<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ECHELON INTERNATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(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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<PAGE> 2
ECHELON LOGO
ECHELON INTERNATIONAL CORPORATION
ONE PROGRESS PLAZA
ST. PETERSBURG, FLORIDA 33701
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 3, 1997
To the Stockholders of
Echelon International Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Echelon
International Corporation, will be held on Tuesday, the 3rd day of June, 1997,
at 9:00 A.M., Local Time, at Le Parker Meridien 118 West 57th Street, New York,
New York for the following purposes:
1. To elect two Class I directors to serve for a three-year term;
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent certified public accountants for fiscal year 1997; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The close of business on March 27, 1997 has been fixed by the Board of
Directors as the record date for the determination of the stockholders entitled
to notice of and to vote at the meeting or any adjournments thereof.
Stockholders are requested to date, sign and mail the enclosed proxy promptly in
the enclosed addressed envelope. If you should be present at the meeting and
desire to vote in person, you may withdraw your proxy.
By Order of the Board of Directors,
/s/ Larry J. Newsome
Larry J. Newsome, Secretary
April 17, 1997
<PAGE> 3
ECHELON LOGO
ECHELON INTERNATIONAL CORPORATION
ONE PROGRESS PLAZA
ST. PETERSBURG, FLORIDA 33701
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 3, 1997
To the Stockholders of April 17, 1997
Echelon International Corporation:
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Echelon International Corporation
("Echelon" or the "Company"), from the holders of the Company's common stock for
use at the Annual Meeting of Stockholders and at any adjournments thereof. This
meeting will be held at 9:00 A.M., Local Time, on Tuesday, June 3, 1997 at Le
Parker Meridien 118 West 57th Street, New York, New York.
This is the first solicitation by Echelon of proxies for its Annual Meeting
of Stockholders. In 1996, Florida Progress Corporation ("Florida Progress"), in
connection with its plan to spin-off its lending, leasing and real estate
businesses to its stockholders, merged such businesses together to form Echelon.
On December 18, 1996, all 6,467,018 outstanding shares of common stock of
Echelon, par value $.01 per share (the "Common Stock"), were distributed to
holders of record of Florida Progress common stock as of the close of business
on December 5, 1996 (the "Distribution").
Any proxy given pursuant to this solicitation may be revoked by notice in
writing to the Secretary prior to the voting, by delivering a proxy bearing a
later date or by attending the Annual Meeting and voting the shares in person.
No such notice of revocation or later-dated proxy, however, will be effective
until received by the Company at or prior to the Annual Meeting. Unless the
proxy is revoked, the shares represented thereby will be voted at the Annual
Meeting or any adjournment thereof. The giving of the proxy does not affect the
right to vote in person should the stockholder attend the meeting.
The entire cost of preparing and mailing the proxy material will be borne
by the Company. Solicitation of proxies will be made by mail, personally, or by
telephone or telegraph, by officers, directors and regular employees of the
Company. The Company has also retained Georgeson & Company Inc., Wall Street
Plaza, New York, New York 10005, to aid, if necessary, solicitation by mail,
telephone, telegraph and personal interview for a fee of approximately $6,000.
The Company will request brokerage houses and other custodians, nominees and
fiduciaries to forward soliciting material to the stockholders and the Company
will reimburse such institutions for their out-of-pocket expenses incurred
thereby.
It is important that proxies be returned promptly to avoid unnecessary
expense. Therefore, whether you plan to attend or not, you are urged, regardless
of the number of shares of stock owned, to date, sign and return the enclosed
proxy promptly.
The approximate date on which this proxy is to be mailed to stockholders is
April 25, 1997.
<PAGE> 4
Shares of Common Stock are the only outstanding voting securities of the
Company.
The Board of Directors in accordance with the By-Laws has fixed the close
of business on March 27, 1997, as the record date for determining the
stockholders entitled to notice of and to vote at the Annual Meeting of
Stockholders and adjournments thereof. At the close of business on such date,
the outstanding number of voting securities of the Company was 6,763,605 shares
of Common Stock, each of which is entitled to one vote. All votes will be
tabulated by employees of The First National Bank of Boston, the Company's
transfer agent, whose representatives will serve as inspectors of election.
Abstentions and broker non-votes are each included in the determination of the
number of shares present but are not counted on any matters brought before the
meeting.
SECURITY OWNERSHIP
The following table sets forth, as of March 31, 1997, the number of shares
of the Company's Common Stock beneficially owned by i) each person known to the
Company as having beneficial ownership of more than 5% of the Company's Common
Stock together with such person's address, ii) each of its directors and
nominees to become a director, iii) each named executive officer (as defined
herein under "Executive Compensation" and pursuant to Securities and Exchange
Commission rule) and iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER OF BENEFICIAL PERCENT
OR NUMBER IN GROUP OWNERSHIP(1) OF CLASS
- ------------------------ ----------------- --------
<S> <C> <C>
W. Michael Doramus.......................................... 480 *
Darryl A. LeClair........................................... 194,187(2) 2.9%
Thomas W. Mahr.............................................. 480 *
Joseph H. Richardson........................................ 1,145 *
Jonathan Blum............................................... 80 *
Larry J. Newsome............................................ 32,335(3) *
Thomas D. Wilson............................................ 12,939(4) *
Raymond F. Higgins.......................................... 13,122(4) *
All Directors and Executive Officers
as a Group (12 persons)................................... 288,765(5) 4.3%
</TABLE>
- ---------------
* Less than one percent
(1) Beneficial ownership of shares, as determined in accordance with applicable
Securities and Exchange Commission rules, includes shares as to which a
person has or shares voting power and/or investment power. Except as
otherwise indicated, all shares are held of record with sole voting and
investment power.
(2) Includes 194,011 shares of the Company's Common Stock granted under the
Company's Long Term Incentive Plan (the "LTIP") subject to a risk of
forfeiture which lapses as to one-quarter of the shares each January 31st,
commencing on January 31, 1998. Does not include 129,340 shares of the
Company's Common Stock subject to options granted under the LTIP.
(3) Includes 32,335 shares of the Company's Common Stock granted under the LTIP
subject to a risk of forfeiture which lapses as to one-quarter of the shares
each January 31st, commencing on January 31, 1998. Does not include 2,500
shares of the Company's Common Stock subject to options granted under the
LTIP.
