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-12
PRIORITY HEALTHCARE CORPORATION
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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)(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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4) Date Filed:
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<PAGE>
PRIORITY HEALTHCARE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 2000
The annual meeting of shareholders of Priority Healthcare Corporation will
be held at SunTrust Bank Central Florida, N.A., Second Floor Tower 2 Campus
Room, 200 South Orange Avenue, Orlando, Florida, on Monday, May 15, 2000, at
11:00 a.m., Orlando time, for the following purposes:
(1) To elect three directors to serve until the 2003 annual meeting of
shareholders and until their successors are elected and have qualified;
(2) To approve the appointment of PricewaterhouseCoopers LLP as auditors
for the Company for 2000;
(3) To approve the proposed amendment to the Company's Restated Articles of
Incorporation which increases the number of authorized shares of the Company's
Class A Common Stock from 15,000,000 to 55,000,000;
(4) To approve the proposed amendment to the Company's Restated Articles of
Incorporation which increases the number of authorized shares of the Company's
Class B Common Stock from 40,000,000 to 180,000,000; and
(5) To transact such other business as may properly come before the
meeting.
All shareholders of record at the close of business on March 14, 2000 will
be eligible to vote.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. WHETHER OR
NOT YOU EXPECT TO BE PRESENT, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED
PROXY FORM IN THE ACCOMPANYING ADDRESSED, POSTAGE-PREPAID ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
Barbara J. Luttrell, Secretary
<PAGE>
PRIORITY HEALTHCARE CORPORATION
250 TECHNOLOGY PARK
SUITE 124
LAKE MARY, FLORIDA 32746
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 2000
This statement is being furnished to shareholders on or about March 28,
2000 in connection with a solicitation by the Board of Directors of Priority
Healthcare Corporation (the "Company") of proxies to be voted at the annual
meeting of shareholders to be held at 11:00 a.m., Orlando time, Monday, May 15,
2000, at the SunTrust Bank Central Florida, N.A., Second Floor Tower 2 Campus
Room, 200 South Orange Avenue, Orlando, Florida, for the purposes set forth in
the accompanying Notice.
The holders of record of shares of the Company's Class A Common Stock,
$0.01 par value per share ("Class A Common Stock"), and Class B Common Stock,
$0.01 par value per share ("Class B Common Stock," together with the Class A
Common Stock, "Common Stock"), outstanding at the close of business on March 14,
2000, the record date for the meeting, are entitled to vote at the meeting. On
that date, there were ___________ shares of Class A Common Stock and ___________
shares of Class B Common Stock outstanding and entitled to vote at the meeting.
On all matters, including the election of directors, each shareholder will have
three votes for each share of Class A Common Stock held and one vote for each
share of Class B Common Stock held. Accordingly, the Common Stock outstanding on
the record date represents an aggregate of ___________ votes.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time insofar as it has not been exercised. If a shareholder
executes more than one proxy, the proxy having the latest date will revoke any
earlier proxies. A shareholder attending the meeting will be given the
opportunity to revoke his or her proxy and vote in person.
Unless revoked, a proxy will be voted at the meeting in accordance with the
instructions of the shareholder in the proxy, or, if no instructions are given,
for the election as directors of all nominees listed under Proposal 1 and for
Proposals 2, 3 and 4. Election of directors will be determined by the vote of a
plurality of the votes cast by holders of both classes of Common Stock on such
election. Approval of Proposal 2 will be subject to the vote of a greater number
of votes cast by holders of both classes of Common Stock favoring approval than
the votes cast opposing it. Approval of Proposal 3 will be subject to the vote
of (i) a greater number of votes cast by holders of Class A Common Stock
favoring approval than those opposing it and (ii) a greater number of votes cast
by holders of both classes of Common Stock favoring approval than those opposing
it. Approval of Proposal 4 will be subject to the vote of (i) a greater number
of votes cast by holders of Class B Common Stock favoring approval than those
opposing it and (ii) a greater number of votes cast by holders of both classes
of Common Stock favoring approval than those opposing it. A proxy may indicate
that all or a portion of the shares represented by such proxy are not being
voted with respect to a specific proposal. This could occur, for example, when a
broker is not permitted to vote shares held in street name on certain proposals
in the absence of instructions from the beneficial owner. Shares that are not
voted with respect to a specific proposal will be considered as not present and
entitled to vote on such proposal, even though such shares will be considered
present for purposes of determining a quorum and voting on other proposals.
Abstentions on a specific proposal will be considered as present, but not as
voting in favor of such proposal. As a result, with respect to all of the
proposals, neither broker non-votes nor abstentions will affect the
determination of whether such proposals will be approved.
The Board of Directors knows of no matters, other than those described in
the attached Notice of Annual Meeting, which are to be brought before the
meeting. If other matters properly come before the meeting,
<PAGE>
it is the intention of the persons named in the accompanying form of proxy to
vote such proxy in accordance with their judgment on such matters.
The cost of the solicitation of proxies will be borne by the Company.
ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company consists of eight directors divided
into three classes. Two classes contain three directors each, and the third
class contains two directors. The term of one class of directors expires each
year. Generally, each director serves until the annual meeting of shareholders
held in the year that is three years after such director's election and until
such director's successor is elected and has qualified.
Three directors are to be elected at the meeting, each to hold office for a
term to expire at the 2003 annual meeting of shareholders and until his or her
successor is elected and has qualified. It is the intention of the persons named
in the accompanying form of proxy to vote such proxy for the election to the
Board of Directors of Messrs. William E. Bindley and Steven D. Cosler and Ms.
Rebecca M. Shanahan. Each of the nominees for director is presently a director.
If any such person is unable or unwilling to accept nomination or election, it
is the intention of the persons named in the accompanying form of proxy to
nominate such other person as director as they may in their discretion
determine, in which event the shares will be voted for such other person.
Unless otherwise indicated in a footnote to the following table, the
principal occupation of each director or nominee has been the same for the last
five years, and such person possesses sole voting and investment power with
respect to the shares of Class B Common Stock and Class A Common Stock indicated
as beneficially owned by such nominee. The number of shares of Class B Common
Stock shown as beneficially owned by each director includes any shares of Class
A Common Stock beneficially owned by such director, as indicated, because any
holder of shares of Class A Common Stock may request to convert any or all of
such shares into shares of Class B Common Stock at any time on a one-for-one
basis. There is no family relationship between any of the directors or executive
officers of the Company.
<TABLE>
<CAPTION>
CLASS B COMMON STOCK CLASS A COMMON STOCK
---------------------- ----------------------
SHARES SHARES
BENEFICIALLY PERCENT BENEFICIALLY PERCENT
PRESENT OWNED ON OF CLASS OWNED ON OF CLASS
PRINCIPAL DIRECTOR JANUARY 31, (IF MORE JANUARY 31, (IF MORE
NAME AGE OCCUPATION SINCE 2000 THAN 1%) 2000 THAN 1%)
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<S> <C> <C> <C> <C> <C> <C> <C>
NOMINEES FOR DIRECTOR
(Nominees for a three-year term to expire at the annual meeting of shareholders in 2003)
William E. Bindley 59 Chairman of the Board of the 1994 3,016,424(1) 15.3% 2,958,947(2) 58.8%
Company; Chairman, Chief
Executive Officer and
President of Bindley Western
Industries, Inc. ("BWI") (3)
Steven D. Cosler 44 Executive Vice President and 2000 97,185(4) --- 2,013 ---
Chief Operating Officer (5)
Rebecca M. Shanahan 46 Vice President, Managed Care 1997 5,569(6) --- 0 ---
of the University of Chicago
Hospitals and Health Systems
(7)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
CLASS B COMMON STOCK CLASS A COMMON STOCK
---------------------- ----------------------
SHARES SHARES PERCENT
BENEFICIALLY PERCENT BENEFICIALLY OF CLASS
PRESENT OWNED ON OF CLASS OWNED ON (IF MORE
PRINCIPAL DIRECTOR JANUARY 31, (IF MORE JANUARY 31, THAN 1%)
NAME AGE OCCUPATION SINCE 2000 THAN 1%) 2000
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<S> <C> <C> <C> <C> <C> <C> <C>
DIRECTORS CONTINUING IN OFFICE
(Term expiring at the annual meeting of shareholders in 2001)
Michael D. McCormick 52 Executive Vice President, 1994 133,994(8) --- 122,736(9) 2.4%
General Counsel and Secretary
of BWI (10)
Thomas J. Salentine 60 Executive Vice President and 1994 234,918(11) 1.4% 144,991 2.9%
Chief Financial Officer of BWI
(12)
(Term expiring at the annual meeting of shareholders in 2002)
Robert L. Myers 54 President and Chief Executive 1997 335,466(13) 2.0% 6,410 ---
Officer of the Company (14)
Donald J. Perfetto 53 Executive Vice President, 1999 82,427(15) --- 0 ---
Chief Financial Officer and
Treasurer of the Company (16)
Richard W. Roberson 53 President of Sand Dollar 1997 31,910(6) --- 0 ---
Partners, Inc. (investment and
consulting firm) (17)
</TABLE>
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(1) Includes 2,958,947 shares of Class A Common Stock (see footnote 2 below for
a description of the manner by which certain of such shares of Class A
Common Stock are held). Excludes 5,254 shares of Class A Common Stock and
3,000 shares of Class B Common Stock held by Mr. Bindley's spouse; Mr.
