<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
The Enstar Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
<PAGE> 2
LOGO
May 23, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
The Enstar Group, Inc. (the "Company") to be held on Monday, June 30, 1997, at
the Montgomery Civic Center at 300 Bibb Street, Montgomery, Alabama 36104. The
meeting will begin promptly at 10:30 a.m., local time, and we hope you will be
able to attend. The Notice of Annual Meeting of Shareholders outlines the
business to be conducted at the meeting.
The 1997 Annual Meeting was originally scheduled to be held on April 28,
1997. Due to unanticipated delays in the distribution of Common Stock to the
Company's former shareholders, associated delays in many shareholders' receipt
of the original proxy materials and certain other matters, the Company announced
on April 18, 1997 that it had decided to reschedule the Annual Meeting for June
30, 1997 so that all of the Company's shareholders would have the opportunity to
participate fully in the Annual Meeting. In connection with the rescheduling of
the Annual Meeting, the Company set a new record date of May 21, 1997 for
purposes of shareholders entitled to receive notice of, and to vote at, the
Annual Meeting and any adjournment thereof. In addition, the Board of Directors
has determined to waive the advance notice requirement in the Company's Bylaws
for nominations for directors at the Annual Meeting.
It is important that your shares be voted whether or not you plan to be
present at the meeting. The Company will only recognize the enclosed proxy with
respect to matters to be acted upon at the Annual Meeting, and any proxies
solicited under the Company's proxy statement dated March 27, 1997 will not be
effective for purposes of actions to be taken at the Annual Meeting.
Accordingly, it is important that you complete the enclosed proxy and specify
your choices by marking the appropriate boxes thereon, and date, sign and return
your proxy in the enclosed envelope as promptly as possible. If you date, sign
and return your proxy without specifying your choices, your shares will be voted
in accordance with the recommendation of the Board of Directors.
I am looking forward to seeing you at the meeting.
Sincerely,
/s/ Nimrod T. Frazer
Nimrod T. Frazer
Chairman, President and
Chief Executive Officer
LOGO
<PAGE> 3
THE ENSTAR GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 30, 1997
To the Shareholders of The Enstar Group, Inc.:
The Annual Meeting of Shareholders of The Enstar Group, Inc. (the
"Company") will be held on Monday, June 30, 1997, at 10:30 a.m., local time, at
the Montgomery Civic Center at 300 Bibb Street, Montgomery, Alabama 36104, for
the following purposes:
(i) to elect five directors;
(ii) to ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company to serve for 1997;
(iii) to ratify the adoption of the 1997 Amended CEO Stock Option
Plan;
(iv) to ratify the adoption of the 1997 Amended Outside Directors'
Stock Option Plan;
(v) to ratify the adoption of the 1997 Amended Omnibus Incentive Plan;
and
(vi) to transact such other business as may properly come before the
Annual Meeting of Shareholders or any adjournment thereof.
Only holders of record of Common Stock as of May 21, 1997 (the "Record
Date") are entitled to receive notice of, and to vote at, the Annual Meeting of
Shareholders and any adjournment thereof. A list of shareholders as of the
Record Date will be open for examination during the Annual Meeting of
Shareholders.
Your attention is directed to the Proxy Statement submitted with this
Notice. This Notice is being given at the direction of the Board of Directors.
By Order of the Board of Directors
/s/ Cheryl D. Davis
Cheryl D. Davis
Secretary
Montgomery, Alabama
May 23, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING OR HAVE PREVIOUSLY
SUBMITTED A PROXY PURSUANT TO THE COMPANY'S PROXY STATEMENT DATED MARCH 27, 1997
(THE "PREVIOUS PROXY STATEMENT"), PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. ANY PROXIES SUBMITTED
UNDER THE PREVIOUS PROXY STATEMENT WILL NOT BE EFFECTIVE FOR PURPOSES OF ACTIONS
TO BE TAKEN AT THE ANNUAL MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE
PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 4
THE ENSTAR GROUP, INC.
172 COMMERCE STREET
MONTGOMERY, ALABAMA 36104
---------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 30, 1997
---------------------
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to the shareholders of The Enstar
Group, Inc. (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the annual meeting of
shareholders of the Company scheduled to be held on June 30, 1997, at the
Montgomery Civic Center, 300 Bibb Street, Montgomery, Alabama 36104, 10:30 a.m.,
local time, and at any adjournment thereof (the "Annual Meeting").
REASONS FOR RESCHEDULING OF ANNUAL MEETING
The 1997 Annual Meeting was originally scheduled to be held on April 28,
1997. Due to unanticipated delays in the distribution of Common Stock to the
Company's former shareholders, associated delays in many shareholders' receipt
of the original proxy materials and certain other matters, the Company announced
on April 18, 1997 that it had decided to reschedule the Annual Meeting for June
30, 1997 so that all of the Company's shareholders would have the opportunity to
participate fully in the Annual Meeting. In connection with the rescheduling of
the Annual Meeting, the Company set a new record date of May 21, 1997 for
purposes of shareholders entitled to receive notice of, and to vote at, the
Annual Meeting and any adjournment thereof. In addition, the Company announced
that it had waived the advance notice requirement set forth in its Bylaws for
nominations for directors at the Annual Meeting. In lieu of such requirement,
the Company intends to accept nominations from shareholders entitled to vote on
the election of directors at the Annual Meeting up until the time action is
taken with respect to the election of directors at the Annual Meeting.
Following the decision to reschedule the date of the Annual Meeting, the
Board of Directors of the Company also took action to expand the number of
directors to five and elected Jeffrey S. Halis, the Company's largest
shareholder, as director. Mr. Halis also has been nominated by the Board of
Directors for election as a director at the Annual Meeting. See "Election of
Directors."
RECORD DATE
The Board of Directors of the Company has fixed May 21, 1997 as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting. Only holders of Common Stock, par
value $.01 per share, of the Company ("Common Stock") as of the Record Date are
entitled to vote at the Annual Meeting or any adjournment thereof. On the Record
Date, 4,468,414 shares of Common Stock were issued and outstanding. No
cumulative voting rights are authorized, and appraisal rights for dissenting
shareholders are not applicable to the matters being proposed. It is anticipated
that this Proxy Statement will be first mailed to shareholders of the Company on
or about May 23, 1997.
VOTING AND PROXIES
When the enclosed form of proxy is properly executed and returned, the
shares it represents will be voted as directed at the Annual Meeting and any
adjournment thereof or, if no direction is indicated, such shares will be voted
in favor of the proposals set forth in the notice attached hereto. Any
shareholder giving a proxy has the power to revoke it at any time before it is
voted. All proxies delivered pursuant to the solicitation are
<PAGE> 5
revocable at any time at the option of the persons executing them by giving
written notice to the Secretary of the Company, by delivering a later-dated
proxy or by voting in person at the Annual Meeting. If Common Stock owned by a
shareholder is registered in the name of more than one person, each such person
should sign the enclosed proxy. If the proxy is signed by an attorney, executor,
administrator, trustee, guardian or by any other person in a representative
capacity, the full title of the person signing the proxy should be given and a
certificate should be furnished showing evidence of appointment.
The Company will only recognize the enclosed proxy with respect to matters
to be acted upon at the Annual Meeting, and any proxies solicited under the
Company's proxy statement dated March 27, 1997 will not be effective for
purposes of actions to be taken at the Annual Meeting.
In accordance with the Company's Articles of Incorporation and Georgia law,
each share of Common Stock is entitled to one vote at the Annual Meeting.
The presence in person or by proxy of holders of a majority of the shares
of Common Stock outstanding on the Record Date will constitute a quorum for the
transaction of business at the Annual Meeting or any adjournment thereof. The
affirmative vote of a plurality of the shares of Common Stock present in person
or by proxy and entitled to vote is required to elect directors. Under Georgia
law and the Bylaws of the Company, the affirmative vote of the majority of the
shares of Common Stock represented at the Annual Meeting and entitled to vote on
the subject matter is required with respect to the ratification of the
appointment of Deloitte & Touche as the Company's independent auditors, the
ratification of each of the 1997 Amended Stock Option Plans (as defined below)
and any other matter that may properly come before the Annual Meeting. Shares of
Common Stock held by nominees for beneficial owners will be counted for purposes
of determining whether a quorum is present if the nominee has the discretion to
vote on at least one of the matters presented even if the nominee may not
exercise discretionary voting power with respect to other matters and voting
instructions have not been received from the beneficial owner (a "broker
non-vote"). Broker non-votes will not be counted as votes for or against matters
presented for shareholder consideration. Abstentions with respect to a proposal
are counted for purposes of establishing a quorum. If a quorum is present,
abstentions have the effect of a negative vote against any proposal, except for
the election of directors.
As of the date of this Proxy Statement, management of the Company has no
knowledge of any business other than that described herein which will be
presented for consideration at the Annual Meeting. In the event any other
business is properly presented at the Annual Meeting, it is intended that the
persons named in the enclosed proxy will have authority to vote such proxy in
accordance with their judgment on such business.
ELECTION OF DIRECTORS
(ITEM 1)
BOARD OF DIRECTORS
In accordance with the Bylaws of the Company, the Board of Directors
currently consists of five members. The Company's Articles of Incorporation
divide the Board of Directors into three classes with the directors in each
class serving a term of three years. Directors for each class are elected at the
annual meeting of shareholders held in the year in which the term for such class
expires. At the Annual Meeting on June 30, 1997, five nominees for director are
to be elected to serve until the Annual Meeting of Shareholders in the years
indicated below, or until their successors are elected and qualified. In
accordance with the Bylaws of the Company, the mandatory retirement age for
directors who are not employees of the Company is 70.
The Board of Directors has no reason to believe that any of the nominees
for the office of director will be unavailable for election as a director.
However, if at the time of the Annual Meeting any of the nominees should be
unable or decline to serve, the persons named in the proxy will vote as
recommended by the Board of Directors either (i) to elect substitute nominees
recommended by the Board, (ii) to allow the vacancy created thereby to remain
open until filled by the Board or (iii) to reduce the number of directors for
the ensuing year. In no event, however, can a proxy be voted to elect more than
five directors.
2
<PAGE> 6
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR NIMROD T. FRAZER, T. WHIT
ARMSTRONG, T. WAYNE DAVIS, J. CHRISTOPHER FLOWERS AND JEFFREY S. HALIS TO HOLD
OFFICE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS IN THE YEARS INDICATED BELOW, OR
UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
NOMINEES FOR ELECTION -- TERM EXPIRING 1998
J. CHRISTOPHER FLOWERS was elected to the position of director in October
of 1996. Mr. Flowers is a General Partner and Managing Director of Goldman,
Sachs & Co., New York, New York. Mr. Flowers has been a General Partner of
Goldman, Sachs & Co. since December of 1988 and a Managing Director of Goldman,
Sachs & Co. since December of 1996. Mr. Flowers is 39 years old.
JEFFREY S. HALIS was elected to the position of director in April of 1997.
Mr. Halis has been a General Partner of Halo Capital L.P., New York, New York,
and the President of Halo Management Corp., New York, New York, since their
formation in February of 1991. Halo Capital L.P. is an investment partnership,
and Halo Management Corp. is an investment services company. Mr. Halis was
formerly a director of KinderCare Learning Centers of Montgomery, Alabama. Mr.
Halis is 42 years old.
NOMINEE FOR ELECTION -- TERM EXPIRING 1999
NIMROD T. FRAZER was elected to the Board of Directors in August of 1990.
