<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CORNICHE GROUP INCORPORATED
- --------------------------------------------------------------------------------
(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 on the date of its filing.
(1) Amount Previously Paid:
------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
CORNICHE GROUP INCORPORATED
610 SOUTH INDUSTRIAL BOULEVARD, SUITE 220
EULESS, TEXAS 76040
(817) 283-4250
June 5, 2000
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Corniche Group Incorporated. The meeting will be held at 10:00 a.m., on Tuesday,
June 27, 2000, at the Texas Star Golf Course and Convention Center, which is
located at 1400 Texas Star Parkway in Euless, Texas. The Board of Directors and
management look forward to seeing those of you able to attend in person.
- You will find enclosed a Notice of Annual Meeting that identifies the
nominees for election to Corniche's Board of Directors.
- The Notice of Annual Meeting also indicates other important business to
be conducted at the Annual Meeting.
- At the Annual Meeting, management will present a report on Corniche's
1999 business results and other matters of current interest to you.
- You will find enclosed Corniche's 2000 Annual Report.
Information about the business of the Annual Meeting is set forth in the
accompanying Proxy Statement, which you are urged to read carefully. Your vote
is very important. The Board of Directors appreciates and encourages stockholder
participation in Corniche's affairs. Whether or not you can attend the Annual
Meeting, please read the Proxy Statement carefully. Then please sign, date and
return the enclosed proxy card promptly in the envelope provided, so that your
shares will be represented at the Annual Meeting.
On behalf of the Board of Directors, thank you for your consideration and
continued support.
Sincerely,
[ROBERT H. HUTCHINS]
Robert H. Hutchins
President and Principal Financial
Officer
<PAGE> 3
CORNICHE GROUP INCORPORATED
610 SOUTH INDUSTRIAL BOULEVARD, SUITE 220
EULESS, TEXAS 76040
(817) 283-4250
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 27, 2000
To Our Stockholders:
The Annual Meeting of Stockholders of Corniche Group Incorporated, a
Delaware corporation, will be held on Tuesday, June 27, 2000, at 10:00 a.m., at
the Texas Star Golf Course and Convention Center, which is located at 1400 Texas
Star Parkway in Euless, Texas, for the following purposes:
- To elect five members of the Board of Directors, whose terms are
described in the proxy statement;
- To approve an amendment to the Certificate of Incorporation to increase
the number of common shares that Corniche may issue to 75 million;
- To approve an amendment to the 1998 Employees Incentive Stock Option Plan
to increase the number of shares issuable under the plan to three
million; and
- To transact any other business that properly comes before the Annual
Meeting or any adjournment of the Annual Meeting.
Record holders of Corniche's common stock and Series B preferred stock at
the close of business on May 1, 2000, are entitled to notice of and to vote at
the Annual Meeting or any adjournment of the Annual Meeting.
Sincerely,
[ROBERT F. BENOIT]
Robert F. Benoit
Chief Executive Officer and
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ACCOMPANYING ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING IN PERSON, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON. RETURNING YOUR PROXY CARD PROMPTLY WILL
HELP INSURE A QUORUM AT THE ANNUAL MEETING AND SAVE CORNICHE THE EXPENSE OF
FURTHER PROXY SOLICITATION.
June 5, 2000
<PAGE> 4
CORNICHE GROUP INCORPORATED
610 SOUTH INDUSTRIAL BOULEVARD, SUITE 220
EULESS, TEXAS 76040
(817) 283-4250
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 27, 2000
SOLICITATION AND REVOCABILITY OF PROXIES
The Board of Directors of Corniche Group Incorporated is soliciting your
proxy for use at our 2000 Annual Meeting of Stockholders. The Annual Meeting
will be held on Tuesday, June 27, 2000, at 10:00 a.m., at the Texas Star Golf
Course and Convention Center, which is located at 1400 Texas Star Parkway in
Euless, Texas. This proxy statement and the accompanying proxy card are being
sent to you on or about June 6, 2000.
We will pay the cost of soliciting proxies. We may use our officers and
employees to solicit proxies in person or by telephone, facsimile or similar
means (any officers or employees soliciting proxies will not receive any extra
compensation for their efforts). We may also reimburse brokers or other persons
holding Corniche stock in their names or in the names of their nominees for
their charges and expenses in forwarding proxy materials to the beneficial
owners of the stock.
