<PAGE> 1
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 Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
GRAHAM-FIELD HEALTH PRODUCTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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)(4) and 0-12.
(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
GRAHAM-FIELD HEALTH PRODUCTS, INC.
81 SPENCE STREET
BAY SHORE, NEW YORK 11706
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 16, 1999
The Annual Meeting of Stockholders of Graham-Field Health Products, Inc.
(the "Company") will be held in Grand Salon One at the Islandia Marriott Long
Island, 3635 Express Drive North, Hauppauge, New York 11788, on Monday, August
16, 1999 at 11:00 A.M. to:
(1) elect two Class III Directors of the Company to serve for a term of
three years;
(2) consider and act upon a proposal to ratify the appointment of Ernst &
Young LLP as the Company's independent auditors for the current fiscal
year; and
(3) transact such other business as may properly come before the Annual
Meeting.
Only stockholders of record at the close of business on July 12, 1999 are
entitled to notice of and to vote at the Annual Meeting. The Annual Meeting for
which this notice is given may be adjourned from time to time without further
notice other than announcement at the meeting or any adjournment thereof. Any
business for which notice is hereby given may be transacted at such adjourned
meeting.
Your attention is directed to the accompanying proxy statement.
RICHARD S. KOLODNY
Senior Vice President,
General Counsel and Secretary
Bay Shore, New York
July 14, 1999
STOCKHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE URGED TO
DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH DOES NOT REQUIRE ANY UNITED STATES POSTAGE.
<PAGE> 3
GRAHAM-FIELD HEALTH PRODUCTS, INC.
81 SPENCE STREET
BAY SHORE, NEW YORK 11706
-------------------------------
PROXY STATEMENT
-------------------------------
Proxies in the form enclosed are solicited by the Board of Directors of
Graham-Field Health Products, Inc. (the "Company") for use at the 1999 Annual
Meeting of Stockholders scheduled to be held on August 16, 1999 in Grand Salon
One at the Islandia Marriott Long Island, 3635 Express Drive North, Hauppauge,
New York 11788 (the "Annual Meeting"). All properly executed proxies received
prior to or at the Annual Meeting will be voted. If a proxy specifies how it is
to be voted, it will be so voted. If no specification is made, it will be voted
(1) for the election of the Board's nominees as directors, (2) for ratification
of the appointment of Ernst & Young LLP as the Company's independent auditors
for the current fiscal year, and (3) if other matters properly come before the
Annual Meeting, in the discretion of either of the persons named in the enclosed
proxy card. Any stockholder giving a proxy has the right to revoke it at any
time before the proxy is voted by giving written notice of revocation to the
Secretary of the Company (at the address set forth above), by submitting a
properly-executed subsequently dated proxy or by voting in person at the Annual
Meeting.
Holders of record of the common stock, par value $.025 per share, of the
Company (the "Common Stock"), the Company's Series B Cumulative Convertible
Preferred Stock (the "Series B Preferred Stock") and the Company's Series C
Cumulative Convertible Preferred Stock (the "Series C Preferred Stock") as of
the close of business on the record date of July 12, 1999 (the "Record Date")
are entitled to notice of and to vote at the Annual Meeting. As of the Record
Date, there were 31,501,680 shares of Common Stock issued and outstanding, 6,100
shares of the Series B Preferred Stock issued and outstanding, and 1,000 shares
of the Series C Preferred Stock issued and outstanding. Each share of Common
Stock is entitled to one vote. The shares of the Series B Preferred Stock and
the shares of the Series C Preferred Stock are entitled to 3,935,483 and 500,000
votes, respectively. The shares of the Series B Preferred Stock and the Series C
Preferred Stock vote as a single class with the Common Stock, and are
beneficially owned by BIL (Far East Holdings) Limited ("BIL Far East") and its
affiliate, BIL Securities (Offshore) Limited ("BIL Securities"; BIL Securities
and BIL Far East are collectively referred to hereinafter as "BIL"). BIL's
ownership of Common Stock, Series B Preferred Stock and Series C Preferred Stock
represents 25% of the total number of votes entitled to be cast at the Annual
Meeting. Pursuant to the Amended and Restated Stockholder Agreement dated as of
September 3, 1996, as amended (the "BIL Stockholder Agreement"), by and between
the Company and BIL, BIL has agreed to vote its shares of Common Stock, Series B
Preferred Stock, and Series C Preferred Stock in accordance with the direction
of the Company's Board of Directors for any nominees recommended by the Board of
Directors and on all proposals presented by any other stockholder of the
Company. This proxy statement, the proxy card and the Annual Report of the
Company for its fiscal year ended December 31, 1998 are being mailed on or about
July 14, 1999 to all holders of Common Stock, the Series B Preferred Stock and
the Series C Preferred Stock as of the Record Date.
As required under Section 231 of the Delaware General Corporation Law (the
"DGCL"), the Company will, in advance of the Annual Meeting, appoint one or more
Inspectors of Election to conduct the vote at the Annual Meeting. The Company
may designate one or more persons as alternate Inspectors of Election to replace
any Inspector of Election who fails to act. If no Inspector or alternate
Inspector is able to act at the Annual Meeting, the person presiding at the
Annual Meeting will appoint one or more Inspectors of Election. Each Inspector
of Election before entering the discharge of his duties shall take and sign an
oath faithfully to execute the duties of inspector with strict impartiality. The
Inspectors of Election will (i) ascertain the number of shares of Common Stock,
the Series B Preferred Stock and the Series C Preferred Stock outstanding as of
the record date, (ii) determine the voting power of the shares of Common Stock,
the Series B Preferred Stock and the Series C Preferred Stock present or
represented by proxy at the Annual Meeting and the validity of the proxies and
ballots, (iii) count all votes and ballots, and (iv) certify the
<PAGE> 4
determination of the number of shares of Common Stock, the Series B Preferred
Stock and Series C Preferred Stock present in person or represented by proxy at
the Annual Meeting and the count of all votes and ballots.
The holders of shares of Common Stock, Series B Preferred Stock and Series
C Preferred Stock representing a majority of the total number of votes entitled
to be cast by the holders of all outstanding shares of Common Stock, Series B
Preferred Stock and Series C Preferred Stock must be present in person or
represented by proxy at the Annual Meeting in order for a quorum to be present.
Under Section 216 of the DGCL, any stockholder who abstains from voting on any
particular matter described herein will be counted for purposes of determining a
quorum. For purposes of voting on the matters described herein, the affirmative
vote of (i) the holders of shares of Common Stock, Series B Preferred Stock and
Series C Preferred Stock, representing a plurality of the total votes cast (not
including abstentions) by the holders of shares of Common Stock, Series B
Preferred Stock and Series C Preferred Stock present or represented at the
Annual Meeting is required to elect directors, and (ii) the holders of shares of
Common Stock, Series B Preferred Stock and Series C Preferred Stock,
representing a majority of the total votes cast (including abstentions) by the
holders of shares of Common Stock, Series B Preferred Stock and Series C
Preferred Stock present or represented at the Annual Meeting is required to
ratify the selection by the Board of Directors of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending December 31,
1999. Abstentions have no legal effect with respect to the election of directors
and the same legal effect as a vote against the ratification of the selection of
Ernst & Young LLP as independent auditors of the Company for the fiscal year
ending December 31, 1999. Any shares as to which a broker or nominee does not
have discretionary voting authority with respect to a particular matter
presented at the Annual Meeting will be counted for purposes of determining a
quorum but will be considered as shares not entitled to vote on such matter and
will therefore not be considered in the tabulation of the votes on such matter.
No compensation will be paid by the Company to any person in connection
with the solicitation of proxies. Brokers, banks and other nominees will be
reimbursed by the Company for out-of-pocket and other reasonable clerical
expenses incurred in obtaining instructions from beneficial owners of the Common
Stock. In addition to the solicitation by mail, solicitation of proxies may, in
certain instances, be made personally or by telephone by directors, officers and
a few regular employees of the Company. It is expected that the expense of such
special solicitation will be nominal. All expenses incurred in connection with
this solicitation will be borne by the Company.
2
<PAGE> 5
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth certain information regarding the beneficial
ownership of Common Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock with respect to each person who, to the knowledge
of the management of the Company, owns beneficially more than five percent of
each class of stock as of July 12, 1999. Beneficial ownership has been
determined for purposes of the following table in accordance with Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), under
which a person is deemed to be the beneficial owner of securities if he or she
has or shares voting power or investment power in respect of such securities or
has the right to acquire beneficial ownership within 60 days.
