<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
IHOP CORP.
-----------------------------------------------------------------------
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (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>
IHOP CORP.
525 NORTH BRAND BOULEVARD
GLENDALE, CALIFORNIA 91203
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
------------------------
To the Shareholders of IHOP Corp.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of IHOP Corp., a Delaware corporation (the "Company"), will be held
at the Hilton Hotel in Glendale, 100 West Glenoaks Boulevard, Glendale,
California, on Tuesday, May 16, 2000, at 10:00 a.m., local time, for the
following purposes:
(1) To elect three Class III directors, each to serve for a term of
three years and until his or her successor is duly elected and qualified.
(2) To approve and ratify the appointment of PricewaterhouseCoopers LLP,
as the Company's independent public accountants for the year ending
December 31, 2000.
(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 23, 2000, the
record date for the Meeting, are entitled to notice of and to vote at the
Meeting and any adjournment thereof. A list of such shareholders will be
available for examination at the principal executive offices of the Company
located at 525 North Brand Boulevard, Glendale, California 91203, at least ten
days prior to the Meeting.
TO ASSURE THAT YOUR INTERESTS WILL BE REPRESENTED, WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY
CARD AND PROMPTLY RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. ALL SHAREHOLDERS ARE
CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF YOU ATTEND THE MEETING,
YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR
PROXY CARD.
By Order of the Board of Directors,
Mark D. Weisberger
Secretary
April 10, 2000
Glendale, California
<PAGE>
IHOP CORP.
525 NORTH BRAND BOULEVARD
GLENDALE, CALIFORNIA 91203
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 16, 2000
------------------------
SOLICITATION OF PROXIES
IHOP Corp. ("IHOP" or the "Company") is furnishing this Proxy Statement
("Proxy") to the shareholders of the Company to solicit their proxies for use at
the Annual Meeting of Shareholders (the "Meeting") to take place on Tuesday,
May 16, 2000, at 10:00 a.m. at the Hilton Hotel in Glendale, 100 West Glenoaks
Boulevard, Glendale, California, and at any adjournment thereof. In addition to
solicitation by use of the mails, proxies may be solicited by directors,
officers and employees of the Company personally or by telephone. Such
directors, officers and employees will not be additionally compensated, but may
be reimbursed for out-of-pocket expenses, in connection with such solicitation.
IHOP will bear all of the costs of preparing, printing, assembling and mailing
this Proxy Statement and the proxy card and all of the costs of the solicitation
of the proxies. The Company may also pay to banks, brokers, nominees and certain
other fiduciaries their reasonable expenses incurred in forwarding proxy
material to the beneficial owners of securities held by them.
Only shareholders of record at the close of business on March 23, 2000 (the
"Record Date"), will be entitled to receive notice of, and to vote at, the
Meeting. As of the Record Date, there were outstanding 20,117,314 shares of
Common Stock, par value $.01 per share (the "Common Stock"), of the Company.
Each such shareholder is entitled to one vote for each share of Common Stock so
held and may vote such shares either in person or by proxy. Presence in person
or by proxy of holders of 10,058,658 shares of Common Stock will constitute a
quorum at the Meeting. Assuming a quorum is present, directors shall be elected
by a plurality of the votes cast in the election of directors. Other matters
submitted for shareholder approval shall be decided by the vote of the holders
of a majority of the stock represented and entitled to vote at the Meeting.
Abstentions and broker non-votes will be counted and will have the same effect
as "no" votes.
The enclosed Proxy, if executed and returned, will be voted as directed on
the Proxy or, in the absence of such direction, for the election of the nominees
as directors and for the approval and ratification of the appointment of
PricewaterhouseCoopers, LLP, as the Company's independent public accountants. If
any other matters shall properly come before the Meeting, the persons authorized
to vote the Proxies solicited hereunder will vote on these matters at their
discretion. The Proxy may be revoked at any time prior to exercise by filing
with the Secretary of the Company, at or before the Meeting, a written
revocation bearing a date later than the date of the Proxy; by duly executing a
Proxy with a later date relating to the same shares and delivering it to the
Secretary of the Company at or before the Meeting; or by attending and voting at
the Meeting.
The approximate date on which this Proxy Statement and form of Proxy are
first being sent to shareholders is April 10, 2000.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes of three
directors each. Class I directors currently serve until the Annual Meeting of
Shareholders in 2001, Class II directors until the Annual Meeting of
Shareholders in 2002 and Class III directors until the Annual Meeting of
Shareholders in 2000 (in each case, until their respective successors are duly
elected and qualified). At the 2000 Annual Meeting of Shareholders, three
Class III directors will be elected for three-year terms. Shares of Common Stock
represented by the enclosed Proxy, if returned duly executed and unless
instructions to the contrary are indicated thereon, will be voted for the
nominees listed below.
The Board of Directors has designated the three nominees listed below for
election as Class III directors of the Company for terms expiring in 2003. The
enclosed Proxy will be voted as specified thereon or, if no instructions are
given, for the Board's nominees; however, the persons designated to vote Proxies
reserve full discretion to vote the Common Stock represented by the Proxies for
the election of the remaining nominees and any substitute nominee or nominees
designated by the Board of Directors in the event the nominee who would
otherwise receive the votes is unavailable or unable to serve as a candidate for
election as a director. The Board of Directors has no reason to believe that any
of the nominees will be unavailable or unable to serve if elected.
