<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 Rule 14a-1(c) or rule 14a-12.
</TABLE>
NEW MEXICO AND ARIZONA LAND COMPANY
- --------------------------------------------------------------------------------
(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 0-11.
(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:
------------------------------------------------------------------------
[ ] 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
NEW MEXICO AND ARIZONA LAND COMPANY
3033 NORTH 44TH STREET, SUITE 270
PHOENIX, ARIZONA 85018
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 1998
To our Shareholders:
We cordially invite you to the 1998 Annual Meeting of the Shareholders of
New Mexico and Arizona Land Company (the "Company"), to be held at the Embassy
Suites Phoenix -- Biltmore, 2630 East Camelback Road, Phoenix, Arizona 85016 on
Friday, May 8, 1998 at 9:30 a.m., Arizona time for the following purposes:
1. The election of Class B Directors;
2. Approval of the 1997 Stock Incentive Plan; and
3. The transaction of such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 27, 1998 are
entitled to receive notice of, and to vote at, the meeting and any adjournment
thereof. Additional copies of the Company's proxy materials may be obtained from
the Company's Corporate Secretary.
By order of the Board of Directors,
R. RANDY STOLWORTHY
President and Chief Executive Officer
Phoenix, Arizona
April 7, 1998
MANY SHAREHOLDERS OWN LESS THAN 100 SHARES. ALL VOTES ARE IMPORTANT. PLEASE
SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOU MAY REVOKE YOUR
PROXY AT ANY TIME BEFORE THE SHARES ARE VOTED AT THE MEETING.
<PAGE> 3
NEW MEXICO AND ARIZONA LAND COMPANY
3033 NORTH 44TH STREET, SUITE 270
PHOENIX, ARIZONA 85018
PROXY STATEMENT
MAILING DATE: ON OR ABOUT APRIL 15, 1998
------------------------
VOTING AND OTHER MATTERS
General. The enclosed proxy is solicited by the Board of Directors of New
Mexico and Arizona Land Company, an Arizona corporation (the "Company" or "NZ"),
for use at the 1998 Annual Meeting of Shareholders to be held on May 8, 1998
(the "1998 Annual Meeting"). If the accompanying proxy is signed and returned,
the shares represented thereby will be voted in accordance with any directions
on the proxy. If a proxy does not specify how the shares represented thereby are
to be voted in connection with the matters listed thereon, it is intended that
it will be voted for the matters listed on the accompanying proxy. A shareholder
may revoke the proxy at any time prior to the voting thereof by giving due
notice of such revocation to the Company, by executing and duly delivering a
subsequent proxy, or by attending the 1998 Annual Meeting. This Proxy Statement,
the accompanying proxy, and the Company's 1998 Annual Report were mailed on or
about April 15, 1998 to the shareholders of record on the record date of March
27, 1998.
Annual Meeting. As of the date of this Proxy Statement, the Company knows
of no matters to be brought before the 1998 Annual Meeting other than those
referred to in the accompanying notice of the 1998 Annual Meeting. If other
matters are properly presented, however, the proxy holders, Mr. Renneckar and
Mr. Stolworthy, will have discretion to vote thereon according to their best
judgment.
Record Date. The Board of Directors has fixed the close of business on
March 27, 1998 as the record date for the determination of shareholders entitled
to notice of the 1998 Annual Meeting, and to vote at it and any adjournment
thereof. On the record date, there were 3,847,982 shares of the Company's common
stock ("Common Stock") outstanding. The Company has no class or series of
capital stock outstanding other than the Common Stock.
Proxy Solicitation. The Company will bear the cost of proxy solicitation
for the 1998 Annual Meeting. In addition to solicitation by mail, certain
directors, officers, and regular employees of the Company may, without
compensation other than their regular salaries and fees, solicit proxies
personally, by telephone, or electronically. The Company will reimburse
brokerage firms and others for expenses in forwarding solicitation material to
beneficial owners.
Voting. Except with respect to the election of directors, each share is
entitled to one vote upon each matter presented for action. The presence in
person or by proxy of a majority of the outstanding shares entitled to vote is
required to constitute a quorum at the 1998 Annual Meeting. The affirmative vote
of a majority of the shares then represented at the meeting and entitled to vote
will constitute the act of the shareholders. Abstentions are counted as "shares
present" for purposes of determining the presence of a quorum, and have the
effect of a vote "against" any matter as to which they are specified. Broker
non-votes with respect to any matter are not considered "shares present" and
will not affect the outcome of the vote on such matter. With respect to the
election of directors, shareholders have cumulative voting rights in the
election of directors: each shareholder is entitled to vote the number of shares
owned for as many persons as there may be directors to be elected; or the
shareholder may cumulate the shares and give one nominee all of the
shareholder's votes, multiplied by the number of directors to be elected; or the
shareholder may distribute votes among as many nominees as he or she thinks fit
to serve. The enclosed proxy does not seek discretionary authority to cumulate
votes in the election of directors.
Revocability of Proxies. Any person giving a proxy may revoke the proxy at
any time before its use by delivering to the Company a duly executed proxy
bearing a later date or by attending the 1998 Annual Meeting and voting in
person.
<PAGE> 4
Annual Report and Other Matters. The Company's 1997 Annual Report to
Shareholders, which was mailed to shareholders with or preceding this Proxy
Statement, contains financial and other information about the affairs of the
Company, and includes a copy of the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 as filed with the United States Securities and
Exchange Commission. Neither the 1997 Annual Report to Shareholders nor the
Annual Report on Form 10-K forms a part of this Proxy Statement and is not to be
considered a part of the Company's proxy soliciting materials. Upon request, the
Company will provide to each shareholder a copy of any exhibits listed in the
Annual Report on Form 10-K at the actual expense incurred by the Company in
furnishing the copy. Any such requests should be directed to the Company's
Secretary at the Company's executive offices.