Shares represented by a proxy card in the form provided to you with this
proxy statement will be voted at the Annual Meeting as you direct on the proxy
card. To be valid and counted at the Annual Meeting, you must properly sign,
date and return the proxy card to us. IF YOU SIGN AND RETURN THE PROXY CARD BUT
DO NOT PROVIDE ANY DIRECTION AS TO HOW TO VOTE YOUR SHARES, THEN YOUR SHARES
WILL BE VOTED FOR THE ELECTION OF THE FIVE NOMINEES FOR DIRECTOR NAMED IN THE
PROXY CARD, FOR THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF COMMON SHARES THAT CORNICHE MAY ISSUE, AND FOR THE AMENDMENT TO
THE 1998 EMPLOYEE INCENTIVE STOCK OPTION PLAN TO INCREASE THE NUMBER SHARES
ISSUABLE UNDER THE PLAN.
The Board of Directors is not aware of any other business to be conducted
at the Annual Meeting. In case any other matters properly come before the Annual
Meeting, the persons named in the proxy card intend to vote on the other matters
in accordance with their best judgment.
You may revoke your proxy at any time before it has been voted at the
Annual Meeting in three ways: (1) by giving written notice of your revocation to
Corniche's Secretary, (2) by filing a proxy having a later date or (3) by voting
in person at the Annual Meeting.
VOTING SECURITIES
On May 1, 2000, the record date for determining the stockholders who are
entitled to notice of and to vote at the Annual Meeting, 14,244,937 shares of
Corniche's common stock were outstanding and 825,000 shares of its Series B
preferred stock were outstanding. Each share of common stock is entitled to one
vote. Each share of Series B preferred stock is entitled to ten votes. Shares of
common stock and shares of Series B preferred stock vote together as one class.
Only the record holders of common stock and Series B preferred stock at the
close of business on May 1, 2000, the record date for the Annual Meeting, are
entitled to notice of and to vote at the Annual Meeting. Unless the context
otherwise requires, all references to "stockholders" in this proxy statement
refer to holders of common stock and Series B preferred stock.
QUORUM AND VOTING PROCEDURES
A majority of the shares of Corniche's common stock and Series B preferred
stock entitled to vote must be present in person at the Annual Meeting or
represented by proxy at the Annual Meeting for there to be a quorum at the
Annual Meeting. For purposes of the quorum and determining the amount of votes
necessary to take stockholder action, stockholders of record who are present at
the Annual Meeting in person or by proxy and who abstain from voting, including
brokers holding customers' shares of record who cause abstentions to
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<PAGE> 5
be recorded at the Annual Meeting, are considered stockholders who are present
and entitled to vote and they count toward the presence of a quorum.
Brokers holding shares of record for customers generally are not entitled
to vote on certain matters unless they receive voting instructions from their
customers. "Broker non-votes" means shares held by a broker who has not received
instructions from its customers on such matters and for which the broker has no
discretionary power to vote.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a plurality of the voting power of
the shares of common stock and Series B preferred stock, voting together as a
single class, present or represented by proxy and entitled to vote at the Annual
Meeting at which a quorum is present is required to elect each of the five
directors nominated for election or re-election to Corniche's Board of Directors
(Proposal 1). Votes may be cast in favor of or withheld with respect to each
nominee. Abstentions and broker non-votes will not be counted and will not
affect the outcome of the election of directors. The approval of Proposal 1 is
not conditioned upon the approval of any other proposal.
The affirmative vote of a majority of the issued and outstanding shares of
common stock and Series B preferred stock, voting together as a single class,
entitled to vote at the Annual Meeting at which a quorum is present is required
to amend Corniche's Certificate of Incorporation to increase the number of
authorized shares of common stock (Proposal 2). Broker non-votes and abstentions
will have the same effect as voting against Proposal 2. The approval of Proposal
2 is not conditioned upon the approval of any other proposal.
The affirmative vote of a majority of the votes cast by the holders of
common stock and Series B preferred stock, voting together as a class, is
required to increase the number of shares issuable pursuant to the 1998
Employees Incentive Stock Option Plan (Proposal 3). Abstentions and broker
non-votes will not be counted and will not affect the outcome of the vote on
Proposal 3. The approval of Proposal 3 is not conditioned upon the approval of
any other proposal.
All other matters properly brought before the Annual Meeting will be
decided by a majority of the votes cast on the matter.