INFORMATION CONCERNING NOMINEES
AND MEMBERS OF THE BOARD OF DIRECTORS
The following sets forth the nominees for election to the Board of
Directors, the directors of the Company whose terms in office will continue
after the Meeting, and certain information with respect to each nominee and
continuing director. Unless otherwise indicated, each person has held his or her
principal occupation for more than five years. For information regarding the
ownership of shares of Common Stock by IHOP's directors and executive officers
and each nominee for election as a director of the Company, see "Security
Ownership of Certain Beneficial Owners and Management."
NOMINEES--TERMS TO EXPIRE 2003 (CLASS III)
H. Frederick Christie, age 66; Director since 1992; Independent Consultant.
Director of Ducommun, Incorporated since 1985, AECOM Technology Corporation
since 1990, Ultramar Diamond Shamrock Corp. since 1992 and Southwest Water Co.
since 1995. Director or trustee of 19 mutual funds(1) under the Capital Research
and Management Company since 1972.
Richard K. Herzer, age 68; Chairman of the Board of Directors, President and
Chief Executive Officer; Director since 1979; Chairman of the Board and Chief
Executive Officer of the Company since 1983. President since 1979.
Patrick W. Rose, age 57; Director since 1992; Private Investor. Chairman of
the Board, President and Chief Executive Officer of Van Camp Seafoods, Inc.,
from March 1995 to August 1997. In April 1997, Van Camp Seafoods, Inc. filed a
voluntary petition under Chapter 11 of the Bankruptcy code to facilitate the
sale of its assets to Tri-Union Seafoods, LLC, which transaction was completed
in August 1997.
CONTINUING DIRECTORS--TERMS TO EXPIRE 2001 (CLASS I)
Frank Edelstein, age 74; Director since 1987; Independent Consultant.
Director of Ceradyne, Inc. since 1987 and Arkansas Best Corp. since 1988.
- ------------------------
(1) American Mutual Fund, AMCAP Fund, U.S. Government Securities Fund, American
High-Income Trust, American High-Income Municipal Bond Fund, American Variable
Insurance Series, The Bond Fund of America, Capital Income Builder, Capital
World Bond Fund, Capital World Growth and Income Fund, Cash Management Trust of
America, Intermediate Bond Fund of America, Limited Term Tax-Exempt Bond Fund of
America, The New Economy Fund, SMALL CAP World Fund, The Tax-Exempt Bond Fund of
America, The Tax-Exempt Fund of California, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America.
2
<PAGE>
Neven C. Hulsey, age 65; Director since 1987; Retired. Chairman of Earle M.
Jorgensen Company, February 1997 to February 1998. President and Chief Executive
Officer of Earle M. Jorgensen Company from March 1990 to February 1997. Director
of Webco Industries, Inc., since 1995.
Caroline W. Nahas, age 51; Director since 1992; Managing Director, Southern
California, of Korn/ Ferry International, Los Angeles, California since
May 1998. Member of the Executive Committee of Korn/Ferry International from
December 1995 until August 1998. Director of Whittier Holdings, Inc. since 2000.
CONTINUING DIRECTORS--TERMS TO EXPIRE 2002 (CLASS II)
Michael S. Gordon, age 64; Director since 1987; Co-Chairman of StoneCreek
Capital, Inc. (formerly The Gordon+Morris Group, Inc.) since April 1992.
Larry Alan Kay, age 53; Director since 1987; Consultant and Private
Investor. Publisher, Fi: The Magazine of Music & Sound, and President and Chief
Executive Officer of Fi, L.L.C. from October 1995 until May, 1998.
Dennis M. Leifheit, age 49; Executive Vice President, Operations, Chief
Operating Officer and Director since December 1995. Division Vice President of
Pizza Hut, Inc., from October 1993 to December 1995.
The Company's Board of Directors held four regular meetings and two special
telephonic meetings during the last full fiscal year. Each director attended at
least 75% of the aggregate of all meetings of the Board of Directors and of all
committees thereof on which he or she served.
The Board of Directors has two committees, an Audit Committee and a
Compensation Committee. The present members of the Audit Committee are H.
Frederick Christie, Michael S. Gordon (Chairman) and Larry Alan Kay. The
function of the Audit Committee is to review the services performed and to be
performed by the Company's independent public accountants and the cost of such
services, to make recommendations regarding the engagement of such independent
public accountants after consultation with management and to review the
quarterly and year-end financial statements of the Company. During fiscal 1999,
the Audit Committee communicated as it deemed necessary with the Company's
accounting personnel and independent public accountants, and held one formal
meeting.
The members of the Compensation Committee are Frank Edelstein (Chairman),
Neven C. Hulsey, Caroline W. Nahas and Patrick W. Rose. Responsibilities of the
Compensation Committee include approval of remuneration arrangements for
executive officers of the Company, review of compensation plans relating to
executive officers and directors, including grants of stock options and other
benefits under the Company's compensation plans, and general review of the
Company's employee compensation policies. The Compensation Committee also acts
as Administrator of the IHOP Corp. 1991 Stock Incentive Plan. During fiscal
1999, the Compensation Committee communicated as it deemed necessary with
management of the Company, and held one formal meeting.
