
projected results, the Company's performance will not be taken into account in
determining the compensation of executive officers.
Base Salaries. Mr. Rickershauser has been the Chairman of the Board, Chief
Executive Officer and a director of the Company since January 30, 1996,
Chairman of the PSG Board since 1991 and Chief Executive Officer of PSG since
October 1994. Mr. Rickershauser performs the duties of Chief Executive Officer
on a part-time basis. In setting his 1996 compensation, the Compensation
Committee considered the time which Mr. Rickershauser expected to devote to
the Company's affairs, taking into account a substantial increase in the
amount of time he has devoted to the affairs of the Company over the past
several years. The Compensation Committee did not tie Mr. Rickershauser's 1996
compensation to the Company's performance.
The other two executive officers of the Company are Lawrence A. Guske, Vice
President-Finance and Chief Financial Officer, and Johanna Unger, Vice
President, Controller and Secretary. Mr. Guske and Ms. Unger each received
annual pay increases of $5,000 in January 1996 and annual pay increases of
$7,000 and $5,000, respectively, in March 1997 (effective January 1, 1997).
These were primarily designed to help their salaries remain competitive and
keep pace with inflation.
ANNUAL DISCRETIONARY BONUSES. The executive officers are eligible to receive
bonuses based upon individual performance. Bonuses are normally awarded in
March of each year to reflect performance for the prior year. The Compensation
Committee has specifically elected not to establish defined criteria on which
bonus compensation will be based but has instead elected to maintain a
subjective approach to bonus compensation based on a post hoc review of the
prior year's performance by each officer. In March, 1997, the two full-time
executive officers were awarded discretionary bonuses of $50,000.
LONG-TERM INCENTIVE PROGRAM. There is currently no long-term incentive
program in place for executive officers of the Company.
Members of the Compensation
Committee
William H. Borthwick
Steven D. Broidy
Robert M. Fomon
J.P. Guerin
Donald W. Killian, Jr.
Gordon C. Luce
Christopher H. B. Mills
Joseph S. Pirinea
Charles E. Rickershauser, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board sits as a Compensation Committee of the whole with respect to
executive compensation matters, except that Mr. Rickershauser was not present
during discussions regarding, nor did he vote on, compensation matters
concerning himself. Mr. Rickershauser did participate in discussions regarding
compensation of executive officers other than himself.
6
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows the compensation as of the end of each of the last
three years ending December 31, 1996 of (i) the Company's chief executive
officer and (ii) the two current executive officers (collectively the "Named
Executive Officers"). The table reflects the period prior to the consummation
of the 1996 Reorganization on June 5, 1996, when the Company either did not
exist or was an inactive subsidiary of PSG.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(A) BONUS(B) COMPENSATION(C)
--------------------------- ---- --------- -------- ---------------
<S> <C> <C> <C> <C>
Charles E. Rickershauser, Jr. .......... 1996 $138,900 $ -- $19,294
Chairman of the Board and 1995 138,600 -- 19,497
Chief Executive Officer 1994 128,604 -- 19,441
Lawrence A. Guske....................... 1996 176,215 50,000 4,500
Vice President--Finance and 1995 170,445 50,000 4,500
Chief Financial Officer 1994 162,946 35,000 4,500
Johanna Unger........................... 1996 148,215 50,000 4,500
Vice President, Controller 1995 142,446 50,000 4,500
and Secretary 1994 134,946 35,000 4,500
</TABLE>
- - --------
(A) Includes amounts deferred pursuant to Section 401(k) of the Tax Code and
cash payments designated as automobile allowances. Fees paid to Mr.
Rickershauser as a director are included.
(B) Bonuses earned for calendar years 1994, 1995 and 1996 were actually
awarded and paid in March 1995, January 1996 and March 1997, respectively.
(C) The Company's contribution to each executive officer's 401(k) plan is
included in "All Other Compensation." The amount of the 401(k)
contribution by the Company in 1996 was $4,167 for Mr. Rickershauser and
$4,500 for each of the other Named Executive Officers. In addition, for
Mr. Rickershauser, $15,127 is included for life insurance premiums for
1996. The Company has agreed to pay life insurance premiums on Mr.
Rickershauser for a period of six years beginning in 1992. All premiums so
paid will be reimbursed to the Company out of any death benefits paid
under such insurance.
STOCK OPTIONS
The following table sets forth information with respect to the number of
unexercised options held by each of the Named Executive Officers as of the end
of the last fiscal year. PSG's 1984 Stock Incentive Plan terminated in March,
1994, and no additional stock options were granted since such termination. The
Company has no stock option plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS/SARS AT
DECEMBER 31, 1996
NAME (ALL EXERCISABLE)
---- ----------------------
<S> <C>
Charles E. Rickershauser, Jr. ..................... --
Lawrence A. Guske ................................. 5,000
Johanna Unger...................................... 3,000
</TABLE>
None of the Named Executive Officers exercised any options during 1996. None
of the unexercised options were in-the-money at December 31, 1996.
7
<PAGE>
RETIREMENT BENEFITS
The Company maintains an unfunded retirement plan (the "Retirement Plan")
providing retirement benefits for its officers. The only officers currently
participating in, and accruing benefits under, the Retirement Plan are
Mr. Guske and Ms. Unger. The normal retirement benefit under the Retirement
Plan is a straight life annuity commencing at age 60 with monthly payments
equal to 2.5% of compensation for each year of service up to 20 years plus 2%
of compensation for each year of additional service up to five years. The term
"compensation," for this purpose, means the average monthly compensation
received for the 60 consecutive calendar months during the last 120 months in
which the participant had the highest compensation. A participant may elect to
receive his or her benefits in one of certain annuity forms, each of which is
the actuarial equivalent of a straight life annuity.
A participant who reaches his or her "early retirement date" may choose to
retire and to receive an early retirement benefit equal to the normal
retirement benefit subject to certain reductions. A participant generally
reaches his or her early retirement date at age 55, but may have an early
retirement date as early as age 50 if either the Company consents or the
Company consummates certain merger or consolidation transactions.
A participant whose employment with the Company terminates before he or she
reaches his or her early retirement date will receive a normal retirement
benefit on reaching age 60, or an early retirement benefit on reaching his or
her early retirement date, based on his or her years of service at termination
of employment.
Benefits payable under the Retirement Plan are not offset or reduced by
Social Security benefits, but are reduced by the actuarial equivalent of the
lump sum payments which the participants received upon the termination in 1988
of the qualified defined benefit pension plan which PSG formerly maintained,
and which covered most of its employees, including the participants.
For illustrative purposes only, the following table provides examples of the
annual benefits payable under the Retirement Plan as a straight life annuity
at age 60.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
"COMPENSATION" 15 20 25 30 35
-------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000 $ 56,250 $ 75,000 $ 90,000 $ 90,000 $ 90,000
175,000 65,625 87,500 105,000 105,000 105,000
200,000 75,000 100,000 120,000 120,000 120,000
225,000 84,375 112,500 135,000 135,000 135,000
250,000 93,750 125,000 150,000 150,000 150,000
300,000 112,500 150,000 180,000 180,000 180,000
</TABLE>
Mr. Guske and Ms. Unger have approximately 27 and 18 years of service,
respectively. All amounts listed in the Summary Compensation Table are
included in "Compensation" for purposes of the Pension Plan Table, except that
automobile allowances shown under "Salary" in the Summary Compensation Table
and Company 401(k) contributions shown under "All Other Compensation" in the
Summary Compensation Table are excluded.
