<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
U.S. Filter
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF U.S. FILTER]
To U.S. Filter Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of U.S. Filter
stockholders. We will meet on Tuesday, August 13, 1996 at 9:30 a.m., Pacific
Daylight Time, in the Indian Wells Resort Hotel in Indian Wells, California.
I urge you to vote your shares by proxy, even if you plan to attend the
meeting. After you read this proxy statement, indicate on the proxy card the
way you want to have your shares voted. Then date, sign and mail the proxy
card in the postage-paid envelope that is provided.
We hope to see you at the meeting.
Sincerely,
/s/ Richard J. Heckmann
Richard J. Heckmann
Chairman of the Board,
Chief Executive Officer and
President
July 9, 1996
<PAGE>
UNITED STATES FILTER CORPORATION
40-004 COOK STREET
PALM DESERT, CALIFORNIA 92211
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 13, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of United States Filter Corporation (the "Company") will be held at
the Indian Wells Resort Hotel, 76661 Highway 111, Indian Wells, California
92210 on Tuesday, August 13, 1996 at 9:30 a.m., Pacific Daylight Time, for the
following purposes, as more fully described in the attached Proxy Statement:
1. to elect three directors, each for a term of three years;
2. to approve the Company's 1991 Employee Stock Option Plan, as amended
and restated;
3. to approve the Company's 1991 Directors Stock Option Plan, as amended
and restated;
4. to increase the number of authorized shares of the Company's Common
Stock from 75,000,000 to 150,000,000;
5. to ratify the appointment of KPMG Peat Marwick LLP as independent
certified public accountants for the Company;
and to consider any other matters that may properly come before the meeting or
any adjournment of the Annual Meeting.
The Board of Directors has fixed the close of business on June 25, 1996 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting or at any adjournment thereof. A complete list of
the stockholders entitled to vote at the Annual Meeting will be open to the
examination of any stockholder during ordinary business hours for a period of
at least ten days prior to the Annual Meeting at the executive offices of the
Company, 40-004 Cook Street, Palm Desert, California 92211.
You are cordially invited to attend the Annual Meeting in person. In order
to ensure your representation at the meeting, however, please promptly
complete, date, sign and return the enclosed proxy in the accompanying
envelope. If you should decide to attend the Annual Meeting and vote your
shares in person, you may revoke your proxy at that time.
By Order of the Board of Directors
/s/ Damian C. Georgino
Damian C. Georgino
Secretary
July 9, 1996
<PAGE>
UNITED STATES FILTER CORPORATION
40-004 COOK STREET
PALM DESERT, CALIFORNIA 92211
----------------
PROXY STATEMENT
JULY 9, 1996
----------------
PROXY SOLICITATION AND VOTING INFORMATION
The accompanying proxy is solicited by the Board of Directors of United
States Filter Corporation (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Tuesday, August 13, 1996 at
the Indian Wells Resort Hotel, 76661 Highway 111, Indian Wells, California
92210 at 9:30 a.m., Pacific Daylight Time and at any adjournment of the Annual
Meeting. These proxies will be voted if properly signed, received by the
Secretary of the Company prior to the close of voting at the meeting and not
revoked. If no direction is given in the proxy, it will be voted "FOR" (i) the
election of the directors nominated; (ii) the proposal to approve the
Company's 1991 Employee Stock Option Plan, as amended and restated (the
"Amended Employee Plan Proposal"); (iii) the proposal to approve the Company's
1991 Directors Stock Option Plan, as amended and restated (the "Amended
Directors Plan Proposal"); (iv) the proposal to increase the number of
authorized shares of the Company's Common Stock from 75,000,000 to 150,000,000
(the "Authorized Capital Amendment"); and (v) the ratification of the
appointment of KPMG Peat Marwick LLP as the Company's independent certified
public accountants. With respect to any other item of business that may come
before the Annual Meeting, the proxy holders will vote in accordance with
their best judgment.
A stockholder who has returned a proxy may revoke it at any time before it
is voted at the meeting by delivering a revised proxy, by voting by ballot at
the Annual Meeting, or by delivering a written notice withdrawing the proxy to
the Company's Secretary. This notice may be mailed to the Secretary at the
address set forth above or may be given to the judge of election at the Annual
Meeting.
This Proxy Statement, together with the accompanying proxy, is first being
mailed to stockholders on or about July 9, 1996.
Holders of record of Common Stock at the close of business on June 25, 1996
are entitled to vote at the Annual Meeting. On that date 29,139,429 shares of
Common Stock were outstanding. The presence, in person or by proxy, of
stockholders entitled to cast at least a majority of the votes entitled to be
cast by all stockholders will constitute a quorum for the transaction of
business at the Annual Meeting. Stockholders are entitled to cast one vote per
share on each matter presented for consideration and action at the Annual
Meeting.
On June 4, 1996 the Company announced a three-for-two split of its Common
Stock. The split will be effected in the form of a stock dividend payable on
July 15, 1996 to stockholders of record at the close of business on June 14,
1996 (the "Stock Split"). Except as otherwise specified, all share numbers
used herein are stated on a pre-Stock Split basis.
Abstentions may be specified as to all proposals to be brought before the
Annual Meeting, other than the election of directors. Under the rules of the
New York Stock Exchange, Inc. (the "NYSE"), brokers holding shares for
customers have authority to vote on certain matters when they have not
received instructions from the beneficial owners, and do not have such
authority as to certain other matters (so-called "broker non-votes"). The NYSE
has advised the Company that member firms of the NYSE may vote without
specific instruction from beneficial owners on the election of directors and
on each of the proposals to be brought before the Annual Meeting.
1
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Approval of the Authorized Capital Amendment will require the affirmative
vote of the holders of at least a majority of the outstanding shares of Common
Stock. Approval of the other proposals to be brought before the Annual Meeting
(not including the election of directors) will require the affirmative vote of
at least a majority in voting interest of the stockholders present in person
or by proxy at the Annual Meeting and entitled to vote thereon. As to those
proposals, if a stockholder abstains from voting certain shares it will have
the effect of a negative vote, but if a broker indicates that it does not have
authority to vote certain shares, those shares will not be considered present
and entitled to vote with respect to that proposal and therefore will have no
effect on the outcome of the vote. With regard to the election of directors,
votes may be cast in favor or withheld. The three persons receiving the
highest number of favorable votes will be elected as directors of the Company.
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of ten members, divided into
three classes. The terms of office of the three classes of directors (Class I,
Class II and Class III) end in successive years. The terms of the Class III
directors expire this year and their successors are to be elected at the
Annual Meeting for a three-year term expiring in 1999. The terms of the Class
I and Class II directors do not expire until 1997 and 1998, respectively.
The accompanying proxy will be voted for the election of these nominees,
unless authority to vote for one or more nominees is withheld. In the event
that any of the nominees is unable or unwilling to serve as a director for any
reason (which is not anticipated), the proxy will be voted for the election of
any substitute nominee designated by the Board of Directors.
All directors were previously elected by the Company's stockholders, except
for Mr. Hillas and Mr. Quayle, who were elected by the Board of Directors in
February 1996 to fill two vacancies resulting from the resignations of Mr. J.
Atwood Ives and Mr. James R. Bullock in November 1995.
CLASS III DIRECTORS--NOMINEES FOR TERMS TO EXPIRE IN 1999
JAMES E. CLARK Mr. Clark was President of Western Operations for
Age 67 Prudential Insurance from 1978 to June 1990. Since
Director since 1990 June 1990, he has been a consultant and a private
investor. Mr. Clark is also Chairman of Asian-
Member of the Audit American Communication Company, Inc., and a
Committee and the director of Asian American Association, Inc., a
Compensation Committee joint venture with Sprint, and Durotest
Corporation. He is also a trustee of the Yul
Brynner Foundation.
RICHARD J. HECKMANN Mr. Heckmann was elected Chairman of the Board of
Age 52 Directors, Chief Executive Officer and President
Director and Chairman of the Company on July 16, 1990. Mr. Heckmann was
since 1990 a Senior Vice President at Prudential-Bache
Securities in Rancho Mirage, California from
Chairman of the January 1982 to August 1990. He joined the U.S.
Nominating Committee Small Business Administration in 1977 and served
as Associate Administrator for Finance and
Investment from 1978 to 1979. Prior thereto he was
founder and Chairman of the Board of Tower
Scientific Corporation, a manufacturer of custom
prosthetic devices, which was sold to Hexcel
Corporation in 1977. Mr. Heckmann is a member of
the management board of Treated Water Outsourcing
("TWO"), a Nalco/U.S. Filter Joint Venture. He is
also a director of USA Waste Services, Inc.
