<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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 Section240.14a-11(c) or
Section240.14a-12
THE TITAN CORPORATION
- --------------------------------------------------------------------------------
(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:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
March 31, 1999
Dear Stockholder:
This letter accompanies the Proxy Statement for our Annual Meeting on
Tuesday, May 18, 1999, at the offices of the Company at 3033 Science Park Road,
San Diego, California 92121, at 9:00 a.m. We hope that it will be possible for
you to attend in person.
At the meeting, the stockholders will be asked to elect eight directors and
to ratify the Board's selection of auditors. In addition, we will present a
report on the operations and activities of the Company. Following the meeting,
management will be pleased to answer your questions about the Company.
The Notice of Meeting and Proxy Statement accompanying this letter describe
the matters upon which stockholders will vote at the upcoming meeting, and we
urge you to read these materials carefully. We also urge you to sign and return
your proxy cards so we can be sure of a quorum to vote on these proposals for
stockholder action.
Sincerely,
[SIG]
Gene W. Ray
President and Chief
Executive Officer
3033 SCIENCE PARK ROAD - SAN DIEGO, CALIFORNIA 92121 - (619) 552-9500
<PAGE>
THE TITAN CORPORATION
3033 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121
(619) 552-9500
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 1999
To the Stockholders of The Titan Corporation:
The Annual Meeting of Stockholders of The Titan Corporation will be held at
the offices of the Company at 3033 Science Park Road, San Diego, California
92121, on Tuesday, May 18, 1999, at 9:00 a.m., for the following purposes:
1. To elect a Board of eight directors;
2. To consider and act upon a proposal to ratify the selection of Arthur
Andersen LLP as the Company's auditors for the fiscal year ending
December 31, 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Stockholders of record at the close of business on March 22, 1999, will be
entitled to vote at the meeting.
By order of the Board of Directors,
[LOGO]
Ira Frazer
SECRETARY
San Diego, California
March 31, 1999
TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, YOU ARE REQUESTED
TO SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID,
ADDRESSED ENVELOPE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. OR IN THE ALTERNATIVE, VOTE VIA THE INTERNET ADDRESS OR THE
800-TELEPHONE NUMBER PROVIDED ON THE PROXY CARD. IF YOU ATTEND THE MEETING, YOU
MAY VOTE IN PERSON EVEN THOUGH YOU HAVE SENT IN YOUR PROXY OR VOTED VIA THE
INTERNET OR THE 800-TELEPHONE NUMBER.
<PAGE>
THE TITAN CORPORATION
3033 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121
March 31, 1999
------------------------
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of The Titan
Corporation ("Titan" or the "Company") for use at the Annual Meeting of
Stockholders to be held at the offices of the Company at 3033 Science Park Road,
San Diego, California 92121, on May 18, 1999 at 9:00 a.m. and at any
adjournments thereof. The shares represented by the proxy will be voted at the
meeting if the proxy is properly executed and returned. Any stockholder giving a
proxy has the right to revoke it by giving written notice to the Secretary of
the Company at any time prior to the voting or by executing and delivering a
later dated proxy. A stockholder of record at the close of business on March 22,
1999, if present at the meeting, may vote in person whether or not he has
previously given a proxy. This Proxy Statement and its enclosures are being
mailed to the Company's stockholders on or about March 31, 1999.
The cost of the solicitation will be paid by the Company. In addition to
solicitation of proxies by use of the mails, Internet and telephone, directors,
officers or employees of the Company may solicit proxies personally, or by other
appropriate means. The Company will request banks, brokerage houses and other
custodians, nominees or fiduciaries holding stock in their names for others to
send proxy materials to and to obtain proxies from their principals, and the
Company will reimburse them for their reasonable expenses in doing so. The
Company has retained the services of Georgeson & Company, Inc. to assist in the
solicitation of proxies at an estimated cost of $8,500 plus certain
out-of-pocket expenses.
VOTING
The securities of the Company entitled to vote at the meeting consist, as of
March 22, 1999 of 694,872 shares of $1.00 Cumulative Convertible Preferred Stock
(the "Preferred Stock"), and 37,197,936 shares of common stock, par value $0.01
per share (the "Common Stock"). Only stockholders of record on the books of the
Company at the close of business on that date will be entitled to vote at the
meeting. Each holder of Preferred Stock is entitled to one-third ( 1/3) vote for
each of said shares; holders of Common Stock are entitled to one vote per share.
Holders of Preferred and Common Stock will vote as a single class, and will not
vote separately.
Under the Company's bylaws and Delaware law, shares represented by proxies
that reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee that are represented at the meeting, but with respect to which such
broker or nominee is not empowered to vote on a particular proposal) will be
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Directors will be elected by a favorable
vote of a plurality of the shares of voting stock present and entitled to vote,
in person or by proxy, at the Annual Meeting. Accordingly, abstentions or broker
non-votes as to the election of directors will not affect the election of the
candidates receiving the plurality of votes. All other proposals to come before
the Annual Meeting require the approval of a majority of the shares of stock
having voting power present and entitled to vote thereon. Abstentions as to a
particular other proposal will have the same effect as votes against such
proposal. Shares that reflect broker non-votes, however, will be treated as
shares not present and, therefore, not entitled to vote on such other proposal
for purposes of determining approval of such other proposal. Accordingly, such
shares will not be counted as votes for or against such other proposal and will
not affect the outcome of the vote on such other proposal.