Mr. Frazer was named Chairman of the Board, Acting President and Chief Executive
Officer on October 26, 1990. Mr. Frazer was Chairman of the Board of the Frazer
Lanier Company, a regional investment banking firm, from 1976 to 1996 and was a
Co-Founder. Mr. Frazer is past Chairman of the Water Works and Sanitary Sewer
Board of the City of Montgomery, Alabama and a past director of Columbus Mills
of Columbus, Georgia, Rockdale Industries of Decatur, Georgia, and Sterling Bank
of Montgomery, Alabama. Sterling Bank is a wholly owned subsidiary of Synovus
Financial Corp. of Columbus, Georgia. Mr. Frazer is 67 years old.
NOMINEES FOR ELECTION -- TERM EXPIRING 2000
T. WHIT ARMSTRONG was elected to the position of director in June of 1990.
Mr. Armstrong has been President and Chief Executive Officer of the Citizens
Bank, Enterprise, Alabama, and its holding company, Enterprise Capital
Corporation, Inc. in excess of five years. Mr. Armstrong is also a director of
Alabama Power Company of Birmingham, Alabama. Mr. Armstrong is 50 years old.
T. WAYNE DAVIS was elected to the position of director in June of 1990. Mr.
Davis has been Chairman of the Board of Directors of General Parcel Service,
Inc., a parcel delivery service, since January of 1989. He was a private
investor from June of 1987 until becoming Chairman of General Parcel Service,
Inc., and from January of 1981 to June of 1987, he was Vice President of
Winn-Dixie Stores, Inc., food supermarkets. He is a director of Winn-Dixie
Stores, Inc. of Jacksonville, Florida and Accustaff, Inc. of Jacksonville,
Florida. Mr. Davis is 50 years old.
BANKRUPTCY PROCEEDING
The Company filed for bankruptcy under Chapter 11 of the United States
Bankruptcy Code on May 31, 1991. The Company's plan of reorganization was
confirmed in February, 1992 and became effective on June 1, 1992. The Company's
plan of reorganization was subsequently modified in August, 1993. At the time of
the bankruptcy filing, and thereafter, Nimrod T. Frazer, Cheryl D. Davis and Amy
M. Dunaway were the President and Chief Executive Officer; the Chief Financial
Officer, Vice President of Corporate Taxes and Secretary; and the Treasurer and
Controller of the Company, respectively.
MEETINGS OF THE BOARD OF DIRECTORS
During 1996, the Board of Directors of the Company held a total of five
meetings. Except for Mr. Flowers, who was elected as a director in October of
1996, and for Mr. Halis, who was elected as a
3
<PAGE> 7
director in April of 1997, all members of the Board attended every meeting of
the Board and, to the extent applicable, the committee on which such director
served in 1996.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors has established a Compensation Committee. Messrs.
Armstrong, Davis and Flowers are members of the Compensation Committee, and Mr.
Davis is Chairman of the Committee. The Compensation Committee is responsible
for reviewing, determining and establishing salaries, bonuses and other
compensation for the Company's Chief Executive Officer and for administering the
Company's stock option plans. The Compensation Committee held one meeting in
1996.
COMPENSATION OF DIRECTORS
For all board and committee meetings which took place in 1996 and for all
board and committee meetings prior to May 20, 1997, directors who were not
employees of the Company received a quarterly retainer fee of $2,500 and fee of
$1,000 for each Board meeting attended (including telephonic meetings), as well
as reimbursement of all out-of-pocket expenses incurred in attending all such
meetings and no additional compensation was paid to directors for attendance at
committee meetings. For all board and committee meetings subsequent to May 20,
1997, directors who are not employees of the Company will receive a quarterly
retainer fee of $5,000 and per meeting fees as follows: (i) $2,500 for each
board meeting attended, other than a telephonic board meeting; (ii) $1,000 for
each telephonic board meeting attended; (iii) $1,000 for each committee meeting
attended; and (iv) $1,500 for each committee meeting attended by a Committee
Chairperson. Such outside directors' fees are payable either in cash or in
shares of the Company's Common Stock, at the election of the outside director.
In addition, directors will continue to be entitled to reimbursement for
out-of-pocket expenses incurred in attending all meetings.
In 1996, Messrs. Armstrong and Davis each received one-time bonus payments
equal to $469,245, in accordance with the Directors and Employees Incentive
Bonus Program adopted on June 14, 1994 (the "Bonus Program"). The purpose of the
Bonus Program was to provide certain members of the Board of Directors and
certain employees with an incentive to continue to increase the value of the
Company for the benefit of the Company's shareholders. The Bonus Program also
provided certain directors with an incentive to continue to serve on the Board
of Directors. The Bonus Program provided for a bonus pool equal to three percent
(3%) of the total assets of the Company available for distribution after all
creditors were paid in full. It was adopted at a time when there were not
sufficient assets to pay creditors in full with interest as required by the
Company's bankruptcy plan of reorganization. The bonus pool could not exceed
$1.2 million. All bonuses were paid in 1996, as determined by the Board of
Directors.
Subject to shareholder ratification at the 1997 Annual Meeting, directors
of the Company have received stock options pursuant to the 1997 Amended CEO
Stock Option Plan and the 1997 Amended Outside Directors' Stock Option Plan. See
"Ratification of Adoption of 1997 Amended Stock Option Plans."
4
<PAGE> 8
COMMON STOCK OWNERSHIP BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The table below sets forth certain information regarding the beneficial
ownership of Common Stock as of May 19, 1997 by (i) each person who is known to
the Company to be the beneficial owner of more than 5% of the outstanding Common
Stock, (ii) each of the executive officers named below (the "Named Executive
Officers"), (iii) each of the directors of the Company and (iv) all directors
and executive officers of the Company as a group. Under the rules of the
Securities and Exchange Commission, a person is deemed to "beneficially own"
securities if that person has or shares the power to vote or dispose, or to
direct the vote or disposition, of such securities. The person is also deemed to
beneficially own any securities of which that person has the right to acquire
beneficial ownership within 60 days. Under these rules, more than one person may
be deemed to beneficially own the same securities and a person may be deemed to
beneficially own securities as to which he or she has no beneficial interest.
Except as set forth below, the shareholders named below have sole voting and
investment power with respect to all shares of Common Stock shown as being
beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS(1)
- ------------------------------------ ------------------ -------------------
<S> <C> <C>
NAMED EXECUTIVE OFFICERS
Nimrod T. Frazer........................................... 34,851 *
Cheryl D. Davis............................................ 3 *
Amy M. Dunaway............................................. 87(2) *
DIRECTORS OF THE COMPANY
Nimrod T. Frazer........................................... 34,851 *
172 Commerce Street -- 3rd Floor
Montgomery, Alabama 36104
T. Whit Armstrong.......................................... 6,767(3) *
301 South Edwards Street
Enterprise, Alabama 36330
T. Wayne Davis............................................. 94,036(4) 2.10%
1910 San Marco Blvd.
Jacksonville, Florida 32207
J. Christopher Flowers..................................... 23,820 *
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Jeffrey S. Halis........................................... 289,945(5) 6.49%
941 Park Avenue
New York, New York 10028
All Named Executive Officers and directors
of the Company as a group (7 persons).................... 449,509(6) 10.06%
</TABLE>
- ---------------
* Less than 1%. All individuals who are Named Executive Officers beneficially
own, directly or indirectly, less than 1%.
(1) Based on an aggregate of 4,468,414 shares of Common Stock issued and
outstanding as of May 19, 1997.
(2) Includes 54 shares of which Ms. Dunaway has shared voting power with her
husband and 33 shares of which Ms. Dunaway has sole voting power.
(3) Includes 1,595 shares owned by Mr. Armstrong's minor son.
(4) Includes 116 shares held by Mr. Davis' minor child, 2,352 shares held by Mr.
Davis' mother, 133 shares held by Mr. Davis' wife, 13,410 held in two trusts
and 78,025 shares held in a private foundation for which Mr. Davis has
voting and investment power but is not a beneficiary.
(5) Includes 256,845 shares of which Mr. Halis has shared voting power with Mr.
Halis' wife and 33,100 shares of which Mr. Halis has sole voting power.
(6) Does not include options to purchase an aggregate of 250,000 shares that
have been granted to the Company's Chief Executive Officer and other
directors, subject to shareholder ratification, under the 1997 Amended CEO
Stock Option Plan and the 1997 Amended Outside Directors' Stock Option Plan.
See "Ratification of Adoption of 1997 Amended Stock Option Plans."
5
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth certain information concerning the compensation
paid for the years ended December 31, 1994, 1995 and 1996 for the Company's
Chief Executive Officer and each of the other Named Executive Officers.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION OTHER
------------------------------ ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2)
- --------------------------- ---- --------- ----------- ------------------
<S> <C> <C> <C> <C>
Nimrod T. Frazer................................. 1996 250,000 0 0
Chairman of the Board 1995 250,000 0 1,193,585
of Directors, President and 1994 250,000 0 0
Chief Executive Officer
Cheryl D. Davis.................................. 1996 116,405 121,060 693
Chief Financial Officer, 1995 106,213 0 540
Vice-President of Corporate 1994 100,050 0 420
Taxes and Secretary
Amy M. Dunaway................................... 1996 80,327 80,327 482
Treasurer and Controller 1995 77,524 0 460
1994 73,025 0 399
All Named Executive Officers..................... 1996 446,732 201,387 1,175
(3 persons) as a group 1995 433,737 0 1,194,585
1994 423,075 0 819
</TABLE>
- ---------------
(1) Amounts shown for Ms. Davis and Ms. Dunaway are for one-time bonuses paid
pursuant to the Bonus Program. See "Report of Compensation Committee -- Cash
Bonuses" for a discussion of the Bonus Program.
(2) Amounts shown for Ms. Davis and Ms. Dunaway are for premiums paid by the
Company for term life insurance. The amount shown for Mr. Frazer represents
a 1% commission paid on the gross sales price of American Savings of
Florida, F.S.B. in accordance with a Commission Agreement dated March 4,
1993 between Mr. Frazer and the Company. The Company also makes available
group medical insurance plans to all of its Named Executive Officers and
employees.
EXECUTIVE OFFICERS
Certain information concerning the executive officers of the Company is set
forth below:
<TABLE>
<CAPTION>
EXECUTIVE
NAME AGE POSITION OFFICER SINCE
- ---- --- -------- -------------
<S> <C> <C> <C>
Nimrod T. Frazer..................... 67 Director, Chairman of the Board,
President and Chief Executive Officer 1990
Cheryl D. Davis...................... 37 Chief Financial Officer,
Vice-President of Corporate Taxes,
Secretary 1991
Amy M. Dunaway....................... 40 Treasurer and Controller 1991
</TABLE>
MR. FRAZER was named Chairman of the Board, Acting President and Chief
Executive Officer on October 26, 1990. Mr. Frazer was Chairman of the Board of
the Frazer Lanier Company, a regional investment banking firm, from 1976 to 1996
and was a Co-Founder. Mr. Frazer is past Chairman of the Water Works and
Sanitary Sewer Board of Montgomery, Alabama and a past director of Columbus
Mills of Columbus, Georgia, Rockdale Industries of Decatur, Georgia, and
Sterling Bank, of Montgomery, Alabama. Sterling Bank is a wholly owned
subsidiary of Synovus Financial Corp. of Columbus, Georgia.