VOTING SECURITIES, PRINCIPAL HOLDERS, AND MANAGEMENT OWNERSHIP
On March 27, 1998, there were 3,847,982 shares of Common Stock outstanding;
the Company has issued no other category of stock. The following table sets
forth beneficial ownership of Common Stock of the Company as of March 27, 1998,
with respect to each shareholder known by the Company to be the beneficial owner
of more than five percent of its outstanding Common Stock, by each director and
nominee for director, by each executive officer and by all directors and
executive officers as a group.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF COMMON
SHARES STOCK
BENEFICIAL OWNER BENEFICIALLY BENEFICIALLY
DIRECTORS AND EXECUTIVE OFFICERS OWNED(1) OWNED
- -------------------------------- ------------ ------------
<S> <C> <C>
R. Randy Stolworthy......................................... 10,000 *
President and Chief Executive Officer
John C. Lucking............................................. 5,047 *
Director
William A. Pope............................................. 15,995(2) *
Director
Arnold L. Putterman......................................... 35,990(3) *
Director
Stephen E. Renneckar........................................ 3,183 *
Chairman of the Board
Ronald E. Strasburger....................................... 2,784 *
Director
Joe D. Sphar................................................ 5,882 *
Vice President -- Minerals and Assistant Corporate
Secretary
Richard A. Wessman.......................................... 3,508 *
Director
Directors and Executive Officers as a group (8 persons)..... 81,189 2.11%
5% SHAREHOLDERS
- -----------------
Sun NZ L.L.C.(4)............................................ 1,658,658(5) 43.10%
R. R. Hensler, Inc.(6)...................................... 531,714 13.82%
Dimensional Fund Advisors Inc.(7)........................... 201,840 5.25%
</TABLE>
- ---------------
* Less than 1% of outstanding shares of Common Stock
(1) The numbers of shares shown and corresponding percentages shown include
shares owned of record by the listed person's minor children and spouse and
by other related individuals and entities over whose shares such person has
custody, voting control, or power of disposition. There are no shares of
Common Stock which any of the persons or entities listed above have a right
to acquire within 60 days of March 27, 1998. Unless otherwise stated in the
following footnotes, each person's address is c/o the Company, 3033 North
44th Street, Suite 270, Phoenix, Arizona 85018.
(2) This amount includes 2,310 shares that Mr. Pope holds as custodian for his
children and 11,300 shares that Mr. Pope holds indirectly through Sterling
Pacific Assets, Inc., which he controls. In addition,
2
<PAGE> 5
Mr. Pope, as the appointed nominee of Sun NZ L.L.C. ("Sun NZ"), may be
deemed to have shared voting and dispositive power with respect to the
1,658,658 shares owned by Sun NZ L.L.C. Mr. Pope disclaims beneficial
ownership of the Sun NZ shares. Mr. Pope's address is c/o SunChase Holdings,
Inc., 2525 East Camelback Road, Suite 888, Phoenix, Arizona 85016.
(3) Mr. Putterman may be deemed to own beneficially an additional 40,013 shares
of Common Stock held by relatives of Mr. Putterman as well as 5,582 shares
owned by Somers Manor Nursing Home of which Mr. Putterman is an officer. Mr.
Putterman disclaims beneficial ownership of such shares.
(4) Sun NZ, an Arizona limited liability company, has shared voting and
dispositive power over 1,658,658 shares of the Company's Common Stock. Sun
NZ is managed by Sun NMA, Inc., an Arizona corporation. William A. Pope, a
Director of the Company, serves as President of Sun NMA, Inc. By virtue of
their status as a managing member of Sun NZ and president of the managing
member, Sun NMA, Inc. and Mr. Pope, respectively, share with Sun NZ voting
and dispositive power of the 1,658,658 shares of Common Stock owned by Sun
NZ. The information contained in this footnote was obtained from a Schedule
13D dated April 24, 1994, filed by Sun NZ with the Securities and Exchange
Commission. The address of Sun NZ L.L.C. is 2525 E. Camelback Road, Suite
888, Phoenix, Arizona 85016.
(5) Sun NZ owns 1,658,658 shares of the outstanding Common Stock of the Company.
Pursuant to a Loan Agreement between Sun NZ and Bank One, Arizona, NA ("Bank
One"), Sun NZ pledged to Bank One 791,000 shares of the Company's Common
Stock owned by Sun NZ.
(6) R. R. Hensler, Inc., an Arizona corporation, owns 531,714 shares of the
outstanding Common Stock of the Company. R. R. Hensler, Inc. acquired the
shares on November 7, 1997 as a part of the consideration paid by the
Company for certain assets of RRH Financial. The address of R.R. Hensler,
Inc. is 6262 North Swan, Suite 190, Tucson, Arizona 85718.
(7) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 201,840 shares of Common
Stock of the Company as of December 31, 1997, all of which shares are held
in portfolios of DFA Investment Dimensions Group, Inc. , a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, for all of which Dimensional Fund Advisors, Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares. The information contained in this footnote was obtained from a
Schedule 13G dated February 9, 1998, filed by Dimensional Fund Advisors Inc.
with the Securities Exchange Commission. The address of Dimensional Fund
Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California
90401.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 22, 1997, the Company purchased for $2.8 million cash an
industrial park consisting of one partially leased 31,077 square foot
multi-tenant industrial building on 7.1 acres of land in Tempe, Arizona. The
Company purchased the property from R. Randy Stolworthy, who was Executive Vice
President of the Company at the time. The purchase price was based upon an MAI
appraisal that was prepared for the Company by an independent appraiser. The
property had been identified by the Company as a potential acquisition property
in late 1996.
AGENDA ITEM NO. 1
ELECTION OF DIRECTORS
The Board of Directors is comprised of seven directors, each serving a
two-year term. Directors are denominated Class A Directors, whose term expires
in odd-numbered years, and Class B Directors, whose term expires in
even-numbered years. At the 1998 Annual Meeting, four Class B Directors are to
be elected.