<TABLE>
<CAPTION>
SHARES OF SHARES OF SHARES OF
SHARES OF SERIES B SERIES C SERIES D
COMMON STOCK PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED(1) OWNED(1)(2) OWNED (1)(3) OWNED(1)(4)
-------------------- ------------------- ------------------- -------------------
NUMBER NUMBER NUMBER NUMBER
NAME AND ADDRESS OF OF OF OF OF
BENEFICIAL OWNER SHARES PERCENT SHARES PERCENT SHARES PERCENT SHARES PERCENT
------------------- --------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BIL................................. 4,388,353(5) 13.9% 6,100 100% 1,000 100% 2,036 100%
c/o Brierley Investments Ltd.
4th Floor, Stratton House
Stratton Street
London W1X 5FE
United Kingdom
J.B. Fuqua(6)....................... 2,372,190 7.5% -0- -0- -0- -0- -0- -0-
c/o Fuqua Capital, Inc.
1201 West Peachtree Street, N.E
Atlanta, Georgia 30309
J. Rex Fuqua(7)..................... 1,595,563 5% -0- -0- -0- -0- -0- -0-
c/o Fuqua Capital, Inc.
1201 West Peachtree Street, N.E
Atlanta, Georgia 30309
Dimensional Fund Advisors(8)........ 1,781,926 5.7% -0- -0- -0- -0- -0- -0-
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
</TABLE>
- ---------------
(1) All shares are beneficially owned and the sole voting and investment power
is held by the person or entities named, except as otherwise specified
herein.
(2) The Series B Preferred Stock is beneficially owned by BIL and convertible
into shares of Common Stock (i) at the option of BIL, at a conversion price
of $20 per share (or, in the case of certain dividend payment defaults, at a
conversion price of $15.50 per share), (ii) at the option of the Company, at
a conversion price equal to current trading prices (subject to a minimum
conversion price of $15.50 and a maximum conversion price of $20 per share)
and (iii) automatically on November 27, 2001 at a conversion price of $15.50
per share. The conversion prices are subject to customary antidilution
adjustments. The shares of the Series B Preferred Stock are entitled to
3,935,483 votes, and vote as a single class with the Common Stock and the
Series C Preferred Stock.
(3) The Series C Preferred Stock is beneficially owned by BIL and subject to
redemption as a whole at the option of the Company on the fifth anniversary
of the date of issuance at a stated value plus accrued and unpaid dividends
and, if not redeemed will be convertible into shares of Common Stock
automatically at a conversion price of $20 per share, subject to customary
antidilution adjustments. The shares of the Series C Preferred Stock are
entitled to 500,000 votes, and vote as a single class with the Common Stock
and the Series B Preferred Stock.
3
<PAGE> 6
(4) Effective as of May 12, 1999, BIL Securities exchanged a $4 million note
(the "BIL Note") owing by the Company to BIL Securities for 2,036 shares of
non-voting Series D Preferred Stock (the "Series D Preferred Stock"). The
Series D Preferred Stock is beneficially owned by BIL Securities, and has
substantially the same economic rights as 2,036,000 shares of Common Stock.
(5) Does not include 6,100 shares of the Series B Preferred Stock and 1,000
shares of the Series C Preferred Stock owned by BIL (see Notes (2) and (3)
above). The shares of Common Stock, Series B Preferred Stock and Series C
Preferred Stock beneficially owned by BIL represent in the aggregate 25% of
the voting power of the Company's outstanding capital stock as of July 12,
1999. Pursuant to the BIL Stockholder Agreement, BIL has agreed to vote its
shares of Common Stock, Series B Preferred Stock, and Series C Preferred
Stock in accordance with the direction of the Company's Board of Directors
for any nominees recommended by the Board of Directors and on all proposals
presented by any other stockholder of the Company. For a description of
BIL's voting arrangements, see the description of the BIL Stockholder
Agreement on page 1 of this proxy statement.
(6) According to information contained in a Joint Schedule 13D filing dated as
of August 10, 1998 (the "Fuqua 13D Filing"), the shares of Common Stock
beneficially owned by J.B. Fuqua include 675,538 shares held by two trusts
for the benefit of the grandchildren of J.B. Fuqua, of which Mr. Fuqua is
the trustee, and 146,365 shares held by The J.B. Fuqua Foundation, Inc. (the
"Fuqua Foundation"), of which Mr. Fuqua is a director and officer. Mr. Fuqua
shares voting and investment power with J. Rex Fuqua with respect to shares
held by the Fuqua Foundation. J.B. Fuqua also shares voting and investment
power with J. Rex Fuqua with respect to 768,600 shares held by Fuqua
Holdings I, L.P. (the "Fuqua Partnership") as a result of J.B. Fuqua's
status as an officer and director of Fuqua Holdings, Inc. ("Holdings"), the
general partner of the Fuqua Partnership.
(7) According to information contained in the Fuqua 13D Filing, J. Rex Fuqua
shares voting and investment power with J.B. Fuqua with respect to 768,600
shares held by the Fuqua Partnership as a result of J. Rex Fuqua's status as
an officer and director of Holdings, the general partner of the Fuqua
Partnership. In addition, J. Rex Fuqua shares voting and investment power
with J.B. Fuqua with respect to 146,365 shares held by the Fuqua Foundation,
of which J. Rex Fuqua is a director and officer.
(8) According to information contained in a Schedule 13G filing dated as of
February 11, 1999 by Dimensional Fund Advisors Inc. ("Dimensional"),
Dimensional, an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice to four
investment companies registered under the Investment Company Act of 1940,
and serves as investment manager to certain other investment vehicles,
including commingled group trusts. (These investment companies and
investment vehicles are referred to hereinafter as the "Portfolios"). In its
role as investment advisor and investment manager, Dimensional possesses
both voting and investment power over the shares of Common Stock owned by
the Portfolios, and disclaims beneficial ownership of such shares.
4
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock with respect to the Company's directors, the
Company's "named executive officers" (the "Named Executive Officers") within the
meaning of Item 402(a)(3) of Regulation S-K, and by all of the Company's
directors and executive officers as a group, as reported to the Company as of
July 12, 1999. Beneficial ownership has been determined for purposes of the
following table in accordance with Rule 13d-3 of the Exchange Act, under which a
person is deemed to be the beneficial owner of securities if he or she has or
shares voting power or investment power in respect of such securities or has the
right to acquire beneficial ownership within 60 days.
<TABLE>
<CAPTION>
SHARES OF SHARES OF SHARES OF
SHARES OF SERIES B SERIES C SERIES D
COMMON STOCK PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED(1) OWNED(1)(2) OWNED (1)(3) OWNED(1)(4)
------------------- ------------------- ------------------- -------------------
NAME AND ADDRESS NUMBER NUMBER NUMBER NUMBER
OF BENEFICIAL OWNER OF SHARES PERCENT OF SHARES PERCENT OF SHARES PERCENT OF SHARES PERCENT
- ------------------- --------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DIRECTORS:
Rupert O.H. Morley(5)............ 4,388,353 13.9% 6,100 100% 1,000 100% 2,036 100%
c/o Brierley Investments Ltd.
4th Floor, Stratton House
Stratton Street
London W1X 5FE
United Kingdom
J. Rex Fuqua(6).................. 1,595,563 5% -0- -0- -0- -0- -0- -0-
c/o Fuqua Capital, Inc.
1201 West Peachtree Street, N.E
Atlanta, Georgia 30309
Louis A. Lubrano(7).............. 76,200 * -0- -0- -0- -0- -0- -0-
c/o Herzog, Heine, Geduld, Inc.
26 Broadway
New York, New York 10004
Michael S. Dreyer................ 130,000 * -0- -0- -0- -0- -0- -0-
c/o Dreyer, Edmonds &
Associates
355 South Grand Avenue
Suite 4150
Los Angeles, CA 90071-3103
Dr. Kenneth R. Jennings(8)....... -0- -0- -0- -0- -0- -0- -0- -0-
c/o Jay Alix & Associates
4000 Town Center
Suite 500
Southfield, Michigan 04875
NAMED EXECUTIVE OFFICERS:
Irwin Selinger(9)................ 297,940 * -0- -0- -0- -0- -0- -0-
11 High Ridge Lane
Matinecock, New York 11771
Rodney F. Price(10).............. 10,000 * -0- -0- -0- -0- -0- -0-
22 Chester Street
London SW1X 7BL
United Kingdom
Paul Bellamy(11)................. -0- -0- -0- -0- -0- -0- -0- -0-
Four North Street
Old Greenwich, CT 06870
Peter Winocur(12)................ 213,550 * -0- -0- -0- -0- -0- -0-
c/o Graham-Field Health
Products, Inc.
