<PAGE>
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:
/ / 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)(1)
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>
PERRY E. ESPING
[LOGO] Chairman and
Chief Executive Officer
Corporate Offices
BRC Holdings, Inc.
1111 W. Mockingbird Lane
Suite 1400
Dallas, Texas 75247-5014
April 10, 1998
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
BRC Holdings, Inc. to be held in the White Oak Room of the Sheraton Suites
Market Center Hotel, 2101 Stemmons Freeway, Dallas, TX 75207 on May 14, 1998, 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,
/s/ 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 14, 1998
------------------------
To the Stockholders of
BRC HOLDINGS, INC.:
BRC Holdings, Inc., a Delaware corporation, will hold its annual meeting of
stockholders in the White Oak Room of the Sheraton Suites Market Center Hotel,
2101 Stemmons Freeway, Dallas, TX 75207, on May 14, 1998, 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 an amendment to the Restated Certificate of Incorporation
of the Company to increase the number of common shares authorized for
issuance by the Company; and
(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 20, 1998 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,
/s/ Perry E. Esping
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Dallas, Texas
April 10, 1998
<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 14, 1998
------------------------
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 Company for use at the annual meeting of stockholders (the
"Annual Meeting") to be held in the White Oak Room of the Sheraton Suites Market
Center Hotel, 2101 Stemmons Freeway, Dallas, TX 75207, on May 14, 1998, 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 10, 1998.
The enclosed Annual Report of the Company for the year ended December 31,
1997 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 20, 1998. At the close of business on that date, the Company had issued
and outstanding and entitled to vote 7,071,614 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
1
<PAGE>
name on the record 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 as directors of the Company of the
five persons named under the caption "ELECTION OF DIRECTORS," (ii) "FOR" the
amendment of the Company's Restated Certificate of Incorporation to increase the
number of shares of Common Stock authorized for issuance by the Company, 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.
2
<PAGE>
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 20, 1998:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF NATURE OF PERCENT OF
BENEFICIAL OWNER SHARES(1) BENEFICIAL OWNERSHIP CLASS
- ------------------------------------- -------------- ------------------------ -----------
<S> <C> <C> <C>
Perry E. Esping 1,437,945(2) Sole voting and 20.1%
4330 Bordeaux investment power
Dallas, TX 75205
First Pacific Advisors, Inc. 694,000(3) Shared voting and 9.8%
11400 West Olympic Blvd. 62,000(3) investment power 0.9%
Suite 1200 Shared investment power
Los Angeles, CA 90064
Wallace R. Weitz & Co. 369,400(4) Sole voting and 5.2%
1125 South 103rd Street investment power
Suite 600
Omaha, NE 68124
Wanger Asset Management, L.P. 355,800(5) Shared voting and 5.0%
Wanger Asset Mgmt., Ltd. investment power
227 West Monroe, Suite 3000
Chicago, IL 60606
</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 5, 1998, filed with the
Securities and Exchange Commission, Mr. Esping holds 1,264,258 Common Stock
directly. Mr. Esping is also deemed to be the beneficial owner of 100,000
shares of Common Stock which are issuable upon the exercise of presently
exercisable stock options, 2,258 shares of Common Stock in the Company
401(k) plan and 71,429 shares held of record by the Esping Family Foundation
of which Mr. Esping is a Director; such shares are included in the figure
noted in the table.
(3) Based upon information contained in the statement on Schedule 13G dated
February 11, 1993 as amended through Amendment No. 6 dated February 9, 1998
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
3
<PAGE>
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 62,000 of the aggregate
shares shown in the table above.
(4) Based upon information contained in a statement on Schedule 13G dated
February 7, 1990 filed with the Securities and Exchange Commission by
Wallace R. Weitz & Company and amended through Amendment No.7 dated February
11, 1998.
(5) Based upon information contained on Schedule 13G dated March 5, 1998 filed
with the Securities and Exchange Commission by Wanger Asset Management,
Ltd., for itself and as general partner for Wanger Asset Management, L.P.
