<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Chris-Craft Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[LETTERHEAD]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1999
To the Stockholders of
CHRIS-CRAFT INDUSTRIES, INC.:
The annual meeting of the stockholders of Chris-Craft Industries, Inc.
("Chris-Craft") will be held at The Pan Pacific Hotel, 500 Post Street, San
Francisco, California 94102, on May 4, 1999, at 9:00 A.M., for the purpose of
considering and acting upon the following matters:
(1) Election of directors.
(2) Adoption of the 1999 Management Incentive Plan.
(3) Ratification of the selection of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers") as auditors of Chris-Craft for the year ending
December 31, 1999.
(4) Such other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on March 12, 1999 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting.
You are cordially invited to attend the meeting. Arrangements have been
made for interested stockholders to visit our San Francisco television station,
KBHK, after the meeting. Whether or not you plan to attend the meeting, you are
urged promptly to complete, date and sign the enclosed proxy and to mail it to
Chris-Craft in the enclosed envelope, which requires no postage if mailed in the
United States. Return of your proxy does not deprive you of your right to attend
the meeting and to vote your shares in person.
Dated: New York, New York
March 31, 1999
By Order of the Board of Directors,
BRIAN C. KELLY, Secretary
<PAGE> 3
CHRIS-CRAFT INDUSTRIES, INC.
767 FIFTH AVENUE, NEW YORK, NEW YORK 10153
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Chris-Craft for use at the
annual meeting of stockholders on May 4, 1999 and at any adjournment thereof.
March 31, 1999 is the approximate date on which this Proxy Statement and the
accompanying form of proxy are first being mailed to stockholders.
As of March 12, 1999, the record date for the meeting, Chris-Craft had
outstanding 24,481,469 shares of Common Stock, 8,077,177 shares of Class B
Common Stock, 235,784 shares of $1.40 Convertible Preferred Stock and 73,399
shares of Prior Preferred Stock, being the classes of stock entitled to vote at
the meeting. Each share of Common Stock entitles its holder to one vote, and
each share of Class B Common Stock entitles its holder to ten votes. Each share
of $1.40 Convertible Preferred Stock entitles its holder to 33.9 votes, or 237.3
votes if he was the holder of such share on November 10, 1986 (or is a
"Permitted Transferee," as defined in Chris-Craft's Restated Certificate of
Incorporation). Each share of Prior Preferred Stock entitles its holder to .3
vote, or 6.3 votes if he was the holder of such share on November 10, 1986 (or
is a Permitted Transferee). Notwithstanding the foregoing, if the holder of
record of a share of Class B Common Stock, $1.40 Convertible Preferred Stock or
Prior Preferred Stock is a broker or dealer in securities, a bank or voting
trustee or a nominee of any of the foregoing, or if such share is otherwise held
of record by a nominee of the beneficial owner of such share, then such share of
Class B Common Stock entitles such record holder to one vote, such share of
$1.40 Convertible Preferred Stock entitles such record holder to 33.9 votes, and
such share of Prior Preferred Stock entitles such record holder to .3 vote,
except to the extent that such record holder establishes to Chris-Craft's
satisfaction, pursuant to procedures set forth in Chris-Craft's Restated
Certificate of Incorporation, that such share has been held continuously since
November 10, 1986 or its later issuance by a named beneficial owner (whose
address must also be specified). The proxy solicited by this Proxy Statement is
revocable at any time before it is voted.
The presence at the meeting in person or by proxy of stockholders entitled
to cast a majority of the votes at the meeting constitutes a quorum. The
election of directors is decided by a plurality of the votes cast. A majority of
the votes cast is required to approve each other matter to be acted on at the
meeting. Abstentions and broker non-votes have no effect on the proposals being
acted upon.
The proxies named in the enclosed form of proxy and their substitutes will
vote the shares represented by the enclosed form of proxy, if the proxy appears
to be valid on its face, and, where a choice is specified by means of the ballot
on the form of proxy, will vote in accordance with each specification so made.
<PAGE> 4
ELECTION OF DIRECTORS
NOMINEES OF THE BOARD OF DIRECTORS
The proxy will be voted as specified thereon and, in the absence of
contrary instruction, will be voted for the reelection of Jeane J. Kirkpatrick,
Norman Perlmutter, William D. Siegel and Evan C Thompson as directors until the
third annual meeting following the May 4, 1999 meeting and until their
respective successors are elected and qualified. Information with respect to
each such nominee, as well as the eight present directors whose terms of office
expire at the first or second annual meeting following the May 4, 1999 meeting,
is set forth below:
<TABLE>
<CAPTION>
AGE, HAS SERVED
OTHER POSITIONS WITH CHRIS-CRAFT, PRINCIPAL OCCUPATION FEBRUARY 28, AS DIRECTOR
NAME AND CERTAIN OTHER DIRECTORSHIPS 1999 SINCE
---- ------------------------------------------------------ ------------ -----------
<S> <C> <C> <C>
NOMINEES FOR THREE-YEAR TERM
Jeane J. Kirkpatrick......... Leavey Professor of Government, Georgetown Uni- 72 1994
versity; Senior Fellow, the American Enterprise
Institute for Public Policy Research
Norman Perlmutter............ Chairman of the Board, Heitman Financial Ltd., real 65 1975
estate financial services; Director, Horizon Group
Properties, Inc., Prime Retail, Inc. and United
Television, Inc. ("UTV")(1)
William D. Siegel............ Senior Vice President, Chris-Craft; Director, BHC 44 1994
Communications, Inc. ("BHC")(1)
Evan C Thompson.............. Executive Vice President, Chris-Craft, and Presi- 56 1982
dent, Television Division; Director, UTV
INCUMBENT DIRECTORS -- TWO-YEAR REMAINING TERM
John C. Bogle................ Senior Chairman and Founder, The Vanguard Group, Inc. 69 1996
and of the Investment Companies in the Vanguard
Group; Director, The Mead Corporation
T. Chandler Hardwick, III.... Headmaster, Blair Academy, independent secondary 46 1994
school
David F. Linowes............. Professor of Political Economy and Public Policy and 81 1958
Boeschenstein Professor Emeritus, University of
Illinois
Herbert J. Siegel............ Chairman of the Board and President, Chris-Craft; 70 1959
Chairman of the Board, BHC; Director, UTV
INCUMBENT DIRECTORS -- ONE-YEAR REMAINING TERM
Howard Arvey................. Of Counsel, Wildman, Harrold, Allen & Dixon, Chicago 77 1975
law firm
Lawrence R. Barnett.......... Consultant; retired Executive Vice President, Chris- 85 1963
Craft; Director, UTV
James J. Rochlis............. Consultant; retired Executive Vice President, Chris- 82 1958
Craft
John C. Siegel............... Senior Vice President, Chris-Craft; Director, BHC and 46 1994
Chairman of the Board, UTV
</TABLE>
- ---------------
(1) UTV is a majority owned subsidiary of BHC Communications, Inc., which is a
majority owned subsidiary of Chris-Craft.
2
<PAGE> 5
The principal occupation of each of the directors for the past five years
is stated in the foregoing table. In case a nominee shall become unavailable for
election, which is not expected, it is intended that the proxy solicited hereby
will be voted for whomever the present Board of Directors shall designate to
fill such vacancy.
John C. Siegel and William D. Siegel are sons of Herbert J. Siegel.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
Chris-Craft has established standing audit and compensation committees,
among others, to assist the Board of Directors in discharging its
responsibilities. Chris-Craft has no nominating committee.
The Audit Committee reviews Chris-Craft's internal controls, the
objectivity of its financial reporting and the scope and results of the auditing
engagement. It meets with appropriate Chris-Craft financial personnel and
independent accountants in connection with these reviews. The committee
recommends to the Board the appointment of the independent accountants, subject
to ratification by the stockholders at the annual meeting, to serve as auditors
for the following year in auditing the corporate accounts. The independent
accountants periodically meet with the Audit Committee and have access to the
committee at any time. The committee held two meetings during 1998. Its members
are Messrs. Arvey, Bogle and Linowes.
The Compensation Committee makes recommendations to the Board with respect
to the compensation of officers. It also determines and certifies whether
performance goals and other terms of agreements with certain executives are
satisfied. Its members are Messrs. Arvey, Linowes and Perlmutter. The committee
held one meeting during 1998. The Board Compensation Committee Report on
Executive Compensation appears on page 12.
Chris-Craft's Board of Directors held three meetings during 1998.
VOTING SECURITIES OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The management of Chris-Craft has been informed that, as of February 28,
1999, the persons and groups identified in Table I below, including all
directors, nominees for director, executive officers and all owners known to
Chris-Craft of more than 5% of any class of Chris-Craft voting securities, owned
beneficially, within the meaning of Securities and Exchange Commission ("SEC")
Rule 13d-3, the securities of Chris-Craft reflected in such table. Except as
reflected in Tables II and III, as of February 28, 1999, each director or
executive officer of Chris-Craft disclaims beneficial ownership of securities of
any Chris-Craft subsidiary. Except as otherwise specified, the named beneficial
owner claims sole investment and voting power as to the securities reflected in
the tables.
