<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934, as amended (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] 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 Section 240.14a-11(c) or Section 240.14a-12
BRC HOLDINGS, 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):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: *
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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* Set forth amount on which the filing is calculated and state how it was
determined
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD APPEARS HERE]
April 11, 1997
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of BRC
Holdings, Inc. to be held in Salons I & II of the Sheraton Suites Market Center
Hotel, 2101 Stemmons Freeway, Dallas, TX 75207 on May 15, 1997, at 9:00 a.m.
It is important that your shares be represented at the meeting whether or not
you personally attend, and I urge you to sign, date and return the enclosed
proxy at your earliest convenience.
Yours very truly,
LOGO
Perry E. Esping
Chairman and Chief Executive Officer
<PAGE>
BRC HOLDINGS, INC.
1111 W. MOCKINGBIRD LANE, SUITE 1400
DALLAS, TEXAS 75247
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1997
To the Stockholders of BRC Holdings, Inc.:
BRC Holdings, Inc., a Delaware corporation, will hold its annual meeting of
stockholders in the Salons I & II of the Sheraton Suites Market Center Hotel,
2101 Stemmons Freeway, Dallas, TX 75207 on May 15, 1997, at 9:00 a.m., Dallas
time, for the following purposes:
(a) To elect five directors to serve until the next annual meeting of
stockholders or until their respective successors are elected and
qualified;
(b) To approve the Nonqualified Performance Stock Option Plan for New
Employees and Employees of Acquired Companies;
(c) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 26, 1997 are
entitled to notice of, and to vote at, the annual meeting or any adjournment
thereof.
Whether or not you expect to be present at the annual meeting, please sign
and date the enclosed proxy and return it promptly in the enclosed envelope.
You may revoke any previously delivered proxy by signing and dating a new
proxy, submitting a notice of revocation, or by voting in person. No postage
is required if the proxy is mailed in the United States. Prompt response by
our stockholders will reduce the time and expense of solicitation.
By Order of the Board of Directors,
LOGO
Perry E. Esping
Chairman and Chief Executive Officer
Dallas, Texas
April 11, 1997
<PAGE>
BRC HOLDINGS, INC.
1111 W. MOCKINGBIRD LANE, SUITE 1400
DALLAS, TEXAS 75247
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1997
BRC Holdings, Inc., a Delaware corporation (the "Company"), is furnishing
this proxy statement to its stockholders in connection with the solicitation
of proxies by the Board of Directors of the Company (the "Board of Directors")
for use at the annual meeting of stockholders (the "Annual Meeting") to be
held in the Salons I & II of the Sheraton Suites Market Center Hotel, 2101
Stemmons Freeway, Dallas, TX 75207, on May 15, 1997, at 9:00 a.m., Dallas
time, or any adjournment thereof. Shares can be voted at the Annual Meeting
only if the record holder thereof is represented by proxy or is present in
person. All shares represented by a proxy in the form enclosed and properly
executed and returned to the Company before the Annual Meeting will be voted
in accordance with any specification made on such proxy. Any stockholder
giving a proxy has the power to revoke it at any time before it is exercised
by executing a superseding proxy, by submitting a notice of revocation to the
Company or by attending the Annual Meeting and voting in person. However, no
such notice of revocation or later dated proxy will be effective unless and
until received by the Company at or prior to the annual meeting. The
approximate date on which this proxy statement and the enclosed proxy are
first being sent to stockholders is April 11, 1997.
The enclosed Annual Report of the Company for the year ended December 31,
1996 is not part of the proxy solicitation material.
OUTSTANDING CAPITAL STOCK
The record date for stockholders entitled to vote at the Annual Meeting is
March 26, 1997. At the close of business on that date, the Company had issued
and outstanding and entitled to vote 7,092,125 shares of Common Stock, par
value $0.10 per share ("Common Stock").
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Annual Meeting. In deciding all questions, a holder of Common Stock is
entitled to one vote, in person or by proxy, for each share held in his name
on the record
1
<PAGE>
date. The holders of the Common Stock have no cumulative voting rights.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions
are counted in tabulations of the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the stockholder otherwise specifies in the
proxy, will be voted (i) "FOR" the election of directors for the Company of
the 5 persons named under the caption "ELECTION OF DIRECTORS," (ii) "FOR" the
approval of the Nonqualified Performance Stock Option Plan for New Employees
and Employees of Acquired Companies, and (iii) at the discretion of the proxy
holders, on any other matter that may properly come before the Annual Meeting
or any adjournment thereof. The Board of Directors does not know of any such
other matter or business.
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the only persons known
to the Company to be the beneficial owners of 5% or more of Common Stock or
other voting stock of the Company at March 26, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF NATURE OF PERCENT
BENEFICIAL OWNER SHARES(1) BENEFICIAL OWNERSHIP OF CLASS
- ------------------- --------- -------------------- --------
<S> <C> <C> <C>
Perry E. Esping 1,387,651(2) Sole voting and investment power 19.4%
4330 Bordeaux
Dallas, TX 75205
First Pacific 690,000(3) Shared voting and investment power 9.7%
Advisors, Inc.
11400 West Olympic 20,000(3) Shared investment power 0.3%
Blvd. Suite 1200
Los Angeles, CA 90064
</TABLE>
- --------
(1) All are shares of Common Stock.
(2) According to information provided by Mr. Esping and contained in a
statement on Schedule 13D dated March 28, 1988, as amended through
Amendment No. 8 dated June 1, 1994, and Form 5 dated February 28, 1997,
filed with the Securities and Exchange Commission, Mr. Esping holds
1,335,687 shares of Common Stock directly. Mr. Esping is also deemed to be
the beneficial owner of 50,000 shares of Common Stock which are issuable
upon the exercise of presently exercisable stock options and 1,964 shares
of Common Stock in the Company 401(k) plan and such shares are included in
the figure noted in the table.
2
<PAGE>
(3) Based upon information contained in the statement on Schedule 13G dated
February 11, 1993 as amended through Amendment No. 5 dated February 13,
1997 filed with the Securities and Exchange Commission by First Pacific
Advisors, Inc. First Pacific Advisors, Inc. is an investment advisor
acting as record holder for institutional investors, including investment
companies and pension funds. First Pacific Advisors, Inc. has indicated
that it believes it shares voting and disposition authority with its
clients by reason of the contractual arrangements it has with those
parties. First Pacific Advisors, Inc. has advised the Company that, by
virtue of a contract with a specific client, it has no voting authority
with respect to 20,000 of the shares shown in the table above.
PROPOSAL ONE: ELECTION OF DIRECTORS
Directors are to be elected at the Annual Meeting to hold office until the
next annual meeting of stockholders or until their respective successors have
been duly elected and qualified. Pursuant to authority provided in the
Company's By-Laws, the Board of Directors has fixed at five the number of
directors which constitute the whole Board of Directors. The affirmative vote
of a plurality of the votes cast by stockholders, whether present in person or
by proxy, entitled to vote at the Annual Meeting, a quorum being present, is
required to elect each director. It is intended that the shares represented by
the proxies solicited hereby will be voted for the election of each of the
persons nominated for election except where authority to so vote is withheld.
Should any nominee become unable or unwilling to accept nomination or
election, the proxy holders may vote the proxies for any substitute nominee
recommended by the Board of Directors. Each nominee has expressed to the Board
of Directors his intention to serve the entire term for which he is elected.
The following table lists the persons nominated for election as directors
and the named executive officers in the Summary Compensation Table below and
provides information regarding their beneficial ownership of the Common Stock
of the Company at March 26, 1997.
<TABLE>
<CAPTION>
PERCENT OF
NAME OF NUMBER OF VOTING
BENEFICIAL OWNER SHARES NATURE OF BENEFICIAL OWNERSHIP CLASS
---------------- --------- ------------------------------ ----------
<S> <C> <C> <C>
Perry E. Esping......... 1,387,651(1) Sole voting and investment power 19.4%
L.D. Brinkman........... 17,000(2) Sole voting and investment power 0.2%
Robert E. Masterson..... 2,100(3) Sole voting and investment power --
David H. Monnich........ 2,000(4) Sole voting and investment power --
Paul T. Stoffel......... 168,223(5) Sole voting and investment power 2.4%
Jerrold L. Morrison..... 83,767(6) Sole voting and investment power 1.2%
Daniel J. Brennan....... 18,764(7) Sole voting and investment power 0.3%
Bernard J. Owens........ 58,752(8) Sole voting and investment power 0.8%
Harvey V. Braswell...... 1,250(9) Sole voting and investment power --
All directors and
officers as a group
(16 persons)........... 2,032,190(10) Sole voting and investment power 27.6%
</TABLE>
3
<PAGE>
(1) See Note (2) under the caption Principal Stockholders.