MS. DAVIS was named Chief Financial Officer and Secretary in April of 1991
and Vice President of Corporate Taxes in 1989. Ms. Davis has been employed with
the Company since April of 1988.
MS. DUNAWAY was named Treasurer and Controller in April of 1991. Ms.
Dunaway has been employed with the Company since September of 1990.
6
<PAGE> 10
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Compensation
Committee") was created in 1996 and consists of Messrs. Armstrong, Davis and
Flowers. None of the members of the Compensation Committee is an employee of the
Company or any firm which does business with the Company. The Compensation
Committee is responsible for (i) establishing the compensation of the Company's
Named Executive Officers and (ii) considering the issuance of stock options for
executive officers and directors. Mr. Frazer, the Company's Chief Executive
Officer, is responsible for recommending to the Compensation Committee the
compensation for the other executive officers of the Company. The Compensation
Committee has reviewed the applicability of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). Section 162(m) may in certain
circumstances deny a federal income tax deduction for compensation to an
executive officer in excess of $1 million per year. It is not anticipated that
compensation to any executive officer of the Company during 1997 will exceed the
$1 million threshold.
Compensation Policy and Overall Objectives. The Company's executive
compensation policy is designed to attract, retain and motivate executive
officers needed to achieve its strategic and operating objectives and to
maximize the Company's performance and shareholder value.
The Company will support these goals through a compensation strategy of
competitive salaries, annual incentives, and longer-term incentive
opportunities. Compensation will consist of both fixed pay elements (base salary
and benefits) and performance variable pay elements (annual and long-term
incentives) to encourage and reward distinctive contributions to the success of
the organization. Salary and benefit levels will reflect position
responsibilities and strategic importance and will be targeted at market median
base salary levels. Annual incentive payments will reward for significant
contributions to annual financial and strategic non-financial performance, as
defined by management, and will be targeted to deliver market median levels of
total compensation. Long-term incentive opportunities will reward key executives
for financial and non-financial performance that enhances shareholder value.
Long-term incentive opportunities will be above market median levels.
Position responsibilities will be the key determinant of fixed pay and
individual performance will be the key determinant of variable pay. Performance
will include consideration of Company results in varying degrees by position
level. Performance standards will, to the extent possible, be defined and
communicated in advance through a clear system of measurable objectives.
Performance measures will be tailored to the specific responsibilities of each
position. Employees will be responsible for, and rewarded on the basis of,
accomplishment of defined results that contribute to the attainment of strategic
objectives and performance goals.
In light of the fact that the Company had not adopted stock option plans by
the end of 1996, the components of its executive compensation program for 1996
included only base salaries and cash bonuses. The Company has retained an
independent compensation consulting firm to assist it in analyzing its executive
compensation program for 1997 and thereafter. The consulting firm has
recommended that the Company adopt a policy of providing a significant
percentage of certain executive officers' total compensation based on the
Company's performance. In addition, the consultant has provided the Compensation
Committee an analysis of senior executive compensation using published survey
data for the financial services industry. The Compensation Committee considered
these recommendations and the compensation analysis in establishing the base
salaries for the Chief Executive Officer and the other executive officers for
1997.
Base Salary. Each executive officer's base salary, including Mr. Frazer's
base salary, is determined based upon a number of factors including the
executive officer's responsibilities, contribution to the achievement of the
Company's business plan goals, demonstrated leadership skills and overall
effectiveness, and length of service. Base salaries are also designed to be
competitive with those offered in the various markets in which the Company
competes for executive talent and are analyzed with a view towards desired base
salary levels over a three-year to five-year time period. Each executive
officer's salary is reviewed annually and although these and other factors are
considered in setting base salaries, no specific weight is given to any one
factor. During 1996, the base salary of each executive officer other than Mr.
Frazer was increased by approximately 3.6% to 9.6% over each such executive
officer's 1995 base salary. Mr. Frazer's base salary
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<PAGE> 11
was not increased during 1996 over his 1995 base salary, and there is no
increase for the executive officers' base salaries for 1997. The base salaries
are slightly below median competitive levels.
Cash Bonuses. To provide certain members of the Board of Directors and
certain executive officers with an incentive to continue to increase the value
of the Company for the benefit of the Company's former shareholders and to
continue to serve on the Board of Directors, the Board of Directors adopted a
directors and employees incentive bonus program (the "Bonus Program") on June
14, 1994. The Bonus Program provided for a bonus pool equal to three percent
(3%) of the total assets of the Company available for distribution after all
creditors were paid in full. The bonus pool could not exceed $1,200,000. At the
time the Company did not have sufficient assets to pay creditors in full. Due to
the Company's outstanding performance after June 14, 1994, the maximum bonus
pool under the Bonus Program was earned and was paid in 1996, as determined by
the Board of Directors, to employees and current directors of the Company other
than Mr. Frazer, Mr. Flowers and Mr. Halis. All bonuses under the Bonus Program
have been paid.
The Compensation Committee has adopted an annual incentive plan, beginning
in 1997. The annual incentive plan is designed to focus participants on key
performance criteria that are consistent with the Company's short-term business
plan and operating goals. Specific objectives of the plan are to establish
direct links between performance achievement and awards, provide rewards
commensurate with the achievement of specific operating results, and encourage
individual effort toward achievement of corporate performance goals.
Under the annual plan, existing officers will be eligible to participate.
Going forward, any additional participants must be recommended by the CEO and
approved by the Compensation Committee. Eligibility for bonuses will be based on
performance which will be measured at the corporate and individual levels.
Maximum bonuses will be set initially at 45% of base salary for Mr. Frazer and
20% of base salary for the other executive officers.
Long Term Incentives; Amended Stock Option Plans. Long term incentives are
to be provided pursuant to the 1997 Amended CEO Stock Option Plan, the 1997
Amended Outside Directors' Stock Option Plan and the 1997 Amended Omnibus
Incentive Plan. Each of the three plans is subject to shareholder ratification
and are described in greater detail at pages 10-13 of this Proxy Statement. No
stock options were granted in 1996. In connection with the rescheduling of the
date of the Annual Meeting and the expansion of the size of the Board of
Directors, the Compensation Committee sought additional advice from its
independent compensation consulting firm regarding appropriate compensation for
the Company's CEO and outside directors. Based on the advice of its independent
compensation consulting firm and deliberations among members of the Compensation
Committee and Board of Directors, the Company decided to modify the compensation
arrangements applicable to the CEO and outside directors. With respect to the
outside directors, these modifications consisted principally of: (a) reducing
the number of options awarded to outside directors from options to acquire
70,000 shares vesting in four equal installments over a three-year period to
options to acquire 25,000 shares vesting in five equal installments over a
four-year period; and (b) certain modifications to the retainer and meeting fees
payable to non-employee directors which modifications are summarized elsewhere
in this Proxy Statement under the caption "Compensation of Directors." With
respect to the CEO, the Compensation Committee decided to reduce the number of
options awarded to the CEO from options to acquire 200,000 shares to options to
acquire 150,000 shares. In addition, the Compensation Committee also effected
certain technical amendments to each of the 1997 Amended Stock Option Plans.
These amendments were designed to, among other things, insure that the plans
would comply with certain provisions of Section 162(m) of the Code, to
accelerate vesting in the event of a change of control of the Company or in the
8
<PAGE> 12
event of the death or disability of a participant and to permit the transfer of
options or awards to certain related entities.
COMPENSATION COMMITTEE:
T. Wayne Davis, Chairman
T. Whit Armstrong
J. Christopher Flowers
THE FOREGOING REPORT SHOULD 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, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT
THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND
SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
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<PAGE> 13
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2)
The Board of Directors of the Company has appointed the firm of Deloitte &
Touche LLP to serve as independent auditors of the Company for the year ending
December 31, 1997, subject to ratification of this appointment by the
shareholders of the Company. Deloitte & Touche LLP has served as independent
auditors of the Company for 1990 through 1996 and is considered by management of
the Company to be well qualified. The Company has been advised by Deloitte &
Touche LLP that neither it nor any member thereof has any financial interest,
direct or indirect, in the Company or any of its subsidiaries in any capacity.
One or more representatives of Deloitte & Touche LLP will be present at the
Annual Meeting, will have an opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR 1997.
RATIFICATION OF ADOPTION OF 1997 AMENDED STOCK OPTION PLANS
(ITEMS 3, 4 AND 5)
The Board of Directors of the Company has adopted a long-term incentive
program. Under the program, the Board of Directors has approved, subject to
ratification by the shareholders at the Annual Meeting, the 1997 Amended CEO
Stock Option Plan (the "CEO Plan"), the 1997 Amended Outside Directors' Stock
Option Plan (the "Directors' Plan"), and the 1997 Amended Omnibus Incentive Plan
(the "Omnibus Plan") (collectively, the "1997 Amended Stock Option Plans"). The
objectives of the long-term incentive program are to promote the success and
enhance the value of the Company by providing flexibility in the Company's
ability to attract, motivate and retain the services of key employees and
directors. A total of 362,500 shares of Common Stock have been reserved for
issuance under the program.
The Company's success depends in large part on its ability to attract,
motivate and retain key employees and directors. Stock options are a significant
element of compensation for the Company's executive officers and directors.
Options benefit the Company in a number of ways. For example, they tie
compensation to Company performance; they conserve cash and reduce fixed costs;
they result in no charge to reported earnings, either upon grant or exercise;
they produce no dilution to earnings per share without an increase in the stock
price that benefits shareholders generally; the exercise of options increases
the Company's capital; and the Company is entitled to a tax deduction upon the
exercise of nonstatutory options or the disqualifying disposition of incentive
stock options.
The complete text of each of the 1997 Amended Stock Option Plans is set
forth in Appendices A through C to this Proxy Statement. The following are
summaries of certain provisions of each of the 1997 Amended Stock Option Plans
and are qualified in their entirety by reference to the full text of each of the
1997 Amended Stock Option Plans. None of the 1997 Amended Stock Option Plans
will become effective unless shareholder ratification is obtained.
With respect to each of the 1997 Amended Stock Option Plans, the aggregate
number of shares issuable is subject to appropriate adjustment in the event of a
stock split or other recapitalization.
Summary of CEO Plan. The CEO Plan is administered by the Compensation
Committee. Nimrod T. Frazer is the only eligible participant under the CEO Plan.
Subject to shareholder ratification at the Annual Meeting, Nimrod T. Frazer, as
Chief Executive Officer, has been granted options for 150,000 shares of Common
Stock under the CEO Plan, each option having an exercise price equal to $10.50,
which represents the closing price of the Company's Common Stock on April 1,
1997. April 1, 1997 represented the first day of trading in the Company's Common
Stock following the distribution of the Common Stock to the Company's former
shareholders on March 27, 1997. The right to purchase the shares granted under
the CEO Plan will vest in four equal installments of 37,500 shares each,
beginning on the date of the Annual Meeting in 1997, and thereafter vesting on
January 1, 1998, January 1, 1999 and January 1, 2000; provided, however, that
such
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<PAGE> 14
shares will vest only so long as Mr. Frazer is the CEO of the Company as of such
date. The right to purchase shares granted under the CEO Plan also will be
accelerated in the event of a change of control of the Company as defined under
the CEO Plan or in the event of the death or disability of the CEO. The options
granted under the CEO Plan must be exercised no later than the earlier of
January 1, 2007, or 60 days after the CEO ceases to be an employee of the
Company other than by reason of death, mandatory retirement or disability. All
options granted and vested must be exercised within 12 months of the CEO's death
or three years after mandatory retirement or disability. The CEO Plan may be
amended or terminated at any time by the Board of Directors, provided, however,
that any material amendment shall be subject to shareholder approval.
