<PAGE>
Notice of Annual Meeting of Stockholders
To Our Stockholders:
The annual meeting of the stockholders of The ARA Group, Inc., a Delaware
corporation, will be held on the Sixteenth Floor of The ARA Tower, 1101 Market
Street, Philadelphia, Pennsylvania, on Tuesday, February 8, 1994, at 3:00 p.m.
Philadelphia time, for the following purposes:
1. To elect directors for the ensuing year.
2. To consider and act upon a proposal to amend and restate the
Certificate of Incorporation to eliminate the requirement of a
supermajority vote of directors for certain Board actions and to
provide for certain other matters.
3. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on December 30, 1993
as the record date for determination of the stockholders entitled to notice of
and to vote at the meeting. A list of such stockholders will be open for
examination by stockholders for any purpose germane to the meeting for a
period of ten days prior to the meeting at the offices of ARA at The ARA
Tower, 1101 Market Street, Philadelphia, Pennsylvania.
Whether or not you expect to attend the meeting in person, please fill in,
date and sign the enclosed proxy card and mail it in the enclosed return
envelope provided for that purpose.
Martin W. Spector
Executive Vice President
and Secretary
Dated: January 11, 1994
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
Solicitation by Board of Directors
This statement is furnished in connection with the solicitation by the
Board of Directors of The ARA Group, Inc. (herein called "ARA" or the
"Company") of proxies for use at the annual meeting of its stockholders to be
held on February 8, 1994, and at any adjournment thereof. Stockholders who
execute proxy cards may revoke them at any time before they are voted by
delivering a later-dated proxy card or written notice of revocation to the
Secretary of ARA, or by personally notifying the Secretary of ARA at the
meeting.
ARA's executive offices are located at The ARA Tower, 1101 Market Street,
Philadelphia, Pennsylvania 19107 (telephone: 215-238-3000). It is expected
that proxy cards and proxy statements will be mailed to stockholders on or
about January 11, 1994.
Shares Outstanding and Voting Rights
In November 1993, the Board of Directors declared and the Company paid a
four-for-one stock split of the Class A and Class B common stock effected in
the form of a stock dividend.
Only holders of shares of Common Stock Class A and Common Stock Class B of
record at the close of business on December 30, 1993 are entitled to vote at
the meeting. On that date, there were outstanding 2,089,182 shares of Common
Stock Class A and 24,695,193 shares of Common Stock Class B (together, the
"Common Stock"). Each holder of Common Stock entitled to vote will have the
right to one vote for each such share standing in his, her or its name on the
books of ARA. Holders of Series C Preferred Stock are not entitled to notice
of, or to vote at, the meeting.
All shares represented in person or by proxy will be counted for quorum
purposes. Where a stockholder does not specify a choice on a properly signed
and dated proxy card, the shares will be voted as recommended by the Board of
Directors. Where a stockholder, by marking a proxy card, withholds a vote on
the election of any director, such vote will not be counted as entitled to
vote (i.e., will not be counted as a vote cast) with respect to that election.
Abstentions will be counted as votes cast (i.e., will be counted as votes
against) on any matter to which they relate. The Company reserves the right
to challenge any vote attempted to be made or withheld in violation of the
voting requirements of Section 2 of the Amended and Restated Stockholders'
Agreement dated as of April 7, 1988.
1. Election of Directors
Twelve directors will be elected by a plurality of the votes cast at the
meeting. The persons listed below are proposed to be elected to serve until
the next annual meeting of stockholders and until the election and
qualification of their respective successors:
Joseph Neubauer Lee F. Driscoll, Jr.
Robert J. Callander Mitchell S. Fromstein
Alan K. Campbell Edward G. Jordan
Ronald R. Davenport Thomas H. Kean
Davre J. Davidson Reynold C. MacDonald
Philip L. Defliese James E. Preston
Management Investors (and their Permitted Transferees) as these terms are
used in the Stockholders' Agreement, are required, pursuant to Section 2.01(d)
thereof, to vote their shares in favor of the election of the nominees listed
above.
Management Investors (and their Permitted Transferees) held of record at
the close of business on December 30, 1993 an aggregate of 60,110 shares of
Common Stock Class A and 24,695,193 shares of Common Stock Class B entitled to
vote at the meeting. This amount represents approximately 92% of the
total number of votes entitled to be cast at the meeting. Accordingly, this
will result in the election of the nominees listed above.
