<PAGE>
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
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 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)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
I.C.H. CORPORATION
9255 TOWNE CENTRE DRIVE, SUITE 600
SAN DIEGO, CALIFORNIA 92121
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 2000
------------------------
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 26, 2000, at 2:00 p.m. for the following purposes:
1. The election of four 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. Ratification of the appointment of PricewaterhouseCoopers LLP,
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 17, 2000 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
April 21, 2000
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 24, 2000
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 26, 2000, 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 Registrar and Transfer Company, 311 Cox Street.
Roselle, NJ 07203, in soliciting proxies and, in such event, the Company expects
to pay less than $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 17, 2000 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 2,955,167 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
No. 2. 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
four nominees for director named below and FOR Proposal No. 2. Abstentions and
broker non-votes will each be counted as present for purposes of determining the
presence of a quorum, but will have no effect on the outcome of the election of
directors or Proposal No. 2. Broker non-votes will have no effect on the outcome
of the election of directors or Proposal No. 2.
<PAGE>
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.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF SHARES
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING (%)(3)
- ------------------- -------------------- ------------------
<S> <C> <C>
Lloyd I. Miller, III..................... 359,480(1) 12.41%
4550 Gordon Drive
Naples, Florida 34102
James R. Arabia.......................... 289,900(2) 10.0%
9255 Towne Centre Drive
San Diego, California 92121
</TABLE>
- ------------------------
(1) Such shares are variously held directly or indirectly by Mr. Miller as
follows: (a) as investment advisor to the trustee of certain family trusts;
(b) as a manager of a limited liability company, which in turn is the
managing general partner of certain limited partnerships; (c) as custodian
of certain accounts established under the Florida Uniform Gift to Minors Act
for the benefit of his minor children; (d) as an individual; and (e) as a
trustee of certain trusts. Mr. Miller has shared voting power and shared
dispositive power with respect to 180,998 of these shares, and sole voting
power and sole dispositive power with respect to the remaining 178,482
shares.
(2) Includes vested options to purchase 50,000 shares of Common Stock. Does not
include 25,000 shares of Common Stock held by a trust for the benefit of
Mr. Arabia's wife. Mr. Arabia is neither a trustee nor a beneficiary of that
trust and therefore disclaims beneficial ownership of those shares.
(3) Based upon 2,894,390 shares outstanding. The total number of shares
outstanding used in calculating this percentage does not include shares
reserved for issuance upon the exercise of stock options or warrants granted
or reserved for possible grant.
2
<PAGE>
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, if reelected at the Annual Meeting, in the year 2002); and
Class II directors, James R. Arabia, Timothy R. Scott and David A. Gotz, whose
terms currently expire in 2001.
At the Annual Meeting, the stockholders will elect four directors to serve
as Class I directors. The Class I directors who are elected at the Annual
Meeting will serve until the Annual Meeting of Stockholders to be held in 2002
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 John A. Bicks, Robert H. Drechsler, Carl D. Robinson and
Raymond L. Steele will stand for election and will, if elected, serve as such
Class I directors. However, in the event any nominee is unable or unwilling to
serve as a Class I 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.
JOHN A. BICKS, director nominee, 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 LLP 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 to 1991,
and subsequently in private practice.
ROBERT H. DRECHSLER, director nominee, has served as a Director of the
Company since February 2, 1998, and as Executive Vice President of the Company
since 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 1988
through December 1991, Mr. Drechsler was a corporate attorney with Skadden,
Arps, Slate, Meagher & Flom.
CARL D. ROBINSON, director nominee, 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, director nominee, 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 Modernfold, Orion, Emerson, and Video Services Corp.
