<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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
(ENSTAR LOGO)
April 21, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
The Enstar Group, Inc. (the "Company") to be held on Thursday, May 21, 1998, at
the Montgomery Civic Center at 300 Bibb Street, Montgomery, Alabama 36104. The
meeting will begin promptly at 10:00 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.
It is important that your shares be voted whether or not you plan to be
present at the meeting. You should specify your choices by marking the
appropriate boxes on the proxy, 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
(ENSTAR LETTERHEAD ADDRESS)
<PAGE> 3
THE ENSTAR GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 1998
To the Shareholders of The Enstar Group, Inc.:
The Annual Meeting of Shareholders of The Enstar Group, Inc. (the
"Company") will be held on Thursday, May 21, 1998, at 10:00 a.m., local time, at
the Montgomery Civic Center at 300 Bibb Street, Montgomery, Alabama 36104, for
the following purposes:
(i) to elect two (2) directors for three-year terms expiring at the
annual meeting of shareholders in 2001 or until their successors are duly
elected and qualified;
(ii) to ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company to serve for 1998; and
(iii) to transact such other business as may properly come before the
Annual Meeting of Shareholders or any adjournment thereof.
The Board of Directors has fixed the close of business on March 31, 1998 as
the record date (the "Record Date") for determination of shareholders 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
Chief Financial Officer,
Vice-President of
Corporate Taxes and Secretary
Montgomery, Alabama
April 21, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE IN PERSON
IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
<PAGE> 4
THE ENSTAR GROUP, INC.
172 COMMERCE STREET
MONTGOMERY, ALABAMA 36104
---------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 1998
---------------------
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 to be held on May 21, 1998 (the "Annual Meeting"), at the
Montgomery Civic Center, 300 Bibb Street, Montgomery, Alabama 36104, 10:00 a.m.,
local time, and at any adjournment thereof.
RECORD DATE
The Board of Directors of the Company has fixed March 31, 1998 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, the Company had issued and outstanding 4,161,234 shares of Common
Stock. Each share of Common Stock is entitled to one vote at the Annual Meeting.
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 April 21, 1998.
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 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. Any beneficial owner of shares of
Common Stock as of the Record Date who intends to vote such shares in person at
the Annual Meeting must obtain a legal proxy from the record owner and present
such proxy at the Annual Meeting in order to vote such shares. Votes cast by
proxy or in person at the Annual Meeting will be tabulated by the inspector of
election appointed for the meeting who will also determine whether a quorum is
present for the transaction of business.
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 LLP as the Company's independent auditors and
any other matter that may properly come before
<PAGE> 5
the Annual Meeting. At the Annual Meeting, votes cast for or against any matter
may be cast in person or by proxy. 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. At the 1997 annual meeting of
shareholders, two directors were elected to hold office for a term expiring at
the Annual Meeting, one director was elected to hold office for a term expiring
at the 1999 annual meeting of shareholders, and two directors were elected to
hold office for a term expiring at the 2000 annual meeting of shareholders.
Directors for each class are elected at the annual meeting of shareholders held
in the year in which the term for such class expires to serve a term of three
years. At the Annual Meeting, J. Christopher Flowers and Jeffrey S. Halis will
stand for election to serve as directors for three-year terms expiring at the
2001 annual meeting of shareholders or until their successors are duly 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
two directors. The election of the nominees to the Board requires the
affirmative vote of a plurality of the shares held by shareholders present and
voting at the Annual Meeting in person or by proxy.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR J. CHRISTOPHER FLOWERS AND
JEFFREY S. HALIS TO HOLD OFFICE UNTIL THE 2001 ANNUAL MEETING OF SHAREHOLDERS,
OR UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
NOMINEES FOR ELECTION
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 40 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 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
2
<PAGE> 6
Halo Management Corp. is an investment services company. Mr. Halis was formerly
a director of KinderCare Learning Centers of Montgomery, Alabama. Mr. Halis
currently serves on the board of directors of PriceSmart, Inc. Mr. Halis is 42
years old.
