<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
- --------------------------------------------------------------------------------
WESTMINSTER CAPITAL, INC.
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
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:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
WESTMINSTER CAPITAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders (the "Annual Meeting") of Westminster Capital, Inc., a Delaware
corporation (the "Company"), scheduled to be held at The Regent Beverly
Wilshire Hotel, La Fiesta Room, 9500 Wilshire Boulevard, Beverly Hills,
California, on Thursday, June 4, 1998, at 9:00 a.m. local time, subject to
adjournment or postponement by the Board of Directors of the Company, for the
following purposes:
1. To elect eight persons to the Board of Directors to serve until the 1999
Annual Meeting of Stockholders and until their successors are duly elected
and qualified;
2. To approve the adoption of the 1997 Stock Incentive Plan; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only holders of record of the Common Stock, Par Value $1.00 per share,
of the Company on April 6, 1998 will be entitled to notice of and vote at the
Annual Meeting or any adjournment or postponement thereof.
Prior to the voting thereof, a proxy may be revoked by the person
executing such proxy by (i) filing with the Secretary of the Company, prior
to the commencement of the Annual Meeting, either a written notice of
revocation or a duly executed proxy bearing a later date or by (ii) voting in
person at the Annual Meeting.
By order of the Board of Directors,
/s/ William Belzberg
William Belzberg
Chairman of the Board
Beverly Hills, California
April 27, 1998
IMPORTANT: If your shares are held in the name of a brokerage firm or
nominee, only that firm or nominee can execute a proxy on your behalf. To
ensure that your shares are voted, we urge you to telephone the individual
responsible for your account immediately and direct him or her to execute a
proxy on your behalf.
- --------------------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD TODAY.
- --------------------------------------------------------------------------------
<PAGE>
WESTMINSTER CAPITAL, INC.
9665 WILSHIRE BOULEVARD
SUITE M-10
BEVERLY HILLS, CA 90212
APRIL 27, 1998
- ------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 4, 1998
- ------------------------------------------------------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board of Directors") of Westminster Capital,
Inc., a Delaware corporation (the "Company"), of proxies for use at the 1998
Annual Meeting of Stockholders of the Company (the "Annual Meeting")
scheduled to be held at The Regent Beverly Wilshire Hotel, La Fiesta Room,
9500 Wilshire Boulevard, Beverly Hills, California on June 4, 1998 at 9:00
a.m. local time, and at any adjournments or postponements thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. Shares represented by properly executed proxies received by
the Company will be voted at the Annual Meeting in the manner specified
therein, or, if no instructions are marked on the enclosed proxy card, FOR
each of the nominees for director as identified on the card (as more fully
described below under "Election of Directors") and FOR approval of the
adoption of the 1997 Stock Incentive Plan (the "Incentive Plan") (as more
fully described below under "1997 Stock Incentive Plan"). Although
management does not know of any other matter to be acted upon at the Annual
Meeting, shares represented by valid proxies will be voted by the persons
named on the accompanying proxy card in accordance with their respective best
judgment with respect to any other matters which may properly come before the
meeting.
Execution of a proxy will not in any way affect a stockholder's right to
attend the Annual Meeting and vote in person, and any person giving a proxy
has the right to revoke it at any time before it is exercised by (i) filing
with the Secretary of the Company, prior to the commencement of the Annual
Meeting, a duly executed instrument dated subsequent to such proxy revoking
the same or a duly executed proxy bearing a later date or (ii) attending the
Annual Meeting and voting in person.
The mailing address of the principal executive offices of the Company is
9665 Wilshire Boulevard, Suite M-10, Beverly Hills, California 90212, and its
telephone number is (310) 278-1930. The approximate date on which this Proxy
Statement and the enclosed proxy cards are first being sent to stockholders
is April 27, 1998.
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RECORD DATE AND VOTING
Only stockholders of record of the Common Stock, Par Value $1.00
per share, of the Company (the "Common Stock") at the close of business on
April 6, 1998 will be entitled to notice of and to vote at the Annual
Meeting. As of such date there were 7,834,607 shares of Common Stock
outstanding.
Holders of the Common Stock have cumulative voting rights with
respect to the election of directors. Therefore, each stockholder will be
entitled to that number of votes equal to the number of his or her shares
multiplied by eight, which is the number of directors to be elected. The
stockholder may (i) vote for the election of all of the nominees, in which
case an amount equal to the number of shares held by such stockholder will be
counted as voting for the election of each nominee, (ii) withhold his or her
votes with respect to all nominees, or (iii) cast all of his or her votes for
a single nominee or distribute them among the nominees as he or she sees fit.
The eight nominees receiving the highest number of votes will be elected.
Stockholders are entitled to one vote per share of Common Stock
held by them with respect to approval of the Incentive Plan. The affirmative
vote of a majority of the shares of Common Stock present at the meeting or
represented by proxy is required for approval of adoption of the Incentive
Plan.
Shares represented by a properly executed proxy card received by
the Company will be counted in the manner specified therein or, if no
instructions are marked on the enclosed proxy, for each of the director
nominees in an amount equal to the number of shares held by the person(s)
executing the proxy and for approval of adoption of the Incentive Plan. If a
holder indicates his or her intention to vote for the election of only
certain nominees and fails to indicate the number of votes for each such
nominee, such holder's total votes (less any specifically allocated by such
holder) will be allocated as equally as possible (without fractional shares)
among the nominees named by such holder and for whom no votes have been
specifically allocated by the holder and any votes which cannot be allocated
evenly will remain unvoted. Similarly, if a holder chooses to vote for the
election of only certain nominees and indicates a total number of votes in
excess of the number of shares held by such holder multiplied by eight, the
total number of votes entitled to be cast by the holder will be divided as
equally as possible (without fractional votes) among the nominees indicated
by the holder and any votes which cannot be allocated evenly will remain
unvoted. In the event any nominee named on the proxy card is not available
(an event which is not anticipated), proxy holders will vote for a substitute
nominee in their discretion. If any person other than those named on the
proxy card is nominated as a candidate by persons other than the Board of
Directors, the proxies may be voted in favor of any one or more of the
nominees named on the proxy card to the exclusion of others and in such order
of preference as the proxy holders may determine in their discretion, except
that no proxy will be voted for a nominee as to whom an intention to withhold
authority to vote is indicated.
Stockholders are entitled to one vote per share of Common Stock
held by them with respect to all matters other than the election of
directors, and generally the affirmative vote of a majority of the shares of
Common Stock present at the meeting or represented by proxy is required to
take any action on such matters.
Abstentions are not counted as votes cast either for or against a
particular matter, but on matters requiring a majority vote of either the
number of shares represented at the meeting or the number
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<PAGE>
of shares outstanding, an abstention has the effect of a negative vote.
