SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
|X| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
I.C.H. CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
I.C.H. CORPORATION
9255 Towne Centre Drive, Suite 600
San Diego, California 92121
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 28, 1999
----------
To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of I.C.H. Corporation (the "Company") will be held at the
Embassy Suites Hotel, 4550 La Jolla Village Drive, San Diego, California 92121,
on May 28, 1999, at 2:00 p.m. for the following purposes:
1. The election of three persons to the Board of Directors of the Company,
each to serve a two-year term or until their respective successors are
elected and qualified.
2. To approve an increase in the number of authorized shares of common
stock of the Company from nine million (9,000,000) to 19 million
(19,000,000).
3. To approve the creation of a third class of directors, such that the
Board of Directors of the Company would be divided into three classes,
with the directors in each class elected to serve for staggered
three-year terms.
4. Ratification of the appointment of PricewaterhouseCoopers L.L.P.,
independent accountants, as the Company's independent accountants for the
ensuing year.
The enclosed Proxy Statement includes information relating to these
proposals. Additional purposes of the Annual Meeting are to transact such other
business as may properly come before the Annual Meeting.
All stockholders of record as of the close of business on April 19, 1999
are entitled to notice of and to vote at the Annual Meeting. At least a
majority of the outstanding shares of common stock of the Company present in
person or by proxy is required for a quorum.
By Order of the Board of Directors
/s/ John A. Bicks
JOHN A. BICKS
Secretary
<PAGE>
April ___ 1999
San Diego, California
THE BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN
THE COMPANY'S ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. ACCORDINGLY, PLEASE
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY, IF YOU
WISH, AND VOTE IN PERSON. YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE
PROCEDURES SET FORTH IN THE PROXY STATEMENT.
<PAGE>
Mailed to Stockholders
on or about April __, 1999
I.C.H. CORPORATION
9255 Towne Centre Drive, Suite 600
San Diego, California 92121
PROXY STATEMENT
General Information:
This Proxy Statement is furnished to stockholders of I.C.H. Corporation, a
Delaware corporation (the "Company"), in connection with the solicitation by
the Board of Directors (the "Board") of the Company of proxies in the
accompanying form for use in voting at the Annual Meeting of Stockholders of
the Company (the "Annual Meeting") to be held on May 28, 1999, at 2:00 p.m.,
local time, at the Embassy Suites Hotel, 4550 La Jolla Village Drive, San
Diego, California 92121, and any adjournment or postponement thereof.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of John A. Bicks, the Company's Secretary) a written notice of
revocation or a properly executed proxy bearing a later date, or by attending
the Annual Meeting and voting in person.
Solicitation and Voting Procedures
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy materials for the Annual Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
Company may use the services of ACS Securities Services, Inc., 5580 LBJ
Freeway, Suite 230, Dallas, Texas 75240, in soliciting proxies and, in such
event, the Company expects to pay approximately $10,000, plus out-of-pocket
expenses, for such services. The Company may conduct further solicitations
personally, telephonically or by facsimile through its officers, directors and
regular employees, none of whom would receive additional compensation for
assisting with the solicitation.
The presence at the Annual Meeting of a majority of the outstanding shares
of Common Stock of the Company, represented either in person or by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. The
close of business at April 19, 1999 has been fixed as the record date (the
"Record Date") for determining the holders of shares of Common Stock entitled
to notice of and to vote at the Annual Meeting. Each share of Common Stock
outstanding on the Record Date is entitled to one vote on all matters. As of
the Record Date, there were shares of Common Stock outstanding.
Stockholder votes will be tabulated by the persons appointed by the Board
to act as inspectors of election for the Annual Meeting. The American Stock
Exchange permits member organizations to give proxies, whether or not
instructions have been received from beneficial owners, to vote as to the
election of directors and also on matters of the type contained in Proposal
Nos. 2, 3 and 4. Shares represented by a properly executed and delivered proxy
will be voted at the Annual Meeting and, when instructions have been given by
the stockholder, will be voted in accordance with those instructions. If no
instructions are given, the shares will be voted FOR the election of each of
the three nominees for director named below and FOR Proposal Nos. 2, 3 and 4.
Abstentions and broker non-votes will each be counted as present for purposes
of determining the presence of a quorum. Abstentions will have the same effect
as a negative vote on Proposal No. 2 and Proposal No. 3 but will have no effect
on the outcome of the election of directors or Proposal No. 4. Broker non-votes
will have no effect on the outcome of the election of directors or Proposal No.
4, and will have the same effect as a negative vote on the outcome of Proposal
No. 2 and Proposal No. 3.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth information as of the Record Date with
respect to each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding shares of Common Stock. Except as
otherwise noted below, all shares of Common Stock are owned beneficially by the
individual listed with sole voting and/or investment power.