3
<PAGE>
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 RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information as of April 21, 2000 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
FIRST PERCENT OF (CALCULATED ON A
ELECTED NUMBER OF SHARES FULLY-DILUTED
OR TERM SHARES OUTSTANDING BASIS)
NAME AND POSITION AGE APPOINTED EXPIRES (1) (%)(2) (%)(3)
- ----------------- -------- --------- -------- ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James R. Arabia, Chairman of the 289,900 (4)
Board, Chief Executive Officer and
President.......................... 43 1997 2001 9.8 7.2
John A. Bicks, Executive Vice 104,915 (5)
President, General Counsel,
Secretary And Director............. 40 1997 2000 3.6 2.6
Glen V. Freter, Senior Vice President 16,790 (6)
and Chief Financial Officer........ 37 -- -- * *
Robert H. Drechsler, Executive Vice 121,940 (7)
President and Director............. 36 1998 2000 4.2 3.0
F. Edward Chappell, Senior Vice 54,140 (8)
President of Business Development
of Sybra, Inc...................... 55 -- -- 1.9 1 .4
David Fitnich, Chief Operating 39,090 (9)
Officer of Sybra, Inc. and Lyon's
of California, Inc................. 44 -- -- 1.4 1 .0
David A. Gotz, Director.............. 55 1999 2001 16,250(10) * *
Carl D. Robinson, Director........... 42 1997 2000 97,500(11) 3.4 2.4
Timothy R. Scott, Director........... 47 1998 2001 21,250(12) * *
Raymond L. Steele, Director.......... 65 1998 2000 32,500(13) 1.1 *
All directors and executive officers 794,275
of the Company and certain
operating subsidiaries as a
whole.............................. -- -- -- 25.1 19.9
</TABLE>
- ------------------------
* Beneficial ownership of less than 1% is omitted.
(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 21, 2000.
(2) Assumes the exercise of vested options (and options which vest within
60 days of April 21, 2000) 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
<PAGE>
(4) Includes vested options to purchase 50,000 shares of Common Stock. Does not
include 25,000 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 17,500 shares of Common Stock.
(6) Includes vested options to purchase 13,750 shares of Common Stock.
(7) Includes vested options to purchase 17,500 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 35,750 shares of Common Stock.
(9) Includes vested options to purchase 30,000 shares of Common Stock.
(10) Includes vested options to purchase 15,000 shares of Common Stock. Does not
include 2,645 shares of Common Stock held by Mr. Gotz's wife of which
Mr. Gotz disclaims beneficial ownership.
(11) Includes vested options to purchase 45,000 shares of Common Stock.
(12) Includes vested options to purchase 20,000 shares of Common Stock.
(13) Includes vested options to purchase 20,000 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.
JAMES R. ARABIA 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.
TIMOTHY R. SCOTT, PH.D 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 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 the late 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 helps shape investment policy, marketing
and advertising initiatives
GLEN V. FRETER has served as Senior Vice President and Chief Financial
Officer of the Company since October 1, 1999. Mr. Freter joined the Company in
March, 1998, and served as Vice President, Controller and Senior Financial
Analyst prior to assuming his current position. From 1994 to 1998, Mr. Freter
served as chief financial officer of Islands Restaurants, a regional
full-service restaurant chain. From 1986 to 1994, Mr. Freter was an audit
manager with Arthur Andersen LLP.
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.
5
<PAGE>
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 through 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.
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, 1999, 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".
Effective September 1, 1999, the Company entered into an Employment
Agreement with John A. Bicks. See "Employment Contracts, Termination of
Employment--John A. Bicks Employment Agreement".
Effective September 1, 1999, the Company entered into an Employment
Agreement with Robert H. Drechsler. See "Employment Contracts, Termination of
Employment--Robert H. Drechsler Employment Agreement".
Prior to joining the Company in February, 1999, Robert H. Drechsler,
Executive Vice President and Director, was a partner with the firm of Pryor
Cashman Sherman & Flynn LLP. That firm provided significant legal services to
the Company in 1999.
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 Securities and Exchange Commission 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. The Company believes that for the year 1999, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were timely complied with, with the exception of a Statement
of Changes in Beneficial Ownership on Form 4 filed by Robert H. Drechsler dated
April 8, 1999.
MEETINGS OF COMMITTEES AND THE BOARD OF DIRECTORS
During 1999, the entire Board of Directors met seven times, including
telephonic and in-person meetings. No Director attended fewer than 75 percent of
all of the meetings of the Board of Directors held during 1999.
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 1999, the Audit and Finance Committee consisted of Carl D. Robinson
(Chairman), Raymond L. Steele and David A. Gotz. 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
6
<PAGE>
accountants, reviews the 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 once during
1999. The members of the Audit and Finance Committee are independent under the
criteria set forth by the American Stock Exchange in Section 121(A) of the
listing standards of that exchange. As of the date hereof, the Audit and Finance
Committee has not adopted a written charter.