("WAM"). WAM is an investment company registered under the Investment
Company Act of 1940. The shares reported have been acquired on behalf of
discretionary clients of WAM.
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 who
continue to hold their positions as of the
4
<PAGE>
record date and provides information regarding their beneficial ownership of the
Common Stock of the Company at March 20, 1998.
<TABLE>
<CAPTION>
NAME OF NUMBER OF NATURE OF PERCENT OF
BENEFICIAL OWNER SHARES BENEFICIAL OWNERSHIP VOTING CLASS
- ----------------------------------- ------------ --------------------------------- ------------
<S> <C> <C> <C>
Perry E. Esping.................... 1,437,945(1) Sole voting and investment power 20.1%
L.D. Brinkman...................... 21,000(2) Sole voting and investment power 0.3%
Robert E. Masterson................ 6,100(3) Sole voting and investment power 0.1%
David H. Monnich................... 6,000(4) Sole voting and investment power 0.1%
Paul T. Stoffel.................... 172,123(5) Sole voting and investment power 2.4%
Jerrold L. Morrison................ 142,482(6) Sole voting and investment power 2.0%
Bernard J. Owens................... 67,148(7) Sole voting and investment power 0.9%
William J. Fosick.................. 22,697(8) Sole voting and investment power 0.3%
Harvey V. Braswell................. 10,941(9) Sole voting and investment power 0.2%
All directors and officers as a Sole voting and investment power
group (11 persons)............... 1,950,167(10) 26.1%
</TABLE>
- ------------------------
(1) See Note (2) under the caption Principal Stockholders.
(2) Represented by 15,000 share of common stock which Mr. Brinkman is the
record holder and 6,000 shares issuable under options which are presently
exercisable.
(3) Represented by 100 shares of common stock for which Mr. Masterson is the
record holder and 6,000 shares issuable under stock options which are
presently exercisable.
(4) Represented by 6,000 shares issuable under stock options which are
presently exercisable.
(5) Represented by 166,123 shares of common stock for which Mr. Stoffel is the
record holder and 6,000 shares issuable under stock options which are
presently exercisable.
(6) Represented by 141,667 shares issuable under stock options which are
presently exercisable and 815 shares which are held on Mr. Morrison's behalf
by the Company 401(k) plan.
(7) Represented by 12,520 shares of common stock for which Mr. Owens is the
record holder, 53,667 stock options which are presently exercisable, and 961
shares which are held on Mr. Owens' behalf by the Company 401(k) plan.
(8) Represented by 18,364 shares of common stock for which Mr. Fosick is the
record holder and 4,333 stock options which are presently exercisable.
(9) Represented by 10,833 stock options which are presently exercisable and 108
shares which are held on Mr. Braswell's behalf by the Company 401(k) plan.
(10) Includes 394,500 shares subject to employee stock options that are
presently exercisable, or will become exercisable within sixty days of the
record date.
5
<PAGE>
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 subject to the discretion of the Board of Directors, hold office until its
next annual meeting or until their successors have been duly elected and
qualified.
DIRECTORS
Perry E. Esping
Mr. Esping, age 63, 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 previously
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 ("MatriDigm"), a privately-held corporation which
specializes in 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 69, 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.
Robert E. Masterson
Mr. Masterson, age 52, has been a director of the Company since May 1995.
Mr. Masterson is Chairman 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
6
<PAGE>
President and Chief Executive Officer of First Data Resources, Inc., a
subsidiary of American Express which provides data processing services.
David H. Monnich
Mr. Monnich, age 66, 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 64, 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.
EXECUTIVE OFFICERS
Jerrold L. Morrison
Mr. Morrison, age 43, is President and Chief Operating Officer and has
served is 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, from August 1995 to
June 1996. Previously he spent seven years as an 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 of that period.