3
<PAGE> 6
NOMINEES FOR TERMS AS CLASS B DIRECTORS
TERMS TO EXPIRE AT THE 1998 ANNUAL MEETING
The following individuals have been nominated as Class B Directors, with
terms expiring at the Company's 2000 Annual Meeting of Shareholders or until
such Directors' successors are duly elected and qualified. Unless shareholders
withhold authority, their proxies will be voted for the election of these
nominees. If any nominee is unable to serve at the time of the meeting (which is
not anticipated), the proxies will be voted for a substitute nominee designated
by the Board of Directors. The Board recommends a vote for this Agenda Item
electing the nominees to serve as Class B Directors of the Company.
<TABLE>
<CAPTION>
SHARES
OWNED
DIRECTOR AT
NAME AND AGE SINCE 3/27/98
------------ -------- -------
<S> <C> <C> <C>
Arnold L. Putterman, 59........... Mr. Putterman is an attorney in private practice 1988 35,990
in New York City. In addition, since 1970, Mr.
Putterman has been a partner of SNF Management
Services. SNF Management Services is involved in
the development and management of health
facilities and commercial real estate.
Stephen E. Renneckar, 53.......... Since October 1992, Mr. Renneckar served as Vice 1994 3,183
President and General Counsel of SunChase
Holdings, Inc., which is engaged in the business
of acquiring, developing, managing, and
marketing residential and commercial properties
in the United States and wood products, fiber
optic cable, and computer software in the United
States and abroad. Prior to joining SunChase
Holdings, Inc., Mr. Renneckar was a partner with
the law firm of O'Connor Cavanagh in Tucson,
Arizona.
R. Randy Stolworthy, 41........... Since November 1997, Mr. Stolworthy has been * 10,000
President and CEO of the Company. He joined the
Company in February, 1997 as Executive Vice
President and COO. From 1992 to 1997, he founded
and managed R.R. Stolworthy, Inc., a real estate
investment and development Company in Phoenix.
From 1987 to 1992, he co-founded and was
President of Voicelink Data Services, a credit
and marketing service company in Redmond,
Washington. Prior to 1987, he was a General
Partner in FBS Venture Capital Company and
manager of the Seattle office and portfolio.
Richard A. Wessman, 55............ Since January 1993, Mr. Wessman has been 1994 3,508
President of Sterling Pacific Assets, Inc., a
property and financial management company. From
October 1978 to April 1992, he was a partner in
the accounting firm of Ernst & Young. Mr.
Wessman served as CFO of CSY Investments from
May 1992 until December 1992.
</TABLE>
- ---------------
* New Nominee
4
<PAGE> 7
CONTINUING IN OFFICE AS CLASS A DIRECTORS
TERMS TO EXPIRE AT THE 1999 ANNUAL MEETING
<TABLE>
<CAPTION>
SHARES
OWNED
DIRECTOR AT
NAME AND AGE SINCE 3/27/98
------------ -------- -------
<S> <C> <C> <C>
William A. Pope, 42............... Mr. Pope served President and Chief Executive 1995 15,995
Officer of the Company from June 1994 until
November 1997. Since 1993, Mr. Pope has served
as President and Chief Executive Officer of
SunChase Holdings, Inc. and its affiliated
companies. Prior to 1993, Mr. Pope served as
Executive Vice President and Chief Operating
Officer of SunChase Holdings, Inc. and its
affiliated companies. SunChase Holdings, Inc. is
engaged in the business of acquiring,
developing, managing, and marketing residential
and commercial properties in the United States
and wood products, fiber optic cable, and
computer software in the United States and
abroad.
John C. Lucking, 54............... Since 1995, Mr. Lucking has been self-employed 1993 5,047
as an Economist for Econ-Line, which provides
economic consulting services. From 1984 to 1994,
Mr. Lucking served as an Economist for Bank One,
Arizona. Mr. Lucking also serves as a Trustee of
the Tax Free Trust of Arizona (Mutual Fund of
Arizona Municipal Bonds).
Ronald E. Strasburger, 59......... Since 1993, Mr. Strasburger has been employed by 1994 2,784
Sterling Pacific Management Services, Inc.
(SPMS), which is in the business of portfolio
purchases and sales. He has served as President
of SPMS since January 20, 1997. From 1991 to
1993, he was self-employed as a consultant for
the review, negotiation, and disposition of
complex portfolios for various institutions
after being employed by the Resolution Trust
Corporation from 1990 to 1991.
</TABLE>
MEETINGS OF THE BOARD AND ITS COMMITTEES
The Company's Board of Directors met seven times in 1997, and all members
attended 75% or more of those meetings and the meetings of the committees to
which they are assigned. Members of the Audit; Compensation and Nominating; and
Executive Committees are listed below.
Audit. This committee met twice in 1997, and is composed of Arnold L.
Putterman and Richard A. Wessman (Chairman). The committee reviews with the
Company's independent public accountants the annual audit plan, the scope and
results of the audit, and internal control procedures.
Compensation and Nominating. This committee met six times in 1997, and is
composed of John C. Lucking (Chairman), Stephen E. Renneckar, and Ronald E.
Strasburger. The committee administers the Company's salary, bonus, stock
incentive plan and restricted stock plans. It also recommends nominees to fill
vacancies on the Board of Directors. Recommendations for nominees to the Board
of Directors may be sent to the Chairman of the Compensation and Nominating
Committee, in care of the Company's Corporate Secretary.
5
<PAGE> 8
Executive. This committee met once in 1997. It is composed of John C.
Lucking, Stephen E. Renneckar (Chairman), and Richard A. Wessman. It is
empowered to act in the absence of, but as limited by, the Board of Directors.
DIRECTORS FEES AND EXPENSES
Board members are reimbursed for expenses incurred while attending meetings
and are paid the following compensation each year.