CONTINUING DIRECTOR -- TERM EXPIRING 1999
NIMROD T. FRAZER was elected to the position of director 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, American Savings
of Florida, F.S.B. and Sterling Bank of Montgomery, Alabama. Sterling Bank is a
wholly owned subsidiary of Synovus Financial Corp. of Columbus, Georgia. Mr.
Frazer is 68 years old.
CONTINUING DIRECTORS -- TERM EXPIRING 2000
T. WHIT ARMSTRONG was elected to the position of director in June of 1990.
Mr. Armstrong has been President, Chief Executive Officer and Chairman 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 was Chairman of the Board of Directors of General Parcel Service, Inc., a
parcel delivery service, from January of 1989 to September of 1997 and has been
Chairman of the Board of Directors of Transit Group, Inc. since September of
1997. He is a director of Winn-Dixie Stores, Inc. Accustaff, Inc., Redwing
Properties, Inc., General Parcel Corp. and Tine W. Davis Family -- WD Charities,
Inc. Mr. Davis is 51 years old.
MEETINGS OF THE BOARD OF DIRECTORS
During 1997, the Board of Directors of the Company held a total of eight
meetings. All directors attended 75% or more of the aggregate number of meetings
of the Board and all committees on which they served during 1997.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Company has a Compensation Committee which is composed of T. Wayne
Davis, Chairman, T. Whit Armstrong and J. Christopher Flowers. The Compensation
Committee is responsible for, among other things, 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 four meetings in 1997. All members of the
Compensation Committee attended every meeting of the Compensation Committee.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Company has an Audit Committee of the Board that was established in
June of 1997 and which is composed of T. Whit Armstrong, Chairman, T. Wayne
Davis and Jeffrey S. Halis. The Audit Committee is responsible for, among other
things, overseeing the Company's financial reporting and accounting practices
and monitoring the adequacy of internal accounting, compliance and control
systems. The Audit Committee held no meetings in 1997. The Audit Committee met
in January of 1998 to review the audit plan for the Company's 1997 year end
financial statements with its outside auditors, Deloitte & Touche LLP.
The Company does not have a nominating committee.
3
<PAGE> 7
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company 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 telephone Board meeting; (ii) $1,000 for each telephone
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 at the election of the director either in
cash or in stock units under the Company's Deferred Compensation and Stock Plan
for Non-Employee Directors (the "Deferred Plan"). If the director elects to
receive stock units instead of cash, the stock units shall be payable only upon
the director's termination. The number of shares to be distributed in connection
with such termination would be equal to one share of Common Stock for each stock
unit and cash would be paid for any fractional units. All current non-employee
directors elected to receive 100% of their compensation in stock units in lieu
of cash payments for the retainer and meeting fees. As of December 31, 1997, a
total of $30,000 in stock compensation had been deferred under this plan. In
addition, directors are entitled to reimbursement for out-of-pocket expenses
incurred in attending all meetings.
During 1997, the outside directors were each granted options for 25,000
shares of Common Stock under the 1997 Amended Outside Directors' Stock Option
Plan (the "Outside Directors' Plan"), at an exercise price of $10.8125. During
1997, Nimrod T. Frazer, as Chief Executive Officer, was granted options for
150,000 shares of Common Stock under the 1997 Amended CEO Stock Option Plan (the
"CEO Plan"), at an exercise price of $10.50.
COMMON STOCK OWNERSHIP BY MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 31, 1998 by (i) each of the executive
officers named below (the "Named Executive Officers"), (ii) each of the
directors and nominees for director of the Company and (iii) all directors and
Named Executive Officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) PERCENT OF CLASS
- ------------------------ ---------------------- ----------------
<S> <C> <C>
NAMED EXECUTIVE OFFICERS
Nimrod T. Frazer......................................... 130,001(2) 3.12%
Cheryl D. Davis.......................................... 3 *
Amy M. Dunaway........................................... 87(3) *
DIRECTORS OF THE COMPANY
Nimrod T. Frazer......................................... 130,001(2) 3.12%
T. Whit Armstrong........................................ 18,183(4) *
T. Wayne Davis........................................... 108,408(5) 2.61%
J. Christopher Flowers................................... 34,884(6) *
Jeffrey S. Halis......................................... 304,017(7) 7.31%
All Named Executive Officers and directors
of the Company as a group (7 persons).................. 595,583(8) 14.31%
</TABLE>
- ---------------
* Less than 1%.
