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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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
NATIONSRENT, INC.
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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[PRELIMINARY PROXY STATEMENT - CONFIDENTIAL]
[NATIONSRENT LOGO]
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
August __, 1999
DEAR STOCKHOLDER:
You are cordially invited to attend a Special Meeting of Stockholders
of NationsRent, Inc. to be held on __________________, 1999 at 10:00 a.m.,
Eastern Standard Time, at the Company's corporate headquarters at 450 East Las
Olas Boulevard, Fort Lauderdale, Florida 33301, and vote upon the matters set
forth in the accompanying Notice of Meeting and Proxy Statement.
The Notice of Special Meeting, Proxy Statement and proxy form are
included with this letter. The matters to be voted upon as listed in the Notice
of Meeting are more fully described in the Proxy Statement.
Whether or not you plan to attend in person, it is important that your
shares be represented at the Special Meeting. Please sign, date and return your
proxy card in the enclosed envelope as soon as possible. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE MATTERS DESCRIBED IN THE PROXY
STATEMENT TO BE VOTED UPON AT THE SPECIAL MEETING. Thank you.
Sincerely,
James L. Kirk
Chairman of the Board and
Chief Executive Officer
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[NATIONSRENT LOGO]
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF NATIONSRENT, INC.:
A Special Meeting of Stockholders, or any adjournment or postponement
thereof (the "Special Meeting"), of NationsRent, Inc., a Delaware corporation
(the "Company"), will be held on _______, _________, 1999 at 10:00 a.m., Eastern
Standard Time, at 450 East Las Olas Boulevard, Fort Lauderdale, Florida 33301,
to consider and vote upon the following matters, all of which are set forth more
completely in the accompanying Proxy Statement.
1. To approve: (a) the issuance, in a series of transactions, of
100,000 shares of Series A Convertible Preferred Stock (the "Preferred Stock")
to NR Holdings Limited and NR Investments Limited, 78,000 shares of which have
already been issued and 22,000 shares of which will be issued only if
stockholder approval is obtained; and (b) the issuance of shares of Common Stock
upon the conversion of such Preferred Stock.
2. To approve the future issuance of Common Stock or securities
convertible into or exercisable for Common Stock to the holders of the Preferred
Stock from time to time pursuant to their exercise of the preemptive rights to
which they are entitled under the Certificate of Designation.
3. To approve an amendment to the Certificate of Designation for the
Preferred Stock.
The Board of Directors has fixed the close of business on August 2,
1999 as the record date for determining those stockholders entitled to notice
of, and to vote at, the Special Meeting.
A FORM OF PROXY AND THE PROXY STATEMENT OF THE COMPANY RELATING TO THE
SPECIAL MEETING OF STOCKHOLDERS ARE ENCLOSED. IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT
THE SPECIAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors,
Joseph H. Izhakoff
Vice President, General Counsel and Secretary
Fort Lauderdale, Florida
August __, 1999
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[NATIONSRENT LOGO]
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of NationsRent, Inc. (the "Company"), for
use at a Special Meeting of Stockholders of the Company, or any adjournment or
postponement thereof (the "Special Meeting"). The Special Meeting will be held
on _______, _________, 1999 at 10:00 a.m., Eastern Standard Time, at the
Company's corporate headquarters at 450 East Las Olas Boulevard, Fort
Lauderdale, Florida 33301.
It is anticipated that the Notice of Special Meeting, this Proxy
Statement and the proxy form will be mailed to stockholders of the Company on or
about August __, 1999.
RECORD DATE
Only stockholders of record at the close of business on August 2, 1999
(the "Record Date") are entitled to vote at the Special Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
As of the Record Date, there were 56,453,781 shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), and 78,000 shares
of the Company's Series A Convertible Preferred Stock, par value $.01 per share
(the "Preferred Stock"), issued and outstanding, all of which are entitled to be
voted at the Special Meeting. As of the Record Date, the 78,000 shares of issued
and outstanding Preferred Stock were convertible into 11,142,857 shares of
Common Stock. Each share of Common Stock is entitled to one vote on each matter
submitted to stockholders for approval at the Special Meeting. Each share of
Preferred Stock is entitled to one vote per share of Common Stock issuable upon
conversion of the Preferred Stock as of the Record Date and votes together with
shares of Common Stock on all matters submitted to stockholders for a vote at
the Special Meeting, except with respect to the amendment to the Certificate of
Designation for the Preferred Stock, where the shares of Common Stock and
Preferred Stock will each vote as a separate class.
PROXY PROCEDURE
Proxies properly executed and returned in a timely manner will be voted
at the Special Meeting in accordance with the directions noted thereon. If no
direction is indicated, proxies will be voted for (i) approval of the issuance
of the hares of the Preferred Stock and the issuance of shares of the Common
Stock upon the conversion of such Preferred Stock, (ii) approval of the future
issuance of Common Stock or securities convertible into or exercisable for
Common Stock to the holders of the Preferred Stock pursuant to their exercise of
the preemptive rights to which they are entitled under the Certificate of
Designation for the Preferred Stock and (iii) approval of the amendment to the
Certificate of Designation for the Preferred Stock. Any stockholder giving a
proxy has the power to revoke it at any time before it is voted, either in
person at the Special Meeting, by written notice to the Secretary of the Company
or by delivery of a later-dated proxy.
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Votes cast by proxy or in person at the Special Meeting will be
tabulated by the inspectors of elections appointed for the Special Meeting and
will be counted in determining whether or not a quorum is present. A proxy
submitted by a stockholder may indicate that all or a portion of the shares
represented by such proxy are not being voted by such stockholder with respect
to a particular matter ("non-voted shares"). This could occur, for example, when
a broker is not permitted to vote shares held in "street name" on certain
matters in the absence of instructions from the beneficial owner of the shares.