3
<PAGE> 6
I. BENEFICIAL OWNERSHIP OF CHRIS-CRAFT STOCK
<TABLE>
<CAPTION>
$1.40 CONVERTIBLE CLASS B COMMON COMMON STOCK
PREFERRED STOCK(2)(3) STOCK(2)(3)(4) (3)(5)(6)
--------------------- --------------------- ----------------------
NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
BENEFICIAL OWNER(1) OF SHARES OF CLASS OF SHARES OF CLASS OF SHARES OF CLASS
- ------------------- --------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Howard Arvey.............. 100 * 51,043 * 111,262 *
Lawrence R. Barnett....... 50,654 21.5% 1,483,457 16.1% 2,093,708 7.9%
John C. Bogle............. -- -- -- -- 22,686 *
T. Chandler Hardwick,
III..................... -- -- -- -- 29,940 *
Jeane J. Kirkpatrick...... -- -- -- -- 17,382 *
David F. Linowes.......... 6,145 2.6% 143,174 1.7% 249,345 1.0%
Joelen K. Merkel(7)....... -- -- 23,323 * 80,076 *
Norman Perlmutter......... -- -- 6,432 * 54,832 *
James J. Rochlis.......... 16,199 6.9% 877,561 10.4% 1,746,603 6.8%
Herbert J. Siegel(8)...... 142,569 60.5% 4,730,918 41.8% 6,731,912 21.6%
John C. Siegel(9)......... 246 * 932,207 11.5% 1,665,180 6.5%
William D. Siegel(9)...... -- -- 631,218 7.8% 735,064 2.9%
Evan C Thompson(10)....... 130 * 734,601 9.1% 1,497,914 5.9%
All directors and
executive officers as a
group, including those
named above (14
persons)(11)............ 215,667 91.5% 8,724,025 67.3% 12,792,419 34.9%
Capital Research
and Management
Company(12)............. -- -- -- -- 1,568,000 6.4%
The Equitable Companies
Incorporated(13)........ -- -- 1,262,938 15.6% 1,314,421 5.1%
Gabelli Funds, Inc.,
GAMCO Investors, Inc.,
and Mario J.
Gabelli(14)............. -- -- 613,324 7.6% 4,668,836 18.6%
The Gabelli Equity Trust
Inc.(15)................ -- -- 558,864 6.9% 558,864 2.2%
</TABLE>
- ---------------
* Less than 1%.
(1) The address of Capital Research and Management Company is 333 South Hope
Street, Los Angeles, CA 90071; the address of The Equitable Companies
Incorporated is 787 Seventh Avenue, New York, NY 10019; the address of
Gabelli Funds, Inc. ("GFI"), GAMCO Investors, Inc., Mario J. Gabelli, and
the Gabelli Equity Trust Inc. is One Corporate Center, Rye, NY 10580; the
address of each other beneficial owner named in the table is c/o
Chris-Craft Industries, Inc., 767 Fifth Avenue, New York, NY 10153.
(2) Each share of $1.40 Convertible Preferred Stock is convertible into
11.28894 shares of Common Stock and 22.57786 shares of Class B Common
Stock, except that if such share of $1.40 Convertible Preferred Stock was
transferred after November 10, 1986 other than to a Permitted Transferee,
as defined in Chris-Craft's certificate of incorporation, such share is
convertible into 33.86680 shares of Common Stock. Each share of Class B
Common Stock is convertible into one share of Common Stock.
(3) At January 1, 1999, the Trustee of the Chris-Craft/UTV Employees' Stock
Purchase Plan (the "Stock Purchase Plan") held 363,600 shares of Class B
Common Stock, 644,261 shares of Common Stock and 246 shares of $1.40
Convertible Preferred Stock (representing 4.5%, 2.6% and less than 1% of
the outstanding shares of the respective classes at February 28, 1999). A
committee appointed by the Board of Directors of Chris-Craft to administer
the Stock Purchase Plan, comprised of James J. Rochlis, John C. Siegel, and
another Chris-Craft executive officer, is empowered to direct voting of the
shares held by
(Notes continued on next page)
4
<PAGE> 7
the Trustee of that plan. The numbers of shares set forth in the table with
respect to each named executive officer other than John C. Siegel include,
with respect to the Stock Purchase Plan, only shares vested at January 1,
1999. The numbers of shares set forth in the table with respect to the
named members of the Stock Purchase Plan Committee and all directors and
executive officers as a group includes all shares held in the Stock
Purchase Plan as of January 1, 1999. If, at February 28, 1999, the shares
of $1.40 Convertible Preferred Stock held in the Stock Purchase Plan at
January 1, 1999 had been converted, and the Class B Common Stock issuable
upon such conversion had been added to the Class B Common Stock then held
in the Stock Purchase Plan, the shares of Class B Common Stock held in the
plan would represent 4.6% of the Class B Common Stock that would have been
outstanding; if, at February 28, 1999, the shares of $1.40 Convertible
Preferred Stock held in the Stock Purchase Plan at January 1, 1999 had been
converted, the Class B Common Stock then held in the Stock Purchase Plan,
or issuable upon conversion of the $1.40 Convertible Preferred Stock held
in the Stock Purchase Plan, had also been converted, and the Common Stock
issuable upon such conversions had been added to the Common Stock then held
in such plan, the shares of Common Stock held in the plan would represent
4.1% of the Common Stock that would have been outstanding.
(4) Includes shares of Class B Common Stock issuable upon conversion of the
$1.40 Convertible Preferred Stock reflected in the table opposite the
identified person or group. In accordance with SEC rules, the percentages
shown have been computed assuming that the only shares converted are those
shares reflected opposite the identified person or group.
(5) Includes shares of Common Stock issuable upon conversion of the $1.40
Convertible Preferred Stock and Class B Common Stock reflected in the table
opposite the identified person or group. In accordance with SEC rules, the
percentages shown have been computed assuming that the only shares
converted are those shares reflected opposite the identified person or
group.
(6) Includes with respect to the following directors the indicated numbers of
shares issuable on exercise of options previously granted under the 1994
Director Stock Option Plan or to be granted under the 1994 Director Stock
Option Plan immediately following the 1999 annual meeting of stockholders:
Howard Arvey, 34,764; Lawrence R. Barnett, 34,764; John C. Bogle, 17,382;
T. Chandler Hardwick, III, 28,970; Jeane J. Kirkpatrick, 17,382; David F.
Linowes, 34,764; Norman Perlmutter, 34,764; James J. Rochlis, 34,764.
(7) Ownership includes 22,693 shares of Common Stock issuable pursuant to
currently exercisable stock options.
(8) Ownership includes 337,652 shares of Common Stock issuable pursuant to a
currently exercisable stock option and excludes 69,959 shares of Class B
Common Stock owned by Mr. Siegel's wife and 36,613 shares of Class B Common
Stock held by her as trustee.
(9) Ownership includes 56,271 shares of Common Stock issuable pursuant to
currently exercisable stock options.
(10) Ownership includes 225,098 shares of Common Stock issuable pursuant to
currently exercisable stock options and 14,210 shares of Common Stock held
by the Evan C Thompson Foundation.
(11) Ownership includes all shares held in the Stock Purchase Plan, as of
January 1, 1999 (see Note 3), all other shares reflected in the table with
respect to directors and named executive officers, and all other shares,
including an additional 33,761 shares of Common Stock issuable pursuant to
currently exercisable stock options, held by an executive officer of
Chris-Craft not named in the table. Of the shares held in the Stock
Purchase Plan, 116 shares of $1.40 Convertible Preferred Stock, 199,455
shares of Class B Common Stock and 517,205 shares of Common Stock were held
for the accounts of employees other than executive officers.
(12) Voting power is disclaimed as to all shares. Information herein is
furnished in reliance on Amendment No. 1 to Schedule 13G of the named owner
dated February 8, 1999, filed with the SEC.
5
<PAGE> 8
(13) Voting power is shared as to 1,262,938 shares. Information is furnished
herein in reliance on Amendment Nos. 10 and 17 to Schedule 13G of The
Equitable Companies Incorporated, each dated February 10, 1999, filed with
the SEC jointly with AXA and AXA Assurances I.A.R.D. Mutuelle, AXA
Assurances Vie Mutuelle, AXA Conseil Vie Assurance Mutuelle, and AXA
Courtage Assurance Mutuelle, as a group.
(14) Voting power is disclaimed as to 67,022 shares. Information is furnished
herein in reliance on Amendment No. 30 to Schedule 13D of the named owners
dated December 24, 1998, filed with the SEC. Amounts exclude shares
referred to in Note 15.
(15) GFI has investment power respecting the referenced shares. Information is
furnished herein in reliance on Amendment No. 6 to Schedule 13G of the
named owner dated February 13, 1999, filed with the SEC.
6
<PAGE> 9
II. BENEFICIAL OWNERSHIP OF BHC CLASS A COMMON STOCK
<TABLE>
<CAPTION>
NUMBER
BENEFICIAL OWNER OF SHARES(1)
---------------- ------------
<S> <C>
Howard Arvey................................................ 650
Lawrence R. Barnett......................................... --
John C. Bogle............................................... --
T. Chandler Hardwick, III................................... --
Jeane J. Kirkpatrick........................................ --
David F. Linowes............................................ 151
Joelen K. Merkel(2)......................................... 200
Norman Perlmutter........................................... --
James J. Rochlis(3)......................................... 1,109
Herbert J. Siegel........................................... 229
John C. Siegel.............................................. --
William D. Siegel(3)........................................ 540
Evan C Thompson............................................. --
All Chris-Craft directors and executive officers as a group,
including those named above (14 persons)(3)............... 2,570
</TABLE>
- ---------------
(1) Each amount shown represents less than 1% of the class.
(2) Shares are owned jointly with the executive officer's husband.
(3) Ownership includes 309 shares held in the Chris-Craft Profit Sharing Plan,
of which James J. Rochlis, William D. Siegel, and another Chris-Craft
executive officer are Trustees.
7
<PAGE> 10
III. BENEFICIAL OWNERSHIP OF UTV COMMON STOCK
<TABLE>
<CAPTION>
NUMBER PERCENT
BENEFICIAL OWNER OF SHARES OF CLASS
---------------- --------- --------
<S> <C> <C>
Howard Arvey................................................ -- --
Lawrence R. Barnett(1)...................................... 4,000 *
John C. Bogle............................................... -- --
T. Chandler Hardwick, III................................... -- --
Jeane J. Kirkpatrick........................................ -- --
David F. Linowes............................................ -- --
Joelen K. Merkel............................................ -- --
Norman Perlmutter(1)........................................ 10,500 *
James J. Rochlis(2)......................................... 228,821 2.4%
Herbert J. Siegel........................................... -- --
John C. Siegel(2)........................................... 239,821 2.5%
William D. Siegel........................................... -- --
Evan C Thompson(2).......................................... 35,000 2.8%
All Chris-Craft directors and executive officers as a group,
including those named above (14 persons)(2)............... 279,321 3.0%
</TABLE>
- ---------------
* Less than 1%.