In addition to retirement benefits, the Retirement Plan provides a
disability benefit equal to 60% of regular salary, excluding bonuses, and less
other long-term disability and Social Security benefits which may be payable,
continuing for the number of years equal to the number of years of service as
an employee. Thereafter, the monthly benefit is reduced to an amount which is
the greater of (a) 40% of regular salary, (b) $3,000, or (c) the amount to
which the disabled participant would be entitled as a normal retirement
benefit at age 60. The benefit continues until the earlier of age 60, the date
benefits cease under any other long-term disability plan, or death. In
addition, the years of service while disabled are counted toward a retirement
benefit, but are limited to the number of years of service accumulated at the
time of disability. The Retirement Plan also provides a survivor's
8
<PAGE>
benefit if the participant dies while employed by the Company or PSG as an
officer and leaves a surviving spouse or dependent children under the age of
22.
Prior to the 1996 Reorganization, PSG had agreed to accrue an unfunded
retirement benefit for Mr. Rickershauser of $50,000 per year, plus accrued
interest thereon (based on the rate paid on one-year U.S. Treasury Bills as of
January 1 of each calendar year), for each year he served as Chairman of the
PSG Board. On March 12, 1997, with the approval of the Board, PSG and Mr.
Rickershauser entered into an Executive Retirement Agreement, which augments
Mr. Rickershauser's accrued retirement benefit to $100,000 for 1996 and 1997,
and clarifies the terms and conditions under which such retirement benefit
will be accrued and paid. Under the Executive Retirement Agreement, PSG will
establish a bookkeeping account, to which will be credited: (a) the amount of
Mr. Rickershauser's unfunded retirement benefit (including interest thereon)
accrued through December 31, 1996; (b) $50,000 as of December 31, 1996, to
bring Mr. Rickershauser's accrued retirement benefit for 1996 from the $50,000
accrued under the prior arrangement between PSG and Mr. Rickershauser to a
total of $100,000; (c) $100,000 for 1997; (d) $50,000 for each year beginning
with 1998 during which Mr. Rickershauser serves as Chairman of the Board or
Chief Executive Officer of the Company; and (e) interest during each calendar
year beginning in 1997 compounded daily at the rate paid on one-year U.S.
Treasury Bills as of January 1 of such calendar year, with such interest
continuing to accrue until Mr. Rickershauser becomes entitled to payment (the
accrual under (c) or (d) above, as applicable, for the year in which Mr.
Rickershauser no longer serves as either Chairman of the Board or Chief
Executive Officer of the Company will be prorated on the basis of the number
of months served that year). Mr. Rickershauser becomes entitled to payment on
the later of January 1, 2001, or the date on which he no longer performs
services either as Chairman of the Board or Chief Executive Officer of the
Company. The benefits will be paid in one of the annuity forms available to
participants under the Retirement Plan, as elected by Mr. Rickershauser. Each
of these forms of benefit will be the actuarial equivalent of the balance in
the account when Mr. Rickershauser becomes entitled to payment.
EXECUTIVE EMPLOYMENT AGREEMENTS
Executive employment agreements have been entered into with Mr. Guske and
Ms. Unger. The agreements are for continually renewing one-year periods.
Compensation to be paid to each of them is to be determined by the Board but
is not to be less than the amount last established by the Board. The annual
salary for each of them last established in March 1997 was as follows: Mr.
Guske, $177,000 and Ms. Unger, $147,000. Under their respective employment
agreements, the Company has agreed to continue for a one-year period their
then-current compensation if either of them is terminated without cause or
resign because certain provisions of their respective agreements have not been
complied with by the Company. In the event they are terminated as a result of
a change in control of the Company, they will be entitled to severance pay
equal to two years at their then current compensation. Retirement benefits
continue to accrue during such periods.
STOCK PERFORMANCE GRAPH
The following performance graph compares the five-year cumulative total
stockholder returns (assuming reinvestment of dividends) realized by Company
Stockholders with the S&P 500 index and with the peer group described below.
The performance graph assumes $100 is invested in Company Common Stock (or,
before June 5, 1996, the Common Stock of PSG ("PSG Common Stock")), the S&P
500 index and a composite index of peer companies on December 31, 1991, and
that dividends and special cash distributions paid during the five years
ending December 31, 1996 were reinvested when paid to purchase additional
shares. The Company has created a special peer group index because no
published peer group accurately mirrors the three different lines of business
in which the Company has material revenues. The performance of the Company's
aircraft leasing business is closely related to the financial condition of the
companies to which it leases aircraft. As a result, the Company believes that
the peer group against which the performance of its aircraft leasing business
should be measured is more accurately the companies to which it leases
aircraft, rather than other companies in the aircraft leasing business and
therefore the peer group index includes the three companies to which it leases
aircraft. The Company used companies in the fuel sales and distribution and
oil and gas business to measure performance in those businesses.
9
<PAGE>
Within each line of business the selected peer companies were weighted
annually by market capitalization at the beginning of each period for which a
return is indicated. Weighing of peer companies within the Company's line of
businesses was done annually by the asset value of each individual line of
business.
The peer group includes the following companies from each segment:
<TABLE>
<C> <C> <S>
Fuel sales and distribution: Aircraft leasing:
World Fuel Service Corp. US Airways, Inc.
Mercury Air Group Inc. Continental Airlines, Oil and gas:
Inc. Alta Energy Corp.
America West Airlines, Hallador Petroleum Corp.
Inc. Hallador Energy Corp.
</TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
THE COMPANY (PSG PRIOR TO JUNE 5, 1996), S&P 500 AND PEER GROUP)
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period S&P
(Fiscal Year Covered) PSG 500 INDEX Peer Group
- - ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 1991 $100 $100 $100
FYE 1992 $ 31.561 $107.608 $100.037
FYE 1993 $ 44.434 $118.405 $109.927
FYE 1994 $ 36.129 $120.013 $ 52.315
FYE 1995 $ 40.697 $164.951 $135.398
FYE 1996 $ 56.786 $202.724 $170.491
</TABLE>
10
<PAGE>
BENEFICIAL OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth, as of the Record Date, the number of shares
of Company Common Stock beneficially owned by each nominee to or member of the
Board, for each Named Executive Officer shown in the Summary Compensation
Table (see "Executive Compensation") and for all executive officers, directors
and nominees as a group.