DIRECTOR FEES:
<TABLE>
<S> <C>
Annual retainer: $6,000
Board meetings: $700 for each meeting attended
$500 for each meeting attended, payable only to nonemployee
Committee meetings: directors
$300 for each meeting attended, payable only to nonemployee
Telephone meetings: directors
</TABLE>
DIRECTOR BONUS:
On December 31, 1997, the Company issued to each director as bonus
compensation (a) 350 shares of the Company's Common Stock, valued at $14.625 per
share, the closing price of the Company's Common Stock on the American Stock
Exchange on December 31, 1997, and (b) $2,047.50. In addition to this director
bonus, Mr. Pope received a bonus of $30,000 reflecting his contribution to the
Company as CEO during most of 1997 and Mr. Renneckar received a bonus of $25,000
for his service as Chairman of the Board of Directors.
There are no other arrangements or agreements between the Company and any
Board member.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation awarded to or paid by the Company and its subsidiaries to
the Chief Executive Officer (CEO) and other executive officers (collectively
with the CEO, the "Named Officers") of the Company whose aggregate cash
compensation exceeded $100,000 during the last fiscal year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------------- SECURITIES
OTHER UNDERLYING
FISCAL ANNUAL OPTIONS/ ALL OTHER
NAME AND POSITION(1) YEAR SALARY BONUS COMPENSATION SARS(3) COMPENSATION
-------------------- ------ -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
R. Randy Stolworthy............ 1997 $124,431 $ 0 $ 0 250,000 $ 0
President & Chief Executive
Officer(2)
William A. Pope................ 1997 $ 0 $ 30,000 $ 0 0 $15,266(4)
President & Chief 1996 20,000 120,000 0 0 21,925
Executive Officer from June 1995 20,000 80,000 0 0 18,025
1994 to November 1997(4)
</TABLE>
- ---------------
(1) There are no other executive officers of the Company whose total annual
salary and bonus for the 1997 fiscal year exceeded $100,000.
(2) As of November 7, 1997, Mr. Stolworthy was named President and CEO,
replacing William A. Pope, who continues as a Board member. Mr. Stolworthy
was Executive Vice President and Chief Operating Officer of the Company from
February 19, 1997 until November 7, 1997.
6
<PAGE> 9
(3) The Company's Board of Directors approved a stock incentive plan in 1997 and
reserved 500,000 shares for issuance under the plan. Mr. Stolworthy was
awarded 250,000 shares under the plan, with vesting to occur at five
different exercise prices over the next five years. All exercise prices were
above the market price, as reported by the American Stock Exchange, at the
time of award. See the table below, "OPTION GRANTS IN FISCAL YEAR 1997" for
details of the stock option grants.
(4) Mr. Pope received $8,100 as fees for serving on the Board of Directors in
fiscal year 1997. In addition, on December 31, 1997, Mr. Pope received, as
bonus compensation for his service on the Board of Directors, $2,047.50 in
cash and 350 shares of Common Stock, valued at $14.625 per share, the
closing price of the Common Stock on the American Stock Exchange on December
31, 1997. See "Directors Fees and Expenses." Mr. Pope is not a participant
in the Company's 401(k) Plan.
Option Grants. The following table sets forth certain information
regarding the grant and exercise of options to the Named Officers in 1997.
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATE OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
------------------------------------------------------------------- -----------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED
OPTIONS TO EMPLOYEES IN EXERCISE OR BASE
NAME GRANTED FISCAL YEAR PRICE ($/SHARE)(1) EXPIRATION DATE 5%($) 10%($)
---- ---------- --------------- ------------------ --------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
R. Randy Stolworthy... 50,000 20% $15.00 to $23.60 2/19/2008 $203,672 $ 879,888
50,000 20% $15.00 to $23.60 2/19/2009 $255,512 $1,063,693
50,000 20% $15.00 to $23.60 2/19/2010 $315,932 $1,265,352
50,000 20% $15.00 to $23.60 2/19/2011 $379,374 $1,487,177
50,000 20% $15.00 to $23.60 2/19/2012 $445,988 $1,731,185
William A. Pope....... 0 0 -- -- $ 0 $ 0
</TABLE>
- ---------------
(1) Represents options to purchase shares of Common Stock granted under the
Company's 1997 Stock Incentive Plan. The exercise prices of such options
were at least 100% of fair market value on the date the option was granted.
Mr. Stolworthy was awarded 250,000 shares in increments of 50,000 shares
each, at the initial exercise price of $15.00 per share; the exercise price
of each consecutive 50,000 share option is to be increased by 12%, i.e.
$15.00, $16.80, $18.82, $21.07 and $23.60. One fifth of the shares in each
price category will become vested at the first anniversary of Mr.
Stolworthy's joining the Company; ten thousand shares of each price category
will become vested on each of the succeeding four anniversaries; the option
term extends for ten years after the shares are vested.
(2) This disclosure is provided pursuant to Item 402(c) of Regulation S-K and
assumes that the actual stock price appreciation over the maximum remaining
ten year option terms will be at the assumed 5% and 10% levels.
7
<PAGE> 10
The following table sets forth certain information regarding the exercise
and values of options held by the Named Officers as of December 31, 1997.
AGGREGATED OPTION EXERCISES AND OPTION VALUES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES ACQUIRED ON DECEMBER 31, 1997 DECEMBER 31, 1997(1)
NAME EXERCISE(#) VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------ -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
R. Randy Stolworthy.... 0 $0 0/250,000 $0/$0
William A. Pope........ 0 $0 0/0 $0/$0
</TABLE>
- ---------------
(1) All the exercisable options were exercisable at a price greater than the
last reported sale price of the Common Stock ($14.625) on the American Stock
Exchange on December 31, 1997.
Employment Agreements. The Company has not entered into written employment
agreements with any of the Named Officers
Compensation Committee Interlocks. Messrs. Lucking, Renneckar and
Strasburger served as members of the Compensation and Nominating Committee
during the 1997 fiscal year. None of these directors held any executive officer
position or other employment with the Company prior to or during such service
nor did any executive officer of the Company serve on any other Company's
compensation committee.