If, due to circumstances not now foreseen, any of the nominees becomes
unavailable for election, the proxy agents named in the proxy cards will have
the right to vote for a substitute in each case, or the Board of Directors
will take appropriate action to reduce the number of directors.
2. Amendment and Restatement of the Certificate of Incorporation
The Board of Directors has unanimously approved an amendment and
restatement of the Company's Restated Certificate of Incorporation (the
"Certificate") and directed that the proposed amendment and restatement (the
"Amendment") be submitted to the stockholders for their approval. The Board
believes that the Amendment significantly simplifies the Certificate. The
following is a summary of the more significant changes provided by the
Amendment. A copy of the Amendment with changes from the Certificate marked,
is attached as Annex A. Stockholders are urged to read the Amendment, which
shows the complete text of changes only summarized below as well as changes
not included in the summary.
Elimination of Supermajority Votes. The proposed Amendment will delete the
requirement of the supermajority vote of directors for certain corporate
actions. Presently, the Certificate requires that certain actions cannot be
approved by the Board of Directors unless a supermajority of directors
approves the action. The Certificate defines a supermajority as a majority of
the number of authorized directors plus one. Currently, seven directors
constitute a supermajority. The Amendment deletes the supermajority
requirement. As a result, under the proposed Amendment, actions which
currently require a supermajority vote could be approved by a majority of the
directors in attendance at a Board or committee meeting where a quorum is
present.
Actions currently requiring a supermajority vote include proposals to
authorize the issue or sale of shares of capital stock, the declaration and
payment of a dividend, the redemption or purchase of Company securities of any
class other than pursuant to "puts" exercised in accordance with the
Stockholders' Agreement, the acquisition or sale of businesses or assets over
a specified size, the incurrence of indebtedness in excess of a specified
amount, the creation of liens on Company assets having a book value in excess
of specified amounts, the amendment of the Company's By-Laws, the
recommendation to the stockholders of an amendment to the Certificate, the
approval of an amendment to the Stockholders' Agreement, the approval of the
compensation and employment arrangements with the chief executive officer, the
hiring or discharge of the chief executive officer, the designation of a
committee of the Board of Directors, and the dissolution, liquidation, merger,
consolidation or sale of substantially all of the assets of the Company or of
ARA Services, Inc.
These provisions were originally included in the Certificate at the time of
the Company's management buy-out in December 1984 as a result of negotiations
with outside stockholders to better assure the outside stockholders of the
orderly management of the Company. Over time, management's Common Stock
ownership (including directors and employee benefit plans) has increased to
its current level of more than 76% (more than 92% of the voting power). In
addition, only one member of the Board of Directors is a current employee of
the Company. Accordingly, management and the Board of Directors believe that
these additional protections are no longer appropriate.
Definition of "Subsidiary". The Amendment expands the definition of
"subsidiary" to include any corporation or any other entity in which the
Company has an equity investment (even though less than 50%) and which the
Board designates as a "subsidiary". The sole consequence of a corporation or
other entity being a subsidiary for purposes of the Certificate is related to
the restriction that only employees and directors of the Company and its
subsidiaries (and their permitted transferees) may hold Class B Common Stock.
If a person is no longer an employee or director of the Company or a
subsidiary, his or her shares are converted automatically into Class A Common
Stock. The new provision would allow the Board limited additional flexibility
in determining when a person could hold Class B Common Stock. For example, if
the Company were to sell more than 50% of a subsidiary or if the Company were
to transfer an employee to a joint venture in which the Company held less than
a 50% interest, the Board of Directors, at its discretion, could designate
that entity as a subsidiary for purposes of the Certificate, and thereby allow
its employees to continue to hold Class B Common Stock.
General. To be adopted, the proposed Amendment must receive the
affirmative vote of 66 2/3% of the Class A shares and Class B shares entitled
to vote, voting as a single class. The previously referred to provisions of
Section 2 of the Stockholders' Agreement do not apply to the vote on the
proposed Amendment.
The Board of Directors recommends a vote FOR the proposal.