Bindley disclaims beneficial ownership of such shares.
(2) Includes 43,387 shares of Class A Common Stock held by two family
foundations and 38,751 shares of Class A Common Stock held by a charitable
remainder trust of which Mr. Bindley is the trustee and has investment
control. Excludes 5,254 shares of Class A Common Stock held by Mr.
Bindley's spouse; Mr. Bindley disclaims beneficial ownership of such
shares.
(3) Mr. Bindley also serves on the Board of Directors of Bindley Western
Industries, Inc. ("BWI"), a distributor of pharmaceuticals and related
products, and of Shoe Carnival, Inc., a shoe retailer. Mr. Bindley was the
Chief Executive Officer of the Company from July 1994 until May 1997 and
the President of the Company from May 1996 until July 1996.
(4) Does not include shares subject to stock options which are not exercisable
within 60 days. Includes 2,013 shares of Class A Common Stock and presently
exercisable stock options to purchase 90,528 shares of Class B Common Stock
granted under the Company's 1997 Stock Option and Incentive Plan. Includes
2,445 shares of Class B Common Stock jointly held with Mr. Cosler's spouse.
(5) From April 1992 to October 1995, Mr. Cosler served as Senior Vice President
of CoreSource, Inc. and served as President of CoreSource/First Benefit in
which he dealt with third party administration and health care management.
From November 1995 to June 1996, Mr. Cosler performed independent
consulting services. From July 1996 to July 1997, Mr. Cosler was Senior
Vice President and General Manager of Priority Healthcare Services
Corporation, a subsidiary of BWI. Since August 1997, Mr. Cosler has served
as Executive Vice President of Priority Pharmacy Services, and since
January 2000, he has served as Chief Operating Officer of the Company.
(6) Includes presently exercisable stock options to purchase 3,000 shares of
Class B Common Stock granted under the Company's Outside Directors Stock
Option Plan.
(7) From December 1996 to September 1997, Ms. Shanahan performed legal and
consulting services as an independent contractor for various entities in
the health care industry. From 1991 until December 1996, she held executive
officer positions with Methodist Medical Group and Beltway Services, a
600-member physician practice group affiliated with Methodist Hospital in
Indianapolis, Indiana, with her latest position being senior vice president
and chief operating officer.
-3-
<PAGE>
(8) Includes 122,736 shares of Class A Common Stock (see footnote 9 below for a
description of the manner by which certain of such shares of Class A Common
Stock are held). Also includes presently exercisable stock options to
purchase 1,500 shares of Class B Common Stock granted under the Company's
Outside Directors Stock Option Plan.
(9) Includes 989 shares held in a family foundation.
(10) Mr. McCormick also serves on the Board of Directors of BWI.
(11) Includes 144,991 shares of Class A Common Stock. Also includes presently
exercisable stock options to purchase 1,500 shares of Class B Common Stock
granted under the Company's Outside Directors Stock Option Plan.
(12) Mr. Salentine also serves on the Board of Directors of BWI.
(13) Does not include shares subject to stock options which are not exercisable
within 60 days. Includes 6,410 shares of Class A Common Stock and presently
exercisable stock options to purchase 276,805 shares of Class B Common
Stock granted under the Company's 1997 Stock Option and Incentive Plan.
(14) Mr. Myers has been the President of the Company since July 1996 and the
Chief Executive Officer of the Company since May 1997. From July 1996 to
May 1997, he was the Chief Operating Officer of the Company. From June 1995
through June 1996, Mr. Myers was a consultant to the health care industry.
From 1971 to June 1995, he was employed by Eckerd Corporation, a retail
drug store chain, where he served as a corporate officer from 1981 through
1995 and as senior vice president of pharmacy from 1990 to 1995. Mr. Myers
is a registered pharmacist.
(15) Does not include shares subject to stock options which are not exercisable
within 60 days. Includes presently exercisable stock options to purchase
79,140 shares of Class B Common Stock granted under the Company's 1997
Stock Option and Incentive Plan.
(16) Prior to joining the Company in June 1997, and since 1986, Mr. Perfetto was
employed by Bimeco, Inc., a distributor of medical products. During such
time, Mr. Perfetto held the positions of vice president of finance and
operations and secretary/treasurer of Bimeco, Inc.
(17) From March 1993 to September 1996, Mr. Roberson served as president and
chief executive officer of Visionworks, Inc., a retail superstore optical
chain. Mr. Roberson is also a director of C. H. Heist Corporation, an
industrial cleaning and maintenance company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED ABOVE.
MEETINGS AND COMMITTEES
During 1999, the Board of Directors of the Company held four meetings.
During the period in 1999 for which he or she served as a director, no director
attended fewer than 75% of the total meetings of the Board of Directors and each
committee on which he or she served. The Board of Directors does not have a
nominating committee. The Board of Directors has a Compensation Committee, which
consists of Mr. Roberson and Ms. Shanahan. The primary functions of the
Compensation Committee are to consider and recommend overall compensation
programs, to review and approve compensation payable to management and to
administer all executive compensation and stock option plans of the Company. The
Compensation Committee met two times during 1999.
The Board of Directors of the Company has an Audit, Ethics and Compliance
Committee (the "Audit Committee"), the current members of which are Mr. Roberson
and Ms. Shanahan. The functions of the Audit Committee are to meet with the
independent accountants of the Company, to review the audit plan for the
Company, to review the annual audit of the Company with the accountants together
with any other reports or recommendations made by the accountants, to recommend
whether the accountants should be continued as auditors for the Company and, if
others are to be selected, to recommend those to be selected, to meet with the
chief accounting officer for the Company and to review with him and the
accountants for the Company the adequacy of the Company's internal controls, to
review related party transactions, to monitor corporate policies and procedures
with respect to the Company's ethics and compliance program and to perform such
other duties as shall be delegated to the Audit Committee by the Board of
Directors. The Audit Committee met two times during 1999.
-4-
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
Common Stock, to file reports of ownership with the Securities and Exchange
Commission. Such persons also are required to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during 1999, all filing
requirements applicable to its executive officers, directors, and greater than
10% shareholders were complied with, except for one Form 4 for Ms. Shanahan
which was not timely filed to report a purchase and one Form 4 for Mr. Woodard
which was not timely filed to report a purchase.
EXECUTIVE OFFICERS
As used throughout this Proxy Statement, the term "executive officers"
refers to William E. Bindley, Chairman of the Board, Robert L. Myers, President
and Chief Executive Officer, Guy F. Bryant, Executive Vice President and Chief
Marketing Officer, Steven D. Cosler, Executive Vice President and Chief
Operating Officer, Donald J. Perfetto, Executive Vice President, Chief Financial
Officer and Treasurer, Melissa E. McIntyre, Vice President - Clinical Services,
Barbara J. Luttrell, Vice President - Administration and William M. Woodard,
Vice President - Strategic Alliances.
-5-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three years to the Company's Chief
Executive Officer and to each of the Company's four other most highly
compensated executive officers, based on salary and bonus earned during 1999
(the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- ---------------
AWARDS
----------
SECURITIES
NAME AND PRICIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS (1) OPTIONS (2) COMPENSATION
- ----------------------------------- ---- --------- ------------ --------------- -----------------
<S> <C> <C> <C> <C> <C>
Robert L. Myers 1999 $ 284,712 $ 325,000 223,800 $ 21,949 (3)
President and 1998 262,620 275,000 150,000 21,592
Chief Executive Officer 1997 233,450 200,000 150,000 21,236
Steven D. Cosler 1999 $177,692 $ 106,615 $ 73,700 86,714 (4)
Executive Vice President and 1998 163,654 83,161 60,000 12,861
Chief Operating Officer 1997 152,004 65,000 69,000 12,896
Guy F. Bryant 1999 $163,077 $ 97,846 73,700 $ 18,222 (5)
Executive Vice President and 1998 149,738 58,208 60,000 12,929
Chief Marketing Officer 1997 138,400 77,723 69,000 12,996
Donald J. Perfetto 1999 $160,000 $ 96,000 73,700 $ 18,957 (6)
Executive Vice President, Chief 1998 122,308 68,439 60,000 12,800
Financial Officer and Treasurer (7) 1997 55,000 40,000 54,000 ---
Melissa E. McIntyre 1999 $127,200 $ 61,056 42,150 $ 12,923 (8)
Vice President-Clinical Services 1998 127,200 56,972 22,500 12,924
1997 125,234 51,839 60,000 12,993
</TABLE>
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(1) Reflects bonus earned during the specified year, which bonuses at times
have been paid in the following year.