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial Percent of Shares
of Beneficial Owner Ownership Outstanding (%)(3)
- ----------------------- -------------------- -------------------
<S> <C> <C>
Lloyd I. Miller, III 369,480 13.1%
4550 Gordon Drive (Indirect)(1)
Naples, Florida 34102
James R. Arabia
c/o I.C.H. Corporation 194,500 6.9%
9255 Towne Centre Drive, (Direct)(2)
Suite 600
San Diego, California 92121
</TABLE>
- ----------
(1) Based upon the Statement of Changes in Beneficial Ownership on Form 4 dated
January 11, 1999 filed by Lloyd I. Miller, III (the "Form 4"), such shares
are held indirectly by Mr. Miller: (a) as Investment Advisor to certain
family trusts, Trust A-1, Trust A-3, Trust A-4 and Trust C; (b) as a manager
of Milfam LLC, which in turn is the managing general partner of Milfam I,
L.P. and Milfam II, L.P.; and (c) by his minor children. According to the
Form 4, 3,000 shares are owned of record by Trust A-1, 16,100 shares are
owned of record by Trust A-3, 137,798 shares are owned of record by Trust
A-4, 34,100 shares are held of record by Trust C, 152,182 shares are held by
record by Milfam I, L.P., 18,300 shares are held of record by Milfam II,
L.P., 4,000 shares are held of record by Lloyd I. Miller IV pursuant to the
Uniform Gifts to Minor Act and 4,000 shares are held of record by Alexandra
Miller pursuant to the Uniform Gifts to Minors Act. Mr. Miller has shared
voting power and shared dispositive power for all shares held of record by
the Trusts and sole voting power and sole dispositive power for all shares
held of record by Milfam I, L.P. and Milfam II, L.P.
(2) Includes vested options to purchase 18,500 shares of Common Stock. Does not
include 39,970 shares of Common Stock owned by a trust for the benefit of
Mr. Arabia's wife. Mr. Arabia is neither a trustee nor a beneficiary of the
trust and therefore disclaims beneficial ownership of such shares.
(3) Based upon 2,821,582 shares outstanding. The total number of shares
outstanding used in calculating this percentage does not include 1,957,500
shares reserved for issuance upon the exercise of stock options or warrants
granted or reserved for possible grant.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation divides the
Company's Board of Directors into two classes, with the members of each such
class serving staggered two-year terms. The Board of Directors presently
consists of seven members as follows: Class I directors, John A. Bicks, Robert
H. Drechsler, Carl D. Robinson and Raymond L. Steele, whose terms currently
expire in 2000; and Class II directors, James R. Arabia, Timothy R. Scott and
David A. Gotz, whose terms currently expire in 1999 (and, if reelected at the
Annual Meeting, in the year 2001). If Proposal 3 presented herein is approved by
the requisite vote of shareholders at the Annual Meeting, the Company
anticipates that Directors from either or both of Class I and Class II may
become Directors assigned to the newly-created Class III.
At the Annual Meeting, the stockholders will elect three directors to serve
as Class II directors. The Class II directors who are elected at the Annual
Meeting will serve until the Annual Meeting of Stockholders to be held in 2001
and until such directors' respective successors are elected or appointed and
qualify or until any such director's earlier resignation or removal. The Board
believes that nominees James R. Arabia, Timothy R. Scott and David A. Gotz will
stand for election and will, if elected, serve as such Class II directors.
However, in the event any nominee is unable or unwilling to serve as a Class II
director at the time of the Annual Meeting, the proxies may be voted for the
balance of those nominees named and for any substitute nominee designated by the
present Board or the proxy holders to fill such vacancy or for the balance of
those nominees named without nomination of a substitute, or the Board may be
reduced in accordance with the By-laws of the Company.
The affirmative vote of a plurality of all the votes cast at the Annual
Meeting, assuming a quorum is present, is necessary for the election of a
director. For purposes of the election of directors, abstentions and other
shares not voted will not be counted as votes cast and will have no effect on
the result of the vote.
James R. Arabia, director nominee, has served as Chairman of the Board,
Chief Executive Officer and President of the Company since its emergence from
bankruptcy on February 19, 1997. Mr. Arabia also serves as President of the
Company's operating subsidiaries, including Sybra, Inc. and Lyon's of
California, Inc. Prior to February 19, 1997, Mr. Arabia served as Chairman of
the Equity Committee. From 1982-1997, Mr. Arabia provided financial advisory and
investment banking services to a variety of private clients.
2
<PAGE>
Timothy R. Scott, Ph.D, director nominee, has served as a Director of the
Company since April 20, 1998. Since 1992, Dr. Scott has served as President and
Senior Pastor of a 1,200 member church located in San Diego, California. Dr.
Scott received his Ph.D. in theology from Christian University in 1981, and
served as a professor of philosophy and religion at Pacific International
College from 1981 to 1985.
David A. Gotz, director nominee, has served as a Director of the Company
since February 17, 1999, when he was appointed to the Board to fill the vacancy
created by the resignation of former Director Kenneth A. Giddens. Since 1982,
Mr. Gotz has been employed by M.L. Stern & Co., Inc., a securities
broker/dealer, where he currently holds the position of First Vice President.
Mr. Gotz is also a member of the Kemper Executive Council Advisory Board, a
17-member panel of financial representatives selected by the senior management
of Scudder Kemper Investments, Inc. to help shape investment policy, marketing
and advertising initiatives.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the shares of the Company's Common Stock
present or represented and voting at the Annual Meeting will be required to
approve this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF ALL NOMINEES NAMED ABOVE.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information as of April 14, 1999 for (i) the
members of the present Board, (ii) the executive officers of the Company and
certain operating subsidiaries and (iii) the directors and executive officers
of the Company and certain operating subsidiaries as a group:
<TABLE>
<CAPTION>
Percent of
Shares
Outstanding
Percent of (calculated on a
Number of Shares fully-diluted
First Term Shares Outstanding basis)
Name and Position Age Elected Expires (1) (%)(2) (%)(3)
- ----------------------------------------- ----- --------- --------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
James R. Arabia, Chairman 42 1997 1999 194,500(4) 6.9% 4.3%
of the Board, Chief
Executive Officer and President
John A. Bicks, Executive 39 1998 2000 50,500(5) 1.7% 1.1%
Vice President, General Counsel,
Secretary and Director
David A. Brainard, 40 -- -- 42,500(6) 1.6% *
Chief Financial Officer
Robert H. Drechsler, 35 1998 2000 66,825(7) 2.3% 1.5%
Executive Vice President
and Director
F. Edward Chappell, Senior 54 -- -- 10,500(8) * *
Vice President of Business
Development of Sybra, Inc.