At the Company's Annual Meeting in 1998, approximately 90.8% of the
outstanding voting power was represented and participated in the election of
directors.
<PAGE>
OWNERSHIP OF TITAN'S SECURITIES
The following table sets forth certain information as to the number of
shares beneficially owned as of March 22, 1999 (a) by each person who is known
to the Company to own beneficially 5% or more of the outstanding shares of any
class of its voting stock, (b) by each present Titan director, each nominee to
become a director and each of the Named Executive Officers (as defined on page
6), and (c) by all Titan officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
IDENTITY OF OWNER BENEFICIAL OF
OR GROUP (1) TITLE OF CLASS OWNERSHIP CLASS
- ------------------------------------------------ ----------------- -------------- -----------
<S> <C> <C> <C>
Charles R. Allen................................ Common Stock 38,880(2) *
Mellon C. Baird................................. Common Stock 230,010(2) *
Joseph F. Caligiuri............................. Common Stock 32,250(2) *
Clifton L. Cooke................................ Common Stock 642,024(2) 1.73%
Eric M. DeMarco................................. Common Stock 53,729(2) *
Daniel J. Fink.................................. Common Stock 37,963(2) *
Ronald B. Gorda................................. Common Stock 163,876(2) *
Robert I. Hanisee............................... Common Stock 47,923(2) *
Robert E. La Blanc.............................. Common Stock 23,000(2) *
Thomas G. Pownall............................... Common Stock 45,951(2) *
Gene W. Ray..................................... Common Stock 604,328(2) 1.62%
James E. Roth................................... Common Stock 0(2)
David L. Babson & Company Incorporated.......... Common Stock 2,248,600 6.04%
FMR Corp........................................ Common Stock 2,024,830 5.44%
All Directors and Officers as a Group
(20 Persons).................................. Common Stock 2,013,337(2) 5.41%
</TABLE>
- ------------------------
* Less than 1%
(1) The address of each owner with the exceptions of David L. Babson & Company,
Inc. and FMR Corp. is: c/o The Titan Corporation, 3033 Science Park Road,
San Diego, California 92121; the address of David L. Babson & Company, Inc.
is: One Memorial Drive, Cambridge, Massachusetts 02142; and the address of
FMR Corp. is: 82 Devonshire Street, Boston, Massachusetts 02109.
(2) Including (A) 21,250; 229,844; 16,250; 36,879; 37,500; 21,250; 143,750; 0;
15,000; 15,000; 330,000; 0; and 929,973 shares subject to outstanding
options held by Messrs. Allen, Baird, Caligiuri, Cooke, DeMarco, Fink,
Gorda, Hanisee, La Blanc, Pownall, Ray, Roth and all directors and officers
as a group, respectively, which are currently exercisable or may become
exercisable within 60 days after March 22, 1999; (B) 21,428 shares that may
be obtained upon conversion of convertible debentures held by Dr. Ray; and
(C) 166; 165; 1,328; 17,626; 66,406; and 111,001 shares held by the trustees
of the Company's 401(k) Retirement Plan and Employee Stock Ownership Plan
for the accounts of Messrs. Baird, Cooke, DeMarco, Gorda, Ray and all
directors and officers as a group, respectively.
Except as otherwise indicated in the above notes, shares shown as
beneficially owned are those as to which the named person possesses sole voting
and investment power. However, under California law, personal property owned by
a married person may be community property that either spouse may manage and
control, and the Company has no information as to whether any shares shown in
this table are subject to California community property law.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Eight directors are to be elected at the meeting, each to serve for a term
of one year and until his successor shall be elected. The proxies solicited
hereby are intended to be voted for the nominees whose names are listed below.
All of the nominees are presently directors. Six of the eight directors were
elected at the Company's last annual meeting and two were appointed by the Board
of Directors to fill new positions. The Company has no reason to believe that
the nominees for election will not be available to serve their prescribed terms
and each nominee for election has agreed to serve if elected. However, the
persons named in the proxy will have discretionary authority to vote for others
if any nominee is unable or unwilling to serve. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
INFORMATION CONCERNING NOMINEES
<TABLE>
<CAPTION>
YEAR FIRST
BECAME OTHER CORPORATE
NAME AGE PRINCIPAL OCCUPATION DIRECTOR DIRECTORSHIPS
- ------------------------ --- --------------------------------- ----------- ----------------------------------
<S> <C> <C> <C> <C>
Charles R. Allen 73 Advisor, New Court Partners, a 1989
venture capital unit of
Rothschild, Inc.
Joseph F. Caligiuri 71 Retired Executive Vice President 1984 Avnet, Inc.; PerImmune Holdings,
of Litton Industries, Inc., Inc.
diversified manufacturing
Daniel J. Fink 72 President of D. J. Fink 1985 Orbital Sciences Corporation;
Associates, Inc., management Magellan Corporation
consulting
Robert I. Hanisee 60 Managing Director of Trust 1998 EDO Corporation; Illgen Simulation
Company of the West Technologies
Robert E. La Blanc 65 President of Robert E. La Blanc 1996 Tribune Co.; Storage Technology
Associates, Inc., financial and Corporation; A family of 12
technical consulting Prudential Mutual Funds; Salient
Three Communications, Inc.
Thomas G. Pownall 77 Retired Chairman and Chief 1992 Burke Industries, Inc.; Special
Executive Officer of Martin Devices, Inc.; Elgar Electronics,
Marietta Corporation Inc.