Non-voted shares with respect to a particular matter will not be considered
shares present and entitled to vote on such matter, although such shares will be
counted for purposes of determining the presence of a quorum. Shares voting to
abstain as to a particular matter will not be considered non-voted shares and
will be considered present and entitled to vote with respect to such matter.
VOTING REQUIREMENTS
The presence, in person or by proxy, of the holders of a majority of
the voting power of the outstanding shares of Common Stock and Preferred Stock
entitled to vote on every matter that is to be voted on, without regard to class
or series, shall constitute a quorum at the Special Meeting. Provided that a
quorum is present, the affirmative vote of the holders of a majority of the
voting power of the shares of Common Stock and Preferred Stock present in person
or by proxy and entitled to vote at the Special Meeting is required for the
approval of the first and second proposals to be voted upon at the Special
Meeting. Provided a quorum is present at the Special Meeting, the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock and
Preferred Stock, each voting as a separate class, is required for the approval
of the amendment to the Certificate of Designation. Non-voted shares will have
no effect on the first and second proposals brought to vote at the Special
Meeting but will have the effect of votes against the third proposal brought to
a vote at the Special Meeting. Abstentions from voting on any of the matters
brought to a vote at the Special Meeting will have the effect of votes against
that particular matter.
Current stockholders who owned 29,778,949 shares of Common Stock as of
the Record Date, representing 44.1% of the voting power of the outstanding
shares of Common Stock and Preferred stock entitled to vote on the first and
second proposals to be acted upon at the Special Meeting, have entered into
agreements to vote in favor of the first and second proposals. In addition,
stockholders who owned shares of Preferred Stock convertible into 11,142,857
shares of Common Stock as of the Record Date, representing 16.5% of the voting
power of the outstanding shares of Common Stock and Preferred Stock entitled to
vote on the first and second proposals, have agreed to vote in favor of the
first and second proposals. Accordingly, approval of the first and second
proposals is assured.
COSTS OF SOLICITATION
All costs of solicitation will be borne by the Company. The
solicitation is to be principally conducted by mail and may be supplemented by
telephone and personal contacts by directors, executive officers and employees
of the Company, without additional remuneration. Arrangements will be made with
brokerage houses, banks and custodians, nominees and other fiduciaries to
forward solicitation materials to the beneficial owners of stock held of record.
The Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred in connection with the distribution of proxy materials.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company recommends that the stockholders
vote "for" the approval of the issuance of the Preferred Stock, the approval of
the issuance of securities to holders of the Preferred Stock upon the future
exercise of their preemptive rights and the approval of the amendment to the
Certificate of Designation for the Preferred Stock.
INTEREST OF CERTAIN DIRECTORS IN THE TRANSACTION
NR Holdings Limited and NR Investments Limited currently own all the
outstanding Preferred Stock issued by the Company. The holders of the Preferred
Stock have the right, voting separately as a class, to elect two directors of
the Company. Pursuant to the Preferred Stock Purchase Agreement, dated July 20,
1999, among the Company, NR Holdings Limited and NR Investments Limited, on July
21, 1999 the Company's Board of Directors increased the size of the Board from
six to eight members and appointed two designees of NR Holdings Limited and NR
Investments Limited, Christopher J. O'Brien and Charles J. Philippin, as
directors of the Company.
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PROPOSAL NO. 1
APPROVAL OF THE ISSUANCE OF PREFERRED STOCK
AND THE ISSUANCE OF COMMON STOCK
UPON THE CONVERSION OF SUCH PREFERRED STOCK
The Company is seeking stockholder approval, pursuant to Paragraphs
312.03(b) and (c) of The New York Stock Exchange Listed Company Manual, of:
(a) the issuance, in a series of transactions, of 100,000 shares
of Series A Convertible Preferred Stock (the "Preferred
Stock") to NR Holdings Limited and NR Investments Limited,
78,000 shares of which have already been issued and 22,000
shares of which will be issued only if stockholder approval is
obtained; and
(b) the issuance of shares of Common Stock upon the conversion of
such Preferred Stock.
Paragraph 312.03(b) requires stockholder approval prior to the issuance
of securities convertible into common stock to a substantial security holder of
an issuer if the number of shares of common stock into which the securities may
be convertible exceeds either one percent of the number of shares of common
stock outstanding before the issuance or five percent of the number of shares of
common stock outstanding before issuance if the issuance to the substantial
security holder relates to a sale of stock for cash at a price at least as great
as each of the book and market value of the issuer's common stock. Paragraph
312.03(c) requires stockholder approval prior to the issuance in a transaction
or series of transactions of securities convertible into common stock if the
number of shares of common stock issuable will upon issuance be equal to or in
excess of 20 percent of the number of shares of common stock outstanding before
the issuance of the convertible securities. On July 20, 1999, pursuant to the
Preferred Stock Purchase Agreement described below, the Company issued an
aggregate of 78,000 shares of Preferred Stock to NR Holdings Limited and NR
Investments Limited, which are affiliates of Investcorp S.A. The 78,000 shares
of Preferred Stock are convertible into 11,142,857 shares of Common Stock
representing 19.7% of the outstanding Common Stock immediately prior to
issuance. At that time, the Company agreed to issue an additional 22,000 shares
of Preferred Stock to the same purchasers subject to obtaining stockholder
approval of such issuance pursuant to The New York Stock Exchange rules. Even if
the Company does not obtain stockholder approval of the issuance of the
additional 22,000 shares of Preferred Stock, the initial 78,000 shares of
Preferred Stock will remain outstanding.