David Fitnich, Chief 43 -- -- 6,500(9) * *
Operating Officer of Sybra, Inc.
David A. Gotz, Director 54 1999 1999 10,000(10) * *
Carl D. Robinson, Director 41 1997 2000 85,000(11) 3.0% 1.9%
Timothy R. Scott, Director 46 1998 2000 15,000(12) * *
Raymond L. Steele, Director 64 1998 2000 25,000(13) * *
All directors and executive officers of -- -- -- 506,325 17.9% 10.6%
the Company and certain operating
subsidiaries as a whole.
- ----------
* Beneficial ownership of less than 1% is omitted.
</TABLE>
3
<PAGE>
(1) Except as otherwise noted below, all shares of Common Stock are owned
beneficially by the individual listed with sole voting and/or investment
power. Includes vested options and options which vest within 60 days of
April 19, 1999.
(2) Assumes the exercise of vested options (and options which vest within 60
days of April 19, 1999) held only by such owner. The total number of
shares outstanding used in calculating this percentage assumes that none
of the options held by other individuals are exercised.
(3) Assumes the exercise of all options and warrants granted or reserved for
possible grant.
(4) Does not include 39,970 shares of Common Stock owned by a trust for the
benefit of Mr. Arabia's wife. Mr. Arabia is neither a trustee nor a
beneficial owner of the trust and therefore disclaims beneficial
ownership of such shares.
(5) Includes vested options to purchase 37,500 shares of Common Stock. Does
not include 4,207 shares of Common Stock held by Mr. Bicks' wife of which
Mr. Bicks disclaims beneficial ownership.
(6) Includes vested options to purchase 15,000 shares of Common Stock.
(7) Includes vested options to purchase 10,000 shares of Common Stock. Does
not include 100 shares of Common Stock held by Mr. Drechsler's minor
child.
(8) Includes vested options to purchase 8,750 shares of Common Stock.
(9) Includes vested options to purchase 15,000 shares of Common Stock.
(10) Includes vested options to purchase 10,000 shares of Common Stock. Does
not include 500 shares of Common Stock held by Mr. Gotz's wife of which
Mr. Gotz disclaims beneficial ownership.
(11) Includes vested options to purchase 40,000 shares of Common Stock.
(12) Includes vested options to purchase 15,000 shares of Common Stock.
(13) Includes vested options to purchase 15,000 shares of Common Stock.
Biographical information concerning the director nominees is set forth
above under the caption "Proposal No. 1 Election of Directors." Biographical
information concerning the remaining directors and executive officers is set
forth below.
John A. Bicks, has served as a Director of the Company since September 19,
1997 and currently serves as Executive Vice President, General Counsel and
Secretary of the Company and its operating subsidiaries. Mr. Bicks joined the
Company in April 1998. From March 1996 through March 1998, Mr. Bicks was an
attorney with the firm of Pryor, Cashman, Sherman & Flynn and served as counsel
to the Official Committee of Equity Security Holders (the "Equity Committee")
of the predecessor companies to the Company. Mr. Bicks has been a practising
attorney in New York since 1985, serving as an Assistant District Attorney in
the Manhattan District Attorney's Office from 1985-1991, and subsequently in
private practice.
David A. Brainard has served as Senior Vice President and Chief Financial
Officer of the Company since February 23, 1998. From 1996-1997, Mr. Brainard
served as Senior Vice President and Chief Financial Officer of Olan Mills,
Inc., a $400 million retail photography chain with over 850 retail locations.
From 1993-1996, Mr. Braindard served as Senior Vice President and Chief
Financial Officer of Ben Franklin Retail Stores, Inc., a $500 million
franchisor, wholesaler and retailer.
F. Edward Chappell has served as Senior Vice President of Business
Development for Sybra, Inc. since November 1, 1997. Mr. Chappell has been with
Sybra since March 5, 1995 when he was hired as Director of Real Estate. Mr.
Chappell has over 25 years of real estate experience, including as Vice
President of Real Estate for Rite Aid Drug Stores, and Director of Development
for Taco Bell Corporation.
Robert H. Drechsler, has served as a Director of the Company since
February 2, 1998, and as Executive Vice President of the Company effective
February 15, 1999. From December 1991 through April 1999, Mr. Drechsler was a
corporate attorney (partner since January 1997) with the firm of Pryor Cashman
Sherman & Flynn LLP, legal counsel to the Company. From October 1998 through
December 1991, Mr. Drechsler was a corporate attorney with Skadden, Arps,
Slate, Meagher & Flom.
David Fitnich has served as Chief Operating Officer of Sybra, Inc. since
December 8, 1997, and as Chief Operating Officer of Lyon's of California, Inc.
since December 14, 1998. From 1989-1997, Mr. Fitnich served as Regional Vice
President of Sybra, Inc.'s Southeastern Region (1989-1994) and then its
Northern Region (1994-1997). Mr. Fitnich has served in various capacities with
Sybra, Inc. since 1981.
4
<PAGE>
Carl D. Robinson, has served as a Director of the Company since its
emergence from bankruptcy on February 19, 1997. Prior to that time, Mr.
Robinson served as a member of the Equity Committee. Mr. Robinson is also the
owner of Southwestern Insurance marketing, a life insurance and annuity
brokerage firm located in Amarillo, Texas, with 120 licensed insurance agents
throughout Texas, Oklahoma, New Mexico, and Colorado. From 1987 to 1994, Mr.