Shares abstaining are normally counted for purposes of determining the
presence of a quorum, and abstentions are not permitted with respect to the
election of directors. Therefore, abstentions will not affect the
determination of a quorum for the Annual Meeting.
SOLICITATION
The cost of preparing, assembling and mailing this Proxy Statement
and the proxy card will be paid by the Company. Following the mailing of
this Proxy Statement, directors and officers of the Company may solicit
proxies by mail, telephone, telegraph or personal interview. Such persons
will receive no additional compensation for such services. Brokerage houses
and other nominees, fiduciaries and custodians nominally holding shares of
Common Stock of record will be requested to forward the proxy soliciting
material to the beneficial owners of such shares and will be reimbursed by
the Company for their reasonable charges and expenses in connection therewith.
ELECTION OF DIRECTORS
The Board of Directors of the Company is currently comprised of eight
directors who are elected annually. The Board of Directors has nominated the
eight persons listed below as candidates for election by the stockholders. All
of the candidates are currently directors of the Company. The term of each
person elected as a director will continue until the 1999 Annual Meeting of
Stockholders or until his or her successor is elected.
William Belzberg
Keenan Behrle
Hyman Belzberg
Samuel Belzberg
Gerald E. Finnell
Barbara C. George
Monty Hall
Lester Ziffren
Mr. William Belzberg, age 65, has served as chairman of the Board of
Directors of the Company since 1977. Mr. Belzberg was also President and
Chief Executive Officer of the Company in 1987 and 1988 and has served as
Chief Executive Officer since September, 1990.
Mr. Behrle, age 55, became Executive Vice President and Chief Financial
Officer of the Company on February 10, 1997. From November, 1993 to
February, 1997, Mr. Behrle was engaged in real estate development activities
for his own account. From 1991 to November, 1993, Mr. Behrle was President
and Chief Executive Officer of Metropolitan Development, Inc., a real estate
development company located in Los Angeles, California. Mr. Behrle has been
a director of the Company since 1985.
Mr. Hyman Belzberg, age 73, has been a director of the Company since 1995.
He has been for more than the last five years the President of Bel-Alta
Holdings Ltd. which is a real estate and mortgage investment company. He
operated a large retail furniture business in Calgary, Alberta, Canada from
1945 to 1994. Mr. Belzberg is also on the Board of the Canadian Athletic
Foundation and is the
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<PAGE>
President of Gaslight Square Ltd. and 623201 Alberta Ltd., both of which are
real estate and investment companies.
Mr. Samuel Belzberg, age 69, has been a director of the Company since 1995.
He is the Chairman of the Board of Balfour Holdings Inc., a real estate and
land development company in eight cities in the United States and Canada.
Mr. Belzberg is a Director of CE Franklin Ltd., an oilfield supply company in
Western Canada.
Mr. Finnell, age 58, became a director of the Company in 1997. He is a
retired partner of the accounting firm of KPMG Peat Marwick LLP with which he
was affiliated from 1962 until 1995. He is also Chairman of the Gaming
Enterprise Board, Salt River Pima-Maricopa Indian Community.
Dr. George, age 62, has been a director of the Company since 1979. She has
been a Professor of Business Law in the Department of Finance, Real Estate
Law in the College of Business Administration, California State University,
Long Beach since 1961 and is currently in the position of Associate Dean of
Academic Affairs. Also, she has served as the department chairperson. She
is a former President of American Business Law Association. Dr. George is
Chairperson of the Board of Directors of the California State University
Forty-Niner Shops, Inc., which operates the bookstore and food service
operations for the University.
Mr. Hall, age 76, has been a director of the Company since 1979. He has been
a television producer, performer and philanthropist for more than the past
twenty-five years.
Mr. Ziffren, age 73, has been a director of the Company since 1979. For more
than the past five years, he has been a retired partner/advisory counsel to
the law firm of Gibson, Dunn & Crutcher, Los Angeles, California.
Mssrs. Hyman Belzberg, Samuel Belzberg and William Belzberg are brothers.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
NOMINEES LISTED ABOVE.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Audit Committee. During 1997, prior to a regular
meeting of the board of directors held in May, the Audit Committee was
comprised of Dr. George and Mr. Baum, and therafter the Audit Committee was
comprised of Dr. George, Mr. Ziffren and Mr. Finnell. There were three
meetings of the Audit Committee held during 1997. All members attended the
meetings of the Audit Committee held while they were members of the
Committee. At the regular meeting of the Board of Directors scheduled to
follow the 1998 Annual Meeting of Stockholders, the Board will consider the
appointment of members to the Audit Committee to serve until such time as
their successors are elected and qualified.
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<PAGE>
The Board of Directors established a Compensation Committee in May, 1997.
The Compensation Committee is comprised of Dr. George and Mr. Hall. This
committee did not meet in 1997.
The Board of Directors does not have a standing nominating committee.
DIRECTOR COMPENSATION
During 1997, directors of the Company were paid $500 per month for service on
the Board and $500 per month for each committee of the Board on which they
served, as well as, $500 for each meeting of the Board of Directors or
committee which they attended.
During 1995, four Directors of the Company, (Mr. Behrle, Dr. George, and
Messrs. Hall and Ziffren), each were granted options to purchase up to 10,000
shares of the Company's common stock under the Company's Non-Statutory Stock
Option Plan at $1.8125 per share, which is equal to the market price on the
date of grant as specified in that plan. The options are exercisable in four
equal annual installments commencing with the first anniversary of the grant
date. The options expire five years from the date of grant. All outstanding
options previously granted to these Directors were cancelled as a part of
this grant.
MEETINGS OF THE BOARD OF DIRECTORS
During 1997 there were four meetings of the Board of Directors of the
Company. All directors participated in at least 75% of the meetings.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Directors, officers and beneficial owners of more than 10% of the outstanding
shares of the Common Stock of the Company are required by rules of the
Securities and Exchange Commission to file certain reports with the
Commission and the Pacific Stock Exchange (upon which the Company's Common
Stock is listed) relating to certain changes in their beneficial ownership of
shares and their aggregate holdings at the end of the calendar year. The
Company is not aware that any officer, director or beneficial owner of more
than 10% of the Common Stock failed to file on a timely basis reports
required by Section 16(a) of the Securities Exchange Act of 1934 during 1997.
EXECUTIVE OFFICER COMPENSATION
The table set forth below reflects the annual compensation, long-term
compensation and other compensation paid during each of the Company's three most
recent fiscal years to the chief executive officer of the Company and the other
person who was an executive officer at the end of 1997.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Number of
Shares
Underlying Other
Annual Compensation Options Compensation (2)
--------------------- ------------ ----------------
Name and Principal Position Year Salary
- --------------------------- ---- --------
<S> <C> <C> <C> <C>
William Belzberg, 1997 $200,000 - 0 - $45,500
Chairman of the Board 1996 200,000 - 0 - 44,400
and Chief Executive 1995 200,000 250,000(1) 8,000
Officer
Keenan Behrle, 1997 $178,846(3) 100,000(4) $ 3,000
Executive Vice 1996 - 0 - - 0 - 20,000
President and 1995 - 0 - 10,000(5) 21,500
Chief Financial
Officer
</TABLE>
- ---------------
(1) Replaced an option to purchase 150,000 shares granted in 1986 and
exercisable at a price of $12.88 per share.