<TABLE>
<CAPTION>
COMMON STOCK PERCENT OF
BENEFICIALLY COMMON
NAME OWNED(1) STOCK
---- ------------ ----------
<S> <C> <C>
William H. Borthwick.................................. 1,000 *
Steven D. Broidy...................................... 4,100(2) *
Robert M. Fomon....................................... 281 *
J.P. Guerin........................................... 319,693(3) 5.3
Lawrence A. Guske..................................... 11,538(4) *
Donald W. Killian, Jr................................. 1,600(5) *
Gordon C. Luce........................................ 153(6) *
Christopher H. B. Mills............................... 277,400(7) 4.6
Joseph S. Pirinea..................................... 65,400(8) 1.1
Charles E. Rickershauser, Jr. ........................ 4,000 *
Johanna Unger......................................... 3,000(9) *
All current Officers and Directors as a group......... 688,165(10) 11.3
</TABLE>
- - --------
* Less than one percent
(1) Unless otherwise disclosed, beneficial ownership is direct and the person
indicated has sole voting and dispositive power over the shares of common
stock listed. In certain instances, as footnoted, ownership figures
include shares that may be acquired pursuant to options exercisable within
60 days of the Record Date. All expressions of percentage of shares held
assume that the options of the particular person or group in question have
been exercised and no others.
(2) These shares are held by the Broidy Revocable Trust, of which Mr. Broidy
is a Trustee and beneficiary.
(3) Includes (i) 12,358 shares owned by Mr. Guerin's wife, (ii) 50,714 shares
and 100,000 shares in the John Patrick Guerin Trust and Guerin Family
Trust, respectively, each of which Mr. Guerin is a Trustee and beneficiary
and (iii) 156,621 shares in the J. Patrick Guerin III Trust, of which Mr.
Guerin is a Trustee but in which he has no beneficial interest. The shares
held by the John Patrick Guerin Trust and Guerin Family Trust are pledged
as collateral under Mr. Guerin's personal line of credit with a bank,
which bank thereby has or shares dispositive power with respect to such
shares.
(4) Includes 5,000 shares which may be acquired upon the exercise of stock
options.
(5) These shares are held by the Killian Family 1987 Trust of which Mr.
Killian is a Trustee and beneficiary.
(6) These shares are held by the Luce Family Trust of which Mr. Luce is a
Trustee and beneficiary.
(7) These shares are beneficially owned by NASCIT.
(8) Includes (i) 27,000 shares owned jointly with Mr. Pirinea's wife, (ii)
23,100 shares owned jointly with Mr. Pirinea's mother, (iii) 8,700 shares
owned jointly with Robert Oliveri, (iv) 200 shares held in the Pirinea,
Cozzolino & Kelly P.C. Retirement Fund for Mr. Pirinea, (v) 1,000 shares
held in a custodial account for Mr. Pirinea's daughter, (vi) 3,100 shares
held in Mr. Pirinea's Individual Retirement Account ("IRA") and (vii)
2,300 shares held in Mr. Pirinea's wife's IRA.
(9) These shares may be acquired upon the exercise of stock options.
(10) Includes 8,000 shares which officers as a group may acquire upon exercise
of stock options (see "Executive Compensation--Stock Options").
11
<PAGE>
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to all persons known
to the Company to be the beneficial owners of more than five percent of
Company Common Stock as of the Record Date.
<TABLE>
<CAPTION>
COMMON STOCK
NAME AND ADDRESS BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED COMMON STOCK
------------------- ------------ ------------
<S> <C> <C>
Berkshire Hathaway Inc.(1)............................ 1,208,039 19.9
1440 Kiewit Plaza
Omaha, Nebraska 68131
ESL Partners, L.P.(2)................................. 1,198,970 19.7
115 East Putnum Avenue
Greenwich, Connecticut 06830
J.P. Guerin(3)........................................ 319,693 5.3
355 South Grand Avenue
Los Angeles, CA 90071
</TABLE>
- - --------
(1) Ownership information obtained from Berkshire Hathaway Inc. ("Berkshire")
Schedule 13D dated December 14, 1990 (the "Berkshire 13D"). The Berkshire
13D was also filed on behalf of Warren E. Buffett, who may be deemed to
control Berkshire and the following subsidiaries of Berkshire (the amount
of Company Common Stock reported to be owned by each such subsidiary in
the Berkshire 13D is shown in parentheses following the respective
subsidiary's names): National Indemnity Company (579,957); National
Liability & Fire Insurance Company (330,475); Columbia Insurance Company
(197,600); and National Fire and Marine Insurance Company (100,000).
Berkshire exercises shared voting and dispositive power over all shares
listed. In connection with a 1990 amendment to PSG's Rights Agreement
dated as of June 30, 1986 (the "PSG Rights Plan;" the PSG Rights Plan
ceased to be in effect upon consummation of the Reorganization and the
Company has no similar plan) permitting Mr. Buffett, Berkshire and their
respective affiliates to acquire up to 45% of PSG Common Stock without
triggering the provisions of the PSG Rights Plan, Berkshire entered into
an agreement with PSG dated December 13, 1990 (the "Berkshire Agreement")
that: (i) it would vote all shares of PSG Common Stock owned by it or by
its subsidiaries in excess of 22.5% of the outstanding PSG Common Stock in
the same proportion as all other shares of PSG Common Stock (including the
shares owned by Berkshire not in excess of 22.5%, as to the voting of
which Berkshire and its subsidiaries were not restricted by the Berkshire
Agreement) were voted in connection with all matters on which shares of
PSG Common Stock were voted; (ii) it would not sell any shares of PSG
Common Stock owned by it in any transaction if it knew, following
reasonable inquiry, that as a result of such transaction any purchaser
would be the "Beneficial Owner" (as defined in the PSG Rights Plan) of a
number of shares of PSG Common Stock sufficient to make such purchaser an
"Acquiring Person" as defined in the PSG Rights Plan; (iii) it would not
make any further purchases of shares of PSG Common Stock following receipt
of notice from PSG that further purchases of such shares by it might have
caused the de-listing of PSG Common Stock on the NYSE; (iv) it would not
be a "participant," as defined in Rule 14a-11 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in any proxy
solicitation in opposition to a solicitation by PSG involving the election
or removal of PSG directors nor solicit, within the meaning of Rule 14a-
1(1), any proxy in connection with any other matter on which a vote of PSG
shareholders was taken if such solicitation was in opposition to any
proposal or position approved by the Board; (v) it would not be a member
of an Exchange Act Section 13(d) group (other than one composed solely of
itself and its affiliates) with respect to any securities of PSG; and (vi)
it would cause its subsidiaries owning shares of PSG Common Stock to
comply with the same obligations as itself. Mr. Buffett agreed (the
"Buffett Commitment") with the Company in his individual capacity to
execute a similar agreement before purchasing any shares of PSG Common
Stock for his own account and not to make any such purchases while
Berkshire owned any shares of PSG Common Stock. There has been no
discussion between the Company and Mr. Buffett or Berkshire with respect
to the application of the Berkshire Agreement or the Buffett
12
<PAGE>
Commitment to the 1996 Reorganization and the conversion therein of PSG
Common Stock to Company Common Stock. Berkshire and Mr. Buffett are
precluded from buying additional shares of Company Common Stock under, and
subject to the exemptions set forth in, the transfer restrictions imposed
by Article X of the Restated Certificate (the "Transfer Restrictions") so
long as the Transfer Restrictions are in effect.
(2) Ownership information obtain from Amendment No. 12, dated May 21, 1996, to
Schedule 13D dated December 10, 1993 and prior amendments thereto. ESL
Partners, L.P. exercises sole voting and dispositive power over all
shares.
(3) See footnote (2) to the table set forth under the caption "Beneficial
Ownership of Directors and Officers."