81 Spence Street
Bay Shore, New York 11706
Richard S. Kolodny(13)........... 159,000 * -0- -0- -0- -0- -0- -0-
c/o Graham-Field Health
Products, Inc.
81 Spence Street
Bay Shore, New York 11706
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
SHARES OF SHARES OF SHARES OF
SHARES OF SERIES B SERIES C SERIES D
COMMON STOCK PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED(1) OWNED(1)(2) OWNED (1)(3) OWNED(1)(4)
------------------- ------------------- ------------------- -------------------
NAME AND ADDRESS NUMBER NUMBER NUMBER NUMBER
OF BENEFICIAL OWNER OF SHARES PERCENT OF SHARES PERCENT OF SHARES PERCENT OF SHARES PERCENT
- ------------------- --------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ralph Liguori(14)................ 131,000 * -0- -0- -0- -0- -0- -0-
c/o Graham-Field Health
Products, Inc.
81 Spence Street
Bay Shore, New York 11706
Jeffrey Schwartz(15)............. 42,000 * -0- -0- -0- -0- -0- -0-
c/o Graham-Field Health
Products, Inc.
81 Spence Street
Bay Shore, New York 11706
All directors and executive
officers as a group (15
persons)(16)................... 6,874,543 21.4% 6,100 100% 1,000 100% 2,036 100%
</TABLE>
- ---------------
* Less than 1%.
(1) All shares are beneficially owned and the sole voting power and investment
power is held by the persons named, except as otherwise specified herein.
(2) The Series B Preferred Stock is beneficially owned by BIL and convertible
into shares of the Common Stock (i) at the option of BIL, at a conversion
price of $20 per share (or, in the case of certain dividend payment
defaults, at a conversion price of $15.50 per share), (ii) at the option of
the Company, at a conversion price equal to current trading prices (subject
to a minimum conversion price of $15.50 and a maximum conversion price of
$20 per share) and (iii) automatically on November 27, 2001 at a conversion
price of $15.50 per share. The conversion prices are subject to customary
antidilution adjustments. The shares of the Series B Preferred Stock are
entitled to 3,935,483 votes, and vote as a single class with the Common
Stock and the Series C Preferred Stock.
(3) The Series C Preferred Stock is beneficially owned by BIL and subject to
redemption as a whole at the option of the Company on the fifth anniversary
of the date of issuance at a stated value plus accrued and unpaid dividends
and, if not redeemed will be convertible into shares of Common Stock
automatically at a conversion price of $20 per share, subject to customary
antidilution adjustments. The shares of the Series C Preferred Stock are
entitled to 500,000 votes, and vote as a single class with the Common Stock
and the Series B Preferred Stock.
(4) The non-voting Series D Preferred Stock is beneficially owned by BIL
Securities and has substantially the same economic rights as 2,036,000
shares of Common Stock.
(5) Consists of shares of Common Stock, Series B Preferred Stock, Series C
Preferred Stock, and Series D Preferred Stock owned by BIL, which Mr.
Morley may be deemed to own beneficially as the Operations Director of BIL
and one of BIL's designees to the Company's Board of Directors. Does not
include up to 3,935,483 shares of Common Stock issuable upon the conversion
of the shares of the Series B Preferred Stock and up to 500,000 shares of
Common Stock issuable upon the conversion of the shares of the Series C
Preferred Stock owned by BIL (see Notes 2 and 3 above). Effective as of May
12, 1999, BIL Securities exchanged the BIL Note for 2,036 shares of Series
D Preferred Stock.
(6) The amount set forth above includes voting and investment power which J.
Rex Fuqua shares with J.B. Fuqua with respect to 768,600 shares held by the
Fuqua Partnership as a result of J. Rex Fuqua's status as an officer and
director of Holdings, the general partner of the Fuqua Partnership. In
addition, J. Rex Fuqua shares voting and investment power with J.B. Fuqua
with respect to 146,365 shares held by the Fuqua Foundation, of which J.
Rex Fuqua is a director and officer.
(7) The amount set forth above includes 200 shares owned by the Virginia
Lubrano Trust, and 70,000 shares currently issuable upon the exercise of
directors' stock options issued pursuant to the Company's Incentive
Program.
6
<PAGE> 9
(8) The amount set forth above does not include 200,000 shares underlying a
stock option granted to Jay Alix & Associates ("Jay Alix") as of March 24,
1999. Dr. Jennings is the Vice Chairman of Jay Alix, and disclaims any
beneficial interest in the shares issuable upon the exercise of the stock
option.
(9) On July 29, 1998, Mr. Selinger resigned as Chief Executive Officer,
President and a director of the Company. Based on information available to
the Company as of June 17, 1999, Mr. Selinger owns 297,940 shares of Common
Stock, which includes 5,500 shares owned by his wife as to which shares Mr.
Selinger disclaims any beneficial interest.
(10) On February 4, 1999, Mr. Price resigned as Chairman of the Board and Chief
Executive Officer of the Company. Mr. Price served as Chairman of the Board
from July 25, 1998 through February 4, 1999, and as Chief Executive Officer
from July 29, 1998 through February 4, 1999. The amount set forth above
represents 10,000 shares currently issuable upon the exercise of directors'
stock options issued pursuant to the Company's Incentive Program.
(11) On March 24, 1999, Mr. Bellamy resigned as President, Chief Executive
Officer and a director of the Company. Mr. Bellamy served in various
executive capacities with the Company from March 2, 1998 through March 24,
1999, including Vice President, Chief Financial Officer, President, Chief
Executive Officer, and a director of the Company.
(12) The amount set forth above includes 178,094 shares currently issuable upon
the exercise of stock options issued pursuant to the Company's Incentive
Program.
(13) The amount set forth above includes 107,517 shares currently issuable upon
the exercise of stock options issued pursuant to the Company's Incentive
Program.
(14) On April 29, 1999, the Company provided Mr. Liguori with three (3) months
prior written notice of termination of employment. The amount set forth
above includes 98,131 shares currently issuable upon the exercise of stock
options issued pursuant to the Company's Incentive Program.
(15) The amount set forth above represents 42,000 shares currently issuable upon
the exercise of stock options issued pursuant to the Company's Incentive
Program.
(16) The amount set forth above includes 578,908 shares currently issuable upon
the exercise of stock options issued pursuant to the Company's Incentive
Program. Such amount excludes (i) shares of Common Stock and (ii) shares
currently issuable upon the exercise of stock options issued pursuant to
the Company's Incentive Program, held by former officers and directors.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock of the
Company to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and the exchange on which the Common
Stock is listed for trading. Officers, directors and more than ten percent
stockholders are required by regulations promulgated under the Exchange Act to
furnish the Company with copies of all Section 16(a) reports filed.
Based solely on the Company's review of copies of the Section 16(a) reports
filed for the year ended December 31, 1998, and written representations from
certain reporting persons that no Forms 5 were required for such persons for the
year ended December 31, 1998, the Company believes that all reporting
requirements applicable to its officers, directors, and more than ten percent
stockholders were complied with for the year ended December 31, 1998, except for
(i) a Form 4 filing on behalf of BIL dated as of June 2, 1998, which reported
open market purchases of 11,800 shares and 5,000 shares of Common Stock on June
2, 1997 and June 3, 1997, respectively, and (ii) a Form 4 filing on behalf of
Rodney F. Price, a former BIL designee to the Company's Board of Directors and
former Chief Executive Officer of the Company, to reflect Mr. Price's indirect
ownership of the shares of Common Stock purchased in the open market by BIL on
June 2, 1997 and June 3, 1997.
7
<PAGE> 10
ELECTION OF DIRECTORS
At the Annual Meeting, two Class III directors are to be elected for
three-year terms expiring in 2002. Effective as of April 14, 1999, the Board of
Directors was fixed at five (5) members. Unless authority to do so is withheld,
the Board of Directors intends to vote the enclosed proxy at the Annual Meeting
for the election of the nominees named below. If any nominee for any reason
should become unavailable for election, it is intended that discretionary
authority will be exercised by either of the persons named in the enclosed proxy
card in respect of the election of such other person as the Board of Directors
shall nominate or the number of directors may be reduced accordingly by the
Board of Directors. The Board of Directors is not aware of any circumstances
likely to cause any nominee to become unavailable for election.