Robinson was a Regional Director of Southwestern Life Insurance Company. Since
1994, he has been a Managing General Agent for Southwestern Life Insurance
Company. Mr. Robinson is a Chartered Financial Consultant and a Certified Life
Underwriter. Mr. Robinson has also served as President and as a member of the
board of directors of the Amarillo Area CLU Association.
Raymond L. Steele, has served as a Director of the Company since February
2, 1998. Mr. Steele is a retired executive with experience in investment
banking and investment management, who serves or has served as a director of
Robinson Humphrey, Classic Car Investments, Webcraft, Modernfold, Orion,
Emerson Radio, Pharmhouse, Video Services Corp. and GFTA, and as an outside
consultant to Pizza Hut.
Certain Relationships and Related Transactions
Certain directors and executive officers of the Company (or members of
their immediate families or related trusts) and persons who hold more than 5%
of the outstanding shares of Common Stock had direct or indirect interests in
certain transactions of the Company in the last fiscal year as follows:
Effective September 1, 1998, the Company entered into an Amended and
Restated Employment Agreement with James R. Arabia. See "Employment Contracts,
Termination of Employment--James R. Arabia Employment Agreement".
In connection with Mr. Arabia's exercise of his vested stock options to
purchase 176,000 shares of Common Stock at an exercise price of $2.17 per
share, the Company accepted promissory notes in the aggregate principal amount
of $381,920 in lieu of cash from Mr. Arabia. Such promissory notes are secured
by a portion of the Common Stock purchased by Mr. Arabia through the exercise
of such vested stock options.
Robert H. Drechsler, Executive Vice President and Director, was a partner
with the firm of Pryor Cashman Sherman & Flynn LLP during 1998. That firm
provided significant legal services to the Company in 1998.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who beneficially own more than 10% of the Company's
Common Stock to file initial reports of ownership and reports of changes of
ownership (Forms 3, 4 and 5) of the Common Stock with the SEC and the American
Stock Exchange. Officers, directors and greater than 10% holders are required
by SEC regulations to furnish the Company with copies of such forms that they
file.
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company, the Company believes that for
the fiscal year 1998, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with,
with the exception of Statements of Changes in Beneficial Ownership on Form 4
filed by John A. Bicks dated May 6, 1998, and by Robert H. Drechsler dated May
6, 1998 and August 20, 1998.
Meetings of Committees and the Board of Directors
During 1998, the entire Board of Directors met seven times. With the
exception of former Director Kenneth E. Giddens, no Director attended fewer
than 75 percent of all of the meetings of the Board of Directors held during
1998.
The Board of Directors has two committees: the Compensation and Stock
Option Committee and the Audit and Finance Committee. Upon appointment to a
committee, no member of a committee attended fewer then 100% of all the
meetings of the Committee of which he was a member. The Board of Directors does
not have a nominating committee or a committee performing the functions of a
nominating committee.
During 1998, the Audit and Finance Committee consisted of Kenneth Giddens
(Chairman), Raymond L. Steele, Timothy R. Scott and Carl D. Robinson. Prior to
his resignation from the Board on April 20, 1998, Michael D. Dunn served as a
member of the Audit and Finance Committee. The Audit and Finance Committee
makes recommendations concerning the engagement of independent accountants,
reviews with the independent accountants the scope and results of the audit
engagement, approves professional services provided by the independent
accountants, reviews the
5
<PAGE>
independence of the independent accountants, considers the range of audit and
non-audit fees and reviews the adequacy of the Company's internal accounting
controls. The Audit and Finance Committee met twice during 1998.
During 1998, the Compensation and Stock Option Committee consisted of Carl
D. Robinson, Raymond L. Steele and Robert H. Drechsler. Prior to his
resignation from the Board on April 20, 1998, Michael D. Dunn served as a
member of the Compensation and Stock Option Committee. The Compensation and
Stock Option Committee establishes remuneration levels for executive officers
of the Company and implements incentive programs, including the Employee Stock
Option Plan and the Director Stock Option Plan. The Compensation and Stock
Option Committee met eight times during 1998.
Compensation of Directors
Directors' Fees. Each non-employee director is paid a monthly fee of
$1,250, plus $250 for each committee chaired. Each director is also reimbursed
for expenses incurred in attending director and committee meetings.
Directors' Stock Option Plan. Each non-employee director is granted a
non-qualified option to purchase 25,000 shares of Common Stock in connection
with the director's initial election or appointment to the Board. These grants
under the Director Plan are made at an exercise price equal to the "fair market
value" (as defined under the Director Stock Option Plan) of the shares of
Common Stock subject to such option at the time of the grant and severally vest
over three years. The Compensation and Option Committee may make additional
discretionary option grants to eligible directors, consistent with the terms of
the Plan. The Board may amend, suspend or discontinue the Director Plan at any
time.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation of the chief executive officer and the four most highly
compensated executive officers of the Company and its subsidiaries other than
the chief executive officer in 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other Annual Securities Underlying
Name and Principal Position Year Salary($) Bonus($) Compensation($) Options (#)
- ----------------------------- ------ ----------- ---------------- ----------------- ----------------------
Annual Compensation
------------------------------
<S> <C> <C> <C> <C> <C>
James R. Arabia ............. 1998 321,000 100,000 5,400(1) 74,000(2)
Chairman of the Board,
President and Chief
Executive Officer
John A. Bicks ............... 1998 133,557 104,082 -- 80,000(3)
Executive Vice President,
General Counsel and
Secretary
David A. Brainard ........... 1998 128,051 102,500(4) -- 60,000(5)
Chief Financial Officer
David Fitnich ............... 1998 140,375 114,211(6) -- 60,000(7)
Chief Operating Officer
Of Sybra, Inc.