2
<PAGE>
ROBERT S. HILLAS Mr. Hillas has served as a Managing Director of
Age 47 E.M. Warburg, Pincus & Co., Inc., a private
Director since 1996 investment firm, since 1993. Previously, Mr.
Hillas was a partner of DSV Management Ltd., a
venture capital investment firm, and its
affiliated venture capital partnerships. Mr.
Hillas is currently a director of Advanced
Technology Materials, Inc., Transition Systems,
Inc. and several privately-held companies. Mr.
Hillas was previously associated with Warburg,
Pincus from 1972 until he joined DSV Management
Ltd. in 1981. Mr. Hillas was graduated from
Dartmouth College in 1970 with a Bachelor of Arts
degree in Mathematics, and was graduated from
Stanford University with a Masters of Business
Administration degree in 1972.
CLASS I DIRECTORS--PRESENT TERM EXPIRES IN 1997
JOHN L. DIEDERICH Mr. Diederich has been Executive Vice President--
Age 59 Chairman's Counsel for Aluminum Company of America
Director since 1993 ("Alcoa") since August 1991. Prior to assuming his
present position, he had been Group Vice
Member of the President--Alcoa Metals and Chemicals since 1986
Compensation Committee and a Vice President of Alcoa since 1982. Mr.
Diederich is a trustee of Shadyside Hospital and a
director of Alcoa Foundation.
TIM L. TRAFF Mr. Traff was first appointed a Senior Vice
Age 37 President of the Company on December 8, 1992,
Director since 1990 having previously been Vice President--Corporate
Development since March 1992. He had been
Member of the Nominating President of Traff Capital Management, a money
Committee management company, since 1989. From 1985 to 1988
he was an analyst at SIT Investment, a money
management company. Mr. Traff received a B.S.
degree in business economics from the University
of Minnesota.
C. HOWARD WILKINS, JR. Mr. Wilkins served as the United States Ambassador
Age 58 to the Netherlands from June 1989 to July 10,
Director since 1992 1992. Prior to being Ambassador and thereafter,
Mr. Wilkins has been Chairman of the Board of
Member of the Maverick Restaurant Corp., which owns and operates
Compensation Committee restaurants under franchise agreements, and
Maverick Development Corp. He was Vice Chairman of
Pizza Hut, Inc. until 1975. From 1981 to 1983 Mr.
Wilkins served as a director of U.S. Synthetic
Fuels Corporation. Mr. Wilkins received a B.A.
degree from Yale University in 1960.
CLASS II DIRECTORS--PRESENT TERM EXPIRES IN 1998
J. DANFORTH QUAYLE Mr. Quayle was the forty-fourth Vice President of
Age 49 the United States. He was graduated from DePaul
Director since 1996 University in 1969 with a B.A. degree in political
science and from Indiana University in 1974 with a
law degree. In 1976, Mr. Quayle was elected to
Congress and in 1980 to the United States Senate,
being reelected in 1986 and serving until 1989. As
Vice President, he headed the Competitiveness and
Space Councils for the President. Since leaving
office in January 1993, Mr. Quayle served as
Chairman of Circle Investors, Inc. (a private
financial services and insurance holding company),
and BTC, Inc. (a private company through which he
operates certain of his personal business
interests). He is a director of Amtran, Inc.,
Central Newspapers, Inc. and American Standard
Companies, Inc. and is a member of the Board of
Trustees of The Hudson Institute.
3
<PAGE>
ARTHUR B. LAFFER Dr. Laffer has been Chairman and Chief Executive
Age 55 Officer of A.B. Laffer, V.A. Canto & Associates,
Director since 1991 an economic research and financial firm (and its
predecessor, A.B. Laffer Associates), since
Chairman of the Audit founding the firm in 1979. He is also Chairman of
Committee Calport Asset Management, Inc., a money management
firm. Dr. Laffer has been Chief Executive Officer
of Laffer Advisors, Inc., a registered broker-
dealer and investment advisor, since 1981. He was
the Charles B. Thornton Professor of Business
Economics at the University of Southern California
from 1976 through 1984, Distinguished University
Professor at Pepperdine University from October
1984 to September 1987, and was a member of
President Reagan's economic policy advisory board.
Dr. Laffer received a B.A. degree in economics
from Yale University and later received an M.B.A.
degree and a Ph.D. in economics from Stanford
University. He is a director of Mastec, Inc.,
Nicholas Applegate Mutual and Growth Equity Funds
and Value Vision, Inc.
ALFRED E. OSBORNE, JR. Dr. Osborne is Director of the Harold Price Center
Age 51 for Entrepreneurial Studies and Associate
Director since 1991 Professor of Business Economics at the John E.
Anderson Graduate School of Management at UCLA. He
Chairman of the has been on the UCLA faculty since 1972. Dr.
Compensation Committee Osborne was educated at Stanford University, where
and Member of the Audit he earned a B.S. degree in electrical engineering,
Committee an M.B.A. in finance, a master's degree in
economics and a Ph.D. in business-economics. He is
a director of Greyhound Lines, Inc., Nordstrom,
Inc., ReadiCare, Inc., SEDA Specialty Packaging
Corporation and The Times Mirror Company.
MICHAEL J. REARDON Mr. Reardon was appointed Executive Vice President
Age 42 of the Company in June of 1995, having previously
Director since 1990 served as Executive Vice President and Chief
Operating Officer, and prior to that as the Chief
Member of the Nominating Financial Officer and Secretary of the Company.
Committee From May 1995 to April 1996, Mr. Reardon served as
president of Arrowhead Industrial Water, Inc. He
became President and General Manager of Illinois
Water Treatment, Inc., a subsidiary of the
Company, in March 1992. From 1981 to July 1990 he
was Chief Financial Officer of The C&C
Organization, a company engaged in restaurant
ownership, management and construction. Mr.
Reardon is a certified public accountant and was a
senior auditor with Arthur Andersen & Co. from
1978 to 1981. Mr. Reardon is a member of the
management board of TWO. In June 1978, Mr. Reardon
received a B.S. in Business Administration from
California State Polytechnic University, and in
1995 attended the Kellogg Management Institute,
Northwestern University.
Meetings and Committees of the Board. During the fiscal year ended March 31,
1996 ("Fiscal 1996"), the Board of Directors met on six occasions and also
took action three times by written consent and once by telephonic conference
call. The Board has three standing committees, the Audit, Compensation and
Nominating Committees. Each director attended all the Board and applicable
Board Committee meetings.
The Audit Committee reviews the performance of the Company's independent
public accountants and makes recommendations to the Board concerning the
selection of independent public accountants to audit the Company's financial
statements. The Audit Committee also reviews the audit plans, audit results
and findings of the internal auditors and the independent accountants, and
reviews the Company's systems of internal control. Members of the Audit
Committee meet regularly with the Company's management and independent public
accountants to discuss the adequacy of internal accounting controls and the
financial accounting process. The
4
<PAGE>
Company's independent accountants have free access to the Audit Committee,
without management's presence. The Audit Committee held one meeting in Fiscal
1996.
The Compensation Committee reviews and determines the compensation of the
Company's officers (including salary and bonus), authorizes or approves any
contract for remuneration to be paid after termination of any officer's
regular employment, and performs specified functions under the Company's
various compensation plans, including the 1991 Employee Stock Option Plan and
the 1991 Directors Stock Option Plan. The Compensation Committee reviews, but
is not required to approve, the participation of officers in the Company's
other benefit programs for salaried employees. The Compensation Committee held
three meetings and took action by written consent on seven occasions in Fiscal
1996.
The Nominating Committee reviews the performance of incumbent directors and
the qualifications of nominees proposed for election to the Board and makes
recommendations to the Board with respect to nominations for director. In
recommending candidates for the Board of Directors, the Nominating Committee
will seek individuals having experience in fields applicable to the Company's
goals and functions. Stockholders who wish to suggest qualified candidates
should write to the Secretary of the Company, stating the qualifications of
such persons for consideration by the Nominating Committee. The Nominating
Committee held two meetings in Fiscal 1996.
Compensation of Directors. Directors receive no cash compensation for their
services as directors, although they are reimbursed for out-of-pocket expenses
incurred in attending meetings. Each director who is not an employee of the
Company participates in the Company's 1991 Directors Stock Option Plan, other
than Mr. Hillas, who has chosen not to participate. That plan was amended and
restated in February 1996 to provide that directors of the Company who are
neither officers nor employees of the Company or its subsidiaries are granted
in April of each year options to purchase 12,000 shares of the Company's
Common Stock at fair market value, as determined on the date of the grant.
This change was unanimously adopted by the Board in order to more closely
align the directors interests with those of the Company's stockholders. See
"Proposal to Approve the 1991 Directors Stock Option Plan, As Amended and
Restated."