New Mexico and Arizona Land Company Defined Benefit Plan. The Company's
Defined Benefit Plan, which was "frozen" on December 31, 1996. The Retirement
Plan Administrative Committee of the Board of Directors is responsible for
overseeing the distribution of the assets of the plan according to existing
ERISA regulations. The Retirement Committee consists of Ronald E. Strasburger
(Chairman) and R. Randy Stolworthy.
COMPENSATION AND NOMINATING COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation and Nominating Committee is composed of John C.
Lucking, Stephen E. Renneckar, and Ronald E. Strasburger. The members of the
Compensation and Nominating Committee are not employees of the Company. The
Committee's report is as follows:
The Compensation and Nominating Committee reviews and determines the amount
of compensation paid to the Company's executive officers. The Compensation
Committee advised the Board of Directors that the compensation levels for the
Company's executive officers during fiscal 1997 did not bear a specific
relationship to the Company's performance. Rather, executive compensation was
set at levels designed to retain the Company's executive officers and the
Compensation and Nominating Committee's assessment of the performance of the
officer and the Company, respectively, is subjective and not subject to specific
criteria.
New Mexico and Arizona Land Company
Compensation and Nominating Committee:
John C. Lucking (Chairman)
Stephen E. Renneckar
Ronald E. Strasburger
Dated: March 12, 1998
8
<PAGE> 11
STOCK PRICE PERFORMANCE GRAPH
The following compares the total return on the Company's Common Stock for
the period December 31, 1992 through December 31, 1997 with the cumulative total
return on the AMEX Composite Index, an industry index composed of SIC Code 651:
Real Estate Operators and Lessors and an industry index composed of SIC Code
615: Business Credit Institutions. The comparison assumes that $100 was invested
on December 31, 1992 in the Company's Common Stock and in each of the comparison
indices, and assumes reinvestment of dividends.
FISCAL YEAR ENDING
<TABLE>
1992 1993 1994 1995 1996 1997
---- ------ ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
New Mexico & Arizona Land Co. 100 104.35 91.30 139.13 148.27 205.21
Business Credit Industry Index 100 97.20 87.51 135.75 191.57 272.16
Real Estate Industry Index 100 120.36 113.75 130.52 189.55 226.80
Amex Composite Index 100 118.81 104.95 135.28 142.74 171.76
</TABLE>
AGENDA ITEM NO. 2:
APPROVAL OF THE COMPANY'S 1997 STOCK INCENTIVE PLAN
On October 27, 1997, the Board of Directors approved the New Mexico and
Arizona Land Company 1997 Stock Incentive Plan (the "Plan"), and directed that
the Plan be submitted to the Company's shareholders for their approval at the
1998 Annual Meeting.
The Plan is intended to promote the interest of the Company by providing
Directors, officers and other key employees of the Company and its subsidiaries
with the opportunity to acquire an equity interest in the Company. The Board of
Directors believes that providing such persons with an equity interest in the
Company will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.
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GENERAL DESCRIPTION OF THE PLAN
The Plan provides for the award of various stock-based incentives, and is
intended to provide the Board with maximum flexibility regarding the type of
incentives that may be awarded consistent with the purpose of the Plan. The Plan
provides that the following types of awards (collectively, "Awards") may be
granted under the Plan: stock appreciation rights ("SARs"); incentive stock
options ("ISOs"); non-qualified stock options ("NQSOs"); restricted stock
awards; unrestricted stock awards; and performance share awards which entitle
recipients to acquire shares upon the attainment of specified performance goals.
ISOs are intended to meet the requirements of Section 422 of the Internal
Revenue Code of 1984, as amended (the "Tax Code"), and accordingly may be
granted only to eligible participants who are employees of the Company or a
subsidiary of the Company. Other Awards may be granted to all persons eligible
to participate in the Plan, including non-employee directors of the Company.
Under the Plan, Awards may be granted with respect to a maximum of 500,000
shares of the Company's Common Stock, subject to adjustment in connection with
certain events such as a stock split, merger or other recapitalization of the
Company. The Plan is administered by the Board of Directors, which may delegate
administrative responsibility to the Compensation and Nominating Committee of
the Board (herein, the administrator of the Plan is referred to as the
"Committee"). The Committee determines, within the provisions of the Plan, the
type of Awards and the terms thereof that will be awarded to eligible
participants. As discussed below under "Stock Options", NQSOs are automatically
granted to Directors each year under the Plan.
Stock Appreciation Rights. Each SAR granted under the Plan entitles the
holder to receive a payment having an aggregate value equal to the product of
the excess of (A) the Fair Market Value (i.e., the last reported sale price of
the Company's Common Stock on the relevant date) of a specified number of shares
of the Company's Common Stock on the exercise date over (B) the Fair Market
Value on the grant date of such shares. The Committee may fix the waiting
periods and exercise dates of SARs.
Stock Options. Stock options granted under the Plan may be either ISOs or
NQSOs, and any stock option granted under the Plan which for any reason fails to
qualify as an ISO will be a NQSO. The Committee shall determine the persons to
whom stock options shall be granted from time to time, the number of shares of
Common Stock subject to each option granted, and the terms of each such option.
Pursuant to the Plan, options shall not be granted at an exercise price that is
less that 100% of the Fair Market Value of the Company's Common Stock on the
date of grant of the option (or not less than 110% of such Fair Market Value if
granted to any employee who owns more than 10% of the combined voting power of
all classes of the Company's voting stock). ISOs may be exercisable for a term
not exceeding ten years from the date of grant. Stock options granted under the
Plan shall become vested and exercisable at such times as shall be determined by
the Committee at or after the date of grant, and the Committee may accelerate
the vesting period of all or any portion of an option. Prior to the exercise of
an option, the optionee has no rights as a shareholder with respect to shares
subject to the option.
