<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 20, 1999
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 20, 1999, 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 20, 1999
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 20, 1999, 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 one (1) director for a three-year term expiring at the
annual meeting of shareholders in 2002 or until his successor is duly
elected and qualified;
(ii) to ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company to serve for 1999; 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 April 1, 1999 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 20, 1999
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 20, 1999
---------------
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 20, 1999 (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 April 1, 1999 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 5,265,729 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 20, 1999.
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
elections 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 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
<PAGE> 5
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 1998 annual meeting of shareholders, one director was elected to hold office
for a term expiring at the Annual Meeting, 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 1998 annual meeting of shareholders, J. Christopher Flowers and
Jeffery S. Halis were elected to hold office for a term expiring at the 2001
annual meeting or until their successors are duly elected and qualified. At the
Annual Meeting, Nimrod T. Frazer will stand for election to serve as director
for a three-year term expiring at the 2002 annual meeting of shareholders or
until his successor is 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 the nominee for the
office of director will be unavailable for election as a director. However, if
at the time of the Annual Meeting the nominee 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 a substitute nominee 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 one director. The
election of the nominee 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 Nimrod T. Frazer to hold
office until the 2002 annual meeting of shareholders, or until his successor is
duly elected and qualified.
NOMINEE FOR ELECTION
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 also a 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. of Miami and Sterling Bank of Montgomery, Alabama.
Sterling Bank is a wholly owned subsidiary of Synovus Financial Corp. of
Columbus, Georgia. Mr. Frazer is Vice Chairman of the Montgomery Chamber of
Commerce, on the Board of Visitors of
2
<PAGE> 6
Air University of the USAF in Alabama at Maxwell AFB and a director of Just
Care, Inc. of Montgomery, Alabama. Mr. Frazer is 69 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 51 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., Modis Professional Services,
Inc., Redwing Properties, Inc., General Parcel Corp. and Tine W. Davis
Family -- WD Charities, Inc. Mr. Davis is 52 years old.
CONTINUING DIRECTORS -- TERM EXPIRING 2001
J. Christopher Flowers was elected to the position of director in October
of 1996. Mr. Flowers joined Goldman, Sachs & Co. in 1979, was made a General
Partner in 1988 and a Managing Director in 1996. At Goldman, Sachs & Co., Mr.
Flowers headed the Financial Institutions Group. He resigned from Goldman, Sachs
& Co. as of November 27, 1998 in order to pursue his own business interests. Mr.
Flowers was named Vice Chairman of the Board of Directors effective December 1,
1998. Mr. Flowers is 41 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 Halo Management Corp. is an investment services company. Mr. Halis was
formerly a director of KinderCare Learning Centers. Mr. Halis is 43 years old.
MEETINGS OF THE BOARD OF DIRECTORS
During 1998, the Board of Directors of the Company held a total of seven
meetings. All directors attended 75% or more of the aggregate number of meetings
of the Board and all committees on which they served during 1998.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Company has a Compensation Committee which from January 1998 until
December 1, 1998 was composed of T. Wayne Davis, Chairman, T. Whit Armstrong and
J. Christopher Flowers. Upon Mr. Flowers' appointment to Vice Chairman of the
Board of Directors effective December 1, 1998, he resigned from the Compensation
Committee. At a Board meeting on December 17, 1998, Jeffrey S. Halis was
appointed to the Compensation Committee. The Compensation Committee is
responsible for, among other things, reviewing, determining and establishing,
upon the recommendation of the Chief Executive Officer (with the exception of
the compensation of the Chief Executive Officer) salaries, bonuses and other
compensation for the Company's named executive officers and for administering
the Company's stock option plans. The Compensation Committee held one meeting in
1998. All members of the Compensation Committee attended the 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
3
<PAGE> 7
held three meetings in 1998. All members of the Audit Committee attended every
meeting of the Audit Committee.
The Company does not have a nominating committee.
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. The distribution of stock
units is also subject to acceleration upon certain events constituting a change
in control of the Company. 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, 1998, a total of $174,000 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 1998, no directors were granted options for shares of Common Stock
under the 1997 Amended Outside Directors' Stock Option Plan (the "Outside
Directors' Plan") or the 1997 Amended CEO Stock Option Plan (the "CEO Plan").