Prior to the amendment and restatement, the 1991 Directors Stock Option Plan
provided that non-employee directors of the Company were to be granted in
April of each year options to purchase 8,000 shares of the Company's Common
Stock at an exercise price equal to the higher of (i) $2.00 less than the fair
market value of the Common Stock or (ii) 60% of that fair market value, in
both instances determined on the date of grant. During Fiscal 1996, options to
purchase 12,000 shares of Common Stock were granted under this plan to each of
the Company's non-employee directors on April 3, 1995 at an exercise price of
$14.2325 per share, reflecting an adjustment based on the three-for-two split
of the Company's Common Stock paid in December 1994. In addition, Mr. Quayle
was granted an option to purchase 6,000 shares of Common Stock upon his
initial election to the Board of Directors in February 1996, in accordance
with the terms of the plan, as amended and restated.
5
<PAGE>
SECURITY OWNERSHIP
MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of June 5, 1996 by each director, nominee for director and the
executive officers named in the Summary Compensation Table, and by all
directors and executive officers as a group. Unless otherwise indicated, the
holders of all shares shown in the table have sole voting and investment power
with respect to such shares.
<TABLE>
<CAPTION>
NAME OPTIONS HELD(1) SHARES OWNED PERCENT OF CLASS(2)
- ---- --------------- ------------ -------------------
<S> <C> <C> <C>
Richard J. Heckmann(3)........ 259,800 463,772 2.5%
Michael J. Reardon(4)......... 109,380 24,924 *
Tim L. Traff.................. 48,750 110,347 *
Nicholas C. Memmo(5).......... 51,250 12 *
Thierry Reyners(6)............ 22,500 0 *
Kevin L. Spence............... 52,500 0 *
James E. Clark................ 48,000 36,000 *
John L. Diederich............. 42,000 1,500 *
Robert S. Hillas(7)........... 0 1,813,079 6.2
Arthur B. Laffer(8)........... 48,000 23,250 *
Alfred E. Osborne, Jr......... 48,000 24,350 *
J. Danforth Quayle............ 18,000 0 *
C. Howard Wilkins, Jr......... 48,000 51,000 *
All Directors and Executive
Officers as a Group
(18 persons)................. 878,180 2,582,574 11.5
</TABLE>
- --------
(1) Includes presently exercisable options and options exercisable within 60
days of June 5, 1996. All options were granted pursuant to the Company's
1991 Employee Stock Option Plan or the Company's 1991 Directors Stock
Option Plan.
(2) An asterisk (*) indicates ownership of less than 1% of the Common Stock.
(3) Includes 12,700 shares held by Mr. Heckmann's wife and by Mr. Heckmann as
custodian for his children as to which Mr. Heckmann may be deemed to have
indirect beneficial ownership.
(4) Includes 1,800 shares held in a trust for the benefit of Mr. Reardon's
father-in-law. As the trustee, Mr. Reardon has voting and investment power
with respect to the shares held by the trust and may be deemed to have
indirect beneficial ownership of them. Mr. Reardon disclaims beneficial
ownership of such shares.
(5) Constitutes 12 shares held by Mr. Memmo's wife as custodian for his minor
children.
(6) Includes 700 shares held by Mr. Reyners' wife.
(7) Constitutes 1,813,079 shares held by Warburg, Pincus Capital Company, L.P.
of which Mr. Hillas is a General Partner. Mr. Hillas disclaims personal
beneficial ownership of such shares except that Mr. Hillas may be deemed
to have an indirect pecuniary interest in an indeterminate portion of such
shares.
(8) Includes 20,000 shares held by A.B. Laffer, V.A. Canto & Associates, a
company controlled by Mr. Laffer.
OTHER BENEFICIAL OWNERS
Warburg, Pincus Capital Company, L.P., 466 Lexington Avenue, New York, New
York 10017, reported to the United States Securities and Exchange Commission
(the "SEC") that it and certain affiliated entities (including Warburg, Pincus
& Co., E.M. Warburg, Pincus & Co., Inc. and Warburg, Pincus Ventures, Inc.)
beneficially owned 1,813,079 shares, or approximately 6.2% of the Company's
Common Stock as of June 5, 1996. It reported shared power to dispose of all of
these shares and shared voting power over all of the shares.
Laidlaw, Inc. ("Laidlaw"), 3221 North Service Road, Burlington, Ontario,
Canada L7R 3Y8, a parent holding company, reported to the SEC that it and
certain of its subsidiaries beneficially owned 2,965,829 shares, or
approximately 10.2%, of the Company's Common Stock as of June 5, 1996. It
reported sole voting power
6
<PAGE>
over and sole power to dispose of all of these shares. For the period ending
August 31, 2000, and subject to certain exceptions, Laidlaw has agreed to vote
all of its shares for the Board of Directors' nominees for election to the
Board and on all other matters in the same proportion as the votes cast by
other holders of voting securities. In November 1995 Laidlaw One, Inc., a
wholly-owned subsidiary of Laidlaw, issued in a public offering 5 3/4%
Exchangeable Notes due 2000 which, pursuant to their terms, may be repaid at
maturity in cash or by delivery, in lieu of cash, of the shares of the
Company's Common Stock owned by Laidlaw.
The TCW Group, Inc., 865 South Figueroa Street, Los Angeles, California
90017, a parent holding company, reported to the SEC that it beneficially
owned 1,672,600 shares, or approximately 5.4%, of the Company's Common Stock,
which it has the right to acquire upon conversion of its holdings of the
Company's 5% Convertible Subordinated Debentures due 2000 and 6% Convertible
Subordinated Notes due 2005. It reported sole voting power over and sole power
to dispose of all of these shares.
COMPLIANCE WITH REPORTING REQUIREMENTS
Under the securities laws of the United States, the Company's directors, its
executive officers and any persons beneficially holding more than ten percent
of the Company's Common Stock are required to report their ownership of the
Company's Common Stock and any changes in that ownership to the SEC and the
NYSE. Specific due dates for these reports have been established and the
Company is required to report in this proxy statement any failure to file by
these dates. All of these filing requirements were satisfied, except that the
Form 5's required to be filed for each of the Company's executive officers and
directors, other than Messrs. Heckmann and Hillas, with respect to Fiscal 1996
were filed after the specified due date. Each of these reports related to a
single stock option grant, except that the reports filed by Messrs. Clark,
Laffer, Osborne and Wilkins also related to a stock option exercise. In making
these statements, the Company has relied on copies of the reports that its
officers and directors have filed with the SEC.
CERTAIN TRANSACTIONS
The Company was involved in a number of transactions with Laidlaw during
Fiscal 1996 that related to or resulted from the Company's acquisition of
Smogless S.p.A., a subsidiary of Laidlaw ("Smogless"), on October 4, 1994. On
September 18, 1995 Laidlaw acquired 2,500,000 shares of the Company's Common
Stock upon the exercise of warrants issued by the Company to Laidlaw as part
of the consideration for Smogless. Laidlaw paid the exercise price for the
warrants by delivering to the Company the notes of a subsidiary (the
"Subsidiary Notes") of the Company in the principal amount of $45,000,000. The
Subsidiary Notes had been issued to Laidlaw as part of the consideration for
Smogless. On September 18, 1995 the Company repurchased from Laidlaw for
$4,709,000 the 139,518 shares of the Company's Series B Voting Convertible
Preferred Stock that were issued to Laidlaw in connection with the Smogless
transaction.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation information for the three fiscal
years ended March 31, 1996 for the Company's Chief Executive Officer and for
the four other most highly compensated executive officers of the Company for
Fiscal 1996 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES
------------------------------ ------------
OTHER
FISCAL ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(1) COMPENSATION(2)
- --------------------------- ------ ------- ------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Heckmann.....
Chairman, Chief 1996 414,731 150,000 -- 150,000 --
Executive Officer and 1995 300,000 150,000 -- 60,000 5,551
President 1994 300,000 150,000 -- 60,000 4,432
Michael J. Reardon...... 1996 184,631 -- -- 15,000 4,714
Executive Vice 1995 150,000 25,000 -- 15,000 3,983
President 1994 125,000 30,000 -- 22,500 1,252
Thierry Reyners.........
Executive Vice 1996 190,000 -- -- 15,000 --
President--European 1995 167,236 -- -- 15,000 --
Group 1994 44,017(3) -- -- 15,000 --
Nicholas C. Memmo.......
Executive Vice 1996 189,042 37,500 -- 17,500 5,014
President--Process 1995 135,000 20,000 -- 22,500 4,389
Water Group 1994 122,538 20,000 -- 22,500 2,918
Kevin L. Spence......... 1996 164,774 41,500 -- 15,000 4,865
Vice President and 1995 145,000 20,000 -- 15,000 4,453
Chief Financial Officer 1994 110,000 20,000 -- 15,000 4,421
</TABLE>
- --------
(1) Options granted pursuant to the Company's 1991 Employee Stock Option Plan
to purchase shares of Common Stock. Option grants during Fiscal 1996 are
described in greater detail below.