(2) Other compensation received by Mr. Belzberg consisted of fees earned as a
director and, in 1997 and 1996, premiums paid with respect to a universal
life insurance policy for Mr. Belzberg. Other compensation received by Mr.
Behrle consisted of fees earned as a director.
(3) Mr. Behrle's employment commenced in February 1997. His salary in 1997 on
an annualized basis was $200,000.
(4) Pursuant to an option granted in 1997 at a price of $2.37 per share (see
"1997 Stock Incentive Plan" below).
(5) Pursuant to an option granted in 1995 to Mr. Behrle as a director of the
Company at a price of $1.81 per share.
STOCK OPTION GRANTS
Stock Options were granted during the fiscal year ended December 31, 1997 to the
executive officers named in the Summary Compensation Table above as follows:
6
<PAGE>
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NO. OF SHARES % OF TOTAL SHARES STOCK PRICE APPRECIATION
UNDERLYING UNDERLYING OPTIONS FOR OPTION TERM (2)
OPTIONS GRANTED TO EMPLOYEES EXERCISE EXPIRATION ------------------------
NAME GRANTED (1) IN FISCAL YEAR PRICE DATE 5% 10%
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Keenan Behrle 100,000 100% 2.37 8/19/02 $65,478 $144,691
</TABLE>
(1) The option was granted under the Company's 1997 Stock Incentive Plan and
has a per share exercise price that is equal to the market value of the
common stock on the date of the grant. The option becomes exercisable in
20% increments on February 10, 1998, 1999, 2000, 2001 and 2002. The 1997
Stock Incentive Plan is subject to approval at the 1998 Annual Meeting of
Stockholders (see "1997 Stock Incentive Plan" below).
(2) Assumes the value of the shares issuable upon exercise of the option
increases at the stated percentages annually from the date of grant to the
date of expiration.
STOCK OPTION EXERCISES AND HOLDINGS
The following table provides information concerning options exercised by the
executive officers named in the Summary Compensation Table above during the
fiscal year ended December 31, 1997 and unexercised options held by such
executives as of December 31, 1997.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES SHARES UNDERLYING IN-THE-MONEY
ACQUIRED OPTIONS AT 12/31/97 OPTIONS AT 12/31/97
ON VALUE -------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William Belzberg - $ - 125,000 125,000 $63,750 $63,750
Keenan Behrle - - 5,000 105,000 3,438 15,938
</TABLE>
INDEMNITY AGREEMENTS
In 1987, the stockholders approved indemnity agreements which have been
entered into with officers and directors of the Company. The indemnity
agreements provide, subject to the satisfaction of certain requirements, for
the Company to indemnify an officer or director who is a party to an
indemnity agreement against expenses (as defined therein), judgments, fines
and penalties incurred by such officer or director in connection with a
threatened or pending proceeding in which the officer or director may have
been involved by reason of the fact that he or she was an officer or director
of the Company, by reason of any action taken by him or her or an inaction on
his or her part while acting as an officer or
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director or by reason of serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
EXECUTIVE COMPENSATION REPORT
Prior to the establishment of a Compensation Committee in May 1997, the
policies applicable to determining the compensation of executive officers of
the Company were determined by the full Board of Directors, except that
Mssrs. William Belzberg and Keenan Behrle, both of whom are executive
officers and directors, did not participate in the determination of policies
affecting their respective compensation. The Compensation Committee did not
meet during 1997 and executive compensation policies remained as established
by the Board of Directors. The following report on executive compensation
has been provided by the Compensation Committee.
For the fiscal year ended December 31, 1997, the Company paid Mr. Belzberg an
annual salary of $200,000, the same salary paid to him in 1996 and 1995. Mr.
Belzberg's salary for 1997 was established by the Board of Directors based on
its evaluation of his efforts and contributions to the Company in prior years
and the expectation that Mr. Belzberg would continue to devote similar time
and energy to the Company in 1997 and that the operations of the Company
would be substantially similar to the operations conducted in 1996 and 1995.
No specific performance criteria were relied upon in setting his salary.
The compensation of Mr. Behrle as listed in the Summary Compensation Table
for the fiscal year ended December 31, 1997, was established by Mr. William
Belzberg, Chairman and Chief Executive Officer of the Company, after review
of such compensation with the Board of Directors (prior to formation of the
Compensation's Committee), based upon the duties and responsibilities to be
performed by Mr. Behrle and compensation paid in similar positions in
comparable companies.
Monty Hall and Barbara C. George
Members of the Compensation Committee of the Board of Directors
THE FOREGOING REPORT OF THE COMPENSATION COMMITTEE SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE IN ANY FILING BY THE COMPANY UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT
THE COMPANY SPECIFICALLY INCORPORATES THE REPORT BY REFERENCE.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The Performance Graph set forth below compares total stockholder return on
the Company's Common Stock with total stockholder return on the Dow Jones
Equity Market Index and the Dow Jones Real Estate Investment Sector for the
period from January 1, 1993 through December 31, 1997. For this purpose,
total stockholder return is determined by adding the increase in the share
price during the period to the cumulative amount of dividends paid during
that period, assuming dividend reinvestment. The resulting sum is then
divided by the closing share price at December 31, 1992 to reflect the total
return as a percentage of that beginning value. For years in which the price
of the stock decreased from the beginning of the year to the end of the year,
the decrease is reflected in the calculation as a negative number.
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[GRAPH]
<TABLE>
<CAPTION>
Westminster Dow Jones Equity Dow Jones Real Estate
Capital Inc. Market Index Investment Sector
-----------------------------------------------------------
<S> <C> <C> <C>
1992 100% 100% 100%
1993 578% 106% 112%
1994 422% 104% 103%
1995 822% 140% 121%
1996 711% 167% 154%
1997 889% 222% 175%
</TABLE>
- ----------------
THE TOTAL STOCKHOLDER RETURNS AS DEPICTED ON THE GRAPH ARE NOT
NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. MANY OF THE COMPANIES INCLUDED
IN THE DOW JONES EQUITY INDEX AND IN THE DOW JONES REAL ESTATE INVESTMENT
SECTOR HAVE SUBSTANTIALLY GREATER REVENUES AND SUBSTANTIALLY GREATER MARKET
CAPITALIZATION THAN THE COMPANY. ALSO THE COMPANIES INCLUDED IN THE DOW
JONES REAL ESTATE INVESTMENT SECTOR ARE NOT DIRECTLY COMPARABLE TO THE
COMPANY BECAUSE DURING THE FIVE YEAR PERIOD PRESENTED IN THE GRAPH THE
COMPANY'S OPERATIONS RELATED TO SEVERAL DIFFERENT INDUSTRIES, ALTHOUGH REAL
ESTATE INVESTMENT REPRESENTED A SIGNIFICANT PART OF THE COMPANY'S ACTIVITIES.