COMMON STOCK OWNERSHIP BY MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of April 1, 1999 by (i) each of the executive
officers named below (the "Named Executive Officers"), (ii) each of the
directors and the nominee 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 PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) CLASS(9)
- ------------------------ ---------------------- ----------------
<S> <C> <C>
NAMED EXECUTIVE OFFICERS
Nimrod T. Frazer........................................... 167,501(2) 3.1%
J. Christopher Flowers..................................... 1,251,989(3) 23%
Cheryl D. Davis............................................ 3 *
Amy M. Dunaway............................................. 87(4) *
DIRECTORS OF THE COMPANY
Nimrod T. Frazer........................................... 167,501(2) 3.1%
T. Whit Armstrong.......................................... 26,461(5) *
T. Wayne Davis............................................. 116,540(6) 2.1%
J. Christopher Flowers..................................... 1,251,989(3) 23%
Jeffrey S. Halis........................................... 370,539(7) 6.8%
All Named Executive Officers and directors of the Company
as a group (7 persons)................................... 1,933,120(8) 35.4%
</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
4
<PAGE> 8
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.
(2) Includes 260 shares which Mr. Frazer holds jointly and shares voting and
investment power with his spouse. Also includes 112,500 shares that are not
currently outstanding, but that may be acquired upon the exercise of stock
options under the CEO Plan.
(3) Includes 2,934 stock units granted under the Deferred Plan. Also includes
15,000 shares that are not currently outstanding, but that may be acquired
upon the exercise of stock options under the Outside Directors' Plan.
(4) Includes 54 shares which Ms. Dunaway holds jointly and shares voting and
investment power with her spouse.
(5) Includes 1,595 shares owned by Mr. Armstrong's son and 4,694 stock units
granted under the Deferred Plan. Also includes 15,000 shares that are not
currently outstanding, but that may be acquired upon the exercise of stock
options under the Outside Directors' Plan.
(6) Includes 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 4,504 stock units
granted under the Deferred Plan. Also includes 15,000 shares that are not
currently outstanding, but that may be acquired upon the exercise of stock
options under the Outside Directors' Plan.
(7) Includes 4,179 stock units granted under the Deferred Plan, and 256,845
shares which Mr. Halis shares voting and investment power with his wife.
Also includes 15,000 shares that are not currently outstanding, but that may
be acquired upon the exercise of stock options under the Outside Directors'
Plan.
(8) Includes 172,500 shares that are not currently outstanding, but that may be
acquired upon the exercise of stock options.
(9) Based on 5,265,729 shares outstanding, 172,500 shares that are not currently
outstanding, but that may be acquired upon the exercise of stock options and
16,311 stock units granted under the Deferred Plan.
SEVERANCE AGREEMENTS
The Compensation Committee approved severance agreements for Nimrod T.
Frazer, Cheryl D. Davis, and Amy M. Dunaway in March 1998 (the "Severance
Agreements"). The Severance Agreements provide that Nimrod T. Frazer, Cheryl D.
Davis, and Amy M. Dunaway 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.
5
<PAGE> 9
PRINCIPAL SHAREHOLDERS
The table below sets forth certain information as of April 1, 1999
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(4)
---------------- ---------------------- -------------------
<S> <C> <C>
Jeffrey S. Halis........................................ 370,539(2) 6.8%
10 E. 50th Street
21st Floor
New York, New York 10022
J. Christopher Flowers.................................. 1,251,989(3) 23%
One Rockefeller Plaza
32nd Floor
New York, New York 10020
</TABLE>
- ---------------
(1) See Note (1) under "Common Stock Ownership by Management" elsewhere herein.
(2) Includes 4,179 stock units granted under the Deferred Plan, and 256,845
shares which Mr. Halis shares voting and investment power with his wife.
Also, includes 15,000 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 24,
1999, and information supplied by Halis and the Company.
(3) Includes 2,934 stock units granted under the Deferred Plan. Also, includes
15,000 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 J. Christopher Flowers ("Flowers") is given in
reliance upon a Form 5 filed by Flowers on or about February 11, 1999, and
information supplied by Flowers and the Company.
(4) Based on 5,265,729 shares outstanding, 172,500 shares that are not currently
outstanding, but that may be acquired upon the exercise of stock options and
16,311 stock units granted under the Deferred Plan.