(2) Represents the Company's 50% matching contribution to the Company's 401(k)
Plan.
(3) For the period after first becoming employed by the Company.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The table below sets forth information with respect to stock options granted
to the Named Executive Officers in Fiscal 1996 under the Company's 1991
Employee Stock Option Plan. The options listed below are included in the
Summary Compensation Table above.
<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM(2)
OPTIONS IN FISCAL EXERCISE EXPIRATION ------------------------------
NAME GRANTED(1) YEAR PRICE ($/SH) DATE 5% 10%
---- ---------- ---------- ------------ ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Heckmann..... 150,000 23.0% $15.06 04/25/05 $ 1,420,673 $ 3,600,264
Michael J. Reardon...... 15,000 2.3 20.75 11/16/05 195,743 496,052
Thierry Reyners......... 15,000 2.3 20.75 11/16/05 195,743 496,052
Nicholas C. Memmo....... 17,500 2.7 20.75 11/16/05 228,367 578,728
Kevin L. Spence......... 15,000 2.3 20.75 11/16/05 195,743 496,052
-------------- --------------
Increase in Value to All
Stockholders(3)........ $ 317,221,839 $ 803,902,423
============== ==============
</TABLE>
- --------
(1) Options granted pursuant to the Company's 1991 Employee Stock Option Plan
to purchase shares of Common Stock. The exercise price may be paid in cash
or in shares of the Company's Common Stock. Of the options granted to
Messrs. Reardon, Reyners, Memmo and Spence, 25% are vested and the
remaining options will vest in equal increments on November 17, 1996, 1997
and 1998. Of the options granted to Mr. Heckmann, 50% are vested and the
remaining options will vest in equal increments on April 3, 1997 and 1998.
(2) Calculated over a ten-year period representing the life of the options.
(3) Represents the increase in value to all stockholders assuming the stock
gains 5% or 10% in value per year, compounded over a ten-year period,
equivalent to the life of the options granted to the Named Executive
Officers. Calculated using a Common Stock price of $20.75, the closing
price on November 17, 1995 on the NYSE, which is the exercise price of
substantially all of the options granted in Fiscal 1996, and the total
weighted average number of shares of Common Stock outstanding in Fiscal
1996.
OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR END OPTION VALUE
The table below sets forth information with respect to stock options
exercised by the named Executive Officers in Fiscal 1996 and the number of
unexercised options held by such persons on March 31, 1996 on a pre-tax basis:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ON EXERCISE OF OPTIONS AT 3/31/96 3/31/96
OPTIONS(1) VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
--------------- -------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Richard J. Heckmann..... 32,700 $713,500 222,300/157,500 $3,498,483/2,110,466
Michael J. Reardon...... 0 0 105,630/ 28,125 1,963,992/ 297,342
Thierry Reyners......... 0 0 18,750/ 26,250 263,124/ 272,498
Nicholas C. Memmo....... 18,750 257,343 46,875/ 34,375 643,594/ 372,497
Kevin L. Spence......... 0 0 48,750/ 26,250 706,250/ 272,498
</TABLE>
- --------
(1) Options granted pursuant to the Company's 1991 Employee Stock Option Plan
to purchase shares of Common Stock.
(2) The dollar value reported is based on the difference between the exercise
price of the outstanding option and the closing price of the Company's
Common Stock on the NYSE on March 29, 1996, $28.00 per share. The closing
price of the Company's Common Stock on June 5, 1996 on the NYSE was $34.25
per share.
9
<PAGE>
RETIREMENT PROGRAM
Effective April 1, 1995, the Company established a non-qualified defined
benefit pension plan for its senior executives, including Messrs. Heckmann,
Reardon, Memmo and Spence. Under this plan (the "Retirement Program"), the
executive becomes entitled to receive from the Company at age 60 an annual
retirement income, payable for 15 years equal to 50% of the executive's final
five year average compensation. Earnings covered by the Retirement Program
include salaries and incentive compensation. Benefits accrue on a percentage
basis over the number of years of service of the executive from his date of
hire with the Company to the attainment of age 60. The benefit accrued vests
commencing after five years of service, 50% at that time, and 10% each year
thereafter. A reduced benefit is payable at age 55 and if the executive's
employment with the Company terminates before age 55, a deferred benefit, to
the extent vested, is payable at or after age 55 based upon the executive's
accrued benefit prior to termination.
The following are the benefits payable per year for 15 years under the
Retirement Program for Messrs. Heckmann, Reardon, Memmo and Spence, assuming
that their covered compensation increases at a rate of 5% annually and that
their employment with the Company continues until age 60: Mr. Heckmann
$379,298; Mr. Reardon $201,993; Mr. Memmo $370,290 and Mr. Spence $261,242.
All benefits under the Retirement Program are payable out of the general
assets of the Company. Any fund vehicle established by the Company to provide
a source for the payment of Plan benefits would remain subject to the general
creditors of the Company.
EMPLOYMENT AND EXECUTIVE RETENTION AGREEMENTS
The Company has entered into Executive Retention Agreements with each of the
Named Executive Officers, other than Mr. Reyners. Each of those agreements
(the "Retention Agreements") is identical, except as to the severance
multiple, below described. The Retention Agreements provide for the employment
of the Named Executive Officers in their respective positions with the Company
or as otherwise determined, provided the duties to be performed are those of a
senior executive or manager of the Company. The Retention Agreements provide
that under certain conditions, including if the executive's employment is
terminated without cause, the executive has the right to receive from the
Company an amount equal to, in the case of Messrs. Memmo and Spence, one times
such individuals' annual salary, in the case of Mr. Heckmann, approximately
three times his annual salary and, in the case of Mr. Reardon, two times his
annual salary. Following a Change-In-Control of the Company, the Retention
Agreements provide for certain benefits if, within one year of the Change-In-
Control, the executive's employment is terminated without cause, or if certain
other conditions of the executive's employment are altered. In any such event,
the Named Executive Officers have the right to receive the same multiple of
their annual salary above described, but including their latest incentive
award or target incentive, if greater, and the Company is also obligated to
maintain for one year for the executive the welfare and retirement plans
available to the executive or to provide an equivalent. Under the Retention
Agreements, and subject to the language thereof, a Change-In-Control of the
Company is defined to occur if (i) any person or group acquires 50% or more of
the Company's voting securities, (ii) during any two year period there is a
change in a majority of the Board of Directors of the Company, (iii) there is
a consolidation or merger of the Company or if there is a transfer of
substantially all of the Company's assets or (iv) a plan of complete
liquidation of the Company is approved by the stockholders.
Mr. Reyners has a separate employment agreement which provides for a
severance payment in the event his employment is terminated, other than for
cause, equal to his annual base compensation. Mr. Reyners employment agreement
also provides for annual review of and discretionary increases to Mr. Reyners'
base salary, for the opportunity to participate in Company incentive bonus
plans (although he does not participate in any such plan at this time), for
the provision of life and medical insurance benefits and for the use of a
Company-owned automobile. Mr. Reyners participates in a French statutory
retirement program. The aggregate cost of this retirement program and certain
tuition reimbursements for Mr. Reyners' children is limited to approximately
8% of his base salary.
10
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of independent outside
directors and is responsible for determining the compensation of the executive
officers of the Company, presently comprising the Named Executive Officers and
six additional individuals. The Compensation Committee also administers the
Company's 1991 Employee Stock Option Plan, the Retirement Program and, with
Mr. Heckmann, the Company's Annual Incentive Compensation Plan.
Compensation Policy and Practice. The Company's executive compensation
policy is intended (i) to link compensation and stockholder value; (ii) to
recognize and reward individuals for their contributions and commitment to the
growth and profitability of the Company; and (iii) to secure and retain the
highest caliber of executives through competitive levels of total
compensation. The Compensation Committee believes this policy is generally
best accomplished by providing a competitive total compensation package, a
significant portion of which is variable and related to established
performance goals. The Company has retained an independent consulting firm to
review the Company's executive compensation levels and programs and to provide
input to the Compensation Committee. Based on this input, the Compensation
Committee believes that the compensation provided to the Company's executives
is competitive, but generally below the average compensation provided to
executives in similar positions at the "peer group" companies identified in
"Comparative Stock Performance" below.
Section 162(m) of the United States Internal Revenue Code of 1986 (the
"Code") limits deductibility of compensation in excess of $1.0 million paid to
a company's chief executive officer and four other highest-paid executive
officers unless such compensation qualifies as "performance-based." The
Company will not be affected by this limitation for the 1996 tax year. The
Compensation Committee intends to review this issue periodically to determine
whether further changes to the Company's compensation policies and practices
are advisable in order to preserve deductibility.