Set forth in the following table is certain information with respect to
each nominee nominated to serve as a Class III director whose term will expire
in 2002.
NOMINEES
CLASS III: TERM EXPIRING IN 2002
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY DIRECTOR SINCE
- ---- --- --------------------------------- --------------
<S> <C> <C> <C>
Rupert O.H. Morley........................... 34 Chairman of the Board and Member 1999
of the Executive Committee
Louis A. Lubrano............................. 65 Director and Member of the Audit 1984
and Compensation Committees
</TABLE>
DIRECTORS CONTINUING IN OFFICE
The following directors are continuing in office for the respective periods
indicated and until their successors are elected and qualified.
CLASS I: TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY DIRECTOR SINCE
- ---- --- ---------------------------- -----------------------
<S> <C> <C> <C>
J. Rex Fuqua................................. 49 Director and Member of the January 16, 1998
Executive, Audit and to April 17, 1998;
Compensation Committees July 29, 1998
to present
</TABLE>
CLASS II: TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY DIRECTOR SINCE
- ---- --- --------------------------------- --------------
<S> <C> <C> <C>
Michael S. Dreyer............................ 47 Director and Member of the Audit 1998
and Compensation Committees
Dr. Kenneth R. Jennings...................... 44 Director 1999
</TABLE>
Mr. Morley has been a director of the Company since February 5, 1999, and
was appointed Chairman of the Board of the Company on March 24, 1999. Mr. Morley
is an Operations Director of Brierley Investments Limited, a New Zealand
investment holding company, an affiliate of BIL. Mr. Morley is also a director
of English, Welsh & Scottish Railways, a UK freight railway company, and a
director of Thistle Hotels plc, a listed UK hotel company. From September 1992
to July 1997, Mr. Morley held various executive positions at The Peninsular &
Oriental Steam Navigation Company, including serving as Managing Director of
Swan Hellenic, a UK cruise line subsidiary, from April 1995 to July 1997.
Pursuant to the BIL Stockholder Agreement, Mr. Morley serves as one of BIL's
designees to the Company's Board of Directors.
Mr. Lubrano has been an investment banker with Herzog, Heine, Geduld, Inc.,
a member New York Stock Exchange firm, since December 1996. From March 1, 1991
to December 1996, Mr. Lubrano was a managing director of Stires & Company, Inc.,
an investment banking firm. From March 1990 to February 1991, Mr. Lubrano was a
director of the Nasdaq Forum. Prior to such time, Mr. Lubrano was a managing
director of Home Group Capital Markets, Inc., an investment banking firm. From
April 1986 to March 1989,
8
<PAGE> 11
he was President of Gabelli & Company, Inc., an investment banking firm. He is
also a director of Andersen Group, Inc., a diversified manufacturing company.
Mr. Fuqua has been President and Chief Executive Officer of Realan Capital
Corporation, a privately-held investment corporation since 1985, and the
President and Chief Executive Officer of Fuqua Capital Corporation, a
privately-held investment management corporation, since 1987. Previously, he was
the Chairman of the Board of Directors of Fuqua Enterprises, Inc., a company
engaged in the manufacture and sale of medical products, which was acquired by
the Company on December 30, 1997. Mr. Fuqua also serves as a director of WebMD,
Aaron Rents, Inc., and FMB Bankshares, Inc.
Mr. Dreyer is a certified public accountant and has been the managing
partner of Dreyer, Edmonds & Associates, a regional accounting firm located in
Los Angeles, California since 1982. Prior to that time, Mr. Dreyer was an
employee of Price Waterhouse. Pursuant to the BIL Stockholder Agreement, Mr.
Dreyer serves as one of BIL's designees to the Company's Board of Directors. Mr.
Dreyer also serves as a director of American Shower Door Corporation.
Dr. Jennings has been the Vice Chairman of Jay Alix & Associates, a firm
specializing in financial reorganizations, cash management, operational
consolidations and other strategies for underperforming companies, since January
1999. From June 1993 to November 1998, Dr. Jennings was a partner with Andersen
Consulting, where he led a national change management practice focused on
clients in health care. Dr. Jennings currently serves as a director of U.S.
Diagnostics and Lumenal, a private molecular diagnostics company, and is a
professor in the executive MBA program at Columbia University's Business School
in New York.
Mr. Lubrano is now serving as a director and was previously elected by the
Company's stockholders. J. Rex Fuqua, Rupert O.H. Morley, Michael S. Dreyer and
Dr. Kenneth R. Jennings were elected at meetings of the Board of Directors held
on July 29, 1998, February 5, 1999, December 14, 1998 and June 18, 1999,
respectively. No director is related to any other director or executive officer.
MEETINGS OF THE BOARD; COMMITTEES
The Board of Directors held fifteen meetings during 1998. No director
attended fewer than 90% of the meetings of the Board of Directors and the
Committees of the Board of Directors on which he served during 1998.
The Board has an Executive Committee, currently consisting of J. Rex Fuqua
and Rupert O.H. Morley. The Executive Committee has all the authority which,
under the DGCL, may be delegated to such Committee. No Executive Committee
meetings were held during 1998.
The Compensation Committee currently consists of J. Rex Fuqua, Michael S.
Dreyer and Louis A. Lubrano. The Compensation Committee reviews and approves the
salary and bonus levels for the Company's executive officers, and awards stock
options under the Company's Incentive Program. The Compensation Committee held
four meetings during 1998.
The Audit Committee currently consists of Michael S. Dreyer, J. Rex Fuqua
and Louis A. Lubrano. The Audit Committee serves as a focal point for
communications with respect to financial accounting, reporting and controls, and
recommends the appointment of independent auditors and reviews the audit fees.
The Audit Committee met once during 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no compensation committee interlocks between the Company and
other entities involving any of the executive officers of the Company who serve
as executive officers of such other entities.
9
<PAGE> 12
COMPENSATION OF DIRECTORS
The directors' cash compensation program provides for the payment of
directors' fees to outside directors of $1,000 for the attendance at each Board
meeting and $500 for each Committee meeting, provided each Committee meeting is
held on a date other than a Board meeting. In addition, no directors' fees are
provided for telephonic Board or Committee meetings which are less than two (2)
hours in duration.
Under the Company's Incentive Program, directors' options are granted
automatically as of January 2nd of each year that the Incentive Program is in
effect to each director who was neither an employee nor officer of the Company
or any of its subsidiaries (a "Qualifying Director"). Each director's option
entitles the Qualifying Director to whom it is granted to purchase 10,000 shares
of the Common Stock at an option price equal to the fair market value of the
Common Stock on the date of grant. Directors' options vest and are exercisable
at the rate of one-third ( 1/3) of each grant annually. Directors' options
terminate ten years from the date of grant or two years after a director's
termination, if other than for cause, in which latter case, the directors'
options terminate immediately. Effective as of February 1998, the Company's
Incentive Program was amended to eliminate the automatic grant feature for
directors' options. As currently in effect, the Company's Incentive Program
provides that directors' options may be granted upon terms and conditions
approved by the Compensation Committee. On January 2, 1999, the Compensation
Committee granted each of the Qualifying Directors a directors' option to
purchase 25,000 shares of the Common Stock at an option price equal to the fair
market value of the Common Stock on the date of grant.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth certain information
concerning the compensation of the Company's Named Executive Officers for each
of the three years during the period ended December 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
-----------------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
--------------------------------------- RESTRICTED OPTIONS TO
OTHER ANNUAL STOCK PURCHASE ALL OTHER
SALARY BONUS COMPENSATION(1) AWARDS SHARES(2) COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
--------------------------- ---- ------- --------- --------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Rodney F. Price(3)............ 1998 -- -- -- -- 10,000(4) --
Chairman of the Board and 1997 -- -- -- -- 10,000(4)
Chief Executive Officer 1996 -- -- -- -- -- --
Paul Bellamy(5)............... 1998 206,731 -- -- -- 475,000(6) --
President and 1997 -- -- -- -- -- --
Chief Financial Officer 1996 -- -- -- -- -- --
Irwin Selinger(7)............. 1998 550,000 -- -- -- 250,000(9) 1,879,252(10)
Former Chairman of the 1997 446,156 1,000,000 -- -- 139,944(9) 33,790(11)
Board,
President and Chief 1996 250,000 100,000 180,000(8) -- 245,517(9) 31,098(11)
Executive Officer
Peter Winocur................. 1998 233,846 -- -- -- 210,000 --
Executive Vice President 1997 200,000 177,089(12) 27,089(13) -- 18,500 --
of Sales and Marketing 1996 150,000 75,000 -- -- 110,000 --
Ralph Liguori(14)............. 1998 223,846 -- -- -- 203,797 --
Executive Vice President 1997 200,000 107,089(12) 27,089(13) -- 16,000 --
of Operations 1996 175,000 50,000 -- -- 35,000 --
Jeffrey Schwartz(15).......... 1998 203,846 15,000 -- -- 10,000 --
President of GF Express 1997 177,885 100,000 -- -- 10,000 --
1996 91,731 75,000 -- -- 35,000 --
Richard S. Kolodny............ 1998 203,365 -- -- -- 213,750 --
Vice President, 1997 175,000 152,089(12) 27,089(13) -- 17,767 --
General Counsel 1996 150,000 75,000 -- -- 35,000 --
and Secretary
</TABLE>
10
<PAGE> 13
- ---------------
(1) Except as set forth in notes (8) and (13) below, the aggregate amount of
Other Annual Compensation for each of the Named Executive Officers did not
equal or exceed the lesser of either $50,000 or 10% of the total of such
individual's base salary and bonus, as reported herein and is not reflected
in the table.