COMPENSATION OF DIRECTORS
Non-employee directors are compensated for their services at the rate of
$20,000 per year, plus $1,000 per meeting of the Board of Directors or committee
thereof attended (with no additional payment when more than one meeting is
attended on the same day) and reimbursement of actual expenses incurred. In
addition, non-employee directors participate in the Stock Option Plan for
Non-Employee Directors (the "1994 Plan"). Under the 1994 Plan, in 1994 each of
the non-employee directors received an option to purchase 15,000 shares of the
Company's Common Stock. Pursuant to the 1994 Plan, in 1996 and 1998, the
non-employee directors also received options to purchase 5,000 shares of the
Company's Common Stock. In 1999, the 1994 Plan was amended to provide for annual
grants of options to non-employee directors to purchase 5,000 shares of Common
Stock. The amendment was approved by the shareholders at their 1999 Annual
Meeting and each non-employee director received an option to purchase 5,000
shares. Under the amended 1994 Plan, non-employee directors will receive options
to purchase 5,000 shares in the year 2000 and thereafter. Employee directors
receive no additional compensation for serving as directors.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of February 29, 2000,
unless otherwise indicated, as to all persons who, to the knowledge of the
Company, were the beneficial owners of more than 5% of the outstanding shares of
Common Stock, as to all directors and nominees for the Board of Directors, as to
certain executive officers and as to all directors and executive officers of the
Company as a group. The persons named hold sole voting and investment power with
respect to the shares shown opposite their respective names, unless otherwise
indicated. The information with respect to each person is as supplied or
confirmed by such person. The Company has no class of equity securities
outstanding other than the Common Stock.
<TABLE>
<CAPTION>
SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OF CLASS
- ------------------------------------ --------- --------
<S> <C> <C>
Richard K. Herzer(2)(3) .................................... 1,548,660 7.5%
Chairman of the Board, President
and Chief Executive Officer
525 North Brand Boulevard
Glendale, CA 91203
H. Frederick Christie(2) ................................... 31,000 *
Director
Frank Edelstein(2) ......................................... 27,000 *
Director
Michael S. Gordon(2) ....................................... 45,000 *
Director
Neven C. Hulsey(2) ......................................... 25,000 *
Director
Larry Alan Kay(2) .......................................... 60,288 *
Director
Dennis M. Leifheit(2)(3) ................................... 159,030 *
Director, Executive Vice President,
Operations, and Chief Operating Officer
Caroline W. Nahas(2) ....................................... 26,000 *
Director
Patrick W. Rose(2) ......................................... 25,000 *
Director
Anna G. Ulvan(2)(3) ........................................ 97,595 *
Vice President, Franchise
Richard C. Celio(2)(3) ..................................... 60,113 *
Vice President, Development
Mark D. Weisberger ......................................... 43,350 *
Vice President, Legal, Secretary & General Counsel
All directors and executive officers as a group (16 2,259,009 10.8%
persons)(2)(3).............................................
FMR Corp., Edward C. Johnson 3d and Abigail P. 1,990,000 9.9%
Johnson(4) ................................................
82 Devonshire Street
Boston, Massachusetts 02109
Southeastern Asset Management, Inc., Longleaf Partners ..... 3,718,300 18.5%
Realty Fund, Longleaf Partners Small-Cap Fund,
and O. Mason Hawkins(5)
Southeastern Asset Management, Inc.
6075 Poplar Avenue, Suite 900
Memphis, TN 38119
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OF CLASS
- ------------------------------------ --------- --------
<S> <C> <C>
Strong Capital Management Inc. and Richard S. Strong(6) .... 1,530,550 7.6%
100 Heritage Reserve
Menomonee Falls, WI 53051
</TABLE>
- --------------------------
* Represents less than 1% of the outstanding Common Stock.
(1) Subject to applicable community property laws and similar statutes.
(2) Share amounts for each of the directors, named executive officers and for
all directors and executive officers as a group include shares subject to
options that are exercisable within 60 days of the date of this statement,
as follows:
<TABLE>
<CAPTION>
NAME NO. SHARES
- ---- ----------
<S> <C>
Richard K. Herzer........................................... 499,999
H. Frederick Christie....................................... 25,000
Frank Edelstein............................................. 25,000
Michael S. Gordon........................................... 25,000
Neven C. Hulsey............................................. 15,000
Larry Alan Kay.............................................. 25,000
Dennis M. Leifheit.......................................... 139,999
Caroline W. Nahas........................................... 25,000
Patrick W. Rose............................................. 25,000
Anna G. Ulvan............................................... 69,999
Richard C. Celio............................................ 60,113
Mark D. Weisberger.......................................... 43,350
All Directors and Executive Officers as a Group (16
persons).................................................. 1,062,659
</TABLE>
(3) Each of the named executive officers participate in the International House
of Pancakes Employee Stock Ownership Plan (the "ESOP"). Mr. Herzer and
Mr. Weisberger possess shared investment power over these shares by virtue
of their membership on the Administrative Committee of the ESOP. The share
amounts for the named executive officers and all directors and executive
officers as a group include shares held for the accounts of executive
officers, as follows:
<TABLE>
<CAPTION>
NAME NO. SHARES
- ---- ----------
<S> <C>
Richard K. Herzer........................................... 36,907
Dennis M. Leifheit.......................................... 1,856
Anna G. Ulvan............................................... 22,046
Richard C. Celio............................................ 1,181
Mark D. Weisberger.......................................... 3,996
All directors and executive officers as a group (16
persons).................................................. 74,482
</TABLE>
(4) In Amendment No. 2 to Schedule 13G, dated February 14, 2000, jointly filed
by FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson, such persons
report that, as of December 31, 1999, they possessed sole power to dispose
or to direct the disposition of these shares.