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC and the NYSE
initial reports of ownership and reports of changes in ownership of equity
securities of the Company. Directors, executive officers and greater than ten-
percent stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and, in the case of its directors and
executive officers, written representations that no other reports were
required, during the Company's fiscal year 1996 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-
percent beneficial owners were met.
13
<PAGE>
THE BOARD UNCLASSIFICATION AMENDMENTS
GENERAL
Company Stockholders are being asked to approve and adopt the Board
Unclassification Amendments, pursuant to which, effective at the 1998 Annual
Meeting, every member of the Board will be elected annually. THE FULL TEXT OF
THE BOARD UNCLASSIFICATION AMENDMENTS IS ATTACHED AS APPENDIX A TO THIS PROXY
STATEMENT AND THE DISCUSSION BELOW, INSOFAR AS IT SUMMARIZES THE MATERIAL
TERMS OF THE BOARD UNCLASSIFICATION AMENDMENTS, IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE THERETO.
Approval and adoption of the Board Unclassification Amendments requires the
affirmative vote of 66 2/3% of the outstanding shares of Company Common Stock.
See "The Annual Meeting--Votes Required."
If the Board Unclassification Amendments are approved and adopted at the
1997 Annual Meeting, they will not be operative for the election of directors
at the 1997 Annual Meeting and, accordingly, the Board will continue,
following the 1997 Annual Meeting, to be comprised of three classes of
directors, each serving a three-year term. See "Election of Directors."
However, the Board Unclassification Amendments, if approved and adopted at the
1997 Annual Meeting, will be operative for annual elections of directors
commencing at the 1998 Annual Meeting. Every current member of the Board
(including those standing for re-election to a new three-year term at the 1997
Annual Meeting; see "Election of Directors--Nominees for Director" and "--
Certain Information Concerning Other Directors") has committed that, if the
Board Unclassification Amendments are approved and adopted at the 1997 Annual
Meeting, he will resign immediately before the vote on the election of
directors is taken at the 1998 Annual Meeting so that all directors nominated
by the Board will stand for re-election at the 1998 Annual Meeting even if
their respective classified terms were otherwise scheduled to expire in a
later year.
THE BOARD UNANIMOUSLY RECOMMENDS THAT COMPANY STOCKHOLDERS VOTE TO APPROVE
AND ADOPT THE BOARD UNCLASSIFICATION AMENDMENTS AT THE 1997 ANNUAL MEETING.
BACKGROUND TO THE BOARD UNCLASSIFICATION AMENDMENTS
On June 5, 1996, the Company and PSG consummated the 1996 Reorganization,
pursuant to which PSG (which was previously the Company's parent company)
became a wholly-owned subsidiary of the Company and every share of PSG Common
Stock was converted into a share of Company Common Stock that, immediately
upon issuance, became subject to the Transfer Restrictions. The purpose and
effect of the 1996 Reorganization, and the reasons why the Board of Directors
of PSG (the "PSG Board") unanimously recommended its approval by the
stockholders of PSG, were discussed in detail in the proxy statement dated
April 17, 1996 issued by the PSG Board (which also contained a prospectus of
the Company) in connection with the 1996 Annual Meeting of Stockholders of PSG
(the "1996 Annual Meeting"), as supplemented by supplements dated May 1, 1996,
May 14, 1996 and May 22, 1996 (collectively, the "1996 Proxy
Statement/Prospectus").
In proposing the 1996 Reorganization, the PSG Board decided that, except as
necessary to provide for the Transfer Restrictions and related matters, the
Restated Certificate and the Restated By-Laws should mirror the provisions of
PSG's Certificate of Incorporation and By-Laws. Since these included
provisions for a classified board of directors, these and related provisions
were retained in Article V of the Restated Certificate and Article III,
Sections 4 and 5, of the Restated By-Laws (collectively, the "Current
Classification Provisions").
Following PSG's public announcement on February 9, 1996 of the intention of
the PSG Board to seek stockholder approval for the 1996 Reorganization,
various stockholders of PSG, representing in the aggregate a substantial
number of shares, expressed their intention, for various reasons, to vote
against the 1996 Reorganization. Since the PSG Board considered that it was
very important for all stockholders that the Share Transfer Restrictions be
implemented by means of the 1996 Reorganization, the PSG Board took various
steps to allay the concerns of these stockholders and obtain their commitment
to vote in favor of the 1996 Reorganization, as described in the 1996 Proxy
Statement/Prospectus. One of these steps was a commitment,
14
<PAGE>
subsequently met, to add Messrs. Mills and Pirinea to the Company Board
immediately following the consummation of the 1996 Reorganization (see
"Election of Directors--Nominees for Director"). Another was a commitment
that, after the 1996 Annual Meeting was concluded, the Board would study the
possibility of proposing that the Current Classification Provisions be
eliminated. PSG was able to resolve its differences with these stockholders
and obtain their agreement to vote in favor of the 1996 Reorganization, which
was approved by PSG's stockholders at the 1996 Annual Meeting on June 5, 1996
and consummated immediately thereafter.
Consistent with its commitment to study the possibility of proposing the
elimination of the Current Classification Provisions, the Board has evaluated
the arguments both for and against retaining the Current Classification
Provisions and has decided to recommend their replacement pursuant to the
Board Unclassification Amendments. See "Reasons for the Board Unclassification
Amendments."
REASONS FOR THE BOARD UNCLASSIFICATION AMENDMENTS
The Board has taken note of the fact that the Current Classification
Provisions, in tandem with (i) Article II, Section 3 of the Restated By-Laws,
which significantly limits the power of stockholders to compel the call of a
special meeting (this provision will remain in effect even if the Board
Unclassification Amendments are approved and adopted (see "Other Matters--
Stockholder Proposals") and, under Article XIV of the Restated By-Laws, cannot
be amended or repealed by the stockholders, as distinct from the Board,
without the affirmative vote of 66 2/3% of the outstanding shares of Company
Common Stock), and (ii) Article VIII of the Restated Certificate, which
eliminates the power of stockholders to take action by written consent in lieu
of a meeting (this provision will also remain in effect even if the Board
Unclassification Amendments are approved and adopted and, under Article X of
the Restated Certificate, cannot be amended or repealed without the
affirmative vote of 66 2/3% of the outstanding shares of Company Common
Stock), prevent an insurgent from replacing a majority of the Board at a
single annual meeting of stockholders. Rather, anyone seeking to obtain
control of the Board by having its nominees elected instead of the Board's
nominees would have to engage in a proxy contest in two (at least) annual
meetings of stockholders since only one-third of the Board is elected at each
annual meeting.
The Board recognizes that the Current Classification Provisions protect the
interests of the Company and its stockholders against the risk that control of
the Board may shift, in a single election, to persons whose knowledge and
understanding regarding the Company is far more limited than incumbent
directors (who have had access to non-public information regarding the Company
and have devoted substantial time to evaluating this information in
preparation for, and during, meetings of the Board and its committees) and who
therefore may be unable to fulfill, or may decide that they have to change,
the commitments they made as part of their election platform.