Compensation of the Company's executive officers consists of the following
elements: base salary, cash bonus payments under the Annual Incentive
Compensation Plan and stock option awards under the 1991 Employee Stock Option
Plans. Each of these elements is discussed below.
Base Salary. In determining base salary for the Company's executive
officers, the Compensation Committee assesses the relative contribution of
each executive to the Company, the background and skills of each individual
and the particular opportunities and problems which the individual confronts
in his position with the Company. These factors are then assessed in the
context of competitive market factors, including competitive opportunities
with other companies.
In making changes in base salary for existing executive officers, other than
Mr. Heckmann, the Compensation Committee considers the recommendations of Mr.
Heckmann based on his personal evaluation of individual performance for the
prior year including attainment of personal objectives and goals, attainment
of Company performance goals, the Company's salary structure, competitive
salary data and the prior year's national percentage increase in the cost of
living.
Annual Cash Incentive. In April 1995 the Board of Directors adopted, in
place of its former discretionary bonus program, an Annual Incentive
Compensation Plan pursuant to which key executive and operational employees
are eligible to earn incentive case bonuses each year based on the Company's
performance. For eligible executives, the maximum award level is 25% of base
salary. For eligible operational employees, the maximum award level is 35% of
base salary.
Of the 25% maximum award level for executives, 8% is earned if the Company
achieves its pre-established profit plan for the fiscal year; up to an
additional 8% may be earned if the Company exceeds its profit plan; and an
additional 9% may be earned based on a subjective assessment of the
executive's performance. Of the 35% maximum award level for operational
employees, up to 8% may be earned if the Company exceeds its profit plan; an
additional 8% is earned if the unit supervised by the employee achieves its
profit plan; an additional
11
<PAGE>
10% is earned if the unit supervised by the employee exceeds its profit plan;
and an additional 9% may be earned based on a subjective assessment of the
employee's performance. With respect to the subjective portion of the award,
the Compensation Committee assesses Mr. Heckmann's performance, and Mr.
Heckmann assesses the performance of each of the other executives or
employees. The Company exceeded its profit plan for Fiscal 1996. Information
with respect to the cash bonuses paid to the Named Executive Officers in
Fiscal 1996 is provided in the Summary Compensation Table above. Mr. Reyners
does not participate in the bonus program.
Stock Options. The grant of stock options under the Company's 1991 Employee
Stock Option Plan is intended to provide long-term performance-based
compensation to officers and key employees of the Company. Options are granted
with an exercise price equal to the market price of the Company's Common Stock
on the date of grant, generally vest over a period of three years, and expire
after ten years. Options only have value to the recipient if the price of the
Company's stock appreciates after the options are granted. The Company
believes that not less than 10% of the Company's outstanding equity securities
should be available for employee stock options and its policy of option grants
by the Compensation Committee has reflected and can be expected to continue to
reflect this belief.
CHIEF EXECUTIVE OFFICER
In determining Mr. Heckmann's compensation for Fiscal 1996, the Compensation
Committee focused upon the policies described above. The increases in Mr.
Heckmann's salary and in the number of options granted to him as compared to
Fiscal 1995 reflect the overall performance of the Company for Fiscal 1996
under Mr. Heckmann's strategic direction, his significant involvement in and
responsibility for the overall operations of the Company and his direct
involvement in numerous acquisitions made by the Company during the year. For
purposes of the Annual Cash Incentive Plan, the Compensation Committee
classifies Mr. Heckmann as an operational employee with supervisory
responsibilities for the entire Company, making him eligible for a maximum
award of 35% of base salary. For Fiscal 1996, Mr. Heckmann received a bonus
under the Annual Incentive Compensation Plan equal to 33% of his base salary
of $450,000 as a combined result of the Company's exceeding its profit plan
and the Compensation Committee's assessment of Mr. Heckmann's role in that
success. Although Mr. Heckmann's Fiscal 1996 compensation is above the average
compensation paid to chief executive officers at the "peer group" companies
identified in "Comparative Stock Performance" below, the Compensation
Committee believes that this compensation level is warranted by Mr. Heckmann's
roles in both the strategic and operational aspects of the Company's business,
the value he brings to the Company in the identification and realization of
acquisition opportunities and the success of the Company both in its business
and in the financial markets.
Alfred E. Osborne, Jr., Chairman
James E. Clark
John L. Diederich
C. Howard Wilkins, Jr.
12
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The chart below sets forth line graphs comparing the performance of the
Company's Common Stock as compared with the NYSE Composite Stock Index and an
appropriate "peer group" index for the five-year period commencing March 28,
1991 and ending March 29, 1996. The "peer group" index consists of the Common
Stock of Calgon Carbon Corporation, Ionics, Incorporated, Osmonics, Inc. and
Wheelabrator Technologies Inc. The indices assume that the value of the
investment in United States Filter Corporation Common Stock and each index was
$100 on March 28, 1991 and that dividends were reinvested.
(PERFORMANCE GRAPH APPEARS HERE)
<TABLE>
<CAPTION>
3/28/91 3/31/92 3/31/93 3/31/94 3/31/95 3/29/96
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
U.S. Filter Common Stock........ $100.00 $263.80 $344.83 $291.39 $320.68 $579.28
NYSE Composite Stock Index...... 100.00 $108.75 $121.50 $120.34 $132.03 $168.98
Peer Group Index(1)............. 100.00 $109.32 $133.46 $120.51 $ 95.05 $115.89
</TABLE>
- --------
(1) Peer Group Index includes: Calgon Carbon Corporation, Ionics Incorporated,
Osmonics Inc. and Wheelabrator Technologies Inc.
13
<PAGE>
PROPOSAL TO APPROVE THE 1991 EMPLOYEE STOCK OPTION PLAN, AS AMENDED AND
RESTATED
Stockholders are being asked to approve the Company's 1991 Employee Stock
Option Plan, as amended and restated by the Board of Directors on June 14,
1996 (the "Amended Employee Plan"). A vote in favor of the Amended Employee
Plan will also be a vote in favor of all of the amendments to the 1991
Employee Stock Option Plan, which will, among other things, increase the
amount of Common Stock that is authorized to be issued under the plan by
750,000 shares (post-Stock Split).
The Company believes that in order to attract, retain and motivate key
employees it is desirable to offer to such employees stock options which
provide an incentive tied to the Company's stock price performance. As the
Company has grown over the past several years, in part through acquisitions
that have involved the issuance of additional shares of Common Stock, the
Company has believed it appropriate to increase the number of shares of Common
Stock available for employee stock options. Accordingly, the Board of
Directors on February 28, 1991 unanimously adopted the 1991 Employee Stock
Option Plan under which plan, as thereafter amended by the Board and approved
by the stockholders, a total of 2,587,500 shares of Common Stock were reserved
for issuance. As of June 5, 1996, of the 2,587,500 shares reserved under the
Employee Plan, 577,009 options had been previously exercised and 1,855,944
options remained outstanding. The Company believes that it is desirable to
increase the number of shares of Common Stock authorized under the 1991
Employee Stock Option Plan by an additional 750,000 shares (post-Stock Split)
and, accordingly, on June 14, 1996, the Board of Directors voted to amend the
Employee Plan to increase the number of shares authorized for issuance under
the plan from 2,587,500 shares to 3,337,500 shares (subject to adjustment to
reflect the effect of the Stock Split on the number of shares currently
reserved under the plan).
General Provisions. The Amended Employee Plan is administered by the
Compensation Committee. The Committee selects the officers and other key
employees of the Company and its subsidiaries (whether or not members of the
Board) to whom options may be granted, determines the size of grants and the
terms and conditions of options, and determines the meaning and application of
the provisions of the Amended Employee Plan and related option agreements.
Members of the Committee are not eligible to receive grants under the Amended
Employee Plan.
Options granted under the Amended Employee Plan may be either "incentive
stock options," that is, options which meet the requirements of Section 422 of
the Code, or "nonqualified stock options," that is, options which do not meet
such requirements. The aggregate fair market value (determined as of the date
of grant) of the stock for which an optionee's incentive stock options will
vest in any calendar year may not exceed $100,000. No optionee may be granted
options with respect to more than 150,000 shares of Common Stock in one
calendar year. No options may be granted under the Amended Employee Plan after
February 27, 2001.
The exercise price per share for each option granted under the Amended
Employee Plan may not be less than the fair market value per share of the
Company's Common Stock on the date of grant. For any option recipient who owns
more than 10% of the Company's voting stock (a "Ten Percent Owner") at the
time of grant, the exercise price must be at least 110% of fair market value.