(2) Stock options are granted under the terms and provisions of the Company's
Incentive Program. For a description of the stock options, see "Executive
Compensation -- Option Grants in Last Fiscal Year."
(3) Mr. Price served as Chairman of the Board from July 25, 1998 to February 4,
1999, and as Chief Executive Officer of the Company from July 29, 1998 to
February 4, 1999. As Chairman of the Board and Chief Executive Officer, Mr.
Price did not receive any cash compensation. During his tenure as Chairman
of the Board and Chief Executive Officer, Mr. Price was reimbursed for
travel, lodging and meal expenses.
(4) Under the terms of the Company's Incentive Program, Mr. Price's directors'
options expire on February 4, 2001.
(5) Mr. Bellamy served in various executive officer capacities with the Company
from March 2, 1998 through December 31, 1998, including Vice President,
Chief Financial Officer, President, and a director of the Company. From
February 5, 1999 through March 24, 1999, Mr. Bellamy served as President,
Chief Executive Officer and a director of the Company.
(6) Under the terms of Mr. Bellamy's stock option agreements, Mr. Bellamy's
stock options expired ninety (90) days following his resignation on March
24, 1999.
(7) Mr. Selinger resigned as Chief Executive Officer, President and a director
of the Company on July 29, 1998, and entered into a Separation Agreement
(the "Separation Agreement") with the Company. The terms of the Separation
Agreement provide that Mr. Selinger will continue to receive his base
salary of $550,000 per year through July 31, 1999. For a description of the
terms and provisions of the Separation Agreement, see "Employment,
Termination and Change in Control Arrangements and Other Arrangements."
(8) On November 27, 1996, the Company forgave indebtedness in the amount of
$180,000 (inclusive of accrued interest), under a secured loan provided to
Mr. Selinger on April 1, 1996. The loan was used by Mr. Selinger to
purchase 50,000 shares of Common Stock in the open market.
(9) Under the terms of Mr. Selinger's stock option agreements, Mr. Selinger's
stock options expired ninety (90) days following his resignation on July
29, 1998.
(10) The amount includes the forgiveness on July 29, 1998 of net indebtedness in
the amount of $1,841,098 (inclusive of accrued interest and certain other
expenses) under a loan (the "Selinger Loan") made by the Company to Mr.
Selinger on December 3, 1997 in the original principal amount of
$2,500,000. The outstanding principal amount of $2,200,000 and accrued
interest under the Selinger Loan was forgiven under the terms and
provisions of the Separation Agreement, in partial consideration of Mr.
Selinger's agreement to repay $500,000 to the Company on June 30, 1999
(which payment was made by Mr. Selinger), and a three (3) year
non-competition covenant. For a description of the terms and provisions of
the Separation Agreement, see "Employment, Termination and Change in
Control Arrangements and Other Arrangements." In addition, such amount
includes $38,154 relating to the projected actuarial benefit to Mr.
Selinger for the year ended December 31, 1998 with respect to the Company's
payment of certain premiums on a life insurance policy owned by a trust for
the benefit of Mr. Selinger's children on a split-dollar basis.
(11) In June 1992, the Company entered into a split-dollar life insurance
arrangement for the benefit of Mr. Selinger. During the fiscal years ended
December 31, 1998, 1997 and 1996, the Company paid the premiums on the life
insurance policy owned by a trust for the benefit of Mr. Selinger's
children on a split-dollar basis. With respect to the payment of such
premiums by the Company, the benefit to Mr. Selinger for the years ended
December 31, 1998, 1997 and 1996, projected on an actuarial basis was
$38,154, $33,790 and $31,098, respectively, which is included in the table
above. Under the terms of the Separation Agreement, the Company is required
to continue to make such premium payments in accordance with the terms of
Mr. Selinger's divorce judgment.
11
<PAGE> 14
(12) Includes the forgiveness of indebtedness in the amount of $27,089
(inclusive of accrued interest) under secured loans (the "Secured Loans")
provided to Mr. Winocur, Mr. Kolodny and Mr. Liguori on February 26, 1996.
The Secured Loans were used by each of Mr. Winocur, Mr. Kolodny and Mr.
Liguori to purchase 6,000 shares of Common Stock on the open market in
1996.
(13) Each of Mr. Winocur, Mr. Kolodny and Mr. Liguori were reimbursed for all
applicable Federal, state and local income taxes relating to the
forgiveness of indebtedness under the Secured Loans.
(14) On April 29, 1999, the Company provided Mr. Liguori with three (3) months
prior written notice of termination of employment in accordance with the
terms of his employment agreement.
(15) On May 14, 1996, Mr. Schwartz joined the Company as the Vice President of
GF Express. Mr. Schwartz became an executive officer of the Company in June
1997.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain summary information concerning the
number of stock options granted and the potential realizable value of the stock
options granted to the Company's Named Executive Officers during the fiscal year
ended December 31, 1998:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE
UNDERLYING OPTIONS APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM(2)
GRANTED IN EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME 1998(1) FISCAL YEAR ($/Sh) DATE 5% 10%
- ---- ---------- ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Rodney F. Price.......... 10,000(3) .7% 16.3125 (3) $ 45,068 $ 99,589
Chairman of the Board
and Chief Executive
Officer
Paul Bellamy............. 200,000 13.4% 7.6875(4) (5) $ 424,783 $ 938,659
President and Chief 275,000 18.4% 2.875 218,435 482,684
Financial Officer
Irwin Selinger........... 250,000 16.8% 17.00 (6) $1,174,197 $2,594,668
Former Chairman of the
Board and Chief
Executive Officer
Peter Winocur............ 10,000(7) .7% 15.50 01/28/03 $ 42,824 $ 94,629
Executive Vice
President 100,000 6.7% 7.6875(4) 02/02/03 212,391 469,330
of Sales & Marketing 100,000 6.7% 2.875 09/15/03 79,431 175,522
Ralph Liguori............ 3,797(7) .3% 15.50 (8) $ 16,260 $ 35,931
Executive Vice
President 100,000 6.7% 7.6875(4) 02/02/03 212,391 469,330
of Operations 100,000 6.7% 2.875 09/15/03 79,431 175,522
Jeffrey Schwartz......... 10,000 .7% 7.6875 04/17/03 $ 21,239 $ 46,933
President of GF Express
Richard S. Kolodny....... 13,750(7) .9% 15.50 01/28/03 $ 58,883 $ 130,115
Vice President, General 100,000 6.7% 7.6875(4) 02/02/03 212,391 469,330
Counsel and Secretary 100,000 6.7% 2.875 09/15/03 79,431 175,522
</TABLE>
- ---------------
(1) During the fiscal year ended December 31, 1998, stock options were granted
under the Company's Incentive Program at an exercise price equal to the fair
market value of the Common Stock on the date of grant. The stock options,
other than directors' options, have a term of five years, subject to earlier
termination in the event of termination of employment for cause. The stock
options are non-transferable, other than by will or the laws of descent and
distribution, and vest and are exercisable at the rate of 50% per year
(other than directors' options, which are exercisable at the rate of 1/3 per
year), subject to certain
12
<PAGE> 15
exceptions including a change of control of the Company and the death of an
optionee. The stock options may be exercised by payment of cash, shares of
Common Stock or other consideration. The Company's Incentive Program is
administered by the Compensation Committee of the Board of Directors.