(2) Consists of options to acquire shares of Class B Common Stock of the
Company. The Company has no SAR plan and did not grant restricted stock
awards to the Named Executive Officers. The amounts shown for stock options
represent the number of shares of Class B Common Stock resulting from the
adjustments relating to the May 1999 three-for-two stock split.
(3) Consists of $12,800 in Company contributions to the Company's profit
sharing plan, $8,926 in Company contributions to the Company's profit
sharing excess plan and $223 in group life insurance premiums.
(4) Consists of $12,800 in Company contributions to the Company's profit
sharing plan, $8,461 in Company contributions to the Company's profit
sharing excess plan, $72 in group life insurance premiums and $65,381 in
relocation expenses.
(5) Consists of $12,800 in Company contributions to the Company's profit
sharing plan, $5,292 in Company contributions to the Company's profit
sharing excess plan and $130 in group life insurance premiums.
(6) Consists of $12,800 in Company contributions to the Company's profit
sharing plan, $5,865 in Company contributions to the Company's profit
sharing excess plan and $292 in group life insurance premiums.
(7) Mr. Perfetto joined the Company in June 1997.
(8) Consists of $12,800 in Company contributions to the Company's profit
sharing plan and $134 in group life insurance premiums.
-6-
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION BENEFITS AGREEMENTS
The Company has entered into a Termination Benefits Agreement with each of
Messrs. Myers, Bryant, Cosler and Perfetto. The purpose of these agreements is
to encourage each officer to remain with the Company by assuring each officer of
certain benefits in the event of a "Change in Control" of the Company.
Each Termination Benefits Agreement provides for payments to Messrs. Myers,
Bryant, Cosler and Perfetto upon the occurrence of certain events. The
Termination Benefits Agreement between the Company and Mr. Myers was entered
into on July 1, 1996. It had an initial term through December 31, 1998 and is
automatically extended annually for an additional one-year period unless notice
is given by the Company or Mr. Myers. The Termination Benefits Agreements
between the Company and Messrs. Bryant, Cosler and Perfetto were entered into on
January 1, 2000. Each of these agreements has an initial term through December
31, 2000 and each is automatically extended annually for an additional one-year
period unless notice is given by the Company or the officer. The Termination
Benefits Agreements are designed to protect Messrs. Myers, Bryant, Cosler and
Perfetto against termination of their employment following a "Change in Control"
of the Company. For purposes of the Termination Benefits Agreements, "Change in
Control" is broadly defined to include, among other things, the acquisition by a
person or group of persons of 25% or more of the combined voting power of the
stock of the Company, the replacement of a majority of the current Board of
Directors, the approval by the shareholders of the Company of a reorganization,
merger or consolidation, or the approval by shareholders of a liquidation or
dissolution of the Company or the sale or disposition of all or substantially
all of the assets of the Company.
Following a "Change in Control," Messrs. Myers, Bryant, Cosler and Perfetto
are entitled to the benefits provided by the Termination Benefits Agreements in
the event their employment is terminated within three years for any reason other
than their death, disability, or normal retirement or is terminated by the
Company for cause.
In addition, Messrs. Myers, Bryant, Cosler and Perfetto are entitled to the
benefits of the Termination Benefits Agreements if, after a "Change in Control,"
they terminate their employment with the Company within three years in response
to certain actions by the Company which include, among other things, a
substantial reduction in their duties or responsibilities, a reduction in the
level of salary payable to them, the failure by the Company to continue to
provide them with benefits substantially similar to those previously provided to
them, their required relocation, or the breach by the Company of any of the
provisions of the Termination Benefits Agreement.
Upon termination of employment, if the officer is entitled to the benefits
payable under the Termination Benefits Agreement, he shall receive within 30
days following the termination all earned but unpaid salary, bonus and incentive
payments through the date of his termination. In addition, he shall be entitled
to a lump-sum payment of an amount equal to 2.9 times his average annual
compensation paid by the Company for the past five years. Any lump sum payment
will be grossed up in an amount sufficient to cover any excise tax imposed upon
such payment pursuant to Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code").
Effective March 1, 1999, the Company entered into employment agreements
with each of Messrs. Bryant, Cosler and Perfetto. These employment agreements
provided for a term to expire on February 28, 2000, however they were terminated
upon the effectiveness of the Termination Benefits Agreements on January 1,
2000. Pursuant to the employment agreements, Messrs. Bryant, Cosler and Perfetto
were entitled to receive base salaries of $12,916, $14,166 and $12,500 per
month, respectively. These employment agreements provided that such officers
were eligible to receive an annual bonus based on individual and Company
performance, up to 60% of annualized monthly salary. Pursuant to the employment
agreements, if the Company had terminated the officer without cause prior to the
expiration of the employment agreement, the Company would have paid to such
individual the aggregate amount of regular compensation that he would be
entitled to receive under the agreement for a six-month period.
-7-
<PAGE>
The Company also entered into a non-compete agreement with each of Messrs.
Bryant, Cosler and Perfetto on March 1, 1999. These non-compete agreements
contained confidentiality provisions and provided that, for one year after
termination of employment with the Company for any reason other than termination
by the Company without cause, in which event the period would have been six
months, the officer could not compete with the Company, solicit the Company's
customers or induce the Company's employees to terminate their employment.
On January 1, 2000, the Company entered into new non-compete agreements
with each of Messrs. Bryant, Cosler, and Perfetto. These non-compete agreements
contain confidentiality provisions. These non-compete agreements provide that
for a period of one year after termination of employment with the Company the
officer may not compete with the Company, solicit the Company's customers or
induce the Company's employees to terminate their employment.
COMPENSATION OF DIRECTORS
During 1999, the Company paid directors who are not employees of the
Company an annual retainer of $15,000 and a fee of $1,000 for each Board meeting
or committee meeting attended (or $500 for each committee meeting held in
conjunction with a Board meeting). The annual retainer is paid 50% in cash and
50% in the form of shares of Class B Common Stock, valued at 100% of the fair
market value of such shares on the date of grant. Such shares are not registered
and are subject to the resale limitations of Rule 144 of the Securities Act of
1933, as amended. Directors who are full-time employees of the Company do not
receive any additional compensation for serving as directors or for attending
meetings, but all directors are reimbursed for all reasonable out-of-pocket
expenses incurred in connection with attendance at meetings. In 1999, the
Company paid $70,154 to Mr. Bindley for services that he provided in his
capacity as Chairman of the Board. Mr. Bindley does not participate in any
benefit plans of the Company.
On August 25, 1997, the Board of Directors and the then sole shareholder
adopted an Outside Directors Stock Option Plan (the "Directors Plan"). Pursuant
to the Directors Plan, each Eligible Director (as defined therein) is
automatically granted an option to purchase 1,500 shares of Class B Common Stock
(as adjusted for the May 1999 three-for-two stock split) on June 1 of each year
beginning in 1998. The Directors Plan reserves for issuance 37,500 shares of the
Company's Class B Common Stock (as adjusted for the May 1999 three-for-two stock
split), subject to adjustment in certain events. The option exercise price per
share is equal to the fair market value of one share of Class B Common Stock on
the date of grant. Each option becomes exercisable six months following the date
of grant and expires ten years following the date of grant. Subject to certain
exceptions, options may be exercised by the holder only if he or she has been in
continuous service on the Board of Directors at all times since the grant of the
option. There are currently four Eligible Directors - Messrs. McCormick,
Roberson and Salentine, and Ms. Shanahan. The Eligible Directors are not
currently eligible for grants or awards under any other stock, bonus or benefit
plans of the Company.
PROFIT SHARING PLAN
The Company and its subsidiaries maintain a qualified profit sharing plan
(the "Profit Sharing Plan") for eligible employees of the Company and its
subsidiaries. All employees are generally eligible to participate in the Profit
Sharing Plan as of the first January 1, April 1, July 1 or October 1 after
having completed at least 90 days of service (as defined in the Profit Sharing
Plan) and having reached age 21.