Summary of Directors' Plan. The Directors' Plan is administered by the
Company's chief executive officer. The Company's current outside directors, T.
Wayne Davis, T. Whit Armstrong, J. Christopher Flowers and Jeffrey S. Halis, are
the only eligible participants under the Directors' Plan. Subject to shareholder
ratification at the Annual Meeting, T. Wayne Davis, T. Whit Armstrong, J.
Christopher Flowers and Jeffrey S. Halis, each have been granted options for
25,000 shares of Common Stock under the Directors' Plan. The exercise price for
each stock option issued under the Directors' Plan will be equal to $10.8125,
which represents the average of the high and low bid prices for a share of the
Company's Common Stock on the date of the grant, May 20, 1997. The right to
purchase options granted each of the four outside directors under the Directors'
Plan will vest in five equal installments, with the first 5,000 shares vesting
upon their election as Directors on the date of the Annual Meeting in 1997, and
the remaining shares vesting in equal 5,000 share installments on January 1,
1998, January 1, 1999, January 1, 2000 and January 1, 2001; provided, however,
that such shares will vest only so long as the director is elected and remains a
director of the Company. The right to purchase shares granted under the
Directors' Plan also will be accelerated in the event of a change of control of
the Company as defined under the Directors' Plan or in the event of the death or
disability of the director. No option granted under the Directors' Plan may be
exercised later than the earlier of January 1, 2007, or 60 days after the
director ceases to be a director of the Company other than by reason of death,
mandatory retirement or disability. All options granted and vested must be
exercised within 12 months of the death of a director or three years after
mandatory retirement or disability. The Directors' Plan may be amended or
terminated at any time by the Board of Directors, provided, however, that any
material amendment shall be subject to shareholder approval.
Summary of Omnibus Plan. The Company has established an Omnibus Plan for
the benefit of key employees other than the CEO and current directors, subject
to shareholder approval. The Omnibus Plan will be administered by the
Compensation Committee. A total of 112,500 shares of Common Stock has been
reserved for issuance under the Omnibus Plan which provides generally for stock
appreciation awards, restricted stock awards, incentive stock options and
nonqualified stock options. No individual participant may receive awards with
respect to more than 100,000 shares of Common Stock under the Omnibus Plan. As
of this date, no awards have been made and no options have been granted under
the Omnibus Plan.
The Compensation Committee determines the persons to whom, and the times at
which, options and awards are granted, the types of options to be granted, the
number of shares and the exercise price of each option or grant, and all of the
related terms, conditions and provisions. In making the awards, the Compensation
Committee will take into account various factors including, but not limited to,
the employee's or director's responsibilities, past, present and potential
contributions to the success of the Company, and anticipated years of future
service. Although the Compensation Committee has discretion in granting options
and awards, no option shall have a term longer than ten years, and the exercise
price of each option may not be less than 100 percent of the fair market value
of the Company's Common Stock on the date of the grant. The Omnibus Plan
generally provides for options and awards that are vested to be cancelled if not
exercised within a specified period of time after termination of the optionee's
service as an employee or director. The Omnibus Plan may be amended or
terminated at any time by the Board of Directors, provided, however, that the
Board of Directors may condition any amendment on shareholder approval if such
approval is necessary or advisable and that any material amendment shall be
subject to shareholder approval.
11
<PAGE> 15
The following table sets forth the options granted under the CEO Plan and
the Directors' Plan. As of the date hereof, no awards have been made under the
Omnibus Plan.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
CEO PLAN DIRECTORS' PLAN
--------------------------------- ---------------------------------
NUMBER OF UNITS NUMBER OF UNITS
NAME AND POSITION DOLLAR VALUE($) (OPTIONS) DOLLAR VALUE($) (OPTIONS)
----------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Nimrod T. Frazer..................... * 150,000 N/A N/A
Chairman of the Board of Directors,
President and Chief Executive
Officer
Cheryl D. Davis...................... N/A N/A N/A N/A
Chief Financial Officer,
Vice-President of Corporate Taxes
and Secretary
Amy M. Dunaway....................... N/A N/A N/A N/A
Treasurer and Controller
Executive Group...................... * 150,000 N/A N/A
Non-Executive Director Group......... N/A N/A + 100,000
Non-Executive Officer Employee
Group.............................. N/A N/A N/A N/A
</TABLE>
- ---------------
* Undeterminable at this time. Options granted under the CEO Plan vest in four
equal installments over a period of three years and expire on January 1, 2007,
unless earlier terminated in accordance with the terms of the plan. The
exercise price for the options granted under the CEO Plan is $10.50, which
represents the closing price of the Company's Common Stock on April 1, 1997.
The market price for a share of Common Stock at the close of business on May
20, 1997 was $11.
+ Undeterminable at this time. Options granted under the Director's Plan vest in
five equal installments over a period of four years and expire on January 1,
2007, unless earlier terminated in accordance with the terms of the plan. The
exercise price for the options granted under the Director's Plan is $10.8125,
which represents the average of the high and low bid prices for a share of the
Common Stock on May 20, 1997. The market price for a share of Common Stock at
the close of business on May 20, 1997 was $11.
FEDERAL INCOME TAX CONSEQUENCES.
Nonqualified Stock Options. No income is realized by the optionee at the
time a nonstatutory option is granted. Upon exercise, the optionee realizes
ordinary income in an amount equal to the difference between the exercise price
and the fair market value of the shares on the date of exercise, and the Company
is entitled to a tax deduction for the same amount. Upon the sale of the shares
by the optionee, appreciation or depreciation after the date of exercise is
treated as a short-term or long-term capital gain or loss and will not result in
any deduction for the Company.
Incentive Stock Options. An optionee will not be required to recognize
taxable income upon the grant or exercise of an incentive stock option (an
"ISO") under the Omnibus Plan. If the optionee does not dispose of shares issued
upon exercise of an ISO within two years from the date of grant or within one
year from the date of exercise, then, upon the sale of such shares, any amount
realized in excess of the exercise price is taxed to the optionee as long-term
capital gain, and any loss sustained will be a long-term capital loss. No
deduction would be allowed to the Company for Federal income tax purposes. The
exercise of ISOs gives rise to an adjustment in computing an alternative minimum
taxable income that may result in an alternative minimum tax liability for the
optionee. If shares of Common Stock acquired upon the exercise of an ISO are
disposed of before the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition"), the optionee would realize
ordinary income in the year of disposition in an amount equal to the
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<PAGE> 16
excess (if any) of the fair market value of the shares at exercise (or, if less,
the amount realized on a sale of such shares) over the exercise price thereof,
and the Company would be entitled to deduct such amount for Federal income tax
purposes. Any further gain realized would be taxed as a short-term or long-term
capital gain and would not result in any deduction to the Company. A
disqualifying disposition in the year of exercise will generally avoid the
alternative minimum tax consequences of the exercise of an ISO.
Stock Appreciation Rights. A participant will not realize any taxable
income upon the award of a stock appreciation right under the Omnibus Plan, but
will realize ordinary income in an amount equal to the cash and the fair market
value of any stock received upon the exercise of such stock appreciation right.
The Company generally will be entitled to a deduction equal to the amount of
ordinary income realized by the participant.
Restricted Stock. A participant who receives a restricted stock award
under the Omnibus Plan will have the right to file an election under Section
83(b) of the Internal Revenue Code (a "Section 83(b) Election") with the
Internal Revenue Service and the Company not later than 30 days after the
transfer of the restricted stock to the participant. If a participant makes a
Section 83(b) Election, he or she will recognize ordinary income in an amount
equal to the fair market value of the restricted stock received on the date of
the award, determined without regard to the restrictions applicable to such
stock, and the Company will be entitled to a deduction at that time in the same
amount. The participant then would recognize capital gain or loss upon sale of
the stock after expiration of the applicable restriction period, but would not
recognize any taxable loss if the stock is forfeited by the participant prior to
the expiration of the applicable restriction period.
A participant who does not make a timely Section 83(b) Election upon
receipt of a restricted stock award will recognize ordinary income equal to the
fair market value of the stock upon expiration of the restriction period
applicable to such stock. In that case the Company generally will be entitled to
a deduction equal to the amount of ordinary income realized by the participant
upon expiration of the applicable restriction period.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS CONSIDERS THE COMPANY'S LONG-TERM INCENTIVE PROGRAM
AND THE GRANTING OF THE STOCK OPTIONS CONTEMPLATED THEREIN TO BE IMPORTANT TO
THE COMPANY'S ABILITY TO COMPETE FOR TOP TALENT AND A SIGNIFICANT INCENTIVE TO
PROMOTE THE COMPANY'S SUCCESS AND, THEREFORE, IN THE BEST INTERESTS OF THE
COMPANY'S SHAREHOLDERS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF
THE 1997 CEO STOCK OPTION PLAN, THE 1997 OUTSIDE DIRECTORS' STOCK OPTION PLAN
AND THE 1997 OMNIBUS INCENTIVE PLAN.
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires officers and directors of the Company and persons who beneficially own
more than ten percent of the Company's Common Stock to file with the Securities
and Exchange Commission certain reports, and to furnish copies thereof to the
Company, with respect to each such person's beneficial ownership of the
Company's equity securities and any changes therein. This proxy statement is
being sent to shareholders in the same year as the registration of the Common
Stock under the Exchange Act. Consequently, the foregoing reporting requirements
did not apply to such persons in 1996.
INFORMATION STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS
The Company has provided herewith to each shareholder as of the Record Date
a copy of an Information Statement and Annual Report to Shareholders that forms
the basis for the Company's Registration Statement on Form 10, including the
financial statements and financial statement schedules, as filed with the
Securities and Exchange Commission on March 27, 1997.
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<PAGE> 17
SHAREHOLDER NOMINATIONS FOR ELECTION OF DIRECTORS
In order to ensure that all of the Company's shareholders would have the
opportunity to participate fully in the Annual Meeting, the Company has waived
the advance notice provisions in its Bylaws with respect to shareholder
nominations for director and intends to accept nominations from shareholders
entitled to vote on the election of directors at the Annual Meeting up until the
time action is taken with respect to the election of directors at the Annual
Meeting. In future years, only persons nominated in accordance with the
procedures set forth in the Company's Articles of Incorporation and Bylaws will
be eligible for election as directors. Under the Company's Articles of
Incorporation and Bylaws, any shareholder entitled to vote for the election of
directors may submit to the Board of Directors nominations for the election of
directors only by giving written notice (such notice to include a statement of
the qualifications of the nominee) to the Secretary of the Company at least
sixty (60) days but not more than ninety (90) days prior to the annual meeting
of shareholders at which directors are to be elected.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 1998
Annual Meeting of Shareholders must be received no later than January 22, 1998
in order to be considered for inclusion in the Proxy Statement and form of proxy
to be distributed by the Board of Directors in connection with such meeting.