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<PAGE> 6
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
Five directors will be elected at the Annual Meeting. Directors are elected
by plurality vote. If any nominee becomes unavailable for election for any
presently unforeseen reason, the persons designated as proxies will have full
discretion to vote for another person designated by the Board of Directors.
Directors are elected to serve until the next Annual Meeting of stockholders and
until their successors are elected and qualified.
NOMINEES FOR DIRECTORS
The five nominees for election to the Board of Directors are named below.
Each nominee has consented to serve as a director, if elected. The table below
contains information regarding the nominees. Messrs. Hutchins and Fyfe are
presently directors of Corniche, were elected as directors at the 1999 Annual
Meeting, and have served continuously as directors since the date of their first
election to the Board of Directors. Mr. Benoit was appointed a director in
September 1999 and has served continuously as a director since his appointment.
Messrs. Harrison and Raftery have not previously served as directors.
<TABLE>
<CAPTION>
NOMINEE AGE CURRENT POSITION
- ------- --- ----------------
<S> <C> <C>
James J. Fyfe.................... 45 Chairman of the Board and Director
Robert F. Benoit................. 42 Director and Chief Executive Officer
Robert H. Hutchins............... 71 Director, President and Principal Financial Officer
Paul L. Harrison................. 38 Nominee for Director
Joseph P. Raftery................ 57 Nominee for Director
</TABLE>
Set forth below is a description of the background of each of the nominees
for director.
James J. Fyfe has served as a director of Corniche since May 1995. He
became Chairman of the Board in April 2000. From May 1995 until May 1998, Mr.
Fyfe served as Vice President and Chief Operating Officer of Corniche. Mr. Fyfe
has been a director of Machine Vision Holdings, Inc., a intelligent automation
technology software company since January 1998 and of Transmedia Asia Pacific,
Inc., a member benefit loyalty marketing company, since October 1999. From
August 1996 to August 1997, Mr. Fyfe was an outside director of Medical Laser
Technologies, Inc.
Robert F. Benoit, 42, has served as Chief Executive Officer since September
1999 and Secretary since June 1999. He was Executive Vice President and Chief
Operating Officer from February 1999 to September 1999. From May 1996 to
February 1999, Mr. Benoit was a business analyst at Warrantech Automotive, Inc.,
a service contract provider, in Euless, Texas, where he served as project leader
for Internet applications. From October 1995 to May 1996, Mr. Benoit served as
the corporate accounting manager responsible for the non-bank subsidiaries of
Shawmut Bank, National Association.
Robert H. Hutchins has served as a director and the President and Principal
Financial Officer of Corniche since May 1998. Mr. Hutchins was employed by
Warrantech Automotive, Inc. as National Claims Manager, from May 1995 to May
1998. Prior to joining Warrantech, he spent 45 years in the property and
casualty insurance industry in various executive and management positions.
Paul L. Harrison has been a director of Transmedia Europe, Inc., a member
benefit loyalty marketing company in London, England, since June 1996. Mr.
Harrison was also President, Principal Financial and Accounting Officer and
Secretary of Transmedia Asia Pacific, Inc., also a member benefit loyalty
marketing company in London, England, until October 1999. From May 1994 until
June 1997, he was a business and financial consultant to Transmedia Europe, Inc.
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<PAGE> 7
Joseph P. Raftery has been an independent business consultant since 1998.
From 1990 to 1998, Mr. Raftery was Chairman and a member of the Board of
Directors and President of BankAmerica Insurance Group, Inc., a subsidiary of
BankAmerica Corp. based in San Diego, California.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED ABOVE.
MEETINGS OF THE BOARD OF DIRECTORS
Three regularly scheduled meetings of Corniche's Board of Directors were
held during the year ended December 31, 1999. All directors attended at least
75% of all the meetings. The Board of Directors has not had separate committees
of directors in the past. The Board intends to appoint audit, compensation and
stock option committees following the Annual Meeting.
DIRECTOR COMPENSATION
Pursuant to the 1998 Independent Director Compensation Plan, each director
who is not an officer or employee of Corniche is entitled to receive
compensation of $2,500 per calendar quarter plus 500 shares of common stock per
calendar quarter of board service, in addition to reimbursement of travel
expenses. Outside directors are entitled to be compensated for committee service
at $500 per calendar quarter plus 125 shares of common stock per calendar
quarter. No directors' fees are payable to Corniche employees who serve as
directors. Corniche deferred the payment of directors' fees for service during
the year ended December 31, 1999.