During 1999, the Compensation and Stock Option Committee consisted of
Raymond L. Steele (Chairman), Carl D. Robinson, Timothy Scott and Robert H.
Drechsler. 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 four times during 1999.
COMPENSATION OF DIRECTORS
DIRECTORS' FEES. Each non-employee director is paid a monthly fee of
$1,250, plus $250 for each committee chaired. In addition, each non-employee
director receives an annual grant of 1,250 shares of the Company's Common Stock.
Each director is also reimbursed for expenses incurred in attending director and
committee meetings.
DIRECTORS' STOCK OPTION PLAN. Pursuant to the Director Stock Option Plan,
each non-employee director is granted a non-qualified option to purchase 25,000
shares of Common Stock in connection with the director's initial election or
appointment to the Board. These grants under the Director Plan are made at an
exercise price equal to the "fair market value" (as defined under the Director
Stock Option Plan) of the shares of Common Stock subject to such option at the
time of the grant. The Compensation and Stock Option Committee may make
additional discretionary option grants to eligible directors, consistent with
the terms of the Plan. The Board may amend, suspend or discontinue the Director
Plan at any time.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation of the chief executive officer and the four most highly compensated
executive officers of the Company and its subsidiaries other than the chief
executive officer in 1999.
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------- OTHER ANNUAL SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($) OPTIONS (#)
- --------------------------- -------- --------- ----------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
James R. Arabia................... 1999 491,666 290,000 97,109(2) 100,000(3)
Chairman of the Board, President
and Chief Executive Officer
John A. Bicks..................... 1999 212,557 140,000 -- 45,000(4)
Executive Vice President, General
Counsel and Secretary
Robert H. Drechsler............... 1999 186,307 138,888(5) -- 95,000(6)
Executive Vice President and
Corporate Counsel
David Fitnich..................... 1999 185,000 85,000 -- --
Chief Operating Officer of Sybra,
Inc.
F. Edward Chappell................ 1999 153,961 90,000 5,000(7) 5,000(8)
Senior Vice President of Business
Development of Sybra, Inc.
</TABLE>
- ------------------------
(1) These amounts do not include bonus payments of $200,000, $75,000, $37,500
and $25,000 made to Messrs. Arabia, Bicks, Fitnich and Chappell,
respectively, during 1999 which were earned during 1998.
(2) Includes: (a) $9,600 that represents Mr. Arabia's car allowance;
(b) $49,196 that represents certain tax gross-up payments authorized by the
board of directors at the time of and related to Mr. Arabia's exercise of
stock options; and (c) $39,313 that represents the scheduled forgiveness of
one-third of a $100,000 loan, plus interest, that was made to Mr. Arabia in
lieu of a bonus during 1997.
(3) Represents options to acquire shares of Common Stock at an exercise price of
$12.25 per share, 50,000 of which are currently vested, and the balance of
which vest in two equal installments on January 1, 2001 and January 1, 2002.
(4) Represents options to acquire shares of Common Stock, 10,000 of which have
an exercise price of $5.63 per share (5,000 of which are currently vested,
and the balance of which vest in two equal installments on January 1, 2001
and January 1, 2002) and 35,000 of which have an exercise price of $12.25
per share (17,500 of which are currently vested, and the balance of which
vest in two equal installments on January 1, 2001 and January 1, 2002).
(5) Includes a signing bonus of $50,000 paid to Mr. Drechsler during 1999.
(6) Represents options to acquire shares of Common Stock, 60,000 of which have
an exercise price of $5.63 per share (30,000 of which are currently vested,
and the balance of which vest 20,000 on January 1, 2001 and 10,000 on
January 1, 2002) and 35,000 of which have an exercise price of $12.25 per
share (17,500 of which are currently vested, and the balance of which vest
in two equal installments on January 1, 2001 and January 1, 2002).
(7) Represents Mr. Chappell's car allowance.
(8) Represents options to acquire shares of Common Stock at an exercise price of
$5.50 per share, 1,250 of which are currently vested, and the balance of
which vest in three equal installments on February 11, 2001, February 11,
2002 and February 11, 2003.