Under the Plan, NQSOs will be awarded automatically to Directors on the
fifth business day after each annual meeting of the Company's shareholders. The
number of shares granted each year shall be determined by the Board of Directors
based upon the overall performance of the Company during the preceding year. The
exercise price of such options shall be the Fair Market Value of the Company's
Common Stock on the date of grant. Options automatically granted to Directors
shall vest and become exercisable one year after their grant date, and shall
expire on the tenth anniversary of their grant date.
Options granted under the Plan shall not be transferable by the optionee
other than by will or the laws of descent and distribution, and during the
optionee's lifetime may be exercised only by the optionee. The Committee has the
power to permit an optionee to transfer NQSOs to members of the optionee's
immediate family members, to trusts for the benefit of such family members, or
to partnerships in which such family members are the only beneficiaries, if the
transferee agrees to be bound by all of the terms and conditions of the Plan and
any applicable option agreement.
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Restricted Stock Awards. Under the Plan, a Restricted Stock Award is an
award entitling the recipient to acquire, at such price as is determined by the
Committee, shares of the Company's Common Stock subject to such restrictions and
conditions as the Committee may determine at the time of grant. Conditions may
be based on continuing employment and/or achievement of pre-established
performance goals and objectives.
Upon execution of a written instrument setting forth the terms of the
Restricted Stock Award, and paying the applicable purchase price, if any, a
participant shall have the rights of a shareholder with respect to the voting of
the Restricted Stock, subject to the conditions contained in such written
instrument. Unless the Committee shall otherwise determine, certificates
evidencing the Restricted Stock Award shall remain in the possession of the
Company until the Restricted Stock Award is vested. Restricted Stock may not be
sold or otherwise transferred except as may be specifically permitted in the
written instrument evidencing the Award. If the recipient's employment with the
Company terminates for any reason before the Restricted Stock Award has vested,
the Company may repurchase Restricted Stock at its purchase price. The Committee
at the time of grant shall determine the date or dates, and/or the performance
goals, objectives and other conditions upon which the restrictions (including
non-transferability and the Company's right to repurchase the Restricted Stock)
shall lapse.
Unrestricted Stock Awards. The Committee may, in its sole discretion,
grant or sell shares of the Company's Common Stock (at a purchase price not less
than 90% of the Fair Market Value of the Company's Common Stock on the date of
such grant or sale) as an Unrestricted Stock Award to any person eligible to
participate in the Plan, pursuant to which the participant may receive shares of
Common Stock free of any restrictions under the Plan. A Plan participant shall
have the right to request that the Committee grant an Unrestricted Stock Award
in lieu of cash compensation otherwise due such participant, either currently or
on a deferred basis.
Performance Share Awards. A Performance Share Award is an Award entitling
the recipient to acquire shares of the Company's Common Stock upon the
attainment of specified performance goals. The Committee shall determine whether
and to whom Performance Share Awards shall be made, the performance goals
applicable under such Award, the periods during which performance is to be
measured, and all other limitations and conditions applicable to awarded
Performance Shares. A participant receiving Performance Shares shall have the
rights of a shareholder only as to shares actually received by the participant
under the Plan and not with respect to shares subject to the Award but not
actually received. Except as may otherwise be provided by the Committee at any
time prior to the termination of employment, a participant's rights in all
Performance Share Awards shall automatically terminate upon the participant's
termination of employment with the Company and its subsidiaries for any reason.
Performance Based Awards. The Plan provides the Committee the ability to
qualify certain Awards under the Plan as "performance-based compensation" within
the meaning of Section 162(m) of the Tax Code. Section 162(m) generally allows a
tax deduction to the Company for compensation in excess of $1 million paid in
any one year to its chief executive officer and four other most highly
compensated executive officers only if such compensation qualifies as
"performance-based compensation." Furthermore, in accordance with Section
162(m), the maximum Performance-Based Award (i.e., those intended to qualify as
"performance-based compensation") payable to any one participant under the Plan
for a Performance Period is 400,000 shares.
Other Plan Provisions. The Plan, if approved by the shareholders, shall
remain in effect until such time as it is terminated by the Board of Directors,
provided that no ISOs may be granted under the Plan after August 31, 2007. The
proceeds of the sale of shares of the Company's Common Stock under the Plan
shall be used by the Company for its general corporate purposes. Upon a Change
of Control, each stock option outstanding under the Plan shall automatically
become fully vested and exercisable, unless the Committee otherwise shall
expressly provide at the time of grant, and each Restricted Stock Award and
Performance Share Award shall be subject to such terms, if any, as have been
provided by the Committee in connection with such Award. As defined in the Plan,
a Change of Control shall be deemed to have occurred if (i) any person (other
than the Company, any of its subsidiaries, or any trustee, fiduciary or other
person holding securities under any employee benefit plan of the Company or any
subsidiary) together with all affiliates and
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associates of such person shall become the beneficial owner of securities of the
Company representing more than 40% of either the combined voting power of the
outstanding securities of the company or the then outstanding shares of the
Company's capital stock (in either case, other than as a result of an
acquisition of securities directly from the Company); (ii) persons who, on the
date of the 1998 Annual Meeting ("Incumbent Directors"), constitute the
Company's Board of Directors cease for any reason to constitute at least a
majority of the Board; provided that a person who becomes a Director and whose
nomination for election was approved by at least a majority of the Incumbent
Directors, shall be considered an Incumbent Director; or (iii) the shareholders
of the Company shall approve (A) any consolidation or merger of the Company or
any subsidiary of the Company where the Company's shareholders immediately prior
to the consolidation or merger would not, immediately after the consolidation or
merger, beneficially own shares representing in the aggregate 50% or more of the
voting shares of the corporation issuing cash or securities in the consolidation
or merger, (B) any sale, lease, exchange or other transfer of all or
substantially all of the assets of the Company; or (C) any plan or proposal for
the liquidation or dissolution of the Company.