F. Edward Chappell .......... 1998 117,346 59,577 8,000(8) 35,000(9)
Senior Vice President of
Business Development
of Sybra, Inc.
</TABLE>
- ----------
(1) Represents Mr. Arabia's 1998 car allowance.
(2) Represents options to acquire shares of Common Stock at an exercise price
of $4.00 per share, 18,500 of which vested in 1998, and the balance of
which vest in three equal installments on September 1, 2000, September 1,
2001 and September 1, 2002.
(3) Represents options to acquire shares of Common Stock, 60,000 of which have
an exercise price of $3.44 (30,000 of which are currently vested and
15,000 of which vest on January 1 of each of 2000 and 2001), 10,000 of
which have an exercise price of $4.00 (5,000 of which are currently vested
and 2,500 of which vest on January 1 of each of 2000 and 2001), and 10,000
of which have an exercise price at $5.63 (2,500 of which are currently
vested and 2,500 of which vest on January 1 of each of 2000, 2001 and
2002).
(4) This bonus amount, payable with respect to 1998, was paid to Mr. Brainard
in 1999.
(5) Represents options to acquire shares of Common Stock at an exercise price
of $3.19 per share, 15,000 of which vested in 1998 and 15,000 of which
vest on February 23rd of each of 2000, 2001 and 2002.
(6) Includes $39,211 in bonus payable with respect to 1997 which was paid to
Mr. Fitnich in 1998.
(7) Represents options to acquire 35,000 shares of Common Stock at an exercise
price of $3.80 per share, 8,750 of which vested in 1998 and 8,750 of which
vest on April 30th of each of 1999, 2000 and 2001 and options to acquire
25,000 shares of Common Stock at an exercise price of $3.75 per share,
6,250 of which vested in 1998, and 6,250 of which vest on December 8th of
each of 1999, 2000 and 2001.
(8) Represents Mr. Chappell's 1998 car allowance.
(9) Represents options to acquire 28,000 shares of Common Stock at an exercise
price of $3.80 per share, 7,000 of which vested during 1998 and 7,000 of
which vest on April 30th of each of 1999, 2000 and 2001 and options to
acquire 7,000 shares of Common Stock at an exercise price of $3.75 per
share, 1,750 of which vested during 1998 and 1,750 of which vest on
December 8th of each of 1999, 2000 and 2001.
7
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
Individual Grants
-------------------------
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to
Options/ Employees Exercise
SARs Granted In Fiscal Price Expiration
Name (#)(2) Year(%) ($/Sh) Date(3) 5%($) 10%($)
- --------------------------- -------------- ------------- --------- ----------- --------- --------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term (4)
--------------------
<S> <C> <C> <C> <C> <C> <C>
James R. Arabia 74,000 20.1% 4.00 9/01/08 186,203 471,811
Chairman of the Board,
Chief Executive Officer
and President
John A. Bicks 10,000 2.7% 4.00 9/01/08 25,206 63,813
Executive Vice President, 60,000 16.3% 3.44 3/12/08 129,847 329,003
General Counsel and
Secretary
David A. Brainard 60,000 16.3% 3.19 2/23/08 120,410 305,093
Chief Financial Officer
F. Edward Chappell 10,000 2.71% 3.50 12/17/08 22,055 55,836
Senior Vice President of 10,000 2.71% 4.00 9/01/08 25,206 63,813
Business Development of
Sybra, Inc.
</TABLE>
- ----------
(1) The Company has not, to date, granted any stock appreciation rights under
the Employee Stock Option Plan.
(2) The Company has established Stock Option Plans for the purpose of
attracting and retaining executive officers, directors and employees.
Options granted under the plans are exercisable for shares of Common
Stock.
(3) Each option granted in 1998 has a ten-year term.
(4) The dollar amounts set forth under these columns are the result of
calculations at the 5% and 10% rates set by the Securities and Exchange
Commission ("SEC") and therefore are not intended to forecast possible
further appreciation, if any, in the Company's stock price.
Employment Contracts, Termination of Employment
James R. Arabia Employment Agreement. Effective September 1, 1998, James
R. Arabia and the Company amended and restated Mr. Arabia's employment
agreement with the Company (the "Amended and Restated Arabia Agreement")
providing for an initial three (3) year term, subject to automatic one-year
extensions. Mr. Arabia's annual base salary is $475,000, with increases within
the discretion of the Board or the Compensation Committee. Mr. Arabia is also
eligible to receive an annual bonus based upon a formula and subject to the
attainment of certain performance goals. Mr. Arabia was previously granted
options to purchase 176,000 shares of Common Stock, all of which options have
vested. In the event Mr. Arabia remains in the continuous employ of the Company
through December 31, 2001 (unless earlier terminated by the Company without
cause, by Mr. Arabia for good reason, or upon the death or disability of Mr.
Arabia), all loans (together with accrued interest thereon) associated with the
exercise of Mr. Arabia's initial 176,000 options to purchase shares of Common
Stock shall be forgiven and Mr. Arabia shall be entitled to a lump sum gross-up
payment to eliminate any tax consequences that may result from such loan
forgiveness. In connection with the Amended and Restated Arabia Agreement, Mr.
Arabia was granted options to purchase an additional 74,000 shares of Common
Stock, which options vest one-quarter upon grant and one-quarter upon each of
the first, second and third anniversaries of the date of grant. In addition,
the Company has agreed, at such time as Mr. Arabia elects
8
<PAGE>
(which election was made on January 20, 1999), to make a loan of $350,000 to
Mr. Arabia, the proceeds of which will be used by Mr. Arabia in connection with
the purchase of a principal residence (the "Loan"). The Loan (and interest
thereon) is repayable over a ten year period. Should the Company terminate Mr.