8
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS/ EMPLOYEES EXERCISE OPTION TERM (4)
SARS GRANTED IN FISCAL PRICE EXPIRATION --------------------
NAME (#)(2) YEAR (%) ($/SH) DATE (3) 5% ($) 10% ($)
- ---- ------------ ------------ -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
James R. Arabia...................... 100,000 28.2 12.25 5/7/09 770,000 1,952,000
Chairman of the Board, Chief
Executive Officer and President
John A. Bicks........................ 10,000 2.8 5.63 2/15/09 35,400 89,700
Executive Vice President, General 35,000 9.9 12.25 5/7/09 269,500 683,200
Counsel and Secretary
Robert H. Drechsler.................. 60,000 16.9 5.63 2/15/09 212,400 538,200
Executive Vice President and 35,000 9.9 12.25 5/7/09 269,500 683,200
Corporate Counsel
Glen V. Freter....................... 30,000 8.5 7.25 12/2/09 136,800 346,500
Senior Vice President and Chief
Financial Officer
F. Edward Chappell................... 5,000 1.4 5.50 2/11/09 17,300 43,850
Senior Vice President of 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 1999 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 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, 1999, 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 $525,000, 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
9
<PAGE>
shall be entitled to a lump sum gross-up payment to eliminate any tax
consequences that may result from such loan forgiveness. In addition, the
Company has agreed, at such time as Mr. Arabia elects (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.
JOHN A. BICKS EMPLOYMENT AGREEMENT. Effective September 1, 1999, John A.
Bicks and the Company entered into an employment agreement (the "Bicks
Agreement") providing for an initial three (3) year term, subject to automatic
extensions. Mr. Bicks' annual base salary is $250,000, subject to increase at
the discretion of the Chief Executive Officer of the Company. Mr. Bicks is also
eligible to receive an annual bonus based upon a formula and subject to the
attainment of certain performance goals. Should the Company terminate
Mr. Bicks' employment other than for cause or should he terminate his employment
for good reason or following a change in control (as defined in the Bicks
Agreement), Mr. Bicks is entitled to a severance payment equal to three times
the sum of Mr. Bicks' (i) then-current base salary and (ii) average bonus paid
during the two immediately preceding years. Mr. Bicks is required to devote
substantially all of his business time to the affairs of the Company.
ROBERT H. DRECHSLER EMPLOYMENT AGREEMENT. Effective September 1, 1999,
Robert H. Drechsler and the Company entered into an employment agreement (the
"Drechsler Agreement") providing for an initial three (3) year term, subject to
automatic extensions. Mr. Drechsler's annual base salary is $250,000, subject to
increase at the discretion of the Chief Executive Officer of the Company.
Mr. Drechsler is also eligible to receive an annual bonus based upon a formula
and subject to the attainment of certain performance goals. Should the Company
terminate Mr. Drechsler'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 Drechsler Agreement), Mr. Drechsler is entitled to a severance payment equal
to three times the sum of Mr. Drechsler's (i) then-current base salary and
(ii) average bonus paid during the two immediately preceding years.
Mr. Drechsler is required to devote substantially all of his business time to
the affairs of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999 the Company's Compensation and Stock Option Committee consisted
of Raymond L. Steele (Chairman), Robert H. Drechsler, Carl D. Robinson and
Timothy Scott. As noted above, Mr. Drechsler served as an officer and employee
of the Company during 1999.
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, John A.
Bicks and Robert H. Drechsler in the year ended December 31, 1999, in the case
of base salary, was determined based on the employment agreements between the
Company and those executives. In the case of stock option grants and bonuses and
with respect to the amount of compensation paid by the Company during 1999 to
executive officers who did not have employment agreements with the Company, such
determinations were
10
<PAGE>
made by the chief executive officer in consultation with the board based upon
the criteria set forth below. In 1999, executive compensation consisted solely
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, F. Edward Chappell, Robert H. Drechsler, Glen V. Freter and David
Fitnich.
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 companies. 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 1999 was established in a manner consistent with the provisions of existing
employment agreements between the Company and James R. Arabia, John A. Bicks and
Robert H. Drechsler and through negotiations between the Company and the
executives who did not have employment agreements with the Company. The base
compensation levels were set to compensate the executives 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 companies. Base salaries will be
reviewed annually and may be increased by the Compensation and Stock Option
Committee, in the case of Mr. Arabia, and by the chief executive officer in
consultation with the board in the case of the Company's other executive
officers. Base salaries are generally determined 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, and
(iii) changes in the compensation peer group in which the Company competes for
executive talent. The weight given such factors 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 bonuses provide
financial rewards for the achievement of substantive Company and personal
objectives.