All directors are entitled to receive options to purchase 1,500 shares of
common stock each May under Corniche's 1992 Stock Option Plan for Directors.
Corniche deferred the grant of such options that otherwise would have been
granted in May 1999 and 2000.
PROPOSAL 2
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
The Board of Directors has determined that it is in the best interest of
Corniche to amend its Certificate of Incorporation to increase the number of
shares of common stock that Corniche is authorized to issue. Corniche currently
has authority to issue 30 million shares of common stock. The Board of Directors
has approved and adopted an amendment to the Certificate of Incorporation,
pursuant to which the authorized common stock would be increased from 30 million
to 75 million shares, and has directed that this proposal be submitted to the
stockholders for approval.
PURPOSES AND EFFECTS OF THE PROPOSED INCREASE OF AUTHORIZED COMMON STOCK
The Board of Directors believes that this amendment is in the best interest
of the Company and its stockholders because it would provide greater flexibility
to the Board of Directors to issue additional equity securities, for example, to
raise additional capital or to facilitate possible future acquisitions.
As of May 1, 2000, after giving effect to an aggregate of approximately
451,433 shares of common stock reserved for issuance upon exercise of warrants,
options or awards granted or that may be granted under stock option and award
plans, Corniche had approximately 7,053,630 shares of common stock available for
issuance. The availability of an adequate supply of authorized and unissued
shares of common stock provides Corniche flexibility by allowing shares to be
issued, for example, in connection with possible future financings or
acquisitions, without the expense and delay of a stockholders meeting, unless
stockholder approval is otherwise required.
Although Corniche actively considers mergers, acquisitions and other
transactions that may involve the issuance of additional shares of common stock
(any one or more of which may be under consideration or acted upon at any given
time), Corniche currently does not have any agreements, commitments or
understandings
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<PAGE> 8
that would involve the issuance of additional shares of common stock in amounts
that would exceed the number of currently authorized but unissued shares.
If the increase in the number of shares of authorized common stock is
approved, generally, no stockholder approval will be solicited for the issuance
of all or any portion of such additional shares of common stock unless required
by law or any rules or regulations to which Corniche is subject, including the
rules of the National Association of Securities Dealers, Inc. ("NASD"). Any
issuance that does not require stockholder approval may be authorized by the
Board of Directors. The rules of the NASD currently require stockholder approval
prior to the taking of certain actions involving or pertaining to the issuance
of common stock, including, the establishment of certain stock option or
purchase plans or other arrangements pursuant to which common stock may be
acquired by officers or directors, the issuance of common stock that would
result in a change of control of Corniche, the issuance of common stock in
connection with certain acquisitions and the issuance of common stock under
certain other circumstances.
Stockholders of the Company have no preemptive rights with respect to the
additional shares proposed to be authorized.
The issuance of any additional shares of common stock will have the effect
of diluting the percentage of stock ownership and voting rights of the present
holders of the common stock. The increase in the number of authorized shares of
common stock may have a potential anti-takeover effect in that it would enhance
Corniche's ability to issue additional shares which could be used to thwart
persons, or otherwise dilute the stock ownership of stockholders, seeking to
control Corniche. The increase may also render more difficult the accomplishment
of mergers or the assumption of control by a principal stockholder, and thus
make more difficult the removal of incumbent management. Corniche is not aware
of any effort to accumulate its securities or to obtain control over it by means
of a tender offer, proxy contest or otherwise.
Other provisions of Corniche's Certificate of Incorporation may also have
an anti-takeover effect. The Certificate of Incorporation does not allow for
cumulative voting. In addition, the Certificate of Incorporation provides that a
business combination (defined, in pertinent part, as any merger or consolidation
with or into any other corporation, firm or entity which under Delaware law must
be submitted to a vote of stockholders, or the sale, lease, exchange or the
disposition of all or substantially all of the property and assets to any other
corporation, firm or entity) requires an affirmative vote or consent of the
holders of a majority of all shares of Corniche's outstanding capital stock
entitled to vote and a majority of each series or class of preferred stock which
is entitled to vote as a class thereon. This class vote required for a business
combination may make it more difficult to effect a hostile or unwanted takeover
of Corniche. In addition, Corniche's Board of Directors may issue new series or
classes of preferred stock without stockholder approval which, if issued, may
have class voting and conversion rights which could adversely affect the voting
power of the holders of common stock and have the effect of delaying, deferring
or preventing a change of control of Corniche. This provision of the Certificate
of Incorporation may not be amended, altered, changed or repealed without the
prior affirmative vote or consent of the holders of 66 2/3% of all shares of
stock entitled to vote and 66 2/3% of any series or class of preferred stock
that has been granted the right to vote as a separate class.