The following summary of the provisions of the Preferred Stock Purchase
Agreement, dated July 20, 1999 (the "Purchase Agreement"), by and among the
Company, NR Holdings Limited, a Cayman Islands corporation, and NR Investments
Limited, a Cayman Islands corporation, the Certificate of Designation of Series
A Convertible Preferred Stock (the "Certificate of Designation") and the
Registration Rights Agreement dated July 20, 1999 (the "Registration Rights
Agreement"), by and between the Company, NR Holdings Limited, NR Investments
Limited, James L. Kirk and H. Wayne Huizenga, is qualified in its entirety by
reference to such documents which are incorporated herein by reference. The
Amended and Restated Certificate of Designation is attached hereto as Exhibit
"A." The Purchase Agreement and the Registration Rights Agreement have been
included as exhibits to the
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Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999,
which has been filed with the Securities and Exchange Commission and a copy of
such documents can be obtained by writing or calling Joseph H. Izhakoff, Vice
President, General Counsel and Secretary, NationsRent, Inc., 450 East Las Olas
Boulevard, Fort Lauderdale, Florida 33301, telephone: 954-760-6550.
GENERAL DESCRIPTION OF THE TRANSACTION
Pursuant to the Purchase Agreement the Company agreed to issue 100,000
shares of Preferred Stock to NR Holdings Limited and NR Investments Limited
(together, the "Purchasers"), for an aggregate purchase price of $100,000,000
(the "Transaction") at two separate closings. On July 20, 1999, the Company
issued 78,000 shares of Preferred Stock to the Purchasers ("First Closing")
consisting of 61,620 shares of Preferred Stock to NR Holdings Limited and 16,380
shares of Preferred Stock to NR Investments Limited (collectively, the "First
Preferred Shares") for a cash purchase price of an aggregate of $78,000,000
consisting of $61,620,000 from NR Holdings Limited and $16,380,000 from NR
Investments Limited (collectively, the "First Purchase Price"). At the second
closing, the Company will issue an aggregate of 22,000 additional shares of
Preferred Stock to the Purchasers ("Second Closing") consisting of 17,380 shares
of Preferred Stock to NR Holdings Limited and 4,620 shares of Preferred Stock to
NR Investments Limited (collectively, the "Second Preferred Shares") for a cash
purchase price of an aggregate of $22,000,000 consisting of $17,380,000 from NR
Holdings Limited and $4,620,000 from NR Investments Limited (collectively, the
"Second Purchase Price").
The purchase and issuance of the Second Preferred Shares will take
place at the Second Closing to be held on the third business day after the
conditions to the Second Closing have been satisfied or waived or on such other
date as the parties may agree (the "Second Closing Date"). At the Second
Closing, subject to the terms and conditions set forth in the Purchase
Agreement, the Company will deliver to each Purchaser the Second Preferred
Shares to be purchased by it in exchange for the Second Purchase Price.
The shares of Preferred Stock issued or to be issued in the Transaction
are unregistered and are subject to transfer restrictions imposed by the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the
Registration Rights Agreement, the Purchasers have been granted certain rights
to require the Company to register their shares of Preferred Stock for resale in
the future. See "--The Registration Rights Agreement."
Consummation of the Second Closing is conditioned on the approval of
the issuance of the Second Preferred Shares by the Company's stockholders at the
Special Meeting. Based on its evaluation of the Transaction, the Board of
Directors has recommended that the Company's stockholders vote in favor of the
issuance to NR Holdings Limited and NR Investments Limited of the shares of
Preferred Stock and the issuance of shares of Common Stock upon the conversion
of such Preferred Stock. In the event that the Company does not obtain such
stockholder approval, the Company is not required to, and will not, consummate
the Second Closing.
VOTING AGREEMENTS
James L. Kirk, H. Wayne Huizenga, and Don R. O'Neal, each of whom is an
officer or director of the Company, and H. Family Investments, Inc., a founding
stockholder of the Company, have agreed
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with the Purchasers to vote all the shares of Common Stock beneficially owned by
them in favor of the first and second proposals to be brought before the Special
Meeting. These parties beneficially own an aggregate of 29,778,949 shares of the
Company's issued and outstanding Common Stock. In addition, the holders of the
Preferred Stock have agreed to vote all of the First Preferred Shares in favor
of the first and second proposals to be brought before the Special Meeting. The
shares of Common Stock beneficially owned by Messrs. Kirk, Huizenga, and O'Neal
and H. Family Investments together with the shares of Preferred Stock held by
the Purchasers represent approximately 60.5% of the total number of votes
entitled to be cast at the Special Meeting.
TERMS OF THE PREFERRED STOCK
Set forth below is a summary of certain terms of the Preferred Stock.
This summary is not complete and is qualified in its entirety by reference to
the Certificate of Designation for the Preferred Stock.
RANKING.
With respect to distributions upon the liquidation, winding-up and
dissolution of the Company, the Preferred Stock will rank (i) senior to all
classes of common stock of the Company, and each class of capital stock or
series of preferred stock established after July 20, 1999, the terms of which do
not expressly provide that such class or series ranks senior to or on parity
with the Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company, (ii) on a parity with
any additional shares of Preferred Stock issued by the Company in the future and
any other class of capital stock or series of preferred stock established after
July 20, 1999 the terms of which expressly provide that such class or series
will rank on a parity with the Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the Company,
and (iii) junior to each class of capital stock or series of preferred stock
issued by the Company established after July 20, 1999 the terms of which
expressly provide that such class or series will rank senior to the Preferred
Stock as to dividend distributions and/or distributions upon the liquidation,
winding-up and dissolution of the Company.
LIQUIDATION PREFERENCE.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, each holder of Preferred Stock will be entitled to
payment out of the assets of the Company available for distribution of an amount
equal to $1,000 per share of Preferred Stock held by such holder (the
"Liquidation Preference"), plus accrued and unpaid dividends, if any, to the
date fixed for liquidation, dissolution or winding-up, before any distribution
is made on the Common Stock. After payment in full of the Liquidation Preference
and such dividends, if any, to which holders of Preferred Stock are entitled,
such holders will not be entitled to any further participation in any
distribution of assets of the Company.
DIVIDENDS.