The annual contribution of the Company to the Profit Sharing Plan is at the
discretion of the Board of Directors and is generally 8% of a participant's
compensation for the year. The employer contribution for a year is allocated
among participants employed on the last day of the year in proportion to their
relative compensation for the year. In order to be eligible to receive a share
of the employer contribution, an employee must have been eligible to have
participated in the Profit Sharing Plan for a full calendar year. Subject to
limitations imposed by the Code, a participant may, in addition to receiving a
share of the employer contribution, have a percentage of his or her compensation
withheld from pay and contributed to
-8-
<PAGE>
the Profit Sharing Plan. Subject to applicable Code requirements, employees may
make "rollover" contributions to the Profit Sharing Plan of qualifying
distributions from other employers' qualified plans.
NONQUALIFIED DEFERRED COMPENSATION ARRANGEMENT
Effective January 1, 1999, the Company established the Priority Healthcare
Corporation 401(k) Excess Plan (the "Excess Plan"), which is a non-qualified
deferred compensation plan for a select group of executive employees. Messrs.
Myers, Cosler, Bryant and Perfetto are currently eligible to participate in the
Excess Plan. The Excess Plan is designed to permit the eligible executives
voluntarily to defer portions of their pre-tax salary and bonus beyond what they
can defer under the 401(k) feature of the Profit Sharing Plan. Under the Excess
Plan, an eligible executive can elect to defer up to 100% of those portions of
his salary and bonus that he is not able to defer under the Profit Sharing Plan.
Before the beginning of each year, the executive must decide the total
deferral he wants to make for the year and elect to have that deferral made
under the Excess Plan. Once the plan administrator of the Profit Sharing Plan
determines how much the executive can defer under the Profit Sharing Plan's
401(k) feature for a year without exceeding Internal Revenue Code limits, then
that amount will be transferred from the Excess Plan to the executive's Company
Profit Sharing Plan 401(k) account.
Amounts credited to an executive's account under the Excess Plan are
credited with investment earnings or losses based on an investment option or
options that the executive elects (at the time he makes his deferral election
for a year) to serve as the measure of the investment earnings and losses on the
executive's deferrals for the year. The executive may select from among the
options available under the Profit Sharing Plan. Under the Excess Plan, a
participating executive, at the time he makes his deferral election, may choose
the form in which his benefits attributable to those deferrals will be paid to
him or his beneficiary upon his retirement or death. The three options available
are a single lump sum payment, quarterly installment payments for a specified
period of up to 15 years and annual installment payments over a specified period
of up to 15 years.
The Excess Plan also provides benefits for Mr. Myers which were formerly
provided under the Bindley Western Industries, Inc. Profit Sharing Excess Plan
and the Bindley Western Industries, Inc. 401(k) Excess Plan. The benefits Mr.
Myers accrued under those plans have been transferred from those plans and
credited to his account under the Excess Plan.
STOCK OPTIONS
On August 25, 1997, the Company's Board of Directors and the then sole
shareholder adopted the 1997 Stock Option and Incentive Plan (the "1997 Stock
Option Plan"). On May 21, 1998, the shareholders of the Company approved the
adoption of the 1997 Stock Option Plan at the 1998 annual meeting of
shareholders. On May 10, 1999, the shareholders approved an amendment to the
Company's 1997 Stock Option Plan which increased from 1,250,000 to 2,875,000 (as
adjusted for the May 1999 three-for-two stock split), the number of shares of
the Company's Class B Common Stock subject to issuance under the plan. Thus, the
1997 Stock Option Plan reserves for issuance 2,875,000 shares of the Company's
Class B Common Stock, subject to adjustment in certain events. The 1997 Stock
Option Plan provides for the grant to officers, key employees and consultants of
the Company of options to purchase shares of Class B Common Stock and restricted
shares of Class B Common Stock. Stock options granted under the 1997 Stock
Option Plan may be either options intended to qualify for federal income tax
purposes as "incentive stock options" or options not qualifying for favorable
tax treatment ("nonqualified stock options"). No individual participant may
receive awards for more than 300,000 shares in any calendar year.
On September 15, 1998, the Company's Board of Directors adopted the Broad
Based Stock Option Plan (the "Broad Based Plan"). The Broad Based Plan reserves
for issuance 600,000 shares of the Company's Class B Common Stock (as adjusted
for the May 1999 three-for-two stock split), subject to adjustment in certain
events. The Broad Based Plan provides for the grant to employees, other than
officers and directors of the Company, of options to purchase shares of Class B
Common Stock. All options granted under the
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Broad Based Plan are nonqualified stock options. No individual participant may
receive awards for more than 40,000 shares in any calendar year.
The following table sets forth information with respect to options granted
by the Company under the 1997 Stock Option Plan to the Named Executive Officers
during 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS GRANT DATE VALUE
-------------------------------------------------------------- ------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE GRANT DATE
NAME GRANTED FISCAL YEAR PRICE EXPIRATION DATE PRESENT VALUE (1)
- -------------------------- -------------- ---------------- --------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Robert L. Myers 150,000(2) 15.3% $25.5833 2/25/09 $2,061,000(3)
73,800(4) 7.5% 25.5833 2/25/09 1,014,012(3)
Steven D. Cosler 23,700(4) 2.4% 25.5833 2/25/09 325,638(3)
2,940(5) 0.3% 34.00 6/09/09 48,892(6)
47,060(7) 4.8% 34.00 6/09/09 899,317(8)
Guy F. Bryant 23,700(4) 2.4% 25.5833 2/25/09 325,638(3)
2,940(5) 0.3% 34.00 6/09/09 48,892(6)
47,060(7) 4.8% 34.00 6/09/09 899,317(8)
Donald J. Perfetto 23,700(4) 2.4% 25.5833 2/25/09 325,638(3)
2,940(5) 0.3% 34.00 6/09/09 48,892(6)
47,060(7) 4.8% 34.00 6/09/09 899,317(8)
Melissa E. McIntyre 23,400(4) 2.4% 25.5833 2/25/09 321,516(3)
2,940(5) 0.3% 34.00 6/09/09 48,892(6)
15,810(7) 1.6% 34.00 6/09/09 302,129(8)
</TABLE>
- ---------------
(1) The Company does not believe that the Black-Scholes model or any other
valuation model is a reliable method of computing the present value of the
Company's employee stock options. The value ultimately realized, if any,
will depend on the amount by which the market price of the stock exceeds
the exercise price on the date of exercise. The grant date present value
calculation uses an expected option term based on past experience, rather
than the contract term of the options. The use of an expected term produces
a valuation adjustment for non-transferability of the options. There have
been no adjustments made for risk of forfeiture of the options.
(2) Nonqualified stock options to purchase Class B Common Stock granted at 100%
of the fair market value of the stock on the date of grant. The options are
exercisable at the rate of 25% per year, beginning February 25, 2000.
(3) The grant date present value is based on a Black-Scholes model and assumes
a risk-free rate of return of 5.32%, an expected term of five years, a
dividend yield of 0.0% and a stock volatility of 55.69%.
(4) Nonqualified stock options to purchase Class B Common Stock granted at 100%
of the fair market value of the stock on the date of grant. The options are
exercisable in full on or after February 25, 2000.
(5) Incentive stock options to purchase Class B Common Stock granted at 100% of
the fair market value of the stock on the date of grant. The options are
exercisable in full on or after January 1, 2001.
(6) The grant date present value is based on a Black-Scholes model and assumes
a risk-free rate of return of 5.90%, an expected term of four years, a
dividend yield of 0.0% and a stock volatility of 55.40%.
(7) Nonqualified stock options to purchase Class B Common Stock granted at 100%
of the fair market value of the stock on the date of grant. The options are
exercisable at the rate of 25% per year beginning January 1, 2001.
(8) The grant date present value is based on a Black-Scholes model and assumes
a risk-free rate of return of 5.90%, an expected term of five years, a
dividend yield of 0.0% and a stock volatility of 58.58%.
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<PAGE>
The following table sets forth information with respect to the exercise of
options to acquire Class B Common Stock by the Named Executive Officers during
1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
ACQUIRED ON VALUE -------------------------- -----------------------------
NAME EXERCISE REALIZED (2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Myers 10,335 $167,513 93,089 461,721 $1,823,422 $5,396,373
Steven D. Cosler --- --- 31,537 204,236 607,355 2,021,478
Guy F. Bryant --- --- 33,684 192,218 650,218 1,965,603
Donald J. Perfetto --- --- 23,899 181,750 453,848 1,751,706
Melissa E. McIntyre --- --- 31,317 106,418 605,309 1,234,736
</TABLE>
- --------------
(1) The closing price for the Company's Class B Common Stock as reported by the
Nasdaq National Market System on December 31, 1999 was $28.9375. The value
is calculated on the basis of the difference between the Class B Common
Stock option exercise price and $28.9375, multiplied by the number of
"In-the-Money" shares of Class B Common Stock underlying the option.