(4) Includes 12,934 shares of the Company's Common Stock granted under the LTIP
subject to a risk of forfeiture which lapses as to one-quarter of the shares
each January 31st, commencing on January 31, 1998. Does not include 1,000
shares of the Company's Common Stock subject to options granted under the
LTIP.
(5) Includes 286,166 shares of the Company's Common Stock granted to executive
officers under the LTIP, subject to a risk of forfeiture which lapses as to
one-quarter of the shares each January 31st, commencing January 31, 1998.
2
<PAGE> 5
1. ELECTION OF DIRECTORS
The By-Laws of the Company provide that the number of directors shall not
be less than three nor more than nine. The Company's Amended and Restated
Articles of Incorporation provide that the Board of Directors shall be divided
into three classes of approximately equal size. The number of directors has
previously been fixed at five. The current terms of the three classes of
directors expire in 1997 (Class I directors), 1998 (Class II directors) and 1999
(Class III directors). Directors are generally elected for three-year terms.
Two directors are to be elected at the 1997 Annual Meeting to fill the two
Class I director seats. The Board of Directors has nominated the following
persons to stand for election at the 1997 Annual Meeting for the two open Class
I director seats (terms expiring in 2000):
Joseph H. Richardson
Jonathan Blum
It is the intention of the persons named in the enclosed form of proxy,
unless otherwise directed, to vote such proxy "FOR" the election of Joseph H.
Richardson and Jonathan Blum as the Class I directors of the Company, to serve
for the terms described above. See "Management -- Directors and Executive
Officers" for further information on such nominees. The nominees that receive a
plurality of the votes cast by the shares entitled to vote at the Annual Meeting
shall be elected as the Class I directors.
The proposed nominees for election as directors are willing to be elected
as such. If, as a result of circumstances not now known or foreseen, a nominee
shall be unavailable or unwilling to serve as a director, proxies may be voted
for the election of such other person as the Board of Directors may select. The
Board of Directors has no reason to believe that the nominees will be unable or
unwilling to serve.
3
<PAGE> 6
MANAGEMENT
The following table sets forth certain information regarding the Company's
current executive officers, continuing directors and nominees for director.
<TABLE>
<CAPTION>
HAS SERVED
AS DIRECTOR
DIRECTORS AND EXECUTIVE OFFICERS AGE POSITION SINCE
- -------------------------------- --- -------- -----------
<S> <C> <C> <C>
W. Michael Doramus..................... 46 Chairman of the Board and Director (term
expiring in 1999) 1996
Darryl A. LeClair...................... 38 President and Chief Executive Officer and
Director (term expiring in 1999) 1992
Joseph H. Richardson................... 47 Director (term expiring in 1997) 1992
Thomas W. Mahr......................... 39 Director (term expiring in 1998) 1996
Jonathan Blum.......................... 40 Director (term expiring in 1997) 1997
Larry J. Newsome....................... 48 Senior Vice President, Chief Financial
Officer, Secretary and Treasurer
Raymond F. Higgins..................... 45 Vice President of Financial Analysis
James R. Hobbs, Jr..................... 44 Vice President and Controller
Susan Glatthorn Johnson................ 39 Vice President of Administration
Michael S. Talmadge.................... 37 Vice President of Leasing and Real Estate
Services
Timothy S. Tinsley..................... 38 Vice President of Apartment Development and
Management
Thomas D. Wilson....................... 50 Vice President
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
W. Michael Doramus brings more than two decades of executive experience in
all phases of multi-family residential real estate operations, including project
planning, acquisition, development, financing, management and disposition. Mr.
Doramus founded Mission Development Company, Dallas, Texas, a real estate
consulting services, real estate development, systems development, technology
and market research company in January of 1996 and serves as its President. He
served as Executive Vice President and National Partner of JPI Development
Partners, Inc., Dallas, Texas from 1992 to 1995. Mr. Doramus served as President
of Rosewood Management and Acquisition Group, Inc., from 1990 to 1992. Prior to
1992, he served as President of various companies including Doramus Ventures,
Inc., from 1988 to the present and two Trammel Crow companies, Brentwood
Properties and Trammell Crow Advisory Services, Inc. from 1977 to 1987.
Darryl A. LeClair, prior to the Distribution, had been employed by Florida
Progress or its affiliates for more than 14 years, serving in a variety of
executive positions, particularly those regarding real estate development,
management and finance and aircraft leasing and finance. Prior to the
Distribution, Mr. LeClair served in a variety of capacities, including as Vice
President of Mergers, Acquisitions and Divestitures of Florida Progress from
1991 through 1996, and as the President of Progress Credit Corporation ("PCC"),
Talquin Development Company ("Talquin") and Progress Leasing Corporation
("Progress Leasing") from 1992 to the time such companies were combined with and
into Echelon, formerly known as PLC Leasing Corporation ("PLC Leasing"). From
1988 to 1992 he was Vice President of Talquin, heading up operations, including
the real estate group.
Joseph H. Richardson has been employed by Florida Progress or its
affiliates for more than 20 years. He joined Florida Power in 1976 as Assistant
Counsel, was promoted to Corporate Counsel in 1977 and became Assistant General
Counsel of Florida Progress in 1983. In 1986 he joined Talquin as Vice President
and was promoted to President and Chief Executive Officer in 1990. While at
Talquin, he also served as Group Vice President and Senior Vice President of the
Development Group of Florida Progress. Mr. Richardson served as Chairman of the
Board of PLC Leasing from 1992-1995. In 1993 Mr. Richardson became Senior Vice
President, Legal and Administrative Services at Florida Power and in 1995 became
Senior Vice President of
4
<PAGE> 7
Energy Distribution. In April 1996, he became a member of the Board of Directors
and was promoted to President and Chief Operating Officer of Florida Power and
continues to serve as a Group Vice President of the Utility Group of Florida
Progress.