Harvey V. Braswell
Mr. Braswell, age 52, has been the President of the Government Services
Division of the Company since November 1996. Upon joining the Company in 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 Board of Directors of the North Carolina Electronics and
Information
7
<PAGE>
Technologies Association, an organization comprised of executives from
technology companies residing in North Carolina, which seeks to provide its
members a forum for discussing industry trends and issues.
L. Stanley Coffee
Mr. Coffee, age 53, is Executive Vice President of the Company and has
served in that capacity since March of 1997. He is responsible for the
operations of the Company's Year 2000 division. 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.
William J. Fosick
Mr. Fosick, age 51, has been President of The Pace Group, Inc., a
wholly-owned subsidiary of the Company, since November 1997. Prior to that time,
Mr. Fosick served as a Senior Vice President of The Pace Group, Inc. from 1993
to November 1997. From 1989 to 1993 Mr. Fosick was the general manager of
managed care operations with Employer's Health Insurance, a national health
insurance provider. Mr. Fosick also currently serves as a member of the Board of
Directors of the Mayo Health Plan in Jacksonville, Florida, a health care
services provider.
Thomas E. Kiraly
Mr. Kiraly, age 38, has been the Company's principal financial and
accounting officer since December 1988. Mr. Kiraly has held the title of Chief
Financial Officer since March 1994. Prior to that time, he served as Vice
President of Finance. He formerly was a Senior Management Consultant with Touche
Ross & Co., a predecessor to Deloitte & Touche, a national accounting firm, from
May 1985 until December 1988.
Bernard J. Owens
Mr. Owens, age 51, has been President of the Company's Government Records
Management division since July 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 from 1984 through May
1989.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established the Audit Committee, the Compensation
Committee, and the Nominating Committee to assist the Board of Directors in
carrying out its duties.
8
<PAGE>
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 1997 the Board of Directors held three meetings (excluding five
actions by unanimous consent). The Audit Committee held one meeting and the
Compensation Committee held one meeting during the year. With the exception of
Mr. Masterson 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 1997.
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, each of the Company's four most highly compensated executive
officers, and one individual who would have been one of the Company's four most
highly compensated officers had there not been a change in his status as an
officer of the Company. The determination of total compensation is based on
salary, bonuses, and other cash compensation earned during fiscal 1997.
9
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
AWARDS
ANNUAL COMPENSATION ----------------------- PAYOUTS
--------------------------------------- RESTRICTED SECURITIES -------
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS(A) COMPENSA- AWARD(S) OPTIONS/ PAYOUTS COMPENSA-
POSITION(a) YEAR(b) ($)(c) ($)(d) TION(D)($)(e) ($)(f) SARS(#)(g) ($)(h) TION(H)($)(i)
- -------------------- ------- ---------- ---------- ------------- ---------- ---------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Esping, P.E. 1997 257,692 3,325
Chairman and CEO 1996 250,000 3,150
1995 265,000 150,000 3,150
Morrison, Jerrold L. 1997 250,000(F) 75,000(G) 3,325
President and Chief 1996 249,039 49,610 50,000 1,393
Operating Officer 1995 169,308(C) 37,000 9,664 125,000 969
Pace, Ray (B) 1997 170,289 186,299 1,425
President, 1996 59,916(C) 135,000
The Pace Group 1995
Owens, Bernard 1997 200,000 96,813(G) 3,325
Executive Vice 1996 200,000 104,205(E) 3,150
President 1995 200,000 25,000 3,150
Fosick, William (B) 1997 133,096 146,000 1,354
President, 1996 49,320(C) 10,001 13,000
The Pace Group 1995
Braswell, Harvey 1997 164,942(I) 102,772(G) 257 2,759
President, 1996 114,462 50,000(E) 54,607 30,000 2,045
Government 1995
Services Division
</TABLE>
- ------------------------
(A) Unless otherwise noted, reflects bonus earned during the fiscal year but
paid during the next year.