(2) The value is calculated based on the difference between the option exercise
price and the closing market price of the Class B Common Stock on the date
of exercise, multiplied by the number of shares to which the exercise
relates.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee's practice with respect to executive
compensation has been to: (a) conduct annual merit reviews for individuals
throughout the year; (b) grant stock options in the fall of each year or such
other times as deemed advisable by the Compensation Committee; and (c) approve
annual bonuses payable, in whole or in part, during the following March. The
Compensation Committee applied the criteria discussed below to the 1999 annual
merit reviews and the 1999 annual bonus amounts for the executive officers.
EXECUTIVE COMPENSATION POLICY
The Company's compensation policy is designed to: (a) be competitive so
that the Company can attract, reward, and retain the quality talent that is
essential to its continued success; (b) motivate key employees through the use
of incentive compensation programs, including annual bonuses and stock option
grants; (c) treat employees fairly and, at the same time, be cost effective; (d)
foster teamwork within the Company so that employees share in the rewards and
risks of the Company; (e) offer executive officers the opportunity to achieve
significant levels of ownership in the Company's stock so that their interests
will be aligned with those of its shareholders; and (f) assure that executive
officers' compensation will be tax deductible to the maximum extent permissible.
Consistent with this policy, the compensation of executive officers has been and
will be related in substantial part to Company performance. Compensation for
executive officers consists of base salary, bonuses and stock option grants.
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<PAGE>
CASH BASED COMPENSATION
BASE COMPENSATION. In making compensation decisions, the Compensation
Committee's subjective review process primarily includes: (a) an analysis of
executive compensation levels within the specialty distribution and health care
services industry at other publicly-traded companies of comparable size and
stature by reviewing proxy statements and national compensation surveys and
reports; (b) individual efforts and accomplishments within the Company, the
industry, and the community; (c) management experience and development; (d) team
building skills consistent with the Company's best interests; (e) base
compensation paid to other executive officers within the Company; and (f)
observance of the Company's ethics and compliance program. Base compensation for
1999 was established for the executive officers after a merit review was
conducted by the CEO.
ANNUAL BONUS. A portion of the cash compensation of the executive officers
(and some other salaried employees) consists of annual bonus payments under the
Company's bonus program. Allocation of the bonuses to the executive officers
(other than the CEO) is based on recommendations made by the CEO to the
Compensation Committee. Bonus amounts to non-executive officers are generally
based on recommendations made by the Company's executive officers.
The Compensation Committee gives consideration to the Company's overall
performance and the executive officer's performance for the specific areas of
the Company under his or her direct control. This balance supports
accomplishment of overall objectives and rewards individual contributions by the
executive officers. The 1999 annual bonuses were approved by the Compensation
Committee after receiving input from the CEO based upon the subjective criteria
used for establishing base compensation as set forth above.
On March 26, 1998, the Compensation Committee adopted the following
performance standards to be used for purposes of establishing annual bonuses:
(a) sales; (b) net earnings; and (c) individual performance criteria. The
Compensation Committee deems such financial goals to be a valid measure of
performance within the specialty distribution and health care services industry
and consistent with the Company's best interests. Discretionary adjustments by
the Compensation Committee are possible should unforeseen or uncontrollable
events occur during the course of the year.
The Compensation Committee's intent is to make the executive officers'
total cash compensation package (base compensation plus annual bonus)
competitive with other publicly-traded companies of comparable size and stature
within the specialty distribution and health care services industry, based on
its analysis of total cash compensation for similar executive officers within
the industry.
EQUITY BASED COMPENSATION
The Compensation Committee believes that equity compensation, in the form
of stock options, is an important element of performance based compensation of
executive officers. By granting stock options, the Compensation Committee will
continue the Company's practice of increasing key employees' equity ownership in
order to ensure that their interests remain closely aligned with those of the
Company's shareholders. Stock options and equity ownership in the Company
provide a direct link between executive compensation and shareholder value.
Stock options also create an incentive for key employees to remain with the
Company for the long term because the options are not immediately exercisable
and, if not exercised, are in most cases forfeited if the employee leaves the
Company before retirement.
Consistent with the above philosophy, the Compensation Committee, based on
input from the CEO, approved the granting of stock options to seven officers on
February 25, 1999, to 44 officers and key employees on June 9, 1999, and to
other employees as they joined the Company during the year. For the executive
officers (other than the CEO) the Compensation Committee considered: (a) the
CEO's input; (b) subjective criteria with respect to individual performance,
including individual efforts and accomplishments, experience, and team building
skills; and (c) the relative number of stock option grants to other executive
officers within the Company.
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<PAGE>
COMPENSATION OF ROBERT L. MYERS, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Mr. Myers' cash compensation is based on the same factors as the other
executive officers. The Compensation Committee's decision to increase Mr. Myers'
cash compensation (base compensation plus annual bonus) was based on the
subjective criteria previously set forth in this report in the discussion with
respect to cash compensation.
Since the approval of the 1997 Stock Option Plan, Mr. Myers has also
participated in the Company's equity based compensation program. By employing
the subjective criteria previously set forth in the discussion with respect to
cash and equity based compensation, the Compensation Committee granted to Mr.
Myers the stock options shown in the Option Grants In Last Fiscal Year table set
forth under "Compensation of Executive Officers and Directors--Stock Options."
It is the Compensation Committee's view that Mr. Myers' total compensation
package for 1999 was based on an appropriate balance of: (a) individual
performance; (b) Company performance; and (c) other CEO compensation packages
within the specialty distribution and health care services industry. The
Compensation Committee points out that the companies used for evaluation of
competitive compensation may not, in all cases, be the same as those companies
comprising the industry peer group described under "Compensation of Executive
Officers and Directors--Performance Graph."
Compensation Committee
Richard W. Roberson
Rebecca M. Shanahan
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<PAGE>
PERFORMANCE GRAPH
The performance graph set forth below compares the cumulative total
shareholder return on the Company's Class B Common Stock with the Nasdaq Market
Index and with peer industries within SIC Code 5122 (Drugs, Drug Proprietaries
and Druggists' Sundries) for the period from October 24, 1997 through December
31, 1999. The Company's Class B Common Stock commenced trading on the Nasdaq
National Market System on October 24, 1997.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
NASDAQ MARKET INDEX AND INDEX OF COMPANIES IN SIC 5122
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
October 24, December 31, December 31, December 31,
1997 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nasdaq Stock Market 100.00 98.77 139.30 245.69
- ----------------------------------------------------------------------------------------------------------
SIC 5122 Companies 100.00 102.35 140.93 72.03
- ----------------------------------------------------------------------------------------------------------
Priority Healthcare Corporation 100.00 104.34 357.79 199.59
- ----------------------------------------------------------------------------------------------------------
</TABLE>
[GRAPH OMITTED]
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that may incorporate future filings (including
this Proxy Statement, in whole or in part), the preceding Compensation Committee
Report on Executive Compensation and the stock price Performance Graph shall not
be incorporated by reference in any such filings.
-14-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On October 29, 1997, the Board of Directors established the Compensation
Committee to approve compensation and stock option grants for the Company's
executive officers. The Compensation Committee members during 1999 were Mr.
Roberson and Ms. Shanahan. None of the Compensation Committee members are
involved in a relationship requiring disclosure as an interlocking executive
officer/director or under Item 404 of Regulation S-K or as a former officer or
employee of the Company.
CERTAIN TRANSACTIONS
Three of the eight members of the Company's Board of Directors (Messrs.
Bindley, McCormick and Salentine) are directors and executive officers of BWI.
Mr. Bindley is also a significant shareholder of BWI. Set forth below are
descriptions of certain services provided by BWI to the Company and certain
agreements between the Company and BWI.
DISTRIBUTION AGREEMENT. In connection with the spin-off of the Class A
Common Stock by BWI on December 31, 1998 (the "Distribution"), the Company and
BWI entered into a Distribution Agreement (the "Distribution Agreement"). The
Distribution Agreement contains a number of provisions relating to arrangements
between the Company and BWI subsequent to the Distribution. The Distribution
Agreement provides that, except as otherwise provided in the Tax Sharing
Agreement, the Administrative Services Agreement and the Indemnification and
Hold Harmless Agreement between the Company and BWI (see descriptions of each
below), the Company will pay, perform and discharge all obligations, liabilities
and losses relating to, and will indemnify and hold harmless BWI from and
against, all contracts, agreements, undertakings, liabilities, claims, suits and
disputes arising out of or relating to the Company, its subsidiaries and the
Company's business, assets, liabilities, operations, occupancies and employee
benefit and other plans. In addition, BWI will indemnify and hold harmless the
Company against all losses, liabilities, claims and damages in any way arising
out of BWI, its subsidiaries (other than the Company and the Company's
subsidiaries) and BWI's business, assets, liabilities, operations, occupancies
and employee benefit and other plans. The Distribution Agreement also provides
that each of BWI and the Company will waive, release, forever discharge and
forever be barred from asserting against the other and the other's executives
all claims, suits, disputes, violations, losses, liabilities and damages that
each may have against the other for events, acts or omissions occurring or taken
on or prior to the Distribution Date.