Thomas W. Mahr, has more than 14 years of experience in the aircraft
leasing and finance and airline industries, including service in the treasury
and financial planning functions for regional and national airlines and more
recently in executive positions with firms focusing solely on airline corporate
finance. Mr. Mahr is currently a Managing Director of The Seabury Group LLC, a
firm specializing in aviation investment banking located in Stamford,
Connecticut. Mr. Mahr was a Principal with Fieldstone Private Capital Group, New
York, New York from 1991 to 1996. From 1989 to 1991, he served as Vice President
of Marketing for Chrysler Capital Corporation, Greenwich, Connecticut,
responsible for all aviation investments. He served as Vice President and Chief
Financial Officer of Rocky Mountain Airways, Denver, Colorado, from 1988 to 1989
and as Director of Finance of Texas Air Corporation, Houston, Texas, from 1986
to 1988. From 1983 to 1985, Mr. Mahr served as Manager of Finance for New York
Air, Flushing, New York.
Jonathan Blum is a director of the Mergers and Acquisitions Department of
Smith Barney, Inc. Prior to 1996, he was with the Chemical Securities, Inc.'s
Mergers and Acquisitions Department for seven years, providing valuations and
financial and advisory services on divestitures and acquisitions. Four years
prior to joining Chemical, Mr. Blum was Vice President of the Mergers and
Acquisitions Department of Citicorp. He has extensive experience in utilities,
light and industrial manufacturing, distribution, building products, apparel and
shipping industries.
Larry J. Newsome, prior to the Distribution, had been employed by Florida
Progress or its affiliates for more than 25 years, serving in a variety of tax,
financial and managerial positions. He served as Vice President of Tax
Administration at Florida Progress (1992-1996) and held the same position at
Florida Power Corporation ("Florida Power"), its subsidiary (1994-1996). He was
the Director of Tax Administration at Florida Progress from 1983 to 1992. Until
1993, Mr. Newsome also served Progress Leasing as a Director from 1983 and as
Assistant Treasurer from 1984 and served PLC Leasing as a Director and Assistant
Treasurer from 1985. He joined Florida Power in 1971 and served in various
capacities including Manager and Supervisor of Tax Accounting, Senior Accountant
and Accountant.
Raymond F. Higgins, prior to the Distribution, had been employed by Florida
Progress or its affiliates for more than 14 years, having served as the Director
of Financial Reporting & Planning for Florida Power (1992-1996) and was Director
of Financial Reporting & Planning for Florida Progress from 1986 to 1992. He
joined Florida Power in 1982 and held various financial positions including,
Manager of Financial Reporting, Senior Accountant and Accountant.
James R. Hobbs, prior to the Distribution, had been employed by Florida
Progress or its affiliates for more than 14 years, having served as Controller
and Assistant Treasurer of PCC (1995-1996), Controller and Assistant Treasurer
of Talquin (1993-1996) and Controller and Assistant Treasurer of Progress
Leasing and PLC Leasing(1995-1996). He was Manager of Accounting for Talquin
from 1987 to 1993, and Supervisor of Accounting for Talquin Corporation from
1985 to 1987. He joined Florida Power in 1982 and held the positions of
Operational Auditor and Senior Operational Auditor until 1985.
Susan Glatthorn Johnson, prior to the Distribution, had been employed by
Florida Progress or its affiliates from 1986 through 1994, serving as Manager of
Trust Programming and Services and as Director of Strategic Planning. Since that
time, she has attended law school at Stetson University College of Law with a
January 1997 class rank of 4/177. She is expected to graduate in May 1997 and
will add the Juris Doctorate to a 1986 Masters of Business Administration
degree, and a 1978 Bachelor of Arts degree.
Michael S. Talmadge has more than 11 years of experience in managing and
leasing commercial real estate projects, the last five years in the Tampa Bay
area. He has served as the President of TRS Commercial Real Estate Services,
Inc., a leasing and property management company in Tampa, Florida since 1993. He
joined TRS Commercial Real Estate Services, Inc. as Director of Marketing in
1991. Mr. Talmadge served as a Principal for Trammell Crow Company in Denver and
Colorado Springs, Colorado from 1989 to 1991. He served as General Manager of
Phase One Development for San Diego Gas & Electric from 1988 to 1989, after
joining the company as marketing executive in 1987.
5
<PAGE> 8
Timothy S. Tinsley had been employed from 1987 through 1993 by Picerne
Development Corp. and served as Assistant Developer, Developer and Vice
President with increasing responsibilities in development of multifamily units.
From 1993 until joining Echelon in December 1996, Mr. Tinsley served as Vice
President Development at ZOM Development, Inc. where he was responsible for
managing the development process for over 1,500 market rate and tax credit
financed multifamily units.
Thomas D. Wilson, prior to the Distribution, had been employed by Florida
Progress or its affiliates for more than seven years, having served as Vice
President of PCC (1989-1996), as Director and Vice President of Progress Leasing
and PLC Leasing (1991-1996) and as Vice President of Talquin (1993-1996). He
joined Florida Progress in 1989 as the Director of Real Estate, Lending and
Leasing.
None of the executive officers or directors are related to one another.
Executive officers are elected by and serve at the discretion of the Board of
Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Board of Directors held four meetings during fiscal 1996. In fiscal
1996, each incumbent Director attended at least 75% of the total number of Board
and Committee meetings.
The Board of Directors has a standing Audit Committee, Compensation
Committee and Nominating Committee.
The members of the Audit Committee are Thomas W. Mahr and Jonathan Blum.
The Audit Committee did not meet in 1996. The Audit Committee's principal
responsibilities are to recommend annually a firm of independent auditors to the
Board of Directors, to review the annual audit of the Company's financial
statements and to meet with the independent auditors of the Company from time to
time in order to review the Company's general policies and procedures with
respect to audits and accounting and financial controls.
The members of the Compensation Committee are Messrs. Mahr and Blum. Mr.
Blum was elected to the Board of Directors on March 12, 1997 at which time he
replaced Mr. Richardson on the Compensation Committee. The Compensation
Committee held two meetings during fiscal 1996. The principal responsibilities
of the Compensation Committee includes the establishment of compensation
policies for the executive officers of Echelon and administration of any
stock-based compensation plans except the Non-Employee Directors' Stock Plan.
The members of the Nominating Committee are Messrs. Doramus and Richardson.
The Nominating Committee did not meet in 1996. The Nominating Committee's
function includes the consideration of recommendations for nominees for election
to the Board of Directors submitted by stockholders. The Nominating Committee
will consider written recommendations from stockholders for positions on the
Board of Directors in accordance with the procedures set forth in the Company's
Amended and Restate Articles of Incorporation. See -- "Stockholder Proposals For
Presentation At the 1998 Annual Meeting" for further information.