(2) Represented by 15,000 shares of common stock for which Mr. Brinkman is
the record holder and 2,000 shares issuable under stock options which are
presently exercisable.
(3) Represented by 100 shares of common stock for which Mr. Masterson is the
record holder and 2,000 shares issuable under stock options which are
presently exercisable.
(4) Represented by 2,000 shares issuable under stock options which are
presently exercisable.
(5) Represented by 166,223 shares of common stock for which Mr. Stoffel is
the record holder and 2,000 shares issuable under stock options which are
presently exercisable.
(6) Represented by 83,333 shares issuable under stock options which are
presently exercisable and 434 shares which are held on Mr. Morrison's
behalf by the Company 401(k) plan.
(7) Represented by 18,333 shares issuable under stock options which are
presently exercisable and 431 shares which are held on Mr. Brennan's
behalf by the Company 401(k) Plan.
(8) Represented by 12,520 shares of common stock for which Mr. Owens is the
record holder, 33,000 stock options which are presently exercisable,
12,333 shares issuable under stock options which will become exercisable
within 60 days of the record date, and 899 shares which are held on Mr.
Owens' behalf by the Company 401(k) plan.
(9) Represented by 1,250 shares issuable under stock options which are
presently exercisable.
(10) Includes 266,249 shares subject to employee stock options that are
presently exercisable, or will become exercisable within sixty days of
the record date.
DIRECTORS AND EXECUTIVE OFFICERS
A brief description of the business experience and current directorships of
each nominee for director and each executive officer of the Company is
provided below. Directors hold office until the next annual meeting of
stockholders or until their respective successors have been duly elected and
qualified. Executive officers are elected by the Board of Directors at its
annual meeting and hold office until its next annual meeting or until their
successors have been duly elected and qualified.
DIRECTORS
Perry E. Esping
Mr. Esping, age 62, has been a director of the Company since April 1988. He
serves on the Compensation Committee of the Board of Directors. Mr. Esping has
been Chairman and Chief Executive Officer of the Company since March 15, 1994.
Prior to such date, Mr. Esping served as President and Chief Executive Officer
of the Company and held such positions since May 27, 1988. He was Chairman of
the Board and Chief Executive Officer of First Data Resources, Inc., a
subsidiary of American Express engaged in providing data processing services,
since before 1983 and until November 1987. Mr. Esping serves as Chairman of
the Board of MatriDigm Corporation, a privately-held corporation which
specializes in
4
<PAGE>
technology designed to address the "Year 2000" computer date problem. He is
also a director of Brite Voice Systems, Inc., a provider of voice messaging
systems, Service Data Corporation, a data processing company, Pan Aero
Corporation, a firm specializing in wind energy systems and Computer
Management Sciences, Inc., a professional services firm specializing in
information technology.
L. D. Brinkman
Mr. Brinkman, age 68, has been a director of the Company since January 1989.
Mr. Brinkman serves on the Compensation Committee of the Board of Directors.
He has been Chairman of the Board, Chief Executive Officer and President of
LDB Corporation since 1970. LDB Corporation owns and franchises Mr. Gatti's
restaurants. Mr. Gatti's, Inc., a wholly owned subsidiary of LDB Corporation,
filed for protection under the United States Bankruptcy Code on October 10,
1991 and was the subject of a reorganization plan under Chapter 11 thereof
which was confirmed on December 2, 1992.
Robert E. Masterson
Mr. Masterson, age 51, has been a director of the Company since May 1995.
Mr. Masterson is Chairman and Chief Executive Officer of Service Data
Corporation and has served in such capacity since 1991. From 1986 to 1991, Mr.
Masterson was owner and President of Masterson Properties, a real estate and
investment company. He served as a division President with American Express
Company in the travel, corporate card and information services divisions from
1984 to 1986. Prior to that time, Mr. Masterson was President and Chief
Executive Officer of First Data Resources, Inc., a subsidiary of American
Express providing data processing services.
David H. Monnich
Mr. Monnich, age 65, has been a director of the Company since January 1989,
serves on the Audit Committee and is Chairman of the Compensation Committee of
the Board of Directors. Mr. Monnich is Chairman and Chief Executive Officer of
Crown Steel, Inc. and has served in such capacity since January 1996. Mr.
Monnich was President and Chief Executive Officer of DHM Corporation, a
private holding company, prior to 1996. Mr. Monnich sought protection under
the United States Bankruptcy Code on June 16, 1995 and received a discharge
under Chapter 7 thereof on October 28, 1995.
Paul T. Stoffel
Mr. Stoffel, age 63 has been a director of the Company since March 1989 and
is Chairman of the Audit Committee of the Board of Directors. Mr. Stoffel is
Chairman of Paul Stoffel Capital Corporation which engages in various public
and private investments. He is also a director of Centex Corporation which is
engaged in the residential construction and development industry. Mr. Stoffel
was Managing Director of Paine Webber, Inc., an investment banking company,
from 1979 through 1985.
5
<PAGE>
EXECUTIVE OFFICERS
Jerrold L. Morrison
Mr. Morrison, age 42 is President and Chief Operating Officer and has served
in such capacity since January 1996. He was Executive Vice President of the
Company since February 1, 1995 and also has served as President of BRC Health
Care, Inc., a wholly owned subsidiary of the Company, since August 1995.
Previously he spent seven years as a corporate executive officer of Newtrend,
L.P., a financial products and services company in Orlando, Florida serving as
President of the client server division the last two years.
Harvey V. Braswell
Mr. Braswell, age 51, has been the President of the Government Services
Division of the Company since November 1996. Upon joining the Company January
1996, he served as Vice President of Information Services and Senior Vice
President of Operations for the Government Services Division. From 1976 to
September 1995, Mr. Braswell held executive management positions with
Electronic Data Systems in their Government Systems and Health Care Divisions.
Mr. Braswell currently serves on the North Carolina Electronics and
Information Technologies Association Board of Directors.
Clifford J. Carroll
Mr. Carroll, Age 46, has been President of the Company's Health Care
Division since joining the Company in June of 1996. Prior to that time, he was
Vice President for the health care division of Unisys Corporation from October
1993 to June 1996. The health care division of Unisys Corporation provides
specialized health care information technology services. From December 1991 to
September 1993, Mr. Carroll served as President of JRS Clinical Technologies,
Inc., a provider of clinical information systems. Prior to that, Mr. Carroll
was an Executive Vice President of Ferranti International Health Care Systems,
a hospital, laboratory, and long term care information systems vendor and
intergrator. Mr. Carroll served in such position from October 1988 to November
1991.
L. Stanley Coffee
Mr. Coffee, age 52, is Executive Vice President of BRC and has served in
that capacity since March of 1997. He is responsible for the operations of the
Technology Sourcing Group's Year 2000 activities. Previously, he spent two
years as Vice President of Energy Management Systems at Altra Energy
Technologies, LLC. For the two years prior, Mr Coffee was Account Manager at
Chrysler Systems, a subsidiary of International Business Machines providing
services relating to software, consulting and financial products. Prior to
that Mr. Coffee was President of SCADACom, a satellite communication company
for the energy industry.
6
<PAGE>
Thomas L. Gegenheimer
Mr. Gegenheimer, age 54, has been Vice President and Chief Technology
Officer since April 1994. Mr. Gegenheimer was previously Director of
Information Processing and Networking Services for Disney Worldwide Services,
Inc., a provider of services to affiliates of the Walt Disney Company from
July 1988 to November 1993.
Thomas E. Kiraly
Mr. Kiraly, age 37, has been Chief Financial Officer since March 1994. Prior
to that time, he served as Vice President of Finance since January 1989. He
formerly was a Senior Management Consultant with Touche Ross & Co., a
predecessor to Deloitte & Touche, a national accounting firm, from 1985 until
1989.
Bernard J. Owens
Mr. Owens, age 50 has been President of the Government Records Management
division since July of 1996 and has been Executive Vice President of the
Company since June 1992. He was President of the Eastern Region from May 1989
to June 1992. He was Vice President of its Northeast Region prior to 1984
through May 1989.