On the other hand, the Board recognizes that the Current Classification
Provisions have the potential for insulating members of the Board against
stockholders whose views regarding the direction in which the Company should
be taken may differ from those of the incumbent directors and that, for this
reason, certain of the Company's larger stockholders appear to favor the
repeal of the Current Classification Provisions. The Board also recognizes
that provisions like the Classification Board Provisions are generally
disfavored by a number of institutional stockholders, including those who hold
or may in the future own Company Common Stock. Accordingly, the Board believes
that the retention of the Current Classification Provisions has the potential
to be a source of disagreement between the Company and these institutions.
Having considered these competing considerations, and having also taken into
account (i) the commitment that the Board made to studying the subject, and
the potentially adverse effects on stockholder relations if the outcome of
that study were a recommendation to retain the Current Classification
Provisions, and (ii) the strong sentiment of certain members of the Board
against the retention of the Current Classification Provisions, the Board has
decided unanimously to recommend the Board Unclassification Amendments.
However, in order to ensure an orderly transition from a classified to an
unclassified Board and to safeguard the Company and its stockholders against
the disruption that might ensue from any attempt to obtain control of the
Board by unseating the Board's nominees at the 1997 Annual Meeting, the Board
has decided to defer the effectiveness of the Board Unclassification
Amendments until the 1998 Annual Meeting.
15
<PAGE>
SUMMARY OF BOARD UNCLASSIFICATION AMENDMENTS
General. As reflected in Appendix A to this Proxy Statement (which contains
both the Current Classification Provisions and the changes that would be made
to them by the Board Unclassification Amendments), the Board Unclassification
Amendments would:
(1) replace Article V of the Restated Certificate with a new Article V;
(2) amend Article III, Section 4 of the By-Laws; and
(3) delete Article III, Section 4 of the By-Laws.
NONE OF THESE CHANGES WILL BE OPERATIVE FOR THE 1997 ANNUAL MEETING BUT ALL
OF THEM WILL BECOME OPERATIVE FOR THE 1998 ANNUAL MEETING. SEE "GENERAL."
AS INDICATED UNDER "REASONS FOR THE BOARD UNCLASSIFICATION AMENDMENTS," THE
PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND THE RESTATED BY-
LAWS THAT SIGNIFICANTLY LIMIT THE POWER OF COMPANY STOCKHOLDERS TO COMPEL THE
CALL OF THE SPECIAL MEETING, ELIMINATE THE POWER OF COMPANY STOCKHOLDERS TO
ACT BY WRITTEN CONSENT IN LIEU OF A MEETING AND REQUIRE A VOTE OF 66 2/3% OF
THE OUTSTANDING SHARES OF COMPANY COMMON STOCK TO REPEAL SUCH LIMITATIONS AND
ELIMINATION WILL ALL REMAIN IN EFFECT EVEN IF THE BOARD UNCLASSIFICATION
AMENDMENTS BECOME OPERATIVE. THE BOARD HAS UNANIMOUSLY CONCLUDED THAT THESE
PROVISIONS OFFER IMPORTANT PROTECTIONS TO THE COMPANY AND COMPANY
STOCKHOLDERS.
Summary of New Article V of the Restated Certificate. The new version of
Article V of the Restated Certificate will differ from the current version in
the following respects:
. It will delete the provision whereby the Board is divided into three
classes, as nearly equal in number as possible, with each director
assigned to one of the classes and serving for a three-year term.
Instead, at each annual meeting of Company Stockholders all directors
will be elected to hold office until their respective successors are
elected and qualified or until their earlier resignation or removal.
. It will delete the provision whereby, if the authorized number of
directors (which is fixed by a Board resolution from time to time under
Article III, Section 2 of the Restated By-Laws and is currently nine) is
increased or decreased, the increase or decrease is apportioned among
the three classes of directors so as to maintain such classes as nearly
equal as possible.
. It will delete the provision whereby, if a vacancy arises or is created
on the Board (through death, retirement, resignation or removal of an
incumbent director or through an increase in the number of directors),
the vacancy is filled by a majority vote of the remaining directors in
the affected class (or by the sole remaining director of that class if
only one remains). Instead, the vacancy will be filled by a majority
vote of the remaining directors (or by the sole remaining director if
only one remains).
. To reflect the fact that Article IV of the Restated Certificate
authorizes the Board to issue up to one million shares of preferred
stock of the Company in one or more series and to fix the rights of each
series, the provisions of Article V regarding the method of fixing the
size of the Board, the effect of an increase or decrease in the
authorized number of directors and the filling of vacancies will all be
made expressly subject to any right of the holders of any series of
preferred stock ("Preferred Stock Rights"). Currently, the Company has
no outstanding shares of preferred stock.
Summary of Changes to Restated By-Laws. The amendments to the Restated By-
Laws pursuant to the Board Unclassification Amendments will differ from the
current By-Laws in the following respects (for a description of certain other
amendments to the Restated By-Laws, which are not part of the Board
Unclassification Amendments and are not subject to approval by Company
Stockholders, see "Amendments to Advance Notice Requirements of Restated By-
Laws"):
. Article III, Section 4 of the Restated By-Laws currently mirrors those
provisions of Article V of the Restated Certificate that divide the
Board into three classes. These provisions will be deleted.
16
<PAGE>
. Article III, Section 4 of the Restated By-Laws also currently mirrors
those provisions of current Article V of the Restated Certificate that
apportion increases or decreases in the authorized number of directors
among the three classes. These provisions will be amended in the same
manner as Article V of the Restated Certificate and will be made
similarly subject to any Preferred Stock Rights.
. Article III, Section 5 of the Restated By-Laws currently mirrors those
provisions of current Article V of the Restated Certificate that provide
for the filling of vacancies on the Board. This provision will be
deleted and the remaining provisions of Article III of the Restated By-
Laws will be appropriately renumbered.
OTHER MATTERS
STOCKHOLDER PROPOSALS
General. Separate and apart from its action to approve the Unclassified
Board Amendments and submit them for approval by Company Stockholders at the
1997 Annual Meeting, the Board has approved certain other amendments to the
Restated By-Laws (the "Advance Notice Amendments"). THE FULL TEXT OF THE
ADVANCE NOTICE AMENDMENTS HAS BEEN FILED BY THE COMPANY WITH THE SEC AS PART
OF A CURRENT REPORT ON FORM 8-K DATED MARCH 13, 1997, A COPY OF WHICH HAS ALSO
BEEN PROVIDED TO THE NEW YORK STOCK EXCHANGE AND THE PACIFIC STOCK EXCHANGE,
AND THE DISCUSSION BELOW, INSOFAR AS IT SUMMARIZES THE MATERIAL TERMS OF THE
ADVANCE NOTICE AMENDMENTS, IS QUALIFIED IN ITS ENTIRETY BY REFERENCE THERETO.
THE ADVANCE NOTICE AMENDMENTS ARE NOT SUBJECT TO APPROVAL BY COMPANY
STOCKHOLDERS AND ARE NOT CONDITIONED ON THE APPROVAL AND ADOPTION OF THE BOARD
UNCLASSIFICATION AMENDMENTS AT THE 1997 ANNUAL MEETING. HOWEVER, THE ADVANCE
NOTICE AMENDMENT WILL NOT BE OPERATIVE WITH RESPECT TO THE ANNUAL MEETINGS OF
COMPANY STOCKHOLDERS UNTIL THE 1998 ANNUAL MEETING.