COMPENSATION OF DIRECTORS
Directors who are not employees of Echelon will receive an annual retainer
fee of $15,000 to be paid quarterly, in arrears, in the form of Company Common
Stock and an automatic grant of options to purchase 1,000 shares of Company
Common Stock each year in accordance with the Company's Non-Employee Directors'
Stock Plan. Options granted under the NonEmployee Directors' Stock Plan will be
at an exercise price equal to the fair market value of the Common Stock on the
date of grant and the options will be 100% exercisable on the subsequent
anniversary of the date of grant. In addition, non-employee directors will
receive $1,000 for each meeting of the Board of Directors attended and $500 for
each meeting of a Committee of the Board of Directors attended. Non-employee
directors who serve as Chairman of a Committee of the Board of Directors will
receive an additional $750 for each meeting chaired.
In addition to the annual retainer fee and meeting fees described above, W.
Michael Doramus will receive an additional $100,000 per year as Chairman of the
Board.
No director who is an employee of the Company will receive separate
compensation for services rendered as a director.
6
<PAGE> 9
COMPENSATION COMMITTEE REPORT
The duties of the Compensation Committee (the "Committee") include the
review of compensation levels of Echelon's executive officers, the evaluation of
the performance of the executive officers and the administration of any
stock-based compensation plans except the Non-Employee Directors' Stock Plan.
The Committee as originally formed consisted of Thomas W. Mahr and Joseph
H. Richardson. On March 12, 1997, Jonathan Blum was elected to the Board of
Directors of Echelon and replaced Mr. Richardson as a member of the Committee.
Prior to December 18, 1996, the date of the Distribution, all compensation
decisions and actions relating to the executive officers of Echelon and its
predecessors were made and taken by Florida Progress, Echelon's parent.
Accordingly, with respect to compensation for 1996 for Echelon's executive
officers, including the Chief Executive Officer, the Committee's involvement was
limited in that it only reviewed and approved compensation to be paid after
December 18, 1996.
GENERAL POLICIES
The Company's executive compensation system is intended to attract, retain
and motivate high quality executives with individually tailored market and
performance based compensation packages that reward the achievement of specific
financial goals and the enhancement of stockholder value. The Committee believes
that linking executive compensation to corporate performance through a more
significant emphasis on performance bonuses results in a better alignment of
compensation with corporate goals and stockholder interests. In evaluating the
performance of executive officers, the Committee's approach is to consult with
the Chief Executive Officer, except when evaluating his performance, in which
case the Committee's approach is to meet and deliberate independently without
the Chief Executive Officer being present.
For the Company's executive officers, excluding the Chief Executive
Officer, for 1997 and 1998, and for the Chief Executive Officer for 1997, 1998
and 1999, compensation will be paid in accordance with the terms of employment
agreements entered into with each of the executive officers. The compensation to
be paid under the employment agreements was determined based upon the Company's
compensation system for executive officers which is made up of three principal
components: base salary; annual incentive cash compensation; and long-term
incentive awards through stock options, stock appreciation rights and/or
restricted stock. The Committee's policies with respect to each of these
elements are discussed below.
BASE SALARY
The annual base salary of each of Echelon's executive officers is based
upon the scope of his or her responsibility and accountability with the Company,
as well as performance and experience criteria. In setting the level of base
salary for executive officers, other than the Chief Executive Officer, the
Committee's approach is to review the Chief Executive Officer's recommendations
together with other information from independent compensation consultants.
As indicated above, for 1996, the base salaries were initially established
by Florida Progress, Echelon's parent. The Committee reviewed these established
base salaries and taking into account the Chief Executive Officer's
recommendations and the information provided by independent consultants,
concluded that such levels were appropriate and consistent with the general
compensation policies of Echelon.
ANNUAL INCENTIVE CASH COMPENSATION
All annual bonuses paid in 1996 were determined by Florida Progress, except
for a one time special bonus paid to certain executive officers (other than the
Chief Executive Officer) for the successful completion of the Distribution.
Echelon has implemented a Management Incentive Compensation Plan (the
"MICP") that provides annual incentive cash compensation opportunities to
executive officers of Echelon by creating "threshold, target and maximum" levels
of cash compensation to be paid upon the achievement of corresponding
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<PAGE> 10
corporate goals. The performance goals under the MICP are established based upon
objective measures of corporate performance and the compensation levels payable
under the MICP are based upon a percentage of the applicable executive officer's
base salary.
Because the Distribution occurred on December 18, 1996, the Committee did
not set performance goals or compensation levels for 1996. For each of 1997 and
1998, the Committee has approved performance goals based upon the Company's
projected net income for 1997 and 1998 and the payment of compensation levels
upon achievement of such goals. The 1997 and 1998 annual incentive compensation
"target" levels for executive officers, other than the Chief Executive Officer,
range from 15% to 35% of base salary.
LONG-TERM INCENTIVE COMPENSATION
To facilitate executive stock ownership and align the interests of key
executives with that of Echelon's stockholders in the long-term growth and
performance of Echelon, the Committee may award stock options, stock
appreciation rights or shares of restricted stock under the Long Term Incentive
Plan (the "LTIP") and 1996 Stock Option Plan. Generally, the Chief Executive
Officer will recommend the number and type of award to be granted (other than
for the Chief Executive Officer) and will present this information along with
appropriate supporting information to the Committee for its review and approval.
In 1996, the Committee approved awards of restricted stock and options
under Echelon's LTIP based upon the recommendations of the Chief Executive
Officer and information provided by independent compensation consultants. All of
the options granted to the executive officers, excluding the Chief Executive
Officer, vest in equal one-fifths over five years and have exercise prices equal
to the fair market value of the Common Stock on August 18, 1997. The shares of
restricted stock granted to the executive officers, excluding the Chief
Executive Officer, vest in equal one-fourths over four years.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR 1996
The Chief Executive Officer's base salary for 1996 was established by
Florida Progress and was adjusted to take into account the increased
responsibilities required of a Chief Executive Officer of a publicly traded
company. In approving the Chief Executive Officer's base salary the Committee
reviewed information provided by independent compensation consultants regarding
executives with comparable positions and responsibilities in peer companies.