(5) In Amendment No. 5 to Schedule 13G, dated February 4, 2000, jointly filed by
Southeastern Asset Management, Inc., Longleaf Partners Realty Fund, Longleaf
Partners Small-Cap Fund and Mr. O. Mason Hawkins, such persons report that,
as of December 31, 1999, Southeastern Asset Management, Inc. possessed sole
power to vote or to direct the vote with respect to 502,800 of these shares,
shared power to vote or to direct the vote with respect to 3,065,500 of
these shares, sole power to dispose or to direct the disposition of 652,800
of these shares and shared power to dispose or to direct the disposition of
3,065,500 of these shares; Longleaf Partners Realty Fund possessed shared
power to vote or direct the vote and shared power to dispose or to direct
the disposition of 1,622,100 of these shares; Longleaf Partners Small-Cap
Fund possessed shared power to vote or to direct the vote and shared power
to dispose or to direct the disposition of 1,443,400 of these shares; and
Mr. Hawkins possessed neither sole nor shared power to vote or to direct the
vote and neither sole nor shared power to dispose or to direct the
disposition of any of these shares.
(6) In Amendment No. 11 to Schedule 13G, dated January 25, 2000, jointly filed
by Strong Capital Management, Inc., and Richard S. Strong, Chairman of the
Board and the principal shareholder of Strong Capital Management, Inc., such
persons report that, as of December 31, 1999, they possessed sole power to
vote or to direct the vote with respect to 1,192,700 of these shares, shared
power to vote with respect to none of these shares, and sole power to
dispose or to direct the disposition of all of these shares.
5
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to each
person who is an executive officer of the Company:
<TABLE>
<CAPTION>
EXECUTIVE OFFICER AGE POSITION AND OFFICES WITH THE COMPANY
- ----------------- --- ---------------------------------------------------
<S> <C> <C>
Richard K. Herzer......................... 68 Chairman of the Board of Directors, President and
Chief Executive Officer
Dennis M. Leifheit........................ 49 Director, Executive Vice President, Operations, and
Chief Operating Officer
Richard C. Celio.......................... 49 Vice President, Development
Robin L. Elledge.......................... 41 Vice President, Human Resources
Susan Henderson-Hernandez................. 52 Vice President, Marketing
Anna G. Ulvan............................. 52 Vice President, Franchise
Alan S. Unger............................. 46 Vice President, Finance, Treasurer and Chief
Financial Officer
Mark D. Weisberger........................ 44 Vice President, Legal, Secretary and General
Counsel
</TABLE>
Executive officers of the Company are appointed by the Board of Directors
and serve at the Board's discretion.
Mr. Herzer was elected Chairman of the Board and Chief Executive Officer in
May 1983. Mr. Herzer was appointed President of the Company in June 1979.
Mr. Leifheit was named Executive Vice President, Operations and Chief
Operating Officer and elected to the Board of Directors effective
December 1995. He served as Division Vice President of Pizza Hut, Inc., from
October 1993 to December 1995 and Vice President Operations Development of Pizza
Hut, Inc., from January 1990 to October 1993.
Mr. Celio was elected Vice President, Development in March 1997. He served
as Senior Vice President, Development of CKE Restaurants, Inc., from June 1994
to March 1997, and as Vice President and General Counsel of Carl Karcher
Enterprises, Inc., from January 1989 to June 1994.
Ms. Elledge became Vice President, Human Resources in March 2000. She had
served as the Company's Director of Training from October, 1995 to March 30,
2000. Prior to joining the Company, she was Director, Practice Enhancement of
Ormco from March 1985 to October, 1995.
Ms. Henderson-Hernandez became Vice President, Marketing in November 1996.
Prior thereto, she served as the Company's Director, Brand Strategy, from
November 1993 to November 1996. She was Vice President, Marketing of Frank's
Nursery and Crafts from January 1993 to September 1993 and Vice President,
Marketing, of Perkins Restaurants from February 1991 until September 1992.
Ms. Ulvan became Vice President, Franchise in February 1990. From May 1987
to February 1990, she was Vice President-Franchise Sales. Prior thereto, she had
been Director of Franchise Development for International House of
Pancakes, Inc., since October 1980.
Mr. Unger became Vice President, Finance, Treasurer and Chief Financial
Officer in February 2000. From November, 1998 to July, 1999, Mr. Unger was Chief
Financial Officer of Matthews Studio Group. Prior thereto, he was with Four
Media Company, where he held several positions, Chief Financial Officer from May
1997 to November 1998 and Vice President of Mergers and Acquisitions from August
1993 to April 1997.
Mr. Weisberger became Vice President, Legal, Secretary and General Counsel
in January 1994. Prior thereto, he was employed by Sizzler International, Inc.,
as General Counsel and Secretary from April 1989 to January 1994, and Assistant
General Counsel from April 1988 to April 1989, and as Corporate Counsel from
April 1987 to April 1988.
6
<PAGE>
EMPLOYMENT AGREEMENTS
Each of the named executive officers are parties to employment agreements
with the Company. The agreements provide for base salaries, participation in a
bonus program, car allowances or a company car, and certain other perquisites
and benefit programs available to other employees. In addition, the Board of
Directors may, at its discretion, increase any officer's base salary during the
term of such officer's employment agreement. The employment agreements for
Messrs. Herzer, Leifheit, Celio, and Weisberger, and Mrs. Ulvan call for
employment terms of one year and provide for automatic successive one-year
extensions unless the Company or the officer gives notice to the contrary more
than 90 days prior to the expiration of the then current term of the agreement.