Background. The Restated By-Laws currently contain two provisions (together,
the "Current Advance Notice Provisions") which impose advance notice
requirements on Company Stockholders who wish to raise items of business at an
annual meeting of stockholders: (i) Article II, Section 10 imposes advance
notice requirements with respect to business other than a nomination of a
candidate for election to the Board; and (ii) Article III, Section 3 imposes
advance notice requirements with respect to a nomination of a candidate for
election to the Board. Although the Current Advance Notice Provisions differ
from one another in certain respects, they contain the same basic timing
requirement, namely that the proponent must give the Company written notice of
the proposed item of business or nomination at least thirty days prior to the
annual meeting of stockholders at which the proponent seeks to have the item
of business or nomination considered.
Reasons for the Advance Notice Amendments. The experience of PSG in
connection with the solicitation of proxies for the 1996 Annual Meeting has
led the Board to the conclusion that thirty days is not a sufficient period of
notice. Typically, the Company would expect that its own proxy material for an
annual meeting of stockholders would have been filed and cleared with the SEC,
printed and distributed to Company Stockholders more than thirty days before
the meeting date, as is customary for public companies with a widely-dispersed
group of stockholders. Indeed, such was the timing in the case of both the
1996 Proxy Statement/Prospectus and this Proxy Statement. If the Company's
proxy material for an annual meeting has already been distributed before an
otherwise-complying notice is received, the Company faces the risk (as, again,
materialized in connection with the 1996 Annual Meeting) of having to prepare,
clear with the SEC, print and distribute to Company Stockholders additional
proxy material relating to the proposal that might have been avoided if the
proposal had been received in time to be addressed in the original proxy.
Since the purpose of the Current Advance Notice Provisions is to give the
Board the opportunity, in the interests of all stockholders, to respond in an
appropriately deliberative manner to any stockholder proposal, the Board
believes that lengthening the minimum notice period to at least 90 days, as
specified in the Advance Notice Amendments, is appropriate to more effectively
advance that goal and limit the Company's expense. However,
17
<PAGE>
in order to provide all Company Stockholders with adequate notice of this
change in the minimum notice requirement, the Board has decided to defer the
effectiveness of the Advance Notice Amendments, insofar as they apply to an
annual meeting of Company Stockholders, until the 1998 Annual Meeting. In
addition to lengthening the amount of advance notice required, the Advance
Notice Amendments require more complete information about the proponent and
the proposal to give the Company a better basis for evaluating it and
responding appropriately.
Summary of Advance Notice Amendments. Under Article II, Section 2 of the
Restated By-Laws, as amended by the Advance Notice Amendments for annual
meetings of stockholders commencing with the 1998 Annual Meeting, a nomination
for election to the Board and a proposal for other business to be transacted
by the stockholders at an annual meeting of stockholders may be made by a
stockholder (as distinct from the Company) only if such stockholder was a
stockholder of record at the time of the giving of a required notice, who is
entitled to vote at the meeting and who has given the required notice. In
addition, business other than a nomination for election to the Board must be a
proper matter for stockholder action under the Delaware General Corporation
Law. The required notice must be in writing and delivered to the Company's
principal executive offices not less than 90 days prior to the first
anniversary of the preceding year's annual meeting of stockholders; provided,
however, that if the date of the annual meeting is advanced more than 30 days
prior to, or delayed by more than 60 days after, such anniversary, the notice,
to be timely, must be so delivered by the close of business on the later of
the 90th day prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first required. In
the event that the numbers of directors to be elected to the Board is
increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board at least 100 days prior
to the first anniversary of the preceding year's annual meeting, a
stockholder's required notice will be considered timely, but only with respect
to nominees for new positions created by such increase, if so delivered not
later than the close of business on the 10th day following the day on which
such public announcement is first made by the Company. The notice must set
forth: (a) as to each person whom the stockholder proposes to nominate for
election as a director, all information relating to such person as would be
required to be disclosed by the SEC's proxy rules in a solicitation of proxies
for such person's election, and such person's written consent to serve as a
director if elected; (b) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of such business,
the reasons for conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial owner, if
any, on whose behalf the proposal is made; and (c) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made, (i) the name and address of such stockholder,
as they appear on the Company's books, and of such beneficial owner, (ii) the
class and number of shares of Company Common Stock which are owned
beneficially and of record by such stockholder and such beneficial owner, and
(iii) whether either such stockholder or beneficial owner intends to solicit
proxies or participate in the solicitation of proxies in favor of such
proposal or nominees.
The Advance Notice Amendments also address the situation where the Company
convenes a special meeting of stockholders (as distinct from an annual
meeting) to elect directors (as noted above, the Restated By-Laws preclude
Company Stockholders from calling a special meeting other than for the purpose
of removing a director for cause, and that provision is unaffected by the
Advance Notice Amendment or the Board Unclassification Amendments; see
"Reasons for the Board Unclassification Amendments"). Under Article II,
Section 3 of the Restated By-Laws, as amended by the Advance Notice
Amendments, a Company Stockholder may nominate candidates at such a special
meeting provided such Company Stockholder gives an advance written notice
complying with the same informational requirements as apply to an advance
notice of nomination at an annual meeting. In the case of a special meeting,
the advance notice must be given no later than the 90th day prior to such
special meeting or the 10th day following the first public announcement of the
date of the meeting and of the Board's nominees for election at the meeting.
Relationship of Advance Notice Amendments to SEC Stockholder Proposal
Rules. Separate and apart from the Current Advance Notice Requirements and the
Advance Notice Amendments, the rules promulgated by the SEC under the Exchange
Act (the "SEC Stockholder Proposal Rules") entitle a Company Stockholder to
require the Company to include a stockholder proposal in the proxy materials
distributed by the Company. However, the
18
<PAGE>
SEC Stockholder Proposal Rules do not require the Company to include in its
proxy materials any nomination for election to the Board (or any other office
with the Company), impose certain other limitations on the content of a
stockholder proposal, and also contain certain eligibility, timeliness and
other requirements. To be considered as satisfying the timeliness requirement
of the SEC Stockholder Proposal Rules in connection with the proxy materials
to be distributed by the Company with respect to the 1998 Annual Meeting,
stockholder proposals must be submitted to the Secretary of the Company at the
Company's principal executive offices not later than December , 1997. Under
the SEC Stockholder Proposal Rules, the Company is not required to include in
its proxy materials any stockholder proposal relating to an election to
office.
INDEPENDENT AUDITORS
Ernst & Young LLP were the Company's auditors for 1996 and have been
appointed to serve as auditors during 1997. A representative of Ernst & Young
LLP is expected to be present at the 1997 Annual Meeting with the opportunity
to make a statement if the representative desires to do so and to be available
to respond to appropriate questions.
OTHER MATTERS
The Board is not aware of any matters to be brought before the 1997 Annual
Meeting other than as stated in the Notice of Annual Meeting attached to this
Proxy Statement. However, if any other matters come before the meeting, it is
the intention of the proxy holders to vote in their discretion on such matters
pursuant to such proxy except as otherwise stated under "The Annual Meeting--
Voting, Solicitation and Revocation of Proxies."