6
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning the
compensation paid for the years ended December 31, 1996, 1997 and 1998 for the
Company's Chief Executive Officer and each of the other Named Executive Officers
(determined as of December 31, 1998).
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
OTHER ---------------
ANNUAL COMPENSATION ANNUAL SECURITIES ALL
------------------------------- COMPENSATION UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($) OPTIONS# COMPENSATIONS($)
- --------------------------- ---- --------- ----------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Nimrod T. Frazer.......... 1998 250,000 0 -- 0 3,146(2)
Chairman of the Board of 1997 250,000 0 -- 150,000 3,931(2)
Directors, President and 1996 250,000 0 -- 0 1,784(2)
Chief Executive Officer
J. Christopher Flowers.... 1998 3,462(3) -- 789,000(4) -- --
Vice Chairman of the 1997
Board of Directors 1996
Cheryl D. Davis........... 1998 127,731 0 -- 0 5,661(5)
Chief Financial Officer, 1997 121,060 0 -- 0 5,790(5)
Vice-President of 1996 116,405 121,060 -- 0 5,065(5)
Corporate
Taxes and Secretary
Amy M. Dunaway............ 1998 80,337 0 -- 0 5,618(5)
Treasurer and Controller 1997 80,327 0 -- 0 5,664(5)
1996 80,327 80,327 -- 0 4,854(5)
</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) This amount represents the compensation Mr. Flowers has received since
December 1, 1998, the effective date of his employment with the Company. His
annual salary is $50,000.
(4) On October 20, 1998, the Company and Mr. Flowers entered into an Investment
Agreement, whereby the Company agreed to sell Mr. Flowers 1,158,860 shares
of newly issued Common Stock for $15,000,000 in exchange for an unsecured,
full recourse promissory note from Mr. Flowers. The purchase price per share
was equal to the average of the closing prices for shares of Common Stock
for the 10 trading days immediately preceding October 20, 1998. The
Company's shareholders approved this sale on December 17, 1998. This amount
represents the dollar value of the difference between the price paid by Mr.
Flowers for such shares of Common Stock, and the fair market value of such
Common Stock on the date of the shareholders' approval. See "Compensation
Committee Interlocks and Insider Participation."
(5) Amounts shown for Ms. Davis and Ms. Dunaway are for premiums paid by the
Company for term life insurance and health and dental insurance.
7
<PAGE> 11
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......... 69 Director, Chairman of the Board, 1990
President and Chief Executive
Officer
J. Christopher Flowers... 41 Director and Vice Chairman of the 1998
Board
Cheryl D. Davis.......... 39 Chief Financial Officer, Vice 1991
President of Corporate Taxes and
Secretary
Amy M. Dunaway........... 42 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. He is also a 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. of Miami and Sterling Bank of Montgomery, Alabama.
Sterling Bank is a wholly owned subsidiary of Synovus Financial Corp of
Columbus, Georgia. Mr. Frazer is Vice Chairman of the Montgomery Chamber of
Commerce, on the Board of Visitors of Air University of USAF at Maxwell AFB in
Alabama and a director of Just Care, Inc. of Montgomery, Alabama.
Mr. Flowers was named Vice Chairman of the Board effective December 1,
1998. Mr. Flowers joined Goldman, Sachs & Co. in 1979, was made a General
Partner in 1988 and a Managing Director in 1996. At Goldman, Sachs & Co., Mr.
Flowers headed the Financial Institutions Group. He resigned from Goldman, Sachs
& Co. as of November 27, 1998 in order to pursue his own business interests.
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
No options were granted during 1998 under the CEO Plan or the 1997 Amended
Omnibus Incentive Plan to any of the named executive officers.
STOCK OPTION EXERCISES
None of the Named Executive Officers exercised any stock options during
1998. 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, 1998. 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, 1998, the
last trading date in 1998 for the Common Stock.
8
<PAGE> 12
AGGREGATED OPTION EXERCISES
IN 1998 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1998 DECEMBER 31, 1998
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Nimrod T. Frazer................................. 75,000 75,000 $196,875 $196,875
J. Christopher Flowers(1)........................ 10,000 15,000 $ 23,125 $ 34,687
Cheryl D. Davis.................................. -- -- -- --
Amy M. Dunaway................................... -- -- -- --
</TABLE>
- ---------------
(1) All options held by Mr. Flowers were granted under the Outside Directors'
Plan prior to his appointment to the executive officer position of Vice
Chairman of the Board, effective December 1, 1998.