In 1996, the annual cash bonus paid to the Chief Executive Officer was
established by Florida Progress. For each of 1997 and 1998, the Committee has
approved under the MICP performance goals based upon the Company's projected net
income for 1997 and 1998 and the payment of annual incentive compensation levels
to the Chief Executive Officer upon achievement of such goals. The 1997 annual
incentive compensation "target" level for the Chief Executive Officer is 50% of
his base salary. In approving the levels of annual bonus compensation under the
MICP, the Committee reviewed information provided by independent compensation
consultants regarding executives with comparable positions and responsibilities
in peer companies.
With respect to long-term incentive compensation in 1996, the Committee
approved awards of stock options, restricted stock and performance based
restricted stock to the Chief Executive Officer. The amounts and terms of the
grants were based on information provided by independent compensation
consultants regarding compensation surveys and market data providing information
on the level of equity ownership for similar executives with comparable
positions and responsibilities in peer companies.
The options vest in equal one-thirds over three years and have an exercise
price equal to the fair market value of the Common Stock on August 18, 1997. The
shares of restricted stock vest in equal one-fourths over four years.
The award of performance based restricted stock provides the Chief
Executive Officer with the opportunity to earn shares of the Company's Common
Stock based upon the satisfaction of performance goals for Echelon. The
Committee approved as performance goals, threshold, target and maximum levels of
cumulative net income for Echelon for the three years ended December 31, 1999
(the "Performance Period") and has set corresponding awards that will be earned
in the form of shares of the Company's Common Stock if
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<PAGE> 11
such levels of cumulative net income are achieved. The cumulative net income
levels were established based on the sum of the three annual MICP net income
goals for the Performance Period. The awards that may be earned are based upon
percentages of the Chief Executive Officer's total base salary for the
Performance Period as previously established under the terms of his employment
agreement, with a target award of 75% of total base salary. The number of shares
of Common Stock to be earned by the Chief Executive Officer upon satisfaction of
the applicable performance goal will be determined by dividing the applicable
award amount by the closing price of the Common Stock on January 1, 1998 as
reported on the New York Stock Exchange. No shares will be earned if less than
the threshold performance goal is achieved and no payout will be made in excess
of the maximum award.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
In general, Echelon's policy with respect to the deductibility limit of
Section 162(m) of the Internal Revenue Code, which disallows a tax deduction for
compensation that exceeds $1,000,000 paid in any fiscal year to a corporation's
chief financial officer and four other most highly compensated officers, is to
preserve the deductibility of compensation paid when it is appropriate and is in
the best interests of Echelon and its stockholders. Echelon reserves the
authority to award non-deductible compensation in other circumstances as deemed
appropriate. Also, because of the ambiguities and uncertainties as to the
application and interpretation of Section 162(m) and the regulations issued
thereunder, no assurance can be given, notwithstanding the efforts of Echelon in
this area, that compensation intended by Echelon to satisfy the deductibility
requirements under Section 162(m) does in fact do so.
Thomas W. Mahr
Jonathan Blum
Joseph H. Richardson
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the companies in the S&P 500
Index and a Peer Group(1) constructed by the Company. Cumulative total return
for each of the periods shown in the Performance Graph is measured assuming an
initial investment of $100 on December 18, 1996, the date of the Distribution,
and the reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) ECHELON S&P 500 PEER GROUP
<S> <C> <C> <C>
DECEMBER 18, 1996 100 100 100
DECEMBER 31, 1996 120.16 101.26 103.41
</TABLE>
- ---------------
(1) The Peer Group comprises publicly traded companies which are engaged
principally or in significant part in: (i) the development, ownership, and
management of commercial and multi-family residential real estate or (ii)
collateralized financing of commercial real estate and leasing of aircraft
and other assets, and which are viewed as being in competition with the
company. The returns of each company have been weighted according to their
respective stock market capitalization for purposes of arriving at a Peer
Group average. The members of the Peer Group are Insignia Financial Group,
Colonial Properties Trust, FM Properties, Inc., Catellus Development
Corporation, Atlanta Gulf Communities Corporation, Major Realty Corporation,
First Union Real Estate Investments, Resurgence Properties, Inc., Cardinal
Realty Services, Inc., Forest City Enterprises, Inc., P.S. Group, Inc. and
Airlease Limited.
10
<PAGE> 13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain compensation information for the
Chief Executive Officer and President of the Company, and the three other
executive officers of Echelon as of the year ended December 31, 1996 who, based
on employment with Echelon and Florida Progress or its respective subsidiaries,
were the most highly compensated executive officers and whose total annual
salary and bonus exceeded $100,000 (the "Named Executive Officers"). Information
set forth in the table reflects compensation earned by such individuals for
services with Echelon and for periods prior to December 18, 1996, with Florida
Progress or its respective subsidiaries.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------
AWARDS
------------------------- PAYOUTS
ANNUAL COMPENSATION(1) RESTRICTED ----------
NAME AND PRINCIPAL ----------------------- STOCK LTIP ALL OTHER
POSITION WITH ECHELON YEAR SALARY($) BONUS($)(2) AWARDS($)(3) OPTIONS(#) PAYOUTS($) COMPENSATION($)
--------------------- ---- --------- ----------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Darryl A. LeClair,...... 1996 238,491 144,000 2,594,897 129,340 34,953 55,610
Chief Executive
Officer 1995 211,947 87,500 -- -- -- 6,645
and President
Larry J. Newsome,....... 1996 143,977 115,300 434,494 2,500 31,561 64,647
Senior Vice President, 1995 133,450 44,000 -- -- -- 2,004
Chief Operating
Officer, Secretary and
Treasurer
Thomas D. Wilson........ 1996 99,782 47,500 172,992 1,000 -- 2,246
Vice President 1995 98,055 19,500 -- -- -- 2,221
Raymond F. Higgins...... 1996 91,700 50,600 172,992 1,000 -- 4,257
Vice President of 1995 -- -- -- -- -- --
Financial Analysis(5)
</TABLE>
- ---------------
(1) Other Annual Compensation, other than salary and bonuses, does not exceed
the minimum amounts required to be reported pursuant to Securities and
Exchange Commission Rules.
(2) Includes for the year ended December 31, 1996, for Messrs. Newsome, Wilson
and Higgins a one time special bonus paid in connection with the completion
of the Distribution.