Corniche is also subject to Section 203 of the Delaware General Corporation
Law which provides certain restrictions on business combinations (as defined
therein) with interested persons (any person who acquires 15% or more of
Corniche's outstanding voting stock). In general, Corniche is prohibited from
engaging in business combinations with an interested person for three years from
the date a person becomes an interested person, subject to certain exceptions,
including approval of the Board of Directors. By restricting Corniche's ability
to engage in business combinations with an interested person, the application of
Section 203 may provide a barrier to hostile or unwanted takeovers.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.
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<PAGE> 9
PROPOSAL 3
INCREASE IN SHARES ISSUABLE PURSUANT TO OPTION GRANTS UNDER THE
1998 EMPLOYEES INCENTIVE STOCK OPTION PLAN
The Board of Directors has determined that it is in the best interest of
Corniche to increase the number of shares of common stock available under the
1998 Employees Incentive Stock Option Plan (the "1998 Plan"). Corniche currently
has authority to issue options for up to 300,000 shares of common stock under
the 1998 Plan. The Board of Directors has approved and adopted a resolution to
increase the number of shares available under the 1998 Plan to three million
shares and has directed that this proposal be submitted to the stockholders for
approval.
In 1998, Corniche's stockholders approved the adoption of the 1998 Plan.
The purpose of the 1998 Plan is to grant stock options to eligible employees
(including employees serving on the Board of Directors) to enable Corniche to
compete successfully in attracting, motivating and retaining employees with
outstanding abilities by making it possible for them to purchase shares of
Corniche's common stock on terms that will give them a direct and continuing
interest in its success. All regularly employed salaried personnel of Corniche
and its subsidiaries (currently four people) are eligible to receive options
under the 1998 Plan.
Currently the maximum number of shares of common stock that may be issued
pursuant to options granted under the 1998 Plan is 300,000. As of May 1, 2000,
only 125,000 shares of common stock remained available for option grants under
the 1998 Plan. As of May 24, 2000, the market value of the common stock was
$2.25 per share. The Board of Directors has determined that it is in the best
interest of Corniche to increase the number of shares of common stock issuable
pursuant to options granted under the 1998 Plan. The Board anticipates hiring
additional employees in the near term and believes that it will be necessary to
offer incentive options as part of a total compensation package to attract and
retain the best candidates.
The Board may not, without prior stockholder approval, amend the 1998 Plan
to increase the maximum number of shares subject to option under the 1998 Plan.
The number of options that might be granted in the future under the 1998
Plan to Corniche's current management and employees is not determinable. During
1999, 175,000 options were issued to Robert F. Benoit under the 1998 Plan.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 3.
OTHER BUSINESS
The Board of Directors does not know of any business to be presented for
consideration at the Annual Meeting or any adjournment thereof other than as
described above. The persons authorized under the Board of Directors' proxies
intend, in the absence of instructions to the contrary, to vote or act in
accordance with their judgment with respect to any other matter properly
presented for action at the Annual Meeting or any adjournment thereof. The
affirmative vote of the holders of a majority of the voting power of the shares
of common stock and Series B preferred stock, voting together as a single class,
present in person or represented by proxy at the Annual Meeting at which a
quorum is present and entitled to vote would be required with respect to any
such matter brought to a stockholder vote.
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<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
In February 1998, Corniche changed its fiscal year end from March 31 to
December 31. Consequently, the executive compensation information presented
below relates to the period from April 1, 1998, through December 31, 1999. Mr.
Hutchins, Corniche's President and Principal Financial Officer, was Corniche's
only executive officer as of December 31, 1998, who received compensation from
Corniche during the nine-month period then ended. Mr. Hutchins and Robert F.
Benoit were Corniche's only executive officers during 1999. Except for Mr.