PURCHASE OF INVENTORY. During 1999, the Company purchased inventory from
BWI at the price paid by BWI for such inventory. Such purchases of inventory
from BWI aggregated $18.1 million in 1999.
LENDINGS. Since the initial public offering of the Class B Common Stock,
the Company has loaned funds to BWI. The largest amount outstanding during 1999
relating to this loan was approximately $15.9 million. The average incremental
borrowing rate applied to the loan was 5.4%. The loan was repaid in full on
December 30, 1999.
TAX SHARING AGREEMENT. Prior to the Distribution, the results of operations
of the Company and its domestic subsidiaries that are at least 80% owned by the
Company (the "Company Group") were included in BWI's consolidated federal income
tax returns and in BWI's consolidated or combined state tax returns. In 1997,
BWI and the Company entered into a Tax Sharing Agreement that provides,
generally, that the Company will be responsible for the portion of any tax
deficiencies of BWI assessed with respect to all periods up to and including the
Distribution Date that give rise to a tax benefit to the Company in a
post-Distribution period. The Company will also be entitled to tax refunds
received by BWI that result in a tax detriment to the Company for those
post-Distribution periods. The Company will also be responsible for all income
taxes imposed on the Company Group during the taxable period beginning on
January 1, 1998 and ending on or before the Distribution Date. Furthermore, the
Tax Sharing Agreement provides that, if the Distribution fails to qualify as a
tax-free distribution as a result of any event occurring prior to the second
anniversary of the Distribution Date that results from the breach of certain
covenants made by the Company in the Tax Sharing Agreement or involves either
the stock or assets (or any combination thereof) of any
-15-
<PAGE>
member of the Company Group, then the Company must indemnify and hold BWI
harmless, on an after-tax basis, from any tax liability imposed upon it in
connection with the Distribution. The Tax Sharing Agreement also prohibits the
Company from entering into certain transactions or disposing of substantially
all of its assets prior to the second anniversary of the Distribution Date in
the absence of a prior opinion of independent tax counsel or the receipt of a
private letter ruling from the Internal Revenue Service that such transaction or
disposition will not cause the Distribution to be a taxable transaction.
INDEMNIFICATION AND HOLD HARMLESS AGREEMENT. The Company and BWI entered
into an Indemnification and Hold Harmless Agreement dated as of September 30,
1997 (the "Indemnification Agreement"), in which each party agrees to indemnify
and hold harmless the other from and against certain obligations and contingent
liabilities. Specifically, the Indemnification Agreement provides that the
Company will indemnify and hold harmless BWI from obligations related to a
guarantee which BWI made in favor of the Company and from certain indemnity and
other obligations which BWI assumed, or which could be charged against BWI, in
connection with five acquisitions by or on behalf of the Company. The
Indemnification Agreement also provides that BWI will indemnify and hold
harmless the Company from and against contingent liabilities in connection with
certain litigation, which was settled and dismissed in January 1999. In 1999,
neither the Company nor BWI made any payments to the other under the
Indemnification Agreement.
The Company has adopted a policy that all agreements, including any
amendments to those described above, between the Company and BWI and its
affiliates will be subject to the review of the Company's Audit Committee and
will be on terms that the Audit Committee believes are no less favorable to the
Company than terms that would be available from unaffiliated parties.
APPOINTMENT OF AUDITORS
The appointment of PricewaterhouseCoopers LLP as auditors for the Company
during 2000 will be submitted to the meeting in order to permit the shareholders
to express their approval or disapproval. In the event of a negative vote, a
selection of other auditors will be made by the Board. A representative of
PricewaterhouseCoopers LLP is expected to be present at the meeting, will be
given an opportunity to make a statement if he or she desires and will respond
to appropriate questions. Notwithstanding approval by the shareholders, the
Board of Directors reserves the right to replace the auditors at any time upon
the recommendation of the Audit Committee of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP.
APPROVAL OF AMENDMENT TO THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION
On February 23, 2000, the Board of Directors of the Company approved an
amendment to Article V of the Company's Restated Articles of Incorporation to
increase the number of authorized shares of the Company's Class A Common Stock
which the Company has authority to issue from 15,000,000 to 55,000,000 and to
increase the number of authorized shares of the Company's Class B Common Stock
which the Company has authority to issue from 40,000,000 to 180,000,000 (the
"Amendment").
As of March 14, 2000, _______ shares of the Company's Class A Common Stock
were issued and outstanding, _______ shares of the Company's Class B Common
Stock were issued and outstanding, _________ shares of the Company's Class B
Common Stock were held as treasury stock, _______ shares of the Company's Class
B Common Stock were subject to outstanding options granted under the Company's
1997 Stock Option and Incentive Plan, _______ shares of the Company's Class B
Common Stock were subject to outstanding options granted under the Company's
Outside Directors Stock Option Plan, _______ shares of the Company's Class B
Common Stock were subject to outstanding options granted
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<PAGE>
under the Company's Broad Based Stock Option Plan, _______ shares of the
Company's Class A Common Stock were authorized but unissued and unreserved and
_______ shares of the Company's Class B Common Stock were authorized but
unissued and unreserved.
The Amendment will ensure that shares of the Company's Common Stock will be
available, if needed, for issuance in connection with stock splits, stock
dividends, acquisitions and other corporate purposes. The Board of Directors
believes that the availability of the additional shares for such purposes
without delay or the necessity for a shareholders' meeting would be beneficial
to the Company. The Company has no immediate plans to issue any of the
additional shares of its Common Stock that would be authorized by the Amendment.
No further action by the shareholders of the Company would be necessary
prior to the issuance of the additional shares of the Company's Common Stock,
except as may be required by applicable law or any stock exchange on which the
Company's securities may then be listed. Neither the shares of the Company's
Common Stock presently authorized nor the shares of the Company's Common Stock
to be authorized by the Amendment have preemptive rights.
If someone attempted a hostile takeover of the Company, the use of the
additional authorized shares to make a counteroffer for the shares of the bidder
or to sell shares to dilute the voting power of the bidder could make the
takeover attempt more difficult. The Amendment is not part of a plan by the
Company to adopt a series of antitakeover amendments, and the Company's Board of
Directors presently is unaware of any effort to accumulate shares of the
Company's Common Stock or to obtain control of the Company by means of a merger,
tender offer, solicitation in opposition to management or otherwise.
The Company's Restated Articles of Incorporation and By-Laws presently
contain certain provisions which could be construed as antitakeover measures.
The Company's Restated Articles of Incorporation and By-Laws provide that the
Board of Directors of the Company will be divided into three classes of
directors, with each class to be as nearly equal in number as possible. The term
of the office of one class of directors expires each year in rotation so that
one class is elected at each annual meeting of shareholders for a full
three-year term. The affirmative vote of the holders of outstanding shares
representing at least sixty-six and two-thirds percent (66- 2/3%) of the votes
then entitled to be cast at an election of Directors is required to remove a
Director prior to the expiration of his or her term and Directors may only be
removed for good cause. Under the classified board of directors provisions
described above, it would take at least two elections of Directors for anyone to
gain control of the Company's Board of Directors. Accordingly, these provisions
would tend to discourage unfriendly takeovers. Cumulative voting is not provided
for by either the Restated Articles of Incorporation or the By-Laws of the
Company.
The Company's By-Laws establish an advance notice procedure for
shareholders to make nominations of candidates for election as Directors, or to
bring other business before an annual meeting of the Company's shareholders. The
Company's By-Laws provide that only persons who are nominated by, or at the
direction of, the Company's Board of Directors, by a nominating committee
appointed by the Board of Directors, or by a shareholder who has given timely
written notice to the Company's Secretary prior to the meeting at which
Directors are to be elected, will be eligible for election as Directors of the
Company. The Company's By-Laws also provide that at an annual meeting only such
business may be conducted as has been brought before the meeting by, or at the
direction of, the Company's Board of Directors, or by a shareholder who has
given timely written notice to the Secretary of the Company of such
shareholder's intention to bring such business before such meeting. Under the
By-Laws, a shareholder's notice must also contain certain information specified
in the By-Laws.