The Preferred Stock will not have a stated dividend. However, in the
event that the Company declares or pays any dividends or other distributions
upon the Common Stock other than dividends paid in shares of Common Stock, the
Company must also declare and pay to the holders of the Preferred
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Stock, at the same time that it declares and pays such dividends or other
distributions to the holders of the Common Stock, the dividends or distributions
which would have been declared and paid with respect to the Common Stock
issuable upon conversion of the Preferred Stock had all of the outstanding
shares of Preferred Stock been converted immediately prior to the record date
for such dividend or distribution, or if no record date is fixed, the date as of
which the record holders of Common Stock entitled to such dividends or
distributions are determined.
CONVERSION RIGHTS.
Subject to possible adjustment as described below, each share of
Preferred Stock is convertible into 142.85 shares of Common Stock (representing
a conversion price of $7.00 per share of Common Stock based on the Liquidation
Preference of $1,000 per share of Preferred Stock).
The Certificate of Designation provides that the conversion price and
the number and kind of securities or rights into which the Preferred Stock is
convertible are subject to certain anti-dilution adjustments upon the occurrence
of any of the following events:
o a distribution in the form of Common Stock is made on any
class of capital stock of the Company (see subsection 3(vi) of
the Certificate of Designation);
o the outstanding shares of Common Stock are subdivided into a
greater number of shares of Common Stock or combined into a
smaller number of shares of Common Stock (see subsection
3(vii) of the Certificate of Designation); or
o a consolidation or merger of the Company, the sale or transfer
of all or substantially all of the assets of the Company, or a
capital reorganization or reclassification, conversion or
exchange of shares of Common Stock (see subsection 3(xv) of
the Certificate of Designation).
REDEMPTION OR AUTOMATIC CONVERSION.
The Company has no obligation to redeem or repurchase the Preferred
Stock, other than upon a Change in Control as described below.
In the event of a Change in Control that is not in connection with an
acquisition that is accounted for under the "pooling-of-interests" method of
generally accepted accounting principles, the Company must offer to purchase,
within 20 business days after the Change in Control (or concurrently with the
effectiveness of the Change in Control if the Company is not the surviving
entity in such transaction), all of the then outstanding shares of Preferred
Stock at a purchase price per share, in cash, equal to the Liquidation
Preference thereof plus an amount equal to 8.00% of the Liquidation Preference,
compounded annually from the date of issuance of such share to the purchase date
(the "Call Price").
In the event of a Change in Control that is an acquisition that is
accounted for under the "pooling-of-interests" method of generally accepted
accounting principles, then, upon the occurrence of the Change in Control, all
of the then outstanding Preferred Stock will be automatically converted into
Common Stock having a market value equal to 110% of the Call Price, valued at
the closing price of the
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Common Stock at the close of business on the business day prior to the effective
date of the Change in Control.
The Certificate of Designation defines a Change in Control as the
occurrence of any of the following events:
o a person or group becomes the beneficial holder of more than 50% of the
total voting stock of the company. An acquisition of more than 50% of
the stock by Messrs. Kirk or Huizenga, H. Family Investments, Inc. or
any holder of Preferred Stock will not be a Change in Control, unless,
in the case of Messrs. Kirk and Huizenga and H. Family Investments, the
event causes the Common Stock to no longer be listed on a national
securities exchange or quoted on NASDAQ; or
o a merger of the Company or a sale or other disposition of all or
substantially all of the Company's assets where the holders of voting
stock of the Company prior to the transaction do not own more than 50%
of the voting power of the voting stock of the entity surviving the
transaction, or to which the assets were transferred.
REDEMPTION AT THE OPTION OF THE COMPANY.
At any time after the first anniversary of the issuance of the
Preferred Stock, the Company may, at its election, redeem, in whole but not in
part, the shares of then outstanding Preferred Stock at a purchase price in cash
per share equal to $14.00 compounded annually at the rate of 20% per annum for
the period from the first anniversary of the issuance of the Preferred Stock up
to and including the date of redemption.
VOTING.
GENERAL VOTING RIGHTS.
Except where holders of Preferred Stock are entitled to vote separately
as a class and except as otherwise required by applicable law, the holders of
Preferred Stock are entitled to vote (or act by written consent) together with
the holders of the Common Stock on all matters submitted to stockholders of the
Company for a vote (or for action). Each share of Preferred Stock is entitled to
one vote for each share of Common Stock issuable upon conversion of such share
of Preferred Stock. Except as provided below under "--Class Voting Rights," the
holders of the Preferred Stock are not entitled to vote as a separate class on
any matter to be voted on by stockholders of the Company.
CLASS VOTING RIGHTS.
The Company may not, without the affirmative vote or consent of the
holders of at least a majority of the shares of Preferred Stock then outstanding
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voting or consenting as the case may be, as a separate class, take certain
actions specified in the Certificate of Designation, including, among others:
o authorize, create or issue any Senior Securities (as defined
in the Certificate of Designation) or any obligation or
security convertible into or evidencing a right to purchase
any Senior Securities;
o authorize an amendment or waiver of the Certificate of
Designation or the Certificate of Incorporation which would
(i) alter the voting rights of Preferred Stock or reduce the
number of shares of Preferred Stock that must consent to an
amendment, supplement or waiver of the Certificate of
Designation; (ii) reduce the Liquidation Preference or alter
the provisions relating to redemption of the Preferred Stock;
(iii) alter the conversion rights of the holders of Preferred
Stock; (iv) reduce the rate of or change the time for payment
of dividends on the Preferred Stock; (v) waive the
consequences of any failure to pay dividends; (vi) make any
shares of Preferred Stock payable other than as stated in the
Certificate of Designation; (vii) change the provisions of the
Certificate of Designation relating to waivers of rights of
holders of Preferred Stock to receive the Liquidation
Preference and dividends; (viii) waive a redemption payment on
Preferred Stock, (ix) change the foregoing amendment and
waiver provisions of the Certificate of Designation; or (x)
require the prior vote of the holders of Preferred Stock as a
separate class under the Delaware General Corporation Law;
o waive compliance with any provision of the Certificate of
Designation;
o make repurchases of, optional redemptions of and/or tender
offers for, the capital stock of the Company the aggregate
fair market value of which exceeds 5% of the Company's market
capitalization (determined as provided in the Certificate of
Designation) during any 12-month period that occurs in whole
or in part during the first five years after July 20, 1999; or
o except for a transaction constituting a Change in Control,
merge with or into, or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of the
Company's assets to, any person unless, if the Company is not
the Surviving Person (as defined in the Certificate of
Designation), the Preferred Stock is converted into or
exchanged for and becomes shares of such Surviving Person,
having the same (or more favorable) powers, preferences and
relative, participating, optional or other special rights as
the Preferred Stock had immediately prior to such transaction.