The Board may at any time amend or discontinue the Plan and may, at any
time, amend or cancel any outstanding Award (or provide substitute Awards at the
same or reduced exercise or purchase price or with no exercise or purchase price
in a manner not inconsistent with he terms of the Plan, but such price, if any,
must satisfy all the requirements which would apply to the substitute or amended
Award if it were then initially granted under the Plan) for the purpose of
satisfying changes in the law or for any other lawful purpose, but no such
action shall adversely affect rights under any outstanding Award without the
holder's consent. If and to the extent determined by the Committee to be
required by the Tax Code to ensure that ISOs granted under the Plan are
qualified under Section 422 of the Tax Code, Plan amendments shall be subject to
approval by the Company's shareholders entitled to vote at a meeting of
shareholders.
As of the date of this Proxy Statement, the Committee has granted to R.
Randy Stolworthy, the Company's President and Chief Executive Officer, options
under the Plan to purchase up to 250,000 shares of the Company's Common Stock.
Such option has been divided into five equal exercise price category units of
50,000 shares for exercise price purposes, with the first unit being exercisable
at $15 per share, with the exercise price of each subsequent unit being
increased by 12% (i.e., at exercise prices of $16.80, $18.82, $21.07 and
$23.60). One fifth of the shares in each price category unit vested and became
exercisable on February 19,1998 and an additional one-fifth will invest on each
of the four subsequent anniversaries of that date. As of the date of this Proxy
Statement, approximately eleven persons were eligible to participate in the
Plan. In the event shareholder approval of the Plan is not obtained at the 1998
Annual Meeting (or thereafter, prior to October 27, 1998), the Plan provides
that any Awards previously made shall be automatically canceled without further
act.
REASONS FOR ADOPTION OF THE PLAN
The Board of Directors believes that the approval of the Plan will promote
the welfare of the Company and its shareholders generally. The Board believes
that the Plan will aid the Company in attracting and retaining non-employee
directors, officers and key employees, and motivating such persons to exercise
their best efforts on behalf of the Company. In addition, the Board believes
that the Plan will further strengthen the identity of interests of the Company's
directors, officers and key employees with those of the shareholders.
Federal Income Tax Consequences for Awards
Non-Qualified Stock Options. The Plan is not a "qualified plan" as defined
in Section 401(a) of the Tax Code. NQSOs do not quality as "incentive stock
options" under Section 422 of the Tax Code.
An Optionee does not realize any compensation income upon the grant of an
NQSO, and the Company may not take a tax deduction at the time of the grant.
Upon exercise of an NQSO, an optionee realizes and must report as compensation
income an amount equal to the difference between the fair market value of the
Common Stock on the date of exercise and the exercise price. The Company is
entitled to take a deduction at the same time and in the same amount as the
optionee reports as compensation income, provided the Company withholds federal
income tax in accordance with the Tax Code and applicable Treasury regulations.
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Special rules apply with respect to shares of Common Stock transferred
directly to or acquired upon exercise of an NQSO by an individual (officers,
directors or 10% stockholders of the Company) who is subject to the
"short-swing" provisions of the Securities Exchange Act of 1934, as amended (an
"Insider"). With respect to Common Stock acquired by an Insider, the later of
the exercise date and the date ending six months after the date of exercise with
regard to shares of Common Stock subject to the NQSO is generally the relevant
date for establishing the Insider's recognition of compensation income, the
amount of such compensation income (and the Company's corresponding deduction),
the Insider's basis in the shares of Common Stock acquired and the start of the
holding period of such shares of Common Stock for tax purposes. An Insider may
elect under Section 83(b) of the Tax Code to include in income the difference
between the value of the Common Stock at exercise and the exercise price.
Furthermore, the Company's deduction for shares of Common Stock transferred
directly to an optionee are conditioned upon satisfying the withholding
requirements of the Tax Code and applicable Treasury Regulations.
When an optionee disposes of the shares of Common Stock received upon
exercise of an NQSO, he or she will realize capital gain income if the amount
realized on the sale exceeds the optionee's basis in the shares. If the
optionee's basis in the shares exceeds the amount realized on the sale, the
optionee will realize a capital loss. A disposition of shares of Common Stock
which results in net capital gain will be taxed at the ordinary income rate.
Capital losses will be deductible for individuals to the extent of capital gains
plus an amount not exceeding $3,000 ($1,500 for married individuals filing
separately). There is no tax impact to the Company upon the sale of shares by an
optionee. The optionee's basis in the optioned shares will be equal to the
exercise price.
Incentive Stock Options. ISOs granted under the Plan qualify under Section
422 of the Tax Code for special tax treatment. Neither the grant of the ISO nor
the exercise of the ISO by an optionee will result in income to the optionee.
The ultimate sale or other disposition by the optionee of the shares obtained
upon exercise of the ISO will result in capital gain or loss equal to the
difference between the fair market value on the date of sale and the exercise
price. The Company will not have a deduction with regard to the ISO at the time
of the grant, the exercise or the ultimate sale of the shares. Notwithstanding
the foregoing, if an optionee sells or disposes of the shares prior to two years
after the date of the grant of the ISO or one year after the date of the
exercise, the optionee will recognize compensation income on the sale to the
extent the value on the date of exercise exceeds price. The excess of the amount
received on the sale over the value on the date of exercise will be capital
gain. In the case of such a premature disposition of shares, the Company may
deduct the amount of income recognized as compensation income. A person entitled
to exercise the ISO after the death of an option may sell stock obtained on the
exercise of an ISO at any time without regard to the normal holding
requirements.
A disposition of shares which results in a net capital gain will be taxed
at the ordinary income rate. If the stock is disposed of at a price less than
the exercise price, the loss will be capital loss. At present, capital losses
are deductible for individuals to the extent of capital gains plus an amount not
exceeding $3,000 ($1,500 for married individuals filing separately).
While the exercise of an ISO will not generate ordinary income at the time
of exercise, it will result in a tax preference item to an optionee equal to the
difference between the exercise price and the fair market value of the stock on
the date of exercise for purposes of the alternative minimum tax.