In the event of a change in control of the Company, the employment periods of
Mr. Herzer and the other named executive officers will automatically be
extended, for three years with respect to Mr. Herzer and for two years with
respect to each of the other named executive officers, from the date of such
change in control. For purposes of the employment agreements, a "change in
control" will be deemed to have occurred if (i) any person acquires 25% or more
of the combined voting power of the Company's then outstanding securities;
(ii) in any two consecutive years individuals who at the beginning of the period
constitute the board, plus any directors approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
(iii) the stockholders approve certain merger or consolidation transactions; or
(iv) the stockholders approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially
all of the Company's assets.
Each officer is entitled to receive compensation through the date of
termination if such officer's employment is terminated (i) by the Company for
"cause" or "disability" or (ii) by the officer for any reason, other than a
"voluntary termination" or for "good reason" following a change in control of
the Company. For purposes of the employment agreements, "cause" means willful
failure to substantially perform one's duties, willful misconduct or the
commission of acts of dishonesty, fraud, misrepresentation or moral turpitude as
would prevent the effective performance of the employee's duties. "Disability"
is defined to mean the employee's absence from the full-time performance of his
or her duties for 90 consecutive days or 180 days within any 12 month period as
a result of incapacity due to physical or mental illness. "Good reason"
includes, generally, a material breach of the agreement, an adverse change in
the officer's duties or responsibilities from those in effect prior to such
change in control, a reduction of the officer's salary or benefits, or
relocation of the officer outside of Southern California and a "voluntary
termination" may occur upon an uncorrected material breach of the agreement by
the Company or, in the case of Mr. Herzer, if such officer is removed from the
Board of Directors without his consent.
If an officer's employment is terminated (i) by the Company other than for
cause or disability, (ii) by the officer in a voluntary termination or for good
reason or (iii) by reason of the officer's death, then the officer (or, in the
event of such officer's death, his or her designated payee) will be entitled to
receive (i) a lump sum payment of the salary and bonus payments that would have
been payable to such officer through (a) in the case of death or a voluntary
termination, the term of the agreement and (b) in any other instance, a period
of 12 months and (ii) continuing insurance benefits for the same period at no
cost to the officer (or designated payee), subject to reduction under certain
circumstances. Payments and benefits under each employment agreement would be
reduced to the extent they are not deductible under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code").
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following Summary Compensation Table sets forth information concerning
compensation earned in the fiscal years ended December 31, 1999, 1998 and 1997,
by the Company's Chief Executive Officer and its remaining four most highly
compensated executive officers serving at the end of fiscal 1999 (the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
---------------------------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING
----------------------------------------- STOCK OPTIONS/
NAME AND PRINCIPAL OTHER ANNUAL AWARDS SARS ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) (NUMBER)(2) (NUMBER)(2) COMPENSATION($)(3)
- ------------------ -------- --------- -------- ------------------ ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard K. Herzer 1999 $580,000 $354,000 -- -- 40,000 $ 17,094
Chairman of the Board, 1998 541,250 396,000 -- -- 40,000 20,337
President and Chief 1997 506,500 285,825 -- -- 40,000 22,780
Executive Officer
Dennis M. Leifheit 1999 318,750 162,500 -- -- 20,000 10,799
Executive Vice 1998 293,782 168,000 -- -- 20,000 193,248
President, Operations 1997 268,750 128,563 -- -- 20,000 179,318
Chief Operating Officer
Director
Anna G. Ulvan 1999 217,000 77,350 -- -- 10,000 11,380
Vice President, 1998 201,250 80,360 -- -- 10,000 13,294
Franchise 1997 187,000 63,508 -- -- 10,000 168,375
Richard C. Celio 1999 215,000 77,000 -- -- 10,000 10,799
Vice President, 1998 197,500 78,400 -- -- 10,000 90,037
Development 1997 150,417 45,636 -- 18,912 40,000 719
Mark D. Weisberger 1999 203,500 72,100 -- -- 10,000 68,261
Vice President, Legal 1998 196,000 76,832 -- -- 10,000 129,697
Secretary and General 1997 184,675 62,471 -- -- 10,000 47,163
Counsel
</TABLE>
- ------------------------
(1) While each of the five named individuals received perquisites or other
personal benefits in the years shown, in accordance with applicable
regulations, the value of these benefits is not indicated because they did
not exceed in the aggregate the lesser of $50,000 or 10% of the individual's
salary and bonus in 1999.
(2) Share amounts have been restated to reflect the 2 for 1 stock split which
was approved on April 29, 1999 by IHOP's Board of Directors, effective
May 27, 1999, in the form of a stock dividend for shareholders of record at
the close of business on May 13, 1999.
(3) Amounts include the value of shares contributed to the ESOP on behalf of the
Named Executives as well as the value of forfeitures allocated to their
accounts from employees who withdrew from the ESOP prior to vesting as
follows for 1999: Mr. Herzer, $9,853; Mr. Leifheit, $9,853; Ms. Ulvan,
$9,853; Mr. Celio, $9,853; and Mr. Weisberger, $9,853. It also includes the
value of premiums for life insurance as follows for 1999; Mr. Herzer,
$7,241; Mr. Leifheit, $946; Ms. Ulvan, $1,527; Mr. Celio, $946; and
Mr. Weisberger, $576. The 1999 amount for Mr. Weisberger also includes
proceeds from the exercise of stock options in the amount $57,832.