VOTING FOR DIRECTORS.
In the election of directors of the Company, the holders of the
Preferred Stock, voting separately as a single class to the exclusion of all
other classes or series of the Company's capital stock, may:
o elect two members of the Company's board of directors provided
that on the record date for such vote Investcorp S.A. and its
affiliates have voting and dispositive power with respect to
at least 66,666 shares of Preferred Stock; or
o elect one member of the Company's board of directors provided
that on the record date for such vote, Investcorp S.A. and its
affiliates have voting and dispositive power with
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respect to at least 33,333 shares of Preferred Stock (but less
than 66,666 shares of Preferred Stock).
If on the record date for a vote for directors, Investcorp, S.A. and
its affiliates do not have voting and dispositive power with respect to at least
33,333 shares of Preferred Stock, then the holders of Preferred Stock shall only
be entitled to vote for the election of directors voting together with the
holders of the Common Stock as a single class, with each share of Common Stock
entitled to one vote per share and each share of Preferred Stock entitled to one
vote for each share of Common Stock issuable conversion of the Preferred Stock.
PREEMPTIVE RIGHTS
Provided the holders of Preferred Stock are entitled to elect as a
class at least one member of the Company's Board of Directors pursuant to the
Certificate of Designation, then the holders of Preferred Stock shall have
preemptive rights to purchase or subscribe to purchase any capital stock of the
Company, or any obligation or security convertible or exchangeable into or
evidencing the right to purchase any capital stock of the Company, offered from
time to time by the Company for cash in a public offering or private placement
(other than any such capital stock or obligation or security issued or issuable
as consideration in a business combination or as compensation to an employee,
consultant or otherwise).
BOARD REPRESENTATION
Pursuant to the Purchase Agreement, on July 21, 1999, the Company's
Board of Directors increased the size of the Board from six to eight members and
appointed two persons designated by the Purchasers, Christopher J. O'Brien and
Charles J. Philippin, as directors to serve until the next annual meeting of
stockholders.
TRANSFER RESTRICTIONS
The shares of Preferred Stock will not be registered under federal or
state securities laws and will bear a legend to such effect. Under such laws,
the shares of Preferred Stock may not be offered, sold or transferred except (i)
pursuant to an exemption from registration under the Securities Act and such
other applicable laws, or (ii) pursuant to an effective registration statement
under the Securities Act. The Purchasers will have certain rights to require the
Company to register the shares of Preferred Stock in the future in accordance
with the Registration Rights Agreement. See "- The Registration Rights
Agreement."
INDEMNIFICATION
The Company has agreed to indemnify and hold harmless each Purchaser
and their respective affiliates, agents, partners, officers and employees from
any and all losses, liabilities, damages, judgments, settlements and expenses
that arise out of any breach by the Company of any of its representations,
warranties or covenants in the Purchase Agreement or in the Registration Rights
Agreement.
- 10 -
<PAGE> 14
CONDITIONS TO THE PURCHASERS' OBLIGATION TO CLOSE AT THE SECOND CLOSING
The obligation of each Purchaser to purchase the Second Preferred
Shares at the Second Closing is subject to the satisfaction or waiver of the
following conditions:
o The representations and warranties of the Company contained in
the Purchase Agreement shall be true and correct when made and
at the time of the Second Closing, except where the failure of
such representations and warranties to be so true and correct
would not individually or in the aggregate have a material
adverse effect, and the Company shall have delivered a
certificate to such effect;
o The Company shall have performed and complied with all
agreements and conditions contained in the Purchase Agreement
required to be performed or complied with by it prior to or at
the Second Closing and the Company shall have delivered a
certificate to such effect; and
o The Company shall have obtained approval of its stockholders
of the transactions contemplated by the Purchase Agreement, in
accordance with the requirements of The New York Stock
Exchange.
FEES AND EXPENSES
The Company paid to an affiliate of the Purchasers at the First Closing
a fee equal to 4% of the aggregate First Purchase Price and will pay to an
affiliate of the Purchasers at the Second Closing a fee equal to 4% of the
aggregate Second Purchase Price. The Company will also pay Bear, Stearns & Co.,
Inc. and Deutsche Bank Alex Brown each a financial advisory fee of approximately
2% of the aggregate First Purchase Price at the First Closing and approximately
2% of the aggregate Second Purchase Price at the Second Closing. In addition,
the Company reimbursed the Purchasers for $550,000 of out-of-pocket expenses
incurred by the Purchasers in connection with the transactions contemplated by
the Purchase Agreement.
