<PAGE>
INVESTORS INSURANCE GROUP, INC.
7200 WEST CAMINO REAL
BOCA RATON, FLORIDA 33433
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Investors
Insurance Group, Inc., formerly Gemco National, Inc., will be held at the
offices of the Company, at 7200 West Camino Real, Boca Raton, Florida on
Friday, November 17, 1995 at 10:00 A.M. for the following purposes:
1. To elect five (5) directors.
2. To approve an Amendment to the Articles of Incorporation authorizing a
class of Preferred Stock, and granting exclusive authority to the Board of
Directors to determine the rights, preferences and limitations of the
Preferred Stock.
3. To transact such other business as may properly come before the meeting.
Your attention is directed to the accompanying Proxy Statement for further
information with respect to the matters to be acted upon at the Annual Meeting
of Shareholders.
Only holders of Common Stock of record at the close of business on October 24,
1995 are entitled to notice of and to vote at said meeting and any adjournments
thereof.
By order of the Board of Directors,
/s/ Susan F. Powell
---------------------------
Susan F. Powell, Vice President,
Assistant Secretary and Treasurer
Boca Raton, Florida
October 25, 1995
- -------------------------------------------------------------------------------
If you do not expect to be present at the meeting, please complete, sign and
date the accompanying proxy and return it promptly in the enclosed envelope.
<PAGE>
INVESTORS INSURANCE GROUP, INC.
PROXY STATEMENT
------------------------
FOR ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 17, 1995
------------------------
GENERAL INFORMATION
The Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Investors Insurance Group, Inc., formerly Gemco
National, Inc., (the "Company"), for use at the Annual Meeting of Shareholders
to be held at the offices of the Company, at 7200 West Camino Real, Boca Raton,
Florida at 10:00 A.M. on Friday, November 17, 1995 and at any adjournment or
adjournments of said meeting (the "Meeting"). The Company intends to mail this
Proxy Statement and the enclosed form of proxy to the Company's shareholders on
or about October 27, 1995.
VOTING RIGHTS AND VOTES REQUIRED
Only holders of record of the Company's shares of common stock, par value $.50
per share (the "Common Stock") at the close of business on October 24, 1995 are
entitled to receive notice of, and to vote at, the Meeting and any adjournment
thereof. As of the close of business on October 24, 1995 there were 2,762,982
shares of Common Stock issued and outstanding.
For each proposal, Stockholders will be able to vote in favor of or against the
proposal, or may abstain from voting. If a Stockholder abstains from voting
for a proposal by selecting the "ABSTAIN" selection on the accompanying proxy
card, no favorable vote is cast and therefore abstentions have the same effect
as a vote against the proposal. If a broker or other nominee holding shares of
Common Stock for the beneficial owner does not vote on a proposal because the
broker or nominee has not received instructions from the beneficial owner and
does not have the right to exercise discretionary voting power, such non-vote
has the same legal effect as a vote against the proposal.
A majority of the outstanding shares of Common Stock must be represented in
person or by proxy at the Meeting in order to constitute a quorum for the
transaction of business. Abstentions and broker non-votes are counted in
determining the presence of a quorum. The record holder of each share of Common
Stock entitled to vote at the Meeting will have one vote for each matter
considered.
The affirmative vote of the holders of a majority of the shares of Common Stock
represented at the Meeting in person or by proxy, and entitled to vote thereat,
will be required to elect the nominees as directors, approve an amendment to
the Articles of Incorporation authorizing a new class of Preferred Stock and
granting exclusive authority to the Board of Directors to determine the rights,
preferences and restrictions of the Preferred Stock, and adopt any shareholder
proposal presented at the Meeting.
<PAGE>
VOTING OF PROXIES
Proxies received in proper form by the Board of Directors of the Company will
be voted at the Meeting, and any adjournment thereof, as instructed therein by
the shareholders executing such proxies, or if no instructions are given, then
such proxies will be voted FOR the election of nominees as directors, FOR the
approval of the amendment to the Articles of Incorporation authorizing a class
of Preferred Stock and granting exclusive authority to the Board of Directors
to determine the rights, preferences and restrictions of the Preferred Stock,
and in the discretion of persons named in the proxy, on all other matters
properly presented at the meeting.