(2) Represents gain that would be realized assuming the stock options were held
for the entire five-year period and the stock price increased at compounded
rates of 5% and 10%, respectively, from the exercise prices set forth in the
table. These amounts represent assumed rates of appreciation only. Actual
gains, if any, on stock option exercises will be dependent on overall market
conditions and on the future performance of the Company. There can be no
assurance that the amounts reflected in the table will be achieved.
(3) This amount represents the grant of directors' options to purchase 10,000
shares of Common Stock issued pursuant to the Company's Incentive Program.
Under the terms of the Company's Incentive Program, Mr. Price's directors'
options expire on February 4, 2001. For a description of the terms and
provisions of directors' options, see "Compensation of Directors."
(4) Such stock options were repriced in 1998. For a description of the repricing
of the stock options, see "Stock Option Repricing Table."
(5) Under the terms of Mr. Bellamy's stock option agreements, Mr. Bellamy's
stock options expired ninety (90) days following his resignation on March
24, 1999.
(6) Under the terms of Mr. Selinger's stock option agreements, Mr. Selinger's
stock options expired ninety (90) days following his resignation on July 29,
1998.
(7) Represents restored stock options granted at the time of an exercise of a
stock option through a stock swap (payment of the exercise price by
surrender of previously owned shares of Common Stock). The restored stock
option was granted for the number of shares tendered to pay the exercise
price of the related option.
(8) Under the terms of Mr. Liguori's restored stock option agreement, Mr.
Liguori's restored stock option expires ninety (90) days following his
effective date of termination of employment of July 29, 1999.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides certain summary information concerning stock
option exercises during the fiscal year ended December 31, 1998 by the Company's
Named Executive Officers and the value of unexercised stock options held by the
Company's Named Executive Officers as of December 31, 1998:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED "IN THE MONEY"
NUMBER OF OPTIONS AT FISCAL OPTIONS AT FISCAL
SHARES ACQUIRED VALUE YEAR END(3) YEAR END(4)
UPON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($)(1)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Rodney F. Price........... -0- -0- 10,000 -0- -0- -0-
Chairman of the Board
and Chief Executive
Officer
Paul Bellamy.............. -0- -0- -0- 475,000 -0- $137,500
President and Chief
Executive Officer
Irwin Selinger............ -0- -0- -0- -0- -0- -0-
Former Chairman of the
Board and Chief
Executive Officer
Peter Winocur............. 30,406 $316,291 121,844 206,250 -0- $ 50,000
Executive Vice President
of Sales and Marketing
Ralph Liguori............. 8,881 $ 78,800 43,131 205,000 -0- $ 50,000
Executive Vice President
of Operations
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED "IN THE MONEY"
NUMBER OF OPTIONS AT FISCAL OPTIONS AT FISCAL
SHARES ACQUIRED VALUE YEAR END(3) YEAR END(4)
UPON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($)(1)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey Schwartz.......... -0- -0- 32,000 15,000 -0- -0-
President of GF Express
Richard S. Kolodny........ 44,000 $468,875 51,267 206,250 -0- $ 50,000
Vice President, General
Counsel and Secretary
</TABLE>
- ---------------
(1) Values were calculated by multiplying the closing market price of the Common
Stock as reported on the New York Stock Exchange, Inc. on the date of
exercise, by the respective number of shares and subtracting the exercise
price per share.
(2) The shares of Common Stock received upon exercise of the stock options were
not disposed of by the Named Executive Officers.
(3) Represents the aggregate number of stock options held as of December 31,
1998.
(4) Values were calculated by multiplying the closing market price of the Common
Stock as reported on the New York Stock Exchange, Inc. on December 31, 1998
by the respective number of shares and subtracting the exercise price per
share, without any adjustment for any termination or vesting contingencies.
STOCK OPTION REPRICING TABLE
The following table sets forth certain summary information concerning the
repricing of stock options held by any of the Company's Named Executive Officers
during the past ten (10) years. See "Report of Compensation Committee -- Stock
Option Repricing."
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES LENGTH OF
UNDERLYING MARKET EXERCISE ORIGINAL OPTION
OPTIONS/ PRICE OF PRICE AT TIME TERM
SARs STOCK AT OF REPRICING NEW REMAINING AT
REPRICED TIME OF OR EXERCISE DATE OF
OR REPRICING OR AMENDMENT PRICE REPRICING OR
NAME DATE AMENDED(#) AMENDMENT ($) ($) AMENDMENT
- ---- ------- ---------- ------------ ------------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Paul Bellamy(1).......... 4/01/98 200,000 $7.50 $17.93 $7.50 4 years, 11 months
Former President and 4/17/98 200,000 $7.6875 $ 7.50 $7.6875 4 years, 11 months
Chief Executive Officer
Peter Winocur............ 4/17/98 100,000 $7.6875 $17.00 $7.6875 4 years, 10 months
Executive Vice
President of Sales and
Marketing
Ralph Liguori............ 4/17/98 100,000 $7.6875 $17.00 $7.6875 4 years, 10 months
Executive Vice
President of Operations
Richard S. Kolodny....... 4/17/98 100,000 $7.6875 $17.00 $7.6875 4 years, 10 months
Vice President, General
Counsel and Secretary
</TABLE>
- ---------------
(1) On March 2, 1998, Mr. Bellamy was granted a stock option to purchase 200,000
shares of common stock, which was repriced on April 1, 1998 and on April 17,
1998. Mr. Bellamy resigned as President, Chief Executive Officer and a
director of the Company on March 24, 1999. Under the terms of Mr. Bellamy's
stock option agreements, Mr. Bellamy's stock options expired ninety (90)
days following his resignation on March 24, 1999.
14
<PAGE> 17
EMPLOYMENT, TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS AND OTHER
ARRANGEMENTS
On July 29, 1998, Irwin Selinger resigned as Chief Executive Officer,
President and a director of the Company, and entered into the Separation
Agreement, which terminated Mr. Selinger's existing employment agreement and
"change in control" agreement. The Separation Agreement provides for, among
other things, (i) the continuation of Mr. Selinger's (a) base salary of $550,000
through July 31, 1999, (b) health care and insurance benefits through July 8,
2001, and (c) automobile lease payments and associated automobile expenses
through July 8, 2001, (ii) the forgiveness of the outstanding principal payment
amount of $2.2 million and accrued interest under the Selinger Loan in partial
consideration of Mr. Selinger's repayment of $500,000 on June 30, 1999 (which
payment was made by Mr. Selinger), (iii) a three (3) year non-competition
covenant, (iv) the continuation of Mr. Selinger's split dollar life insurance
policy in accordance with the terms of Mr. Selinger's divorce judgment, (v) a
non-disparagement agreement, (vi) mutual releases, and (vii) the continuation of
the Company's indemnification provisions for Mr. Selinger.
On March 24, 1999, Paul Bellamy resigned as President, Chief Executive
Officer and a director of the Company. On March 2, 1998, Mr. Bellamy entered
into a three-year employment agreement with the Company providing for, among
other things, an initial base salary of $250,000 per year. Under the terms and
provisions of Mr. Bellamy's employment agreement, Mr. Bellamy is not entitled to
receive any severance benefits or other payments upon a voluntary termination of
employment. On September 15, 1998, Mr. Bellamy entered into an agreement with
the Company providing for the payment of certain benefits following the
occurrence of a "change in control" (as defined in such agreement), which
agreement is no longer in effect as a result of Mr. Bellamy's voluntary
termination of employment.
On June 12, 1998, Andrew A. Giordano resigned as President, Chief Operating
Officer and a director of the Company. On April 17, 1998, Mr. Giordano entered
into a three (3) year employment agreement with the Company providing for an
initial base salary of $350,000 per year, and an agreement with the Company
providing for the payment of certain benefits following the occurrence of a
"change in control" (as defined in such agreement). On April 23, 1998, the
Company loaned $400,000 to Mr. Giordano, which was subsequently repaid in full
with interest on July 31, 1998. In connection with Mr. Giordano's resignation,
Mr. Giordano entered into a four (4) year Consulting Agreement with the Company
on September 17, 1998 (the "Consulting Agreement") to consult with the Company
for no more than ten (10) calendar days per month. As part of the Consulting
Agreement, Mr. Giordano's existing employment agreement and "change in control"
agreement were terminated. The Consulting Agreement provides for, among other
things, (i) four (4) payments of $75,000 per year on each September 17, with the
final payment to be made on September 17, 2001, and (ii) the reimbursement of
reasonable business expenses relating to Mr. Giordano's consultancy with the
Company.