THE PERFORMANCE GRAPH AND RELATED DISCLOSURE SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE IN ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT
OF 1933 OR THE SECURITIES ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THE GRAPH AND SUCH DISCLOSURE BY REFERENCE.
APPROVAL OF 1997 STOCK INCENTIVE PLAN
At the Annual Meeting the stockholders of the Company will be asked to
vote upon the approval of the Company's 1997 Stock Incentive Plan (the
"Incentive Plan"). The Incentive Plan was adopted by the Board of Directors
of the Company on August 19, 1997 and provides for the making of awards to
employees, consultants and advisors of the Company with respect to an
aggregate of 1,000,000 shares of Common Stock of the Company. Awards under
the plan are not restricted to any specific form or structure, although the
Company's present intention is that awards granted under the plan will be in
the
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<PAGE>
form of stock options. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE INCENTIVE PLAN.
The following is a summary of the principal features of the Incentive
Plan. This summary is qualified in its entirety by reference to the full text
of the Incentive Plan, a copy of which is attached to this Proxy Statement as
Appendix A.
DESCRIPTION OF THE PLAN
PURPOSE OF THE PLAN. The purpose of the Incentive Plan is to enable
the Company and its subsidiaries to attract, retain and motivate its
employees, consultants and advisors by providing for or increasing their
proprietary interests in the Company. The Board believes that the use of
options to purchase Common Stock of the Company is desirable because it has
the effect of more closely aligning the interests of the optionees with those
of the stockholders.
ELIGIBILITY. All employees of the Company and its subsidiaries are
eligible to receive awards under the Incentive Plan, although the Board of
Directors presently intends to limit the grant of awards under the Incentive
Plan to officers and directors of the Company. Awards also can be granted
under the Incentive Plan to consultants and advisors of the Company and its
subsidiaries. The Board of Directors does not presently intend to grant
awards to any consultants or advisors, although it would have the flexibility
to do so if the Plan is approved by the stockholders.
NUMBER OF SHARES AVAILABLE UNDER THE PLAN. The aggregate number of
shares of Common Stock as to which awards can be granted under the Incentive
Plan is 1,000,000. That number is subject to adjustment in the event of a
stock split, reverse stock split, merger, and certain other significant
events. The closing price of the Company's Common Stock on the Pacific Stock
Exchange on April 15, 1998 was $3 3/8.
TYPES OF AWARDS TO BE GRANTED UNDER THE PLAN. Under the Incentive
Plan awards may be granted in the form of stock options which qualify as
incentive stock options under Section 422 of the Internal Revenue Code of
1986 or options which do not qualify under any section of the Internal
Revenue Code (so-called "non-incentive stock options"). Only persons who are
employees of the Company or its subsidiaries may be granted incentive stock
options. Such options may not be granted at an exercise price less than the
fair market value of the shares on the date of grant, and any person who owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company may not be granted an incentive stock option
at a price less than 110% of the fair market value of the stock on the date
of grant. The term of options may not be greater than 10 years (5 years for
10% stockholders), the options must not be transferable other than by the
laws of descent and distribution and must be exercisable during the life of
the holder only by him or her. The plan under which incentive options are
granted must be approved by the stockholders within 12 months before or after
it is adopted by the Board of Directors. If the aggregate fair market value
of all shares of stock with respect to which incentive stock options granted
to an individual first become exercisable during any calendar year exceeds
$100,000, the options will not qualify as incentive options to the extent of
the excess.
Under the Incentive Plan the Board of Directors or a committee of
directors (see "ADMINISTRATION" below) will have the power to determine the
terms of each option granted, including the expiration, vesting and exercise
dates and whether the exercise price will be paid in cash, by tender of
outstanding shares of Common Stock, by surrendering option rights with
respect to existing
10
<PAGE>
unexercised stock options, by any combination of the foregoing or by any
other means approved by the Board of Directors or the committee.
Although the Board of Directors presently intends that awards granted
under the Incentive Plan will be in the form of stock options, the Incentive
Plan allows the Company to enter into any type of arrangement with any
eligible grantee that involves or might involve the issuance of shares of
Common Stock of the Company, such as an option, stock appreciation right or
similar right with an exercise or conversion privilege at a price related to
the Common Stock of the Company, or a value derived from the value of the
Common Stock.
The types of awards which other companies have granted under similar
plans include stock appreciation rights, restricted stock and performance
share awards. Stock appreciation rights (also called "SARs") entitle the
grantee exercising the SAR to receive payment in an amount equal to the
difference between the fair market value of a share of stock on the date of
exercise and the exercise price of the SAR multiplied by the number of shares
as to which the SAR is exercised. The SAR can be settled in cash, shares of
stock or a combination of both. It is also possible to grant SARs in tandem
with stock options that are not eligible for the federal income tax treatment
afforded incentive stock options (see "Certain Federal Income Tax
Consequences of Options and Other Awards") in order to provide the grantee
cash to pay the income taxes that are payable upon exercise of such an option.
Awards can be granted in the form of shares of stock which are
restricted by agreements having terms and provisions determined by the Board
of Directors or a committee thereof, which may include forfeiture provisions
or restrictions on transferability that expire over time or upon the
satisfaction of certain performance or other requirements. Grantees
receiving restricted stock typically are entitled to dividends and voting
rights on the shares prior to the lapsing of the restrictions.
The Incentive Plan would also permit the Board of Directors or a
committee of the Board to grant performance share awards involving the
issuance of unrestricted shares of Common Stock based upon the appreciation
in the market value, book value or other measure of value of the Common
Stock, the performance of the Company based on earnings or cash flow or such
other factors as the Board or the committee may determine.
ADMINISTRATION. The Incentive Plan provides that it is to be
administered by the Board of Directors or a committee, which must consist of
two or more directors. The Incentive Plan gives the Board of Directors or
the committee broad authority to determine the persons to whom awards will be
granted, the time or times at which awards will expire, the types of awards
to be granted, the number of shares subject to each award and all other terms
and conditions of awards. The Board and the committee also have the power to
adopt, amend and rescind rules and regulations relating to the Incentive
Plan, to determine whether and the extent to which adjustments are required
to be made under the Plan and under outstanding awards upon the occurrence of
events such as stock splits, reverse stock splits, stock dividends, other
dividends or distributions (except cash dividends paid out of earned surplus)
or a merger, recapitalization or certain other significant events.