(B) Mr. Pace resigned from his position as President of The Pace Group on
November 10, 1997 and has been included in the table in that he would have
been listed as one of the Company's four most highly compensated executive
officers for fiscal year 1997 had there not been a change in his officer
status. Mr. Fosick succeeded Mr. Pace as President of The Pace Group on
November 10, 1997.
(C) Reflects compensation for only a portion of the fiscal year paid to the
listed individual as measured from the date of commencement of the
individual's employment by the Company through the end of the fiscal year.
Mr. Morrison became employed by the Company on February 1, 1995. Mr. Pace
and Mr. Fosick became employed by the Company on September 5, 1996.
10
<PAGE>
(D) Reflects compensation associated with relocation expenses.
(E) With respect to Mr. Owens, of the total amount, $42,393 was paid in March
1997 for performance during 1996, the remainder was paid during the 1996
fiscal year. With respect to Mr. Braswell, of the total amount $25,000 was
paid in March 1997 for performance during 1996, the remainder was paid
during the 1996 fiscal year.
(F) Effective January 1, 1998, Mr. Morrison's base salary was increased to
$275,000 per year.
(G) With respect to Mr. Owens, of the total amount, $47,312 was paid in February
1998 for performance during 1997, the remainder was paid during the 1997
fiscal year. With respect to Mr. Braswell, of the total amount $54,437 was
paid in February 1998 for performance during 1997, the remainder was paid
during the 1997 fiscal year. With respect to Mr. Morrison, of the total
amount, $18,750 was paid in March 1998 for performance during 1997, the
remainder was paid during the 1997 fiscal year.
(H) Amounts represent Company contributions to the Company's 401(k) Plan on the
behalf of the listed individuals.
(I) Effective March 1, 1998, Mr. Braswell's base salary was increased to
$200,000 per year.
OPTION GRANTS DURING 1997 FISCAL YEAR
There were no grants of stock options or stock appreciation rights during
the fiscal year ended December 31, 1997 to the named executives.
OPTION EXERCISES DURING 1997 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides information related to options and warrants
exercised by the named executive officers during the 1997 fiscal year and the
number and value of options held at fiscal year end. The Company does not have
any outstanding stock appreciation rights.
11
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS/SAR'S AT FISCAL THE-MONEY OPTIONS/SARS AT
YEAR-END (#)(d) FISCAL YEAR-END (2)($)(e)
SHARES ACQUIRED VALUE ---------------------------- --------------------------
NAME(a) ON EXERCISE(#)(b) REALIZED(1)($)(c) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------------- ------------------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Esping, P.E........ -- -- 100,000 50,000 75,000 37,500
Morrison Jerrold... -- -- 99,999 75,001 220,832 141,668
Pace, Ray.......... -- -- 45,000 90,000 292,500 585,000
Owens, Bernard..... -- -- 53,667 8,333 197,500 6,250
Fosick, William.... -- -- 4,334 8,666 28,172 56,330
Harvey Braswell.... -- -- 9,583 20,417 1,563 4,688
</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, 1997 was $38.25. Value is calculated on the
basis of the difference between the option exercise price and $38.25
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 1997, 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.
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
12
<PAGE>
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 criteria 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 1997, 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 of the Company, to increase the base compensation
of the Chief Executive Officer from $250,000 to $300,000 per year effective
November 1, 1997 and to award no bonus compensation or stock options during
1997.
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
13
<PAGE>
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 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
Chairman, director and stockholder.