Ray H. Pace
Mr. Pace age 55, has been Executive Vice President of the Company since
September 1996. Since 1980, he has served as the Chairman of the Board and
President of The Pace Group, Inc. which merged with a wholly owned subsidiary
of the Company in September of 1996. Mr. Pace is also the Chairman, President
and stockholder of a private holding company, Pace Investments, Inc.
7
<PAGE>
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to the Company's
Chief Executive Officer and each of the Company's four most highly compensated
executive officers, based on salary, bonuses, and other compensation earned
during fiscal 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
AWARDS PAYOUTS
--------------------------------
ANNUAL COMPENSATION
--------------------------------
SECURITIES
OTHER UNDER- ALL OTHER
ANNUAL RESTRICTED LYING COMPEN-
NAME AND COMPEN- STOCK OPTIONS/ LTIP SATION
PRINCIPAL SALARY BONUS(A) SATION(D) AWARD(S) SARS PAYOUTS(E) (H)
POSITION(A) YEAR(B) ($)(C) ($)(D) ($)(E) ($)(F) (#)(G) ($)(H) ($)(I)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Esping, P.E. 1996 250,000 3,150
Chairman and 1995 265,000 150,000 3,150
CEO 1994 280,000 100,000(B) 3,234
- ----------------------------------------------------------------------------------------------------------
Morrison, Jerrold 1996 249,039 49,610 50,000 1,393
President and Chief 1995 169,308(c) 37,000 9,664 125,000 969
Operating Officer 1994
- ----------------------------------------------------------------------------------------------------------
Brennan, Daniel(G) 1996 200,000 1,387
President, Business 1995 200,000 25,000 1,659
Records Corporation 1994 200,000 87,500 75,000 45,622 1,050
- ----------------------------------------------------------------------------------------------------------
Owens, Bernard 1996 200,000 104,205(F) 3,150
Executive Vice 1995 200,000 30,000 25,000 3,150
President 1994 200,000 37,000 45,622 2,573
- ----------------------------------------------------------------------------------------------------------
Braswell, Harvey 1996 114,462 50,000(F) 54,607 30,000 2,045
President, Government 1995
Services Division 1994
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(A) Unless otherwise noted, reflects bonus earned during the fiscal year but
paid during the next year.
(B) Bonus was awarded in May 1995 and paid in June 1995 for performance during
1994.
(C) Reflects compensation for only a portion of the year paid to Mr. Morrison
who became employed by the Company on February 1, 1995.
(D) Reflects compensation associated with relocation expenses.
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<PAGE>
(E) Reflects payments made in April 1994 associated with the Company's 1990
Key Contributor Plan.
(F) With respect to Mr. Owens, of the total amount, $42,393 was paid in March
1997 for performance during 1996. With respect to Mr. Braswell, of the
total amount, 25,000 was paid in March 1997 for performance during 1996.
(G) Mr. Brennan resigned from his position as an officer of the Company on
November 26, 1996, and terminated his employment with the Company on
December 31, 1996.
(H) Amounts represent Company contributions to the Company's 401(k) Plan on
the behalf of the listed individuals.
OPTION GRANTS DURING 1996 FISCAL YEAR
The following table sets forth information concerning the grant of stock
options and stock appreciation rights during the fiscal year ended December
31, 1996 to the named executives:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------------------------------------------- ---------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS/SAR'S EXERCISE
OPTIONS/SARS GRANTED TO OR BASE
GRANTED EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME (#)(B) FISCAL YEAR(C) ($/SH)(D) DATE(E) ($)(F) ($)(G)
---- ------------ -------------- --------- ----------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Esping, P.E............. -- -- -- -- -- --
Morrison, Jerrold....... 50,000 11% $37.00 February 27, 2006 1,163,455 2,948,424
Brennan, Daniel......... -- -- -- -- -- --
Owens, Bernard.......... -- -- -- -- -- --
Braswell, Harvey........ 5,000 1% $37.00 February 27, 2006 116,346 294,842
25,000 5% $41.00 November 15, 2006 644,617 1,633,586
------ --- ---------- ----------
30,000 6% 760,963 1,928,428
</TABLE>
OPTION EXERCISES DURING 1996 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides information related to options and warrants
exercised by the named executive officers during the 1996 fiscal year and the
number and value of options held at fiscal year end. The Company does not have
any outstanding stock appreciation rights.
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<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SAR'S AT FISCAL OPTIONS/SARS AT
ON VALUE YEAR-END (#)(D) FISCAL YEAR-END(2)($)(E)
EXERCISE REALIZED(1) ------------------------- -------------------------
(#)(B) ($)(C) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Esping, P.E............. -- -- 50,000 100,000 362,500 725,000
Morrison, Jerrold....... -- -- 41,666 133,334 370,826 1,129,174
Brennan, Daniel......... 75,000 996,875 18,333 -- 175,414 --
Owens, Bernard.......... -- 33,000 29,000 344,085 262,665
Braswell, Harvey........ -- -- -- 30,000 -- 132,500
</TABLE>
- --------
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(2) The closing price for the Company's Common Stock as reported by the NASDAQ
Stock Market as of December 31, 1996 was $44.75. Value is calculated on
the basis of the difference between the option exercise price and $44.75
multiplied by the number of shares of Common Stock underlying the option.
COMPENSATION OF DIRECTORS
Each director who is not an officer of the Company or a subsidiary receives
an annual fee of $8,000 plus $500 for each Board of Directors or Committee
meeting attended. In addition, Committee chairmen who are not officers of the
Company or a subsidiary receive an annual fee of $1,000.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Company has strived to structure its executive compensation programs in
a manner designed to attract and retain a talented and capable management
team, and to provide appropriate compensation based on that team's achievement
of financial performance objectives. During 1996, the Compensation Committee
held primary responsibility for determining the compensation of the Company's
chief executive officer (the "Chief Executive"), and for approving the
determinations of compensation paid to other officers and senior executives
proposed by the Chief Executive. In determining compensation for the Chief
Executive, Mr. Perry E. Esping abstained from all discussions.
10
<PAGE>
Compensation is paid to the Chief Executive in the form of base
compensation, bonus compensation and the granting of options to buy shares of
the Company's common stock at then prevailing market prices. Each year the
Board of Directors of the Company sets forth certain financial performance
objectives for the Company. The Company's ability to meet such targeted
financial goals, changes in the market price of the Company's common stock,
and the Chief Executive's previous base compensation level are the most
important criterion utilized by the Compensation Committee in determining the
compensation of the Chief Executive, although the Compensation Committee
reviews other factors, including the compensation awarded to chief executive
officers of similar corporations. Based on a review of such criteria, the
Compensation Committee determines the annual base and bonus compensation of
the Chief Executive. In addition, the Compensation Committee from time to time
may grant stock options in order to reward the Chief Executive for the long-
term performance of the Company. With respect to the Chief Executive's
compensation during 1996, the Compensation Committee largely relied upon the
Company's financial performance and the previously existing compensation level
for the Chief Executive. Although the Compensation Committee did not
quantitatively provide the relationship of such financial performance to the
Chief Executive's compensation, that factor was a significant consideration.
The Compensation Committee also considered the compensation practices of other
corporations in the Company's industry which are most likely to compete with
the Company for the services of executive officers. Based upon a review of
these and other relevant factors, the Compensation Committee considered it
appropriate and in the best interests of the Stockholders, to make no changes
to the Chief Executive's base compensation, and to award no bonus or stock
options during 1996.
Compensation to other officers and senior executives is also provided in the
form of base compensation, bonus compensation and the granting of stock
options. Base compensation is determined based on industry norms associated
with the position held by the executive, while bonus compensation is normally
linked to specific shorter term (e.g., one to three years) profit objectives
and stock options are granted to reward longer-term performance (particularly
the stock price performance) of the Company. The Chief Executive's decisions
concerning the specific compensation elements for individual officers and
senior executives (which, after a thorough review, were almost universally
ratified by the Compensation Committee) were made within this framework and in
light of each executive's level of responsibility, performance, current salary
and prior-year bonus and other compensation awards. The Chief Executive is
responsible for the performance assessment of individual officers and senior
executives and provides his recommendations to members of the Compensation
Committee for review and approval.
Perry E. Esping L.D. Brinkman David H. Monnich
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last fiscal year, Mr. Esping served as both a member of the
Company's Compensation Committee and as the Company's Chief Executive Officer.