THE REGISTRATION RIGHTS AGREEMENT
In connection with the Transaction, the Company, the Purchasers and
certain beneficial owners of shares of Common Stock entered into the
Registration Rights Agreement. Pursuant to the Registration Rights Agreement,
the Purchasers are entitled to certain demand and piggyback registration rights
with respect to the shares of Common Stock issuable upon conversion of the
shares of Preferred Stock. The holders of a majority (by number of shares) of
Registrable Securities (as defined in the Registration Rights Agreement) will
generally be entitled to request that a registration statement be filed with the
Securities and Exchange Commission for the resale of shares of Common Stock
issuable upon the conversion of the Preferred Stock. Such demand registrations
will be limited to three occasions. The Company will generally not be obligated
to effect any such registration during certain periods prior to or after
underwritten public offerings by the Company or if the Company determines in
good faith that such registration would require premature disclosure of certain
material corporate developments. The holders of Registrable Securities will also
generally be entitled to piggyback registration rights in connection with
underwritten public offerings by the Company or other selling stockholders.
- 11 -
<PAGE> 15
In addition, for five years following the Second Closing, the
Purchasers will have "tag-along rights" entitling them to participate on a
pro-rata basis in certain sales of Common Stock by Mr. Kirk or Mr. Huizenga or
members of their immediate families. The tag-along rights only apply to sales of
Common Stock that exceed 2% of the shares of Common Stock on a fully diluted
basis. The tag-along rights do not apply to underwritten offerings, transfers
for tax or estate planning purposes or any pledge as security in a bona fide
loan transaction.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL. PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS
PROPOSAL UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
- 12 -
<PAGE> 16
PROPOSAL NO. 2
TO APPROVE THE FUTURE ISSUANCE OF COMPANY SECURITIES
TO THE HOLDERS OF THE PREFERRED STOCK
PURSUANT TO THEIR PREEMPTIVE RIGHTS
The Company is seeking stockholder approval, pursuant to Paragraph
312.03(b) of The New York Stock Exchange Listed Company Manual, of the future
issuance of Common Stock or securities convertible into or exercisable for
Common Stock to the holders of the Preferred Stock from time to time pursuant to
their exercise of the preemptive rights to which the they are entitled under the
Certificate of Designation. Paragraph 312.03(b) requires stockholder approval
prior to the issuance of common stock, or securities convertible into or
exercisable for common stock, to a substantial security holder of an issuer if
the number of shares of common stock to be issued, or if the number of shares of
common stock into which the securities may be convertible or exercisable,
exceeds one percent of the number of shares of common stock outstanding before
the issuance or five percent of the number of shares of common stock outstanding
before issuance if the issuance to the substantial security holder relates to a
sale of stock for cash at a price at least as great as each of the book and
market value of the issuer's common stock. In the event the holders of the
Preferred Stock elect to exercise their preemptive rights, which are described
below, the issuance of securities to them by the Company pursuant to such
exercise may require prior stockholder approval pursuant to Paragraph 312.03(b).
The Company is hereby seeking advance stockholder approval of any such future
issuance or issuances that may require such approval.
The following summary of the preemptive rights is qualified in its
entirety by reference to the provisions of the Certificate of Designation which
is incorporated herein by reference. The Certificate of Designation for the
Preferred Stock provides that as long as holders of Preferred Stock are entitled
to elect at least one director of the Company, then such holders shall have
preemptive rights to purchase or subscribe to purchase any capital stock of the
Company, or any obligation or security convertible or exchangeable into or
evidencing the right to purchase any capital stock of the Company, offered from
time to time by the Company for cash in a public offering or private placement,
other than any such capital stock or obligation or security issued or issuable
as consideration in a business combination or as compensation to an employee,
consultant or otherwise. Each holder of Preferred Stock shall have the right to
purchase its proportionate share of such securities based on the ratio which the
Common Stock of the Company owned by or issuable to such holder upon conversion
of any Preferred Stock that it owns bears to all the issued and outstanding
shares of Common Stock of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL. PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS PROPOSAL
UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
- 13 -
<PAGE> 17
PROPOSAL NO. 3
APPROVAL OF AMENDMENTS TO THE
CERTIFICATE OF DESIGNATION OF
SERIES A CONVERTIBLE PREFERRED STOCK
The Company has adopted several amendments to the Certificate of
Designation which amendments are subject to the approval of the stockholders of
the Company. The amendments are set forth in the Amended and Restated
Certificate of Designation ("Amended Certificate of Designation") which is
attached as Exhibit "A" hereto. A summary of the amendments is provided below
and is qualified in its entirety by the Amended Certificate of Designation which
is incorporated herein by reference.
Under the terms of the existing Certificate of Designation, upon the
occurrence of a Change in Control that is not an acquisition which is accounted
for under the "pooling-of-interests" method of generally accepted accounting
principals, the Company must offer to purchase all of the then outstanding
shares of Preferred Stock at a purchase price per share, in cash, equal to the
Liquidation Preference thereof plus an amount equal to 8% of the Liquidation
Preference compounded annually from the issue date of the Preferred Stock to the
purchase date, plus accrued dividends, if any, to the date of redemption (the
"Call Price"). The Amended Certificate of Designation provides that if such a
Change in Control occurs that is not approved or publicly recommended by the
Board of Directors of the Company, then the Company will not be obligated to
offer to purchase all of the then outstanding Preferred Stock for cash at the
Call Price, but instead the Company will have the option to do so.
However, if the Company elects not to make such a cash offer (which
election must be made, in the case of a tender offer, at least two business days
prior to the expiration of such tender offer), then the holders of the Preferred
Stock will have, as an alternative to their normal conversion rights, the right
to convert their shares of Preferred Stock that are outstanding immediately
prior to the Change in Control, into a number of shares of Common Stock equal to
110% of the Call Price divided, in the case of a Change in Control resulting
from a tender offer, by the current market price at the expiration of the tender
offer or, in the case of a Change in Control not resulting from a tender offer,
by the current market price per share of Common Stock as of the effective time
of the Change in Control.