<PAGE>
Directors and Executive Officers
Officer/
Director
Name (Age*) Office Held (Committee) Since
- ----------- ----------------------- --------
Joseph Neubauer (52).......... Chairman and President 1979
and Director (1)(2)(3)(5)
Robert J. Callander (62)...... Director(2)(3)(4)(5) 1986
Alan K. Campbell (70)......... Director (4) 1980
Ronald R. Davenport (57)...... Director(1)(4) 1980
Davre J. Davidson (82)........ Director(2)(3) 1959
Philip L. Defliese (78)....... Director(1)(2)(3) 1979
Lee F. Driscoll, Jr. (67)..... Director(1) 1973
Mitchell S. Fromstein (65).... Director (3)(4) 1990
Edward G. Jordan (63)......... Director(1)(3)(4) 1980
Reynold C. MacDonald (75)..... Director(1)(2)(3) 1977
James E. Preston (60)......... Director(4**) 1993
Julian L. Carr, Jr. (47)...... Executive Vice President 1988
John R. Farquharson (55)...... Executive Vice President 1976
James E. Ksansnak (53)........ Executive Vice President 1986
and Chief Financial Officer
William Leonard (45).......... Executive Vice President 1992
Martin W. Spector (55)........ Executive Vice President, 1976
General Counsel and Secretary
L. Frederick Sutherland (41).. Executive Vice President 1983
Richard H. Vent (52).......... Executive Vice President 1982
Dean E. Hill (42)............. Vice President 1993
John P. Kallelis (55)......... Vice President 1982
Brian G. Mulvaney (37)........ Vice President 1993
Anthony J. Tanzola (54)....... Vice President 1976
Alan J. Griffith (39)......... Controller and Chief 1993
Accounting Officer
Melvin M. Mahoney (45)........ Treasurer 1985
Donald S. Morton (45)......... Assistant Secretary and 1985
Associate General Counsel
Elizabeth B. Cartmell (36).... Assistant Treasurer 1992
______________________
* As of November 1, 1993
** As of December 7, 1993
The numbers following the offices held by the directors indicate membership in
the following board committees during fiscal 1993:
(1) Audit and Corporate Practices
(2) Executive
(3) Finance
(4) Human Resources, Compensation and Public Affairs
(5) Stock Transaction (merged into Human Resources, Compensation and
Public Affairs in February 1993)
<PAGE>
Directors Meetings and Committees
ARA's Board of Directors held 8 meetings during fiscal 1993. The Board has
certain standing committees which are described below. During fiscal 1993,
each director attended at least 75% of the aggregate of all board meetings and
all meetings of committees on which he served, except Mr. Fromstein who
attended fourteen out of nineteen such meetings and Mr. Preston who was
elected in May 1993 and attended two out of three such meetings.
The Audit and Corporate Practices Committee reviews the periodic financial
reports and the accounting principles used by the Company and the adequacy of
the Company's system of internal controls. It also reviews with the
independent public accountants and the internal audit department the scope of
their audits, their audit reports and any recommendation made by them to
determine whether these activities are reasonably designed to assure the
soundness of accounting and financial procedures. It recommends the action to
be taken with respect to the appointment, and approves the compensation, of
the Company's independent public accountants and monitors compliance with the
Company's business conduct policy. It held four meetings during fiscal 1993.
The Executive Committee, when acting by unanimous vote of all members, has
the full power of the Board of Directors when the Board is not in session,
with specific limitations relating to certain corporate governance or other
corporate matters. It held one meeting during fiscal 1993.
The Finance Committee reviews the overall financial and business plans of
the Company, including capital expenditures, acquisitions and divestitures,
securities issuances and incurrences of debt and the performance of the
Company's retirement benefit plans. It recommends to the Board specific
transactions involving the foregoing, and it has been empowered by the Board
to approve certain financial commitments and acquisitions and divestitures by
the Company up to specified levels. It held five meetings during fiscal 1993.
The Human Resources, Compensation and Public Affairs Committee (formerly
the Public Affairs and Personnel Committee) determines the base salary of the
Chairman and President (subject to review and approval by the Board) and
approves the salaries and bonuses paid to officers and other employees who are
line of business presidents or whose current or proposed base salary exceeds
$200,000 per annum. It reviews appointments to senior management positions
and the nature and scope of the Company's employee benefit plans. It also
reviews and recommends the compensation of outside directors and reviews the
Company's contribution policy and practices for its retirement benefit plans.