The Compensation Committee will set the terms and vesting schedule of each
option, provided, however, that no term may exceed ten years from the date of
grant, and the term of an incentive stock option granted to a Ten Percent
Owner may not exceed five years. Payment upon exercise of an option may be
made in cash or, with the consent of the Compensation Committee, in Common
Stock of the Company valued at its then-current fair market value, or by a
combination of cash and Common Stock.
Generally, options may be exercised only by the individual to whom the
option is granted, and are not transferable or assignable, except that in the
event of an optionee's death or legal disability, the optionee's heirs or
legal representatives may exercise the options for a period not to exceed one
year. The Board of Directors may terminate or amend the Amended Employee Plan
without the approval of the Company's stockholders, but
14
<PAGE>
stockholder approval is required in order to amend the Amended Employee Plan
to increase the total number of shares, to change the class of persons
eligible to participate in the Amended Employee Plan, to extend the maximum
ten-year exercise period or to permit an option exercise price to be fixed at
less than 100% of the fair market value as of the date of grant.
Termination of Employment. Unless otherwise determined by the Compensation
Committee, options will cease to be exercisable upon termination of the
optionee's service to the Company other than upon termination due to death,
disability or retirement. Options will be exercisable within twelve months of
death or disability and within three months of retirement.
Change in Control. In the event the Company enters into an agreement to
dispose of all or substantially all of the assets or capital stock of the
Company by means of a sale, merger, or other transaction, outstanding options
will, with the approval of the Compensation Committee and the Board of
Directors, and conditioned upon consummation of such agreement, become
immediately exercisable during the period beginning with the date of such
agreement and ending on the date of disposal of the assets or capital stock.
The Amended Employee Plan further provides that, in the event of any merger,
consolidation or other reorganization in which the Company is not the
surviving or continuing corporation, all outstanding options shall be fully
exercisable for a period of 30 days prior to the date of such transaction
unless such options are assumed by the continuing or surviving corporation.
Unexercised options will terminate upon the effective date of such a
transaction, unless they are assumed.
Termination and Amendment of Plan. The Board of Directors may terminate or
amend the Amended Employee Plan without the approval of the Company's
stockholders, but stockholder approval would be required in order to amend the
plan to increase the total number of shares, to change the class of persons
eligible to participate in the plan, to extend the maximum ten-year period or
to permit an option exercise price to be fixed at less than 100% of the fair
market value as of the date of grant.
Antidilution Provisions. The amount of shares reserved for issuance under
the Amended Employee Plan and the terms of outstanding options shall be
adjusted by the Compensation Committee in the event of changes in the
outstanding Common Stock by reason of stock dividends, stock splits, reverse
stock splits, split-ups, consolidations, recapitalizations, reorganizations or
like events.
Benefits Under the Amended Employee Plan. Presently, approximately 280
officers and key employees of the Company and its subsidiaries are eligible to
participate in the Amended Employee Plan. However, the identity of future
grantees and the size of any additional grants have not been determined. On
June 5, 1996 the closing price of the Common Stock on the NYSE was $34 1/4 per
share.
Certain Federal Income Tax Consequences. The following is a brief summary of
the principal federal income tax consequences of awards under the Amended
Employee Plan based upon current federal income tax laws. The summary is not
intended to be exhaustive and, among other things, does not describe state,
local or foreign tax consequences. Options designated as incentive stock
options are intended to fall within the provisions of Section 422 of the Code.
An optionee recognizes no taxable income as the result of the grant or
exercise of such an option. If the stock acquired upon exercise of an option
is held at least until (i) two years following the date of grant of the option
and (ii) one year following the date of exercise, then any gain on subsequent
sale of the stock will be taxed as a long-term capital gain. In that case, the
Company will not be entitled to any deduction for federal income tax purposes.
In general, if an optionee sells shares within two years after the date of
grant or within one year after the date of exercise, the excess of the fair
market value of the shares on the date of exercise over the option exercise
price (not to exceed the gain realized on the sale) will be taxable as
ordinary income at the time of sale. A gain in excess of that amount will be a
long-term or short-term capital gain, depending on the length of time the
stock was held. If the optionee sells the stock for less than the option
exercise price, the loss will be a long-term or short-term capital loss and no
income will be recognized. The amount of any ordinary income
15
<PAGE>
recognized by the optionee upon the disposition of stock would be deductible
by the Company for federal income tax purposes.
An optionee generally recognizes no taxable income as the result of the
grant of a nonqualified stock option. Upon exercise of such an option, the
optionee normally recognizes ordinary income in the amount of the excess of
the fair market value of the shares on the date of exercise over the option
price. Such ordinary income generally is subject to withholding of income and
employment taxes. Upon the sale of stock acquired by the exercise of a
nonqualified stock option, any gain or loss, based on the difference between
the sale price and the fair market value on the date of recognition of income,
will be taxed as short-term or long-term capital gain or loss, depending upon
the length of time the optionee has held the stock from the date of exercise.
The Company would be entitled to a deduction equal to the amount of ordinary
income recognized by the optionee as a result of the exercise of the option.
Special rules will apply to a participant who is an officer or director of
the Company subject to liability under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), if such participant
exercises an option within six months of the date of grant.
VOTE REQUIRED
Approval of the Amended Employee Plan will require the affirmative vote of
at least a majority in voting interest of the stockholders present in person
or by proxy at the Annual Meeting and entitled to vote thereon.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDED EMPLOYEE PLAN
AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE "FOR" ADOPTION OF THE
AMENDED EMPLOYEE PLAN PROPOSAL.
PROPOSAL TO APPROVE THE 1991 DIRECTORS STOCK OPTION PLAN,
AS AMENDED AND RESTATED
Stockholders are being asked to approve the 1991 Directors Stock Option
Plan, as amended and restated by the Board of Directors as of June 14, 1996
(which reflects certain amendments approved by the Board on that date and on
February 13, 1996) (the "Amended Directors Plan"). A vote in favor of the
Amended Directors Plan Proposal will also be a vote in favor of all of the
amendments to the 1991 Directors Stock Option Plan, which will, among other
things, (i) increase the amount of Common Stock that is authorized to be
issued under the plan by 375,000 shares (post-Stock Split), (ii) provide that
the exercise price for each option issued under the Amended Directors Plan
will be the fair market value of the underlying shares of Common Stock on the
date the option is granted, (iii) adjust the amount of options granted to each
participant on a yearly basis from 8,000 to 12,000 shares and to each
participant following his or her initial election from 8,000 to 12,000 shares
or from 4,000 to 6,000 shares, as provided, and (iv) remove from the
discretion of the Compensation Committee certain administrative functions
under the plan. A vote in favor of the Amended Directors Plan Proposal will
also constitute approval of the grants made under the Amended Directors Plan
on April 1, 1996 by the Compensation Committee to each of the six participants
under the plan, as further described below.
The Company currently does not pay any cash compensation to its non-employee
Directors, although they are reimbursed for out-of-pocket expenses incurred in
attending meetings. Directors are compensated for their time and efforts
solely through grants of stock options. The Company believes that the Amended
Directors Plan provides non-employee directors a favorable opportunity to
acquire Common Stock of the Company and creates an incentive for such
directors to serve on the Board of Directors of the Company and contribute to
its long-term growth and profitability objectives. Under the 1991 Stock Option
Plan as originally adopted by the Board of Directors on February 28, 1991 and
approved by the stockholders on October 29, 1991, 375,000 shares of Common
Stock were reserved for issuance. As of June 5, 1996, 134,000 options had been
previously exercised and 252,000 options remained outstanding. Based on the
Company's growth over the past several years, in part
16
<PAGE>
through acquisitions that have involved the issuance of additional shares of
Common Stock, the Company believes it appropriate to increase the number of
shares of Common Stock authorized for issuance pursuant to the plan from
375,000 to 750,000 (subject to adjustment to reflect the effect of the Stock
Split on the number of shares currently reserved under the plan).
Under the original 1991 Directors Stock Option Plan, as amended, options
were granted at an exercise price equal to the greater of (i) $2.00 less than
the fair market value of the underlying shares on the date of grant or (ii)
60% of the fair market value of such shares on the date of grant. In order to
more directly align the interests of the non-employee directors with those of
the Company's stockholders, this provision has been amended, subject to
stockholder approval, to state that the exercise price of options granted
under the Amended Directors Plan will in all cases be equal to 100% of the
fair market value of the underlying shares on the date of grant.
The original 1991 Directors Stock Option Plan, as amended, provided for
yearly grants of options for the purchase of 8,000 shares of Common Stock and
additional grants upon initial election to the Board of 8,000 shares, or 4,000
shares if such election occurred after September 30 of the year first elected.