In addition, if the Company elects not to make such a cash offer and a
holder elects not to convert its shares of Preferred Stock, then immediately
following the effective time of the Change in Control:
(1) the Liquidation Preference shall thereafter increase to an
amount equal to 110% of the Call Price; and
(2) the shares of Preferred Stock shall thereafter be entitled to
receive quarterly dividends payable in cash at a rate per
annum equal to 8% of the Liquidation Preference of each share
of then outstanding Preferred Stock. If dividends on the
Preferred Stock are in arrears and unpaid for 60 days, then an
additional amount of dividends shall accrue at the rate of 2%
per annum until all accrued dividends have been paid in full.
The Amended Certificate of Designation also limits the Company
from declaring or paying certain dividends or
- 14 -
<PAGE> 18
redeeming parity or junior securities unless the accrued
dividends on the Preferred Stock have been paid in full.
These amendments provide the Company with additional flexibility upon a
Change in Control that is not approved by the Board of Directors, which may have
an anti-takeover effect.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL. PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS
PROPOSAL UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
- 15 -
<PAGE> 19
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 22, 1999, information with
respect to the beneficial ownership of the Common Stock by (1) each person or
entity known to the Company to beneficially own more than 5% of the outstanding
shares of Common Stock, (2) each of the Company's directors and each executive
officer of the Company for whom executive compensation disclosure is required by
Item 402 of Regulation S-K, and (3) all of the Company's directors and executive
officers as a group. Unless otherwise indicated, each such stockholder has sole
voting and investment power with respect to the shares beneficially owned by
such stockholder. Percentages of shares beneficially owned are based upon
56,453,781 shares of Common Stock outstanding as of July 22, plus for each
person named below any shares of Common Stock that may be acquired by such
person within 60 days of such date upon exercise of outstanding options or other
rights.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED COMMON STOCK
- ---- ------------------ ------------
<S> <C> <C>
Investcorp, S.A
37 rue Notre-Dame
Luxembourg 14,285,714(1) 20.2%
Sipco Limited
West Wind Building
P.O. Box 1111
Harbour Drive
Grand Cayman, Cayman Islands B.W.I 14,285,714(2) 20.2%
NR Holdings Limited
West Wind Building
P.O. Box 1111
Harbour Drive
Grand Cayman, Cayman Islands B.W.I 11,285,714(3) 16.7%
H. Family Investments, Inc.(4)
450 East Las Olas Blvd
Ft. Lauderdale, Florida 33301 12,000,000(4) 21.3
James L. Kirk 12,062,600(5)(6) 21.3
Don R. O'Neal 4,024,302(5)(7) 7.1
Gene J. Ostrow 1,025,000(8) 1.8
Philip V. Petrocelli 210,394(9) *
Kris Hansel 65,234(10) *
H. Wayne Huizenga 1,692,047(5)(11) 3.0
Harris W. Hudson 1,023,650(12) 1.8
Gary L. Gabriel 471,250(13) *
</TABLE>
- 16 -
<PAGE> 20
<TABLE>
<S> <C> <C>
Thomas H. Bruinooge 97,092(14) *
Ivan W. Gorr 55,700(15) *
Christopher J. O'Brien 25,000 *
Charles J. Philippin -- --
All executive officers and directors as a group 20,911,875(16) 36.4
(14 persons)
</TABLE>
- ----------
* Less than 1%
(1) Investcorp S.A. ("Investcorp") does not directly own any shares of
Common Stock or Preferred Stock. The shares of Common Stock shown in
the table as beneficially owned by Investcorp result from the fact that
Investcorp may be deemed to beneficially own shares of Preferred Stock
(which are convertible into shares of Common Stock) owned by NR
Holdings Limited ("NR Holdings") and NR Investments Limited ("NR
Investments"), the voting securities of which are owned by certain
persons and/or entities which indirectly are managed by affiliates of
Investcorp (the "Managed Entities") through revocable management
services or similar agreements between such persons and/or entities or
their shareholders or principals and an affiliate of Investcorp
pursuant to which each such person or entity indirectly has granted
such affiliate of Investcorp the authority to direct the voting of its
voting securities of NR Holdings and/or NR Investments (and thereby the
power to vote and dispose of the Preferred Stock held by NR Holdings
and NR Investments) for so long as such agreement is in effect. The
number of shares shown in the table includes the 3,142,857 shares of
Common Stock issuable upon conversion of the shares of Preferred Stock
that NR Holdings and NR Investments have the right (and the obligation)
to acquire at the Second Closing pursuant to the Purchase Agreement,
because satisfaction of the only material condition to such
acquisition, the approval of the issuance of such shares by the
Company's stockholders, is assured. See "Proposal No. 1 - Voting
Agreements" above.
(2) Constitute the same shares as those disclosed in the table as
beneficially owned by Investcorp S.A. Sipco Limited ("Sipco") does not
directly own any shares of Common Stock or Preferred Stock. The shares
of Common Stock listed as beneficially owned by Sipco are the shares
into which the Preferred Stock that Investcorp may be deemed to
beneficially own are convertible. Sipco, which is a passive holding
company entity without operations or employees, may be deemed to
control Investcorp through its ownership of a majority of the stock of
a company which indirectly owns a majority of Investcorp's outstanding
stock.
(3) Included in the shares disclosed in the table as beneficially owned by
Investcorp S.A. and Sipco Limited. Represent shares of Common Stock
issuable upon conversion of shares of Preferred Stock held by NR
Holdings. NR Holdings shares voting and dispositive power with respect
to these shares with Investcorp, Sipco and the Managed Entities. See
footnotes (1) and (2) above. Includes 2,482,857 shares of Common Stock
issuable upon conversion of the shares of Preferred Stock that NR
Holdings has the right (and the obligation) to acquire at the Second
Closing pursuant to the Purchase Agreement, because satisfaction of the
only material condition to such acquisition, the approval of the
issuance of such shares by the Company's stockholders, is assured. See
"Proposal No. 1 - Voting Agreements" above.