Hutchins' service in 1998, neither of them was an employee of Corniche during
any prior fiscal year. The table below sets forth information concerning the
compensation of Messrs. Hutchins and Benoit for services in all capacities to
Corniche for the nine months ended December 31, 1998, and the year ended
December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS PERIOD SALARY OTHER(2)
- ---------------------------- ------ ------- --------
<S> <C> <C> <C>
Robert H. Hutchins.......................................... 1997 -- --
President and Principal Financial Officer 1998(1) $49,038 $3,200
1999 $85,000 $4,800
Robert A. Benoit............................................ 1997 -- --
Chief Executive Officer, Executive Vice President, and 1998 -- --
Secretary 1999(3) $62,019 $4,000
</TABLE>
- ---------------
(1) From May 18, 1998, when Mr. Hutchins first joined Corniche, to December 31,
1998.
(2) Represents an automobile allowance.
(3) From February 15, 1999, when Mr. Benoit first joined Corniche, to December
31, 1999.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OF OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
(A) (B) (C) (D) (E) (F) (G)
- ---- ------------ ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Benoit......... 75,000 43% $1.097 2/15/2009 $105,000 $132,500
100,000 57% $1.000 9/27/2009 $127,900 $161,000
</TABLE>
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<PAGE> 11
REPORT ON EXECUTIVE COMPENSATION
Corniche's Board of Directors currently does not have a compensation
committee, but expects to appoint such a committee following the Annual Meeting.
Compensation decisions with respect to Messrs. Hutchins and Benoit, Corniche's
only executive officers during 1998 and 1999, were made by Mr. Joel San Antonio,
then Acting Chairman of the Board, in consultation with Mr. Ronald Glime, then a
director of Corniche. Messrs. Hutchins' and Benoit's compensation, which
consisted solely of salary and a car allowance, was determined through
negotiations between them and Mr. San Antonio. Mr. Hutchins' salary for the
nine-month period ended December 31, 1998, was based primarily upon Mr.
Hutchins' salary at his prior position, the increased responsibilities he would
have as an officer of Corniche, and Corniche's financial position. His salary
for 1999 was the same as in 1998. Mr. Benoit's salary for 1999 was also based
primarily upon his salary at his prior position, the increased responsibilities
he would have as an officer of Corniche, and Corniche's financial position.
Robert F. Benoit, Director
James J. Fyfe, Director
Robert H. Hutchins, Director
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<PAGE> 12
PERFORMANCE GRAPH
The following graph compares cumulative total stockholder return on our
common stock with the MG Composite Market Index and an industry index, the MG
Group Index, for the period from December 31, 1994 to December 31, 1999. The
graph assumes that the value of the investment in the common stock and each
index was $100 at December 31, 1994, and that all dividends were reinvested.
COMPARE CUMULATIVE TOTAL RETURN AMONG CORNICHE GROUP INCORPORATED, MG COMPOSITE
MARKET INDEX AND MG GROUP INDEX
[PERF. GRAPH]
<TABLE>
<CAPTION>
CORNICHE GROUP MG COMPOSITE
INCORPORATED MG GROUP INDEX MARKET INDEX
-------------- -------------- ------------
<S> <C> <C> <C>
6/30/98 100.00 100.00 100.00
9/30/98 38.10 87.16 87.63
12/31/98 44.45 179.81 106.04
3/31/99 61.97 297.77 110.03
6/30/99 60.32 299.85 118.59
9/30/99 47.62 290.18 111.04
12/31/99 95.21 527.81 132.43
3/31/00 152.38 516.11 138.90
</TABLE>
ASSUMES $100 INVESTED ON JUNE 30, 1998
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING MAR. 31, 2000
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
6/30/98 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Corniche Group
Incorporated 100.00 38.10 44.45 61.97 60.32 47.62 95.21 152.38
MG Group Index 100.00 87.16 179.81 297.77 299.85 290.18 527.81 516.11
MG Composite Market
Index 100.00 87.63 106.04 110.03 118.59 111.04 132.43 138.90
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
Weinick Sanders Leventhal & Co., LLP has been appointed by Corniche's Board
of Directors to audit Corniche's financial statements for the year ended
December 31, 1999. Representatives of Weinick Sanders Leventhal & Co., LLP are
expected to be present at the annual meeting to respond to appropriate questions
from the stockholders and will be given the opportunity to make a statement
should they desire to do so.