Certain transactions between the Company and
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Mr. Esping are described under "Certain Transactions" below. In addition, Mr.
Esping is a principal stockholder of Service Data Corporation, a corporation
for which Mr. Masterson serves as Chief Executive Officer, a director and
stockholder. The Board of Directors of Service Data Corporation is responsible
for establishing Mr. Masterson's compensation as Chief Executive Officer.
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STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five fiscal
years ended December 31, 1996 with the cumulative total return on the NASDAQ
Index and the Peer Group Index. The Peer Group Index, compiled by the Company,
is the average of SIC codes 357, NASDAQ Computer Manufacturer Stocks and 737,
NASDAQ Computer and Data Processing Services Stocks. Such compilation was
utilized to achieve a comparison with a group of companies which together have
similar operations to that of the Company. Management does not believe that
any one company or any group of companies in a single industry group provides
a comparable index for the Company's performance. The comparison assumes $100
was invested on December 31, 1991 in the Company's Common Stock and in each of
the foregoing indices.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN AMONG
BRC HOLDINGS, INC., NASDAQ INDEX AND PEER GROUP INDEX
[GRAPH]
NASDAQ
Stock
Market
Measurement Period BRC Index Peer
(Fiscal Year Covered) Holdings (US) Group
- --------------------- -------- ------- ------
Measurement Point-
12/31/1991 100.000 100.000 100.000
1992 92.222 116.378 121.006
1993 148.333 133.595 120.631
1994 147.778 130.587 139.076
1995 175.556 184.674 215.460
1996 198.889 227.164 277.968
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CERTAIN TRANSACTIONS
The Company has a minority investment in, and has certain consulting and
sales representative agreements with, MatriDigm Corporation ("MatriDigm").
MatriDigm is a privately-held company located in Denver, Colorado, which
specializes in the development and use of computer technologies designed to
correct the "Year 2000" date problem which may cause many computer systems to
incorrectly identify two digit numbers representing years occurring after 1999
(i.e., "00," "01," etc.) as years occurring during the early part of the
twentieth century (1900, 1901, etc.). Pursuant to an agreement between the
Company and MatriDigm, Mr. Esping serves as Chairman of the Board of
MatriDigm. Although Mr. Esping receives no compensation from MatriDigm for his
services, an investment trust, whose primary beneficiaries are members of Mr.
Esping's immediate family, owns less than ten percent of the outstanding
equity securities of that company and may be deemed to benefit indirectly from
business relationships with the Company. The Company owns 2,000,000 common
shares and 1,000,000 preferred shares, representing approximately 9% of the
outstanding equity of MatriDigm. The Company paid $3,500,000 for such shares
and they bear certain restrictions, including repurchase rights with respect
to a portion of the common shares. The Company, pursuant to a consulting
agreement, receives 5% of the cumulative pre-tax operating profits of
MatriDigm in exchange for Mr. Esping's services and certain other assistance
by the Company. The Company received no payments during fiscal year 1996 with
regard to this obligation. Additionally, through a sales representative
agreement, the Company serves as a commissioned distributor of MatriDigm
services. No commissions were received by the Company during fiscal year 1996
with respect to MatriDigm's services.
A subsidiary of the Company leases real property owned by a partnership that
includes as a partner Mr. Brennan, an executive officer of the Company. The
lease agreement covering this parcel has a term expiring in February 2004.
Annual rental payments paid by the Company in 1996, 1995, and 1994, were
$229,000, $217,000 and $211,000 respectively. Management believes that, under
the circumstances under which the lease was negotiated, the terms of the lease
are at least as favorable to the Company as those that could have been
obtained in an arm's-length transaction with unaffiliated parties.
A business, partly owned by a family member of Mr. Esping, leased real
property from the Company through September, 1996. The lease agreement covered
approximately 5,600 square feet of production and warehouse space which was
otherwise unused by the Company. The Company collected approximately $21,000
in 1996 under the lease. The lease rate negotiated was based upon what the
Company believes were existing market conditions at the inception of the
lease.
The Company subleases office space to Mr. Esping for personal use. The lease
agreement covers 1,357 square feet of office space on which the Company
collects approximately $16,000 annually in rent. Management believes that the
lease rate negotiated was consistent with existing market conditions at the
inception of the lease.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (The
"Exchange Act"), requires the Company's directors and executive officers and
persons who own more than 10% of the Company's Common Stock to file with the
SEC initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors, and
greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to
the Company and written representations that no other reports were required
during the fiscal year ended December 31, 1996 all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with, except Messrs. Brinkman, Masterson,
Monnich and Stoffel each filed one late report with respect to their being
individually granted options to purchase 10,000 shares of common stock
pursuant to the 1995 Stock Option Plan for Non-Employee Directors in August
1996 and Mr. Gegenheimer filed one late report concerning the purchase of 900
shares of common stock in June 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established the Audit Committee and a
Compensation Committee to assist the Board of Directors in carrying out its
duties.
The Audit Committee's duties include engaging and discharging the Company's
independent auditors; reviewing and approving the engagement of the auditors
for audit and non-audit services; reviewing with the independent accountants
the fee, scope, and timing of the audit and non-audit services; reviewing the
completed audit with the independent accountants regarding their report, the
conduct of the audit, any accounting adjustments and recommendations for
improving internal controls, and any other significant findings during the
audit; meeting periodically with the Company's management, financial staff and
auditors to discuss internal accounting and auditing procedures; initiating
and supervising any special investigations it deems necessary; and reviewing
significant press releases concerning financial matters. The Audit Committee
consists of Messrs. Stoffel and Monnich and is chaired by Mr. Stoffel.
The Compensation Committee periodically reviews the Company's compensation,
employee benefit plans, and other fringe benefits paid to or provided for
officers and directors of the Company and approves the annual salaries and
bonuses of officers of the Company and executive officers of the Company's
subsidiaries. The Compensation Committee also selects the employees to whom
options may be granted under the Company's option plans and generally
administers the option plans. The Compensation Committee consists of Messrs.
Brinkman, Esping and Monnich and is chaired by Mr. Monnich.
During 1996 the Board of Directors held five meetings (excluding two actions
by unanimous consent). The Audit Committee held one meeting and the
Compensation Committee held one meeting during such year. With the exception
of Mr. Monnich with respect to his attendance at one meeting, all members of
the Board of Directors attended all of their respective Board and committee
meetings during 1996.
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PROPOSAL TWO: APPROVAL OF NONQUALIFIED
PERFORMANCE STOCK OPTION PLAN FOR NEW
EMPLOYEES AND EMPLOYEES OF ACQUIRED COMPANIES
On March 11, 1997, the Board of Directors approved the submission for
stockholder approval of the Nonqualified Performance Stock Option Plan for New
Employees and Employees of Acquired Companies (the "Acquired Company Plan"),
the text of which is attached as Exhibit A to this Proxy Statement. The
material features of the Acquired Company Plan are discussed below, but the
description is subject to and is qualified in its entirety by the full text of
the Acquired Company Plan.
GENERAL
The purpose of the Acquired Company Plan is to further the growth,
development and financial success of the Company by providing incentives to
certain prospective employees, advisers and consultants to the Company,
including those who are expected to become employees, advisers or consultants
to the Company as a result of the acquisition by the Company of business
operations or assets of third parties. The Company hopes to provide such
incentives, among other things, to encourage retention of employees of
acquired businesses and the commitment of new employees to achieving the
Company's future performance objectives. In furtherance of this purpose, the
Acquired Company Plan authorizes granting to persons who have agreed to become
employees, advisers or consultants to the Company or to persons who are
employees, advisers or consultants to businesses which the Company intends to
acquire, options to purchase a total of 500,000 shares of the Common Stock
(subject to adjustment as described below). If any option issued under the
Acquired Company Plan terminates or expires or is canceled or surrendered as
to any shares of Common Stock, a new option may be granted covering such
shares. The Company is not currently engaged in any negotiations with regard
to an acquisition of a business or assets to which the Acquired Company Plan
is expected to relate. Nonetheless, the Company expects, in the future, to
consider one or more opportunities to acquire businesses or assets, the
successful operation of which will require the commitment of qualified
personnel to the Company's long-term goals. Management of the Company feels
that the Acquired Company Plan will provide the Company with an important tool
to achieving the successful operation and integration of any business acquired
in the future.