If approved by the stockholders, the Amended Directors Plan will adjust these
grant amounts from 8,000 to 12,000 shares and from 4,000 to 6,000 shares,
respectively. The directors believe such changes are appropriate in light of
the 1994 three-for-two split of the Company's Common Stock and the increase in
the exercise price of options granted under the plan as described above. No
additional adjustment to these grant numbers will be made as a result of the
Stock Split payable July 15, 1996.
As originally adopted, the 1991 Directors Stock Option Plan provided the
Compensation Committee with discretion over certain administrative functions
under the plan. For example, the Compensation Committee had discretion to
prescribe installment periods governing the vesting of options granted under
the Directors Plan, although, in fact, the Committee had never exercised such
discretion. If approved by the stockholders of the Company, the Amended
Directors Plan removes this and other discretionary decisions from the
Compensation Committee.
General Provisions. The Amended Directors Plan is administered by the
Compensation Committee. The persons eligible to participate in the Amended
Directors Plan are the duly elected non-employee directors of the Company
(presently 7 individuals). The Compensation Committee determines the meaning
and application of the provisions of the Amended Directors Plan and related
option agreements.
Options granted under the Amended Directors Plan are nonqualified stock
options. The Amended Directors Plan provides that each participant shall
receive a grant of options for the purchase of 12,000 shares of Common Stock
on the first business day of April in each calendar year. In addition, a
participant shall receive a grant of options for the purchase of 12,000 shares
of Common Stock upon his or her initial election to the Board, provided that
if such election occurs after September 30 of the year first elected, such
initial grant shall be for 6,000 shares of Common Stock. The exercise price of
each option granted under the Amended Directors Plan shall be equal to 100% of
the fair market value of the underlying shares on the date of grant. Each
option is fully exercisable on the date of the grant and has a term of four
years from the date of the grant. No options may be granted after February 27,
2001.
Generally, options may be exercised only by the individual to whom the
option is granted, and are not transferable or assignable, except that in the
event of an optionee's death or legal disability, the optionee's heirs or
legal representatives may exercise the options for a period not to exceed one
year. The Board of Directors may terminate or amend the Amended Directors Plan
without the approval of the Company's stockholders, but stockholder approval
would be required in order to amend the Amended Directors Plan to increase the
total number of shares, to lower the exercise price of options to less than
100% of the fair market value as of the date of the grant, to extend the
maximum four-year exercise period or to change the class of persons eligible
to participate in the Amended Directors Plan.
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Termination of Service. Options will cease to be exercisable within 30 days
after termination of the optionee's service to the Company, other than upon
termination due to death, disability or retirement or upon termination for
cause. Options will be exercisable within twelve months of death or disability
and within three months of retirement. Upon termination for cause, a
participant's options shall be rescinded.
Termination and Amendment of Plan. The Board of Directors may terminate or
amend the Amended Directors Plan without the approval of the Company's
stockholders, but stockholder approval would be required in order to amend the
plan to increase the number of shares, to change the class of persons eligible
to participate in the plan, to extend the maximum ten-year exercise period or
to permit an option exercise price to be fixed at less than 100% of the fair
market value as of the date of grant.
Antidilution Provisions. The amount of shares reserved for issuance under
the Amended Directors Plan and the terms of outstanding options shall be
adjusted in the event of changes in the outstanding Common Stock by reasons of
stock dividends, stock splits, reverse stock splits, split-ups,
consolidations, recapitalizations, reorganizations or like events.
Benefits Under the Amended Directors Plan. Presently, seven Directors of the
Company and its subsidiaries are eligible to participate in the Amended
Directors Plan, although Mr. Hillas does not participate at this time. On
April 1, 1996, a grant was made to each of the non-employee directors, other
than Mr. Hillas, of an option for 12,000 shares of Common Stock of the
Company, for an aggregate grant of options for 72,000 shares of Common Stock.
On June 5, 1996 the closing price of the Common Stock on the NYSE was $34.25
per share.
Certain Federal Income Tax Consequences. The following is a brief summary of
the principal federal income tax consequences of awards under the Amended
Directors Plan based upon current federal income tax laws. The summary is not
intended to be exhaustive and, among other things, does not describe state,
local or foreign tax consequences.
An optionee generally recognizes no taxable income as the result of the
grant of a nonqualified stock option. Upon exercise of such an option, the
optionee normally recognizes ordinary income in the amount of the excess of
the fair market value on the date of exercise over the option price. Upon the
sale of stock acquired by the exercise of a nonqualified stock option, any
gain or loss, based on the difference between the sale price and the fair
market value on the date of recognition of income, will be taxed as short-term
or long-term capital gain or loss, depending upon the length of time the
optionee has held the stock from the date of exercise. No tax deduction is
available to the Company with respect to the grant of the option or the sale
of stock acquired pursuant thereto. The Company would be entitled to a
deduction equal to the amount of ordinary income recognized by the optionee as
a result of the exercise of the option. Special rules apply under Section
16(b) of the Exchange Act if a participant exercises an option within six
months of the date of grant.
VOTE REQUIRED
Approval of the Amended Directors Plan will require the affirmative vote of
at least a majority in voting interest of the stockholders present in person
or by proxy at the Annual Meeting and entitled to vote thereon.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDED DIRECTORS PLAN
AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE "FOR" ADOPTION OF THE
AMENDED DIRECTORS PLAN PROPOSAL.
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PROPOSAL TO INCREASE THE AUTHORIZED CAPITAL OF THE COMPANY
The Board of Directors proposes to increase the Company's authorized share
capital from 78,000,000 to 153,000,000 by amendment to the Company's Restated
Certificate of Incorporation, as amended (the "Authorized Capital Amendment").
If the Authorized Capital Amendment is approved by the stockholders, the
number of the Company's authorized shares of Common Stock would be increased
from 75,000,000 shares to 150,000,000 shares. Specifically, if the Authorized
Capital Amendment is approved, Article V, Section 1 of the Company's Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation"),
will be amended and restated to read in its entirety as follows:
"Section 1. Authorized Stock. The Corporation shall be authorized to
issue two classes of shares to be designated, respectively, "Preferred
Stock" and "Common Stock"; the total number of shares which the Corporation
shall have the authority to issue is one hundred fifty three million
(153,000,000) shares; the total number of authorized shares of Preferred
Stock shall be three million (3,000,000) and each share shall have a par
value of ten cents ($.10); and the total number of authorized shares of
Common Stock shall be one hundred fifty million (150,000,000) and each
share shall have a par value of one cent ($.01)."
As of June 5, 1996, there were issued and outstanding 29,134,298 shares of
Common Stock. Of the unissued shares of Common Stock, 2,926,342 shares were
reserved for issuance upon conversion of the Company's 5% Convertible
Subordinated Debentures due 2000, 5,090,909 shares were reserved for issuance
upon conversion of the Company's 6% Convertible Subordinated Notes due 2005
and an aggregate of 2,122,467 shares were reserved for issuance pursuant to
the Company's stock option plans for employees and directors. Consequently, on
a post-Stock Split basis, the Company presently has reserved for issuance
15,209,577 shares of Common Stock and presently has available for issuance
16,088,976 shares of Common Stock and 3,000,000 shares of Preferred Stock. In
addition, a maximum of 3,200,000 shares (4,800,000 post-Stock Split) are
issuable pursuant to an Agreement and Plan of Merger dated as of June 10, 1996
pursuant to which the Company will acquire, upon satisfaction of various
conditions, Davis Water & Waste Industries, Inc. Approval of the Authorized
Capital Amendment is not necessary for, or a condition to, the consummation of
the transactions contemplated by this agreement.
PURPOSES AND REASONS FOR THE PROPOSED INCREASE IN AUTHORIZED CAPITAL
If the Authorized Capital Amendment is approved, the increased number of
authorized shares of Common Stock will be available for issuance from time to
time, for such purposes and consideration, and on such terms, as the Board of
Directors may approve, and no further vote of the stockholders of the Company
will be required, except as provided under the Delaware General Corporation
Law or the rules of the NYSE.
An increase in authorized shares will enable the Company to meet possible
contingencies and opportunities in which the issuance of shares of Common
Stock in amounts greater than would otherwise remain available for issuance
may be deemed advisable, such as in equity financings, acquisition
transactions, stock dividends and distributions and employee benefit plans. By
adopting the Authorized Capital Amendment at this time, consummation of
issuances of any additional shares of Common Stock would be facilitated,
because the delay and expense incident to the calling of a special meeting of
the Company's stockholders, in cases where such a meeting would not otherwise
be required, would be avoided. The timing of the actual issuance of additional
shares of Common Stock, if any, will depend upon market conditions, the
specific purpose for which the stock is to be issued, and other similar
factors. Any additional issuance of Common Stock could have a dilutive effect
on existing holders of Common Stock. The Company has issued a substantial
number of shares in business acquisitions in the past and is frequently
engaged in preliminary discussions with acquisition candidates. However, the
Company currently has no plans for the issuance of any shares of Common Stock,
except as described above, none of which are shares for which the Company is
securing authorization pursuant to the Authorized Capital Amendment.