The Company's Restated Articles of Incorporation authorize the Board of
Directors (without shareholder approval) to issue shares of Preferred Stock from
time to time in one or more series, each series to have such powers,
designations, preferences and rights, and qualifications, limitations or
restrictions thereof, as may be determined by the Board of Directors by adoption
of an amendment to the Restated Articles of Incorporation that specifies the
terms of the series of Preferred Stock. Because the Board of Directors has the
power to establish the preferences and rights of each series of Preferred Stock,
it may afford the holders
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<PAGE>
of any series of Preferred Stock preferences and rights, voting or otherwise,
that are senior to the rights of holders of Common Stock. The Company currently
has no shares of Preferred Stock outstanding.
The Restated Articles of Incorporation provide that, in the case of a
merger, sale of assets, issuance of securities, liquidation or reclassification
(a "business combination") involving a beneficial owner of 10% or more of the
voting power of the Company's capital stock (a "Related Person"), or any
affiliate or associate of a Related Person, such business combination must be
approved by (i) 66-2/3% of the voting power of the outstanding voting stock of
the Company and (ii) a majority of the then outstanding voting power of the
voting stock held by shareholders other than the Related Person, unless the
business combination is approved in advance by the Continuing Directors (as
defined in the Restated Articles of Incorporation) or the consideration to be
received by shareholders in the business combination is at least equal to the
highest price paid by the Related Person in acquiring its interest in the
Company, with certain adjustments, and unless certain other requirements are
met. The term Related Person does not include any person who beneficially owned
more than 20% of the voting power of the Company's capital stock or of BWI on
August 25, 1997.
The Indiana Business Corporation Law (the "IBCL") applies to the Company as
an Indiana corporation. Under certain circumstances, the following provisions of
the IBCL may delay, prevent or make more difficult unsolicited acquisitions or
changes of control of the Company. Such provisions also may have the effect of
preventing changes in the management of the Company. It is possible that such
provisions could make it more difficult to accomplish transactions which
shareholders may otherwise deem to be in their best interests.
Under Sections 23-1-42-1 to 23-1-42-11 of the IBCL, an "acquiring person"
who makes a "control share acquisition" in an "issuing public corporation" may
not exercise voting rights on any "control shares" unless such voting rights are
conferred by a majority vote of the disinterested shareholders of the issuing
corporation at a special meeting of such shareholders held upon the request and
at the expense of the acquiring person. In the event that control shares
acquired in a control share acquisition are accorded full voting rights and the
acquiring person acquires control shares with a majority or more of all voting
power, all shareholders of the issuing corporation have dissenters' rights to
receive the fair value of their shares.
Under the IBCL, "control shares" means shares acquired by a person that,
when added to all other shares of the issuing public corporation owned by that
person or in respect to which that person may exercise or direct the exercise of
voting power, would otherwise entitle that person to exercise voting power of
the issuing public corporation in the election of directors within any of the
following ranges: (a) one-fifth or more but less than one-third; (b) one-third
or more but less than a majority; or (c) a majority or more. "Control share
acquisition" means, subject to certain exceptions, the acquisition, directly or
indirectly, by any person of ownership of, or the power to direct the exercise
of voting power with respect to, issued and outstanding control shares. Shares
acquired within 90 days or under a plan to make a control share acquisition are
considered to have been acquired in the same acquisition. "Issuing public
corporation" means a corporation which is organized in Indiana, has 100 or more
shareholders, its principal place of business, its principal office or
substantial assets are within Indiana and either (a) more than 10% of its
shareholders resident in Indiana, (b) more than 10% of its shares owned by
Indiana residents or (c) 10,000 shareholders resident in Indiana. The above
provisions do not apply if, before a control share acquisition is made, the
corporation's articles of incorporation or by-laws (including a board adopted
by-law) provide that they do not apply. The Company's Restated Articles of
Incorporation and By-Laws do not exclude it from the restrictions imposed by
such provisions.
Sections 23-1-43-1 to 23-1-43-23 of the IBCL restrict the ability of a
"resident domestic corporation" to engage in any combinations with an
"interested shareholder" for five years after the interested shareholder's date
of acquiring shares unless the combination or the purchase of shares by the
interested shareholder on the interested shareholder's date of acquiring shares
is approved by the board of directors of the resident domestic corporation
before that date. If the combination was not previously approved, the interested
shareholder may effect a combination after the five-year period only if such
shareholder receives approval from a majority of the disinterested shares or the
offer meets certain fair price criteria. For purposes of the
-18-
<PAGE>
above provisions, "resident domestic corporation" means an Indiana corporation
that has 100 or more shareholders. "Interested shareholder" means any person,
other than the resident domestic corporation or its subsidiaries, who is (1) the
beneficial owner, directly or indirectly, of 10% or more of the voting power of
the outstanding voting shares of the resident domestic corporation or (2) an
affiliate or associate of the resident domestic corporation and at any time
within the five-year period immediately before the date in question was the
beneficial owner of 10% or more of the voting power of the then outstanding
shares of the resident domestic corporation. The above provisions do not apply
to corporations that so elect in an amendment to their articles of incorporation
approved by a majority of the disinterested shares. Such an amendment, however,
would not become effective until 18 months after its passage and would apply
only to stock acquisitions occurring after its effective date. The Company's
Restated Articles of Incorporation do not exclude the Company from the
restrictions imposed by such provisions.
Under Sections 23-1-22-1 to 23-1-22-5 of the IBCL, in addition to any other
provision authorized by any other section of the IBCL or contained in the
articles of incorporation or the by-laws, a corporation may establish one or
more procedures to regulate transactions that would, when consummated, result in
a change of "control" of the corporation. Such a procedure may be established in
the original articles of incorporation or by-laws, by an amendment to the
articles of incorporation, or notwithstanding the fact that a vote of the
shareholders would otherwise be required by any other provision of the IBCL or
the articles of incorporation, by an amendment to the by-laws. For purposes of
this section, "control" means, for any corporation that has 100 or more
shareholders, the beneficial ownership, or the direct or indirect power to
direct the voting, of not less than 10% of the voting shares of a corporation's
outstanding voting shares.
Section 23-1-35-1 provides that directors are required to discharge their
duties: (i) in good faith; (ii) with the care an ordinarily prudent person in a
like position would exercise under similar circumstances; and (iii) in a manner
the directors reasonably believe to be in the best interests of the Company.
However, this section also provides that a director is not liable for any action
taken as a director, or any failure to act, unless the director has breached or
failed to perform the duties of the director's office and the action or failure
to act constitutes willful misconduct or recklessness. This statutory
exoneration from liability does not affect the liability of directors for
violations of the federal securities laws.
The overall effect of the provisions of the statutes, the Company's
Restated Articles of Incorporation and By-Laws described above may be to render
more difficult or to discourage a merger, tender offer, proxy contest, the
assumption of control of the Company by a holder of a large block of the
Company's Common Stock or other person, or the removal of incumbent management,
even if such actions may be beneficial to the Company's shareholders generally.
If the Amendment to increase the number of authorized shares of the
Company's Common Stock is approved, the Amendment will become effective upon the
filing of Articles of Amendment with the Indiana Secretary of State.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT.
PRINCIPAL OWNERS OF COMMON STOCK
The following table sets forth as of January 31, 2000, the number of
shares of each class of Common Stock of the Company owned by any person
(including any group) known by management to beneficially own more than 5% of
each class of Common Stock of the Company, by each of the Named Executive
Officers, and by all directors and executive officers of the Company as a group.
Unless otherwise indicated in a footnote, each individual or group possesses
sole voting and investment power with respect to the shares indicated as
beneficially owned. The number of shares of Class B Common Stock shown in the
table below as beneficially owned by each individual or entity includes any
shares of Class A Common Stock beneficially owned by such person or entity, as
indicated, because any holder of shares of Class A Common Stock may request to
convert any or all of such shares into shares of Class B Common Stock at any
time on a one-for-one basis.
-19-
<PAGE>
<TABLE>
<CAPTION>
CLASS B COMMON STOCK CLASS A COMMON STOCK
----------------------------------- -------------------------------
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF CLASS NUMBER OF SHARES PERCENT OF
INDIVIDUAL OR BENEFICIALLY (IF MORE BENEFICIALLY CLASS (IF MORE
IDENTITY OF GROUP OWNED (1) THAN 1%) OWNED (1) THAN 1%)
----------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Robert L. Myers 335,466(2)(3) 2.0 % 6,410 ---
Steven D. Cosler 97,185(2)(4) --- 2,013 ---
Guy F. Bryant 104,538(2)(5) --- 10,363 ---
Melissa E. McIntyre 78,908(2)(6) --- 0 ---
Donald J. Perfetto 82,427(2)(7) --- 0 ---
William E. Bindley 3,016,424(8) 15.3 % 2,958,947(9) 58.8%
8909 Purdue Road
Indianapolis, IN 46268
American Express Financial Corporation 2,911,566 17.3 % 0 ---
IDS Tower 10
Minneapolis, MN 55440 (10)*
All current directors and executive 4,216,125(2)(11) 20.3 % 3,245,460 64.5%
officers as a group (12 persons)
</TABLE>
- ---------------
*Information is based solely on reports filed by such shareholder under Section
13(d) of the Securities Exchange Act of 1934.