(3) The shares of restricted stock shown have been granted under the Company's
Long Term Incentive Plan and are subject to a substantial risk of forfeiture
which lapses as to one-quarter of the shares each January 31st, commencing
on January 31, 1998. The aggregate restricted stock holdings and value of
such holdings at December 31, 1996 were for Mr. LeClair, 194,011 shares and
$3,031,422, respectively; for Mr. Newsome, 32,336 shares and $505,250,
respectively; and for each of Messrs Wilson and Higgins, 12,934 shares and
$202,094, respectively. The foregoing aggregate restricted stock holdings
and value of such holdings do not include the shares set forth under the
Long Term Incentive Plan Award Table that have not been issued, but that
Messrs. LeClair and Newsome may be eligible to receive upon the satisfaction
of certain performance criteria as described in such table. Dividends on all
restricted shares issued to the named executive officers are paid at the
same rate as paid to all stockholders. The Company currently intends to
retain all future earnings for the development of its business and does not
anticipate paying any cash dividends for the foreseeable future.
(4) Florida Progress matching contributions to its Savings Plan and/or its
Executive Optional Deferred Compensation Plan on behalf of the Named
Executive Officers. In 1996, for Messrs. LeClair and Newsome includes
payouts under the Florida Progress Nondiscrimination Plan and/or
Supplemental Employee Retirement Plan of $48,470 and $62,493, respectively.
(5) Mr. Higgins was not an executive officer in 1995 and therefore, no
compensation information is shown for such year.
11
<PAGE> 14
OPTION/SAR GRANTS TABLE
The following table sets forth information concerning stock options granted
by the Company for the year ended December 31, 1996 for the Named Executive
Officers shown in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------- GRANT DATE
% OF TOTAL VALUE (1)
OPTIONS GRANTED EXERCISE OR -------------
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE PRESENT VALUE
---- ----------- --------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Darryl A. LeClair................... 129,340 93.8 (2) 12/17/06 490,199
Larry J. Newsome.................... 2,500 1.8 (2) 12/17/06 9,475
Thomas D. Wilson.................... 1,000 * (2) 12/17/06 3,790
Raymond F. Higgins.................. 1,000 * (2) 12/17/06 3,790
</TABLE>
- ---------------
* Less than one percent.
(1) The options were valued using a Black-Scholes based option repricing method
using the following assumptions; volatility 30%; dividend rate 0%; and a
risk free rate of return of 7.75%.
(2) The option exercise price will be the closing price of the Company's Common
Stock on August 18, 1997 as reported on the New York Stock Exchange.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information concerning stock option values
at December 31, 1996 for stock options granted by the Company for Named
Executive Officers shown in the Summary Compensation Table.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------------ -------------------------
<S> <C> <C>
Darryl A. LeClair.............................. -0-/129,340 (1)
Larry J. Newsome............................... -0-/2,500 (1)
Thomas D. Wilson............................... -0-/1,000 (1)
Raymond F. Higgins............................. -0-/1,000 (1)
</TABLE>
- ---------------
(1) The value of the unexercised options at December 31, 1996 could not be
determined because the option exercise price will be the closing price of
the Company's Common Stock on August 18, 1997 as reported on the New York
Stock Exchange.
LONG TERM INCENTIVE PLAN AWARD TABLE
The following table sets forth information concerning awards under the
Company's Long Term Incentive Plan(1) during fiscal 1996 for the individuals
shown in the Summary Compensation Table.
ESTIMATED PAYOUT AT END OF PERIOD(2)
<TABLE>
<CAPTION>
NUMBER OF RESTRICTED PERFORMANCE
NAME SHARES OR OTHER RIGHTS(#)(3) PERIOD THRESHOLD(#)(3) TARGET(#)(3) MAXIMUM(#)(3)
- ---- ---------------------------- ----------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Darryl A. LeClair.... 52,137 1997-1999 17,379 34,758 52,137
Larry J. Newsome..... 16,882 1997-1999 5,627 11,255 16,882
Thomas D. Wilson..... -- -- -- -- --
Raymond F. Higgins... -- -- -- -- --
</TABLE>
12
<PAGE> 15
- ---------------
(1) The Company's Long Term Incentive Plan (the "LTIP") is a common stock based
incentive plan to reward participants for long-term growth and performance
of the Company.
(2) The Compensation Committee of the Company has approved threshold, target and
maximum levels of cumulative net income of the Company for the performance
period and has approved corresponding threshold, target and maximum awards
that will be paid in shares of Common Stock if such levels of cumulative net
income are achieved at the end of the performance period. The threshold,
target and maximum awards are based on percentages of the applicable Named
Executive Officers' total base salary for the performance period as
previously established under the terms of their employment agreements. The
number of shares of Common Stock that will be earned upon satisfaction of
the applicable performance goal will be determined by dividing the
applicable award amount by the closing price of the Company's Common Stock
on January 1, 1998 as reported on the New York Stock Exchange. No payout
will be made if less than threshold cumulative net income is achieved and no
payout will be made in excess of the maximum award. Upon the termination of
a Named Executive Officer's employment "Without Cause" or upon a "Change in
Control" (as such terms are defined in the Named Executive Officer's
employment agreement) the Named Executive Officer will be entitled to
receive a cash payment equal to the value of the number of restricted shares
the Named Executive Officer would be entitled to if the target level of
cumulative net income had been achieved.
(3) The number of shares shown has been determined by dividing the applicable
dollar award by the closing price of the Company's Common Stock on March 31,
1997 as reported on the New York Stock Exchange. The actual number of shares
that the Named Executive Officers will be eligible to earn under the LTIP
will be determined by dividing the applicable percentage of total base
salary for the performance period by the closing price on January 1, 1998 of
the Company's Common Stock as reported on the New York Stock Exchange.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of its
executive officers, including the Named Executive Officers. The initial term of
the agreement for Mr. LeClair is through December 31, 1999, and for each of
Messrs. Newsome, Wilson and Higgins is through December 31, 1998. Pursuant to
their employment agreements, the annual base salaries of Messrs. LeClair,
Newsome, Wilson and Higgins will be at least $280,000, $170,000, $106,860, and
$100,000, respectively. Under their employment agreements, Messrs. LeClair,
Newsome, Wilson, and Higgins are eligible for annual incentive cash bonuses
under the Company's management incentive compensation plan (the "MICP Bonus")
which is based upon the annual results of the Company's operations and Messrs.