Dr. Gene W. Ray 60 President and Chief Executive 1981
Officer of Titan
James E. Roth 62 Former President & CEO of GRC 1998
International, Inc.
</TABLE>
Mr. Allen was employed by TRW, Inc., a diversified manufacturing company,
from 1955 to 1986, where he held a number of executive management positions,
including director from 1972 to 1986 and Executive Vice President and Chief
Financial Officer from 1977 to 1986.
3
<PAGE>
Mr. Caligiuri was employed by Litton Industries, Inc., a diversified
manufacturing and services company, from 1969 to 1993, where he held a number of
executive management positions, including Executive Vice President from
September 1981 to April 1993.
Mr. Fink was employed by General Electric Co. from 1967 to 1982, where he
held a number of executive management positions, including Senior Vice President
of Corporate Planning and Development, after which he founded and has been the
President of D. J. Fink Associates, Inc., a management consulting firm.
Mr. Hanisee is currently Chief Investment Officer for Asset Allocation in
the Private Client Services Group of Trust Company of the West. He managed the
Convertible Securities Group from 1992 to 1998, and had been Portfolio Manager
for the Global Telecom Trust from September 1996 to October 1998. Mr. Hanisee
was a founding partner of Amdec Securities, and later was President of Seidler
Amdec Securities.
Mr. La Blanc was a General Partner with Salomon Brothers, an investment
banking firm, from 1969 to 1979. From 1979 to 1981 he was Vice Chairman of
Continental Telecom, Inc., after which he founded and has been the President of
Robert E. La Blanc Associates, Inc., a financial and technical consulting firm.
Mr. Pownall was employed by Martin Marietta Corporation, a diversified
manufacturing and services company, from 1963 to 1988 where he held a number of
executive management positions, including director from September 1971 to April
1992, Chief Executive Officer from April 1982 to December 1987, and Chairman of
the Board of Directors from January 1983 to April 1988.
Dr. Ray was a co-founder of Titan Systems, Inc., the parent of which merged
into the Company in 1985. He served as a director, Chief Executive Officer and
President of Titan Systems from its inception in 1981 until the merger. He has
been President and Chief Executive Officer of the Company since the merger.
Mr. Roth is retired from GRC International. From July 1974 to June 1996, he
held key executive management positions there including President and Chief
Executive Officer from January 1992 to November 1998.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS AND DIRECTORS' FEES
The Company's Board of Directors has an Audit Committee and a Compensation,
Stock Option and Pension Committee. The members of the Audit Committee are Mr.
Allen, Chairman, and Messrs. Caligiuri, Fink, Hanisee, La Blanc, Pownall and
Roth. This Committee, which monitors the Company's basic accounting policies,
reviews audit and management reports and makes recommendations regarding the
appointment of the independent auditors, held three meetings during fiscal 1998.
The members of the Compensation, Stock Option and Pension Committee are Mr.
Pownall, Chairman, and Messrs. Allen, Caligiuri, Fink, Hanisee, La Blanc and
Roth. This Committee, which deals with the hiring and election of corporate
officers, salary and incentive compensation policies for officers and
executives, and the granting of stock options and stock appreciation rights to
employees, held five meetings during fiscal 1998.
During fiscal 1998, the Board of Directors held nine meetings and took
action by unanimous written consent on four occasions. With the exception of
Messrs. Hanisee and Roth, each of the incumbent directors attended more than 75%
of the meetings of the Board. Mr. Hanisee attended one, and Mr. Roth attended
two of the two meetings held after their appointment to the Board of Directors.
With the exception of Messrs. Hanisee, La Blanc and Roth each of the incumbent
directors attended 100% of the meetings of the committees on which he served
during 1998. Messrs. Hanisee and Roth both attended 100% of the committee
meetings held after their appointment to the Board of Directors. Mr. La Blanc
was absent from one Compensation, Stock Option and Pension Committee meeting.
As of January 1999, directors who are not officers receive directors' fees
at an annual rate of $30,000, paid quarterly, and $1,500 per meeting for each
meeting attended in excess of five meetings per calendar year. Additionally,
directors who serve as chairs to committees of the Board receive $1,000 per
quarter. In
4
<PAGE>
addition to the above compensation, pursuant to the terms of the Company's
existing 1996 Directors' Stock Option and Equity Participation Plan, as amended,
(the "Plan"), options to purchase 5,000 shares of the Common Stock of the
Company are granted to each director at fair market value upon election to the
Board. Directors also receive non-discretionary annual grants of options to
purchase 5,000 shares of Common Stock under the Plan. The options vest at 25%
per year. Directors who are not also employees of the Company may elect to
receive their directors' fees in Common Stock, pursuant to the terms of the
Plan.