(1) Includes with respect to the following directors the indicated numbers of
shares issuable on exercise of options previously granted under UTV's 1995
Director Stock Option Plan or to be granted thereunder immediately following
UTV's 1999 annual meeting of stockholders: Lawrence R. Barnett, 4,000;
Norman Perlmutter, 8,500.
(2) As of January 1, 1999, (a) the Trustee of the Stock Purchase Plan held
228,821 shares of UTV Common Stock (representing 2.4% of the outstanding
shares at February 28, 1999), and (b) the Trustees of the UTV Profit Sharing
Plan held 10,000 shares of UTV Common Stock (representing less than 1% of
the outstanding shares at February 28, 1999). John C. Siegel, Evan C
Thompson, and another executive officer of UTV are the Trustees of the UTV
Profit Sharing Plan empowered to vote and dispose of the shares held by that
plan. The numbers of shares set forth in the table with respect to all
Chris-Craft directors and executive officers as a group include all shares
held in the Stock Purchase Plan and the UTV Profit Sharing Plan as of
January 1, 1999, and the numbers of shares set forth respecting the named
members of the Stock Purchase Plan and the named Trustees of the UTV Profit
Sharing Plan include the respective numbers of shares held in those plans as
of such date.
8
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth all plan and non-plan compensation paid to
the named individuals for services rendered in all capacities to Chris-Craft and
its subsidiaries during the three years ended December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION(1) SECURITIES
---------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS(#) COMPENSATION($)
--------------------------- ---- ---------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Herbert J. Siegel................... 1998 1,050,604 2,133,810 -- 1,135,828(2)
Chairman of the Board 1997 1,033,043 2,124,300 -- 1,222,257
and President 1996 1,000,041 2,249,895 -- 864,695
Joelen K. Merkel.................... 1998 334,215 250,000 -- 70,047(3)
Vice President 1997 324,480 220,000 -- 126,035
and Treasurer 1996 312,000 220,000 -- 48,344
John C. Siegel...................... 1998 590,190 600,000 -- 127,193(4)
Senior Vice President 1997 573,000 900,000* -- 300,143
1996 551,000 400,000 -- 69,862
William D. Siegel................... 1998 590,190 600,000 -- 127,193(5)
Senior Vice President 1997 573,000 1,500,000** -- 374,728
1996 551,000 400,000 -- 69,342
Evan C Thompson..................... 1998 1,050,604 1,727,100 -- 750,334(6)
Executive Vice President 1997 1,033,043 1,950,060 -- 1,166,215
and President, Television 1996 1,000,041 2,225,180 -- 540,925
Division
</TABLE>
- ---------------
* Includes $500,000 paid by a BHC subsidiary.
** Includes $1,100,000 paid by a BHC subsidiary.
(1) Excludes automobile allowance of $1,200 per month paid to each of the named
individuals and perquisites and other personal benefits aggregating less
than the lesser of $50,000 or 10% of the total annual salary and bonus
reported for the named person.
(2) Reflects Chris-Craft contributions, or accruals under the Benefit
Equalization Plan in lieu of contributions and forfeiture allocations, of
$142,741 with respect to the Stock Purchase Plan and $331,725 with respect
to the Profit Sharing Plan; also includes $53,117 reported as income of the
named individual with respect to premiums paid on "split-dollar" life
insurance policies and $608,245 credited to a deferred compensation account.
(3) Reflects Chris-Craft contributions, or accruals under the Benefit
Equalization Plan in lieu of contributions and forfeiture allocations, of
$25,453 with respect to the Stock Purchase Plan and $44,594 with respect to
the Profit Sharing Plan.
(4) Reflects Chris-Craft contributions, or accruals under the Benefit
Equalization Plan in lieu of contributions and forfeiture allocations, of
$48,311 with respect to the Stock Purchase Plan and $78,882 with respect to
the Profit Sharing Plan.
(5) Reflects Chris-Craft contributions, or accruals under the Benefit
Equalization Plan in lieu of contributions and forfeiture allocations, of
$48,311 with respect to the Stock Purchase Plan and $78,882 with respect to
the Profit Sharing Plan.
(6) Reflects Chris-Craft contributions, or accruals under the Benefit
Equalization Plan in lieu of contributions and forfeiture allocations, of
$186,978 with respect to the Stock Purchase Plan and $286,881 with respect
to the Profit Sharing Plan; also includes $276,475 credited to a deferred
compensation account.
9
<PAGE> 12
The following table sets forth information concerning each exercise of
stock options during 1998 by each of the named individuals, along with the
year-end value of unexercised options. No option was granted to any executive
officer during 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert J. Siegel..... 0 0 337,652 -- 5,958,140 --
Joelen K. Merkel...... 0 0 22,693 -- 390,356 --
John C. Siegel........ 0 0 56,271 -- 947,959 --
William D. Siegel..... 0 0 56,271 -- 947,959 --
Evan C Thompson....... 0 0 225,098 -- 3,972,034 --
</TABLE>
Chris-Craft entered into employment agreements with Herbert J. Siegel and
Evan C Thompson, as of January 1, 1994.
The employment agreement with Herbert J. Siegel ("Mr. Siegel's agreement")
provides for his continued service as Chief Executive Officer for a term ending
December 31, 2000. Annual base salary is currently $1,067,414, subject to
adjustment ("COLA adjustment"), to reflect price level increases, as reported in
a U.S. Department of Labor Consumer Price Index. Deferred compensation,
currently in the amount of $618,977 annually, subject to COLA adjustment, plus
any other current compensation that would not be deductible by Chris-Craft
pursuant to Section 162(m) of the Internal Revenue Code (the "Code"), is
credited to a deferred compensation account, together with interest on the
account balance, to be computed based on the yield of U.S. Treasury Notes
maturing in five years. The account balance will be paid to Mr. Siegel in five
annual installments after termination of the employment term.
Mr. Siegel's agreement provides that in the event of any change in control
of Chris-Craft during the employment term, the employment term will be extended
automatically to the third anniversary following such change in control, if the
employment term otherwise would have terminated before such third anniversary.
Mr. Siegel has the right to terminate the employment term in the event of a
diminution of his authority or other material breach by Chris-Craft of Mr.
Siegel's agreement or the occurrence without his consent of specified
fundamental changes in Chris-Craft. In the event of such termination, he is
entitled to receive, in lump sum, an amount equal to the base salary, deferred
compensation and consulting fees that would have been payable to him through the
term of the agreement (assuming no additional extensions of the employment term
after such termination), plus an amount equal to the mean performance bonuses
theretofore paid or payable to him multiplied by the number of years remaining
in the employment term. If Mr. Siegel dies during the employment term, Mr.
Siegel's estate is to receive for each of the three following 12-month periods
an amount equal to "Average Annual Compensation"; and in the event of his
disability, Mr. Siegel is to receive, annually for the remainder of the
employment term, an amount equal to one-half of his Average Annual Compensation.
"Average Annual Compensation" generally means the executive's average base
salary plus bonus for a specified period prior to the event. Additionally, if
any payment to Mr. Siegel pursuant to the agreement should be subject to the
excise tax imposed on "golden parachutes" by Section 4999 of the Code,
Chris-Craft will pay on his behalf or reimburse him in an amount equal to the
sum of the excise tax and related interest and penalties, if any, plus any
income taxes (and related penalties and interest) that may become payable by Mr.
Siegel arising from Chris-Craft's compliance with such payment or reimbursement
obligations, such that he would be in the same position as he would have been
had no excise tax been imposed.
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Mr. Siegel's agreement entitles him to a cash bonus for each year of his
employment equal to 1 1/2% of the amount by which Chris-Craft "Pre-tax Income"
exceeds $36,000,000. For purposes of the agreement, "Pre-tax Income" means
Chris-Craft income before provision for income taxes and minority interest, as
such amount is reported on Chris-Craft's audited consolidated statements of
income included in its annual report to stockholders; provided that, in
determining such Pre-tax Income, there will be excluded (i) any loss of any
business commenced or newly acquired by Chris-Craft during (or within the six
months next preceding commencement of) the employment term, if such business
would at any time during such term constitute a Development Stage Company under
Securities and Exchange Commission Regulation S-X, assuming such business were
organized as a separate entity, e.g., the United Paramount Network, but only to
the extent that the loss of such business, aggregated with the losses of all
other such businesses (if any) so commenced or acquired, exceeds $10,000,000 in
any fiscal year, and provided further, that such losses incurred by any business
shall not be so excluded for any fiscal year beginning after the fourth
anniversary of the date of commencement or acquisition of such business by
Chris-Craft; and (ii) any goodwill amortization (similarly determined) arising
out of a business acquisition during the employment term.
During the consulting term, which will commence on expiration of the
employment term and end five years thereafter, Mr. Siegel is to receive annual
compensation of $500,000 (subject to COLA adjustment from December 1993), is
required to devote not more than 20 hours in any month to Chris-Craft's affairs,
and is prohibited from engaging in activity competitive with Chris-Craft. If Mr.
Siegel dies during the consulting term, his estate is to receive the full
consulting fee until the third anniversary of his death or the end of the
consulting term, whichever is earlier; if he is disabled, he is entitled to
receive one-half of the consulting fee until the end of the consulting term. For
each year covered by Mr. Siegel's agreement, Chris-Craft will match on a
cumulative basis up to $200,000 of his charitable contributions, in addition to
matching his contributions under any other charitable gift matching program of
Chris-Craft or any subsidiary.
As additional inducement to Mr. Siegel to enter into the agreement,
Chris-Craft made "split-dollar" life insurance agreements with each of Mr.
Siegel's two sons, pursuant to which, under each agreement, Chris-Craft procured
and will pay the full amount of each annual premium for 15 years on last-to-die
policies on the lives of Herbert J. Siegel and his wife. Each of the sons is the
owner of policies, having face amounts totaling $15 million, covered by his
agreement and has the right to designate and change the beneficiaries
thereunder; however, none of the policies may be borrowed against, surrendered,
or canceled, and no dividend election thereunder may be terminated, without
Chris-Craft's consent. The premiums on these policies are paid by Chris-Craft
and BHC in the respective proportions of 15% and 85% until they shall otherwise
agree. The policies and the split-dollar agreements contemplate that an amount
equal to the aggregate premiums paid, but without interest, will be repaid to
Chris-Craft and BHC, upon the death of the last to die of the insureds.