REVOCATION OF PROXIES
A shareholder who has given a proxy pursuant to this solicitation may revoke it
at any time prior to its exercise at the Meeting. A proxy may be revoked by (1)
filing with the Secretary of the Company, at the address set forth on the first
page of this Proxy Statement, a written revocation; or (2) executing and
delivering a duly executed proxy bearing a later date; or (3) by attending the
Meeting and voting the shares of Common Stock covered by the Proxy.
SOLICITATION OF PROXIES
The cost of solicitation of proxies from the Company's shareholders will be
borne by the Company. Solicitation will be primarily by mail. In addition to
the solicitation of proxies by mail, proxies may be solicited by personal
interview, telephone or telegram by the directors, officers, employees and
agents of the Company. Upon request, the Company will reimburse brokers,
nominees, fiduciaries, and custodians for reasonable expenses incurred by them
in forwarding proxy material to the beneficial owners of the Company's Common
Stock.
ELECTION OF DIRECTORS
The accompanying proxy will be voted in favor of the election as directors of
the nominees, to serve subject to the provisions of the bylaws, until the next
Annual Meeting of shareholders and until their successors are duly elected and
qualified. If any of such nominees does not remain a candidate at the time of
the forthcoming meeting (a situation which the management does not now
anticipate), proxies solicited hereunder will be voted in favor of those
nominees who do remain as candidates and for such other persons as shall be
designated by the Board of Directors to replace such nominees.
NOMINEES
The Board of Directors of the Company consists of five directors. Their terms
will expire at the 1995 Annual Meeting. The five persons designated by the
Board of Directors as nominees for election as directors are Messrs. Melvin C.
Parker, Ronald W. Hayes, Donald F.U. Goebert, Ernest D. Palmarella and Jack L.
Howard. Each of the nominees currently serves as a director of the Company.
<PAGE>
The following table sets forth the age and address of each nominee, the
principal occupation or employment of each nominee during the previous five
years, and the year in which each nominee initially became a director of the
Company.
<TABLE>
<CAPTION>
Name Position with the Company and Principal Occupation or
Employment During Past Five Years Director Since
- ------------------------- --------------------------------------------------------------- ---------------
<S> <C> <C>
Melvin C. Parker <F1><F3> President, Chief Executive Officer and a Director of the Company January 3, 1992
7200 W. Camino Real since January 1992; President, Chief Executive Officer and a
Boca Raton, FL 33433 Director of IIC, Inc. and Investors Insurance Corporation since
Age 51 June 1990; President, Treasurer and a Director of Investors
Marketing Group, Inc. since June 1994; President and Chief
Marketing Officer of Financial Benefit Life Insurance Company
from August 1988 to June 1990.
Ronald W. Hayes <F1> Chairman of the Board from January 1989 to present; President and June 11, 1987
7200 W. Camino Real Chief Executive Officer of the Company from January 1989 to
Boca Raton, FL 33433 January 1992; President and 100% shareholder of Lincoln
Age 57 Consulters and Investors, Inc. for more than the past five years.
Donald F.U. Goebert <F1> Vice President and a Director of the Company from June 1987 to June 11, 1987
615 Willowbrook Lane present; Secretary and Treasurer of the Company from June 1987 to
West Chester, PA 19382 June 1992; Chairman of the Board and President of Adage, Inc.
Age 58 (formerly General Business Investment Corporation) for more than
the past five years.
Ernest D. Palmarella <F2><F3> Vice President and a Director of the Company since January 1989; January 13, 1989
2 Radnor Corporate Center attorney and principal shareholder in the law firm of Palmarella
Radnor, PA 19087 & Sweeney, P.C. since September 1994; attorney and principal
Age 43 shareholder in the law firm of Mirarchi & Palmarella, P.C. from
May 1990 to September 1994; associate in the law firm of Boroff,
Harris and Heller, P.C. from April 1989 to May 1990.
Jack L. Howard <F2><F3> Principal of Mutual Securities, Inc., a division of Cowles, January 3, 1992
2927 Montecito Ave. Sabol & Co., since December 1989.
Santa Rosa, CA 95404
Age 33
- -------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Designates member of Executive Committee
<F2> Designates member of Finance/Audit Committee
<F3> Designates member of Compensation Committee
</FN>
</TABLE>
<PAGE>
Meetings of the Board of Directors and Standing Committees
During 1994, the Board of Directors held five (5) meetings and executed two (2)
Unanimous Consents to Action in Lieu of Meetings.