[THIS SPACE LEFT INTENTIONALLY BLANK]
5
<PAGE>
TITAN MANAGEMENT
The executive officers of Titan and their respective positions with Titan
and ages are set forth in the following table. Biographical information on each
executive officer who is not a director is set forth following the table. There
are no family relationships between any director or executive officer and other
director or executive officer of Titan. Executive officers serve at the
discretion of the Board of Directors.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME POSITION AGE HE/SHE BECAME OFFICER
- ------------------------- --------------------------------------------------------- --- -----------------------
<S> <C> <C> <C>
Gene W. Ray President and Chief Executive Officer 60 1981
Mellon C. Baird Senior Vice President 68 1998
Herbert L. Bradley Senior Vice President 57 1999
Carl J. Bubela Vice President 50 1998
Clifton L. Cooke Executive Vice President 51 1998
Eric M. DeMarco Executive Vice President and Chief Financial Officer 35 1997
Sharon A. Donahoo Vice President 43 1998
Louis L. Fowler Vice President and Assistant Secretary 60 1989
Ira Frazer Senior Vice President, General Counsel and Secretary 44 1998
Ronald B. Gorda Senior Vice President 43 1994
Deanna Hom Petersen Vice President and Corporate Controller 31 1997
Dianne D. Scott Vice President 49 1995
Gregory S. Szabo Vice President 45 1998
</TABLE>
The term of office of each executive officer is until his or her respective
successor is elected and has been qualified, or until his or her death,
resignation or removal. The Board of Directors elects officers annually at its
first meeting following the Annual Meeting of Stockholders.
Mr. Baird has been Senior Vice President of the Company and President and
Chief Executive Officer of Titan Technologies and Information Systems since
September 1998. Since November 1990 he has been President and Chief Executive
Officer of Delfin Systems, now a wholly-owned subsidiary of the Company. From
1986 to 1990 Mr. Baird was President and Chief Executive Officer of Tracor.
Prior thereto, Mr. Baird held senior positions at Eaton Corporation, Sanders
Associates, Inc., F&M Systems Company, and Varo, Inc.
Mr. Bradley has been Senior Vice President of the Company and President and
Chief Executive Officer of Titan Wireless, Inc. since January 1999. Prior
thereto, he had been executive director of product development at Global One
since February 1996. From February 1989 to February 1996, Mr. Bradley was
President of Sprint China, Sprint International.
Mr. Bubela has been Vice President of the Company since September 1998. From
January 1985 to March 1998, he was Treasurer & Vice President of Validity
Corporation, now a wholly-owned subsidiary of the Company, and President of
Validity from March 1998 to September 1998.
6
<PAGE>
Mr. Cooke has been Executive Vice President of the Company since September
1998. He has been the President and Chief Executive Officer of VisiCom
Laboratories, Inc. since April 1988. VisiCom is now a wholly-owned subsidiary of
the Company.
Mr. DeMarco was Senior Vice President and Chief Financial Officer of the
Company from January 1997 to August 1998 and has been Executive Vice President
and Chief Financial Officer since August 1998. From June 1986 to January 1997 he
was a Senior Manager with Arthur Andersen LLP.
Ms. Donahoo has been Vice President of Corporate Communications of the
Company since April 1998. From 1988 to 1998, she was Secretary and Vice
President of Validity Corporation.
Mr. Fowler has been Vice President since September 1989. From March 1987 to
September 1989 he served as Vice President of Titan Systems, Inc. Prior thereto,
Mr. Fowler was Director of Contracts of Titan Systems, Inc.; from March 1985 to
March 1987.
Mr. Frazer has been Senior Vice President, General Counsel and Secretary of
the Company since February 1998. From August 1995 through January 1998 he served
as General Counsel for California Steel Industries, Inc., a joint venture
Japanese/Brazilian steel company. From June 1994 to August 1995, he had a
private legal and consulting practice. From 1989 until June 1994 he was General
Counsel and Chief Administrative Officer of Daihatsu America, Inc., an
automotive distributor.
Mr. Gorda has been Senior Vice President since February 1995 and Chief
Operating Officer of Linkabit Wireless, Inc., since September 1997. He served as
President of the Linkabit division of the Company from June 1993 to September
1997. From May 1994 to February 1995 he was a Vice President of the Company.
From August 1991 to June 1993 he served as Senior Vice President of the SATCOM
Systems business unit of the Linkabit division. Prior thereto, he was Senior
Program Manager of the SATCOM Command and Control division of Rockwell
International from April 1986 to July 1991.
Ms. Petersen has been Corporate Controller of the Company since December
1996 and Vice President of the Company since July 1998. From September 1993 to
December 1996, Ms. Petersen was Corporate Manager of Operations Analysis with
the Company. From January 1990 to September 1993 she was a Senior Auditor at
Arthur Andersen LLP.
Ms. Scott has been Vice President since June 1995. From July 1992 to April
1995 she was an independent consultant. From April 1987 to June 1992 she was a
principal with the Scott Group, Inc.
Mr. Szabo has been Vice President of the Company and President and Chief
Executive Officer of Titan Scan Corporation since June 1998. From September 1997
to June 1998 he was President and Chief Executive Officer of Goulter Medical.
From September 1996 to August 1997 he was an independent management consultant.
From January 1990 to September 1996 he was an executive with Sunrise Medical.
[THIS SPACE LEFT INTENTIONALLY BLANK]
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company's Compensation, Stock Option and Pension Committee has the duty
to administer the Company's cash and equity-based executive compensation
programs and to evaluate the overall performance of the executive officers.
COMPENSATION PHILOSOPHY
The Company believes that there should be a direct relationship between
executive compensation and value delivered to the stockholders. The Company
implements this philosophy with a set of supporting principles:
- Compensation must be fair.
The Company strives to evaluate the relative contribution of its
executive officers and to compensate them fairly in relationship to their
individual contributions, to each other, and to their relative value in
comparable companies.
- Compensation must be competitive.
The Company is committed to providing base salary programs that enable
it to attract and retain the best available people. It maintains these
programs by monitoring the competitive pay practices of other companies in
similar businesses.