9
<PAGE> 13
CHANGES IN ACCOUNTANTS
In February 1997, Corniche appointed Simontacchi & Co, LLP as Corniche's
independent auditors responsible for the audit of Corniche's financial
statements. Corniche's Board of Directors approved the appointment. Corniche did
not consult Simontacchi regarding any accounting or financial reporting issues
before Corniche retained that firm. Simontacchi audited Corniche's financial
statements for the fiscal years ended March 31, 1996, 1997 and 1998.
Simontacchi's report on Corniche's financial statements for the fiscal years
ended March 31, 1996, 1997 and 1998 expressed an unqualified opinion on those
financial statements based upon their audits.
On August 12, 1998, Corniche and Simontacchi terminated their
client-auditor relationship. The reports of Simontacchi on the financial
statements of Corniche for the prior two fiscal years contained no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. The Board of Directors
participated in and approved the decision to change the independent accountants.
In connection with its audits for the prior two fiscal years and through August
12, 1998, there were no disagreements with Simontacchi on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Simontacchi, would have caused Simontacchi to make reference thereto in its
report on the financial statements for such years.
Corniche engaged Weinick Sanders Leventhal & Co., LLP as its new
independent accountants as of August 12, 1998. Corniche's Board of Directors
approved the appointment. Corniche did not consult with Weinick Sanders
Leventhal regarding accounting or financial reporting issues before that firm
was retained.
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
The following table sets forth information, as of May 1, 2000, concerning
the beneficial ownership of (i) Corniche's common stock, (ii) Corniche's Series
B preferred stock and (iii) Corniche's voting power by (A) beneficial owners of
more than 5% of Corniche's common stock or Series B preferred stock, (B) each of
Corniche's directors and nominees for director, (C) each of Corniche's executive
officers, and (D) all of Corniche's directors and executive officers, as a
group. To Corniche's knowledge, no other person beneficially owns more than 5%
of the outstanding shares of common stock or Series B preferred stock. For the
purposes of reporting beneficial ownership, a person is considered the
beneficial owner of the shares over which the person holds or shares voting or
investment power, including the power to direct the disposition of the shares,
or over which the person can acquire such power within 60 days. However, the
information shown below for Corniche's common stock does not reflect the number
of shares of common stock issuable upon conversion of the shares of Series B
preferred stock that are included in the table below. Except as otherwise noted,
each person listed has sole investment and voting power with respect to the
shares of capital stock listed by the person's name.
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF SERIES B
COMMON STOCK PREFERRED STOCK PERCENTAGE OF
BENEFICIALLY OWNED BENEFICIALLY OWNED(1) CORNICHE'S TOTAL
-------------------- ---------------------- VOTING POWER
NAME(2) NUMBER PERCENT NUMBER PERCENT BENEFICIALLY OWNED
- ------- --------- ------- --------- --------- ------------------
<S> <C> <C> <C> <C> <C>
Joel San Antonio(3)................. 0 0% 685,000 83.0% 44.8%
PICTET & CIE........................ 2,925,000 20.5% 0 0 13.0%
Robert F. Benoit.................... 5,000 * 0 0 *
James J. Fyfe(4).................... 3,000 * 10,000 * *
Paul L. Harrison.................... 0 0% 0 0 0.0%
Robert H. Hutchins(5)............... 0 0% 15,000 *
Joseph P. Raftery................... 0 0% 0 0 0.0%
All directors and executive officers
as a group (3 persons)............ 8,000 * 25,000 0 *
</TABLE>
10
<PAGE> 14
- ---------------
* Less than 1%.
(1) Pursuant to the terms of the Stock Purchase Agreement relating to the
issuance of the Series B preferred stock, the initial purchasers of the
Series B preferred stock are required to nominate Mr. Fyfe or his nominee to
serve as director through June 30, 2000.
(2) All addresses are c/o Corniche Group Incorporated, 610 South Industrial
Boulevard, Euless, Texas 76040, except for PICTET & CIE, which is B.D.
Georges-Favon 29, Geneva 1204, Switzerland.
(3) According to Amendment No. 1 to Schedule 13D filed by Mr. Antonio in
September 1998, Mr. San Antonio has sole power to vote and to direct the
disposition of 575,000 of the shares included in the table. He shares voting
and dispositive power with respect to 110,000 shares included in the table,
which are issued to his wife, children, mother, and brother.