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, 1997 with the cumulative total return on the NASDAQ
Index and the Peer Group Index. The Peer Group Index, compiled by the Company is
reflective of SIC code 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
14
<PAGE>
for the Company's performance. The comparison assumes $100 was invested on
December 31, 1992 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
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BRC HOLDINGS, INC. NASDAQ STOCK MARKET INDEX (US) PEER GROUP
<S> <C> <C> <C>
12/31/92 100.000 100.000 100.000
1993 160.843 114.796 105.835
1994 160.241 112.214 128.526
1995 190.361 158.699 195.739
1996 215.663 195.196 241.536
1997 184.337 239.527 296.704
</TABLE>
CERTAIN TRANSACTIONS
The Company has a minority investment in, and has certain consulting and
sales representative agreements with, MatriDigm. MatriDigm is a privately-held
company located in San Jose, California, 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
beneficiaries
15
<PAGE>
include members of his 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. As of March 1, 1998,
the Company owns 2,000,000 shares of common stock 1,000,000 shares of preferred
stock of MatriDigm. The Company paid $3,500,000 for such shares which bear
certain restrictions, including repurchase rights with respect to a portion of
the common shares.
On December 5, 1997, MatriDigm issued to the Company a $1.5 million
convertible promissory note and agreement. The note bears interest at a rate of
6% per annum, payable quarterly, until the note is converted. The note is
convertible, in part or in full, into common stock of MatriDigm at the Company's
option and terminates upon the closing of a registered public offering of
MatriDigm's securities, unless exercised simultaneously with such an event. The
principal amount of the note outstanding subsequent to the termination of the
conversion option period is due and payable in six equal monthly installments
beginning on January 1, 1999. The rate of conversion of the Promissory Note is
dependent on certain performance requirements by MatriDigm during the first
three months of 1998.
Depending on MatriDigm's achievement of the performance requirements
associated with the convertible promissory note and the resulting effect on the
rate of conversion, assuming conversion of the promissory note, the Company's
total equity ownership in MatriDigm would constitute 9% to 11% of the total
outstanding equity of that firm.
The Company, pursuant to a consulting agreement, receives 5% of the
cumulative pre-tax operating profits of MatriDigm in exchange for the services
of Mr. Esping and certain other assistance by the Company. The Company received
no payments during 1997 or 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 1997 or 1996 with respect to MatriDigm's services.
A business partly owned by a family member of Mr. Esping's 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 subleased office space to Mr. Esping for personal use through
August of 1997. The lease agreement covered 1,357 square feet of office space on
which the Company collected 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.
16
<PAGE>
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, 1997 all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% beneficial owners were complied
with.
PROPOSAL TWO:
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
SHARES OF AUTHORIZED COMMON STOCK
Under the provisions of Article Fourth of the Company's Restated Certificate
of Incorporation, as amended, the Company's current authorized capital stock is
twenty-two million shares, consisting of twenty million shares of common stock
with a par value of $0.10 per share ("Common Stock") and two million shares of
preferred stock, with a par value of $10.00 per share ("Preferred Stock"). On
March 3, 1998, the Board of Directors approved by a Unanimous Written Consent
the distribution of a 100% stock dividend payable to holders of record of the
Company's Common Stock on March 20, 1998. The distribution date of the dividend
was set by the Board of Directors as April 6, 1998. By virtue of the stock
dividend, as of the record date, after considering the Common Stock dividend to
be issued and all adjustments necessary to outstanding options to purchase the
Common Stock, there were an equivalent of 14,143,228 shares of Common Stock
outstanding and 3,676,658 shares reserved for issuance upon the exercise of
outstanding stock options. Thus, following the distribution of the stock
dividend, the Company will have available approximately 2,180,114 shares of
Common Stock authorized for future issuance pursuant to its Restated Certificate
of Incorporation. The Board of Directors believes that this number may be
inadequate to meet future contingencies. As a result, the Board of Directors of
the Company has approved for submission to a vote of the stockholders a proposal
to amend the first paragraph of Article Fourth of the Restated Certificate of
Incorporation of the Company to provide for a total authorized capital stock of
32,000,000 shares, consisting of 30,000,000 shares of Common Stock, par value
$0.10 per share, and 2,000,000 shares of Preferred Stock, par value $10.00 per
share. The effect of this amendment would be to increase the number of
authorized but unissued shares of the Company's Common Stock by 10,000,000
shares, giving the Company approximately 12,180,114 shares of authorized but
unissued Common Stock over and above the amount necessary to satisfy the
Company's obligations for issuance of shares upon the exercise of
17
<PAGE>
currently outstanding stock options. In all other respects, Article Fourth of
the Restated Certificate of Incorporation would remain unchanged.