Chris-Craft has also agreed, in the event of Mr. Siegel's death, to pay
$2,000,000 to a beneficiary named by Mr. Siegel. Chris-Craft has purchased, and
is the sole owner and beneficiary of, insurance on the life of Mr. Siegel and
anticipates that the insurance benefits received by Chris-Craft will exceed the
cost, after applicable income taxes, of paying the foregoing death benefit.
Mr. Thompson's employment agreement ("Mr. Thompson's agreement") provides
for his continued service until December 31, 2000 on substantive terms similar
to those specified in Mr. Siegel's agreement, except that annual deferred
compensation is currently in the amount of $280,898, subject to COLA adjustment,
and Mr. Thompson can elect each year whether amounts deferred for such year will
be paid in lump sum immediately, or over five years, after termination of the
employment term; Mr. Thompson's consulting fee is $250,000 per year (subject to
COLA adjustment from December 1993), and the consulting term will end May 31,
2007; if Mr. Thompson dies during the employment term or the consulting term, a
death benefit is payable until the earlier of the first anniversary of his death
or the end of the consulting term; there is no split-dollar life insurance;
Chris-Craft will match on a cumulative basis up to $100,000 of Mr. Thompson's
charitable contributions during each year of the employment term; and Mr.
Thompson's bonus is equal to 1% of the amount by which Chris-Craft's "TV
Broadcast Cash Flow" for each year exceeds $20 million, up to $50 million, and
2% of the amount by which TV Broadcast Cash Flow exceeds $50 million. The bonus
computation will be adjusted if Chris-Craft acquires, in one or more
transactions, additional television stations having aggregate mean TV Broadcast
Cash Flow exceeding $10 million for the three fiscal
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years of each such television station prior to its acquisition by Chris-Craft,
or disposes of a television station having mean TV Broadcast Cash Flow exceeding
$5 million for the three fiscal years prior to its disposition by Chris-Craft.
TV Broadcast Cash Flow for purposes of the bonus calculation means operating
income plus depreciation and amortization of goodwill and programming contracts,
minus payments on programming contracts. The Board of Directors will consider
adjusting the bonus calculation and formulae if and at such time as Chris-Craft
shall own 10 or more television stations or Mr. Thompson shall have chief
operating responsibility for a business owned by Chris-Craft that derives
revenues exceeding $25,000,000 other than from television broadcasting.
------------------------
Benefits under the Chris-Craft Salaried Employees' Pension Plan are based
on a participant's compensation, including salaries, bonuses and commissions.
The plan provides a retirement annuity, generally based on specified percentages
of annual compensation (for 1989 and subsequent years, generally 1.5% of the
first $18,000 of compensation and 2.0% of the remainder) aggregated through the
years of service. Estimated annual benefits payable upon retirement after
working to age 65 (including benefits payable under the predecessor pension plan
and the Benefit Equalization Plan) are, for Joelen K. Merkel, John C. Siegel,
William D. Siegel and Evan C Thompson, $315,147, $540,495, $666,477 and
$1,006,244, respectively. Herbert J. Siegel, who has reached age 65, is
currently receiving $79,874 per year from the predecessor pension plan and, as
of February 28, 1999, has accrued an additional annual benefit of $1,042,453
under the current pension plan, including the Benefit Equalization Plan.
Under the Executive Deferred Income Plan, Chris-Craft entered into an
agreement with each participating employee, whereby the employee agreed to defer
$1,000 per year of salary in each of four years, and Chris-Craft agreed to make
annual payments in specified amounts for 10 years in the event of the employee's
death or for 15 years commencing at age 60. The plan also provides supplemental
disability benefits of $10,000 per year from the onset of a disability until
annual payments commence at age 60 or death. Benefits under the plan do not
depend on compensation and are payable in full if the employee has accumulated
20 years of service, or is employed by Chris-Craft, when the condition for
payment occurs. Maximum annual benefits payable in the event of death of Mrs.
Merkel and Messrs. John C. Siegel, William D. Siegel and Thompson would be
$101,585, $109,677, $136,853 and $55,137, respectively, for 10 years. Annual
benefits payable to Mrs. Merkel and Messrs. John C. Siegel, William D. Siegel
and Thompson commencing at age 60 would be $76,798, $83,076, $103,305 and
$31,898, respectively, for 15 years, assuming full vesting of benefits. After an
employee has participated in the plan for four years, premiums for insurance on
his life are paid through policy loans involving no direct out-of-pocket cost to
Chris-Craft. Accordingly, since 1987, Chris-Craft has made no payment under the
plan with respect to the participation of any Chris-Craft executive officer,
other than for interest on policy loans and disability waiver premiums.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee"),
which is comprised of three directors who have never been employees of
Chris-Craft, is responsible for reviewing the recommendations of the Chief
Executive Officer ("CEO") and making recommendations to the Board of Directors
with respect to the salaries, bonuses, and other forms of compensation,
including stock option grants, of Chris-Craft's executive officers.
The Committee seeks to attract and retain executive officers of the highest
caliber and motivate them to maximize the success of Chris-Craft's businesses by
linking their compensation to performance. Each executive officer's cash
compensation consists of two components: base salary and annual bonus.
Base salary and bonus for the CEO and the Executive Vice President and
President, Television Division are fixed by their respective employment
agreements, as described under Executive Compensation.
The remaining executive officers are not directly responsible for the
operating results of particular businesses. Their salaries for 1998 were fixed
at the end of the prior fiscal year, based on subjective perceptions of salaries
paid by comparable companies for comparable positions, and their bonuses were
based on subjective assessments of the executive officers' success at fulfilling
the duties and responsibilities of their
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respective positions and the particular tasks assigned to them. The Committee
generally adopts the recommendations of the CEO, who bases his recommendations
on past salary levels and his perception of the quality of their respective
performances and attempts to match their salaries with his perception of
compensation levels at a small number of companies he considers comparable,
which companies operate in the entertainment industry, although not included in
the S&P Broadcast-500 Index. The CEO assesses executive officer performance in
terms of normal responsibilities, assumption of extra responsibilities, and
additional work related to special projects. No relative weight was assigned to
any of the foregoing factors. Specifically, the bonuses of executive officers
and option grants to them reflect their relative participation and performance,
as perceived by the CEO, in various matters, including analysis and planning
relating to government policies such as legislative and regulatory initiatives,
analysis and negotiation of business acquisitions, planning new business
ventures, and assumption of additional responsibilities.
Each of the employment agreements for the CEO and the Executive Vice
President provides that current compensation otherwise payable, but that would
not be deductible for federal income tax purposes under Section 162(m) of the
Code, will be credited to a deferred compensation account and paid to the
executive after his employment with Chris-Craft has terminated. Chris-Craft's
policy with respect to Section 162(m) of the Code for the other executive
officers is that their compensation should be fully deductible.
HOWARD ARVEY DAVID F. LINOWES NORMAN PERLMUTTER
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PERFORMANCE GRAPH
The following line graph compares cumulative total shareholder return for
Chris-Craft Common Stock, the Standard & Poor's ("S&P") 500 Stock Index and the
S&P Broadcast-500 index, assuming the investment of $100 in each in December
1993 and the monthly reinvestment of dividends. The performance shown on the
graph is not necessarily indicative of future performance.
CHRIS-CRAFT INDUSTRIES, INC.
[CHRIS-CRAFT CHART] TOTAL RETURN TO SHAREHOLDERS: 1993-1998
<TABLE>
<CAPTION>
CHRIS-CRAFT 'BRDCAST(TV,RADIO,CABLE)-
INDS 500' S&P 500 INDEX
<S> <C> <C> <C>
DEC-93 100.00 100.00 100.00
DEC-94 97.02 92.85 101.32
DEC-95 125.28 121.55 139.40
DEC-96 123.07 99.63 171.40
DEC-97 160.76 163.92 228.59
DEC-98 152.53 254.30 293.91
</TABLE>
Pursuant to SEC rules, the material under the captions Board Compensation
Committee Report on Executive Compensation and Performance Graph is not to be
deemed "soliciting material" nor "filed" with the SEC. It is specifically
excluded from any material incorporated by reference in Chris-Craft filings
under the Securities Act of 1933 or Securities Exchange Act of 1934, whether
such filings occur before or after the date of this proxy statement and
notwithstanding anything to the contrary set forth in any such filing.
COMPENSATION OF DIRECTORS
Each director who is not a Chris-Craft employee receives a retainer of
$35,000 per year plus $7,500 per year for service on each of the Audit,
Compensation, and Pension Committees. Pursuant to the 1994 Director Stock Option
Plan, on each annual meeting date, each such director is granted a five-year
option to purchase 5,000 shares of Chris-Craft Common Stock (as constituted when
the plan was adopted in 1994), at a price per share equal to the market price
per share on the date of grant.
Lawrence R. Barnett and James J. Rochlis, each a director and retired
Executive Vice President of Chris-Craft, served as consultants to Chris-Craft
during 1998, each for compensation of $75,000 annually, and are continuing, on a
year-to-year basis, to serve as consultants for the same compensation. Mr.
Rochlis received a $75,000 bonus for 1998. Messrs. Barnett and Rochlis are
consulted from time to time, as operating officers deem necessary, to obtain
their advice and the benefit of their experience with respect to those Chris-
Craft operations for which they were responsible during their years of service
as Executive Vice Presidents of Chris-Craft. Mr. Barnett consults respecting
films and other media entertainment for broadcast by Chris-Craft. Mr. Rochlis
consults with respect to Chris-Craft's Industrial Division and Chris-Craft
environmental
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matters. Chris-Craft also pays a portion of the premiums for health insurance
for these consultants, which totaled $6,098 for Mr. Barnett and $2,564 for Mr.