LeClair and Newsome are eligible under the Company's Long Term Incentive Plan
(the "LTIP") to earn shares of Common Stock based upon the cumulative results of
the Company's operations for the three years ending December 31, 1999 (the "LTIP
Bonus"). Pursuant to their employment agreements, Messrs. LeClair, Newsome,
Wilson and Higgins have been granted 194,011, 32,335, 12,934 and 12,934 shares,
respectively, of Common Stock under the LTIP. These shares are subject to a risk
of forfeiture which lapses with respect to one-quarter of the shares each
January 31st, commencing January 31, 1998. In addition, Messrs. LeClair,
Newsome, Wilson and Higgins have been granted options to purchase 129,340,
2,500, 1,000 and 1,000 shares, respectively, of Common Stock under the LTIP at
an exercise price equal to the closing price for the Common Stock on the New
York Stock Exchange eight months after the completion of the Distribution. These
options generally have a term of ten years. One third of the options issued to
Mr. LeClair and one-fifth of the options issued to Messrs. Newsome, Wilson and
Higgins become exercisable each January 31st, commencing January 31, 1998.
The employment agreements provide that Messrs. LeClair, Newsome, Wilson and
Higgins are entitled to certain severance benefits in the event that their
employment is terminated by the Company "without cause" or by such executive
within one year following a "change of control" (both as defined in the
employment agreements). In the event of termination "without cause," the
executive will receive his base salary for the remainder of the then effective
employment term or 24 months (36 months for Mr. LeClair), whichever occurs
first, and the MICP Bonus for the year of termination multiplied by the number
of years (and fractions thereof) in the unexpired term of the agreement. In the
event of such termination within one year after a
13
<PAGE> 16
"change of control," Mr. LeClair will receive cash payments equal to three times
his base salary and three times his MICP Bonus, the cash value of his LTIP Bonus
for the then current three-year cycle, and a cash payment of between $500,000
and $2,000,000 depending on the year of termination. In the event of such
termination within one year after a "change of control," Messrs. Newsome, Wilson
and Higgins will each receive cash payments equal to two times their base salary
and two times their MICP Bonus; in addition, Mr. Newsome will receive a payment
equal to the cash value of his LTIP Bonus for the then current three-year cycle.
In addition, upon any such termination "without cause" or within one year after
a "change of control," all vesting, performance or similar requirements in
respect of any award under the LTIP shall be deemed to have been fully satisfied
and each executive will receive an additional cash payment in an amount
necessary to pay any federal excise taxes. Each employment agreement is also
subject to termination in the event of disability, death or voluntary retirement
by the individual or his termination "for cause." Each employment agreement
includes certain non-competition covenants applicable to certain activities
within Florida which remain in effect for two years following any termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee as of December 31, 1996
were Thomas W. Mahr and Joseph H. Richardson. On March 12, 1997, Jonathan Blum
was elected to the Board of Directors of the Company and replaced Mr. Richardson
on the Compensation Committee. Mr. Richardson served as Chairman of the Board of
Echelon from 1992 - 1995 at which time Echelon was PLC Leasing Corporation, an
affiliate of Florida Progress.
Mr. Richardson, a director of Echelon following the Distribution, is an
executive officer of both Florida Progress and Florida Power. During 1996,
Florida Progress entered into various agreements with Echelon governing the
relationships between Florida Progress and Echelon subsequent to the
Distribution and providing for the allocation of tax, employee benefits and
certain other liabilities and obligations arising from periods prior to the
Distribution, including the Distribution Agreement, Tax Sharing Agreement,
Employee Benefits Allocation Agreement and Transition Services Agreement. Copies
of such agreements have been filed as exhibits to the Registration Statement of
Echelon in respect of the registration of Common Stock under the Securities
Exchange Act of 1934, as amended.
In addition, Florida Progress and Florida Power have ongoing lease
agreements with Echelon. Such leases are on terms which reflect market rates and
conditions and have been entered into by the parties in the ordinary course of
their respective businesses. The leases are summarized in the following table:
<TABLE>
<CAPTION>
RENTABLE SQUARE
LOCATION FEET LEASED APPROXIMATE REMAINING TERM
-------- --------------- -------------------------------
<S> <C> <C>
FLORIDA PROGRESS
Barnett Tower............................ 62,149 10 years
FLORIDA POWER
Highpoint Center......................... 1,837 10 years
Bayboro (land lease only)................ 104,152 Cancellable upon written notice
from Florida Power
</TABLE>
14
<PAGE> 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In July 1996, Talquin, a former affiliate of Echelon which has since been
merged into Echelon, entered into a Consulting Agreement with Mission
Development Company, a company which is wholly owned by Mr. Doramus, Echelon's
current Chairman of the Board. Talquin agreed to pay Mission Development Company
a total of $400,000 for real estate consulting services to be provided through
March 31, 1997. The Consulting Agreement was initially entered into when the
parties were unaffiliated and, in the view of Echelon's management, the terms of
such agreement are comparable to those which could have been obtained from other
unaffiliated sources. Management has entered into an amendment to the Consulting
Agreement with Mission Development Company pursuant to which the term has been
extended through the end of 1997, the services to be provided have been
expanded, and the compensation to be paid has been increased by a total of
$400,000. Management believes that the terms of the amendment are also
comparable to the terms which could be obtained from a third party. The services
rendered pursuant to the Consulting Agreement and the compensation therefore are
independent of Mr. Doramus' services as Chairman and the compensation paid to
him as a director and Chairman.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
To the Company's knowledge, based solely on a review of the forms, reports
and certificates filed with the Company by the Company's directors and officers
and the holders of more than 10% of the Company's Common Stock, all Section
16(a) filing requirements were complied with by such persons in fiscal 1996.
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP has been the Company's independent
certified public accountants since 1996. KPMG Peat Marwick LLP has been
recommended by the Audit Committee and approved by the Board of Directors as the
Company's independent certified public accountants for the year ending December
31, 1997, subject to ratification of such appointment by the stockholders.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting of Stockholders with the opportunity to make a statement if they
desire to do so and such representatives are expected to be available to respond
to appropriate questions by stockholders. Ratification of the Company's
independent certified public accountants is not required by the Company's
By-Laws or otherwise, but the Board of Directors has decided to seek such
ratification as a matter of good corporate practice.