- Compensation must be related to Company goals.
Executive officers are rewarded based on overall Company performance and
on individual performance. Company performance is evaluated by measuring the
achievement of Company goals and business plans. Individual performance is
measured by reviewing progress against specific personal objectives.
Individual performance goals are established for each executive officer
based upon his or her ability to effect overall company objectives. Such
individual performance goals typically include business unit profitability,
asset management, cost control, contract performance objectives and success
in diversifying into commercial and international businesses as appropriate.
- Compensation must motivate.
The compensation program is designed to provide a direct link between
performance and compensation. Realistic individual and Company performance
targets provide the motivation to strive to meet or exceed performance
goals.
COMPENSATION MEASUREMENT
The Company has a formal process to assist in the evaluation of performance
and in the determination of compensation amounts for each of the executive
officers. It is as follows:
1. Early in the fiscal year, the Board of Directors approves the
overall Company goals including earnings per share ("EPS") and return on
equity ("ROE"), for the year. Individual performance goals are established
for the executive officers by the President and CEO, and approved by the
Committee. The President and CEO's goals are established by the Committee.
The Company measurement goals of EPS and ROE represent approximately
two-thirds of the incentive opportunity for the President and CEO and other
executive officers on the Corporate staff. The remaining one-third is tied
to individual performance measures. In the case of executive officers with
business unit responsibility, approximately half of the incentive
compensation measurement is based upon individual business unit
profitability and return on equity, with the remainder equally split between
overall Company goals and individual performance measures.
8
<PAGE>
2. Each executive officer is given feedback periodically during the
year against these objectives.
3. Upon review and recommendation of the Compensation, Stock Option and
Pension Committee, and approval by the Board of Directors, each executive
officer is rewarded according to the overall performance of the Company and
according to the achievement of individual objectives.
TOTAL COMPENSATION
The Company has a program of cash compensation and equity-based
compensation. These programs apply equally to the President and CEO and all
other executive officers.
CASH COMPENSATION
BASE SALARY COMPENSATION
Base salary is set to allow the Company to attract and retain the people
necessary for the successful operation and growth of the Company. Base salary is
reviewed annually and is examined to determine compatibility with the pay
practices of companies in similar businesses. Variable pay opportunity is
established in keeping with the competitive environment. Dr. Ray's base salary
was increased in March of 1998 in recognition of his performance during the
prior fiscal year. In March 1999, Dr. Ray's base salary was increased from
$400,000 to $480,000 in recognition of his performance during the most recent
fiscal year. The base salaries of three of the other five highest paid executive
officers in 1998 were also increased.
INCENTIVE COMPENSATION
The Committee believes that a substantial portion of the total compensation
should be related to the overall performance of the Company as well as the
individual contribution of each executive officer. As a result, much of the
total compensation is "at risk."
Under the Company's Incentive Plan, bonuses are paid to the President and
CEO and each executive officer based on individual performance and the
performance of the Company, with maximum incentive compensation ranging from 30%
to 85% of base salary compensation. The maximum incentive compensation range is
established based upon the individual's goals as well as to be consistent with
maximum incentive compensation of similar businesses. A supplemental bonus is
available to reward growth above plan in Company EPS, ROE or unit profitability.
The Incentive Compensation set forth in the accompanying table for the
President and CEO and the other four highest paid executive officers was
dependent on the achievement of the Company and individual performance goals for
the periods shown. The variation in incentive compensation from year to year and
from individual to individual reflects the executive officer's relative
achievement of his/her performance objectives, as well as whether the Company
goals were achieved. In March 1999, Dr. Ray and each of the other four highest
paid executive officers received a bonus as a result of the Company's
performance in 1998.
EQUITY BASED COMPENSATION
STOCK OPTION PROGRAMS
The Company's Stock Option Program's purpose is to provide additional
incentives to the executive officers to encourage their commitment to the
maximization of stockholder value over the long term.
Options are granted consistent with the responsibility and accountability of
the recipient and the compensation philosophy previously expressed. Stock option
grants afford a desirable long-term compensation method because they closely
ally the interests of management with shareholder value.
The option programs utilize a four-year vesting period to encourage
executive officers to continue in the employ of the Company. During 1998, Dr.
Ray was awarded an option to purchase 200,000 shares of
9
<PAGE>
common stock at $5.00 per share in recognition of his performance in 1998. These
options are granted at current market value and are available to all executive
officers. Three of the other four highest paid executive officers, were awarded
stock options as shown in the accompanying table.
The Compensation Committee has evaluated the total compensation of the five
highest paid executive officers in 1998 and has approved their compensation as
reasonable and consistent with the Company's compensation philosophy.
It is the Company's policy to qualify all compensation paid to its top
executives for deductibility under Section 162(n) of the Internal Revenue Code
and regulations in order to maximize the Company's income tax deductions.
No member of the Committee is a former or current officer or employee of the
Company or any of its subsidiaries.