Effective as of March 15, 1996, Mr. Schwartz entered into a five (5) year
employment agreement with the Company. Under the terms of Mr. Schwartz's
employment agreement, Mr. Schwartz receives an annual base salary of $200,000
and participates in the Company's bonus program. The employment agreement
contains certain non-competition provisions, which are effective until the later
to occur of March 14, 2001 or the date of termination of employment, subject to
certain extension terms. Mr. Schwartz's employment agreement provides that the
Company may terminate the employment of Mr. Schwartz only for cause (as defined
in the employment agreement), death or extended illness or disability. On May
14, 1996, Mr. Schwartz entered into an agreement with the Company providing for
the payment of certain benefits if within two years following the occurrence of
a "change in control" (as defined in each such agreement), Mr. Schwartz is
terminated other than by reason of death, disability, retirement, or for cause,
or if Mr. Schwartz terminates his employment for good reason. Under the terms of
such agreement, Mr. Schwartz is entitled upon the occurrence of a triggering
event to receive his base salary and incentive compensation, if any, through the
date of termination, plus a lump sum severance payment equal to one times Mr.
Schwartz' base salary.
On April 17, 1998, Mr. Winocur, Mr. Kolodny, and Mr. Liguori entered into
three (3) year employment agreements with the Company. The employment agreements
provide for initial annual base salaries of $230,000, $200,000 and $220,000,
respectively. Under the terms of the employment agreements, each of the
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<PAGE> 18
executives participates in the Company's bonus program. The terms of the
employment agreements provide that the Company may terminate the executive's
employment for "cause" (as defined in the employment agreements), death or
extended illness or disability without any severance obligation. The Company may
terminate an executive's employment without "cause" under the employment
agreements by providing not less than three (3) months prior written notice to
the executive, in which case the executive shall be entitled to receive (i) his
base salary and benefits through the effective date of termination, (ii) a lump
sum payment equal to the sum of the aggregate base salary that would have been
payable to the executive from the date of termination through the end of the
initial term of the employment agreement, and (iii) all benefits through the end
of the initial term of the employment agreement. On April 29, 1999, the Company
provided Mr. Liguori with three (3) months prior written notice of termination
of employment in accordance with the terms of his employment agreement. In
addition, Mr. Winocur is subject to a non-competition agreement with the
Company, which provides that Mr. Winocur may not compete with the Company for a
period of five (5) years following his termination of employment.
On September 15, 1998, the Company entered into agreements with Mr.
Winocur, Mr. Liguori and Mr. Kolodny providing for the payment of certain
benefits following the occurrence of a "change in control" (as defined in such
agreements). The terms of such agreements generally provide that if the (i)
executive's employment is terminated, other than for "cause" within thirteen
(13) months following the occurrence of a "change in control", or (ii) executive
terminates his employment for any reason during the thirty (30) day period
immediately following the first anniversary of a "change in control", the
executive shall be entitled to receive upon the date of termination of
employment a lump sum severance payment in cash (or at the executive's sole
exclusive option receive such amounts as salary continuation during the
applicable period), equal to (x) three (3) times the highest annual base salary
paid or payable to the executive during the thirty-six (36) month period
immediately preceding the month in which the "change in control" occurs, and (y)
the aggregate of the maximum bonuses, which could have been earned, vested or
otherwise paid under the Company's bonus program during the term of such bonus
program. The agreements provide that the Company shall continue to provide the
executive and/or his dependents with life, disability, accident and health
insurance benefits, and certain other benefits following the occurrence of a
"change in control". In addition, in the event the executive receives any
payments under such agreements or pursuant to any other plan which become
subject to excise taxes under the Internal Revenue Code of 1986, as amended (the
"Code"), the agreements provide that the Company is required to pay to the
executive a gross-up payment such that after the payment by the executive of all
taxes and any excise taxes imposed upon or attributable to the gross-up payment,
the executive retains an amount of the gross-up payment equal to the excise tax
imposed upon the payments received by the executive.
On May 17, 1999, the Company hired Robert Mealey as its Senior Vice
President of Operations. In connection with Mr. Mealey's employment with the
Company, the Company entered into an arrangement with Mr. Mealey, which provides
for an eighteen (18) month severance arrangement in the event Mr. Mealey's
employment is terminated following a sale of the Company and Mr. Mealey is not
offered employment with an acquiror upon substantially the same employment terms
as in effect immediately prior to the sale of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 1, 1996, the Company entered into a three (3) year lease with HIP
Realty, Inc. ("HIP") for the Company's facility located in Mount Vernon, New
York. The lease terminated on February 28, 1999, and the Company has occupied
the facility on a month-to-month basis since March 1, 1999 upon the same terms
and conditions as provided under the lease. The lease with HIP Realty provided
for the payment by the Company of an annual rent of $180,000 during the 1998
fiscal year, and the payment of incremental real estate taxes over a base year.
The principal stockholders of HIP are Harvey P. Diamond, the former Senior Vice
President of Sales, and Peter Winocur, the President of the Company's Labtron
Business Unit. The Company believes that the terms of the lease are at least as
favorable to it as those it would have received from an unrelated third party.
On April 2, 1999, subject to the terms of the Company's month-to-month lease
arrangement with HIP, the Company subleased a portion of the facility for a
monthly rental of $2,000.
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<PAGE> 19
The Company, through its wholly-owned subsidiary, Lumex/Basic American
Holdings, Inc. (formerly, Fuqua Enterprises, Inc.) ("Fuqua"), subleases certain
office space located in Atlanta, Georgia to Fuqua Capital Corporation
("Capital"), an entity controlled by the Fuqua Family. The sublease has a
remaining term of one year and provides that if Fuqua moves out of the space it
shares with Capital, or there is a change in control of Fuqua, Capital has the
option of taking over the office space now occupied by Fuqua upon terms
favorable to Capital. Pursuant to the terms of the sublease, Capital pays Fuqua
approximately $4,200 per month.
Effective as of May 12, 1999, BIL Securities waived certain events of
default under the BIL Note and exchanged all of its right, title and interest
under the BIL Note, in consideration of the issuance of 2,036 shares of the
Series D Preferred Stock. The shares of Series D Preferred Stock are non-voting,
but have substantially the same economic rights as 2,036,000 shares of Common
Stock. Based on the closing price of the Common Stock on May 12, 1999, that
number of shares would have a market value of $4,072,000, which equals the
aggregate of the unpaid principal amount and accrued interest on the BIL Note.
Simultaneously with the closing of such transaction, Graham-Field and BIL
entered into an agreement dated as of May 12, 1999, which provided Graham-Field
with the sole and exclusive option for a period of one year following May 12,
1999, to convene a meeting of its stockholders or take such other corporate
action, in accordance with applicable laws and regulatory requirements, as may
be required to obtain applicable corporate approval to exchange each share of
Series D Preferred Stock for 1,000 shares of Common Stock.
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<PAGE> 20
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return of the Common Stock of the Company for the last five years with the
cumulative total return of the Standard & Poor's 500 Stock Index ("S&P 500
Index") and the Standard & Poor's Medical Products and Supplies Index ("S&P
Health Care Index") over the same period assuming the investment of $100 on
December 31, 1993 in the Common Stock of the Company, the S&P 500 Index and the
S&P Health Care Index (assuming the reinvestment of all dividends).
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GRAHAM-FIELD HEALTH PRODUCTS, INC.,
THE STANDARD & POOR'S 500 STOCK INDEX AND
THE STANDARD & POOR'S MEDICAL PRODUCTS AND SUPPLIES INDEX
<TABLE>
<CAPTION>
COMPANY/INDEX NAME DEC 93 DEC 94 DEC 95 DEC 96 DEC 97 DEC 98
------------------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
GRAHAM-FIELD HEALTH PRODUCTS, INC........................... $100 $ 79 $ 71 $182 $351 $ 71
S&P 500..................................................... 100 101 139 171 229 294
S&P HEALTHCARE (MEDICAL PRODUCTS & SUPPLIES)................ 100 119 200 230 287 413
</TABLE>
- ---------------
* ASSUMES $100 INVESTED ON DECEMBER 31, 1993 IN STOCK OR INDEX, INCLUDING
REINVESTMENT OF DIVIDENDS.