EXPENSES OF SOLICITATION
The Company will bear the costs of the proxy solicitation. In addition to
this solicitation of proxies by mail, some officers and employees of the
Company, without additional compensation, may solicit proxies personally or by
telephone, facsimile or cable. The Company will also request brokerage houses,
nominees, custodians and fiduciaries to forward soliciting materials to the
beneficial owners of stock held of record and will reimburse such persons for
handling such materials. In addition, the Company has retained Georgeson & Co.,
Inc., New York, New York, to aid in the solicitation of proxies at a fee not to
exceed $8,500, plus reimbursement for out-of-pocket expenses incurred by that
firm on behalf of the Company.
By Order of the Board of Directors
/s/ Cheryl D. Davis
Cheryl D. Davis
Secretary
---------------------
THE INFORMATION STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR
ENDED DECEMBER 31, 1996, ACCOMPANIES THIS PROXY STATEMENT. THE INFORMATION
STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS DOES NOT FORM ANY PART OF THE
MATERIAL FOR THE SOLICITATION OF PROXIES.
---------------------
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<PAGE> 18
APPENDIX A
THE ENSTAR GROUP, INC.
1997 AMENDED CEO STOCK OPTION PLAN
This is the 1997 Amended CEO Stock Option Plan of The Enstar Group, Inc., a
Georgia corporation (the "Company").
SECTION 1. Purpose. The Company is adopting The Enstar Group, Inc. 1997
CEO Stock Option Plan (the "Plan") to secure and retain the services of the
chief executive officer ("CEO") of the Company by giving him an opportunity to
invest in the future success of the Company. The Board of Directors of the
Company (the "Board of Directors") believes the Plan will promote personal
interest in the welfare of the Company by, and provide an incentive to, the
current CEO of the Company, thus facilitating the continued growth and financial
success of the Company.
SECTION 2. Administration. The Plan shall be interpreted and administered
by the Compensation Committee of the Board of Directors (the "Committee"). The
Committee shall have the exclusive authority to interpret the Plan. The decision
of the Committee with respect to matters concerning the Plan shall be final,
conclusive, and binding on both the Company and the Participant.
SECTION 3. Participant. The only Participant (the "Participant") in the
Plan shall be Nimrod T. Frazer.
SECTION 4. Grant of Options. Subject to approval by the shareholders of
the Company, the Company hereby grants Participant an option ("Option") to
acquire 150,000 shares of the Common Stock of the Corporation. The Option is a
nonqualified option and is not an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
SECTION 5. Stock Subject to Options. The Company has authorized and
reserved for issuance upon the exercise of Options pursuant to the Plan an
aggregate of one hundred and fifty thousand (150,000) shares of $.01 par value
Common Stock of the Company (the "Shares"). If the Option is cancelled, expires
or terminates without the Participant exercising it in full, it shall be
cancelled.
The Company shall adjust the total number of Shares and any outstanding
Options, both as to the number of Shares and the option price, for any increase
or decrease in the number of outstanding Shares resulting from a stock split or
a payment of a stock dividend on the Shares, a subdivision or combination of the
Shares, a reclassification of the Shares in accordance with the provisions of
the next paragraph, a merger or consolidation of the Shares or any other like
changes in the Shares or in their value. The Company shall not issue fractional
shares as a result of any of these changes, and shall eliminate from the
outstanding Options any fractional shares that result from a change. The Company
shall not adjust outstanding Options for cash dividends or the issuance of
rights to subscribe for additional stock or securities of the Company.
After any merger of one or more corporations into the Company, any merger
of the Company into another corporation, any consolidation of the Company and
one or more other corporations, or any other corporate reorganization to which
the Company is a party that involves any exchange, conversion, adjustment or
other modification of the outstanding Options, the CEO shall receive at no
additional cost upon the exercise of his Option, subject to any required action
by shareholders and in lieu of the number of Shares as to which he would
otherwise exercise the Option, the number and class of shares of stock or other
securities or any other property to which the terms of the agreement of merger,
consolidation, or other reorganization would entitle the Participant to receive,
if, at the time of the merger, consolidation, or other reorganization, the
Participant had been a holder of record of the number of Shares as to which he
could exercise the Option. Comparable rights shall accrue to the Participant in
the event of successive mergers, consolidations or other reorganizations.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Company in its sole discretion. Any
adjustments may provide for the elimination of any fractional Share which might
otherwise become subject to an Option.
A-1
<PAGE> 19
SECTION 6. Terms and Conditions of Option. The Option granted pursuant to
the Plan shall be evidenced by an agreement in the form and containing the terms
and conditions as the Committee or the Board of Directors of the Company from
time to time may determine, provided that such agreement shall:
(a) state the number of Shares to which it pertains (150,000);
(b) state the option exercise price, which shall be the closing price
thereof on the initial trading day after the Company's Common Stock is
registered;
(c) state the terms and conditions for payment;
(d) provide that such Option shall vest as follows:
(i) The right to purchase 37,500 shares (25% of the shares
available under such Option) shall vest on the date of the Company's
first annual meeting after the distribution of the Company's Common
Stock (subject to ratification of the Plan by the shareholders of the
Company);
(ii) The right to purchase an additional 37,500 shares (25% of the
shares available under the Option) shall vest on January 1, 1998;
provided the Participant is the CEO of the Company as of such date;
(iii) The right to purchase an additional 37,500 shares (25% of the
shares available under the Option) shall vest on January 1, 1999;
provided the Participant is the CEO of the Company as of such date;
(iv) The right to purchase an additional 37,500 shares (25% of the
shares available under the Option) shall vest on January 1, 2000;
provided the Participant is the CEO of the Company as of such date;
(v) The right to purchase all of the shares (100% of the shares
available under the Option) shall vest upon a Change of Control of the
Company (as hereinafter defined); provided the Participant is the CEO of
the Company immediately prior to the first public announcement
concerning such Change of Control of the Company;
(vi) The right to purchase all of the shares (100% of the shares
available under the Option) shall vest upon the death or disability (as
defined in Code Section 22(e)(3)) of the Participant; provided the
Participant is the CEO of the Company immediately prior to such death or
disability;
(e) provide that the Option is not transferable by the Participant
other than pursuant to (1) the last will and testament of the Participant,
or (2) the applicable laws of descent and distribution, and is exercisable
during the Participant's lifetime only by the Participant (except as set
forth in Subsection (g) of this Section); provided, however, the
Participant shall be entitled to transfer the Option to or among his
spouse, children and grandchildren or to one or more trusts or partnerships
in which one or more of such persons hold the primary beneficial interests;
and provided, further, that the Committee may allow transferability in
other appropriate circumstances;
(f) provide that the Option shall terminate no later than the earlier
of (a) January 1, 2007, or (b) sixty (60) days after the date the
Participant ceases to be a CEO of the Company other than by reason of
death, mandatory retirement or disability (as defined in Code Section
22(e)(3));
(g) provide that if a Participant dies while a CEO of the Company, the
Option may be exercised by a legatee or legatees of the Participant under
his last will and testament, or by his personal representative or
representatives, at any time within one (1) year (or within such lesser
period as may be specified in the applicable option agreement) after the
Participant's death but in no event may the Option be exercised later than
January 1, 2007; and
(h) provide that the Option may be exercised at any time within three
(3) years after the mandatory retirement or disability (within the meaning
of Code Section 22(e)(3)) of the Participant, but in no event may the
Option be exercised later than January 1, 2007.
A-2
<PAGE> 20
The Company may require the Participant, as a condition of exercising such
Option, to give written assurances in substance and form satisfactory to the
Company to the effect that such person is acquiring the Shares subject to the
Option for his own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Company in connection with any public offering of its Common Stock.
Such Option shall be subject to the requirement that if, at any time,
counsel to the Company shall determine that the listing, registration or
qualification of the Shares subject to such Option upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or the disclosure of non-public information or
the satisfaction of any other condition is necessary as a condition of, or in
connection with the issuance or purchase of Shares thereunder, such Option may
not be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of Directors.
Nothing herein shall be deemed to require the Company to apply for or to obtain
such listing, registration or qualification, or to satisfy such condition.
For purposes hereof, a Change of Control of the Company shall be deemed to
have occurred upon: (a) the adoption of a plan of merger or consolidation or
share exchange of or by the Company with any other corporation as a result of
which the holders of the outstanding Shares of the Company as a group would
receive less than fifty percent (50%) of the voting common stock of the
surviving or resulting or acquiring corporation; (b) the adoption of a plan of
liquidation or the approval of the dissolution of the Company; or (c) the sale
or transfer of all or substantially all of the assets of the Company.
SECTION 7. Acceleration, Extension. The Committee may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan vest and may be exercised or (ii)
extend the dates during which all, or any particular, option or options granted
under the Plan may be exercised.
SECTION 8. Term of Plan. The effective date of the Plan shall be January
20, 1997, subject to subsequent shareholder ratification of the Plan.
SECTION 9. Exercise of Option by Participant. The Participant shall pay
the Company the purchase price of the Shares as set forth in the Agreement,
which may provide that payment will be made (a) in cash, (b) by delivery to the
Company of Shares that have been owned by the holder for at least six (6) months
prior to the date of exercise, such Shares being credited at their fair market
value, as determined by the Committee in its sole discretion, (c) by receipt of
the exercise price in cash from a broker, dealer, or other "creditor" as defined
in Regulation T issued by the Board of Governors of the Federal Reserve System
following delivery by the Participant to the Committee of instructions in a form
acceptable to the Committee regarding delivery to such broker, dealer, or other
creditor of that number of Shares with respect to which the Option is exercised,
or (d) in any other form or manner as is acceptable to the Company.
Until the Participant receives stock certificates from the Company that
reflect the Shares accruing to the Participant upon the exercise of the Option,
the Participant shall have no rights as a shareholder with respect to the Shares
the Option covers. The Company shall make no adjustment to the Shares for any
dividends or distributions or other rights for which the record date is prior to
the date of that stock certificate, except as the Plan otherwise provides.
SECTION 10. Withholding Taxes. Whenever the Company proposes or is
required to issue Shares to an optionee who is or was an employee of the
Company, or his legatee or legal representative under the Plan, the Company
shall have the right to require the recipient to remit in cash to the Company an
amount sufficient to satisfy any federal, state, and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares.
SECTION 11. Assignability. Except as Section 6(e) of the Plan permits, no
Option or any of the rights and privileges thereof accruing to Participant shall
be transferred, assigned, pledged or hypothecated in any
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way whether by operation of law or otherwise, and no Option, right or privilege
shall be subject to execution, attachment or similar process.
SECTION 12. No Right to Continue as CEO. No provision in the Plan or any
Option shall confer upon Participant any right to continue as the CEO of the
Company.
SECTION 13. Amendment and Termination. The Board of Directors (or the
Committee) at any time may amend or terminate the Plan, provided, however, that
any material amendment hereto shall be subject to shareholder approval.
SECTION 14. Choice of Law. The laws of the State of Georgia shall govern
the Plan.
SECTION 15. Approval of Stockholders. The Company shall submit the Plan
to its shareholders for ratification within twelve (12) months of the adoption
of the Plan by the Board of Directors; failure to receive their approval shall
render all outstanding Options under the Plan immediately void and of no effect.
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APPENDIX B
THE ENSTAR GROUP, INC.
1997 AMENDED OUTSIDE DIRECTORS' STOCK OPTION PLAN
This is the 1997 Amended Outside Directors' Stock Option Plan of The Enstar
Group, Inc., a Georgia corporation (the "Company").