(1) Under the rules of the Securities and Exchange Commission, a person is
deemed to be a "beneficial owner" of a security if that person has or shares
"voting power", which includes the power to vote or to direct the voting of
such security, or "investment power", which includes the power to dispose of
or to direct disposition of such security. A person also is deemed to be a
beneficial owner of any securities which that person has the right to
acquire within sixty (60) days. Under these rules, more than one person may
be deemed to be a beneficial owner of the same securities and a person may
be deemed to be a beneficial owner of securities as of which he or she has
no economic or pecuniary interest. Except as set forth in the footnotes
below, the persons named above have sole voting and investment power with
respect to all shares of Common Stock shown as being beneficially owned by
them.
4
<PAGE> 8
(2) Includes 75,000 shares that are not currently outstanding, but that may be
acquired upon the exercise of stock options under the CEO Plan.
(3) Includes 54 shares which Ms. Dunaway holds jointly and shares voting and
investment power with her spouse.
(4) Includes 1,595 shares owned by Mr. Armstrong's son and 1,416 stock units
granted under the Deferred Plan. Also includes 10,000 shares that are not
currently outstanding, but that may be acquired upon the exercise of stock
options under the Outside Directors' Plan.
(5) Includes 116 shares held by Mr. Davis' child, 2,352 shares held by Mr.
Davis' mother, 133 shares held by Mr. Davis' wife, 13,410 held in two
trusts, 81,025 shares held in a private foundation for which Mr. Davis has
voting and investment power but is not a beneficiary and 1,372 stock units
granted under the Deferred Plan. Also, includes 10,000 shares that are not
currently outstanding, but that may be acquired upon the exercise of stock
options under the Outside Directors' Plan.
(6) Includes 1,064 stock units granted under the Deferred Plan. Also, includes
10,000 shares that are not currently outstanding, but that may be acquired
upon the exercise of stock options under the Outside Directors' Plan.
(7) Includes 1,372 stock units granted under the Deferred Plan, and 256,845
shares which Mr. Halis shares voting and investment power with his wife.
Also, includes 10,000 shares that are not currently outstanding, but that
may be acquired upon the exercise of stock options under the Outside
Directors' Plan.
(8) Includes 115,000 shares that are not currently outstanding, but that may be
acquired upon the exercise of stock options.
PRINCIPAL SHAREHOLDERS
The table below sets forth certain information as of March 31, 1998
concerning persons known to the Board to be a "beneficial owner", as such term
is defined by the rules of the Securities and Exchange Commission, of more than
5% of the outstanding shares of the Common Stock.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED(1) PERCENT OF CLASS
- ---------------- ---------------------- ----------------
<S> <C> <C>
Jeffrey S. Halis........................................... 304,017(2) 7.31%
500 Park Avenue
Fifth Floor
New York, New York 10022
</TABLE>
- ---------------
(1) See Note (1) under "Common Stock Ownership by Management" elsewhere herein.
(2) Includes 1,372 stock units granted under the Deferred Plan, and 256,845
shares which Mr. Halis shares voting and investment power with his wife.
Also, includes 10,000 shares that are not currently outstanding, but that
may be acquired upon the exercise of stock options under the Outside
Directors' Plan. The information regarding Jeffrey S. Halis ("Halis") is
given in reliance upon a Form 5 filed by Halis on or about February 12, 1998
and information supplied by Halis and the Company.
5
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning the
compensation paid for the years ended December 31, 1995, 1996 and 1997 for the
Company's Chief Executive Officer and each of the other Named Executive Officers
(determined as of December 31, 1997).
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES ALL
------------------------------ UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS# COMPENSATIONS($)
- --------------------------- ---- --------- ----------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Nimrod T. Frazer........................ 1997 250,000 0 150,000 3,931(2)
Chairman of the Board of 1996 250,000 0 0 1,784(2)
Directors, President and 1995 250,000 0 0 1,195,451(3)
Chief Executive Officer
Cheryl D. Davis......................... 1997 121,060 0 0 5,790(4)
Chief Financial Officer, 1996 116,405 121,060 0 5,065(4)
Vice-President of Corporate 1995 106,213 0 0 4,390(4)
Taxes and Secretary
Amy M. Dunaway.......................... 1997 80,327 0 0 5,664(4)
Treasurer and Controller 1996 80,327 80,327 0 4,854(4)
1995 77,524 0 0 4,310(4)
</TABLE>
- ---------------
(1) Amounts shown for Ms. Davis and Ms. Dunaway are for one-time bonuses paid
pursuant to a director and employee incentive bonus program.