8
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table provides information with respect to the Named
Executives concerning grants of stock options during the year ended
December 31, 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL STOCK PRICE
UNDERLYING OPTIONS/SARS EXERCISE APPRECIATION FOR
OPTIONS/SARS GRANTED TO OR BASE OPTION TERM
GRANTED EMPLOYEES IN PRICE ---------------------
NAME (#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE 5% ($) 10% ($)
- ---- ------------- ------------- -------- ----------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard K. Herzer............... 40,000 13.0% $ 20.31 February 23, 2009 $510,914 $1,294,756
Dennis M. Leifheit.............. 20,000 6.5% $ 20.31 February 23, 2009 255,457 647,378
Anna G. Ulvan................... 10,000 3.3% $ 20.31 February 23, 2009 127,728 323,689
Richard C. Celio................ 10,000 3.3% $ 20.31 February 23, 2009 127,728 323,689
Mark D. Weisberger.............. 10,000 3.3% $ 20.31 February 23, 2009 127,728 323,689
</TABLE>
- ------------------------
(1) One-third of the shares subject to options vested and became exercisable on
February 23, 2000; an additional one-third of the shares subject to options
vest and become exercisable on February 23, 2001; and the remaining shares
subject to options vest and become exercisable on February 23, 2002.
(2) The potential realizable values illustrate values that might be realized
upon exercise immediately prior to the expiration of the term of these
options using 5% and 10% appreciation rates, as required by the Securities
and Exchange Commission, compounded annually. These values do not, and are
not intended to, forecast possible future appreciation, if any, of the
Company's stock price. Additionally, these values do not take into
consideration the provisions of the options providing for vesting over a
period of years or termination of options following termination of
employment.
The following table provides information with respect to the Named
Executives concerning: (a) the exercise of stock options during the year ended
December 31, 1999, and (b) unexercised stock options held at December 31, 1999.
There were no Stock Appreciation Rights outstanding at December 31, 1999. No
stock options have been repriced, amended or replaced.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END(1)
SHARES ACQUIRED VALUE --------------------------------- ---------------------------------
NAME ON EXERCISE(#) REALIZED(2) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
- ---- --------------- ----------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard K. Herzer......... -- -- 499,999 40,001 $2,516,200 0
Dennis M. Leifheit........ -- -- 139,999 20,001 281,250 0
Anna G. Ulvan............. -- -- 69,999 10,001 99,375 0
Richard C. Celio.......... -- -- 40,665 10,001 86,248 0
Mark D. Weisberger........ 6,000 $57,832 39,999 10,001 46,874 0
</TABLE>
- ------------------------
(1) Represents the difference between the $16.69 closing price of the Company's
stock at December 31, 1999 and the exercise price of the option, multiplied
by the number of shares subject to option.
(2) Represents the difference between the closing price of the Company's stock
on the exercise date and the option exercise price.
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
As of December 31, 1999, the members of the Compensation Committee of the
Board of Directors were Frank Edelstein (Chairman), Neven C. Hulsey, Caroline W.
Nahas and Patrick W. Rose.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee Report on Executive Compensation shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
or under the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
THE COMPENSATION COMMITTEE. Executive compensation decisions are made by
the four-member Compensation Committee of the Board of Directors. Each member of
the Compensation Committee is a non-employee director. The Compensation
Committee administers the executive incentive plan, reviews compensation plans,
programs and policies, monitors the performance and compensation of executive
officers and other key employees and makes appropriate recommendations and
reports to the Board of Directors. All executive compensation decisions made by
the Compensation Committee are reviewed by the entire Board of Directors, except
for decisions regarding awards under the IHOP Corp. 1991 Stock Incentive Plan,
which are made solely by the Compensation Committee.
COMPENSATION PHILOSOPHY. The Company's philosophy regarding compensation is
based on several objectives, including: (i) linking executives' interests with
those of the Company's shareholders; (ii) instilling an ownership culture
throughout the Company and officer group; (iii) attracting and facilitating
retention of high caliber executive talent; and (iv) paying for performance and
rewarding executives for achievement of both annual and longer term Company
financial and key operating goals. The Company maintains a compensation program
designed to attract and retain highly-qualified executives and to motivate
management. We seek to tie each executive's "at risk" compensation, to the
extent feasible, directly to his or her contribution to the Company's success in
achieving its performance objectives.
The Company's executive compensation program consists of three main
components: (1) base salary, (2) bonus, and (3) long-term incentives in the form
of stock options or other stock-based awards. The bonus and long-term incentives
constitute the "at risk" portion of the compensation program. The Named
Executives' compensation for 1999 reflected the Compensation Committee's
commitment to coordinating pay with Company and individual performance. In
establishing specific compensation levels for Named Executives in 1999, the
Compensation Committee considered information provided by compensation
consultants, surveys of compensation programs offered by comparable companies,
statistical information generated by the Company's Human Resources Department
and evaluations of the individual performances of the Named Executives. In
general, the Named Executives' total compensation was structured to fall in the
range from the 50th to the 75th percentile, as indicated by the surveys of
comparable companies.
FEDERAL INCOME TAX CONSIDERATIONS The Compensation Committee has considered
the impact of section 162(m) of the Code. This section disallows tax deductions
for any publicly-held corporation for individual compensation to certain
executives of such corporation exceeding $1 million in any taxable year, except
for certain performance-based compensation which has been approved by
shareholders. It is the intent of the Company and the Compensation Committee to
qualify to the maximum extent possible its executives' compensation for
deductibility under applicable tax laws, while recognizing that under certain
circumstances, compensation for certain executives in excess of the 162(m) limit
may be warranted. The
10
<PAGE>
Compensation Committee believes that the Company's compensation programs provide
the necessary incentives and flexibility to promote the Company's
performance-based compensation philosophy while being consistent with Company
objectives.