COMPENSATION, STOCK OPTION AND PENSION COMMITTEE
Thomas G. Pownall, Chairman
Charles R. Allen
Joseph F. Caligiuri
Daniel J. Fink
Robert I. Hanisee
Robert E. La Blanc
James E. Roth
February 18, 1999
[THIS SPACE LEFT INTENTIONALLY BLANK]
10
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1998,
1997 and 1996, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to each
of the most highly compensated executive officers of the Company in 1998 (the
"Named Executive Officers") in all capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION
AWARDS
-------------------- ------------- ALL OTHER
SALARY($) BONUS($) OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (A) (B) SARS (#) ($)(C)
- ----------------------------------------------------- --------- --------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Gene W. Ray.......................................... 1998 408,366 260,000 200,000 46,740
President and Chief 1997 337,500 210,000 150,000 47,567
Executive Officer 1996 337,500 0 150,000 44,311
Mellon C. Baird...................................... 1998 330,514 141,000 40,000 13,174
Senior Vice President 1997 353,848 0 3,515 4,750
1996 339,501 0 10,042 4,500
Clifton L. Cooke..................................... 1998 252,327 70,000 53,410 9,851
Executive Vice President 1997 234,025 16,000 22,350 1,364
1996 207,756 42,100 22,350 1,505
Eric M. DeMarco...................................... 1998 202,934 150,000 60,000 24,173
Executive Vice President and 1997 144,830 100,000 100,000 18,684
Chief Financial Officer 1996 -- -- -- --
Ronald B. Gorda...................................... 1998 214,774 68,000 0 29,443
Senior Vice President 1997 196,490 92,000 60,000 27,212
1996 183,111 12,951 60,000 25,748
</TABLE>
- ------------------------
(A) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(B) Amounts shown include bonus cash compensation earned by executive officers
for each fiscal year whether received in the fiscal year in which it was
earned or in the subsequent fiscal year.
(C) Amounts shown consist of (i) the Company's matching contribution to its
401(k) Retirement Plan; (ii) the Company's matching contribution to its
Supplemental Retirement Plan for Key Executives; (iii) the Company's
contribution to its Employee Stock Ownership Plan and (iv) interest earned
in the Company's Supplemental Retirement Plan for Key Executives that
exceeded 120% of the applicable federal long-term rate with compounding (as
prescribed under Section 1274(d) of the Internal Revenue Code). Amounts
shown for fiscal year 1998 for each Named Executive Officer consist of the
following elements of compensation: Dr. Ray: (i) $8,000; (ii) $33,000; (iii)
$2,624; and (iv) $3,116; Mr. Baird: (i) $4,800; (ii) $8,333; (iii) $0; and
(iv) $41; Mr. Cooke: (i) $1,477; (ii) $8,333; (iii) $0; and (iv) $41; Mr.
DeMarco: (i) $8,000, (ii) $15,000, (iii) $1,020 and (iv) $153; and Mr.
Gorda: (i) $8,000; (ii) $19,300; (iii) $1,442; and (iv) $701.
11
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options made during fiscal 1998 under the Company's long-term incentive program
to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR (A)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------- ANNUAL RATES OF
% OF TOTAL OPTIONS STOCK PRICE
GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES IN EXERCISE OPTION TERM (F)
GRANTED FISCAL PRICE EXPIRATION ---------------------
NAME (B) YEAR (C) ($/SH) (D) DATE (E) 5% ($) 10% ($)
- ---------------------------------- --------- ------------------ ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gene W. Ray....................... 200,000 24.76% 5.000 11/03/08 628,895 1,593,742
Mellon C. Baird................... 40,000 4.95% 4.125 09/08/08 103,768 262,968
Clifton L. Cooke.................. 13,410 1.66% 2.125 03/30/03 17,921 45,416
40,000 4.95% 4.125 09/08/08 103,768 262,968
Eric M. DeMarco................... 60,000 7.43% 5.000 11/03/08 188,668 478,123
Ronald B. Gorda................... -- -- -- -- -- --
</TABLE>
- ------------------------
(A) No SARs were granted to any of the Named Executive Officers during the last
fiscal year.
(B) Incentive stock options granted in 1998 were granted at fair market value
and are exercisable starting 12 months after grant date, with 25% of the
options becoming exercisable at that time and with an additional 25% of the
options becoming exercisable on each successive anniversary date, with full
vesting occurring on the fourth anniversary date. If the Company were
acquired by another company, the options would automatically vest unless the
acquiring company assumes the options.
(C) In 1998, employees of the Company received stock options covering a total of
807,876 shares.
(D) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares or by offset of the underlying
shares, subject to certain conditions.
(E) With the exception of Mr. Cooke, the options were granted for a term of 10
years, subject to earlier termination in certain events related to
termination of employment. The 13,410 options granted to Mr. Cooke on March
30, 1998 have a term of 5 years subject to earlier termination in certain
events related to termination of employment.
(F) Present value was calculated using an assumed annual compounded growth over
the term of the option of 5% and 10%, respectively. Use of this model should
not be viewed in any way as a forecast of the future performance of the
Company's stock, which will be determined by future events and unknown
factors.
[THIS SPACE LEFT INTENTIONALLY BLANK]
12
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FY-END OPTION VALUE (A)
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FY-END (#) AT FY-END ($) (C)
EXERCISE REALIZED -------------------------- ---------------------------
NAME (#) ($) (B) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------- ----------- --------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Gene W. Ray........................ -- -- 330,000 400,000 432,500 212,500
Mellon C. Baird.................... -- -- 223,202 56,300 1,018,112 120,555
Clifton L. Cooke................... -- -- 27,938 70,172 85,776 161,323
Eric M. DeMarco.................... -- -- 25,000 135,000 23,437 100,312
Ronald B. Gorda.................... -- -- 143,750 81,250 147,500 45,000
</TABLE>
- ------------------------
(A) No SARs were owned or exercised by any of the Named Executive Officers
during the last fiscal year.