The Board recommends that you vote "FOR" ratification of the appointment of
KPMG Peat Marwick LLP as independent certified public accountants for the period
specified. If the stockholders do not ratify this appointment, other certified
public accountants will be considered by the directors upon recommendations of
the Audit Committee.
OTHER BUSINESS
It is not expected that any other matters are likely to be brought before
the meeting. However, if any other matters are presented, it is the intention of
the persons named in the proxy to vote the proxy in accordance with their best
judgment.
15
<PAGE> 18
STOCKHOLDER PROPOSALS FOR PRESENTATIONS AT THE 1998 ANNUAL MEETING
Pursuant to the General Rules under the Securities Exchange Act of 1934,
proposals of stockholders intended to be presented at the 1998 Annual Meeting of
Stockholders must be received by management of the Company at its executive
offices on or before December 20, 1997.
The Company's Articles of Incorporation and Bylaws, as amended to date,
also require certain advance notice to the Company of any stockholder proposal
and of any nominations by stockholders of persons to stand for election as
directors at a stockholders' meeting. Notice of stockholder proposals and of
director nominations must be timely given in writing to the Secretary of the
Company prior to the meeting at which the directors are to be elected. To be
timely, a stockholder's notice must be delivered to, or mailed and received at,
the principal executive offices of the Company not less than 60 days prior to
the date of the meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the scheduled
meeting is given or made, notice by the stockholder, to be timely, must be so
delivered or received not later than the close of business on the tenth day
following the earlier of the day on which notice was given or such public
disclosure was made.
A stockholder's notice shall set forth as to each matter the stockholder
proposes to bring before the annual meeting, in addition to any other
information as may be required by the Florida Business Corporation Act, the
Securities Exchange Act of 1934 or other law, (a) a brief description of the
proposal desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Company's books, of the stockholder proposing such business
and any other stockholders known by such stockholder to be supporting such
proposal, (c) the class and number of shares of the Company's stock which are
beneficially owned by the stockholder on the date of such stockholder notice and
by any other stockholders known by such stockholder to be supporting such
proposal on the date of such stockholder notice, and (d) any financial interest
of the stockholder in such proposal.
A stockholder's notice with respect to a director nomination shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director, (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class and number of shares of capital stock of the Company
which are beneficially owned by the person and (iv) any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of directors pursuant to Schedule 14A under the Securities
Exchange Act of 1934, as amended; and (b) as to the stockholder giving the
notice (i) the name and address, as they appear on the Company's books, of the
stockholder and (ii) the class and number of shares of the Company's stock which
are beneficially owned by the stockholder on the date of such stockholder
notice. The Company may require any proposed nominee to furnish such other
information as may reasonably be required by the Company to determine the
eligibility of such proposed nominee to serve as a director of the Company.
Copies of the complete provisions of the Company's Articles of
Incorporation and Bylaws governing these matters are available to any
stockholder upon request without charge from the Secretary of the Company.
By Order of the Board of Directors,
/s/ Larry J. Newsome
Larry J. Newsome, Secretary
Dated: April 17, 1997
16
<PAGE> 19
APPENDIX
ECHELON INTERNATIONAL CORPORATION
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 3, 1997
R
O The undersigned, a stockholder of ECHELON INTERNATIONAL CORPORATION
(the "Company"), does hereby appoint Darryl A. LeClair, Larry J. Newsome and
X Susan Glatthorn Johnson, and each of them acting individually, as the
attorney and proxy of the undersigned, with power of substitution, for and
Y on behalf of the undersigned, to attend the Annual Meeting of Stockholders
of the Company to be held at Le Parker Meridien, 118 West 57th Street, New
York, New York, on June 3, 1997 and any adjournment or adjournments thereof
(the "Annual Meeting"), to represent the undersigned at the Annual Meeting,
and there to vote all the shares of Common Stock of the Company which the
undersigned is entitled to vote at the Annual Meeting, in any manner and
with the same effect as if the undersigned were personally present at the
Annual Meeting, all as described in the Company's proxy statement dated
April 17, 1997 relating to the Annual Meeting, and the undersigned hereby
authorizes and instructs the above named proxy to vote as specified on the
reverse side.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED ONLY IF THIS PROXY
IS PROPERLY EXECUTED AND TIMELY RETURNED. IN THAT EVENT, SUCH SHARES WILL BE
VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THE SHARES
WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR LISTED ON THE REVERSE SIDE, FOR
THE PROPOSAL TO RATIFY THE APPOINTMENT OF THE INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS AND IN THE DISCRETION OF THE PROXIES FOR OTHER MATTERS WHICH MAY
PROPERLY COME BEFORE THE ANNUAL MEETING.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 20
/ X / PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE FOLLOWING PROPOSALS:
1. ELECTION OF DIRECTORS. NOMINEES FOR CLASS I DIRECTORS:
Joseph H. Richardson, Jonathan Blum
FOR WITHHELD
BOTH FOR BOTH
NOMINEES NOMINEES
/ / / / MARK HERE
IF YOU PLAN
TO ATTEND
THE MEETING / /
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE BELOW / /
/ /__________________________________________
For Both nominees except as written on the
line above
2. PROPOSAL TO RATIFY THE APPOINTMENT FOR AGAINST ABSTAIN
OF KPMG PEAT MARWICK LLP AS THE / / / / / /
COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS FOR FISCAL YEAR
1997.
3. OTHER MATTERS. The proxies herein named may in their discretion vote the
shares represented by this Proxy upon such other matters as may properly
come before the Annual Meeting.
The undersigned acknowledges receipt of (1) the Company's 1996 Annual
Report to Stockholders and (2) the Company's Notice of Annual Meeting and
Proxy Statement dated April 17, 1997 relating to the Annual Meeting. The
undersigned does hereby revoke any proxy previously given with respect to
the shares represented by this Proxy.
NOTE: Your signature should appear as your name appears hereon. As to
shares held in joint names, each joint owner should sign. If the signer is a
corporation, please sign full corporate name by a duly authorized officer.
If a partnership, please sign in partnership name by an authorized person.
If signed as attorney, executor, administrator, trustee, guardian, or in
other representative capacity, please give full title as such.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT USING
THE ENCLOSED ENVELOPE.
Signature:______________Date:__________Signature:_______________Date:___________