By Order of the Board of Directors
/s/ Johanna Unger
JOHANNA UNGER
Secretary
Dated: April , 1997
19
<PAGE>
APPENDIX A
THE BOARD
UNCLASSIFICATION
AMENDMENTS*
- - --------
* Underscorings on the following pages of this Appendix A indicate language
proposed to be added by the Board Unclassification Amendments. Strike-
throughs on the following pages of this Appendix A indicate language
proposed to be deleted by the Board Unclassification Amendments.
NOTE TO EDGAR VERSION: Deleted language is indicated by brackets, not
strike-throughs.
<PAGE>
AMENDMENTS TO
ARTICLE V OF RESTATED CERTIFICATE
[(A) The number of directors of this corporation shall be fixed and may be
altered from time to time as may be provided in the By-laws. The directors of
this corporation need not be stockholders therein.]
](B) The Board of Directors shall be and is divided into three classes, Class
I, Class II and Class III, which shall be as nearly equal in number as
possible. Each director shall serve for a term ending on the date of the third
annual meeting following the annual meeting at which such director was
elected; provided, however, that each initial director in Class I shall hold
office until the annual meeting of stockholders in 1997; each initial director
in Class II shall hold office until the annual meeting of stockholders in
1998; and each initial director in Class III shall hold office until the
annual meeting of stockholders in 1999.]
[(C) In the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall nevertheless continue
as a director of the class of which he is a member until the expiration of his
current term, or his prior death, retirement, resignation, or removal, and
(ii) the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
three classes of directors so as to maintain such classes as nearly equal as
possible.]
[(D) Notwithstanding any of the foregoing provisions of this Article, each
director shall serve until his successor is elected and qualified or until his
death, retirement, resignation or removal. Should a vacancy occur or be
created, whether arising through death, resignation or removal of a director
or through an increase in the number of directors of any class, such vacancy
shall be filled by a majority vote of the remaining directors of the class in
which such vacancy occurs, or by the sole remaining director of that class if
only one such director remains, or by the majority vote of the remaining
directors of the other two classes if there be no remaining member of the
class in which the vacancy occurs. A director so elected to fill a vacancy
shall serve for the remainder of the then present term of office of the class
to which he was elected.]
(A) Subject to any rights of the holders of any series of Preferred Stock to
----------------------------------------------------------------------------
elect additional directors under specified circumstances ("Preferred Stock
- - --------------------------------------------------------------------------
Rights"), the number of directors of this corporation shall be fixed and may
- - ----------------------------------------------------------------------------
be altered from time to time as may be provided in the By-laws. The directors
- - -----------------------------------------------------------------------------
of this corporation need not be stockholders therein.
- - -----------------------------------------------------
(B) Subject to any Preferred Stock Rights, unless the By-laws of this
---------------------------------------------------------------------
corporation are amended by the stockholders after the effectiveness of this
- - ---------------------------------------------------------------------------
provision to provide for the division of the directors into classes, at each
- - ----------------------------------------------------------------------------
annual meeting all directors shall be elected to hold office until their
- - ------------------------------------------------------------------------
respective successors are elected and qualified or until their earlier
- - ----------------------------------------------------------------------
resignation or removal. Subject to any Preferred Stock Rights, until such time
- - ------------------------------------------------------------------------------
as the stockholders of this corporation adopt any such By-law, any director or
- - ------------------------------------------------------------------------------
the entire Board of Directors may be removed with or without cause, by the
- - --------------------------------------------------------------------------
holders of a majority of the shares then entitled to vote at an election of
- - ---------------------------------------------------------------------------
directors.
- - ----------
(C) Subject to any Preferred Stock Rights, in the event of any increase or
--------------------------------------------------------------------------
decrease in the authorized number of directors, each director then serving as
- - -----------------------------------------------------------------------------
such shall nevertheless continue as a director until the expiration of his
- - --------------------------------------------------------------------------
current term, or his prior death, retirement, resignation, or removal.
- - ----------------------------------------------------------------------
(D) Subject to any Preferred Stock Rights, each director shall serve until
--------------------------------------------------------------------------
the end of the term to which he was elected and until his successor is elected
- - ------------------------------------------------------------------------------
and qualified or until his death, retirement, resignation or removal, and any
- - -----------------------------------------------------------------------------
newly-created directorship or vacancy, whether arising through death,
- - ---------------------------------------------------------------------
resignation or removal of a director or otherwise, shall, unless otherwise
- - --------------------------------------------------------------------------
provided by law or by act of the Board of Directors, be filled only by a
- - ------------------------------------------------------------------------
majority vote of the remaining directors, or by the sole remaining director if
- - ------------------------------------------------------------------------------
only one such director remains.
- - -------------------------------
A-1
<PAGE>
AMENDMENTS TO
ARTICLE III OF RESTATED BY-LAWS
SECTION 4. Vacancies and Newly Created Directorships. Subject to any rights
----------------------------------------------------------------
of holders of any Series of Preferred Stock of the Corporation, each director
- - -----------------------------------------------------------------------------
shall serve until the end of the term to which he was elected and until his
- - ---------------------------------------------------------------------------
successor is elected and qualified or until his death, retirement, resignation
- - ------------------------------------------------------------------------------
or removal, and any newly-created directorship or vacancy, whether arising
- - --------------------------------------------------------------------------
through death, resignation or removal of director or otherwise, shall, unless
- - -----------------------------------------------------------------------------
otherwise provided by law or by act of the Board of Directors, be filled only
- - -----------------------------------------------------------------------------
by a majority vote of the remaining directors, or by the sole remaining
- - -----------------------------------------------------------------------
director if only one such director remains. [Class Division and Term. The Board
- - -------------------------------------------
shall be and is divided into three classes, Class I, Class II, and Class III,
which shall be as nearly equal in number as possible. Each Director shall
serve for a term ending on the date of the third annual meeting following the
annual meeting at which such Director was elected; and until his successor
shall have been elected and qualified; provided, however, that each initial
Director in Class I shall hold office until the annual meeting of stockholders
in 1997; each initial Director in Class II shall hold office until the annual
meeting of stockholders in 1998; and each initial Director in Class III shall
hold office until the annual meeting of stockholders in 1999.]
[In the event of any increase or decrease in the authorized number of
Directors, (i) each Director then serving as such shall nevertheless continue
as a Director of the class of which he is a member until the expiration of his
current term, or his prior death, retirement, resignation or removal, and (ii)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board among the three classes of
Directors so as to maintain such classes as nearly equal as possible.]
[SECTION 5. Vacancies and Newly Created Directorships. Any vacancy in the
Board caused by death, resignation, removal or otherwise, or through an
increase in the number of Directors of a class, shall be filled by a majority
vote of the remaining Directors of the class in which such vacancy occurs, or
by the sole remaining Director of that class if only one Director remains, or
by the majority vote of the remaining Directors of the other two classes if
there be no remaining members of the class in which the vacancy occurs. A
Director so elected to fill a vacancy shall serve for the remainder of the
then present term of the office of the class to which he was elected.]
SECTION 5. Initial Meeting. The Board shall meet as soon as practicable
-
after the annual election of Directors and notice of such first meeting shall
not be required.