9
<PAGE> 13
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Compensation
Committee") was created in 1996 and until December 1, 1998 consisted of Messrs.
Davis, Armstrong and Flowers. Upon Mr. Flowers' appointment to Vice Chairman of
the Board of Directors on December 1, 1998, he resigned from the Compensation
Committee. At a Board of Directors meeting on December 17, 1998, Jeffrey S.
Halis was appointed to the Compensation Committee. The Compensation Committee is
responsible for (i) establishing the compensation of the Company's Named
Executive Officers, upon the recommendation of the Chief Executive Officer (with
the exception of the compensation of the Chief Executive Officer) 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. 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
1999 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 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 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 1998 and 1999.
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
10
<PAGE> 14
base salaries. Effective July 1, 1998, the base salary of Cheryl D. Davis, the
Chief Financial Officer, Vice President of Corporate Taxes and Secretary of the
Company was increased 11%. Mr. Frazer's and Ms. Dunaway's base salaries were not
increased in 1998. There has been no increase for the Named Executive Officers'
base salaries for 1999. The base salaries are slightly below median competitive
levels.
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, Mr. Frazer, Ms. Davis and Ms. Dunaway are eligible
to participate. Going forward, any additional participants must be recommended
by the Chief Executive Officer 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 Ms. Davis and Ms. Dunaway.
The Company did not pay any bonuses to the Named Executive Officers during 1998.
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. No stock
options were granted in 1998 under the CEO Plan, the Outside Directors' Plan or
the 1997 Amended Omnibus Incentive Plan.
Severance Agreements. The Compensation Committee approved severance
agreements for Nimrod T. Frazer, Cheryl D. Davis, and Amy M. Dunaway in March
1998 (the "Severance Agreements"). The Severance Agreements provide that Nimrod
T. Frazer, Cheryl D. Davis, and Amy M. Dunaway 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.
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 1998, Mr. Frazer
received base compensation of $250,000. 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
Jeffrey S. Halis
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.
11
<PAGE> 15
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., Network
Event Theater, Inc., Norton Drilling Services, Inc., Sport-Haley, Inc. and
VeraMark Technologies, Inc. (formerly Moscom Corporation).
CUMULATIVE TOTAL RETURN
BASED ON INITIAL INVESTMENT OF $100 ON APRIL 1, 1997
WITH DIVIDENDS REINVESTED
<TABLE>
<CAPTION>
CUSTOM
COMPOSITE
MEASUREMENT PERIOD THE ENSTAR INDEX (14
(FISCAL YEAR COVERED) GROUP, INC. NASDAQ US STOCKS)
<S> <C> <C> <C>
1-APR-97 100 100 100
30-JUN-97 110 119 106
30-SEP-97 115 139 130
31-DEC-97 105 130 111
31-MAR-98 133 152 116
30-JUN-98 137 157 107
30-SEP-98 124 142 73
31-DEC-98 125 183 101
</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.
12
<PAGE> 16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described earlier in this Proxy Statement, the Company has a
Compensation Committee of the Board composed of Messrs. Davis, Armstrong and
until December 1, 1998 Mr. Flowers. Upon Mr. Flowers' appointment to Vice
Chairman of the Board of Directors on December 1, 1998, he resigned and Mr.
Halis was appointed to the Compensation Committee. Mr. Flowers, a current
director of the Company was a General Partner and Managing Director of Goldman,
Sachs & Co. ("Goldman") until November 27, 1998. During 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 $12,075 for
such brokerage services.