Stock Appreciation Rights. The issuance of a Stock Appreciation Right in
connection with an option, either an incentive stock option or a non-qualified
stock option, or by itself will not result in taxable income to the employee.
When the employee exercises the Stock Appreciation Right, the employee will
recognize as compensation income an amount equal to the cash and fair market
value of any shares received. The basis in any shares received becomes the
amount treated as compensation income with respect to such shares. The Company
is entitled to take a deduction equal to the compensation income of the
employee, provided it complies with the federal income tax withholding
requirements to the extent required by Section 83 of the Tax Code.
Special rules apply to shares acquired upon the exercise (or the deemed
exercise of) a Stock Appreciation Right by an Insider subject to the
"short-swing profits" liability provisions of the Securities
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Exchange Act of 1934, as amended. The date ending six months after the date of
exercise (rather than the date of the exercise itself) is generally the relevant
date for establishing the Insider's recognition of compensation income, the
amount of compensation income (and the Company's corresponding deduction), the
Insider's basis in the shares acquired and the start of the holding period of
such shares for tax purposes. Alternatively, an Insider may elect under Section
83(b) of the Tax Code to treat the date of exercise as the relevant date.
Restricted Stock and Unrestricted Awards. The transfer of Unrestricted
Stock to a participant under the Plan will result in the receipt by the
participant of taxable ordinary income in amount equal to the difference between
the value of the stock received and the price paid therefore by the participant.
The transfer of restricted stock to a participating employee under the Plan will
not result in tax at the time of the transfer unless the employee makes an
election under Section 83(b) of the Tax Code to include in income the difference
between the value of the stock and the amount paid for the stock at the time of
the transfer. If the employee elects not to make a Section 83(b) election, at
the time the restriction lapses, the employee will have income equal to the
difference between the fair market value on the date the restriction lapses and
the amount paid for the shares. At that point, the Company is entitled to take a
deduction equal to the compensation income of the employee, provided it complies
with the federal income tax withholding requirements to the extent required by
Section 83 of the Tax Code.
Special rules apply to shares acquired upon the receipt of restricted stock
or other stock awards by an Insider subject to the "short-swing profits"
liability provisions of the Securities Exchange Act. The date ending six months
after the date of transfer (rather than the date of transfer itself) is
generally the relevant date for establishing the Insider's recognition of
compensation income, the amount of compensation income (and the Company's
corresponding deduction), the Insider's basis in the shares acquired and the
start of the holding period of such shares for tax purposes. Alternatively, an
Insider may elect under Section 83(b) of the Tax Code to treat the date of
exercise or transfer as the relevant date.
Tax Withholding
Subject to the approval of the Committee, the optionee may make an
irrevocable election to have the Company withhold from those shares that would
otherwise be received upon the exercise of an Award, a number of shares equal to
the minimum amount necessary to satisfy the Company's federal, state, local and
foreign tax withholding obligations and FICA and FUTA obligations with respect
to the exercise of such Award by the Optionee. The value of the shares to be
withheld is based on the fair market value of the Common Stock on the date that
the amount of tax to be withheld is determined (the "Tax Date"). The Company
shall be entitled if necessary or desirable to pay or withhold the amount of any
tax attributable to the delivery of Common Stock under the Plan from other
amounts payable to the optionee after giving the person entitled to receive such
Common Stock notice as far in advance as practical, and the Company may defer
making delivery of such Common Stock if any such tax may be pending unless and
until indemnified to its satisfaction.
In addition to the foregoing tax considerations, the exercise of an Award
and the ultimate sale or other disposition of the shares of Common Stock
acquired thereby will be in most cases be subject to state income taxation.
Required Vote
Approval of the amendment to the Plan requires the affirmative vote of a
majority of shares of Common Stock of the Company present at the 1998 Annual
Meeting in person or through proxy.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE COMPANY'S 1997 STOCK INCENTIVE PLAN.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's directors, officers, and persons owning more than 10% of
a registered class of the Company's registered equity securities to file reports
of ownership and changes of ownership with the Securities and Exchange
Commission. Based on its review of copies of such forms it received, the Company
believes that during 1997 all applicable filing requirements were complied with.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
A proposal submitted by a shareholder and intended for inclusion in the
proxy statement for the 1999 Annual Meeting of Shareholders must be received by
the Corporate Secretary of the Company by January 15, 1999.
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NEW MEXICO AND ARIZONA LAND COMPANY
1998 PROXY
Solicited on behalf of the Board of Directors of New Mexico and Arizona Land
Company. Directors recommend a vote "FOR" Agenda Items 1 and 2. The undersigned
shareholder of New Mexico and Arizona Land Company hereby appoints Stephen E.
Renneckar and R. Randy Stolworthy, or either of them, as proxies of the
undersigned, each with power of substitution, at the 1998 Annual Meeting of
Shareholders of the Company to be held in Phoenix, Arizona on Friday, May 8,
1998 at 9:30 a.m. and any adjournments thereof, to vote all common shares of the
Company held or owned by the undersigned, as follows:
1. ELECTION OF CLASS B DIRECTORS: Arnold L. Putterman, Stephen E. Renneckar, R.
Randy Stolworthy, Richard A. Wessman
____FOR all nominees (except as marked below)
____WITHHOLD AUTHORITY to vote for nominees
To withhold authority to vote for individual nominees, write those nominees'
names immediately below:
2. APPROVAL OF THE 1997 STOCK INCENTIVE PLAN
____FOR approval of the 1997 Stock Incentive Plan
____ABSTAIN
____AGAINST approval of the 1997 Stock Incentive Plan
In their discretion, the Proxies are authorized to vote upon other business as
may properly come before the meeting.
The proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted "FOR" the Agenda Item stated. The right to revoke this proxy at any time
before it is voted is reserved.
Date:_______________________________________
Signature:__________________________________
Signature:__________________________________
(Sign as shown. If held jointly,
all holders should sign. If held in
a certain capacity, so state.)