No specific transaction is now contemplated which would result in the
issuance, after amendment of the Certificate of Incorporation, of additional
shares of Common Stock. However, the Board of Directors believes it would be
advantageous to the Company to have such additional shares available for
issuance to meet possible future developments and financing requirements,
without the expense and delay associated with calling a special meeting of the
stockholders to secure authorization each time a specific need arises. Among the
purposes for which such additional authorized but unissued shares of Common
Stock could be used would be for the acquisition of businesses and the raising
of funds for general corporate requirements. The increase in authorized capital
stock of the Company would also permit the Board of Directors to consider the
possibility of declaring further stock dividends to existing stockholders or to
provide for additional shares to be reserved for issuance under various of the
Company's stock option and other plans as a means of retaining qualified
management personnel and attracting additional personnel. While the reasons for
the increase in the authorized capital stock which will result from the approval
of this proposed amendment are those discussed above, the availability of the
additional common stock could also be utilized by the Company as a part of a
defensive strategy to counter any hostile takeover attempts. No such action is
presently anticipated, however. Although the Company anticipates issuing the
newly authorized stock at some time in the future for one or more of the reasons
set forth above, it has no present intention of doing so for any particular
purpose.
For the reasons described above, the Board of Directors recommends that the
following amendment to the first paragraph of Article Fourth of the Company's
Restated Certificate of Incorporation be approved by the stockholders:
"Fourth". This corporation is authorized to issue thirty-two
million (32,000,000) shares of capital stock. Thirty million
(30,000,000) of the authorized shares shall be common stock, $0.10
par value, and two million (2,000,000) of the authorized shares
shall be preferred stock, $10.00 par value each.
A copy of the entire text of Article Fourth of the Restated Certificate of
Incorporation is attached as Exhibit A to this Proxy Statement. The italicized
portions of paragraph 1 of Article Fourth in Exhibit A reflect the proposed
amendment to be voted on at the Annual Meeting.
Unless marked to the contrary, proxies received will be voted "FOR" adoption
of the foregoing amendment to the Certificate of Incorporation. An affirmative
vote of a majority of the outstanding shares of the Company's Common Stock is
required to approve the amendment.
The Board of Directors recommends a vote "FOR" this proposal.
18
<PAGE>
STOCKHOLDERS' PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the 1999 annual meeting of stockholders must be received by the Company at its
principal executive offices not later than January 13, 1999 in order to be
included in the Company's proxy statement and form of proxy with respect to such
1999 annual meeting.
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 1997. 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 1998. 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. 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,
/s/ Perry E. Esping
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Dallas, Texas
April 10, 1998
19
<PAGE>
EXHIBIT A
ARTICLE FOURTH
OF THE
CERTIFICATE OF INCORPORATION
"FOURTH". This corporation is authorized to issue thirty-two million
(32,000,000) shares of capital stock. Thirty million (30,000,000) of the
authorized shares shall be common stock, $0.10 par value each, and two million
(2,000,000) of the authorized shares shall be preferred stock, $10.00 par value
each.
Each holder of both classes of capital stock shall at every meeting of
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock held by the shareholder.
Shares of preferred stock may be issued from time to time in one or more
series, each such series to have such distinctive designation or title as may be
fixed by the Board of Directors prior to the issuance of any shares thereof.