(2) Amount shown represents premiums paid by the Company for health and dental
insurance for Mr. Frazer.
(3) Amount shown represents $1,866 in premiums paid by the Company for health
and dental insurance for Mr. Frazer and, $1,193,585 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.
(4) Amounts shown for Ms. Davis and Ms. Dunaway are for premiums paid by the
Company for term life insurance and health and dental insurance.
6
<PAGE> 10
EXECUTIVE OFFICERS
Certain information concerning the executive officers of the Company is set
forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION EXECUTIVE OFFICER SINCE
- ---- --- -------- -----------------------
<S> <C> <C> <C>
Nimrod T. Frazer................... 68 Director, Chairman of the Board, 1990
President and Chief Executive
Officer
Cheryl D. Davis.................... 38 Chief Financial Officer, Vice 1991
President of Corporate Taxes and
Secretary
Amy M. Dunaway..................... 41 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 past director of Columbus Mills
of Columbus, Georgia, Rockdale Industries of Decatur, Georgia, American Savings
of Florida, F.S.B. 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.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to options granted
under the CEO Plan to the Company's Chief Executive Officer. No options were
granted during 1997 under the 1997 Amended Omnibus Incentive Plan to any of the
named executive officers.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AND ASSUMED
ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) 1997 PER SHARE DATE 5% 10%
- ---- ------------- ------------- -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Nimrod T. Frazer......... 150,000(3) 100% $10.50 Jan. 2007 $960,000 $2,413,500
Cheryl D. Davis.......... -- -- -- -- -- --
Amy M. Dunaway........... -- -- -- -- -- --
</TABLE>
- ---------------
(1) Mr. Frazer's options were granted under the CEO Plan at an exercise price
equal to the fair market value of the Common Stock on the initial trading
day after the Common Stock was registered. Such options may not be exercised
later than the earlier of January 1, 2007, or 60 days after he ceases to be
an employee of the Company other than by reason of death, mandatory
retirement or disability.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent as the future
performance of the Common Stock and overall market conditions. The amounts
set forth in this table may not necessarily be achieved.
(3) These options vested as to 37,500 shares on June 30, 1997 and 37,500 shares
on January 1, 1998. The remainder of these options will vest in two equal
installments of 37,500 shares each on January 1, 1999 and January 1, 2000.
7
<PAGE> 11
STOCK OPTION EXERCISES
None of the Named Executive Officers exercised any stock options during
1997. The table below shows the number of shares of Common Stock covered by both
exercisable and unexercisable stock options held by the Named Executive Officers
as of December 31, 1997. The table also reflects the values for in-the-money
options based on the positive spread between the exercise price of such options
and the last reported sale price of the Common Stock on December 31, 1997, the
last trading date in 1997 for the Common Stock.
AGGREGATED OPTION EXERCISES
IN 1997 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Nimrod T. Frazer................................ 37,500 112,500 $21,093.75 $63,281.25
Cheryl D. Davis................................. -- -- -- --
Amy M. Dunaway.................................. -- -- -- --
</TABLE>
8
<PAGE> 12
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Compensation
Committee") was created in 1996 and consists of Messrs. Davis, Armstrong and
Flowers. None of the members of the Compensation Committee is an employee of 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 by the Omnibus Budget
Reconciliation Act of 1993. 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 1998 will exceed the $1 million threshold.
Compensation Policy and Overall Objections. The Company's executive
compensation policy is designed to attract, retain and motivate executive
officers needed to achieve its strategic objectives and to maximize the
Company's performance and shareholder value.
The Company supports these goals through a compensation strategy of
competitive salaries, annual incentives, and longer-term incentive
opportunities. Compensation consists 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 reflect position responsibilities
and strategic importance and are targeted at market median base salary levels.