Rochlis in 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Lawrence R. Barnett and James J. Rochlis, each a director and retired
Executive Vice President of Chris-Craft, served as consultants to Chris-Craft
during 1998, as more fully described under Compensation of Directors.
Laurey J. Barnett, who is the daughter of Lawrence R. Barnett, a director
of Chris-Craft, continued during 1998 to serve UTV as Vice President and
Director of Programming. Her salary and bonus for 1998 aggregated $335,000; she
received a monthly automobile allowance of $800; and she participated in UTV
benefit plans on the same basis as other eligible employees. Ms. Barnett's
employment continues in the same capacity and on essentially the same terms,
except that her salary is $185,000.
A son of Lawrence R. Barnett, a director of Chris-Craft, is a principal of
the firm of Gipson Hoffman & Pancione, which performed legal services for
certain Chris-Craft subsidiaries during 1998 and is expected to perform similar
services during 1999.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Chris-Craft's directors and executive officers are required under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
beneficial ownership of Chris-Craft equity securities with the SEC. Copies of
those reports must also be furnished to Chris-Craft. Based solely on a review of
the copies of reports furnished to Chris-Craft and written representations that
no Forms 5 were required, Chris-Craft believes that during 1998 all filing
requirements applicable to directors and executive officers were timely complied
with.
1999 MANAGEMENT INCENTIVE PLAN
The Board of Directors has adopted the 1999 Management Incentive Plan (the
"1999 Plan"), subject to stockholder approval. The Board of Directors believes
that the 1999 Plan is desirable to attract and retain the best available talent
and to encourage the highest level of performance. Fewer than 11,000 shares
remain available for grant under the employee stock option plan most recently
adopted by stockholders, the 1994 Management Incentive Plan.
The 1999 Plan is set forth as Exhibit A to this Proxy Statement, and the
following description is qualified in its entirety by this reference thereto.
Under the 1999 Plan, options to purchase an aggregate of 2,500,000 shares
of Chris-Craft Common Stock, $.50 par value ("Common Stock"), may be granted
from time to time to employees, including officers and directors who are
employees, of Chris-Craft or of any subsidiary of Chris-Craft, who have been so
employed for at least one year at the end of the fiscal year ended immediately
prior to the grant of the option (provided that the Board of Directors may
authorize the grant of an option to an employee who has not served for such
period). The aggregate number of shares which may be subject to options granted
to any one employee within any period of three years shall not exceed 500,000
shares. Approximately 150 persons, including six executive officers, are
expected to be eligible to participate in the 1999 Plan.
The 1999 Plan is to be administered by a committee (the "Committee"),
appointed by the Board of Directors, which will consist of at least two
non-employee directors. The Committee is generally empowered to interpret the
1999 Plan, to prescribe rules and regulations relating thereto, to determine the
terms of option agreements, to amend them with the consent of the optionee, to
determine the employees to whom options are to be granted and to determine the
number of shares subject to each option granted.
The per share exercise price of each option is established by the Committee
and in each instance will not be less than the fair market value of a share of
the Common Stock on the date the option is granted (110% of fair market value on
the date of grant of an ISO, as defined below, if the optionee owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of Chris-Craft or any of its subsidiary
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corporations (a "10% Holder")). Upon exercise of an option, the optionee may pay
the purchase price with securities of Chris-Craft previously acquired by him, if
so permitted by the Committee or by the related option agreement.
Options will be exercisable for a term determined by the Committee, which
term will not be greater than ten years from the date of grant (five years for
ISOs granted to a 10% Holder). Generally, an option will become exercisable as
to one-third of the number of the shares covered thereby cumulatively upon each
anniversary of the date of the grant. Except in the event of certain
terminations of employment or death or permanent and total disability, no option
may be exercised unless the holder thereof is then an employee of Chris-Craft or
any subsidiary corporation. Options will not be transferable other than by will
or the laws of descent and distribution and may be exercised during the
optionee's lifetime only by the optionee or his guardian or legal
representative.
Options granted pursuant to the 1999 Plan may be designated as incentive
stock options ("ISOs") with the attendant tax benefits provided under Sections
421 and 422 of the Internal Revenue Code of 1986 (the "Code"). The 1999 Plan
provides that the aggregate fair market value (determined at the time an ISO is
granted) of the Common Stock subject to ISOs exercisable for the first time by
an employee during any calendar year (under all plans of Chris-Craft and any
subsidiary corporation) may not exceed $100,000.
Stock appreciation rights ("SARs") may also be awarded to holders of
options granted under the 1999 Plan at any time prior to the exercise in full of
the related options and on the same terms and conditions. A SAR permits a holder
of a related option to surrender the option with respect to all or any part of
the shares covered thereby and to receive from Chris-Craft in exchange therefor
a payment having an aggregate value equal to the Right Value of one share
multiplied by the number of shares as to which the related option is
surrendered. Payment may be made in the form of cash or Common Stock, in the
discretion of the Committee. The Right Value of a share is the greater of (A)
the amount by which the fair market value of one share when the SAR is exercised
exceeds the option price per share and (B) the amount by which the book value of
one share when the SAR is exercised exceeds the book value of one share when the
related option was granted, except that if the related option is an ISO, the
Right Value is determined only pursuant to clause (A). Each SAR is exercisable
for the same term and terminates under the same conditions as the related
option.
An option shall expire three months after termination of employment, unless
extended by the Committee, in its sole discretion and at the employee's request,
prior to the end of such three-month period, and except that a non-ISO option
held by an employee who continues to serve Chris-Craft as a consultant will
continue in effect, but, in either case, not beyond the date that the option
would have, by its terms, expired. An option shall nonetheless terminate
immediately upon termination of employment by Chris-Craft for cause or
voluntarily by the employee without Chris-Craft's consent.
The number of shares subject to option and the exercise price of options
are subject to adjustment or cash settlement in the event of changes in the
outstanding Common Stock by reason of stock dividends, recapitalizations,
mergers, and similar events or a change in control of Chris-Craft.
The Board of Directors may suspend, terminate, modify or amend the 1999
Plan, provided, however, that (except for adjustments by reason of stock
dividends, recapitalizations, mergers and similar events) any increase in the
aggregate number of shares issuable upon the exercise of options, any reduction
in the purchase price of the Common Stock covered by any option, any extension
of the period during which options may be granted or increase in the maximum
term of options, and any material modification in the requirements as to
eligibility for participation in the 1999 Plan shall be subject to the approval
of stockholders. No suspension, termination, modification or amendment of the
1999 Plan may adversely affect an optionee's rights under an option theretofore
granted without the consent of the optionee.
The 1999 Plan also authorizes the Board of Directors to cause Chris-Craft
or any subsidiary to give or arrange for financing, including direct loans,
secured or unsecured, or guaranties of loans by banks, which guaranties may be
secured in whole or in part by assets of Chris-Craft or any subsidiary
corporation, to any eligible participant in the 1999 Plan who shall have been
employed by Chris-Craft or any subsidiary for at least two years at the end of
the fiscal year ending immediately prior to arranging such financing, but the
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Board of Directors may in any specific case authorize financing for an employee
who has not served for such period. Such financing shall be for the purpose of
providing funds for the purchase by such person of Common Stock pursuant to the
exercise of an option, for payment of taxes incurred in connection therewith, or
otherwise to purchase or carry a stock investment in Chris-Craft. The maximum
amount of loans made and liabilities for guaranties incurred by Chris-Craft in
connection with all such financing outstanding at any time will not exceed
$5,000,000. Each loan will bear interest. Each recipient of financing will be
personally liable for the full amount of all financing extended to him. If
authorized, such financing will be administered by a special committee of the
Board consisting of not less than two directors, each of whom shall be a non-
employee director.
No option may be granted under the 1999 Plan or financing given or arranged
after March 22, 2009, provided that financing given or arranged prior thereto
may remain outstanding in accordance with such terms and conditions as may have
been established by the Board of Directors or the committee administering such
financing under the 1999 Plan.
On March 19, 1999, the closing sale price of the Common Stock, as reported
in the consolidated transaction reporting system, was $45.875 per share.
TAX CONSEQUENCES
Chris-Craft has been advised as follows regarding the federal income tax
consequences with respect to stock options, ISOs, SARs and payment in stock of
the exercise price of options under the 1999 Plan.
Optionees will not be taxed upon the grant of an option or a SAR. Except as
noted below, at the time of exercise of an option other than an ISO, the
optionee generally will recognize ordinary income in an amount equal to the
excess of the fair market value of the shares over the option price, and
Chris-Craft generally will be entitled to a deduction in the same amount. The
shares acquired pursuant to the exercise of an option other than an ISO will
have a basis to the optionee equal to their fair market value on, and a holding
period measured from, the date of exercise.
At the time of exercise of an ISO, the optionee will recognize no income,
and Chris-Craft will not be entitled to any deduction; the optionee, however,
will generally have an item of adjustment to income, for purposes of calculating
the alternative minimum tax, equal to the excess of fair market value of the
shares at such time over the option price. Upon exercise of a SAR, the optionee
will be taxed at ordinary income rates on the amount of cash received or the
fair market value of shares acquired, and Chris-Craft generally will be entitled
to a deduction in the same amount.
Upon the sale of a share acquired pursuant to the exercise of an option
other than an ISO, any gain or loss will result in a capital gain or loss
measured by the difference between the optionee's basis and the amount realized
on such sale, provided the share sold is a capital asset in the hands of the
holder. Upon the sale of a share acquired pursuant to the exercise of an ISO,
any gain or loss will result in a capital gain or loss measured by the
difference between the amount realized on such sale and the exercise price,
provided the share sold is a capital asset in the hands of the holder. Such
capital gain or loss will be long term gain or loss if at the time of sale the
optionee held the share at least one year after its issuance to him following
exercise and at least two years since the grant of the option. In the case of a
disposition of a share having a shorter holding period (a "Premature
Disposition"), a portion (or all) of such gain will be taxed at ordinary income
rates to the extent of the lesser of (a) the excess of the fair market value of
the share at the time of exercise over the option price and (b) the gain on the
sale, and Chris-Craft will be entitled to a deduction in the same amount. Any
excess of the amount realized over the fair market value of the share at the
time of exercise will be short-term capital gain.