- 17 -
<PAGE> 21
(4) H. Family Investments, Inc. ("HFI") is a Florida corporation controlled
by H. Wayne Huizenga, Jr., the son of Mr. Huizenga.
(5) James L. Kirk, H. Wayne Huizenga, Don R. O'Neal and H. Family
Investments, Inc. have entered into voting agreements with Investcorp
S.A. to vote their shares for the first and second proposals to be
acted upon at the Special Meeting. Accordingly, pursuant to Rule 13d-3
of the Securities Exchange Act of 1934, as amended, each may be deemed
to beneficially own the aggregate of each other's shares of Common
Stock (29,778,949 shares of Common Stock) prior to the Special Meeting.
(6) 12,000,000 of these shares are held by Kirk Holdings Limited
Partnership. Includes 62,500 shares of Common Stock issuable upon
exercise of options, which are exercisable within 60 days.
(7) Includes 621,392 shares of Common Stock owned by Don R. O'Neal's
spouse, as to which Mr. O'Neal disclaims beneficial ownership. Also
includes 1,966,000 shares of Common Stock in the name of the 1997 Ray
L. O'Neal and Ellen M. O'Neal irrevocable trust for Don R. O'Neal of
which Don R. O'Neal is a trustee.
(8) Includes 25,000 shares of Common Stock issuable upon exercise of
options, which are exercisable within 60 days.
(9) Includes 86,618 shares of Common Stock issuable upon exercise of
options, which are immediately exercisable.
(10) Includes 28,142 shares of Common Stock issuable upon exercise of
options, which are immediately exercisable.
(11) 1,632,047 of these shares are held by Huizenga Investments Limited
Partnership ("HILP"). Includes 60,000 shares of Common Stock issuable
upon exercise of options, which are immediately exercisable. The number
of shares of Common Stock beneficially owned by Mr. Huizenga does not
include the 12,000,000 shares of Common Stock held by H. Family
Investments, Inc. because Mr. Huizenga does not share voting or
dispositive control of such shares and disclaims beneficial ownership
of such shares.
(12) Includes 250,000 shares of Common Stock owned by Mr. Hudson's spouse,
as to which Mr. Hudson disclaims beneficial ownership. Also includes
60,000 shares of Common Stock issuable upon exercise of options, which
are immediately exercisable.
(13) Includes 411,250 shares of Common Stock issuable upon conversion of
convertible promissory notes in an aggregate principal amount of $3.29
million, which are convertible at a price of $8.00 per share of Common
Stock. Also includes 60,000 shares of Common Stock issuable upon
exercise of options, which are immediately exercisable.
(14) Includes 60,000 shares of Common Stock issuable upon exercise of
options, which are immediately exercisable.
- 18 -
<PAGE> 22
(15) Includes 50,000 shares of Common Stock issuable upon exercise of
options, which are immediately exercisable.
(16) Includes (a) an aggregate of 559,136 shares of Common Stock issuable
upon exercise of options held by certain executive officers and
directors, which are immediately exercisable or exercisable within 60
days and (b) 411,250 shares of Common Stock issuable upon conversion of
convertible promissory notes beneficially owned by Mr. Gabriel.
- 19 -
<PAGE> 23
STOCKHOLDER PROPOSALS
In accordance with the rules promulgated by the Securities and Exchange
Commission, any stockholder who wishes to submit a proposal for inclusion in the
proxy material to be distributed by the Company in connection with the 2000
Annual Meeting of Stockholders must do so no later than December 31, 1999. Any
such proposal should be submitted in writing to the Secretary of the Company at
its principal executive offices, 450 East Las Olas Boulevard, Suite 1400, Fort
Lauderdale, Florida 33301, Attention: Joseph H. Izhakoff, Vice President,
General Counsel and Secretary.
- 20 -
<PAGE> 24
EXHIBIT A
---------
Amended and Restated Certificate of Designation
[To be filed with Definitive Proxy]
<PAGE> 25
[LOGO]
NATIONSRENT, INC.
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of NATIONSRENT, INC., a Delaware
corporation (the "Company"), hereby appoints James L. Kirk and Gene J. Ostrow,
or either of them, the proxy or proxies of the undersigned, each with full power
of substitution, to vote all shares of Common Stock of the Company and all
shares of Series A Convertible Preferred Stock of the Company which the
undersigned would be entitled to vote at the Special Meeting of Stockholders to
be held on _______, _________, 1999 at 10:00 a.m., Eastern Standard Time at the
Company's corporate headquarters, at 450 East Las Olas Boulevard, Fort
Lauderdale, Florida 33301, or any adjournment thereof, according to the number
of votes that the undersigned would be entitled to if personally present upon
the matters referred to in this proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
1. PROPOSAL 1--Approval of: (a) the issuance, in a series of transactions,
of 100,000 shares of Series A Convertible Preferred Stock to NR
Holdings Limited and NR Investments Limited, 78,000 shares of which
have already been issued and 22,000 shares of which will be issued only
if stockholder approval is obtained; and (b) the issuance of shares of
Common Stock upon the conversion of such Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL 2--To approve the future issuance of Common Stock or
securities convertible into or exercisable for Common Stock to the
holders of the Series A Convertible Preferred Stock from time to time
pursuant to the exercise of their preemptive rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL 3-- Approval of amendments to the Certificate of Designation
of the Series A Convertible Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE> 26
(CONTINUED FROM OTHER SIDE)
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the proposals set forth herein.
The undersigned acknowledges receipt of Notice of Special Meeting of
Stockholders dated August __, 1999, and the accompanying Proxy Statement.
Date: , 1999.
------------------------
---------------------------------------
Signature
---------------------------------------
Name(s) (typed or printed)
---------------------------------------
---------------------------------------
Address(es)
Please sign exactly as name appears on this
Proxy. When shares are held by joint
tenants, both should 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 the President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