The Company has three (3) Standing Committees: the Executive Committee; the
Finance/Audit Committee; and the Compensation Committee. The members of these
committees are identified by footnote in the "Election of Directors - Nominees"
section above. The Company does not have a Nominating Committee.
Executive Committee
The Executive Committee is responsible for monitoring the growth of the Company
and providing guidance to the executive officers of the Company. This
Committee also approves capital expenditures, approvals of contributions and
investments and delegates certain responsibilities to the executive officers of
the Company. The Committee held no meetings in 1994.
Finance/Audit Committee
The Finance/Audit Committee is responsible for reviewing and implementing the
policies and procedures which pertain to external and internal auditing and
monitoring the financial trends and results of the Company. The Committee also
recommends the appointment of the Company's independent certified public
accountant. The Committee held one (1) meeting in 1994.
Compensation Committee
The Compensation Committee is responsible for administering and approving the
compensation for corporate officers and other employees, including salaries,
bonuses, fringe benefits and the grant of stock options. The Company held one
(1) meeting in 1994.
Directors' Compensation
A director receives a fee in the amount of $500 for each meeting of the Board
of Directors and receives a fee in the amount of $300 for each meeting of any
standing committee of the Board of Directors. The Company has no other
arrangements regarding compensation for service as a Director.
Transactions Involving Directors and Officers
During 1994, the Company and its Subsidiaries engaged in various transactions
with directors or with organizations with which directors are associated in
their principal occupations. As indicated in the Compensation Table, Mr.
Goebert received $100,000 of compensation for consulting services. These fees
were paid to Mr. Goebert as non-employee compensation. During 1994, the law
firm of Palmarella & Sweeney, P.C. and/or Mirarchi & Palmarella, P.C., in which
Mr. Palmarella is a principal shareholder, received fees from the Company and
its subsidiaries, in the amount of $90,900, for legal services and related
costs and expenses. All the aforesaid transactions were in the ordinary course
of business and at normal or lower commercial prices and terms.
<PAGE>
Executive Officers
The name and age of each executive officer of the Company, the office or
offices held by such person and the date on which such person initially held
such office or offices are set forth below.
Name Office Age Initial Date of Office
- ------------------ ----------------------- ---- ----------------
Melvin C. Parker President 51 January 1992
Ronald W. Hayes Chairman of the Board 57 January 1989
Donald F.U. Goebert Vice President 58 July 1989
Ernest D. Palmarella Vice President 43 July 1989
Susan F. Powell Vice President, Assistant July 1989
Secretary and Treasurer* 46
* Ms. Powell assumed the position of Treasurer on April 1, 1995
following the resignation of Richard T. Magsam on March 31, 1995.
Richard T. Magsam, CPA served as Assistant Secretary and Assistant
Treasurer of the Company from January 20, 1992 to June 18, 1992.
From June 18, 1992 to March 31, 1995, Mr. Magsam served as Vice
President, Secretary and Treasurer of the Company. Mr. Magsam also
served as Senior Vice President, Chief Financial Officer and
Treasurer of Investors Insurance Corporation and IIC, Inc., all
subsidiaries of the Company. He held these positions from January 20,
1992 to March 31, 1995. Mr. Magsam was Vice President, Chief
Administrative Officer and Controller of Financial Benefit Life
Insurance Company from 1989 to 1991; Director of Reinsurance
Accounting for Prudential Reinsurance Company from 1988 to 1989; and
a Senior Manager, Audit at KPMG Peat Marwick from 1979 to 1988. The
position of Secretary, which Mr. Magsam held prior to his resignation
and which is currently vacant, will be filled at the Annual Meeting
of the Board of Directors which is anticipated to be held on November
17, 1995.
Each officer is elected to serve until the next annual meeting of directors is
held and until his/her successor is elected and has qualified or until his/her
earlier death, resignation or removal from office.
The business experience for the previous five (5) years of Ronald W. Hayes,
Melvin C. Parker, Donald F.U. Goebert and Ernest D. Palmarella is set forth
under "Election of Directors - Nominees."
Susan F. Powell has served as Vice President of the Company since June 11, 1993
and Assistant Secretary of the Company since June 18, 1992. Ms. Powell also
serves as Executive Vice President and Secretary of Investors Insurance
Corporation and IIC, Inc., and Secretary of Investors Marketing Group, Inc.,
all subsidiaries of the Company. She has held these positions since
June 1990. During the period of 1988 to 1990, Ms. Powell was Director of
Operations of Copytronics, Inc.