If the optionee uses previously acquired shares of Common Stock to pay the
exercise price of a stock option, the optionee will not ordinarily recognize
taxable income to the extent that the number of new shares of Common Stock
received does not exceed the number of previously acquired shares so used. If
non-recognition treatment applies to the payment for option shares with
previously acquired shares, the tax basis and holding period of shares received
without recognition of taxable income will be determined by reference to
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the shares surrendered as payment. If a greater number of shares of Common Stock
is received upon exercise than the number of shares surrendered in payment of
the option price, where an ISO is being exercised, such excess shares will have
a zero basis in the hands of the holder; where an option other than an ISO is
being exercised, the optionee will be required to include in gross income (and
Chris-Craft will be entitled to deduct) an amount equal to the fair market value
of the additional shares on the date the option is exercised less any cash paid
for the shares, and the holding period will be measured from the exercise date.
Moreover, if stock previously acquired by exercise of an ISO is transferred
in connection with the exercise of another ISO, and if, at the time of such
transfer, the stock so transferred has not been held for the holding period
required in order to receive favorable treatment under the ISO rules (i.e., the
stock is "Immature ISO Shares"), then such transfer will be treated as a
Premature Disposition. Accordingly, with respect to the shares so transferred,
the optionee will recognize ordinary income under the rules governing Premature
Disposition discussed earlier in this section. However, the shares so acquired
upon exercise of the ISO can still qualify for ISO treatment, if all of the
other ISO requirements are fulfilled. By contrast, if Immature ISO Shares are
transferred in connection with the exercise of an option other than an ISO, the
transfer is not treated as a Premature Disposition. Instead, the number of
shares issued upon exercise of the option equal to the number of delivered
Immature ISO Shares retain the status of Immature ISO Shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE 1999
MANAGEMENT INCENTIVE PLAN.
RATIFICATION OF SELECTION OF AUDITORS
The stockholders are to take action upon ratification of the selection of
PricewaterhouseCoopers as auditors of Chris-Craft for its fiscal year ending
December 31, 1999. Representatives of PricewaterhouseCoopers are expected to be
present at the meeting and will have the opportunity to make a statement if they
desire to do so and be available to respond to appropriate questions.
PricewaterhouseCoopers was the independent accountant for Chris-Craft for its
fiscal year ended December 31, 1998. If the selection of PricewaterhouseCoopers
is not ratified, or prior to the next annual meeting of stockholders such firm
shall decline to act or otherwise become incapable of acting, or if its
engagement shall be otherwise discontinued by the Board of Directors, the Board
of Directors will appoint other independent accountants whose selection for any
period subsequent to the next annual meeting will be presented for stockholder
approval at such meeting.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals intended for inclusion in the proxy statement for the
next annual meeting must be received by Chris-Craft at its principal executive
offices by November 30, 1999. The persons named on the form of proxy to be sent
in connection with the solicitation of proxies on behalf of Chris-Craft's Board
of Directors for Chris-Craft's 2000 annual meeting of stockholders will vote in
their own discretion on any matter as to which Chris-Craft shall not have
received notice by February 15, 2000.
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GENERAL
CHRIS-CRAFT'S 1998 FORM 10-K ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION, EXCLUSIVE OF EXHIBITS, WILL BE MAILED WITHOUT CHARGE TO ANY
STOCKHOLDER ENTITLED TO VOTE AT THE MEETING, UPON WRITTEN REQUEST TO BRIAN C.
KELLY, SECRETARY, CHRIS-CRAFT INDUSTRIES, INC., 767 FIFTH AVENUE, NEW YORK, NEW
YORK 10153.
Chris-Craft will bear the entire cost of preparing, assembling, printing
and mailing this Proxy Statement, the accompanying proxy and any additional
material which may be furnished to stockholders. Solicitation material will be
furnished to brokers, fiduciaries and custodians to forward to beneficial owners
of stock held in their names, and Chris-Craft will reimburse these organizations
in accordance with the New York Stock Exchange schedule of charges for the cost
of forwarding proxy material to such beneficial owners. The solicitation of
proxies may also be made by the use of the mails and through direct
communication with certain stockholders or their representatives by officers,
directors or employees of Chris-Craft, who will receive no additional
compensation therefor. Chris-Craft has engaged Georgeson & Company Inc. to
solicit proxies and distribute materials to brokers, banks, custodians and other
nominee holders and will pay approximately $8,000 for these services, in
addition to reimbursement of certain expenses.
By Order of the Board of Directors,
BRIAN C. KELLY, Secretary
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<PAGE> 22
EXHIBIT A
CHRIS-CRAFT INDUSTRIES, INC.
1999 MANAGEMENT INCENTIVE PLAN
1. PURPOSE OF THE 1999 PLAN.
Chris-Craft Industries, Inc. (the "Corporation") desires to attract and
retain the best available talent and to encourage the highest level of
performance. The 1999 Management Incentive Plan (the "1999 Plan") is intended to
contribute significantly to the attainment of these objectives, by affording
eligible employees of the Corporation or any of its parent or subsidiary
corporations the opportunity to acquire and to increase their proprietary
interests in the Corporation and by providing incentives for such employees to
put forth maximum efforts for the success of the business.
2. SCOPE AND DURATION OF THE 1999 PLAN.
Under the 1999 Plan, options ("Options") to purchase Common Stock of the
Corporation, par value $.50 per share ("Common Stock"), and stock appreciation
rights ("Rights"), may be granted. Rights may be granted only in association
with Options. Options may, at the time of grant, also be designated as incentive
stock options ("ISOs") with the attendant tax benefits provided under Sections
421 and 422 of the Internal Revenue Code of 1986 (the "Code"). The aggregate
fair market value (determined at the time an ISO is granted) of the Common Stock
covered by ISOs exercisable for the first time by an employee during any
calendar year (under all plans of the Corporation and any parent corporation or
any of its subsidiary corporations), may not exceed $100,000.
The aggregate number of shares of Common Stock reserved for grant from time
to time under the 1999 Plan is 2,500,000, which shares may be authorized but
unissued shares or shares which shall have been or which may be reacquired by
the Corporation. The aggregate number of shares which may be subject to Options
granted to any one employee within any period of three years under the 1999 Plan
shall not exceed 500,000 shares. Such aggregate numbers shall be subject to
adjustment as provided in paragraph 12. If an Option shall expire or terminate
for any reason without having been exercised in full or surrendered in full in
connection with the exercise of a Right, the shares represented by the portion
thereof not so exercised or surrendered shall (unless the 1999 Plan shall have
been terminated) become available for other Options to be granted under the 1999
Plan. The 1999 Plan shall become effective upon approval by the stockholders of
the Corporation as provided in paragraph 13. No Option or Right shall be granted
under the 1999 Plan after March 22, 2009. The grant of an Option or a Right is
sometimes referred to herein as an award thereof.
3. ADMINISTRATION OF THE 1999 PLAN.
The Board of Directors shall appoint a 1999 Plan Committee (the
"Committee") to administer the 1999 Plan, except as otherwise specifically
provided in the 1999 Plan. The Committee shall consist of not less than two
members of the Board of Directors who are Non-Employee Directors (as hereinafter
defined). The Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee.
The Committee shall have plenary authority in its discretion, subject to
and not inconsistent with the express provisions of the 1999 Plan, to direct the
grant of Options, to determine the number of shares and purchase price of the
Common Stock covered by each Option, the employees to whom, and the time or
times at which, Options shall be granted and may be exercised; to designate
Options as ISOs; to direct the grant of Rights in connection with any Option; to
interpret the 1999 Plan; to prescribe, amend, and rescind rules and regulations
relating to the 1999 Plan, including, without limitation, such rules and
regulations as it shall deem advisable so that transactions involving Options or
Rights may qualify for exemption under such rules and regulations as the
Securities and Exchange Commission may promulgate from time to time exempting
transactions from Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"); to determine the terms and provisions of and to cause the
Corporation to enter into agreements with employees in
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connection with awards made under the 1999 Plan ("Agreements"), which Agreements
may vary from one another as the Committee shall deem appropriate; to amend any
such Agreements from time to time, with the consent of the optionee; and to make
all other determinations it may deem necessary or advisable for the
administration of the 1999 Plan. Any interpretation or determination made by the
Committee pursuant to the foregoing shall be conclusive and binding upon any
person having or claiming any interest under the 1999 Plan.
The Committee shall hold its meetings at such times and places as it shall
deem advisable. Members may participate in meetings through conference telephone
or similar arrangements. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held. The Committee may appoint
a secretary, shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable. The
Committee may delegate to one or more of its members or to one or more agents
such administrative duties as the Committee may deem advisable and may employ
(or authorize any person to whom it has delegated duties as aforesaid to employ)
one or more persons to render advice with respect to any responsibility the
Committee (or such person) may have under the 1999 Plan.
4. ELIGIBILITY: FACTORS TO BE CONSIDERED IN GRANTING AWARDS.
Options may be granted only to employees (including officers and directors
who are employees) of the Corporation or of any parent or subsidiary corporation
who shall have been so employed for a period of at least one year at the end of
the fiscal year ended immediately prior to the grant; provided that the Board of
Directors may, in any specific case, authorize an award to an employee who shall
not have served for such a period. In determining the persons to whom awards
shall be made and the number of shares to be covered by each option, the
Committee shall take into account the duties of the respective persons, their
present and potential contributions to the success of the Corporation or any
parent or subsidiary corporation, the anticipated number of years of effective
service remaining, and such other factors as the Committee, in its discretion,
shall deem relevant in connection with accomplishing the purposes of the 1999
Plan. No person shall be eligible for an Option grant if he shall have filed
with the Secretary of the Corporation an instrument waiving such eligibility;
provided that any such waiver may be revoked by filing with the Secretary of the
Corporation an instrument of revocation, which revocation will be deemed
effective upon such filing. Subject to the provisions of paragraph 2, more than
one award under the 1999 Plan may be made to any employee.