SALARIES. The general policy of the Compensation Committee is to establish
executive base salaries that are (i) competitive and consistent with those
provided to others holding similar positions in the restaurant and franchising
industries, and (ii) consistent with each executive's actual and expected
contributions to the Company's short-term and long-term success. The Board of
Directors, acting on the Compensation Committee's recommendation, increased
Mr. Herzer's salary in 1999 by approximately seven percent. The increase
reflected the Compensation Committee's and the Board of Directors' assessment of
his performance in light of the Company's performance in the prior fiscal year,
and, to a lesser extent, other factors including the performance of the
Company's stock and consideration of competitive data in compensation surveys of
comparable companies. His salary is also reflective of his long service with the
Company and breadth of knowledge about the restaurant industry. Salary increases
for the other senior executives effected during 1999 ranged from about five
percent to about ten percent, and were based on similar considerations including
individual performance, position, tenure, experience and competitive data in
compensation surveys of comparable companies.
BONUS AWARDS. Pursuant to the IHOP Corp. Executive Incentive Plan (the
"Incentive Plan"), Mr. Herzer and the Named Executives earned cash bonuses for
1999. Under the Incentive Plan, the amount of any bonus is targeted as a
percentage of salary. The percentage of the targeted bonus actually earned is
determined according to a formula that compares the Company's actual profit for
any given fiscal year to the projected profit (before income taxes and
contributions to the ESOP) in the Company's budget as approved by the Board of
Directors at the beginning of the fiscal year. The Board of Directors' budget
approval process considers short-term profits and the Company's long-term
development and objectives, thereby giving greater weight to those activities
that will result in recurring success and lesser weight to extraordinary and
non-recurring items. The formula for determining Mr. Herzer's bonus under the
Incentive Plan is based solely on the Company's profit level. The formula for
determining the amount of bonuses under the Incentive Plan to be paid to the
Named Executives other than Mr. Herzer is based on the Company's profit level
and, to a lesser extent, the achievement of specific goals, which were
established at the beginning of the fiscal year.
LONG-TERM INCENTIVES. The Named Executives participate in the IHOP Corp.
1991 Stock Incentive Plan which, as indicated above, is aimed at promoting the
acquisition and ownership of the Company's stock. Under the program, grants may
be made of stock options or other long-term stock based incentives. In 1999, the
Committee granted options to purchase 40,000 shares of the Company's common
stock to Mr. Herzer and lesser amounts to the other Named Executives. In
determining the amounts of the individual option awards, the Compensation
Committee considered several factors including primarily the executive's actual
and potential contributions to the Company's long-term success, the size of
awards provided to others holding similar positions in the restaurant industry
and, to a lesser extent, the amount of options or other long-term incentives
currently held by the executive for whom an option grant or other long-term
incentive award was being considered. To date, stock options have been granted
to the Named Executives at the fair market value of the Company's stock on the
date of grant as reflected in the Summary Compensation Table.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS
Frank Edelstein Neven C. Hulsey Caroline W. Nahas Patrick W. Rose
Chairman
11
<PAGE>
COMPANY STOCK PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total return to
shareholders for the Company, the S&P 500 Composite Index (the "S&P 500") and
the Value-Line Restaurants Index (the "Restaurant Index") from December 31, 1994
through December 31, 1999. The graph assumes an initial investment in stock of
$100 and subsequent reinvestment of any dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN*
DECEMBER 31, 1994 THROUGH DECEMBER 31, 1999
Assumes $100 invested at the close of trading December 31, 1994 in IHOP Corp.
common stock, the S&P 500, and the Restaurant Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
IHOP CORP. S&P 500 INDEX RESTAURANT INDEX
<S> <C> <C> <C>
12/31/94 $100.00 $100.00 $100.00
12/31/95 $95.41 $137.50 $137.79
12/31/96 $86.70 $169.47 $150.22
12/31/97 $119.27 $226.03 $175.11
12/31/98 $146.57 $290.22 $250.92
12/31/99 $122.48 $349.08 $302.97
</TABLE>
* Cumulative total return assumes reinvestment of dividends.
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
IHOP Corp............................. $100.00 $ 95.41 $ 86.70 $119.27 $146.57 $122.48
S&P 500 Index......................... $100.00 $137.50 $169.47 $226.03 $290.22 $349.08
Restaurant Index...................... $100.00 $137.79 $150.22 $175.11 $250.92 $302.97
</TABLE>
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See Compensation Committee Interlocks and Insider Participation.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for the 1999 fiscal year were
Pricewater-houseCoopers, LLP, and the Board of Directors has unanimously
selected PricewaterhouseCoopers, LLP, as the Company's independent public
accountants for the 2000 fiscal year. PricewaterhouseCoopers, LLP, or its
predecessor Coopers & Lybrand, L.L.P. has been the Company's public accountant
for each of the last 17 years. Representatives of PricewaterhouseCoopers, LLP
are expected to be present at the Meeting and will have an opportunity to make a
statement if they desire to do so and are expected to be available to respond to
appropriate questions. Unless otherwise indicated thereon, the persons named in
the Proxy will vote all proxies in favor of ratifying the selection of
PricewaterhouseCoopers, LLP, as the Company's independent public accountants. If
shareholders do not ratify the reappointment of PricewaterhouseCoopers, LLP, the
selection of independent public accountants will be reconsidered by the Board of
Directors.