TERMS AND CONDITIONS
Subject to stockholder approval, the Stock Option Committee of the Board of
Directors of the Company (the "Committee") may grant options to purchase up to
500,000 shares to natural persons who have agreed to become Employees (as
defined below) of the Company or who are employees, advisers or consultants to
other persons or business entities, if such employees, advisers or consultants
are, or are expected to become, Employees following the consummation of any
transaction pursuant to which the Company acquires one or more businesses or
assets to be utilized by the Company in connection with its existing or
contemplated business activities. For the purposes of the Acquired Company
Plan, an "Employee" is any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Internal Revenue Code of 1986, as amended (the "Code")) of or
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any adviser or consultant to the Company, or of or to any corporation which is
then a subsidiary of the Company; provided, however, that to the extent any
person receiving options shall not be an employee for the purposes of Section
3401(c) of the Code, such person shall be, at the time of such grant,
rendering, or under contract or agreement to render in the future, bona fide
services to the Company or any of its subsidiaries other than services in
connection with the offer or sale of securities in a capital raising
transaction. In addition, no person shall be eligible for the grant of options
under the Acquired Company Plan if such person has been an Employee during the
sixty (60) days preceding the date of grant. Although the recipients of
options who are employees, advisers or consultants of or to businesses which
the Company proposes to acquire, will not be Employees as of the date of
grant, no option granted under the Acquired Company Plan will be exercisable
by a recipient unless such person becomes an employee, adviser or consultant
to the Company and renders bona fide services to Company in connection
therewith, following the date of grant.
Options may be granted under the Acquired Company Plan at an exercise price
deemed appropriate by the Committee. Options may be granted with exercise
prices below the market value of the Common Stock on the date of grant. No
cash consideration is to be paid by persons receiving grants. In order to
exercise an option, a holder may pay the full exercise price in cash, or at
the discretion of the Committee, the Company may accept an exchange of shares
of the Common Stock previously owned by the optionee for payment of the
exercise price and related costs. Options granted under the Acquired Company
Plan will vest and become exercisable at such times and in such installments
(which may be cumulative) as the Company shall provide in the terms of
individual stock option agreements, as same may be amended from time to time.
By a resolution adopted by the Committee following the date of any option, and
subject to the consent of the holder of such option, the Committee may
accelerate the time at which such option, or any portion thereof, may be
exercised. Vested options are exercisable for a period of ten years from the
date of grant.
Options granted under the Acquired Company Plan will be nontransferable,
except by will or pursuant to the laws of descent and distribution and will be
exercisable (assuming the satisfaction of conditions prescribed above) during
the optionee's lifetime only by such optionee or his guardian or legal
representative. If an optionee dies, any vested and exercisable options may be
exercised, in whole or in part, by the person to whom his rights under the
options have passed by will or intestacy, at any time during the year after
his death but not later than the expiration of the options in question. Any
option which expires or is canceled without having been fully exercised prior
to its expiration or cancellation, may again be granted under the Acquired
Company Plan.
The number of shares issuable upon exercise of options granted under the
Acquired Company Plan will be subject to adjustment in the event that the
outstanding shares of the Common Stock subject to such options are, from time
to time, changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company, or in the event holders of the
Common Stock receive additional shares of Common Stock, or a different kind or
number of shares of security of the Company,
17
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or other securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split up, stock dividend,
combination of shares, or otherwise. In any event, the Committee will make an
appropriate and equitable adjustment in the aggregate number of shares of the
Common Stock which may be issued pursuant to the Acquired Company Plan and the
number and kind of shares or other consideration as to which all outstanding
options under the Acquired Company Plan, or portions thereof then unexercised,
shall be exercisable. Any such adjustment by the Committee shall be final and
binding upon the Company, all persons holding, or eligible to receive options
under the Acquired Company Plan and all other interested persons. In addition,
the Company, in its sole discretion, may provide that an option granted under
the Acquired Company Plan may be exercised upon the merger or consolidation of
the Company into another corporation, upon the exchange or acquisition by any
person or entity, in one transaction or a series of transactions, of all or
substantially all of the Company's assets or fifty percent (50%) or more of
its then outstanding voting stock, whether through merger, consolidation or
otherwise, or upon the recapitalization, reclassification, liquidation or
dissolution of the Company or, with respect to a particular optionee of an
option under the Acquired Company Plan, such other events as may be defined as
a "Change of Control" in such optionee's option agreement. Any such
determination by the Committee shall be adopted by resolution prior to the
occurrence of the Change of Control. If the Committee so determines prior to
the occurrence thereof, options granted under the Acquired Company Plan shall
be exercisable as to all shares subject thereto, notwithstanding any other
provision of such option agreement, but subject to any prior expiration
thereof, upon the occurrence of a Change of Control. The Committee may also
decide that options granted under the Acquired Company Plan shall remain
exercisable after any such Change of Control and that upon exercise thereof,
holders of options granted under the Acquired Company Plan shall be entitled
to receive the kind and amount of securities or other properties, or the cash
equivalent thereof, receivable as a result of the Change of Control by the
holder of a number of shares of the securities of the Company into which the
option in question could have exercised immediately prior to such Change of
Control. Finally, in the event that the Committee shall determine that options
granted under the Acquired Company Plan will not be exercisable following such
Change of Control, holders thereof shall be entitled to receive consideration
for the termination of such options, whether or not then exercisable or
vested, in an amount not less than the excess, if any, of (a) the per share
consideration payable pursuant to the terms of the transaction resulting in
the Change of Control in respect of the Common Stock (or, if applicable, in
respect of the assets of the Company), over (b) the exercise price per share
of all shares of the Common Stock subject to such option, times the number of
shares of Common Stock subject to such option (or the fair market value of
securities or other property received in respect of the Common Stock as a
result of the Change of Control).
FEDERAL TAX CONSEQUENCES
Each of the options granted under the Acquired Company Plan will be a
nonqualified stock option and, therefore, not entitled to the special tax
treatment afforded to incentive stock options under the Code. The granting of
such options with exercise prices equal to the fair market value of the Common
Stock is
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not a taxable event to either the optionees or to the Company. Upon the
exercise of such options, an optionee will recognize ordinary income in the
amount equal to the excess of the then fair market value of the Common Stock
acquired over the exercise price of the option and the Company may deduct the
amount of such ordinary income recognized by the optionee.
GRANT OF OPTIONS
No options under the Acquired Company Plan have been granted. The number of
option shares granted under all of the Company's plans to each executive
officer and all executive officers as a group during the last fiscal year and
the relevant exercise prices for such grants are set forth in the table
entitled "Options/SAR Grants in the Last Fiscal Year." Current employees,
including executive officers, of the Company and nonemployee directors of the
Company will not be eligible to receive grants under the Acquired Company Plan
unless their employment by the Company should terminate and not be renewed for
sixty (60) days or more. The Company has no current plans to grant options
under the Acquired Company Plan to any person.
REQUIRED AFFIRMATIVE VOTE
Approval of the Acquired Company Plan requires the affirmative vote of the
holders of a majority of the shares of Common Stock present in person or by
proxy at the 1997 Annual Meeting. The Board of Directors believes that the
proposal is in the best interest of the Company and its stockholders and
recommends that stockholders vote FOR approval of the Acquired Company Plan.
TERMINATION AND AMENDMENT OF THE ACQUIRED COMPANY PLAN
The Acquired Company Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time by the Board of Directors of the
Company and in some cases, the Committee; provided, however, that without a
majority vote of the stockholders of the Company present in person or by proxy
at any regular or special meeting, no action by the Committee or the Board
may, except as provided with regard to a Change of Control, increase the
number of shares issuable pursuant to options granted under the Acquired
Company Plan, reduce the minimum option price requirements provided for in the
Acquired Company Plan or extend the period during which options may be granted
under the Acquired Company Plan. No option may be granted under the Acquired
Company Plan after the expiration of ten years from the date that the Acquired
Company Plan is adopted or the date that the stockholders of the Company
approve the Acquired Company Plan, if earlier.
STOCKHOLDERS' PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the 1998 annual meeting of stockholders must be received by the Company at its
principal executive offices not later than December 10, 1997 in order to be
included in the Company's proxy statement and form of proxy with respect to
such 1998 annual meeting.