Annual incentive payments are designed to reward for significant contributions
to annual financial and strategic non-financial performance, as defined by
management, and are targeted to deliver market median levels of total
compensation. Long-term incentive opportunities reward key executives for
financial and non-financial performance that enhances shareholder value.
Long-term incentive opportunities are above market median levels.
Position responsibilities are the key determinant of fixed pay and
individual performance is the key determinant of variable pay. Performance
includes consideration of Company results in varying degrees by position level.
In the future, 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.
The Company retained an independent compensation consulting firm to assist
it in analyzing its executive compensation program for 1997 and thereafter. The
consulting firm 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 with 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 and 1998.
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. The Named Executive Officers' base salaries were not increased during
1997 over their 1996 base salaries, and there is no increase for the Named
Executive Officers' base salaries for 1998. The base salaries are slightly below
median competitive levels.
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<PAGE> 13
Cash Bonuses. The Compensation Committee 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 are eligible to participate. Going
forward, any additional participants must be recommended by the CEO and approved
by the Compensation Committee. Eligibility for bonuses is 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. The Company did not pay any bonuses to
the Named Executive Officers during 1997.
Long Term Incentives. Long term incentives are provided pursuant to the
CEO Plan, the Outside Directors' Plan, the 1997 Amended Omnibus Incentive Plan
and the Deferred Plan. Stock option plans are designed to align executives' and
shareholders' interest in the enhancement of shareholder value. Stock options
are used by the Company to encourage long-term service by executives.
Severance Agreements. The Compensation Committee approved severance
agreements for the three Named Executive Officers in March 1998 (the "Severance
Agreements"). The Severance Agreements provide that the Named Executive Officers
will receive their base salary for a period of twelve months following a
termination of employment, other than for "cause", as defined in the Severance
Agreements or a voluntary termination. The Severance Agreements are subject to
Board approval. As of the date of this Proxy Statement, the Severance Agreements
have not been executed by the parties.
Chief Executive Officer Compensation. Mr. Frazer does not have an
employment agreement with the Company. The Compensation Committee is responsible
for determining Mr. Frazer's compensation annually. In fiscal 1997, Mr. Frazer
received base compensation of $250,000 and 150,000 options under the CEO Plan.
Mr. Frazer's base salary was based on, among other things, his responsibilities,
his length of service, his contributions to the business and his overall
leadership skills.
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.
10
<PAGE> 14
PERFORMANCE GRAPH
The graph below reflects the cumulative shareholder return (assuming the
reinvestment of dividends) on the Common Stock compared to the return on the
Center for Research in Security Prices ("CRSP") Total Return Index for the
Nasdaq Stock Market (U.S. Companies) (the "Nasdaq Index") and a return on an
index made up of companies with comparable market capitalization as of December
31, 1997. The Company does not currently have an operating business, and as a
result does not have a identifiable peer group index. The companies that
comprise the custom composite index outlined below include: Ancor
Communications, Incorporated, Biotransplant, Inc., Computron Software, Inc.,
Craftmade International, Inc., Featherlite MFG., Inc., Hungarian Tel & Cable
Corp., Intellicorp, Inc., Iridex Corporation, Mesabi Trust, MFB Corp., Moscom
Corporation, Network Event Theater, Inc., Norton Drilling Services, Inc. and
Sport-Haley, Inc.
CUMULATIVE TOTAL RETURN
BASED ON INITIAL INVESTMENT OF $100 ON APRIL 1, 1997
WITH DIVIDENDS REINVESTED
<TABLE>
<CAPTION>
MEASUREMENT PERIOD THE ENSTAR GROUP, CUSTOM COMPOSITE
(FISCAL YEAR COVERED) INC. NASDAQ US INDEX (14 STOCKS)
<S> <C> <C> <C>
01-APR-97 100 100 100
30-JUN-97 110 118 106
30-SEP-97 115 138 130
31-DEC-97 105 130 111
</TABLE>
Source: Georgeson & Company Inc.
The performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under 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.