Beginning in February 1993, the committee also assumed the functions of the
Stock Transaction Committee. It held six meetings during fiscal 1993.
The Stock Transaction Committee had been authorized to exercise the
Company's rights and powers under the Restated and Amended Stockholders'
Agreement, including approval of grants of stock purchase opportunities under
The ARA Ownership Program as well as the annual approval of an internal market
policy providing for the repurchase of shares from management investors. It
held one meeting during fiscal 1993. The Committee was discontinued in
February 1993, and its functions were assigned to the Human Resources,
Compensation and Public Affairs Committee.
Business Experience
The principal occupations during the past five years of the Company's
directors and nominees and other directorships currently held by directors and
nominees are as follows:
Mr. Neubauer has been president and chief executive officer of the Company
since February 1983 and the chairman since April 1984. He is a director of
Bell of Pennsylvania, Federated Department Stores, Inc., First Fidelity
Bancorporation, Penn Mutual Life Insurance Co. and Versa Services Ltd.
Mr. Callander was vice chairman of Chemical Bank from February 1987 until
August 1990. He was president of Chemical Bank and Chemical Banking
Corporation from August 1990 to June 1992. He is a director of Barnes Group,
Inc., Beneficial Corporation, Omnicon Management, Inc. and Latin American
Dollar Income Fund.
Dr. Campbell was vice chairman of the Company from April 1984 and was
executive vice president from December 1980 until his retirement in September
1990.
Mr. Davenport has been the chairman and president of Sheridan Broadcasting
Corporation since 1972. He is a director of Bell of Pennsylvania.
Mr. Davidson founded ARA in 1959, and was its chief executive officer and
chairman until his retirement in July 1977.
Mr. Defliese was the chairman and managing partner of Coopers & Lybrand
prior to his retirement in 1977 and is currently Professor Emeritus, Graduate
School of Business, Columbia University.
Mr. Driscoll was a partner in the Philadelphia law firm of Ballard, Spahr,
Andrews & Ingersoll from January 1984 until December 1990. He is a director
of CoreStates Bank, N.A. and Versa Services Ltd.
Mr. Fromstein has been chief executive officer and president of Manpower
Inc. since March 1976. He is a director of Manpower Inc. and ARI Network
Services, Inc.
Mr. Jordan served as the president of The American College from October
1982 until December 1987. He is a director of Acme Steel Company and
Pittston, Inc.
Former Governor Kean was the Governor of the State of New Jersey from 1982
until 1990. He has been the president of Drew University since 1990. He is a
director of Amerada Hess Corporation, Bell Atlantic Corporation, Beneficial
Corporation, Fiduciary Trust International and United Health Care Corporation.
Mr. Kean is 59 years old.
Mr. MacDonald serves as a consultant to Acme Steel Company. He was
chairman of Acme Steel Company from June 1986 until May 1992. He is a
director of Acme Steel Company and Kaiser Steel Resources.
Mr. Preston has been the chairman, president, chief executive officer and a
director of Avon Products, Inc. since 1989. He is a director of F. W.
Woolworth Company.
Except as set forth below, the principal occupations of the executive
officers throughout the past five years have been the performance of the
functions of the corporate offices shown above.
Mr. Carr was vice president of the Company from November 1988 until
February 1991 when he was promoted to his current position.
Mr. Farquharson was vice president of the Company from 1976 until
February 1991 when he was promoted to his current position.
Mr. Ksansnak was senior vice president of the Company from May 1986 until
February 1991 when he was promoted to his current position.
Mr. Leonard was president of Aratex Services, Inc. from 1984 until March
1992 when he was promoted to his current position.
Mr. Sutherland was vice president and treasurer from 1983 until February
1991 when he was promoted to senior vice president. In May 1993 he was
promoted to his current position.
Mr. Vent was vice president of the Company from 1982 until February 1991
when he was promoted to his current position.
Mr. Hill was elected vice president of the Company in January 1993. Prior
to joining the Company in 1993, he was vice president of Farley Industries,
Inc. and Fruit of the Loom, Inc.
Mr. Mulvaney was vice president of Aratex Services, Inc. from 1988 until
February 1993 when he was promoted to his current position.
Mr. Tanzola was vice president and controller of the Company from 1978 to
1993 when he assumed new responsibilities as vice president, controls.