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GENERAL
The Board of Directors has engaged the firm of Price Waterhouse L.L.P. to
act as the independent auditors of the Company for fiscal year 1996. As of the
date of this proxy statement, the Board of Directors has not had the
opportunity to meet and designate the independent auditors for fiscal year
1997. One or more representatives of Price Waterhouse L.L.P. will attend the
Annual Meeting, will have an opportunity to make a statement, and will respond
to appropriate questions from stockholders.
The accompanying proxy is being solicited on behalf of the Board of
Directors. The expense of preparing, printing and mailing the form of proxy
and the material used in the solicitation thereof will be borne by the
Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors and officers and
employees of the Company and by any third parties retained by the Company for
such purpose. The cost of any such solicitation will be borne by the Company.
Arrangements have been made with Corporate Investor Communications, Inc.
("CIC") for the delivery of proxy materials to brokers, nominees, fiduciaries
and other custodians for distribution to their beneficial owners. If deemed
necessary by the Company, the Company may engage CIC to solicit proxies for a
prearranged fee.
The cost of approximately $4,000 plus out-of-pocket expenses for proxy
distribution by CIC and any additional expenses resulting from any such
solicitation will be borne by the Company.
By Order of the Board of Directors,
LOGO
Perry E. Esping
Chairman and
Chief Executive Officer
Dallas, Texas
April 11, 1997
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EXHIBIT A
BRC HOLDINGS, INC.
NONQUALIFIED PERFORMANCE
STOCK OPTION PLAN FOR NEW EMPLOYEES
AND EMPLOYEES OF ACQUIRED COMPANIES
BRC Holdings, Inc. ("BRC"), a Delaware corporation, hereby adopts this
Nonqualified Performance Stock Option Plan for New Employees and Employees of
Acquired Companies. The purpose of this Plan is to further the growth,
development and financial success of BRC by providing incentives to certain
prospective employees, advisers and consultants to BRC, including those who
are expected to become employees, advisers or consultants to BRC as a result
of the acquisition of business operations or assets of third parties. BRC is
providing such incentives, among other things, to encourage retention of
employees of acquired companies and the commitment of new employees to
achieving BRC's future performance objectives.
ARTICLE 1
DEFINITIONS
SECTION 1.1 BOARD
"Board" shall mean the Board of Directors of BRC.
SECTION 1.2 BRC
"BRC" shall mean BRC Holdings, Inc., a Delaware corporation.
SECTION 1.3 CHANGE OF CONTROL
"Change of Control" shall mean either the effective date of either the
merger or consolidation of BRC into another corporation, or the exchange or
acquisition by another Person in one transaction or a series of transactions
of all or substantially all of BRC's assets or 50% or more of its then
outstanding voting stock, whether through merger, consolidation or otherwise,
or the recapitalization, reclassification, liquidation or dissolution of BRC
or, with respect to a particular Employee designated by the Committee, the
occurrence of a "Change of Control" as specifically defined in such Employee's
employment or equivalent agreement with BRC.
SECTION 1.4 CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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SECTION 1.5 COMMITTEE
"Committee" shall mean the Stock Option Committee of the Board, appointed as
provided in Section 6.1 or a successor or substitute committee thereto
designated by the Board to exercise the authority of the "Committee" with
regard to the Plan.
SECTION 1.6 COMMON STOCK
"Common Stock" shall mean the Common Stock, par value $.10 per share, of
BRC.
SECTION 1.7 EMPLOYEE
"Employee" shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of or any adviser or consultant to BRC, or of or to any corporation
which is then a Subsidiary, whether such employee, adviser or consultant is so
employed at the time this Plan is adopted or becomes so employed subsequent to
the adoption of this Plan; provided, however, that to the extent any person
receiving options shall not be an employee for the purposes of Section 3401(c)
of the Code, such person shall be, at the time of such grant, rendering, or
under contract or agreement to render in the future, bona fide services to BRC
or any of its Subsidiaries other than services in connection with the offer or
sale of securities in a capital raising transaction.
SECTION 1.8 GENERAL
Whenever the following terms are used in this Plan they shall have the
meaning specified below unless the context clearly indicates to the contrary.
SECTION 1.9 OPTION
"Option" shall mean an option granted under the Plan to purchase Common
Stock. Options include only options which are not intended to be "incentive
stock options" under Section 422 of the Code.
SECTION 1.10 OPTION PRICE
"Option Price" shall have the meaning given in Section 4.2.
SECTION 1.11 PERSON
"Person" shall mean any individual, corporation, partnership, limited
partnership, trust or business entity, or any group of them acting in concert
or under common control with regard to BRC or the Common Stock.
SECTION 1.12 PLAN
"Plan" shall mean the Nonqualified Performance Stock Option Plan for New
Employees of BRC and its Subsidiaries.
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SECTION 1.13 PRONOUNS
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
SECTION 1.14 SECRETARY
"Secretary" shall mean the Secretary, or any successor officer holding
substantially similar duties, as delegated by the Board, with regard to the
Plan, of BRC.
SECTION 1.15 STOCK OPTION AGREEMENT
"Stock Option Agreement" shall have the meaning contemplated in Section 4.1.
SECTION 1.16 SUBSIDIARY
"Subsidiary" shall mean any corporation (other than BRC) in an unbroken
chain of corporations beginning with BRC if each of the corporations, or if
each group of commonly controlled corporations, other than the last
corporation in an unbroken chain then owns stock possessing 50% or more of the
total combined voting power of all classes of stock in at least one of the
other corporations in such chain.
SECTION 1.17 TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the employee-employer
advisory or consultancy relationship between the Employee and BRC or its
Subsidiaries is terminated for any reason whatsoever. The Committee, in its
absolute discretion, shall determine, for purposes of the Plan, the effect of
all matters and questions relating to Termination of Employment, including,
but not by way of limitation, all questions of whether particular leaves of
absence constitute Terminations of Employment and the question of whether any
reemployment (which may include a commitment to rehire) by BRC is
simultaneous, for the purposes of this Plan, with termination. Notwithstanding
any other provision of this Plan, BRC or any of its Subsidiaries have an
absolute and unrestricted right to terminate any Employee's employment at any
time for any reason whatsoever with or without cause.
ARTICLE 2
SHARES SUBJECT TO PLAN
SECTION 2.1 SHARES SUBJECT TO PLAN
Subject to the provisions of Sections 4.6 and 4.7, the shares of stock
subject to Options shall be shares of Common Stock. The aggregate number of
shares of Common Stock which may be issued upon exercise of Options shall not
exceed 500,000 shares, subject to adjustment as provided in Section 4.6 or 4.7
hereof and subject to the amendment of this Plan by any action of the Board of
Directors of BRC, as ratified by the stockholders of BRC, in accordance with
Section 7.4 hereof.
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SECTION 2.2 UNEXERCISED OPTIONS
If any Option expires or is canceled without having been fully exercised,
the number of shares subject to such Option but as to which such Option was
not exercised prior to its expiration or cancellation may again be optioned
hereunder, subject to the limitations of Section 2.1.
ARTICLE 3
GRANTING OF OPTIONS
SECTION 3.1 ELIGIBILITY
Any natural person who has agreed to become an Employee or who is an
employee, adviser or consultant to any other Person and who is, or is expected
to become an Employee following the consummation of any transaction between
the Person in question and BRC pursuant to which BRC acquires from such Person
(i) one or more businesses or (ii) assets to be utilized by BRC in connection
with its existing or contemplated business activities, shall be eligible to be
granted Options. Notwithstanding the foregoing, no Options hereunder may be
granted to any Person who was, at any time during the sixty (60) days
preceding such grant, an Employee of BRC or its Subsidiaries.
SECTION 3.2 GRANTING OF OPTIONS
The Committee shall from time to time, in its absolute discretion:
(i) Determine the eligible Persons to whom options should be granted; and
(ii) Determine the number of shares to be subject to any such Options;
and
(iii) Determine the terms and conditions of such Options consistent with
the Plan; and
(iv) Establish such conditions as to the vesting of options and the
manner of exercise of such Options as it may deem necessary, including but
not limited to establishing a maximum number of Options that any Person
shall be entitled to and requiring option holders under this Plan to enter
into agreements regarding transferability and other restrictions with
respect to shares issuable upon exercise of such Options.
SECTION 3.3 BONA FIDE SERVICES REQUIRED
Notwithstanding any provision of Sections 3.1 or 3.2, or of any agreement
relating to an Option granted hereunder, no Option shall become exercisable in
whole or in part until the Person to whom such Option shall have been granted
has become an Employee of BRC or its Subsidiaries or has otherwise begun to
render bona fide services to BRC or its Subsidiaries.