SECTION 1. Purpose. The Company is adopting The Enstar Group, Inc. 1997
Amended Outside Directors' Stock Option Plan (the "Plan") to secure and retain
the services of directors of the Company (who are not also employees of the
Company) (the "Outside Directors") by giving them an opportunity to invest in
the future success of the Company. The Board of Directors of the Company (the
"Board of Directors") believes the Plan will promote personal interest in the
welfare of the Company by, and provide an incentive to, the current Outside
Directors of the Company, thus facilitating the continued growth and financial
success of the Company. The Plan will be administered by the Chief Executive
Officer of the Company (the "CEO").
SECTION 2. Participants. The only participants (the "Participants") in
the Plan shall be the current Outside Directors of the Company, namely T. Wayne
Davis, T. Whit Armstrong, J. Christopher Flowers and Jeffrey S. Halis.
SECTION 3. Grant of Options. Subject to approval by the shareholders of
the Corporation, the Corporation hereby grants each Participant an option
("Option") to acquire 25,000 shares of the Common Stock of the Corporation. Each
Option is a nonqualified option and is not an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
SECTION 4. Stock Subject to Options. The Company has authorized and
reserved for issuance upon the exercise of Options pursuant to the Plan an
aggregate of one hundred thousand (100,000) shares of $.01 par value Common
Stock of the Company (the "Shares"). If any Option is canceled, expires or
terminates without the respective Participant exercising it in full, it shall be
canceled and shall not be reissued to another Participant.
The Company shall adjust the total number of Shares and any outstanding
Options, both as to the number of Shares and the option price, for any increase
or decrease in the number of outstanding Shares resulting from a stock split or
a payment of a stock dividend on the Shares, a subdivision or combination of the
Shares, a reclassification of the Shares in accordance with the provisions of
the next paragraph, a merger or consolidation of the Shares or any other like
changes in the Shares or in their value. The Company shall not issue fractional
shares as a result of any of these changes, and shall eliminate from the
outstanding Options any fractional shares that result from a change. The Company
shall not adjust outstanding Options for cash dividends or the issuance of
rights to subscribe for additional stock or securities of the Company.
After any merger of one or more corporations into the Company, any merger
of the Company into another corporation, any consolidation of the Company and
one or more other corporations, or any other corporate reorganization to which
the Company is a party that involves any exchange, conversion, adjustment or
other modification of the outstanding Options, each Participant shall receive at
no additional cost upon the exercise of his Option, subject to any required
action by shareholders and in lieu of the number of Shares as to which he would
otherwise exercise the Option, the number and class of shares of stock or other
securities or any other property to which the terms of the agreement of merger,
consolidation, or other reorganization would entitle the Participant to receive,
if, at the time of the merger, consolidation, or other reorganization, the
Participant had been a holder of record of the number of Shares as to which he
could exercise the Option. Comparable rights shall accrue to each Participant in
the event of successive mergers, consolidations or other reorganizations.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Company in its sole discretion. Any
adjustments may provide for the elimination of any fractional Share which might
otherwise become subject to an Option.
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SECTION 5. Terms and Conditions of All Options. Each Option granted
pursuant to the Plan is subject to the following terms and conditions:
(a) the Option pertains to 25,000 shares;
(b) the Option exercise price shall be the average of the high and low
bid price on the date of the grant, May 20, 1997;
(c) each Option shall vest as follows:
(i) The right to purchase 5,000 shares (20% of the shares available
under each Option) shall vest on the date of the Company's first annual
meeting after the distribution of the Company's Common Stock; provided
the Participant is elected as a Director of the Company by the
shareholders at such meeting;
(ii) The right to purchase an additional 5,000 shares (20% of the
shares available under the Option) shall vest on January 1, 1998;
provided the Participant is a Director of the Company as of such date;
(iii) The right to purchase an additional 5,000 shares (20% of the
shares available under the Option) shall vest on January 1, 1999;
provided the Participant is a Director of the Company as of such date;
(iv) The right to purchase an additional 5,000 shares (20% of the
shares available under the Option) shall vest on January 1, 2000;
provided the Participant is a Director of the Company as of such date;
(v) The right to purchase an additional 5,000 shares (20% of the
shares available under the Option) shall vest on January 1, 2001;
provided the Participant is a Director of the Company as of such date;
(vi) The right to purchase all of the shares (100% of the shares
available under the Option) shall vest upon a Change of Control of the
Company (as hereinafter defined); provided the Participant is a Director
of the Company immediately prior to the first public announcement
concerning such Change of Control of the Company;
(vii) The right to purchase all of the shares (100% of the shares
available under the Option) shall vest upon the death or disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code of
1986, as amended) of the Participant; provided the Participant is a
Director of the Company immediately prior to such death or disability;
(d) the Option is not transferable by the Participant other than
pursuant to (1) the last will and testament of the Participant, or (2) the
applicable laws of descent and distribution, and is exercisable during the
Participant's lifetime only by the Participant (except as set forth in
Subsection (f) of this Section); provided, however, the Participant shall
be entitled to transfer the Option to or among his spouse, children and
grandchildren, or to one or more trusts or partnerships in which one or
more of such persons hold the primary beneficial interest; and provided,
further that the Company may allow transferability in other appropriate
circumstances;
(e) the Option shall terminate no later than the earlier of (a)
January 1, 2007, or (b) sixty (60) days after the date the Participant
ceases to be a Director of the Company other than by reason of death,
mandatory retirement or disability (as defined in Code Section 22(e)(3));
(f) if a Participant dies while a Director of the Company, the Option
may be exercised by a legatee or legatees of the Participant under his last
will and testament, or by his personal representative or representatives,
at any time within one (1) year after the Participant's death but in no
event may the Option be exercised later than January 1, 2007; and
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<PAGE> 24
(g) the Option may be exercised at any time within three (3) years
after the mandatory retirement or disability (within the meaning of Code
Section 22(e)(3)) of the Participant but in no event may the Option be
exercised later than January 1, 2007.
The Company may require any person to whom an Option is granted, as a
condition of exercising such Option, to give written assurances in substance and
form satisfactory to the Company to the effect that such person is acquiring the
Shares subject to the Option for his or her own account for investment and not
with any present intention of selling or otherwise distributing the same, and to
such other effects as the Company deems necessary or appropriate in order to
comply with federal and applicable state securities laws, or with covenants or
representations made by the Company in connection with any public offering of
its Common Stock.
Each Option shall be subject to the requirement that if, at any time,
counsel to the Company shall determine that the listing, registration or
qualification of the Shares subject to such Option upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or the disclosure of non-public information or
the satisfaction of any other condition is necessary as a condition of, or in
connection with the issuance or purchase of Shares thereunder, such Option may
not be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of Directors.
Nothing herein shall be deemed to require the Company to apply for or to obtain
such listing, registration or qualification, or to satisfy such condition.
For purposes hereof, a Change of Control of the Company shall be deemed to
have occurred upon: (a) the adoption of a plan of merger or consolidation or
share exchange of or by the Company with any other corporation as a result of
which the holders of the outstanding Shares of the Company as a group would
receive less than fifty percent (50%) of the voting common stock of the
surviving or resulting or acquiring corporation; (b) the adoption of a plan of
liquidation or the approval of the dissolution of the Company; or (c) the sale
or transfer of all or substantially all of the assets of the Company.
SECTION 6. Term of Plan. The effective date of the Plan shall be May 20,
1997, subject to subsequent shareholder ratification of the Plan.
SECTION 7. Exercise of Option by Participant. The Participant shall pay
the Company the purchase price of the Shares (a) in cash, (b) by delivery to the
Company of Shares that have been owned by the holder for at least six (6) months
prior to the date of exercise, such Shares being credited at their fair market
value, as determined by the CEO in his or her sole discretion, (c) by receipt of
the exercise price in cash from a broker, dealer, or other "creditor" as defined
in Regulation T issued by the Board of Governors of the Federal Reserve System
following delivery by the Participant to the Committee of instructions in a form
acceptable to the Committee regarding delivery to such broker, dealer, or other
creditor of that number of Shares with respect to which the Option is exercised,
or (d) in any other form or manner as is acceptable to the Committee.
Until the Participant receives stock certificates from the Company that
reflect the Shares accruing to the Participant upon the exercise of the Option,
the Participant shall have no rights as a shareholder with respect to the Shares
the Option covers. The Company shall make no adjustment to the Shares for any
dividends or distributions or other rights for which the record date is prior to
the date of that stock certificate, except as the Plan otherwise provides.
SECTION 8. Withholding Taxes. Whenever the Company proposes or is
required to issue Shares to a Participant who is or was an employee of the
Company, or his legatee or legal representative under the Plan, the Company
shall have the right to require the recipient to remit in cash to the Company an
amount sufficient to satisfy any federal, state, and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares.
SECTION 9. Assignability. Except as Section 5(d) of the Plan permits, no
Option or any of the rights and privileges thereof accruing to a Participant
shall be transferred, assigned, pledged or hypothecated in any way whether by
operation of law or otherwise, and no Option, right or privilege shall be
subject to execution, attachment or similar process.
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SECTION 10. No Right to Continue as a Director. No provision in the Plan
or any Option shall confer upon any Participant any right to continue as a
Director of the Company.
SECTION 11. Amendment and Termination. The Board of Directors at any time
may amend or terminate the Plan, provided, however, that any material amendment
hereto shall be subject to shareholder approval.
SECTION 12. Choice of Law. The laws of the State of Georgia shall govern
the Plan.
SECTION 13. Approval of Stockholders. The Company shall submit the Plan
to its shareholders for ratification within twelve (12) months of the adoption
of the Plan by the Board of Directors; failure to receive their approval shall
render all outstanding Options immediately void and of no effect.
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APPENDIX C
THE ENSTAR GROUP, INC.
1997 AMENDED OMNIBUS INCENTIVE PLAN
This is the 1997 Amended Omnibus Incentive Plan of The Enstar Group, Inc.,
a Georgia corporation (the "Company").
SECTION 1. Name, Purpose and Definitions.
1.1 Name and Purpose. The Company is adopting The Enstar Group, Inc. 1997
Omnibus Incentive Plan (the "Plan") to secure and retain the services of
officers, key employees, and directors of the Company by giving them an
opportunity to invest in the future success of the Company. The Board of
Directors of the Company (the "Board of Directors") believes the Plan will
promote personal interest in the welfare of the Company by, and provide an
incentive to, the individuals who are primarily responsible for the regular
operations of the Company and for shaping and carrying out the long term plans
of the Company, thus facilitating the continued growth and financial success of
the Company.
1.2 Definition. Whenever used in the Plan, the following terms shall have
the meaning set forth below:
(a) "Affiliate" shall mean any affiliate or subsidiary (direct or
indirect) of the Company, which the Board of Directors may from time to
time determine to bring under the Plan and which shall adopt the Plan, and
any successor of any of them.
(b) "Award" shall mean, individually and collectively, any Option,
Stock Appreciation Rights, or Restricted Stock granted under the Plan.
(c) "Base Value" shall mean the Fair Market Value of a Stock
Appreciation Right on the date of its grant.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Committee" shall mean a committee composed of not fewer than two
(2) members of the Board of Directors, all of which shall be
"disinterested" persons as defined in Section 2 hereof.
(f) "Common Stock" shall mean the Common Stock of The Enstar Group,
Inc.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(h) "Company" shall mean The Enstar Group, Inc.
(i) "Disability" shall have the meaning set forth in Section 22(e)(3)
of the Code.
(j) "Employee" shall mean any person who is currently employed by the
Company or an Affiliate.