On October 20, 1998, the Company and Mr. Flowers entered into an Investment
Agreement, whereby the Company agreed to sell Mr. Flowers 1,158,860 shares of
newly issued Common Stock for $15,000,000 in exchange for an unsecured, full
recourse promissory note from Mr. Flowers (the "Transaction"). The note bears
interest at a rate of 4.06% annum, matures and is payable in full on December
18, 2000 and requires quarterly interest payments. Since the interest rate on
the note is less than the rate an independent lender would charge Mr. Flowers,
the note was recorded at a discount so as to yield a then current "market rate"
of interest over its term, and a charge to earnings of approximately $990,000
was incurred to reflect such discount. The Transaction was submitted to the
Company's shareholders who approved the Transaction at a special meeting held on
December 17, 1998. Since the price per share on the date of the shareholders'
approval ($13 5/8) exceeded the per share sales price to Mr. Flowers, a charge
to earnings of approximately $789,000 was recognized. In addition, legal,
professional and other fees of approximately $464,000 ($60,000 of which covered
Mr. Flowers' legal fees) incurred in relation to the Transaction were charged to
equity. Pursuant to a Registration Rights Agreement entered into by the Company
and Mr. Flowers in connection with the Transaction, Mr. Flowers was granted
certain rights to require the Company to register his shares in the future. Also
in connection with the Transaction, the Company executed an amendment to the
Rights Agreement dated as of January 20, 1997 (the "Rights Agreement") with
American Stock Transfer and Trust Company, as rights agent, to exclude from the
definition of "Acquiring Person" Mr. Flowers and certain permitted transferees
and to otherwise exempt the Transaction from the applicable provisions of the
Rights Agreement.
CERTAIN TRANSACTIONS
Mr. Flowers, a current director of the Company was a General Partner and
Managing Director of Goldman until November 27, 1998. During 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
$12,075 for such brokerage services.
On October 20, 1998, the Company and Mr. Flowers entered into an Investment
Agreement, whereby the Company agreed to sell Mr. Flowers 1,158,860 shares of
newly issued Common Stock for $15,000,000 in exchange for an unsecured, full
recourse promissory note from Mr. Flowers (the "Transaction"). The note bears
interest at a rate of 4.06% annum, matures and is payable in full on December
18, 2000 and requires quarterly interest payments. Since the interest rate on
the note is less than the rate an independent lender would charge Mr. Flowers,
the note was recorded at a discount so as to yield a then current "market rate"
of interest over its term, and a charge to earnings of approximately $990,000
was incurred to reflect such discount. The Transaction was submitted to the
Company's shareholders who approved the Transaction at a special meeting held on
December 17, 1998. Since the price per share on the date of the shareholders'
approval ($13 5/8) exceeded the per share sales price to Mr. Flowers, a charge
to earnings of approximately $789,000 was recognized. In addition, legal,
professional and other fees of approximately $464,000 ($60,000 of which covered
Mr. Flowers' legal fees) incurred in relation to the Transaction were charged to
equity. Pursuant to a Registration Rights Agreement entered into by the Company
and Mr. Flowers in connection with the Transaction, Mr. Flowers was granted
certain rights to require the Company to register his shares in the future. Also
in connection with the Transaction, the Company executed an amendment to the
Rights Agreement dated as of January 20, 1997 (the "Rights Agreement") with
American Stock Transfer and Trust Company, as rights agent, to exclude from the
definition of "Acquiring Person" Mr. Flowers and certain
13
<PAGE> 17
permitted transferees and to otherwise exempt the Transaction from the
applicable provisions of the Rights Agreement.
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, 1999, 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 1998 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 1999.
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, 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. In
1998, all of the Company's reporting persons filed their Section 16(a) reports
on a timely basis, except Jeffrey S. Halis who failed to file a Form 5 on a
timely basis, to report one transaction in which Jeffrey S. Halis received on
December 17, 1998 185 stock units under the Deferred Plan not previously
reported for the year ending December 31, 1998.
ANNUAL REPORT ON FORM 10-K
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, 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
14
<PAGE> 18
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 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 2000
Annual Meeting of Shareholders must be received no later than December 22, 1999
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.
Notice of any shareholder proposals intended to be presented at the Company's
2000 Annual Meeting of Shareholders submitted outside the processes of Rule
14a-8 discussed above must be received no later than March 6, 2000 to be
considered timely.
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
15
<PAGE> 19
THE ENSTAR GROUP, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS ON MAY 20, 1999
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 20,
1999, 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 one (1) director for a three-year term expiring at the 2002 annual
meeting of shareholders or until his successor is duly elected and
qualified:
<TABLE>
<S> <C>
[ ] FOR nominee [ ] WITHHOLD AUTHORITY to vote for
Nimrod T. Frazer nominee listed
</TABLE>
(2) To ratify the appointment of Deloitte & Touche LLP as independent auditors
of the Company to serve for 1999.
[ ] 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 1 AND 2.
Date: , 1999
-------------------
------------------------------
------------------------------
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 20, 1999.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