SECTION 6. Regular Meeting. Regular meetings of the Board shall be held
-
without call or notice at such time and place as shall from time to time be
fixed by standing resolution of the Board.
SECTION 7. Special Meetings. Special meetings of the Board may be called at
-
any time, and for any purpose permitted by law, by the Chairman of the Board,
the Chief Executive Officer or by the Secretary on the request (whether
written or oral) of any two members of the Board, which meetings shall be held
at the time and place designated by the person or persons calling the meeting.
Notice of the time and place of any such meetings shall be given to the
Directors by the Secretary, or in case of his absence, refusal or inability to
act, by any other officer. Any such notice may be given by mail, by private
express courier service, by telegraph, by telecopier, by telephone, by
personal service, or by any thereof as to different Directors.
Notice to a Director by mail or by private express courier service shall be
deemed to have been given if addressed to such Director at the address shown
upon the records of the Corporation for such Director (or as may have been
given to the Corporation by such Director for purposes of notice) and
deposited in a United States Post Office or delivered to such private express
courier service, as the case may be, at least forty-eight hours before the
time of the meeting. Any other written notice shall be deemed to have been
given at the time it is personally delivered to the recipient or is delivered
to a common carrier for transmission, or actually transmitted to the recipient
by the person giving the notice by electronic means. Oral notice shall be
deemed to have been given at the time it is communicated, in person or by
telephone or wireless, to the recipient or to a person at the office or home
of the recipient who may reasonably be expected to communicate the notice to
the recipient.
A-2
<PAGE>
A notice need not specify the purpose of any special meeting of the Board.
Whenever any Director has been absent from any meeting of the Board for which
notice has not been dispensed with, an entry in the minutes of such meeting to
the effect that notice has been duly given shall be conclusive and
incontrovertible evidence that due notice of such meeting was given to such
Director.
SECTION 8. Quorum. At all meetings of the Board a majority of the whole
-
Board shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of the Board, except
as may be otherwise specifically
provided by applicable law or by the Certificate of Incorporation or by these
By-laws. Any meeting of the Board may be adjourned to meet again at a stated
day and hour. Even though no quorum is present, as required in this Section, a
majority of the Directors present at any meeting of the Board, either regular
or special, may adjourn from time to time until a quorum be had, but no later
than the time fixed for the next regular meeting of the Board. Notice of any
adjourned meeting need not be given.
SECTION 9. Fees and Compensation. Each Director and each member of a
-
committee of the Board shall receive such fees and reimbursement of expenses
incurred on behalf of the Corporation or in attending meetings as the Board
may from time to time determine.
SECTION 10. Meetings by Telephonic Communication. Members of the Board or
--
any committee thereof may participate in a regular or special meeting of such
Board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, if the standing resolutions fixing the time and place of a regular
meeting or if the notice of the time and place of any regular or special
meeting provides for such participation. Participation in a meeting pursuant
to this Section shall constitute presence in person at such meeting.
SECTION 11. Qualification of Directors. No person can be elected a Director
--
of this Corporation (whether by vote of the stockholders or the Directors) if,
were he or she to be elected a Director, less than a majority of the total
number of Directors would be Outside Directors. If such a person is nominated
for Director, no votes cast for his or her election shall be counted and, for
this purpose, the announcement of the results of any election of Directors,
shall be delayed pending the determination by the Board referred to below. An
Outside Director is a person who is not: (a) an officer or employee of the
Corporation or any relative of an officer or employee; (b) a Related Person
(as that term is defined in Article X of the Corporation's Certificate of
Incorporation) or an officer, director, employee, associate or affiliate of a
Related Person, or a relative of any of the foregoing; or (c) a person having
a direct or indirect material business relationship with the Corporation. The
Board shall be empowered to determine in its sole and absolute discretion
whether a person is or is not an Outside Director within the meaning of the
foregoing.
SECTION 12. Committees. The Board may, by resolution passed by a majority of
--
the whole Board, designate one or more committees, each committee to consist
of one or more of the Directors of the Corporation. The Board may designate
one or more Directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of a member of a committee and if the Board has
not designated one or more alternates (or if such a designation has been made,
in the absence or disqualification of such alternate(s)), the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such absent or
disqualified member or alternate. Any such committee, to the extent provided
in the resolution of the Board shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to
all papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the By-laws of the
Corporation; and, unless the
A-3
<PAGE>
resolution expressly so provides, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock.
SECTION 13. Action Without Meetings. Unless otherwise restricted by
--
applicable law or by the Certificate of Incorporation or by these By-laws, any
action required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without meeting if all members of the Board or
of such committee consent thereto in writing as the case may be, and the
writing or writings are filed with the minutes of proceedings of the Board or
committee. Action shall be taken by the stockholders only at annual or special
meetings of stockholders and stockholders may not act by written consent.
A-4
<PAGE>
PROXY
PS GROUP HOLDINGS, INC.
ANNUAL MEETING--FRIDAY, MAY 30, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints LAWRENCE A. GUSKE and JOHANNA UNGER, and each of
them, proxies, with power of substitution, to vote all shares which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of PS
Group Holdings, Inc. called to be held at the Sheraton Grande Hotel, 333 South
Figueroa Street, Los Angeles, California, on Friday, May 30, 1997, at 9:00 a.m.
local time and any and all postponements and/or adjournments.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ITEMS 1 AND 2
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
-- FOLD AND DETACH HERE --
<PAGE>
YOUR VOTE IS IMPORTANT TO US.
PLEASE SIGN AND DATE YOUR PROXY
ON THE REVERSE SIDE OF THIS CARD.
<PAGE>
Please mark your votes as indicated in this example [X]
PLEASE SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES BELOW. IF NO
DESIGNATION IS MADE, YOUR PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
- - -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ITEMS 1 AND 2
ITEM 1. ELECTION OF DIRECTORS
Nominees
J.P. Guerin, Christopher H.B. Mills, Joseph S. Pirinea
FOR WITHHELD
[_] [_]
WITHHELD FOR: (Write that nominee's name in the space provided below.)
---------------------------------------------------------
ITEM 2. BOARD UNCLASSIFICATION AMENDMENTS
FOR AGAINST ABSTAIN
[_] [_] [_]
3. By executing this proxy, the undersigned hereby authorizes the proxy
holders to vote upon such other business as may properly come before the
meeting, or any postponement or adjournment thereof (including, without
limitation, any postponement or adjournment for the purpose of enabling the
Board of Directors to continue soliciting proxies in favor of Item 2 unless
the undersigned has voted "Against" or "Abstain" on Item 2), as to which the
undersigned hereby confers discretionary authority upon said proxies.
I PLAN TO ATTEND THE MEETING
IMPORTANT: Please sign exactly as name or names appear hereon. If signed as
executor, trustee or other fiduciary, give your full title as such.
Dated: __________________________________________________________________, 1997
_______________________________________________________________________________
Signature
_______________________________________________________________________________
Signature
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE U.S.A.
<PAGE>
PS GROUP HOLDINGS, INC.
EVEN IF YOU PLAN TO JOIN US AT THE MEETING,
PLEASE . . .
SIGN, DATE, AND RETURN YOUR PROXY
IN THE ENCLOSED, POSTAGE PAID ENVELOPE.
THANK YOU