(k) "Effective Date" shall mean May 20, 1997, provided, however, that
the Plan's adoption is subject to ratification by the shareholders of the
Company at the Company's first annual meeting after the Company's Common
Stock is distributed to its former shareholders.
(l) "Fair Market Value" shall mean the fair market value of Common
Stock on the date of a grant or exercise of an Award, as the case may be,
as determined by a methodology adopted by the Board of Directors or the
Committee.
(m) "Incentive Stock Option" shall mean a stock option within the
meaning of Section 422 of the Code granted pursuant to Section 4.1(a).
(n) "Nonqualified Stock Option" shall mean an Option, other than an
Incentive Stock Option, granted pursuant to Section 4.1(b).
(o) "Option" shall mean, individually and collectively, an Incentive
Stock Option and a Nonqualified Stock Option to purchase Common Stock.
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(p) "Option Price" shall mean the price per share of Common Stock set
by the grant of an Option, but in no event less than the Fair Market Value
of the Option.
(q) "Participant" shall mean those officers, key employees and
directors of the Company, and its Affiliates to whom Awards may be granted.
(r) "Restricted Stock" shall mean an Award granted pursuant to Section
4.1(d).
(s) "Separation Date" shall mean, as determined by the Committee, the
date on which a Participant's employment with the Company or an Affiliate
terminates for reasons other than his transfer of employment to another
Employing Company; and in the case of a Participant who is solely a
director shall mean the date of such Participant is no longer a director of
the Company. Whether any leave of absence shall constitute termination of
employment for the purposes of the Plan shall be determined in each case by
the Committee at its sole discretion.
(t) "Stock Appreciation Rights" or "SAR's" shall mean a right to any
appreciation in shares of Common Stock granted pursuant to Section 4.1(c).
SECTION 2. Administration. The Board of Directors shall appoint at least
two of its members to a committee (the "Committee") that will administer the
Plan on behalf of the Company. Except as may otherwise be provided in Rule 16b-3
of the Securities Exchange Act of 1934 (if applicable), no person shall be
appointed as a member of the Committee who is, or within one year prior to his
becoming a member of the Committee was, granted or awarded equity securities
pursuant to the Plan or any other plan of the Company or an affiliate, if such
grant or award would cause that person not to be "disinterested" for purposes of
Rule 16b-3 as promulgated pursuant to the Securities Exchange Act of 1934.
Each member of the Committee shall serve at the pleasure of the Board of
Directors, which may fill any vacancy, however caused, in the Committee. The
Committee shall select one of its members as a chairman and shall hold meetings
at the times and in the places as it shall deem advisable. All actions the
Committee takes shall be made by majority decision. Any action evidenced by a
written instrument signed by all of the members of the Committee shall be as
fully effective as if the Committee had taken the action by majority vote at a
meeting duly called and held.
The Committee shall also have complete and conclusive authority to (1)
interpret the Plan, (2) prescribe, amend, and rescind rules and regulations
relating to it, (3) determine the terms and provisions of the agreements the
Company makes with Participants (the "Agreement"), the terms of which need not
be identical, and (4) make all other determinations necessary or advisable for
the administration of the Plan. With respect to each Award granted hereunder,
the Agreement evidencing the grant shall specifically state whether the Option
is an Incentive Stock Option, a Nonqualified Stock Option, an Award of
Restricted Stock or an Award of SAR's.
In addition to any other rights of indemnification that they may have as
directors of the Company or as members of the Committee, the directors of the
Company and members of the Committee shall be indemnified by the Company against
the reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of action taken or failure to act under or in connection with the Plan
or any Award granted thereunder, and against all amounts paid by them in
settlement thereof (provided the settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in the action, suit or proceeding that the Committee member is
liable for negligence or misconduct in the performance of his duties; provided
that within sixty (60) days after institution of any action, suit or proceeding,
a Committee member shall in writing offer the Company the opportunity, at its
own expense, to handle and defend the same.
SECTION 3. Eligibility. The Committee shall grant Awards only to
officers, key employees, and directors of the Company or its Affiliates;
provided, however, that an Incentive Stock Option may only be granted if such
individual is an employee of the Company or an Affiliate. Subject to the limits
set forth in this
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Plan, the Committee at any time may grant additional Awards to directors,
officers or key employees to whom the Committee had previously granted Awards,
so that a Participant may hold more than one Award at the same time.
SECTION 4.
4.1 Awards. The Committee shall determine the forms and amounts of Awards
for Participants; provided that in no event shall any Award be effective until
the shareholders of the Company have ratified the Plan. All Awards shall be
subject to the terms and conditions of the Plan and to such other terms and
conditions consistent with the Plan as the Committee deems appropriate. Awards
under the Plan need not be uniform and Awards under two (2) or more paragraphs
may be combined in one agreement. Any combination of Awards may be granted at
one time and on more than one occasion to the same Participant. Such Awards may
take the following forms, in the Committee's sole discretion:
(a) Incentive Stock Options -- These shall be stock options within the
meaning of Section 422 of the Code to purchase Common Stock. In addition to
other restrictions contained in the Plan, an Incentive Stock Option (1)
shall not be exercised more than ten (10) years after the date it is
granted, (2) shall not have an Option Price less than the Fair Market Value
of Common Stock on the date the Incentive Stock Option is granted, (3)
shall otherwise comply with Section 422 of the Code, and (4) shall be
designated as an "Incentive Stock Option" by the Committee. The aggregate
Fair Market Value of Common Stock determined at the time of each grant for
which any Participant may exercise Incentive Stock Options under this Plan
for any calendar year shall not exceed $100,000. Subject to the provisions
of Section 5.1 hereof, no Incentive Stock Option may be exercised during
the first twelve (12) months following its grant.
(b) Nonqualified Stock Options -- These shall be stock options to
purchase Common Stock which are not designated by the Committee as
"Incentive Stock Options." At the time of the grant, the Committee shall
determine the Option exercise period, the Option Price, and such other
conditions or restrictions on the exercise of the Nonqualified Stock Option
as the Committee deems appropriate. In addition to other restrictions
contained in the Plan, a Nonqualified Stock Option (1) shall not be
exercised more than ten (10) years after the date it is granted, and (2)
shall not have an Option Price less than 100% of the Fair Market Value of
Common Stock on the date the Nonqualified Stock Option is granted. Subject
to the provisions of Section 5.1 hereof, no Nonqualified Stock Options
granted under this Plan may be exercised during the first twelve (12)
months following its grant.
(c) Stock Appreciation Rights -- These shall be rights that on
exercise entitle the holder to receive the excess of (1) the Fair Market
Value of Common Stock on the date of exercise over (2) its Base Value
multiplied by (3) the number of SAR's exercised. Such rights shall be
satisfied in cash, stock, or a combination thereof, as determined by the
Committee. Stock Appreciation Rights granted under the Plan may be granted
in the sole discretion of the Committee in conjunction with an Incentive
Stock Option or Nonqualified Stock Option under the Plan. The Committee may
impose such conditions or restrictions on the exercise of SAR's as it deems
appropriate and may terminate, amend, or suspend such SAR's at any time.
Subject to the provisions of Section 5.1 hereof, no SAR's granted under
this Plan shall be exercised less than one (1) year or more than ten (10)
years after the date it is granted.
(d) Restricted Stock -- Restricted Stock shall be shares of Common
Stock held by the Company for the benefit of a Participant without payment
of consideration, with restrictions or conditions upon the Participant's
right to transfer or sell such shares. The following provisions shall be
applicable to Restricted Stock Awards:
(1) Each certificate for Restricted Stock shall be registered in
the name of the Participant and shall be deposited by him with the
Company, together with a stock power endorsed in blank.
(2) At the time of making a Restricted Stock Award, the Committee
shall establish the "Restriction Period" applicable thereto. Such
Restriction Period shall range from three (3) to ten (10) years as
determined by the Committee. The Committee may provide for the annual
lapse
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of restrictions with respect to a specified percentage of the Restricted
Stock, provided the Participant satisfies all eligibility requirements
at such time.
(3) The Participant shall be entitled to receive dividends during
the Restriction Period and shall have the right to vote such Common
Stock and exercise all other shareholder's rights except the following:
(i) the Participant shall not be entitled to delivery of the
stock certificate during the Restriction Period,
(ii) the Company shall retain custody of the Restricted Stock
during the Restriction Period, and
(iii) a breach of a restriction or a breach of the terms and
conditions established by the Committee with respect to the
Restricted Stock shall cause a forfeiture of the Restricted Stock.
(4) The Committee may, in its sole discretion, prescribe such
additional restrictions, terms, or conditions upon or to the Restricted
Stock Awards as it may deem necessary or appropriate.
4.2 Individual Agreements. After the Committee determines a form and
amount of a Participant's Award, it shall cause the Company to enter into such
written agreement or agreements with the Participant setting forth the form and
amount of the Award and any conditions and restrictions on the Award imposed by
the Plan and the Committee.
4.3 Exercise and Payment. Options may be exercised from time to time by
giving notice to the Committee, specifying the number of shares to be purchased.
Notice of exercise shall be accompanied by payment in full of the Option Price
in cash. The Committee, in its discretion, may permit the Option Price to be
paid in whole or in part through the transfer to the Company of shares of Common
Stock previously acquired by the Participant; provided, however, that the shares
so transferred shall have been held by the Participant for a period of more than
six (6) months and no Restricted Stock may be transferred as payment of the
Option Price. In the event the Option Price is paid, in whole or in part, with
shares of Common Stock, such shares shall be valued at their Fair Market Value,
as of the date of exercise of the Option. Such shares shall be delivered, along
with any portion to be paid in cash, within five (5) days after the date of
exercise. If the Participant fails to pay the Option Price within such five (5)
day period, the Committee shall have the right to take whatever action it deems
appropriate, including voiding the exercise of the Option. The Company shall not
issue or transfer Common Stock upon the exercise of an Option until the Option
Price is fully paid.
4.4 Transfer of Awards. The Committee may, in its discretion, provide that
any Award may be transferred by a Participant to or among his spouse, children
and grandchildren or to one or more trusts or partnerships in which one or more
of such persons hold the primary beneficial interests, or the Committee may
allow transferability in other appropriate circumstances.
SECTION 5.
5.1 Termination of Employment. A Participant whose employment terminates
for reasons other than retirement, Disability, or death shall, in the discretion
of the Committee, have no right to receive any benefit or payment for existing
Awards under the Plan. Any outstanding Award shall terminate on the
Participant's Separation Date; provided, however, that the Committee, in its
sole discretion, may permit the exercise of any outstanding Award after the
Participant's Separation Date, but in no event beyond the earlier of (a) three
(3) months from the Participant's Separation Date or (b) the expiration date of
the Award, to the extent exercisable on such Participant's Separation Date.
5.2 Death of a Participant. In the event of the death of a Participant
prior to the exercise of all Incentive Stock Options, Nonqualified Stock
Options, and Stock Appreciation Rights granted to such Participant, the
administrator of the deceased Participant's estate, the executor under his will,
or the person or persons to whom the Options or SAR's shall have been validly
transferred by such executor or administrator pursuant to the will or laws of
interstate succession shall have the right, within one year from the date of
such
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Participant's death, but not beyond the expiration date of the Options or SAR's,
to exercise such Options or SAR's to the extent exercisable on such
Participant's Separation Date.