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ARTICLE 4
TERMS OF OPTIONS
SECTION 4.1 OPTION AGREEMENT
Each Option shall be evidenced by a written stock option agreement (a "Stock
Option Agreement") which shall be executed by the Employee and an authorized
officer of BRC and which shall contain such terms and conditions as the
Committee shall determine, consistent with the Plan.
SECTION 4.2 OPTION PRICE
The price per share of the Common Stock subject to each Option (the "Option
Price") shall be set by the Committee in its discretion. The Option Price may
be less than the fair market value of such shares on the date such Option is
granted.
SECTION 4.3 COMMENCEMENT OF EXERCISABILITY
Subject to the provisions of Section 7.4, Options shall become exercisable
at such times and in such installments (which may be cumulative) as the
Committee shall provide in the terms of each individual Stock Option Agreement
as amended from time to time; provided, however, that by a resolution adopted
after an Option is granted, the Committee may, on such terms and conditions as
it may determine to be appropriate and subject to Section 7.4, accelerate the
time at which such Option or any portion thereof may be exercised.
SECTION 4.4 EXPIRATION OF OPTIONS
(a) No Option may be exercised to any extent by anyone after, and every
Option shall expire no later than the tenth anniversary of the date the Option
was granted or deemed granted.
(b) Subject to the provisions of Section 4.4(a), the Committee shall
provide, in the terms of each individual Stock Option Agreement, when such
Option expires and becomes unexercisable
SECTION 4.5 NO RIGHT TO CONTINUE IN EMPLOYMENT OR OFFICE
Nothing in this Plan or in any Stock Option Agreement (i) shall confer upon
any Person any right to employment or continued employment by BRC or any of
its Subsidiaries or (ii) shall interfere with or restrict in any way the
rights of BRC and its Subsidiaries, which are hereby expressly reserved, to
terminate the employment of any Employee at any time for any reason
whatsoever, with or without good cause. No termination of any Employee, or any
document or agreement executed or delivered in connection therewith shall have
the effect of amending any Stock Option Agreement or modifying any of its
terms unless such Stock Option Agreement or this Plan is specifically
referenced with regard thereto.
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SECTION 4.6 ADJUSTMENTS IN OUTSTANDING OPTIONS
Subject to Section 4.7, in the event that the outstanding shares of Common
Stock subject to Options are, from time to time, changed into or exchanged for
a different number or kind of shares of BRC or other securities of BRC or in
the event holders of the Common Stock receive additional shares of Common
Stock or a different kind or number of shares of BRC or other securities of
BRC by reason of a merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend, combination of shares, or otherwise, the
Committee shall make an appropriate and equitable adjustment in the aggregate
number of shares which may be issued pursuant to Section 2.1 hereof and the
number and kind of shares or other consideration as to which all outstanding
Options, or portions thereof then unexercised, shall be exercisable. Any such
adjustment made by the Committee shall be final and binding upon all
Employees, BRC and all other interested persons.
SECTION 4.7 CHANGE OF CONTROL
In its absolute discretion, and on such terms and conditions as it deems
appropriate, coincident with or after the grant of any Option, the Committee
may provide that such Option cannot be exercised after a Change of Control,
and if the Committee so provides, it may, in its absolute discretion and on
such terms and conditions as it deems appropriate, also provide, either by the
terms of such Option or by a resolution adopted prior to the occurrence of
such Change of Control, that, for some period of time prior to such Change of
Control, such Option shall be exercisable as to all shares subject thereto,
notwithstanding anything to the contrary in Section 4.3 and/or in any
installment provisions of such Option (but subject to the provisions of
Section 4.4(a)) and that, upon the occurrence of such Change of Control, such
Option shall terminate and be of no further force or effect; provided,
however, that the Committee may also provide, in its absolute discretion, that
even if the Option shall remain exercisable after any such Change of Control,
from and after such Change of Control, any such Option shall be exercisable
only for the kind and amount of securities and/or other property, or the cash
equivalent thereof, receivable as a result of such Change in Control by the
holder of a number of shares of stock for which such Option could have been
exercised immediately prior to such Change of Control. Notwithstanding the
foregoing, in the event that the Committee determines that the Option cannot
be exercised or terminates after the occurrence of a Change of Control, then
to the extent the holder thereof has not exercised such Option or otherwise
received adequate consideration in respect thereof prior to the occurrence of
such Change of Control, that holder shall be entitled to receive in
consideration for the termination of such Option, whether or not then
exercisable or vested, an amount not less than the excess, if any, of (a) the
per share consideration payable pursuant to the terms of such Change of
Control, in respect of the Common Stock (or, if applicable, in respect of the
assets of BRC), over (b) the Option Price per share for all shares of Common
Stock subject to such Option, times the number of shares of Common Stock
subject to such Option; provided, however, that, to the extent the
consideration referred to in clause (a) above includes, in whole or in part,
securities
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or property (other than cash), the per share consideration for purposes of
such clause (a) shall equal the fair market value of such securities or
property plus any cash portion of the consideration. Notwithstanding anything
to the contrary contained herein, a person who is an Employee as of the
effective date of a Change in Control shall vest and be entitled to 100% of
any options theretofore granted to such Employee, and all such Options shall
become fully exercisable immediately prior to (but conditional upon the
occurrence of) any event constituting a Change of Control.
ARTICLE 5
EXERCISE OF OPTIONS
SECTION 5.1 PERSONS ELIGIBLE TO EXERCISE
During the lifetime of the Person receiving an Option hereunder, only he or
his guardian may exercise such Option. After the death of the Person receiving
an Option hereunder, any exercisable portion of an Option may, prior to the
earlier to occur of (i) one year following the death of such Person or (ii)
the time when such portion becomes unexercisable under Section 4.4 or Section
4.7, be exercised by his personal representative or by any person empowered to
do so under the deceased Employee's will or under the then applicable laws of
descent and distribution.
SECTION 5.2 PARTIAL EXERCISE
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof expires or becomes unexercisable under
Section 4.4 or Section 4.7, such Option or portion thereof may be exercised in
whole or in part; provided, however, that BRC shall not be required to issue
fractional shares and the Committee may, in the Stock Option Agreement,
require any partial exercise to be with respect to a specified minimum number
of shares.
SECTION 5.3 MANNER OF EXERCISE
An exercisable Option, or any exercisable portion thereof, may be exercised
solely by delivering to the Secretary or his office all of the following prior
to the time when such Option or such portion becomes unexercisable under
Section 4.4 or Section 4.7:
(a) Notice in writing signed by the Employee or other person then
entitled to exercise such Option or portion thereof, stating that such
Option or portion thereof is exercised;
(b) Full payment of the Option Price (in cash or by delivery of a
properly executed exercise notice as specified in Section 5.3(a) above
together with irrevocable instructions to a broker to promptly deliver to
BRC the amount of sale or loan proceeds to pay the exercise price) for the
shares with respect to which such Option or portion thereof is thereby
exercised, together with payment or
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arrangement for payment of any federal income or other tax required to be
withheld by BRC with respect to such shares;
(c) In lieu of payment contemplated in clause (b) above, at the
discretion of the Committee, an exercising holder may tender, in payment of
all or any part of the Option Price or any federal or other taxes due with
respect to an exercise, shares of Common Stock having a fair market value
equal to the required cash payment amounts;
(d) Such representations and documents as the Committee reasonably deems
necessary or advisable to effect compliance with all applicable provisions
of the Securities Act of 1933, the Securities Exchange Act of 1934 and any
other federal, state or foreign securities laws or regulations promulgated
thereunder, all as may be amended from time to time. The Committee may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance, including, without limitation,
placing legends on share certificates and issuing stop- transfer orders to
transfer agents and registrars;
(e) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than an Employee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof; and
(f) Such other documents, certificates or undertakings as the Committee
may require in accordance with Section 7.2 hereof or as may be required
pursuant to applicable law.
ARTICLE 6
ADMINISTRATION
SECTION 6.1 STOCK OPTION COMMITTEE
The Committee shall consist of at least two Directors. It shall be appointed
by and shall serve at the pleasure of the Board. If the Board shall make the
determination to seek or maintain such exemption, and to the extent required
to secure or maintain any exemption available under Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no person
shall be eligible to serve on the Committee unless he is then a "Non-Employee
Director" within the meaning of paragraph (b)(3) of Rule 16b-3 which has been
adopted by the Securities and Exchange Commission under the Exchange Act, as
amended, as such Rule or its equivalent is then in effect. Appointment of
Committee members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board.