REPORT OF COMPENSATION COMMITTEE
OVERALL POLICY
The Company's executive officer compensation program is administered to be
closely linked to corporate performance and the total return to stockholders
over the long-term. The overall objectives of the executive officer compensation
program are to attract and retain the best possible executive talent, to
motivate these executives to achieve the goals inherent in the Company's
business strategy, to link executive and stockholder
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<PAGE> 21
interests through participation in the Company's Incentive Program and finally
to provide a compensation package that recognizes individual contributions as
well as overall business results.
The key elements of the Company's executive officer compensation consist of
base salary, an annual bonus pursuant to the Company's bonus program, and the
grant of stock options under the Company's Incentive Program. The Compensation
Committee reviews and approves the compensation package for the executive
officers of the Company. In addition, while the elements of compensation
described below are considered separately, the Compensation Committee takes into
account the full compensation package afforded by the Company to the individual.
BASE SALARIES
Base salaries for executive officers (officers with principal
decision-making authority) are initially determined by the Compensation
Committee through a subjective evaluation of the responsibilities of the
position held and the experience of the individual. Annual salary adjustments
and increases are determined by evaluating the performance of the Company and of
each executive officer, and also take into account new responsibilities.
ANNUAL BONUS
Cash bonuses are granted on a discretionary basis primarily to reward
individual contribution, following years in which the Company achieved projected
earnings and revenue growth. Due to the performance of the Company in 1998, no
cash bonuses were awarded to the executive officers, other than a $15,000 bonus
paid to one executive officer.
STOCK OPTIONS
Under the Company's Incentive Program, which was approved by the Company's
stockholders, stock options exercisable for Common Stock are granted to the
Company's employees, including executive officers. The Compensation Committee
approves the grant of stock option awards.
Stock options are designed to align the interests of executives with those
of the stockholders. Stock options are granted with an exercise price equal to
the market price of the Common Stock on the date of grant and generally vest and
are exercisable at the rate of 50 percent per year. This approach is designed to
incentivize the creation of stockholder value over the long term since the full
benefit of a compensation package cannot be realized unless stock price
appreciation occurs over a number of years.
CHIEF EXECUTIVE OFFICER COMPENSATION
From January 1, 1998 to July 29, 1998, Irwin Selinger served as Chief
Executive Officer of the Company, and was paid a base salary at an annual rate
of $550,000. On February 2, 1998, Mr. Selinger was granted a stock option to
purchase 250,000 shares of the common stock of the Company, which expired ninety
(90) days following his resignation on July 29, 1998. On July 29, 1998, Mr.
Selinger entered into the Separation Agreement, which terminated Mr. Selinger's
existing employment agreement and "change in control" agreement. For a
description of the terms and provisions of the Separation Agreement, see
"Employment, Termination and Change in Control Arrangements and Other
Arrangements."
From July 29, 1998 to February 4, 1999, Rodney F. Price served as Chief
Executive Officer of the Company, as well as Chairman of the Board. Mr. Price
did not receive any compensation for his services as Chief Executive Officer,
but was reimbursed for travel, lodging and other expenses. On January 2, 1998,
Mr. Price was granted directors' options under the Company's Incentive Program
to purchase 10,000 shares of the common stock of the Company, which expire two
(2) years following his resignation on February 4, 1999.
STOCK OPTION REPRICING
On April 1, 1998, the Compensation Committee determined to lower the
exercise price of stock options granted to Mr. Bellamy on March 2, 1998. In
addition, on April 17, 1998, the Compensation Committee
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<PAGE> 22
determined to reset the exercise price of Mr. Bellamy's repriced stock options
of April 1, 1998, and reset the exercise price with respect to stock options
granted on February 2, 1998 to Mr. Winocur, Mr. Liguori and Mr. Kolodny. In
connection with the repricing of the stock options, the Compensation Committee
cancelled the previously granted stock options and granted new stock options.
The terms of the new stock options are identical in all respects to the
cancelled stock options except for the exercise price. The purpose and intention
of the repricing was to maintain equity incentives for key employees and to
foster loyalty and economic motivation. The Compensation Committee believes that
stock options which are significantly out of the money provide no particular
compensatory incentive to employees regarding performance, and that the
repricing of stock options may cause executives to forego alternative employment
opportunities.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Code generally disallows a tax deduction to public
companies for compensation over $1 million paid to a company's chief executive
officer and the other four most highly compensated individuals who are executive
officers as of the end of the year. Although maintaining tax deductibility is
one consideration among many, the Committee reserves the right to determine from
time to time that compensation arrangements are in the best interest of the
Company and its stockholders despite the fact that such arrangements might not
qualify for tax deductibility. The Company's bonus program is designed so that
individual bonuses are not dependent solely on objective or numerical criteria,
which enables the Committee to apply its independent judgment to reflect
performance against qualitative strategic objectives.
Compensation Committee
J. Rex Fuqua
Louis A. Lubrano
Michael S. Dreyer
RATIFICATION OF APPOINTMENT
OF
THE COMPANY'S INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee of the Board of Directors,
the firm of Ernst & Young LLP has been appointed independent auditors for 1999,
subject to ratification of such appointment by the stockholders. Ernst & Young
LLP has acted as the Company's independent auditors since 1986. If the
stockholders do not ratify such appointment, the Audit Committee will recommend
another accounting firm for selection by the Board of Directors. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting and will have an opportunity to make a statement and will be available
to answer proper questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
PROCEDURE FOR SUBMITTING STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Exchange Act, stockholders may present
proper proposals for inclusion in the Company's proxy statement and for
consideration at the next annual meeting of its stockholders by submitting their
proposals to the Company in a timely manner. In order to be included in the
Company's proxy statement and proxy relating to the 2000 Annual Meeting,
stockholder proposals must be received by the Company no later than one hundred
twenty (120) days prior to the first anniversary date of this year's Annual
Meeting, and must otherwise comply with the requirements of Rule 14a-8.
Pursuant to the Company's By-Laws, as amended, any stockholder entitled to
vote at an annual meeting of stockholders of the Company may nominate persons
for election as directors or submit a proposal to be
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<PAGE> 23
voted on by stockholders (other than proposals to be included in the Company's
proxy materials as provided in the preceding paragraph) at such annual meeting
only if written notice of such stockholder's intent to make such nomination or
proposal is given either by personal delivery or by the United States mail,
postage prepaid, to the Secretary of the Company not later than one hundred
twenty (120) days in advance of such annual meeting of stockholders.
All notices of proposals by stockholders, whether or not to be included in
the Company's proxy materials, should be sent to the attention of the Secretary
of the Company at 81 Spence Street, Bay Shore, New York 11706.
OTHER BUSINESS
The Board of Directors does not intend to present to the meeting any
business other than the matters stated in the accompanying Notice of the Annual
Meeting of Stockholders and, at the time the proxy statement was printed, was
not aware of any other business that properly might be presented. If any other
business not described herein should properly come before the meeting for action
by the stockholders, or if any procedural matters requiring a vote of
stockholders should arise at the meeting, the persons named as proxies on the
enclosed card or their substitutes will vote the shares represented by them in
accordance with their best judgment.
By Order of the Board of Directors
RICHARD S. KOLODNY
Senior Vice President, General
Counsel and Secretary
Dated: July 14, 1999
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<PAGE> 24
GRAHAM--FIELD HEALTH PRODUCTS, INC.
81 Spence Street, Bay Shore, New York 11706
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints RUPERT O.H. MORLEY and RICHARD S.
KOLODNY as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
Common Stock of Graham Field Health Products, Inc., held of record by the
undersigned on July 12, 1999, at the Annual Meeting of Stockholders to be held
on August 16, 1999, or any adjournment thereof.
(CONTINUED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 25
[X] Please mark your
votes as in this
example
FOR
all nominees WITHHOLD
(except as marked AUTHORITY
to the contrary to vote for all
below) nominees
1. Election of [ ] [ ]
Directors
CLASS III NOMINEES: Rupert O.H. Morley
Louis A. Lubrano
INSTRUCTION: TO WITHHOLD VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME IN LINE PROVIDED BELOW
____________________________________________________________________
FOR AGAINST ABSTAIN
2. Ratification of appointment of Ernst & [ ] [ ] [ ]
Young LLP as independent auditors.
3. In their discretion upon any other
matters which may properly come before
such meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR the election of management's nominees for directors, and FOR Proposal 2.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
SIGNATURE(S) ______________________________________ DATED ________________, 1999
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.