Arabia's employment other than for cause or should he terminate his employment
for good reason or following a change in control (as defined in the Amended and
Restated Arabia Employment Agreement), Mr. Arabia is entitled to a severance
payment equal to four times the sum of Mr. Arabia's (i) current base salary and
(ii) average bonus paid during the two immediately preceding full fiscal years
of employment. In addition, upon such termination, the vesting of Mr. Arabia's
options shall be accelerated. Mr. Arabia is required to devote substantially
all of his business time to the affairs of the Company.
Compensation Committee Interlocks and Insider Participation
There are no interlocking relationships involving the Company's Board
which require disclosure under the executive compensation rules of the SEC.
Board Compensation and Stock Option Committee Report on Executive Compensation
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph which follows shall not be deemed to be
incorporated by reference into any such filings.
The amount of compensation paid by the Company to James R. Arabia in the
year ended December 31, 1998, in the case of base salary, was determined based
on an employment agreement between the Company and Mr. Arabia. In the case of
stock option grants and bonuses and with respect to the amount of compensation
paid by the Company during 1998 to executive officers who did not have
employment agreements with the Company, such determinations were made by the
Compensation and Stock Option Committee of the Board based upon the criteria
set forth below. In 1998, executive compensation to the named officers
consisted primarily of base salary, grants of stock options under the Company's
Employee Stock Option Plan that vest over time, and bonuses paid to James R.
Arabia, John A. Bicks, David A. Brainard, David Fitnich and F. Edward Chappell.
Executive Compensation Philosophy. The Compensation and Stock Option
Committee will annually consider the appropriate combination of cash and
option-based compensation and weigh the competitiveness of the Company's
overall compensation arrangements in relation to comparable fast food
franchisees. From time to time the Compensation and Stock Option Committee may
retain compensation and other management consultants to assist with, among
other things, structuring the Company's various compensation programs and
determining appropriate levels of salary, bonus and other compensatory awards
payable to the Company's executive officers and key employees, as well as to
guide the Company in the development of near-term and long-term individual
performance objectives necessary to achieve long-term profitability.
The Compensation and Stock Option Committee believes that a fundamental
goal of the Company's executive compensation program should be to provide
incentives to create value for the Company's stockholders.
Base Salaries. The base compensation for the Company's executive officers
in 1998 was established in a manner consistent with the provisions of existing
employment agreements between the Company and James R. Arabia, and through
negotiations between the Company and the executive officers who did not have
employment agreements with the Company. The base compensation levels were set
to compensate the executive officers for the functions they will perform as
well as to be consideration for certain non-competition provisions contained in
certain executive officers' employment agreements. While no specific formula
was used to determine base compensation levels for the Company's executive
officers, the Company believes that the base salaries are generally in line
with those of comparable fast food franchisees. Base salaries will be reviewed
annually and may be increased by the Compensation and Option Committee in
accordance with certain criteria determined primarily on the basis of growth of
revenues and EBITDA and on the basis of certain other factors, which include
(i) individual performance, (ii) the functions performed by the Executive
Officer, and (iii) changes in the compensation peer group in which the Company
competes for executive talent. The weight given such factors by the
Compensation and Stock Option Committee may vary from individual to individual.
Annual Bonus Compensation. The Company's policy of awarding annual cash
bonuses is designed to specifically relate executive pay to Company and
individual performance. As a pay-for-performance program, cash
9
<PAGE>
bonuses provide financial rewards for the achievement of substantive Company
and personal objectives. Actual awards paid are based primarily on actual
Company performance.
Employee Stock Option Plan. Awards are granted under the Employee Stock
Option Plan based on a number of factors, including (i) the executive officer's
or key employee's position in the Company, (ii) his or her performance and
responsibilities, (iii) the extent to which he or she already holds an equity
stake in the Company, (iv) equity participation levels of comparable executives
and key employees at other companies in the compensation peer group and (v)
individual contribution to the success of the Company's financial performance.
However, the Employee Stock Option Plan does not provide any formulated method
for weighing these factors, and a decision to grant an award is based primarily
upon the Compensation and Stock Option Committee's evaluation of the past as
well as the future anticipated performance and responsibilities of the
individual in question. During 1998, an aggregate of 224,000 options at
exercise prices ranging from $3.19 per share to $4.00 per share were granted to
Messrs. Arabia, Bicks, Brainard and Chappell.
The Company's Employee Stock Option Plan relates closely to traditional
forms of equity-oriented compensation in the fast food franchisee industry. The
purpose of the option grants is to aid the Company in attracting and retaining
quality employees, all advancing the interest of the Company's stockholders, by
offering employees an incentive to maximize their efforts to promote the
Company's economic performance. In addition, to assist the Company in retaining
employees and encouraging them to seek long-term appreciation in the value of
the Company's stock, options generally are not exercisable immediately upon
grant, but instead vest over a period of years. Accordingly, an employee must
remain with the Company for a period of years to enjoy the full economic
benefit of an option.