DURATION, TERMINATION AND AMENDMENT OF PLAN. The Incentive plan
provides that awards cannot be granted under the Plan after August 18, 2007,
which is the expiration of ten years after the Incentive Plan was adopted by
the Board of Directors. Although no awards can be granted after that date,
shares of Common Stock can be issued until August 18, 2017 pursuant to awards
granted prior to August 18, 2007. The Board of Directors can amend or
terminate the Incentive Plan at any time in any manner, except that no
amendment or termination of the Incentive Plan can deprive any grantee of any
11
<PAGE>
award already granted without the consent of the grantee and no amendment can
increase the number of shares subject to the Plan that can be issued pursuant
to incentive stock options or change, alter or modify the employees or class
of employees eligible to receive incentive stock options without obtaining
the approval of the stockholders within 12 months after the adoption of any
such amendment and prior to the issuance of any increased number of shares or
the issuance of shares to any person not eligible for awards prior to the
amendment.
OPTIONS GRANTED UNDER INCENTIVE PLAN
The following table shows certain information as to the only option
granted under the Incentive Plan since its adoption by the Board of Directors.
<TABLE>
<CAPTION>
NO. OF EXERCISE EXPIRATION
NAME AND POSITION SHARES PRICE DATE
----------------- ------- -------- ----------
<S> <C> <C> <C>
Keenan Behrle 100,000 $2.37 8/19/02
Executive Vice President
and a Director
</TABLE>
The option was granted to Mr. Behrle on August 19, 1997. The $2.37
price represented the closing price of the Company's Common Stock on the
Pacific Stock Exchange on the date of grant. The option became exercisable
as to 20% of the total number of shares, subject to the option commencing,
February 10, 1998 and becomes exercisable as to an additional 20% of the
total number of shares on February 10 of each of the subsequent four years.
The option will be rescinded if the Incentive Plan is not approved by the
stockholders within 12 months after the adoption of the Incentive Plan by the
Board (which occurred on August 19, 1997).
The option granted under the Incentive Plan terminates within three
months after any termination of employment by the optionee and is exercisable
during that three-month period only to the extent that it was exercisable on
the date of termination of employment. If the optionee's employment
terminates as the result of death or disability, the option terminates one
year after such death or disability, and if an optionee dies or becomes
disabled after termination of his or her employment, the option is
exercisable until the first anniversary of such death or disability. The
option terminates in the event of a reorganization, merger or consolidation
as a result of which the securities then subject to the option are exchanged
for or converted into cash property and/or securities not issued by the
Company unless provision is made in the transaction for assumption of the
option or the substitution of another option. The option also terminates in
the event of the dissolution or liquidation of the Company or a sale of
substantially all of its assets. The Board or the committee administering
the Incentive Plan has the power in its sole discretion to accelerate the
dates when the options become exercisable for any reason.
The terms of the options permit payment of the purchase price upon
exercise to be made in cash or, subject to certain limitations, by tendering
outstanding shares of Common Stock valued at their then fair market value (as
defined). If any of the options are not eligible for the tax treatment as
incentive stock options under the Internal Revenue Code (see "Certain Federal
Income Tax Consequences of Options and Other Awards"), any withholding taxes
can be paid in the same manner.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS AND OTHER AWARDS
The following is a brief description of the federal income tax treatment
that will generally apply to awards granted under the Incentive Plan based on
federal income tax laws in effect on the date of this
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<PAGE>
Proxy Statement. The exact federal income tax treatment of awards will
depend on the specific nature of the award. This summary does not constitute
tax advice, is not intended to be exhaustive and, among other things, does
not describe any state, local or foreign tax consequences, nor does it fully
describe the tax rules applicable to persons subject to Section 16(b) of the
Securities Exchange Act of 1934. Such persons should consult their own tax
advisors with respect to the tax rules applicable to them.
INCENTIVE STOCK OPTIONS. Neither the grant nor exercise of an
incentive stock option under the Incentive Plan is taxable to the employee
receiving the option. If the employee holds the stock purchased upon
exercise of an incentive stock option for at least one year after the
purchase of the stock and at least two years after the option was granted,
his or her later sale of the stock will produce long-term capital gain or
loss, and the Company will not be entitled to any tax deduction. Under
current law, the maximum long-term capital gain rate of 20% only applies to
assets held for more than 18 months. The maximum rate is 28% for assets held
for more than 12 months but not more than 18 months. However, if the employee
sells or otherwise transfers the stock before these holding periods have
elapsed (a "disqualifying disposition"), he or she will generally be taxed at
ordinary income rates on the portion of any gain on the sale equal to the
excess of the fair market value of the stock when the option was exercised
over the option exercise price, and the Company will be entitled to a tax
deduction in the same amount. Any remaining gain or loss will be short-term
or long-term capital gain or loss depending on the holding period of the
shares. If shares acquired pursuant to the exercise of an incentive option
are surrendered to the Company upon exercise of an incentive option and if
such shares have not been held for the requisite one and two-year periods,
the surrender will be treated as a disqualifying disposition.
NON-INCENTIVE OPTIONS. Although the grant of non-incentive stock
options under the Incentive Plan also is not generally taxable to the
optionee, when he or she exercises the option, he or she will be taxed at
ordinary income rates on the excess of the fair market value of the stock
received over the option exercise price, and the Company will be entitled to
a tax deduction in the same amount. The amount paid by the optionee on
exercise plus the amount included in an optionee's income as a result of the
exercise of a non-incentive option will be treated as his or her basis in the
shares acquired, and any gain or loss on the subsequent sale of the shares
will be treated as long-term or short-term capital gain or loss as the case
may be.
STOCK APPRECIATION RIGHTS. The grant of a stock appreciation right is
generally not a taxable event for the grantee. Upon exercise of the stock
appreciation right, the grantee will recognize ordinary income in an amount
equal to the amount of cash received upon such exercise, and the Company will
be entitled to a deduction equal to the same amount.
RESTRICTED STOCK. The purchase of restricted stock is not a taxable
event for the purchaser. When restrictions imposed upon the stock expire,
the purchaser will recognize ordinary income in an amount equal to the
excess, if any, of the fair market value of the restricted stock on the date
of such expiration over the purchase price of the shares. The purchaser may,
however, elect within 30 days after the date of purchase under Section 83(b)
of the Internal Revenue Code to recognize ordinary income on the date of
purchase in an amount equal to the excess of the fair market value of the
restricted stock on the date of purchase, determined without regard to the
restrictions imposed on such shares, over the purchase price of the shares.
If and when the purchaser recognizes ordinary income attributable to the
restricted stock, the Company will be entitled to a deduction equal to the
amount of such ordinary income.
13
<PAGE>
OTHER AWARDS. Awards may be granted to employees under the Incentive
Plan that do not fall clearly into the categories described above. The
federal income tax treatment of these awards will depend upon their specific
terms.