<PAGE>
Executive Compensation
The following table shows the compensation paid or accrued by the Company or
its Subsidiaries for the fiscal years ended December 31, 1994, 1993 and 1992 to
or for the account of the Chief Executive Officer and each of the four highest
paid executive officers whose compensation exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation Awards
-------------------------- ---------------------------
Restricted
Other Annual Stock Options/ LTIP All Other
Name and Salary Bonus Compensation Award(s) SARs Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)<F5>
- ------------------ ---- ------- ------- ----------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Melvin C. Parker, 1994 208,586 64,640 6,000<F1> - - - 23,500
President and CEO 1993 203,908 44,194 6,000<F1> - 25,000 - 25,360
1992 200,000 54,299 6,000<F1> - 300,000 - 25,965
Ronald W. Hayes, 1994 120,135 - - - - - 12,000
Chairman of the 1993 120,000 - - - - - 12,000
Board 1992 119,212 - - - - - -
Richard T. Magsam 1994 80,020 16,160 - - - - 9,616
Vice President, 1993 77,492 9,665 43,445<F4> - 15,000 - 8,422
Secretary and 1992 70,673 12,018 - - 10,000 - -
Treasurer
Susan F. Powell, 1994 114,152 19,692 - - - - 13,379
Executive Vice 1993 112,149 10,226 - - 20,000 - 12,238
President of 1992 105,269 12,029 - - 20,000 - 11,727
Investors Insurance
Corporation
Donald F.U. Goebert,1994 100,000<F2> - - - - - -
Vice President 1993 100,000<F2> - - - - - -
and Director <F3> 1992 100,000<F2> - - - - - -
<FN>
<F1> Represents car allowance.
<F2> Represents fee paid under investment consulting contract.
<F3> Mr. Goebert served as a non-compensated officer prior to 1992.
<F4> Represents expenses and other costs incurred by Mr. Magsam
to relocate, at the Company's request, to the Company's
Jacksonville headquarters which were reimbursed by the Company.
<F5> Represents contributions made by the Company or its
subsidiaries, on behalf of the named officer, to the Investors
Insurance Group, Inc. Simplified Employee Pension Plan. Under
the Plan, the Company or its subsidiaries may make annual
contributions not in excess of the lesser of fifteen (15%)
percent of an employee's salary or thirty thousand ($30,000)
dollars.
</FN>
</TABLE>
<PAGE>
EXECUTIVE AND OTHER EMPLOYEE BENEFIT PLANS
Incentive Stock Option Plan No. 1
The Company currently has in effect an Incentive Stock Option Plan
adopted by the Shareholders of the Company in 1982 which provides
that (a) options for up to 200,000 shares of common stock may be
issued to employees of the Company and/or its subsidiaries; (b) the
exercise price shall not be less than fair market value on the date
of grant; (c) the term of an option may not exceed ten (10) years and
will end no later than three (3) months after termination of
employment, death or retirement or one (1) year after date of
permanent disability; and (d) such other terms as set forth in the
Plan or as may be set by the Company's Board of Directors. The Plan
and each option is subject to the provisions of section 422 of the
Internal Revenue Code of 1986, as amended. The Plan is applicable
only to those options outstanding and no additional options may be
granted under the Plan.
Incentive Stock Option Plan No. 2
The Company currently has in effect an Incentive Stock Option Plan
adopted by the Shareholders of the Company on June 18, 1992 which
provides that (a) options for up to 500,000 shares of common stock,
par value $.50 per share, may be issued to employees of the Company
and/or its subsidiaries; (b) the exercise price shall be not less
than the fair market value of the shares on the date on which the
option is granted; (c) the term of the option may not exceed ten (10)
years and will end no later than three (3) months after an employee's
death, retirement or termination from service for any reason other
than disability and shall expire no later than one (1) year after an
employee's termination from service due to disability; and (d) such
other terms set forth in the Plan or as may be approved by the Board
of Directors of the Company. The Plan and each option is subject to
Section 422 of the Internal Revenue Code of 1986, as amended.
There were no stock options issued to executive officers under Stock
Option Plan No. 2, in 1994.
Option Exercises and Fiscal Year End Values
The following table provides information as to the unexercised
options to purchase the Company's Common Stock granted in fiscal year
1994 and prior fiscal years to the named officers and the value of
said options held by them as of the end of the year.