(B) Market value of underlying securities on date of exercise, minus the
exercise or base price.
(C) Market value of underlying securities at year-end, minus the exercise or
base price.
AGREEMENTS WITH EXECUTIVE OFFICERS
The Company has entered into agreements with its Executive Officers (each
hereinafter referred to as the "Executive") to reinforce and encourage their
continued dedication without distraction arising from the possibility of a
change in control of the Company. The terms of the agreements provide that, in
the event of a Change in Control (as defined), and the termination of the
Executive's employment at any time during the two-year period thereafter by the
Company other than for cause or by the Executive for good reason, the Executive
will be paid a lump sum amount equal to two times his base salary plus maximum
annual bonus. Additionally, the Executive will receive a prorated bonus for the
year of termination and continuation of medical and dental benefits covering the
Executive and his dependents for 2 years following the termination. The payments
are limited to ensure deductibility for tax purposes under Section 280G of the
Internal Revenue Code.
Under the agreements, Change in Control is deemed to have occurred in the
event of (i) the acquisition by any person, together with its affiliates, of
beneficial ownership of capital stock of the Company possessing 25% or more of
the combined voting power of the Company's outstanding capital stock, (ii)
within any two year period, the majority of the members of the Board were to be
comprised of individuals other than those who were members at the beginning of
such period, unless the new members elected during such period were approved by
two-thirds of the members of the Board still in office who were members of the
Board at the beginning of such two-year period, (iii) all or substantially all
of the Company's assets are sold as an entirety to any person or related group
of persons, or (iv) the Company is merged with or into another corporation or
another corporation is merged into the Company with the effect that immediately
after such transaction, the stockholders of the Company immediately prior to
such transaction hold less than a majority interest of the total voting power
entitled to vote in the election of directors, managers or trustees of the
entity surviving such transaction.
13
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG THE TITAN CORPORATION,
NEW YORK STOCK EXCHANGE MARKET INDEX AND INDUSTRY GROUP INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TITAN CORPORATION MG INDUSTRY GROUP NYSE MARKET INDEX
<S> <C> <C> <C>
1993 $100.00 $100.00 $100.00
1994 $212.50 $105.40 $98.06
1995 $237.50 $140.20 $127.15
1996 $112.50 $160.22 $153.16
1997 $208.33 $178.33 $201.50
1998 $183.33 $212.83 $239.77
</TABLE>
- ------------------------
(1) The above graph compares the performance of The Titan Corporation with that
of the New York Stock Exchange Market Index and the MG Industry Group
826--Electronics Equipment Manufacturers Index, which is a published
industry group index.
(2) The comparison of total return on investment (change in year-end stock price
plus reinvested dividends) for each of the periods assumed that $100 was
invested on December 31, 1993 in each of The Titan Corporation, the New York
Stock Exchange Market Index and the MG Industry Group 826-- Electronics
Equipment Manufacturers Index with investment weighted on the basis of
market capitalization. The Company's stock price was $5.50 per share on
December 31, 1998.
[THIS SPACE LEFT INTENTIONALLY BLANK]
14
<PAGE>
PROPOSAL 2
APPROVAL OF SELECTION OF AUDITORS
The Board is seeking stockholder ratification of its selection of Arthur
Andersen LLP to serve as the Company's auditors for the fiscal year ending
December 31, 1999. Arthur Andersen LLP is serving as the Company's auditors for
1998 and previously served as the Company's auditors since 1985 and as Titan
Systems' auditors since 1981. It is anticipated that representatives of Arthur
Andersen LLP will attend the Annual Meeting with the opportunity to make any
statement they may desire, and will be available to respond to appropriate
questions from stockholders. Arthur Andersen LLP will be retained as the
Company's auditors for the fiscal year ending December 31, 1999 if this proposal
is approved by the holders of a majority of the voting power of the shares
represented and voting at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OTHER BUSINESS
The Company knows of no other matters to be brought before the Annual
Meeting of Stockholders. If other matters should come before the meeting, it is
the intention of each person mentioned in the proxy to vote such proxy in
accordance with his judgment of such matters. Discretionary authority with
respect to such other matters is granted by the execution of the enclosed proxy.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
and the New York Stock Exchange initial reports of ownership and reports of
changes in ownership of that Common Stock.
To the Company's knowledge, based solely upon a review of copies of reports
provided by those individuals to the Company and written representations of
those individuals that no other reports were required with respect to the year
ended December 31, 1998, the Company believes that all of the foregoing filing
requirements applicable to its directors, executive officers, and greater than
ten percent beneficial owners have been met.
STOCKHOLDERS' PROPOSALS
Proposals by stockholders intended to be included in the Company's Proxy
Statement at the next annual meeting in 2000 pursuant to Rule 14a-8 of the
Securities Exchange Act of 1934, must be in writing and received by the Company
by December 1, 1999 to be considered for inclusion in the Company's proxy
material under the rules of the Securities and Exchange Commission.
Unless a stockholder who wishes to bring a matter before the stockholders of
the Company at the Company's 2000 annual meeting of stockholders notifies the
Company prior to January 15, 2000, management will have the discretionary
authority to vote all shares for which it has proxies in opposition of such
matter.
FINANCIAL STATEMENTS
The Company's 1998 Annual Report, including financial statements for fiscal
year 1998, accompanies this proxy statement. STOCKHOLDERS MAY OBTAIN FREE OF
CHARGE A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION BY WRITING TO THE SECRETARY, 3033
SCIENCE PARK ROAD, SAN DIEGO, CALIFORNIA 92121.