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 1999, an aggregate of 275,000 options at
exercise prices ranging from $5.50 per share to $12.25 per share were granted to
Messrs. Arabia, Bicks, Drechsler, Freter and Chappell.
11
<PAGE>
The Company's Employee Stock Option Plan relates closely to traditional
forms of equity-oriented compensation in the restaurant 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 1999 of $491,666 pursuant to the employment
agreement entered into with him. Mr. Arabia also received options to purchase
100,000 shares of Common Stock at an exercise price of $12.25 per share under
the Employee Stock Option Plan during 1999. In respect of 1999, Mr. Arabia was
also paid a cash bonus of $290,000. 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. The
Board of Directors deemed such bonus, option grants and Mr. Arabia's total
compensation appropriate in light of Mr. Arabia's substantial contribution to
the Company's growth and success in 1999.
COMPENSATION AND STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
RAYMOND P. STEELE, CHAIRMAN
ROBERT H. DRECHSLER
CARL D. ROBINSON
TIMOTHY SCOTT
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, 1999 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 per share.
12
<PAGE>
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 prices.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ICH S&P NRN
<S> <C> <C> <C>
2/19/97 $100 $100 $100
12/31/97 $167 $120 $101
12/31/98 $167 $154 $135
12/31/99 $507 $186 $128
</TABLE>
13
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP served as the Company's independent accountants
for the fiscal year ended December 31, 1999 and has been appointed by the Board
of Directors to continue as the Company's independent accountants for the fiscal
year ending December 31, 2000. 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 LLP as the independent accountants for the fiscal year
ending December 31, 2000.
A representative of PricewaterhouseCoopers LLP 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE
YEAR ENDING DECEMBER 31, 2000.
14
<PAGE>
SHAREHOLDER PROPOSALS
To be considered for presentation at the annual meeting of the Company's
stockholders to be held in 2000, 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 23, 2000.
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 21, 2000
San Diego, California
15
<PAGE>
REVOCABLE PROXY
I.C.H. CORPORATION
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF I.C.H.
CORPORATION The undersigned shareholder of I.C.H. Corporation (the "Company")
hereby constitutes and appoints John A. Bicks the Proxy of the undersigned, with
full power of substitution and resubstitution, to vote at the Annual Meeting of
Shareholders of the Company to be held at Embassy Suites Hotel, 4550 La Jolla
Village Drive, San Diego, California, 92121 on May 26, 2000 at 2:00 p.m., local
time (the "Annual Meeting"), all of the shares of the Company which the
undersigned is entitled to vote at the Annual Meeting, or at any adjournment
thereof, on each of the following proposals, all of which are described in the
accompanying Proxy Statement. Please be sure to sign and date this Proxy in the
box below.
Date
------------------------------ -------------------------------------
Shareholder sign above
-------------------------------------
Co-holder (if any) sign above
FOR WITHHOLD FOR ALL EXCEPT
1. The election of four directors: / / / / / /
John A. Bicks Robert H. Drechsler
Carl D. Robinson Raymond L. Steele
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The approval of the selection of / / / / / /
PricewaterhouseCoopers LLP as the
auditors of the Company for the
current fiscal year.
This Revocable Proxy will be voted
as directed by the undersigned member.
If no direction is given, this
Revocable Proxy will be voted FOR
the nominees listed and FOR proposal 2.
All Proxies previously given by the
undersigned are hereby revoked. Receipt
of the Notice of Annual Meeting of
Shareholders of the Company and of the
accompanying Proxy Statement is hereby
acknowledged.
SIGNATURE(S)___________________________________ DATE _________________________
NOTE: Please sign your name exactly as it appears on this Proxy. Joint accounts
require only one signature. If you are signing this Proxy as an attorney,
administrator, agent, corporation, officer, executor, trustee or guardian, etc.,
please add your full title to your signature.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.
- --------------------------------------------------------------------------------
^Detach above card, date, sign and mail in postage paid envelope provided.^
I.C.H. CORPORATION
IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND RETURN ALL CARDS
IN THE ACCOMPANYING ENVELOPE. PLEASE ACT PROMPTLY DATE, SIGN & MAIL YOUR PROXY
CARD TODAY