<PAGE>
<TABLE>
<CAPTION>
OPTION VALUES AS OF DECEMBER 31, 1994
Number of Unexercised Options Value of Unexercised In-the-Money
at December 31, 1994 (#) Options at December 31,1994($)
---------------------------- --------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Melvin C. Parker 241,000 84,000 108,000 42,000
Susan F. Powell 40,000 - 10,000 -
Richard T. Magsam 25,000 - 5,000 -
Ronald W.Hayes 67,409 - 33,705 -
Donald F.U. Goebert 67,409 - 33,705 -
Ernest D. Palmarella 12,256 - 15,320 -
</TABLE>
* Value determined from market price at fiscal year end ($1.875) less
exercise price. The actual value, if any, an executive may realize
will depend on the stock price on date of exercise of option, so
there is no assurance the value stated will be equal to the value
realized by the executive.
Simplified Employee Pension Plan
On January 1, 1992, the Company's subsidiary, Investors Insurance Corporation,
adopted a Simplified Employee Pension Plan. This same plan was subsequently
adopted by the Company on June 11, 1993. Under the Plan, the Company may
contribute each year for each employee the lesser of fifteen percent (15%) of
each employee's salary (not to exceed $150,000) or thirty thousand dollars
($30,000). A ten percent (10%) of salary contribution was in effect in 1994 and
continues in 1995. Contributions under the Plan are not mandatory.
Deferred Compensation Plan
The Company executed a Deferred Compensation Plan with Melvin C. Parker on
December 12, 1994. The terms of this Plan provide for the annual payment of
$8,500.00 to a Trust Account for the benefit of Mr. Parker. Upon Mr. Parker's
retirement, disability or death, such amount which is existing in said Trust
Account shall be paid to him or his beneficiary. The Trust Account is
maintained pursuant to a Trust Agreement, the trustees of which are Ronald W.
Hayes and Jack L. Howard. The Trust Account is subject to the claims of the
general creditors of the Company in the event the Company becomes insolvent.
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information concerning the beneficial security
ownership of the Company's Common Stock by the Directors and Executive
Officers, individually and as a group. The table also sets forth the only
persons who, to the company's knowledge, are the beneficial owners of more than
five (5%) percent of the outstanding voting securities of the company.
Shares Owned
Name and Address Beneficially as of Percent of
of Beneficial Owner October 24, 1995 Class (1)
- -------------------- ---------------- ----------
Melvin C. Parker 379,850 (2) 12.3%
7200 W. Camino Real
Boca Raton, Florida 33433
Ronald W. Hayes 173,909 (3) 6.1%
7200 W. Camino Real
Boca Raton, Florida 33433
Donald F.U. Goebert 2,000,714 (4) 51.4%
615 Willowbrook Lane
West Chester, PA 19382
Ernest D. Palmarella 12,816 (5) *
2 Radnor Corporate Center
Radnor, PA 19087
Jack L. Howard 58,200 (6) 2.1%
2927 Montecito Avenue
Santa Rosa, CA 95404
Susan F. Powell 41,000 (7) 1.5%
3030 Hartley Road
Jacksonville, FL 32257
All Directors and Officers
of the Company 2,666,489 (2-7) 61.5%
* Less than 1% ownership interest.
(1) These percentages are computed by dividing the number of shares
of Common Stock shown for each person by the sum of (i) the
number of shares of Common Stock outstanding on October 24,
1995 and (ii) the number of shares which that particular person
beneficially owns pursuant to stock options and stock warrants.
(2) The shares listed as being beneficially owned by Mr.
Parker include a 1992 option, granted pursuant to Incentive
Stock Option Plan 2, which is currently exercisable in the
amount of 288,000 shares. The actual grant to Mr. Parker is for
300,000 shares, which vests 24% a year for four years,
commencing in 1992 and a final vesting of 4% in 1996. Mr.
Parker's 1993 option of 25,000 shares and 4,000 shares held in
the Deferred Compensation Plan are also included in the
calculation of his beneficial ownership as of October 24, 1995.
<PAGE>
(3) The shares listed as being beneficially owned by Mr.
Hayes are held of record by Lincoln Consulters and Investors,
Inc. The shares listed as being beneficially owned by Mr. Hayes
include an option granted to him to purchase 67,409 shares
pursuant to Incentive Stock Option Plan 1.