401(k) Savings Plan. The Company also maintains a tax-qualified 401(k)
savings plan for its eligible employees known as the "I.C.H. Corporation 401(k)
Savings and Retirement Plan" ("401(k) Plan"). Employees who have attained age
21 and completed one year of service with the Company are eligible to
participate and may elect to defer up to 15% of their base pay on a pre-tax
basis to the 401(k) Plan. The Company may make discretionary contributions,
including matching contributions, to the 401(k) Plan on behalf of eligible
participants in any plan year. Participants are always 100% vested in their
pre-tax contributions and will become vested in any matching contributions made
on their behalf after one year of service with the Company at a rate of 20% per
year becoming 100% vested after a total of five years of service with the
Company. The assets of the 401(k) Plan are held in trust and a separate account
is established for each participant. A participant may receive a distribution
of his vested account balance in the 401(k) Plan in a single sum or installment
payment or in the form of an annuity upon his termination of service with the
Company.
Chief Executive Officer Compensation. James R. Arabia, the Chief Executive
Officer of the Company since its emergence from bankruptcy on February 19,
1997, received a base salary during 1998 of $321,000 pursuant to the employment
agreement entered into with him. Mr. Arabia also received options to purchase
74,000 shares of Common Stock at an exercise price of $4.00 per share under the
Employee Stock Option Plan during 1998. In respect of 1998, Mr. Arabia was also
paid a cash bonus of $100,000. The Compensation and Stock Option Committee
recognizes Mr. Arabia's contributions to the Company's operations and attempts
to ensure that the Chief Executive Officer's compensation is commensurate with
the compensation of chief executive officers of competitive corporations.
COMPENSATION AND STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
RAYMOND P. STEELE
CARL D. ROBINSON
ROBERT H. DRECHSLER
10
<PAGE>
Performance Graph
The Company's Common Stock commenced trading on the American Stock
Exchange on July 23, 1997. The following graph compares total stockholder
returns from February 19, 1997 through December 31, 1998 to the Standard &
Poor's 500 Stock Index ("S&P 500 Index") and to the Nation's Restaurant News
Index ("NRN Index"). The graph assumes that the value of the investment in the
Company's Common Stock and in the S&P 500 and NRN indices was $100 at February
19, 1997 and that all dividends were reinvested. The price of the Common Stock
on February 19, 1997 (on which the graph is based) was $2.17.
The stockholder return shown on the following graph is not necessarily
indicative of future performance and the Company does not believe that the
graph is particularly meaningful.
Performance Comparison
The graph below provides a comparison of the Company's Common Stock
cumulative total shareholder return with the S&P 500 Index and the NRN Index.
This graph assumes the investment of $100 on February 19, 1997 in the Company's
Common Stock, the S&P 500 Index and the NRN Index, and reinvestment of
dividends at the monthly closing stock proces.
Date I.C.H. Corporation S&P 500 NRN Index
- ---------- -------------------- --------- ----------
2/19/97 100 100 100
12/31/97 167 120 101
12/31/98 167 154 [ ]
PROPOSAL NO. 2
The articles of incorporation of the Company currently authorize the
Company to issue up to 9,000,000 shares of Common Stock and 1,000,000 shares of
Preferred Stock. The Board of Directors has no immediate plans to issue a
significant number of additional shares of Common Stock. However the larger
number of authorized shares proposed herein will provide the Company with the
certainty and flexibility to undertake various types of transactions, including
stock splits, financings, acquisitions, increases in the shares reserved for
issuance pursuant to the Company's two stock option plans, or other corporate
transactions not yet determined.
The Board of Directors believes that the availability of additional
authorized but unissued shares will provide the Company with the flexibility to
issue Common Stock for appropriate corporate purposes which may be identified
in the future, such as to raise equity capital, to make acquisitions through
the use of stock, to establish strategic relationships with other companies and
to adopt additional employee benefit plans or reserve additional shares for
issuance under such new or existing plans.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of the holders of a majority of the outstanding
shares of the Company's Common Stock will be required to approve this proposal.
As a result, abstentions and broker non-votes will have the same effect as a
vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF THE COMPANY TO 19,000,000
SHARES.
PROPOSAL NO. 3
The Company's Board of Directors currently consists of seven members who
are divided into two classes: four directors are members of Class I and three
directors are members of Class II. Directors in each class are elected to
two-year terms and stand for election on a rotating basis every year at the
Company's Annual Meeting. This method of electing directors is intended to make
changes in the composition of the Board of Directors more difficult, and thus
make a potential change in control of a corporation a lengthier and more
difficult process. As currently classified, however, a majority of the
Company's Board of Directors could be replaced in a single Annual Meeting,
severely limiting the utility of the classified board structure for the Company
and its shareholders. The Board of Directors has thus unanimously approved this
proposal to create an additional class of directors such that the seven members
of the Board would be divided among three classes, each to be elected to
three-year terms and stand for election on a rotating basis every year at the
Annual Meeting.
11
<PAGE>
The Board of Directors believes that dividing the directors into three
classes is advantageous to the Company and its shareholders because by
providing that directors will serve three-year terms, the likelihood of
continuity and stability in the policies formulated by the Board will be
enhanced. The Board of Directors also believes that the proposed three-class
staggered board, if adopted, would effectively reduce the possibility that a
third party could effect a sudden or surprise change in control of the
Company's Board of Directors. Such a classified board would serve to ensure
that the Board and management, if confronted by a surprise proposal from a
third party who has acquired a block of the Company's Common Stock, will have
sufficient time to review the proposal and appropriate alternatives to the
proposal and to attempt to negotiate a better transaction, if possible, for the
shareholders.
The Board of Directors believes that if a potential acquiror were to
purchase a significant or controlling interest in the Company, such potential
acquiror's ability to remove the Company's directors and obtain control of the
Board and thereby remove the Company's management would severely curtail the
Company's ability to negotiate effectively with such potential acquiror. The
threat of obtaining control of the Board would deprive the Board of the time
and information necessary to evaluate the proposal, to study alternative
proposals and to help ensure that the best price is obtained in any transaction
involving the Company which may ultimately be undertaken. A classified board
such as that proposed herein is designed to reduce the vulnerability of the
Company to an unsolicited takeover proposal, particularly a takeover proposal
that does not contemplate the acquisition of all of the Company's outstanding
shares, or an unsolicited proposal for the restructuring or sale of all or a
part of the Company.