5. OPTION PRICE.
The purchase price per share of the Common Stock covered by each Option
shall be established by the Committee, but in no event shall it be less than the
fair market value (as hereinafter defined) of a share of Common Stock on the
date the Option is granted.
In the case of an individual who at the time the Option is granted owns
stock possessing more than 10% of the total combined voting power of all classes
of the stock of the Corporation or of its parent or a subsidiary corporation (a
"10% Holder"), the purchase price of the Common Stock covered by any ISO shall
in no event be less than 110% of the fair market value of the Common Stock on
the date the ISO is granted.
6. TERM OF OPTIONS.
The term of each Option shall be fixed by the Committee, but in no event
shall it be more than 10 years from the date of grant, subject to earlier
termination as provided in paragraph 10. The term of an ISO granted to a 10%
Holder shall be no more than 5 years from the date of grant. The term of any
Option may be extended from time to time by the Committee, provided that no such
extension shall extend the term beyond 10 years from the date of grant.
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7. EXERCISE OF OPTIONS.
(a) Subject to the provisions of the 1999 Plan, an Option granted under the
1999 Plan shall become fully exercisable on the third anniversary of the date of
grant. Prior thereto, each Option shall become exercisable as to one-third of
the number of shares originally covered thereby upon the first anniversary of
the date of the grant of the Option; and as to an additional one-third upon the
second anniversary of the date of the grant of the Option. Such installments
shall be cumulative. Notwithstanding the foregoing, at any time subsequent to
the first anniversary of the date of grant, the Committee may declare any Option
immediately and fully exercisable, and Options shall automatically become fully
exercisable upon the normal retirement of an optionee as provided in paragraph
10. Except as provided in paragraphs 10 or 11, no Option may be exercised unless
the optionee has remained an employee of the Corporation or any parent or
subsidiary corporation (or any combination thereof) continuously from the date
of grant.
(b) An Option may be exercised as to any or all full shares as to which the
Option is then exercisable; provided that an Option may not be exercised as to
fewer than 100 shares (or less than all the shares as to which the Option is
then exercisable, if fewer than 100 shares).
(c) The purchase price of the shares as to which an Option is exercised
shall be paid in full in cash at the time of exercise; provided that, if
permitted by the related Agreement or by the Committee, the purchase price may
be paid, in whole or in part, by surrender or delivery to the Corporation of
securities of the Corporation having a fair market value on the date of exercise
equal to the portion of the purchase price being so paid. In addition, the
optionee shall, upon notification of the amount due and prior to or concurrently
with delivery to the optionee of a certificate representing such shares, pay
promptly any amount necessary to satisfy applicable federal, state or local tax
requirements.
(d) No person shall have the rights of a stockholder with respect to shares
covered by an Option until such person becomes the holder of record of such
shares.
8. AWARD AND EXERCISE OF RIGHTS.
(a) A Right may be awarded by the Committee in association with any Option
either at the time such Option is granted or at any time prior to the exercise
in full, termination, or expiration of such Option. Each such Right shall be
subject to the same terms and conditions as the related Option and shall be
exercisable only to the extent such Option is exercisable, and the Right Value,
as hereinafter defined, is a positive amount.
(b) A Right shall entitle the optionee to surrender to the Corporation
unexercised the related Option (or any portion or portions thereof which the
optionee from time to time shall determine to surrender for this purpose) and to
receive in exchange therefor, subject to the provisions of the 1999 Plan and
such rules and regulations as from time to time may be established by the
Committee, a payment having an aggregate value equal to the product of (A) the
Right Value of one share, as hereinafter defined, and (B) the number of shares
covered by the Option, or portion thereof, that is surrendered. For purposes of
the 1999 Plan, the Right Value of one share shall be the greater of (x) the
excess of (i) the fair market value of one share on the date on which the Right
is exercised, over (ii) the option price per share of the surrendered Option, or
(y) the excess of (i) the book value of one share as of the last day of the
fiscal quarter of the Corporation ended immediately prior to the date on which
the Right is exercised, over (ii) the book value of one share as of the last day
of the fiscal quarter of the Corporation ended immediately prior to the date of
the grant of the surrendered Option, except that if the surrendered Option is an
ISO, the Right Value shall be determined only pursuant to (x). For purposes of
the 1999 Plan, the book value of one share shall be determined by dividing the
Shareholders' Investment as of the relevant date (after eliminating such portion
of such Shareholders' Investment as the Committee shall determine to be
applicable to securities of the Corporation other than Common Stock) by the
number of shares issued and outstanding at such date. The Committee may also
make such adjustments to Shareholders Investment as the Committee, in its sole
discretion, shall consider appropriate, in view of the purpose of the 1999 Plan,
to reflect any unusual or non-recurring transaction or any extraordinary income
or expense item. The date on which the Committee or the Corporation shall
receive notice from the optionee of the exercise of a Right shall be considered
the date on which the Right is exercised.
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Upon exercise of a Right, an optionee shall indicate to the Committee what
portion of the payment he desires to receive in cash and what portion in shares
of Common Stock of the Corporation; provided, that the Committee shall have sole
discretion to determine in any case or cases that payment will be made in the
form of all cash, all shares, or any combination thereof. If the optionee is to
receive a portion of such payment in shares, the number of shares shall be
determined by dividing the amount of such portion by the fair market value of
one share on the date on which the Right is exercised. The number of shares that
may be received pursuant to the exercise of a Right may not exceed the number of
shares covered by the related Option, or portion thereof, that is surrendered.
No fractional share will be issued, but instead cash will be paid for any
fractional share.
No payment will be required from the optionee upon exercise of a Right,
except that the optionee shall, upon notification of the amount due and prior to
or concurrently with delivery to the optionee of cash or a certificate
representing shares, pay promptly any amount necessary to satisfy applicable
federal, state or local tax requirements, and the Corporation shall have the
right to deduct from any payment any taxes required by law to be withheld by the
Corporation with respect to such payment.
(c) Upon exercise of a Right, the number of shares subject to exercise
under the related Option shall be reduced automatically by the number of shares
represented by the Option, or portion thereof, that is surrendered. Shares
subject to Options, or portions thereof, that are surrendered in connection with
the exercise of Rights shall not be available for subsequent Option grants under
the 1999 Plan.
(d) Whether payments upon exercise of Rights are made in cash, shares or a
combination thereof, the Committee shall have discretion as to the timing of the
payments, including whether payment shall be made in a lump sum or in
installments, but payment may not be deferred beyond the first business day of
the fifteenth calendar month next following the month of exercise of a Right.
Deferred payments may bear interest at a rate determined by the Committee. The
Committee may make such other further provisions and adopt such rules and
regulations as it shall deem appropriate, not inconsistent with the 1999 Plan,
related to the timing of the exercise of a Right and the determination of the
form and timing of payment to the optionee upon such exercise.
9. NON-TRANSFERABILITY OF OPTIONS AND RIGHTS.
Options and Rights granted under the 1999 Plan shall not be transferable,
other than by will or the laws of descent and distribution, and Options and
Rights may be exercised, during the lifetime of the optionee, only by the
optionee, or by his guardian or legal representative.
10. TERMINATION OF RELATIONSHIP TO THE CORPORATION.
(a) In the event that any optionee shall cease to be an employee of the
Corporation and of any parent or subsidiary corporation, other than by reason of
death or permanent and total disability, any Option held by such optionee may be
exercised (to the extent that the optionee was entitled to exercise such Option
at the termination of such employment) at any time within three months after
such termination, or such later date as the Committee, in its sole discretion
shall determine at the employee's request prior to the end of such three-month
period, but, in either case, not later than the date on which the Option, by its
terms, otherwise would have expired; provided, however, that any Option held by
an employee whose employment shall be terminated either (A) by the Corporation
for cause or (B) voluntarily by the employee and without the consent of the
Corporation or any parent or subsidiary corporation (which consent shall be
presumed in the case of normal retirement), shall, to the extent not theretofore
exercised, forthwith terminate. Notwithstanding the provisions of paragraph 7
specifying the installments in which an Option shall be exercisable, upon an
optionee's actual retirement at any time subsequent to the first anniversary of
the grant of the Option, the Option shall be exercisable (within the time
periods set forth in this paragraph 10(a)) as to all shares of Common Stock
remaining subject to the Option; provided, however, such acceleration shall not
be applicable if the optionee retires prior to his normal retirement date and
without the consent of the Corporation.
(b) Awards made under the 1999 Plan shall not be affected by any change of
duties or position so long as the optionee continues to be an employee of the
Corporation, or any parent or subsidiary corporation.
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(c) Any Agreement may contain such provisions as the Committee shall
approve with reference to the determination of the date employment terminates
for purposes of the 1999 Plan and the effect of leaves of absence, which
provisions may vary from one another. Without limiting the foregoing, any
Agreement may provide, for purposes of paragraphs 7(a), 10 and 11, that, with
respect to the award of non-ISO Options to which the Agreement relates, the
optionee's employment shall be deemed not to terminate upon, and such optionee
shall be deemed to continue to be employed until, the termination of the
optionee's engagement as a consultant, if such engagement commences within three
months after the optionee ceases to be an employee.
(d) Nothing in the 1999 Plan or in any award made pursuant to the 1999 Plan
shall confer upon any employee any right to continue in the employ of the
Corporation or any parent or subsidiary corporation or affect the right of the
Corporation or such parent or subsidiary corporation to terminate his employment
at any time.