(4) Including 3,000 currently exercisable options to purchase common stock.
(5) Held by Mr. Hutchins as co-trustee for a living trust, with Mr. and Mrs.
Hutchins as the beneficiaries of such trust.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Corniche's
directors and officers, and persons who own more than 10% of a registered class
of Corniche's equity securities, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission.
These persons are required by the Securities and Exchange Commission to furnish
Corniche with copies of all Section 16(a) reports that they file. Based solely
on our review of these reports and written representations furnished to us, we
believe that in 1999 each of the reporting persons complied with these filing
requirements.
STOCKHOLDER PROPOSALS
The 2001 Annual Meeting of Corniche's Stockholders is expected to take
place on May 22, 2000. Any stockholder who intends to present a proposal at the
2001 Annual Meeting of Stockholders, and who wishes to have a proposal included
in Corniche's proxy statement for that meeting, must deliver the proposal to
Corniche's Secretary at Corniche's offices in Euless, Texas, a reasonable time
before Corniche begins to prepare and mail its proxy materials for the 2001
Annual Meeting. Corniche expects that it will begin preparing the proxy
materials in April 2001. Stockholders who intend to present a proposal at the
2001 Annual Meeting without including their proposal in Corniche's proxy
materials must provide notice of the proposal to Corniche no later than April
18, 2001.
11
<PAGE> 15
ANNUAL REPORT AND FORM 10-K
Corniche's 1999 Annual Report accompanies this proxy statement.
A COPY OF CORNICHE'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1999, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES,
BUT NOT INCLUDING EXHIBITS, WILL BE FURNISHED AT NO CHARGE TO EACH PERSON TO
WHOM A PROXY STATEMENT IS DELIVERED UPON THE WRITTEN REQUEST OF SUCH PERSON
ADDRESSED TO CORNICHE GROUP INCORPORATED, ATTN: SECRETARY, 610 SOUTH INDUSTRIAL
BOULEVARD, SUITE 220, EULESS, TEXAS 76040.
By Order of the Board of Directors,
/s/ Robert H. Hutchins
Robert H. Hutchins
President and Principal Financial
Officer
June 5, 2000
12
<PAGE> 16
CORNICHE GROUP INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, JUNE 27, 2000.
The undersigned hereby appoints James Fyfe as attorney and proxy, with
power of substitution, to vote on behalf of the undersigned at the Corniche
Group Incorporated 2000 Annual Meeting of Stockholders to be held on June 27,
2000, and at any adjournments or postponements thereof (the "Meeting"), upon the
following matters and upon any other business that may properly come before the
Meeting, as set forth in the related Notice of 2000 Annual Meeting of
Stockholders and Proxy Statement, both of which have been received by the
undersigned.
This proxy, when properly executed, will be voted in the manner directed
by the undersigned stockholder. If this proxy is executed but no direction is
made, this proxy will be voted FOR the board's nominees for director and FOR
each matter presented.
PLEASE INDICATE YOUR VOTE FOR THE ELECTION OF DIRECTORS ON THE OTHER
SIDE. The nominees are: Robert A Benoit, James J. Fyfe, Paul Harrison, Robert H.
Hutchins and Joseph P. Raftery.
(CONTINUED, AND TO BE DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE> 17
PLEASE MARK BOXES IN BLUE OR BLACK INK
1. Election of 5 directors.
For all nominees [ ] Against all nominees [ ] Exception* [ ]
* To withhold authority for individual nominees, print nominee's name on the
line below and check Exception Box.
- --------------------------------------------------------------------------------
2. Approval of the proposed amendment to the Certificate of Incorporation to
increase the number of common shares that Corniche is authorized to issue.
For [ ] Against [ ] Abstain [ ]
3. Approval of the proposed amendment to the 1998 Employee Incentive Stock
Option Plan to increase the number of shares available for issuance thereunder.
For [ ] Against [ ] Abstain [ ]
If you have noted an address change or comments on either side of this card,
mark here: [ ]
Dated: , 2000
-------------------------
Signed:
-------------------------------------
Please sign this proxy and return it promptly whether or not you expect to
attend the Meeting. You may nevertheless vote in person if you attend.
Please sign exactly as your name appears hereon. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc.
For an account in the name of two or more persons, each should sign, or if one
signs, he or she should attach evidence of authority.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