Since the implementation of the classified Board proposed herein will
increase the amount of time required for a takeover bidder to obtain control of
the Company without the cooperation of the Board, even if the takeover bidder
were to acquire a majority of the Company's outstanding Common Stock, the
existence of such a classified board could tend to discourage certain tender
offers which stockholders might feel would be in their best interests. Because
tender offers for control usually involve a purchase price higher than the
current market price, the implementation of the classified Board proposed
herein could also discourage open market purchases by a potential takeover
bidder. Such tender offers or open market purchases could increase the market
price of the Company's Common Stock, enabling stockholders to sell their shares
at a price higher than that which would otherwise prevail. In addition, the
implementation of the classified Board as proposed herein could make the
Company's Common Stock less attractive to persons who invest in securities in
anticipation of an increase in price if a takeover attempt develops. Since
these proposed provisions would make the removal of directors more difficult,
it will increase the directors' security in their positions and, since the
Board has the power to retain and discharge management, could perpetuate
incumbent management.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of the classification of the Board of Directors into three
classes as proposed herein will require the affirmative vote of the holders of
seventy-five percent (75%) of the outstanding shares of Common Stock of the
Company. As a result, abstentions and broker non-votes will have the same
effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE CLASSIFICATION OF THE
BOARD OF DIRECTORS INTO THREE CLASSES.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers L.L.P. served as the Company's independent
accountants for the fiscal year ended December 31, 1998 and has been appointed
by the Board of Directors to continue as the Company's independent accountants
for the fiscal year ending December 31, 1999. In the event that ratification of
this appointment of auditors is not approved by the affirmative vote of a
majority of votes cast on the matter, then the appointment of independent
accountants will be reconsidered by the Board of Directors. Unless marked to
the contrary, proxy received will be voted for RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS L.L.P. AS THE INDEPENDENT ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1999.
A representative of PricewaterhouseCoopers L.L.P. is expected to be
present at the annual meeting. The representative will have an opportunity to
make a statement and will be able to respond to appropriate questions.
VOTE REQUIRED AND RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of the shares of the Company's Common
Stock present or represented and voting at the Annual Meeting will be required
to approve this proposal.
12
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS L.L.P. AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1999.
SHAREHOLDER PROPOSALS
To be considered for presentation at the annual meeting of the Company's
stockholders to be held in 1999, a stockholder proposal must be received by
John A. Bicks, Secretary, I.C.H. Corporation, 9255 Towne Centre Drive, Suite
600, San Diego, California 92121, no later than December 24, 1999.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
to the annual meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof and accordance with the judgments of the persons voting the
proxies.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ John A. Bicks
JOHN A. BiCKS
Secretary
Date: April __, 1999
San Diego, California
13
<PAGE>
APPENDIX
A-FORM OF PROXY
PROXY
I.C.H. CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) James R. Arabia, John A. Bicks and
David A. Brainard, or any of them, lawful attorneys and proxies of the
undersigned, with full power of substitution, for and in the name, place and
stead of the undersigned to attend the Annual Meeting of Stockholders of I.C.H.
Corporation to be held at the Embassy Suites Hotel, 4550 La Jolla Village Drive,
San Diego, California on Friday, May 28, 1999, at 10:00 A.M., local time, and
any adjournment(s) or postponement(s) thereof, with all powers the undersigned
would possess if personally present, and to vote the number of shares the
undersigned would be entitled to vote if personally present.
This proxy when properly executed will be voted in the manner described
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for Proposals 1, 2, 3 and 4. Any prior proxy is hereby revoked.
(to be signed on other side)
FOLD AND DETACH HERE
The Board of Directors recommends a vote "FOR" proposals number 1, 2 and 3.
PROPOSAL 1: The Election of Instructions: To
Directors: James R. withhold authority to
Arabia, Timothy R. Scott, vote for any individual
and David A. Gotz nominee write that
nominee's name here:
FOR all WITHHOLD --
nominees listed AUTHORITY
above (except to vote
as marked to for all
the contrary) nominees
|_| listed
above
|_|
PROPOSAL 2: Approval of an increase in the number of authorized shares of Common
Stock of the Company from nine million (9,000,000) to nineteen million
(19,000,000).
FOR AGAINST ABSTAIN
|_| |_| |_|
PROPOSAL 3: Approval of the creation of a third class of directors, such that
the Board of Directors of the Company would be divided into three classes,
with the directors in each class elected to serve for staggered three-year
terms.
FOR AGAINST ABSTAIN
|_| |_| |_|
PROPOSAL 4: Ratification of the appointment of PricewaterhouseCoopers L.L.P. as
the independent auditors of the Company.
FOR AGAINST ABSTAIN
|_| |_| |_|
In accordance with their
discretion, said
Attorneys and Proxies are
authorized to vote upon
such other matters or
proposals not known at
the time of solicitation
of this proxy which may
properly come before the
meeting.
19
<PAGE>
Please sign exactly as
your name appears at the
left. When shares are
held by joint tenants,
both should sign. When
signing as attorney,
executor, administrator,
trustee or corporation,
please sign in full
corporate name by
president or other
authorized person. If a
partnership, please sign
in partnership name by
authorized person.
Dated: , 1999
Signature
(Signature if held
jointly)
PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY
CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE, THANK
YOU
20