INSIDERS. Special rules apply to awards if the grantee of an award is
subject to Section 16 of the Securities Exchange Act of 1934, which applies
to directors and officers of the Company and beneficial owners of 10% or more
of the outstanding shares of its Common Stock. Section 16 and the rules
thereunder require that persons subject to Section 16 pay over to the Company
and any profit realized from the purchase and sale of any equity security if
the purchase and sale occur within six months of each other (subject to
certain exceptions). Because of these provisions the timing of the
recognition of income with respect to awards granted under the Incentive plan
by persons subject to Section 16 may be different from that described above,
and such persons should consult their own tax advisors. Section 16 also has
a corresponding effect on the timing of any deductions to which the Company
is entitled in connection with awards granted under the Incentive Plan.
EXCESS PARACHUTE PAYMENTS. The Board of Directors or the committee
thereof administering the Incentive Plan has the power to accelerate the
exercise dates of options granted under the Plan In that event and depending
upon the individual circumstances of the recipient employee, certain amounts
with respect to such awards may constitute "excess parachute payments" under
the golden parachute provisions of the Internal Revenue Code. Pursuant to
those provisions, an employee will be subject to a 20% excise tax on any
"excess parachute payment."
WITHHOLDING TAXES. The Company will generally be required to withhold
applicable taxes with respect to any ordinary income recognized by a grantee
in connection with awards under the Incentive Plan.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR"
APPROVAL OF THE INCENTIVE PLAN.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 1998 the number of shares of
the Company's Common Stock known to the Company to be owned beneficially by
each person who owned more than 5% of the outstanding shares, by each
director and executive officer and by all directors and executive officers,
as a group. Except as indicated in the notes to the table, each person named
has sole voting and investment power with respect to the shares indicated.
<TABLE>
<CAPTION>
SHARES OF COMMON
NAME AND ADDRESS OF STOCK BENEFICIALLY PERCENT OF CLASS
BENEFICIAL OWNER OWNED (1)
-------------------- ------------------ ----------------
<S> <C> <C>
William Belzberg (2) 1,832,070 22.90%
9665 Wilshire Blvd.
Suite M-10
Beverly Hills, CA 90212
14
<PAGE>
Hyman Belzberg (3) 1,703,974 21.70%
#1420 Aquitaine Towers
540 - 5 Avenue S.W.
Calgary, Alberta
Canada T2P 0M2
Samuel Belzberg (4) 1,387,048 17.70%
1177 West Hastings St.
Suite 2000
Vancouver, B.C.
Canada V6E 2K3
Keenan Behrle (5),(6) 75,000 less than 1%
Gerald E. Finnell 5,000 less than 1%
Barbara C. George, Ph.D. (6) 5,000 less than 1%
Monty Hall (6) 5,000 less than 1%
Lester Ziffren (6) 8,000 less than 1%
All Directors and Officers as
a Group (8 persons) 5,016,092 62.30%
</TABLE>
- ---------------
(1) This table may not reflect limitations on voting power and investment
power arising under community property and similar laws.
(2) Includes 125,000 shares exercisable as of March 31, 1998 pursuant to an
option to purchase a total of 250,000 shares. The shares are deemed to be
outstanding for the purpose of computing the percentage of the outstanding
shares beneficially owned by Mr. Belzberg.
(3) Based on an amended Schedule 13D filed with the Securities and Exchange
Commission, the shares shown in the table as being beneficially owned by
Hyman Belzberg are owned of record by Bel-Alta Holdings Ltd., a Canadian
corporation, of which Hyman Belzberg is the President, sole director and
beneficial owner of a majority of the outstanding shares of capital stock.
(4) Based on an amended Schedule 13D filed with the Securities and Exchange
Commission, of the shares shown in the table as owned beneficially by Samuel
Belzberg, 1,287,048 shares are owned of record by Gibralt Holdings Ltd., a
Canadian corporation, of which Samuel Belzberg is the sole director, officer
and stockholder, and 100,000 shares are owned by M.D.B. Capital, a Liberian
corporation, which has granted to Mr. Belzberg a limited power of attorney
with respect to those shares.
(5) Includes 20,000 shares exercisable as of March 31, 1998 pursuant to an
option to purchase a total of 100,000 shares. The shares are deemed to be
outstanding for the purpose of computing the percentage of the outstanding
shares beneficially owned by Mr. Behrle.
(6) Includes 5,000 shares exercisable as of March 31, 1998 pursuant to an
option to purchase a total of 10,000 shares. The shares are deemed to be
outstanding for the purpose of computing the percentage of the outstanding
shares beneficially owned.
15
<PAGE>
THE COMPANY'S RELATIONSHIP WITH
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the Company's independent auditors
for the year ended December 31, 1997. Representatives of Deloitte &Touche
are expected to be present at the Annual Meeting of Stockholders. They will
have the opportunity to make any statement they desire to make, and they are
expected to be available to respond to appropriate questions.
KPMG Peat Marwick, LLP ("KPMG") served as the Company's independent
auditors for the years ended December 31, 1995 and 1996. On May 5, 1997,
KPMG resigned as the Company's independent auditors and on August 19, 1997,
the Company retained Deloitte & Touche. The reports of KPMG on the Company's
financial statements for the years ended December 31, 1995 and 1996 did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified
or modified as to uncertainty, audit scope or accounting principles. Also
there were no disagreements between KPMG and the Company during that period
or during 1997 on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of KPMG, would have caused that firm to refer to the subject
matter of the disagreement in connection with their audit report.
STOCKHOLDERS' PROPOSALS
Any stockholder of the Company wishing to submit a proposal for
inclusion in the proxy statement relating to the Company's 1999 Annual
Meeting of Stockholders must have delivered such proposal to the Company at
its principal office on or before December 28, 1998. The Board of Directors
will review any proposals from eligible stockholders which it receives by
that date and will determine whether any such proposal will be included in
the 1999 proxy solicitation materials. An eligible stockholder is one who at
the time of submission of the proposal is the record or beneficial owner of
at least 1% or $1,000 in market value of securities entitled to be voted at
the 1999 Annual Meeting of Stockholders, who has held such securities for at
least one year and who shall continue to own such securities through the date
on which the meeting is held.
ANNUAL REPORT
Concurrently with this Proxy Statement the Company is providing to
each stockholder a copy of its Annual Report to Stockholders, which consists
of its Annual Report on Form 10-K filed with the Securities and Exchange
Commission. If for any reason a stockholder does not receive the accompanying
Annual Report, the Company will provide any such stockholder a copy (without
charge) upon the stockholder's written request. Requests should be directed
to: Westminster Capital, Inc., Attn:
16
<PAGE>
Shareholders Relations, 9665 Wilshire Boulevard, Suite M-10, Beverly Hills,
California 90212.