Vacancies in the Committee may be filled by the Board as it deems appropriate.
At the option of the Board, or in the absence of the appointment or
designation of the Committee by the Board, the entire Board shall constitute
the Committee.
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SECTION 6.2 DUTIES AND POWERS OF COMMITTEE
It shall be the duty of the Committee to conduct the general administration
of the Plan in accordance with its provisions. The Committee shall have the
power to interpret the Plan and the Options and to adopt such rules for the
administration, interpretation, and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules shall be consistent with the basic purpose of the
Plan to grant Options. In its absolute discretion, the Board may at any time
and from time to time exercise any and all rights and duties of the Committee
under the Plan.
SECTION 6.3 MAJORITY RULE
The Committee shall act by a majority of its members in office and the
Committee may act either by vote at a telephonic or other meeting or by a
memorandum or other written instrument signed by a majority of the Committee.
SECTION 6.4 COMPENSATION: PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS
Members of the Committee shall not receive compensation for their services
as members but all expenses and liabilities they incur in connection with the
administration of the Plan shall be borne by BRC. The Committee may employ
attorneys, consultants, accountants, appraisers, brokers or other persons. The
Committee, BRC and the officers and Directors of BRC shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committee in good faith
shall be final and binding upon all Employees, BRC and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options, and all members of the Committee shall be fully protected by BRC
with respect to any such action, determination or interpretation.
ARTICLE 7
MISCELLANEOUS PROVISIONS
SECTION 7.1 RIGHTS AS STOCKHOLDERS
The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of BRC in respect of any shares purchasable upon
the exercise of any part of an Option unless and until certificates
representing such shares have been issued by BRC to such holders.
SECTION 7.2 TRANSFER RESTRICTIONS
The Committee, in its absolute discretion, may impose such restrictions on
the transferability of the shares purchasable upon the exercise of an Option
as it deems appropriate, and any such restrictions shall be set forth in the
respective Stock Option Agreement or a stock subscription agreement to be
executed by
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the grantee thereof prior to the exercise of an option and may be referred to
on the certificates evidencing such shares.
SECTION 7.3 OPTIONS NOT TRANSFERABLE
No Option or interest or right therein shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means, whether such disposition be voluntary or involuntary or by
operation of law or by judgment, levy, attachment, garnishment or any other
legal or equitable proceeding (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 7.3 shall prevent transfers by will or
by the applicable laws of descent and distribution.
SECTION 7.4 AMENDMENT. SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Board. However, without
approval of a majority vote of BRC's stockholders present in person or by
proxy at any regular or special meeting given within 12 months before or after
the action by the Board or the Committee, no action of the Committee or the
Board may, except as provided in Sections 4.6 or 4.7, increase any limit
imposed in Section 2.1 on the maximum number of shares which may be issued
upon exercise of Options, reduce the minimum option price requirements in
Section 4.2 or extend the limit imposed in this Section 7.4 on the period
during which Options may be granted. Except as expressly permitted by the
terms of the Plan, neither the amendment, suspension nor termination of the
Plan shall, without the consent of the holder of the Option, alter or impair
any rights or obligations under any Option theretofore granted. No Option may
be granted during any period of suspension nor after termination of the Plan,
and in no event may any Option be granted under this Plan after the expiration
of ten (10) years from the date the Plan is adopted or the date the
stockholders of BRC approve this Plan, if earlier.
SECTION 7.5 EFFECT OF PLAN UPON OTHER OPTIONS AND COMPENSATION PLANS
Nothing in this Plan shall be construed to limit the right of BRC or any of
its Subsidiaries (a) to establish any other forms of incentives or
compensation for employees of BRC or any of its Subsidiaries or (b) to grant
or assume options otherwise than under this Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
SECTION 7.6 TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
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P
R
O
X
Y
BRC HOLDINGS, INC.
1111 W. MOCKINGBIRD LANE, SUITE 1400
DALLAS, TEXAS 75247
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (1) acknowledges receipt of the notice dated April
11, 1997 of the annual meeting of stockholders of BRC Holdings, Inc. (the
"Company") to be held in the Salons I and II of the Sheraton Suites Market
Center Hotel, 2101 Stemmons Freeway, Dallas, Texas 75207 on May 15, 1997, at
9:00 a.m., Dallas time, and the proxy statement in connection therewith, and
(2) appoints Perry E. Esping and Paul T. Stoffel, and each of them, his
proxies, with full power of substitution, for and in the name, place, and
stead of the undersigned, to vote upon and act with respect to all of the
shares of Common Stock of the Company held of record by the undersigned on
March 26, 1997 at said meeting and at any adjournment thereof, and the
undersigned directs that his proxy be voted as follows:
1. Election of Directors, Nominees: L. D. Brinkman, Perry E. Esping,
Robert E. Masterson, David H. Monnich, and Paul T. Stoffel.
2. To approve the Nonqualified Performance Stock Option Plan for New
Employees and Employees of Acquired Companies.
You may specify your choices by making the boxes on the reverse side, but
you do not need to mark any boxes if you want to vote as recommended by the
Company's Board of Directors. The proxies cannot vote your shares unless you
sign and return this proxy card.
See Reverse Side
<PAGE>
BRC HOLDINGS, INC. 0 SHARES IN YOUR NAME
PLEASE MARK VOTE IN OVAL
IN THE FOLLOWING MANNER
USING DARK INK ONLY.
[ ]
1. Election of Directors (See Reverse) For All
For Withheld Except
0 0 0
- --------------------------------------
Nominee Exception
2. Adoption of the Nonqualified Performance For Against Abstain
Stock Option Plan. 0 0 0
3. In their discretion, the proxies are For Against Abstain
authorized to vote upon such other 0 0 0
business as may properly come before
the meeting.
[_] Check if Change of Address. Please sign exactly as name is
registered under the plan and appears
above.
Signature _______________Date_________
<PAGE>
P
R
O
X
Y
BRC HOLDINGS, INC.
1111 W. MOCKINGBIRD LANE, SUITE 1400
DALLAS, TEXAS 75247
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (1) acknowledges receipt of the notice dated April
11, 1997 of the annual meeting of stockholders of BRC Holdings, Inc. (the
"Company") to be held in the Salons I and II of the Sheraton Suites Market
Center Hotel, 2101 Stemmons Freeway, Dallas, Texas 75207 on May 15, 1997, at
9:00 a.m., Dallas time, and the proxy statement in connection therewith, and
(2) appoints Perry E. Esping and Paul T. Stoffel, and each of them, his
proxies, with full power of substitution, for and in the name, place, and
stead of the undersigned, to vote upon and act with respect to all of the
shares of Common Stock of the Company held of record by the undersigned on
March 26, 1997 at said meeting and at any adjournment thereof, and the
undersigned directs that his proxy be voted as follows:
1. Election of Directors, Nominees: L. D. Brinkman, Perry E. Esping,
Robert E. Masterson, David H. Monnich, and Paul T. Stoffel.
2. To approve the Nonqualified Performance Stock Option Plan for New
Employees and Employees of Acquired Companies.
The shares credited in the name of the undersigned will be voted as
specified if this card is signed by or on behalf of the participant and
received by the Trustee by May 9, 1997. If no specification is made as to
how to vote the shares, then the shares will be voted for the matters
specifically referred to above. If this card is not signed and received by
the Trustee, then the shares will be voted by the Trustee in the same
proportion as the shares with respect to which voting instructions are
received.
See Reverse Side
<PAGE>
BRC HOLDINGS, INC. 0 SHARES IN YOUR NAME
PLEASE MARK VOTE IN OVAL
IN THE FOLLOWING MANNER
USING DARK INK ONLY.
[ ]
1. Election of Directors (See Reverse) For All
For Withheld Except
0 0 0
- --------------------------------------
Nominee Exception
2. Adoption of the Nonqualified Performance For Against Abstain
Stock Option Plan. 0 0 0
3. In their discretion, the proxies are For Against Abstain
authorized to vote upon such other 0 0 0
business as may properly come before
the meeting.
[_] Check if Change of Address. Please sign exactly as name is
registered under the plan and appears
above.
Signature _______________Date_________