(1) For information regarding the beneficial ownership of shares of Class B
Common Stock and shares of Class A Common Stock held by non-employee
directors, see "Election of Directors--Nominees."
(2) Does not include shares subject to stock options which are not exercisable
within 60 days.
(3) Includes 6,410 shares of Class A Common Stock. Also includes presently
exercisable stock options to purchase 276,805 shares of Class B Common
Stock granted under the 1997 Stock Option Plan.
(4) Includes 2,013 shares of Class A Common Stock. Also includes presently
exercisable stock options to purchase 90,528 shares of Class B Common Stock
granted under the 1997 Stock Option Plan. Also includes 2,445 shares of
Class B Common Stock held jointly with Mr. Cosler's spouse.
(5) Includes 10,363 shares of Class A Common Stock. Also includes presently
exercisable stock options to purchase 92,675 shares of Class B Common Stock
granted under the 1997 Stock Option Plan.
(6) Includes presently exercisable stock options to purchase 78,383 shares of
Class B Common Stock granted under the 1997 Stock Option Plan.
(7) Includes presently exercisable stock options to purchase 79,140 shares of
Class B Common Stock granted under the 1997 Stock Option Plan.
(8) Includes 2,958,947 shares of Class A Common Stock (see footnote 9 below for
a description of the manner by which certain of such shares of Class A
Common Stock are held). Excludes 5,254 shares of Class A Common Stock and
3,000 shares of Class B Common Stock held by Mr. Bindley's spouse; Mr.
Bindley disclaims beneficial ownership of such shares.
(9) Includes 43,387 shares of Class A Common Stock held by two family
foundations and 38,751 shares of Class A Common Stock held by a charitable
remainder trust of which Mr. Bindley is the trustee and has investment
control. Excludes 5,254 shares of Class A Common Stock held by Mr.
Bindley's spouse; Mr. Bindley disclaims beneficial ownership of such
shares.
(10) The shareholder is an investment adviser and a subsidiary of American
Express Company, a parent holding company which owns the shares jointly
with the shareholder. American Express Company has disclaimed beneficial
ownership of the shares listed.
(11) Includes 3,245,460 shares of Class A Common Stock. Also includes presently
exercisable stock options to purchase 718,044 shares of Class B Common
Stock granted by the Company.
-20-
<PAGE>
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The date by which shareholder proposals must be received by the Company for
inclusion in proxy materials relating to the 2001 Annual Meeting of Common
Shareholders is November 28, 2000.
In order to be considered at the 2001 Annual Meeting, shareholder proposals
must comply with the advance notice and eligibility requirements contained in
the Company's By-Laws. The Company's By-Laws provide that shareholders are
required to give advance notice to the Company of any nomination by a
shareholder of candidates for election as directors and of any business to be
brought by a shareholder before an annual shareholders' meeting. Specifically,
the By-Laws provide that for a shareholder to nominate a person for election to
the Company's Board of Directors, the shareholder must be entitled to vote for
the election of directors at the meeting and must give timely written notice of
the nomination to the Secretary of the Company. The By-Laws also provide that
for business to be properly brought before an annual meeting by a shareholder,
the shareholder must have the legal right and authority to make the proposal for
consideration at the meeting and the shareholder must give timely written notice
thereof to the Secretary of the Company. In order to be timely, a shareholder'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 meeting. In the event
that less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder must be
received not later than the close of business on the tenth day following the day
on which notice of the date of the meeting was mailed or public disclosure was
made. The notice must contain specified information about each nominee or the
proposed business and the shareholder making the nomination or proposal.
The specific requirements of these advance notice and eligibility
provisions are set forth in Section 1.4 and Section 1.5 of the Company's
By-Laws, a copy of which is available upon request. Such requests and any
shareholder proposals should be sent to the Secretary of the Company at the
principal executive offices of the Company.
-21-
<PAGE>
PROXY PRIORITY HEALTHCARE CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby appoint Robert L. Myers and Barbara J. Luttrell, or either of them, my
proxies, with power of substitution, to vote all shares of Class A Common Stock
of the Company which I am entitled to vote at the annual meeting of common
shareholders of said company, to be held at SunTrust Bank Central Florida, N.A.,
Second Floor Tower 2 Campus Room, 200 South Orange Avenue, Orlando, Florida, on
May 15, 2000 at 11:00 a.m., Orlando time, and at any adjournment, as follows:
Election of Directors, Nominees: (change of address)
William E. Bindley, Steven D. Cosler, Rebecca M. Shanahan _____________________
_____________________
_____________________
(If you have written
in the above space
please mark the
corresponding box
on the reverse
side of this
card.)
This proxy when properly executed will be voted in the ---------------------
manner directed herein by the signed shareholder. If no SEE REVERSE
direction is made, this proxy will be voted FOR the SIDE
election as directors of all nominees listed under ---------------------
proposal 1, FOR proposal 2, FOR proposal 3 and FOR
proposal 4.
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PRIORITY HEALTHCARE CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. Election of Directors-- For Withhold For All
01-William E. Bindley, All All Except*
02-Steven D. Cosler,
03-Rebecca M. Shanahan ____ ____ ____
____________________________
*Nominee Exception
For Against Abstain
2. To approve the appointment ____ ____ ____
of PricewaterhouseCoopers
LLP as auditors for the
Company for 2000;
3. To approve the proposed For Against Abstain
amendment to the Company's ____ ____ ____
Restated Articles of
Incorporation which
increases the number of
authorized shares of
Class A Common Stock from
15,000,000 to 55,000,000;
For Against Abstain
4. To approve the proposed ____ ____ ____
amendment to the Company's
Restated Articles of
Incorporation which
increases the number of
authorized shares of Class
B Common Stock from
40,000,000 to 180,000,000;
and
5. In their discretion, to
transact such other
business as may properly
come before the meeting.
Address Change Requested [ ]
Dated:________________, 2000
Signature(s) _____________________________
___________________________________________
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person. Please, mark, sign, date and
return the proxy promptly in the enclosed postage
paid envelope.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
YOUR VOTE IS IMPORTANT!
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE>
PROXY PRIORITY HEALTHCARE CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby appoint Robert L. Myers and Barbara J. Luttrell, or either of them, my
proxies, with power of substitution, to vote all shares of Class B Common Stock
of the Company which I am entitled to vote at the annual meeting of common
shareholders of said company, to be held at SunTrust Bank Central Florida, N.A.,
Second Floor Tower 2 Campus Room, 200 South Orange Avenue, Orlando, Florida, on
May 15, 2000 at 11:00 a.m., Orlando time, and at any adjournment, as follows:
Election of Directors, Nominees: (change of address)
William E. Bindley, Steven D. Cosler, Rebecca M. Shanahan _____________________
_____________________
_____________________
(If you have written
in the above space
please mark the
corresponding box
on the reverse
side of this
card.)
This proxy when properly executed will be voted in the ---------------------
manner directed herein by the signed shareholder. If no SEE REVERSE
direction is made, this proxy will be voted FOR the SIDE
election as directors of all nominees listed under ---------------------
proposal 1, FOR proposal 2, FOR proposal 3 and FOR
proposal 4.
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PRIORITY HEALTHCARE CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. Election of Directors-- For Withhold For All
01-William E. Bindley, All All Except*
02-Steven D. Cosler,
03-Rebecca M. Shanahan ____ ____ ____
____________________________
*Nominee Exception
For Against Abstain
2. To approve the appointment ____ ____ ____
of PricewaterhouseCoopers
LLP as auditors for the
Company for 2000;
3. To approve the proposed For Against Abstain
amendment to the Company's ____ ____ ____
Restated Articles of
Incorporation which
increases the number of
authorized shares of
Class A Common Stock from
15,000,000 to 55,000,000;
For Against Abstain
4. To approve the proposed ____ ____ ____
amendment to the Company's
Restated Articles of
Incorporation which
increases the number of
authorized shares of Class
B Common Stock from
40,000,000 to 180,000,000;
and
5. In their discretion, to
transact such other
business as may properly
come before the meeting.
Address Change Requested [ ]
Dated:________________, 2000
Signature(s) _____________________________
___________________________________________
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person. Please, mark, sign, date and
return the proxy promptly in the enclosed postage
paid envelope.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
YOUR VOTE IS IMPORTANT!
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