(4) Mr. Goebert is the direct owner of 185,554 shares and
has options to purchase 67,409 shares of the Company's Stock
pursuant to Incentive Stock Option Plan 1. In addition, Mr.
Goebert has beneficial ownership through Chester County Fund,
Inc. of 686,658 shares and a warrant to purchase 1,061,093
shares of the Company's Common Stock.
(5) The shares listed as being beneficially owned by Mr.
Palmarella include an option granted to him to purchase 12,256
shares of the Company's Common Stock pursuant to Incentive
Stock Option Plan 1.
(6) Mr. Howard is the direct owner of 45,600 shares. He
has beneficial ownership of 2,600 shares through his wife, who
owns 600 shares, and two of his children, who each own 1,000
shares. The shares listed as being beneficially owned by Mr.
Howard include an option granted to him to purchase 10,000
shares pursuant to Incentive Stock Option Plan 2.
(7) The shares listed as beneficially owned by Ms. Powell include
options granted to her to purchase 40,000 shares pursuant to
Incentive Stock Option Plan 2.
Effective August 13, 1992, the Securities and Exchange Commission adopted new
rules regarding the filing of public reports by directors, officers and
beneficial owners of more than ten (10%) percent of any class of Securities of
a company registered pursuant to Section 12 of the Securities Exchange
Act. The new rules require proxy statement disclosure of those directors,
officers and more than ten (10%) percent beneficial owners that fail to file
required reports or that fail to timely file such reports. The Company is not
aware of any violation of these rules.
<PAGE>
OTHER MATTERS TO BE CONSIDERED BY INVESTORS SHAREHOLDERS
PROPOSAL NO. 2
Amendment to Articles of Incorporation
to Authorize a Class of Preferred Stock and to
Grant Exclusive Authority to the Board of Directors to
Determine the Rights and Preferences of the Preferred Stock
At a meeting of the Board of Directors held on January 30, 1995, the Board
adopted a resolution amending Article III of the Corporation's Articles of
Incorporation to authorize a class of Preferred Stock and further to grant
exclusive authority to the Board of Directors to determine the rights,
preferences and restrictions of the Preferred Stock. The Board determined that
the authorization of a Preferred Class of Stock would be beneficial to the
Corporation in its effort to raise capital. Specifically, it will allow the
Corporation to sell Preferred stock to an investor who requests Preferred Stock
to evidence the investor's investment.
The Board of Directors discussed the possibility that the Company may have a
need for capital in the future and desires to have available a class of
Preferred Stock for capital raising activities, including issuance to
prospective investors as incentive for investors to invest in the Corporation.
The relative powers, rights, privileges and restrictions, if any, of this new
class of Preferred stock would be determined by the Board of Directors prior to
issuance of any shares of stock. All powers, rights, privileges and
restrictions applied to these shares of Preferred Stock will be filed with the
Office of the Secretary of State pursuant to a Statement of Designations.
The Board of Directors requests the power to determine the powers, rights,
privileges and restrictions of the Preferred stock at a future date so that it
may ascertain what powers, rights, privileges and restrictions would be the
most beneficial to the Corporation and its shareholders while continuing to
provide incentive to potential investors.
The Florida Corporation Laws require that the preferences, limitations and
relative rights of a class of stock be described in the Articles of
Incorporation or in a resolution adopted by the Board of Directors, prior to
issuance of any shares of stock of such class. If the relative rights and
preferences were identified presently in the Articles of Incorporation, a
further amendment to the Articles of Incorporation may be required to
amend these rights, preferences and restrictions. Allowing the Board of
Directors to determine the rights, preferences and restrictions of this stock
by resolution would alleviate the need to file a further amendment to the
Articles of Incorporation and would avoid any time sensitive problem which
would exist if the Board of Directors were required to wait until the next
annual meeting of the Shareholders to define the rights and preferences of the
preferred stock.
The authority of the Board of Directors to issue Common or Preferred Stock
might be considered as having the effect of discouraging an attempt by another
person or entity to effect a takeover or otherwise gain control of the Company,
since the issuance of Preferred Stock with voting powers, or the issuance
or additional shares of Common Stock, would dilute the voting power of the
Common Stock and Preferred Stock then outstanding. Such shares could also be
sold in private or public transactions to purchasers who might assist the Board
of Directors in opposing a takeover bid which the Board determines not to be in
the best interest of the Company and its Stockholders.