5.3 Retirement. (a) In the event of the termination of a Participant's
employment due to his retirement prior to the exercise of all Incentive Stock
Options granted to the Participant, such Participant shall have the right,
within three (3) months of his Separation Date, but not beyond the expiration of
such Options, to exercise such Incentive Stock Options to the extent exercisable
on his Separation Date.
(b) In the event of the termination of a Participant's employment due to
his retirement prior to the exercise of all Nonqualified Stock Options or Stock
Appreciation Rights granted to the Participant, such Participant shall have the
right, within thirty-six (36) months of his Separation Date, but not beyond the
expiration date of such Nonqualified Stock Options or SAR's, to exercise such
Nonqualified Stock Options or SAR's to the extent exercisable on his Separation
Date.
5.4 Disability. (a) In the event of the termination of a Participant's
employment due to Disability prior to the exercise of all Incentive Stock
Options granted to the Participant, such Participant or his legal representative
shall have the right, within twelve (12) months of his Separation Date, but not
beyond the expiration date of such Incentive Stock Options, to exercise such
Incentive Stock Options to the extent exercisable on his Separation Date.
(b) In the event of the termination of a Participant's employment due to
Disability prior to the exercise of all Nonqualified Stock Options and Stock
Appreciation Rights granted to the Participant, such Participant or his legal
representative shall have the right, within thirty-six (36) months of his
Separation Date, but not beyond the expiration date of such Nonqualified Stock
Options or SAR's, to exercise such Nonqualified Stock Options or SAR's to the
extent exercisable on his Separation Date.
SECTION 6.
6.1 Limitation of Shares of Common Stock Available Under the Plan. (a) The
total number of shares of Common Stock available to be granted by the Committee
as Awards to the Participants under the Plan shall not exceed 112,500 shares.
The aggregate number of shares of Common Stock to be granted as Awards to any
individual Participant shall not exceed 100,000 shares.
(b) The total number of shares available under Section 6.1(a) shall be
reduced from time to time in the manner specified:
(1) Incentive Stock Options and Nonqualified Stock Options -- The
grant of an Incentive Stock Option and Nonqualified Stock Option shall
reduce the available shares by the number of shares subject to such Option.
(2) Stock Appreciation Rights -- The grant of Stock Appreciation
Rights shall reduce the available shares by the number of SAR's granted;
provided, however, if SAR's are granted in conjunction with an Option and
the exercise of such Option would cancel the SAR's and vice versa, then the
grant of the SAR's will only reduce the amount available by the excess, if
any, of the number of SAR's granted over the number of shares subjected to
the related Option.
(3) Restricted Stock -- The grant of Restricted Stock shall reduce the
available shares by the number of shares of Restricted Stock granted.
(c) The total number of shares available under Section 6.1(a) shall be increased
from time to time in the manner specified:
(1) Incentive Stock Options and Nonqualified Stock Options -- The
lapse or cancellation of an Incentive Stock Option or Nonqualified Stock
Option shall increase the available shares by the number of shares released
from such Option; provided, however, in the event the cancellation of an
Option is due to the exercise of SAR's related to such Option, the
cancellation of such Option shall only increase the amount available by the
excess, if any, of the number of shares released from such Option over the
number of SAR's exercised.
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(2) Stock Appreciation Rights -- The lapse or cancellation of Stock
Appreciation Rights shall increase the available shares by the number of
SAR's which lapse or are cancelled; provided, however, in the event the
cancellation of such SAR's is due to the exercise of an Option related to
such SAR's, the cancellation of such SAR's shall only increase the
available shares by the excess, if any, of the number of SAR's cancelled
over the number of shares delivered on the exercise of such Option.
(3) Restricted Shares -- The reversion of Restricted Stock to the
Company due to the breach or occurrence of a restriction or condition on
such shares shall increase the available shares by the number of shares of
Restricted Stock reverted.
SECTION 7. Adjustment Upon Changes in Capitalization. The total number of
shares of Common Stock available for Awards under the Plan or allocable to any
individual Participant, the number of shares of Common Stock subject to
outstanding Options, the exercise price for such Options, the number of
outstanding SAR's, and the Base Value of such SAR's shall be appropriately
adjusted by the Committee for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock dividend, subdivision
or combination of shares, or reclassification. In the event of a merger or
consolidation of the Company or a tender offer for shares of Common Stock, the
Committee may make such adjustments with respect to Awards under the Plan and
take such other action as it deems necessary or appropriate to reflect, or in
anticipation of, such merger, consolidation, or tender offer, including without
limitation the substitution of new Awards, the termination or adjustment of
outstanding Awards, the acceleration of Awards, or the removal of limitations or
restrictions on outstanding Awards.
SECTION 8. Terms and Conditions of All Awards. The Committee may include
in any Award it grants a condition that the Participant shall agree to remain an
employee of and/or to render services to the Company or any of its Affiliates
for a specified period of time following the date it grants the Award. This
condition shall not impose on the Company or any Affiliate any obligation to
employ the Participant or retain the Participant as a director for any period of
time.
The Committee may require any person to whom an Award is granted, as a
condition of exercising such Award, to give written assurances in substance and
form satisfactory to the Company to the effect that such person is acquiring the
Common Stock subject to the Award for his or her own account for investment and
not with any present intention of selling or otherwise distributing the same,
and to such other effects as the Company deems necessary or appropriate in order
to comply with federal and applicable state securities laws, or with covenants
or representations made by the Company in connection with any public offering of
its Common Stock.
Each Award shall be subject to the requirement that if, at any time,
counsel to the Company shall determine that the listing, registration or
qualification of the Common Stock subject to such Award upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with the issuance or purchase of Common Stock
thereunder, such Award may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.
SECTION 9. Compliance with Code for Incentive Stock Options. All
Incentive Stock Options are intended to comply with Code Section 422, and all
provisions of the Plan and all Incentive Stock Options granted hereunder shall
be construed in such manner as to effectuate that intent.
SECTION 10. Term of Plan. The effective date of the Plan shall be May 20,
1997, subject to subsequent shareholder ratification of the Plan. The Plan shall
terminate ten (10) years after that date. The Committee may grant Awards
pursuant to the Plan at any time on or between that effective date and that
termination date.
SECTION 11. Withholding Taxes. Whenever the Company proposes or is
required to issue Common Stock to an Participant who is or was an employee of
the Company or an Affiliate, or his legatee or legal
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representative under the Plan, the Company shall have the right to require the
recipient to remit in cash to the Company an amount sufficient to satisfy any
federal, state, and local withholding tax requirements prior to the delivery of
any certificate or certificates for such Common Stock.
SECTION 12. Assignability. Except as Section 4.4 or Section 5.2 of the
Plan permits, no Award or any of the rights and privileges thereof accruing to a
Participant shall be transferred, assigned, pledged or hypothecated in any way
whether by operation of law or otherwise, and no Award, right or privilege shall
be subject to execution, attachment or similar process. Except as permitted
pursuant to Section 4.4 of the Plan, no election as to benefits or exercise of
Options, SAR's, or other rights, may be made during a Participant's lifetime by
anyone other than the Participant.
SECTION 13. The Right of the Company to Terminate Employment. No
provision in the Plan or any Award shall confer upon any Participant any right
to continue in the employment of the Company or any subsidiary of the Company or
to continue performing services for or to interfere in any way with the right of
the Company or any subsidiary of the Company to terminate his employment or
discontinue his directorship at any time for any reason.
SECTION 14. Amendment and Termination. The Board of Directors at any time
may amend or terminate the Plan without shareholder approval; provided, however,
that the Board of Directors may condition any amendment on the approval of the
shareholders of the Company if such approval is necessary or advisable with
respect to tax, securities (which require such approval for a material increase
of the number of shares of Common Stock subject to the Plan, and for material
modifications to the eligibility requirements of the Plan, among others) or
other applicable laws to which the Company, the Plan, optionees or eligible
employees are subject. No amendment or termination of the Plan shall affect the
rights of a Participant with regard to his Awards without his consent.
SECTION 15. Choice of Law. The laws of the State of Georgia shall govern
the Plan.
SECTION 16. Approval of Shareholders. The Company shall submit the Plan
to its shareholders for ratification within twelve (12) months of the adoption
of the Plan by the Board of Directors; failure to receive their approval shall
render all outstanding Awards immediately void and of no effect.
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APPENDIX D
THE ENSTAR GROUP, INC.
PROXY FOR COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON JUNE 30, 1997
The undersigned hereby appoints Nimrod T. Frazer and Cheryl D. Davis, and
each of them, proxies, with full power of substitution and resubstitution, for
and in the name of the undersigned, to vote all shares of Common Stock of The
Enstar Group, Inc. which the undersigned would be entitled to vote if personally
present at the annual meeting of shareholders to be held on Monday, June 30,
1997, at 10:30 a.m., local time, at the Montgomery Civic Center, 300 Bibb
Street, Montgomery, Alabama 36104, or at any adjournment thereof, upon the
matters described in the accompanying Notice of Annual Meeting of Shareholders
and Proxy Statement, receipt of which is hereby acknowledged, and upon any other
business that may properly come before the annual meeting or any adjournment
thereof. Said proxies are directed to vote on the matters described in the
Notice of Annual Meeting of Shareholders and Proxy Statement as follows, and
otherwise in their discretion upon such other business as may properly come
before the meeting or any adjournment thereof.
1. To elect five (5) directors:
---FOR all nominees listed (except as marked to the contrary)
Nimrod T. Frazer
T. Whit Armstrong
T. Wayne Davis
J. Christopher Flowers
Jeffrey S. Halis
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME.)
---WITHHOLD AUTHORITY to vote for all nominees listed
Nimrod T. Frazer
T. Whit Armstrong
T. Wayne Davis
J. Christopher Flowers
Jeffrey S. Halis
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors.
---------- FOR ---------- AGAINST ---------- ABSTAIN
3. To ratify the adoption of the 1997 Amended CEO Stock Option Plan.
---------- FOR ---------- AGAINST ---------- ABSTAIN
4. To ratify the adoption of the 1997 Amended Outside Directors' Stock
Option Plan.
---------- FOR ---------- AGAINST ---------- ABSTAIN
5. To ratify the adoption of the 1997 Amended Omnibus Incentive Plan.
---------- FOR ---------- AGAINST ---------- ABSTAIN
<PAGE> 34
6. In their discretion, to vote upon such other business as may properly
come before the Annual Meeting.
THIS PROXY WILL BE VOTED AS INDICATED, BUT IF NO DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED FOR THE ABOVE PROPOSALS.
Date:
--------------------------------, 1997
--------------------------------------
--------------------------------------
Please sign exactly as your name or
names appear hereon. For more than one
owner as shown above, each should
sign. When signing in a fiduciary or
representative capacity, please give
full title. If this proxy is submitted
by a corporation, it should be
executed in the full corporate name by
a duly authorized officer, if a
partnership, please sign in
partnership name by authorized person.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ON JUNE
30, 1997 OR HAVE PREVIOUSLY SUBMITTED A PROXY PURSUANT TO THE COMPANY'S PROXY
STATEMENT DATED MARCH 27, 1997 (THE "PREVIOUS PROXY STATEMENT"). ANY PROXIES
SUBMITTED UNDER THE PREVIOUS PROXY STATEMENT WILL NOT BE EFFECTIVE FOR PURPOSES
OF ACTIONS TO BE TAKEN AT THE ANNUAL MEETING. IF YOU ATTEND THE ANNUAL MEETING,
YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR
PROXY.