11. DEATH OR DISABILITY OF OPTIONEE.
If an optionee shall become permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code or die, while he is employed by the
Corporation or any parent or any subsidiary corporation, or within three months
after the termination of his employment (other than termination for cause or
voluntarily on the part of the optionee and without the consent of the
Corporation or such parent or subsidiary corporation), any Option owned by such
optionee may be exercised, as set forth in the related Agreement, by the
guardian or legal representative or the optionee's estate or transferee by will
or laws of descent and distribution, within nine months after the earlier of the
death or commencement of permanent and total disability of the optionee, or such
later date as the Committee, in its sole discretion shall determine at the
request of such guardian, legal representative, estate, or transferee prior to
the end of such nine-month period, but in either case, not later than the date
on which the Option, by its terms, otherwise would have expired.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
Notwithstanding any other provision of the 1999 Plan, each Agreement may
contain such provisions as the Committee shall determine to be appropriate for
the adjustment of the number and class of shares covered by such Option, the
exercise prices and the number of shares as to which Options shall be
exercisable at any time, and appropriate changes in Rights related to such
Options, in the event of changes in the outstanding Common Stock of the
Corporation by reason of stock dividends, split-ups, reverse splits,
recapitalizations, spin-offs, reorganizations, liquidations and the like. In the
event of any such change in the outstanding Common Stock of the Corporation, the
aggregate number of shares as to which Options may be granted under the 1999
Plan and to any employee shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. No adjustment shall be made in the
requirements set forth in paragraph 7(b) with respect to the minimum number of
shares that must be purchased upon any exercise.
Immediately prior to the occurrence of a dissolution, liquidation, merger
or consolidation of the Corporation, sale of all or substantially all of the
assets of the Corporation or change in control of the Corporation (collectively,
a "Change Event"), as a result of which the outstanding Common Stock shall
become convertible into or exchangeable for any other security or property
(other than cash), if the Committee shall so determine, each outstanding Option
shall automatically be converted into the right to purchase, on substantially
the same terms as otherwise set forth in the related Agreement, the amount of
such other security or property as a number of shares of Common Stock equal to
the number of shares of Common Stock subject to such Option immediately prior to
the operation of this sentence ("Option Shares") shall become convertible or for
which such number of shares of Common Stock shall become exchangeable, at a
purchase price per unit of such other security or property bearing the same
ratio to the purchase price of one Option Share as the number of Option Shares
shall bear to the number of units of such other security for which the Option
shall, by operation of this sentence, become exercisable (subject, in the case
of an ISO, to such further adjustment as may be appropriate to preserve the ISO
status of the ISO). In the event that a Change Event to which the preceding
sentence shall not apply shall have occurred or is about to occur, or in the
event a Change Event applicable to a subsidiary corporation of the Corporation
shall have occurred or is about to occur, then, if the Committee shall so
determine, each Option outstanding under the 1999 Plan, if
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such Change Event shall apply to the Corporation, or each Option held by any
employee of such subsidiary corporation, shall be terminated upon the occurrence
of such Change Event, and the Corporation shall pay to each holder of such
terminated Option an amount equal to the Right Value of one share as of the
close of business on the trading day immediately preceding the date of
occurrence of such Change Event multiplied by the number of shares of Common
Stock subject to such Option immediately prior to its termination.
For purposes of the 1999 Plan, the term "change in control" means an event
or series of events that would be required to be described as a change in
control of the Corporation in a proxy or information statement pursuant to
Schedule 14A or 14C promulgated under the Exchange Act. The determination
whether and when a change in control has occurred or is about to occur shall be
made by vote of a majority of the persons who shall have constituted the
Committee immediately prior to the occurrence of the event or series of events
constituting such change in control.
13. EFFECTIVENESS OF THE 1999 PLAN.
The 1999 Plan shall become effective upon the approval thereof by a
majority of the votes properly cast thereon at a meeting of stockholders of the
Corporation duly called and held. The Committee thereafter may, in its
discretion, make awards under the 1999 Plan, the exercise of which shall be
expressly subject to the conditions that, at the time of exercise, (i) the
shares of Common Stock reserved for purposes of the 1999 Plan shall be duly
listed, upon official notice of issuance, upon the New York Stock Exchange, if
shares of Common Stock are then so listed, and (ii) a Registration Statement
under the Securities Act of 1933 (the "Securities Act") with respect to such
shares shall be effective, or other provision satisfactory to the Committee
shall have been made so that such shares may be issued without violation of the
Securities Act.
14. TERMINATION AND AMENDMENT OF THE 1999 PLAN.
The Board of Directors of the Corporation may, at any time prior to the
termination of the 1999 Plan, suspend, terminate, modify or amend the 1999 Plan;
provided that any increase in the aggregate number of shares reserved for
issuance upon the exercise of Options, any increase in the maximum number of
shares for which Options may be granted to any employee during any period, any
reduction in the purchase price of the Common Stock covered by any Option, any
extension of the period during which Options may be granted or increase beyond
ten years in the maximum term of Options, any change in the formula for
determining the amount payable upon exercise of a Right, or any material
modification in the eligibility requirements for participation in the 1999 Plan,
shall be subject to the approval of stockholders in the manner provided in
paragraph 13, except that any such increase, reduction, or change that may
result from any adjustment authorized by paragraph 12 or any modification or
amendment based on any amendment of the Exchange Act, the Code or change in any
regulation promulgated thereunder (to the extent permitted by the Exchange Act,
the Code, the Securities and Exchange Commission or the Internal Revenue
Service) shall not require such approval. No suspension, termination,
modification or amendment of the 1999 Plan may, without the consent of the
holder of an outstanding option, adversely affect the rights of such holder.
15. FINANCING FOR INVESTMENT IN STOCK OF THE CORPORATION.
Until March 22, 2009, the Board of Directors may cause the Corporation or
any subsidiary to give or arrange for financing, including direct loans, secured
or unsecured, or guaranties of loans by banks, which guaranties may be secured
in whole or in part by assets of the Corporation or any subsidiary, to any
employee of the Corporation or any parent corporation or any subsidiary
corporation who shall have been so employed for a period of at least two years
at the end of the fiscal year ended immediately prior to the arranging of such
financing; but the Board of Directors may, in any specific case, authorize
financing for an employee who shall not have served for such period. Such
financing shall be for the purpose of providing funds for any one or more of:
the purchase by the employee of shares pursuant to the exercise of an Option;
the payment of taxes incurred in connection with such exercise; or otherwise
purchasing or carrying a stock investment in the Corporation. The maximum amount
of financing given and liability incurred by the Corporation and its
subsidiaries in connection with all such financing at any time outstanding shall
not exceed $5,000,000. Such financing shall bear interest at a rate not less
than the lowest rate that avoids imputation of interest at a higher
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rate under the Code. Each recipient of such financing shall be personally liable
for the full amount of all financing extended to him. Such financing shall be
based upon the judgment of the Board of Directors that such financing may
reasonably be expected to benefit the Corporation, and that such financing as
may be granted shall be consistent with the Certificate of Incorporation and
By-Laws of the Corporation or such subsidiary, and applicable laws.
If any such financing is authorized by the Board of Directors, such
financing shall be administered by a special committee of the Board to be
denominated the Stock Investment Financing Committee. Such Committee shall
consist of not less than two directors, each of whom shall be a Non-Employee
Director.
16. SEVERABILITY.
In the event that any one or more provisions of the 1999 Plan or any
Agreement, or any action taken pursuant to the 1999 Plan or such Agreement,
should, for any reason, be unenforceable or invalid in any respect under the
laws of the United States, any state of the United States or any other
government, such unenforceability or invalidity shall not affect any other
provision of the 1999 Plan or of such or any other Agreement, but in such
particular jurisdiction and instance the 1999 Plan, and the affected Agreement
shall be construed as if such unenforceable or invalid provision had not been
contained therein or if the action in question had not been taken thereunder.
17. EFFECT ON PRIOR OPTION PLANS.
The adoption of the 1999 Plan shall have no effect on outstanding options
previously granted by the Corporation.
18. CERTAIN DEFINITIONS.
(a) The term "parent corporation" and "subsidiary corporation" shall have
the meanings, with respect to the corporation, set forth in Sections 424(e) and
(f) of the Code, respectively.
(b) The term "Non-Employee Director" shall mean a director who is both a
"Non-Employee Director" within the meaning of paragraph (b)(3)(i) of Rule 16b-3
promulgated under the Exchange Act and an "outside director" within the meaning
of Code Section 162(m).
(c) The term "fair market value" of a share of Common Stock shall mean as
of the date on which such fair market value is to be determined the closing
price of a share of Common Stock as reported in The Wall Street Journal (or a
publication deemed equivalent to The Wall Street Journal for such purpose by the
Committee) for the national securities exchanges and other securities markets
which at the time are included in the stock price quotations of such
publication. In the event that the Committee shall determine such stock price
quotation is not representative of fair market value, the Committee may
determine fair market value in such a manner as it shall deem appropriate under
the circumstances.
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CHRIS-CRAFT INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
BRIAN C. KELLY, JAMES J. ROCHLIS and WILLIAM D. SIEGEL, and each of them,
each with full power of substitution, hereby are authorized to vote, by a
P majority of those or their substitutes present and acting at the meeting
R or, if only one shall be present and acting, then that one, all of the
O shares of Chris-Craft Industries, Inc. that the undersigned would be
X entitled, if personally present, to vote at its 1999 annual meeting of
Y stockholders and at any adjournment thereof, upon such business as may
properly come before the meeting, including the items set forth on the
reverse side and in the notice of annual meeting and the proxy statement.
ELECTION OF DIRECTORS, NOMINEES: CHANGE OF ADDRESS:
---------------------------
JEANNE J. KIRKPATRICK, NORMAN PERLMUTTER,
---------------------------
WILLIAM D. SIEGEL, EVAN C. THOMPSON
---------------------------
PLEASE COMPLETE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY.
SEE REVERSE
SIDE
<PAGE> 30
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
Unless otherwise specified, this proxy will be voted FOR Proposals 1, 2 and 3.
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
FOR ALL AUTHORITY WITHHELD
NOMINEES AS TO ALL NOMINEES
1. Election of
Directors (see
other side). [ ] [ ]
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Adoption of the
1999 Management
Incentive Plan. [ ] [ ] [ ]
3. Selection of
PricewaterhouseCoopers
LLP as auditors. [ ] [ ] [ ]
Mark here for Address Change and note on reverse. [ ]
Mark here if you plan to attend the annual meeting. [ ]
NOTE: Please sign exactly as your name appears hereon. If the named holder is a
corporation, partnership or other association, please sign its name and add your
name and title. When signing as attorney, executor, administrator, trustee or
guardian, please also give your full title. If shares are held jointly, EACH
holder should sign.
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SIGNATURE(S) DATE