<PAGE>
The authority of the Board to issue Preferred Stock and to determine the
relative rights, powers, rights, privileges and restrictions, if any, of one or
more series of Preferred Stock of the Company could be used in a manner
calculated to prevent the removal of management, and make more difficult or
discourage an unwelcomed change in control of the Company.
To effect the proposed amendment, the following resolution is presented for
adoption by the shareholders:
RESOLVED, that Article III of the Articles of Incorporation,
entitled "CAPITAL STOCK" be deleted in its entirety and replaced
with the following:
(A) "The number of shares of stock that this Corporation is authorized to
have outstanding at any one time shall be equal to Fifty Million
(50,000,000) consisting of:
1. Twenty Million (20,000,000) Preferred Shares, no par
value.
2. Thirty Million (30,000,000) Common Shares, par value
$.50 per share.
(B) The Board of Directors is authorized, subject to the limitations
prescribed by law and the provisions of this Article III, to provide
for the issuance of the shares of Preferred Stock in series, and by
filing an amendment pursuant to section 607.0602 of the Florida
Corporation Laws, to establish from time to time the number of shares
to be included in such series, and to fix the designation, powers,
preferences and rights of the shares of such series and the
qualifications, limitations or restrictions thereof, without
shareholder action.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, if any, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment
of dividends on shares of that series;
(c) Whether that series shall have voting rights, and if so the
terms of such voting rights;
(d) Whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events
as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of
redemption, which amount shall vary under different conditions
and at different redemption dates;
<PAGE>
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the corporation, and the relative rights of priority, if
any, of payment of shares of that series;
(h) Any other relative rights, preferences and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or declared
and set apart for payment before any dividends shall be paid or declared and
set apart for payment on the common shares with respect to the same dividend
period."
Board of Directors' Recommendation and Vote Required for Approval
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE HOLDERS OF THE COMPANY'S COMMON STOCK
PRESENT AT THE MEETING OR BY PROXY IS REQUIRED FOR THE ADOPTION OF THE
PROPOSAL. UNLESS OTHERWISE DIRECTED, PROXIES WILL BE VOTED "FOR" APPROVAL OF
THIS PROPOSAL.
The Board of Directors recommends that shareholders vote FOR an amendment to
the Articles of Incorporation to authorize a Class of Preferred Stock and to
grant exclusive authority to the Board of Directors to determine the rights,
preferences and restrictions of the Preferred Stock.
Independent Public Accountants
The accounting firm of KPMG Peat Marwick has served as auditors of the Company
for the past 4 years, including the previous fiscal year. The Company's Audit
Committee, which is responsible for selecting and recommending an independent
public accounting firm to the Board of Directors has not selected or
recommended an accounting firm for fiscal year 1995. The Company is currently
interviewing other accounting firms. The Company is disappointed with its
relationship with KPMG Peat Marwick.
Representatives of KPMG Peat Marwick are not expected to be at the Meeting.
PROPOSALS FOR 1996 ANNUAL MEETING
Shareholder proposals for the 1996 Annual Meeting must be received at the
principal executive offices of the Company, 7200 West Camino Real, Boca Raton,
Florida 33433, no later than February 15, 1996 for inclusion in the 1996 Proxy
Statement and form of Proxy.
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OTHER MATTERS
It is not intended that any matters except as mentioned above will be brought
before the meeting, and management is not aware of any other matters that will
be presented at the meeting by any other person. However, if any other business
should properly come before the meeting, it is intended that the accompanying
proxy may be voted on such other matters in accordance with the best judgment
of the person or persons voting said proxy.
A copy of the 1994 Annual Report of the Company is being mailed to shareholders
together with this Notice and Proxy Statement. The Annual Report contains
consolidated financial statements for the Company and its subsidiaries and the
report thereon of KPMG Peat Marwick, independent certified public accountants.
The Company will provide, upon request, a copy of the Company's Form 10-K for
the fiscal year ended December 31, 1994 as filed with the Securities and
Exchange Commission. Any such request should be in writing and addressed to the
Company at 3030 Hartley Road, Suite 390, Jacksonville, Florida 32257,
attention: Susan F. Powell, Assistant Secretary.
By Order of the Board of Directors,
/s/ Susan F Powell
------------------
Susan F. Powell, Vice President,
Assistant Secretary and Treasurer
Boca Raton, Florida