By order of the Board of Directors,
/s/ Keenan Behrle
Keenan Behrle
Corporate Secretary
Beverly Hills, California
April 27, 1998
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can execute the proxy. Accordingly,
please contact the person responsible for your account and give instructions
regarding the execution of the enclosed consent.
17
<PAGE>
APPENDIX A
WESTMINSTER CAPITAL, INC.
1997 STOCK INCENTIVE PLAN
Section 1. PURPOSE OF PLAN
The purpose of this 1997 Stock Incentive Plan ("Plan") of
Westminster Capital, Inc., a Delaware corporation (the "Company"), is to
enable the Company and its subsidiaries to attract, retain and motivate their
directors, employees and consultants by providing for or increasing the
proprietary interests of such persons in the Company.
Section 2. PERSONS ELIGIBLE UNDER PLAN
Any person, including any director of the Company, who is a
director, employee, consultant or adviser of the Company or any of its
subsidiaries (a "Grantee") shall be eligible to be considered for the grant
of Awards (as hereinafter defined) hereunder; PROVIDED, HOWEVER, that only
those Grantees who are employees of the Company or any of its subsidiaries
shall be eligible to be considered for the grant of Incentive Stock Options
(as hereinafter defined) hereunder.
Section 3. AWARDS
(a) The Board of Directors of the Company (the "Board") or the
Committee (as hereinafter defined), on behalf of the Company, is authorized
under this Plan to enter into any type of arrangement with a Grantee that is
not inconsistent with the provisions of this Plan and that, by its terms,
involves or might involve the issuance of (i) shares of Common Stock, par
value $.01 per share, of the Company (the "Common Shares") or (ii) a
Derivative Security (as such term is defined in Rule 16a-1 promulgated under
the Securities Exchange Act of 1934, as such Rule may be amended from time to
time) with an exercise or conversion privilege at a price related to the
Common Shares or with a value derived from the value of the Common Shares.
The entering into of any such arrangement is referred to herein as the
"grant" of an "Award."
(b) Awards are not restricted to any specified form or structure
and may include, without limitation, sales or bonuses of stock, restricted
stock, stock options, reload stock options, stock purchase warrants, other
rights to acquire stock, securities convertible into or redeemable for stock,
stock appreciation rights, limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares, and an Award
may consist of one such security or benefit, or two or more of them in tandem
or in the alternative.
(c) Common Shares may be issued pursuant to an Award for any
lawful consideration as determined by the Committee, including, without
limitation, services rendered by the recipient of such Award.
(d) Awards in the form of options shall provide for an exercise
price which is not less than 85% of the fair value of the stock at the time
the option is granted, except that the price shall be 110% of the fair value
in the case of any person who owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company. For
purposes of this Paragraph (d) the fair value of stock issuable upon exercise
of an option shall be determined by the Board of Directors of the Company or
Committee taking into account the following:
<PAGE>
(i) If stock of the same class is publicly traded in an
active market of substantial depth, the recent market price of such
securities.
(ii) If stock of the same class has not been so publicly
traded, the price at which securities of reasonably comparable
corporations (if any) in the same industry are being traded, subject
to appropriate adjustment for the dissimilarities between the
corporations being compared.
(iii) In the absence of any reliable indicator under
subparagraph (i) or (ii) above, the earnings history, book value and
prospects of the Company in the light of market conditions generally.
(e) The exercise period for awards granted in the form of options
shall be not more than 120 months from the date the option is granted.
(f) Awards granted in the form of options shall provide that neither
the option nor any interest therein may be sold, assigned, conveyed, gifted,
pledged, hypothecated or otherwise transferred in any manner other than by will
or the laws of descent and distribution.
(g) Awards granted in the form of options shall be exercisable at the
rate of at least 20% per year over five years from the date the option is
granted.
(h) Awards granted in the form of options shall provide that the
holder of the option shall have the right to exercise in the event of
termination of employment to the extent that the holder is entitled to exercise
on the date employment terminates as follows:
(i) At least six months from the date of termination if
termination was caused by death or disability.
(ii) At least 30 days from the date of termination if
termination was caused other than by death or disability.
(i) Subject to the other specific provisions of this Plan, the Board
or the Committee, in its sole and absolute discretion, shall determine all of
the terms and conditions of each Award granted under this Plan, which terms and
conditions may include, among other things:
(i) a provision permitting the recipient of such Award,
including any recipient who is a director or officer of the Company, to pay
the purchase price of the Common Shares or other property issuable pursuant
to such Award, or such recipient's tax withholding obligation with respect
to such issuance, in whole or in part, by any one or more of the following:
(A) the delivery of previously owned shares of capital
stock of the Company (including "pyramiding") or other property,
(B) a reduction in the amount of Common Shares or other
property otherwise issuable pursuant to such Award, or
(C) the delivery of a promissory note, the terms and
conditions of which shall be determined by the Committee; or
2
<PAGE>
(ii) a provision required in order for such Award to
qualify as an incentive stock option under Section 422 of the Internal
Revenue Code (an "Incentive Stock Option").
(j) No Awards shall be granted pursuant to this Plan if, after the
granting of the Award, the number of Common Shares subject to such Award and all
other Awards then outstanding under this Plan and all other stock option, stock
bonus, stock purchase and other similar plans for employees, directors and/or
consultants exceeds 30% of the then outstanding shares of Common Stock of all
classes (determined by treating all shares of convertible preferred or
convertible senior common stock as if they had been converted but not taking
into account any shares subject to promotional waivers under Section 260.141 of
Title 10 of the California Code of Regulations), unless a percentage higher than
30% is approved by at least two-thirds of the outstanding shares entitled to
vote. All calculations under this Section 4(i) shall be made in accordance with
the conditions and exclusions of Rule 260.140.45 of Title 10 of the California
Code of Regulations.
Section 4. STOCK SUBJECT TO PLAN
(a) The aggregate number of Common Shares that may be issued pursuant
to all Incentive Stock Options granted under this Plan shall not exceed
1,000,000. Such maximum number does not include the number of Common Shares
subject to the unexercised portion of any Incentive Stock Option granted under
this Plan that expires or is terminated. Such maximum number of Common Shares
is subject to adjustment as provided in Section 7 hereof (and is referred to
herein as the "Share Limitation").
(b) At any time, the aggregate number of Common Shares issued and
issuable pursuant to all Awards (including all Incentive Stock Options) granted
under this Plan shall not exceed the Share Limitation, subject to adjustment as
provided in Section 7 hereof.
(c) For purposes of Section 4(b) hereof, the aggregate number of
Common Shares issued and issuable pursuant to Awards granted under this Plan
shall at any time be deemed to be equal to the sum of the following:
(i) the number of Common Shares which were issued prior to
such time pursuant to Awards granted under this Plan excluding (except for
purposes of computing the Share Limitation applicable to Incentive Stock
Options granted under this Plan) shares which were reacquired by the
Company pursuant to provisions in the Awards with respect to which those
shares were issued giving the Company the right to reacquire such shares
upon the occurrence of certain events; plus
(ii) the number of Common Shares which are or may be issuable
at or after such time pursuant to outstanding Awards granted under this
Plan prior to such time.