Subject to the preceding paragraph, each such series shall have such voting
powers and such preferences and relative, participating, optional or other
special rights, with such qualification, limitations, or restrictions of such
preferences and/or rights as shall be stated in the resolution or resolutions
providing for the issue of such series of preferred stock, as may be adopted
from time to time by the Board of Directors prior to the issuance of any shares
thereof, in accordance with the laws of the State of Delaware. Each share of any
series of preferred stock shall be identical with all other shares of such
series, except as to the date from which accumulated preferred dividends, if
any, shall be cumulative.
No stockholder of this corporation shall by reason of his holding shares of
any class have any preemptive or preferential right to purchase or subscribe to
any shares of any class of the corporation, nor or hereafter to be authorized,
or any notes, debentures, bonds, or other securities convertible into or
carrying warrants or options to purchase shares of any class, now or hereafter
to be authorized, whether or not the issuance of any such shares or such notes,
debentures, bonds, or other securities would adversely affect the dividend or
voting rights of such stockholder, other than such rights, if any, as the Board
of Directors, in its discretion, may fix; and the Board of Directors may issue
shares of any class of this corporation, or any notes, debentures, bonds, or
other securities convertible into or carrying options or warrants to purchase
shares of any class, without offering any such shares of any class, either in
whole or in part, to the existing stockholders of any class.
20
<PAGE>
BRC HOLDINGS, INC.
1111 W. MOCKINGBIRD LANE, SUITE 1400
DALLAS, TEXAS 75247
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby (1) acknowledges receipt of the notice dated
April 10, 1998 of the annual meeting of stockholders of BRC Holdings,
R Inc. (the "Company") to be held in the White Oak Room of the Sheraton
Suites Market Center Hotel, 2101 Stemmons Freeway, Dallas, Texas 75207
O on May 14, 1998, 9:00 a.m. Dallas time, and the proxy statement in
connection therewith, and (2) appoints Perry E. Esping and Paul T. Stoffel,
X 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
Y with respect to all of the shares of Common Stock of the Company held
of record by the undersigned on March 20, 1998 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 Amendment of the Restated Certificate of Incorporation
of the Company to increase the number of common shares authorized for
issuance by the Company.
You may specify your choices by marking 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>
<TABLE>
<S> <C> <C>
BRC HOLDINGS, INC. SHARES IN YOUR NAME
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. Election of Directors (See Reverse) For Withheld Except 3. In their discretion the For Against Abstain
/ / / / / / proxies are authorized / / / / / /
to vote upon such other
----------------- business as may properly
Nominee Exception come before the meeting
2. To approve the Amendment of Article For Against Abstain
Fourth of the Restated Certificate of / / / / / /
Incorporation of the Company.
Please sign exactly as name is registered under the plan and appears above.
/ / Check if Change of Address Signature _____________________________________ Date _____________________
</TABLE>
<PAGE>
BRC HOLDINGS, INC.
1111 W. MOCKINGBIRD LANE, SUITE 1400
DALLAS, TEXAS 75247
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby (1) acknowledges receipt of the notice dated
April 10, 1998 of the annual meeting of stockholders of BRC Holdings,
R Inc. (the "Company") to be held in the White Oak Room of the Sheraton
Suites Market Center Hotel, 2101 Stemmons Freeway, Dallas, Texas 75207
O on May 14, 1998, at 9:00 a.m., Dallas time, and the proxy statement in
connection therewith, and (2) appoints Perry E. Esping and Paul T. Stoffel,
X 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
Y respect to all of the shares of Common Stock of the Company held of
record by the undersigned on March 20, 1998 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 Amendment of the Restated Certificate of Incorporation
of the Company to increase the number of common shares authorized for
issuance by the Company.
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 8, 1998. 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.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
SHARES IN YOUR NAME
[ ]
For Withheld Except
1. Election of Directors (See Reverse) / / / / / /
-----------------------
Nominee Exception
2. To approve the Amendment of Article Fourth of the For Against Abstain
Restated Certificate of Incorporation of the / / / / / /
Company.
3. In their discretion the proxies are authorized For Against Abstain
to vote upon such other 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 ____________________