CERTAIN TRANSACTIONS
J. Christopher Flowers, a current director of the Company who is nominated
for re-election in this Proxy Statement is a General Partner and Managing
Director of Goldman, Sachs & Co. ("Goldman"). During 1997 and 1998, the Company
used the brokerage services at Goldman to sell and repurchase certain call
options on First Union common stock. The Company paid Goldman approximately
$3,805 for such brokerage services.
11
<PAGE> 15
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, 1998, 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 1997 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 1998.
OTHER MATTERS
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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, with respect to each such person's
beneficial ownership of the Company's equity securities, including statements of
changes in beneficial ownership on Form 4. In addition, Item 405 of Regulation
S-K requires the Company to identify in its Proxy Statement each reporting
person that failed to file on a timely basis reports required by Section 16(a)
of the Exchange Act during the most recent fiscal year or prior fiscal years.
The Form 4 for T. Wayne Davis, a director of the Company, relating to the
acquisition of 3,000 shares of the Company's Common Stock was not filed on a
timely basis during 1997.
ANNUAL REPORT ON FORM 10-K/A-1
The Company has provided herewith to each shareholder as of the Record Date
a copy of the Company's Annual Report on Form 10-K/A-1, including the financial
statements and financial statement schedules, as filed with the Securities and
Exchange Commission, except exhibits thereto. The Company will provide copies of
the exhibits, should they be requested by eligible shareholders, and the Company
may impose a reasonable fee for providing such exhibits. Requests for copies of
such exhibits should be mailed to:
THE ENSTAR GROUP, INC.
172 Commerce Street
Third Floor
Montgomery, Alabama 36104
Attention: Amy M. Dunaway
Treasurer and Controller
SHAREHOLDER NOMINATIONS FOR ELECTION OF DIRECTORS
Under the Company's Articles of Incorporation and Bylaws, only persons
nominated in accordance with the procedures set forth therein will be eligible
for election as directors. Shareholders are entitled to nominate persons for
election to the Board of Directors of the Company only if the shareholder is
otherwise entitled to vote generally in the election of directors and only if
timely notice in writing is sent to the Secretary of the Company. To be timely,
a shareholder's notice must be received at the principal executive offices of
the Company at least 60 days but not more than 90 days prior to the annual
meeting. Such shareholder's notice
12
<PAGE> 16
should set forth (i) the qualifications of the nominee and the other information
that would be required to be disclosed in connection with the solicitation of
proxies for the election of directors pursuant to Regulation 14(a) under the
Exchange Act and (ii) with respect to such shareholder giving such notice, (a)
the name and address of such shareholder and (b) the number of shares of Common
Stock beneficially owned by such shareholder. The Company may require any
proposed nominee to furnish such other information as may reasonably be required
by the Company to determine the eligibility of such proposed nominee to serve as
a director of the Company.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the Company's 1999
Annual Meeting of Shareholders must be received no later than December 18, 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 cost of solicitation of proxies by the Board of Directors in connection
with the Annual Meeting will be borne by the Company. No specific fee has been
allocated to services provided in connection with the solicitation of proxies.
The Company will reimburse brokers, fiduciaries and custodians for reasonable
expenses incurred by them in forwarding proxy materials to beneficial owners of
Common Stock held in their names. In addition, the Company has retained
Georgeson & Co., Inc., New York, New York, to aid in the mailing and tabulation
of proxies for a nominal fee, 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
Chief Financial Officer,
Vice-President of
Corporate Taxes and Secretary
13
<PAGE> 17
APPENDIX
THE ENSTAR GROUP, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS ON MAY 21, 1998
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 Thursday, May 21,
1998, at 10:00 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 two (2) directors for three-year terms expiring at the 2001 annual
meeting of shareholders or until their successors are duly elected and
qualified:
<TABLE>
<S> <C>
[ ] FOR all nominees listed (except as [ ] WITHHOLD AUTHORITY to vote for
marked below to the contrary) all nominees listed
J. Christopher Flowers
Jeffrey S. Halis
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
(2) To ratify the appointment of Deloitte & Touche LLP as independent auditors
of the Company to serve for 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS INDICATED, BUT IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED FOR THE ABOVE PROPOSALS.
Date: , 1998
---------------------
--------------------------------
--------------------------------
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 MAY 21, 1998.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