The terms of the additional shares of Common Stock for which authorization
is sought will be identical with the terms of the shares of Common Stock
currently authorized and outstanding, and approval of the Authorized Capital
Amendment proposal will not affect the terms, or the rights of the holders, of
such shares.
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The Common Stock has no cumulative voting, conversion, preemptive or
subscription rights and is not redeemable. Laidlaw has certain rights to
purchase voting capital stock of the Company or rights to acquire such stock
("Securities") in order to maintain its percentage share of the Company's
voting power, except in the case of Securities issuable in the ordinary course
under any employee or director stock benefit plan or in connection with a
merger or other acquisition. In addition, if the Company proposes to issue
Securities at a price less than the lower of (i) 15% below the current market
price or (ii) the prevailing customary and reasonable price for such
Securities, Laidlaw has the right to purchase on the same terms as the
proposed issuance such number of the offered Securities as it shall specify.
POSSIBLE ANTI-TAKEOVER EFFECTS
Although it did not form a basis for the Board's decision to adopt the
Authorized Capital Amendment, the existence of additional authorized shares of
Common Stock could have the effect of rendering more difficult or discouraging
hostile takeover attempts. The Company is not aware of any existing or planned
effort on the part of any person to acquire the Company by means of a merger,
tender offer, solicitation of proxies in opposition to management or
otherwise, or to change the Company's management, nor is the Company aware of
any person having made any offer to acquire the capital stock or substantially
all of the assets of the Company.
The Certificate of Incorporation and Restated Bylaws (the "Bylaws") of the
Company and the Delaware General Corporation Law contain certain provisions
that could also have an anti-takeover effect. The Certificate of Incorporation
places certain restrictions on the voting rights of a "Related Person,"
defined therein as any person who directly or indirectly owns 5% or more of
the outstanding voting stock of the Company. The founders and the original
directors of the Company are excluded from the definition of "Related
Persons," as are seven named individuals including Mr. Heckmann, the Chairman
of the Board, Chief Executive Officer and President of the Company. These
voting restrictions apply in two situations. First, the vote of a director who
is also a Related Person is not counted in the vote of the Board of Directors
to call a meeting of stockholders where that meeting will consider a proposal
made by the Related Person director. Second, any amendments to the Certificate
of Incorporation that relate to specified Articles therein (those dealing with
corporate governance, limitation of director liability or amendments to the
Certificate of Incorporation), in addition to being approved by the Board of
Directors and a majority of the Company's outstanding voting stock, must also
be approved by either (i) a majority of directors who are not Related Persons,
or (ii) the holders of at least 80% of the Company's outstanding voting stock,
provided that if the change was proposed by or on behalf of a Related Person,
then approval by the holders of a majority of the outstanding voting stock not
held by Related Persons is also required. In addition, any amendment to the
Company's Bylaws must be approved by one of the methods specified in clauses
(i) and (ii) in the preceding sentence.
The Certificate of Incorporation provides that the Company is authorized to
issue 3,000,000 shares of Preferred Stock. The Board of Directors is
authorized to issue such shares without stockholder approval in one or more
series and to fix the rights, preferences, privileges, qualifications,
limitations and restrictions thereof, including voting rights.
The Certificate of Incorporation and the Company's Bylaws provide that the
Board of Directors shall fix the number of directors and that the Board shall
be divided into three classes, each consisting of one-third of the total
number of directors (or as nearly as may be possible). Stockholders may not
take action by written consent. Meetings of stockholders may be called only by
the Board of Directors (or by a majority of its members). Stockholder
proposals, including director nominations, may be considered at a meeting only
if written notice of that proposal is delivered to the Company from 30 to 60
days in advance of the meeting, or within ten days after notice of the meeting
is first given to stockholders.
Section 203 of the Delaware General Corporation Law ("Section 203")
provides, in general, that a stockholder acquiring more than 15% of the
outstanding voting shares of a corporation subject to the statute (an
"Interested Stockholder"), but less than 85% of such shares, may not engage in
certain "Business Combinations" with the corporation for a period of three
years subsequent to the date on which the stockholder became an Interested
Stockholder unless (i) prior to such date the corporation's board of directors
has approved
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either the Business Combination or the transaction in which the stockholder
became an Interested Stockholder or (ii) the Business Combination is approved
by the corporation's board of directors and authorized by a vote of at least
two-thirds of the outstanding voting stock of the corporation not owned by the
Interested Stockholder. Section 203 defines the term "Business Combination" to
encompass a wide variety of transactions with or caused by an Interested
Stockholder in which the Interested Stockholder receives or could receive a
benefit on other than a pro rata basis with other stockholders, including
mergers, certain asset sales, certain issuances of additional shares to the
Interested Stockholder, transactions with the corporation that increase the
proportionate interest of the Interested Stockholder or transactions in which
the Interested Stockholder receives certain other benefits.
VOTE REQUIRED
Approval of the Authorized Capital Amendment will require the affirmative
vote of the holders of at least a majority of the outstanding shares of Common
Stock.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AUTHORIZED CAPITAL
AMENDMENT AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE "FOR" ADOPTION OF
THE AUTHORIZED CAPITAL AMENDMENT PROPOSAL.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as independent
certified public accountants of the Company for the fiscal year ending March
31, 1997 and has further directed that the appointment be submitted for
ratification by the stockholders at the Annual Meeting.
KPMG Peat Marwick LLP is an internationally recognized firm of independent
certified public accountants and has audited the Company's financial statements
since fiscal 1992. A representative of KPMG Peat Marwick LLP will be present at
the Annual Meeting and will be available to make a statement, if he or she so
desires, and to respond to appropriate questions.
OTHER MATTERS
The solicitation of Proxies is made on behalf of the Board of Directors of
the Company and the cost thereof will be borne by the Company. In addition to
soliciting Proxies by mail, directors, officers and employees of the Company,
without receiving additional compensation therefor, may solicit Proxies by
telephone, telegram, in person or by other means. Arrangements also will be
made with brokerage firms and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of Common Stock held
of record by such persons and the Company will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in connection therewith.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Stockholder proposals intended to be presented at the 1997 annual meeting of
stockholders of the Company must be received by March 11, 1997. Any such
proposals should be addressed to the Secretary of the Company, 40-004 Cook
Street, Palm Desert, California 92211.
By Order of the Board of Directors
/s/ Damian C. Georgino
Damian C. Georgino
Secretary
July 9, 1996
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[X] Please mark your
votes as in this
example.
(1) The election of three directors, each for a term of three years;
FOR all nominees listed [ ] Nominees: James E. Clark
at right (except as marked Richard J. Heckmann
to the contrary below). Robert S. Hillas
WITHHOLD AUTHORITY to vote [ ]
for all nominees listed at right.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, draw a
line through such nominee's name.)
FOR AGAINST ABSTAIN
(2) The proposal to approve the Company's 1991 [ ] [ ] [ ]
Employee Stock Option Plan, as amended and
restated;
(3) The proposal to approve the Company's 1991 [ ] [ ] [ ]
Directors Stock Option Plan, as amended and
restated;
(4) The proposal to increase the number of [ ] [ ] [ ]
authorized shares of the Company's Common
Stock from 75,000,000 to 150,000,000;
(5) The proposal to ratify the appointment of [ ] [ ] [ ]
KPMG Peat Marwick LLP as independent public
accountants for the Company;
In their discretion, the proxy holders are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 THROUGH 5.
SIGNATURE DATED , 1996
---------------------------------------------- --------
SIGNATURE DATED , 1996
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Note: Please sign exactly as name or names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized partner.
<PAGE>
UNITED STATES FILTER CORPORATION
40-004 COOK STREET, PALM DESERT, CALIFORNIA 92211
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON AUGUST 13, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard J. Heckmann and Damian C. Georgino,
and each or either of them as proxies, each with the power to appoint his
substitute, and hereby authorizes any of them to represent and to vote, as
designated on the reverse side of this proxy card, all the shares of the common
stock, par value $.01 per share (the "Common Stock"), of United States Filter
Corporation (the "Company"), which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held
on August 13, 1996, commencing at 9:30 A.M., Pacific Daylight Time, at the
Indian Wells Resort Hotel, 76-861 Highway 111, Indian Wells, California 92210 or
any adjournment or postponement thereof as follows on the reverse side of this
proxy card.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