(d) The maximum number of shares as to which Awards can be made to
any employee in any calendar year under this Plan is 500,000.
Section 5. DURATION OF PLAN
No Awards shall be granted under this Plan after August 18, 2007.
Although Common Shares may be issued after August 18, 2007 pursuant to Awards
granted prior to such date, no Common Shares shall be issued under this Plan
after August 18, 2017.
3
<PAGE>
Section 6. ADMINISTRATION OF PLAN
(a) This Plan shall be administered by the Board or a committee
thereof (the "Committee") consisting of two or more directors.
(b) Subject to the provisions of this Plan, the Board or the
Committee shall be authorized and empowered to do all things necessary or
desirable in connection with the administration of this Plan, including, without
limitation, the following:
(i) adopt, amend and rescind rules and regulations relating to
this Plan;
(ii) determine which persons meet the requirements of Section 2
hereof for eligibility under this Plan and to which of such eligible
persons, if any, Awards shall be granted hereunder;
(iii) grant Awards to eligible persons and determine the terms
and conditions thereof, including the number of Common Shares issuable
pursuant thereto;
(iv) determine whether, and the extent to which adjustments are
required pursuant to Section 7 hereof; and
(v) interpret and construe this Plan and the terms and
conditions of any Award granted hereunder.
Section 7. ADJUSTMENTS
If the outstanding securities of the class then subject to this
Plan are increased, decreased or exchanged for or converted into a different
number or kind of shares or securities of the Company as a result of a
reorganization, merger, consolidation, recapitalization, restructuring,
reclassification, stock dividend, stock split, reverse stock split or the
like, then appropriate and proportionate adjustments shall be made in (a) the
number and type of shares or other securities of the Company that may be
acquired, and the exercise price at which they may be acquired, pursuant to
Incentive Stock Options and other Awards theretofore granted under this Plan
and (b) the maximum number and type of shares or other securities of the
Company that may be issued pursuant to Incentive Stock Options and other
Awards thereafter granted under this Plan.
Section 8. AMENDMENT AND TERMINATION OF PLAN
The Board may amend or terminate this Plan at any time and in any
manner; PROVIDED, HOWEVER, that (a) no such amendment or termination shall
deprive the recipient of any Award theretofore granted under this Plan,
without the consent of such recipient, of any of his or her rights thereunder
or with respect thereto; and (b) no such amendment shall increase the
aggregate number of Common Shares that may be issued to all Incentive Stock
Options granted under this Plan (except pursuant to Section 7 hereof) or
change, alter or modify the employees or class of employees eligible to
receive Incentive Stock Options under the Plan without the approval of the
stockholders of the Company, which approval must be obtained within 12 months
after the adoption of such amendment by the Board.
Section 9. EFFECTIVE DATE OF PLAN
This Plan shall be effective as of August 19, 1997, the date upon
which it was approved by the Board; PROVIDED, HOWEVER, that no Common Shares
may be issued under this
4
<PAGE>
Plan until it has been approved, directly or indirectly, by a majority vote
of the holders of the outstanding shares of Common Stock of the Company at a
meeting duly held or by written consent in accordance with the laws of the
State of Delaware. If an Award granted under this Plan takes the form of an
option, it shall be rescinded if such stockholder approval is not obtained
within 12 months before or after the date set forth above upon which this
Plan was approved by the Board. No shares subject to any such option shall
be counted in determining whether such stockholder approval is obtained.
Section 10. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAW
Notwithstanding anything to the contrary in this Plan, no Common
Shares purchased upon exercise of an Award, and no certificate representing all
or any part of such shares, shall be issued or delivered if (a) such shares have
not been admitted to listing upon official notice of issuance on each stock
exchange or interdealer quotation system upon which shares of that class are
then listed or (b) in the opinion of counsel to the Company, such issuance or
delivery would cause the Company to be in violation of or to incur liability
under any Federal, state or other securities law, or any requirement of any
listing agreement to which the Company is a party, or any other requirement of
law or of any administrative or regulatory body having jurisdiction over the
Company.
Section 11. INFORMATION TO GRANTEES
The Company will provide to all Grantees of Awards under this Plan for
so long as such Awards remain outstanding financial statements of the Company at
least annually on or before 120 days after the end of each fiscal year of the
Company. Such financial statements shall consist of a balance sheet, income
statement and statement of cash flows and shall be audited if the Company is
then employing independent certified public accountants to audit its financial
statements. Such financial statements need not comply with Section 260.613 of
Title 10 of the California Code of Regulations.
5
<PAGE>
DETACH HERE
PROXY
WESTMINSTER CAPITAL, INC.
The undersigned hereby appoints William Belzberg and Keenan Behrle, and
either of them acting alone, with full power of substitution and revocation,
as proxies of the undersigned to vote all shares of Common Stock of
Westminster Capital, Inc. (the "Company") which the undersigned is entitled
to vote at the 1998 Annual Meeting of Stockholders of the Company to be held
on June 4, 1998, or at any adjournment or postponement thereof, upon the
matters referred to on the reverse side of this Proxy, and, in their
discretion, upon any other business that may come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED ON THE REVERSE SIDE
AND FOR APPROVAL OF ADOPTION OF THE 1997 STOCK INCENTIVE PLAN.
IMPORTANT - PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
/ SEE REVERSE SIDE /
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/ SEE REVERSE SIDE /
<PAGE>
DETACH HERE
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE ELECTION OF ALL OF THE
NOMINEES LISTED BELOW AND FOR PROPOSAL 2.
1. Election of Directors
NOMINEES: Keenan Behrle, Hyman Belzberg, Samuel Belzberg, William
Belzberg, Gerald E. Finnell, Barbara C. George, Monty Hall and
Lester Ziffren
/ / FOR ALL NOMINEES / / WITHHELD FROM ALL NOMINEES
/ /
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For only the nominees listed above and allocated my votes among them equally
unless otherwise specified above.
2. Approve the adoption of the 1997 FOR AGAINST ABSTAIN
Stock Incentive Plan. / / / / / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
If the total number of votes indicated above exceeds the number of votes that
undersigned is entitled to cast, the undersigned's votes shall be divided as
equally as possible among the nominees indicated by the undersigned.
(Please date this Proxy and sign EXACTLY as your name appears on this card.
Joint owners should each sign. Attorneys-in-fact, executors, administrators,
trustees, guardians or corporation officers should give full title. This
Proxy shall be valid and may be voted, however, regardless of the form of
signature.)
Signature: Date:
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Signature: Date:
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