PROPOSALS OF SHAREHOLDERS
No other proposals of shareholders were received by the Company for
presentation at the 2000 Annual Meeting of Shareholders. The Board of Directors
will make provision for presentation of proposals of shareholders at the 2001
Annual Meeting of Shareholders provided such proposals are submitted by eligible
shareholders who have complied with the relevant regulations of the Securities
and Exchange Commission. In order for any such proposals to be included in the
proxy materials for consideration at the 2001 Annual Meeting of Shareholders,
the proposal should be mailed to Mark D. Weisberger, Secretary, IHOP Corp., 525
North Brand Boulevard, Glendale, California 91203, and must be received no later
than December 11, 2000. Shareholders who intend to present a proposal at the
2001 Annual Meeting of Shareholders without inclusion of such proposal in the
Company's proxy materials are required to provide notice of such proposal to the
Company no earlier than February 11, 2001 nor later than March 12, 2001. The
Company reserves the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with these
and other applicable requirements.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 and the Securities and
Exchange Commission's regulations thereunder require the Company's officers and
directors, and persons who own more than 10% of the outstanding Common Stock, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the New York Stock Exchange and to furnish the Company
with copies of all such forms they file.
Based solely on its review of the copies of such forms received by it and
written representations from certain reporting persons, the Company believes
that, during the period from January 1, 1999, through December 31, 1999, all
filing requirements applicable to its officers, directors, and greater than 10%
beneficial owners were complied with in a timely manner.
13
<PAGE>
OTHER BUSINESS
The management of the Company is not aware of any other matters to be
brought before the Meeting. However, if any other matters are properly brought
before the Meeting, the persons named in the enclosed form of Proxy will have
discretionary authority to vote all proxies with respect to such matters in
accordance with their best judgment.
UPON THE WRITTEN REQUEST OF ANY RECORDHOLDER OR BENEFICIAL OWNER OF SHARES
ENTITLED TO VOTE AT THE MEETING, THE COMPANY, WITHOUT CHARGE, WILL PROVIDE A
COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999,
THAT WAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE
MAILED TO SECRETARY, IHOP CORP., 525 NORTH BRAND BOULEVARD, GLENDALE, CALIFORNIA
91203.
By Order of the Board of Directors,
Mark D. Weisberger
Secretary
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY IN THE ENCLOSED, PRE-ADDRESSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
The date of this Proxy Statement is April 10, 2000.
14
<PAGE>
PROXY
IHOP CORP.
525 NORTH BRAND BOULEVARD - GLENDALE, CALIFORNIA 91203
THIS PROXY/VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Richard K. Herzer, Larry Alan Kay and
Dennis M. Leifheit as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below, all
the shares of common stock of IHOP Corp. held of record by the undersigned at
the close of business on March 23, 2000, at the Annual Meeting of
Shareholders to be held on May 16, 2000, or any adjournment thereof.
THIS PROXY/VOTING INSTRUCTION WHEN PROPERLY EXECUTED WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED ON THE REVERSE AND FOR
PROPOSAL 2. IF YOU HAVE A BENEFICIAL INTEREST IN SHARES HELD BY WELLS FARGO
BANK, N.A., AS TRUSTEE ("TRUSTEE") OF THE INTERNATIONAL HOUSE OF PANCAKES
EMPLOYEE STOCK OWNERSHIP PLAN (THE "ESOP") THEN THIS CARD ALSO CONSTITUTES
YOUR VOTING INSTRUCTIONS TO THE TRUSTEE OF THE ESOP AND IF YOU DO NOT SIGN
AND RETURN THIS CARD, SUCH SHARES WILL BE VOTED BY THE TRUSTEE IN THE SAME
PROPORTIONS AS THE SHARES FOR WHICH THE TRUSTEE RECEIVES VALID VOTING
INSTRUCTIONS.
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENTS/ADDRESS
CHANGE ON REVERSE SIDE
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
FOLD AND DETACH HERE
<PAGE>
Please mark your
votes as indicated /X/
in the example
<TABLE>
<CAPTION>
<S><C>
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD NOMINEES: H. Frederick Christie, Richard K. Herzer, Patrick W. Rose
listed (except as AUTHORITY to vote
marked to the contrary) for all nominees listed INSTRUCTION: To withhold authority to vote for any individual
nominee, (indicate that nominee's name below):
/ / / / -----------------------------------------------------------------
2. PROPOSAL TO APPROVE AND RATIFY THE APPOINTMENT 3. In their discretion the Proxies are authorized to
OF PRICEWATERHOUSECOOPERS LLP as the independent vote upon such other business as may properly come
accountants of the Company. before the Meeting or any adjournment thereof.
FOR AGAINST ABSTAIN
/ / / / / / PLEASE SIGN EXACTLY AS NAME APPEARS I PLAN TO ATTEND MEETING / /
HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING
AS ATTORNEY, EXECUTOR, ADMINISTRATOR, COMMENTS/ADDRESS / /
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL CHANGE PLEASE MARK
TITLE AS SUCH. IF A CORPORATION, PLEASE THIS BOX IF YOU HAVE
SIGN IN FULL CORPORATE NAME BY PRESIDENT WRITTEN
OR OTHER AUTHORIZED OFFICER. IF A COMMENTS/ADDRESS
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP CHANGE ON THE
NAME BY AUTHORIZED PERSON. REVERSE SIDE
SIGNATURE OR SIGNATURES, IF HELD JOINTLY______________________________________________________________DATED__________________, 2000.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE
FOLD AND DETACH HERE
</TABLE>