15
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS OF
THE TITAN CORPORATION
MAY 18, 1999
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
- ---------------
Please date, sign and mail your proxy card in the envelope provided as soon
as possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
- -------------------
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS ----------------------->
- Please Detach and Mail in the Envelope Provided -
A /X/ Please mark your
votes as in this
example
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR EACH OF THE ITEMS LISTED BELOW.
UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE CAST FOR ITEMS 1 AND 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / Nominees Robert E. La Blanc 2. RATIFICATION OF THE SELECTION / / / / / /
Directors Charles R. Allen OF ARTHUR ANDERSEN LLP AS
Thomas G. Pownall THE COMPANY'S AUDITORS FOR
FOR, except vote withheld from the Joseph F. Caligiuri THE FISCAL YEAR ENDING DECEMBER 31, 1999.
following nominee(s) Dr. Gene W. Ray
Daniel J. Fink
- ------------------------------------ Robert I. Hanisee
James E. Roth
Check here for address change and note below. / /
NEW ADDRESS
-------------------------
------------------------------------
------------------------------------
SIGNATURE(S) DATE
----------------------------------------------------------------------------------- -------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
</TABLE>
<PAGE>
PROXY PROXY
THE TITAN CORPORATION - PROXY
ANNUAL MEETING OF STOCKHOLDERS, MAY 18, 1999
Dr. Gene W. Ray, with power of substitution, is hereby appointed proxy
at the Annual Meeting of Stockholders of THE TITAN CORPORATION to be held May
18, 1999, or at any adjournment or adjournments thereof, to represent and to
vote all shares of stock of said corporation (preferred and common) which the
undersigned would be entitled to vote if personally present, upon the matters
specified on the reverse side and upon such other matters as may properly
come before the Meeting, and any prior proxy to vote at such Meeting is
hereby revoked. With respect to matters not known to said corporation's Board
of Directors at the time of the solicitation hereof, said proxies are
authorized to vote in their discretion. You have the option to vote by mail,
internet or telephone. Your vote does not count until we receive it.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE TITAN
CORPORATION. UNLESS A CONTRARY DIRECTION IS INDICATED, IT WILL BE VOTED FOR
THE ELECTION OF ALL THE NOMINEES SET FORTH ON THE REVERSE AS DIRECTORS AND
FOR RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
AUDITORS.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
PROXY PROXY
THE TITAN CORPORATION - PROXY
ANNUAL MEETING OF STOCKHOLDERS, MAY 18, 1999
The undersigned (a) revokes all proxies and appoints and authorizes Dr.
Gene W. Ray with power of substitution, as the proxy Committee, to vote the
stock of the undersigned at the 1999 Annual Meeting of the Stockholders of
THE TITAN CORPORATION on May 18, 1999, and any adjournment thereof, as
specified on the reverse side of this card on proposals 1 and 2 and in their
discretion on all other matters incident to the conduct of the meeting and,
if applicable, (b) directs, as indicated on the reverse, the voting of the
shares allocated to The Titan Corporation 401(k), The Titan Corporation
Employee Stock Ownership Plan account(s) as well as the 401(k) and Employee
Stock Ownership Plan account(s) of Horizons Technology, Inc., the 401(k)
account of Delfin Systems and the Savings Plan and Trust of VisiCom
Laboratories, Inc. of the undersigned at the 1999 Annual Meeting and any
adjournment thereof. Plan shares for which no directions are received and
unallocated plan shares will be voted on each issue in proportion to those
shares allocated to participant accounts of the same plan for which voting
instructions on that issue have been received. Each trustee is authorized to
vote in its judgment or to empower the Proxy Committee to vote in accordance
with the Proxy Committee's judgment on other matters incident to the conduct
of the meeting and any adjournment thereof. You have the option to vote by
mail, the Internet or telephone. Your vote does not count until we receive it.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE TITAN
CORPORATION. UNLESS A CONTRARY DIRECTION IS INDICATED, IT WILL BE VOTED FOR
THE ELECTION OF ALL THE NOMINEES SET FORTH ON THE REVERSE AS DIRECTORS AND
FOR RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
AUDITORS.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS OF
THE TITAN CORPORATION
MAY 18, 1999
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
- ---------------
Please date, sign and mail your proxy card in the envelope provided as soon
as possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
- -------------------
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS ----------------------->
- Please Detach and Mail in the Envelope Provided -
A /X/ Please mark your
votes as in this
example
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR EACH OF THE ITEMS LISTED BELOW.
UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE CAST FOR ITEMS 1 AND 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / Nominees Robert E. La Blanc 2. RATIFICATION OF THE SELECTION / / / / / /
Directors Charles R. Allen OF ARTHUR ANDERSEN LLP AS
Thomas G. Pownall THE COMPANY'S AUDITORS FOR
FOR, except vote withheld from the Joseph F. Caligiuri THE FISCAL YEAR ENDING DECEMBER 31, 1999.
following nominee(s) Dr. Gene W. Ray
Daniel J. Fink
- ------------------------------------ Robert I. Hanisee
James E. Roth
Check here for address change and note below. / /
NEW ADDRESS
-------------------------
------------------------------------
------------------------------------
SIGNATURE(S) DATE
----------------------------------------------------------------------------------- -------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
</TABLE>