Mr. Griffith was assistant controller from 1985 until 1991. He has been
the director of corporate planning since 1991, and in December 1993 he was
promoted to controller and chief accounting officer.
Mr. Mahoney was elected treasurer of the Company in February 1991. He had
been assistant treasurer since 1985.
Ms. Cartmell was elected assistant treasurer of the Company in February
1992. Previously, she was manager, cash and banking. Prior to joining the
Company in 1989, she was a vice president of Mellon Bank.
Executive Compensation
In 1992, the Securities and Exchange Commission adopted new disclosure
requirements covering executive compensation. The rules now require a report
of the Human Resources, Compensation and Public Affairs Committee on executive
compensation as well as additional statistical information.
The following table sets forth information with respect to the compensation
of the named executive officers for services in all capacities to the Company
in the years indicated.
<PAGE>
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
Annual Compensation Stock
Name and Fiscal ----------------------- Options All Other
Current Principal Position Year Salary Bonus Granted (#) Compensation (2)
- -------------------------- ------ -------- -------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Joseph Neubauer 1993 $760,000 $550,000 0 $17,000
Chairman, President and 1992 $753,000 $575,000 105,252 $5,000
Chief Executive Officer 1991 $679,000 $495,000 0 $5,000
Julian L. Carr, Jr. 1993 $300,000 $205,000 0 $5,000
Executive Vice President 1992 $275,000 $195,000 42,100 $5,000
and President of ARA 1991 $255,000 $175,000 0 $5,000
Health and Education
Services Sector
James E. Ksansnak 1993 $315,000 $195,000 0 $5,000
Executive Vice President, 1992 $306,000 $200,000 42,100 $5,000
Finance and Personnel 1991 $280,000 $175,000 0 $5,000
Chief Financial Officer
William Leonard 1993 $290,000 $225,000 185,040 $14,000
Executive Vice President 1992 $257,000 $200,000 42,100 $10,000
and President of 1991 $207,000 $140,000 0 $9,000
ARASERVE Sector
Richard H. Vent 1993 $333,000 $180,000 0 $7,000
Executive Vice President 1992 $332,000 $185,000 33,680 $5,000
and President of Leisure/ 1991 $309,000 $140,000 0 $5,000
International Sector
<FN>
___________________
(1) The information presented includes the effect of the November stock split.
(2) For fiscal 1993, other compensation includes employer contributions to the
Stock Unit Retirement Plan plus above-market interest accrued during the
period on deferred compensation. Above-market is defined as the portion of
interest in excess of 120% of the applicable federal long-term rate.
</TABLE>
<PAGE>
The following table sets forth information with respect to the named
executive officer's concerning individual grants of stock purchase
opportunities made in fiscal 1993.
Options Granted In Fiscal 1993 (1)
(Stock Purchase Opportunities)
<TABLE>
<CAPTION>
Potential Realizable Value at
Percentage of Assumed Annual Rates
Total Options of Stock Price Appreciation
Granted to All for Option Term (3)
Date of Options Employees in ---------------------------
Name Grant Granted (2) Fiscal 1993 5% 10%
- ---- ------- ----------- -------------- -- ---
<S> <C> <C> <C> <C> <C>
William Leonard November 1992 85,040 3.1% $120,000 $256,000
May 1993 100,000 3.6% $189,000 $412,000
<FN>
- -------------------
(1) The information presented includes the effect of the November stock split.
(2) The options granted were stock purchase opportunities. Purchase
opportunities are exercisable in six annual installments. An installment
must be exercised in the year it becomes exercisable or it is cancelled.
The stock purchase opportunities in the table were granted in November 1992
and May 1993 at per share exercise prices of $8.87 and $10.42,
respectively, which was the appraised value of the shares at the time of
grant and reflects the November stock split. The exercise schedule of
those stock purchase opportunities is as follows:
</TABLE>
November 1992 Grant May 1993 Grant
------------------- --------------
12/15/92-1/15/93 10% 6/15/93-7/15/93 10%
12/15/93-1/15/94 15% 12/15/94-1/15/95 15%
12/15/94-1/15/95 15% 12/15/95-1/15/96 15%
12/15/95-1/15/96 20% 12/15/96-1/15/97 20%
12/15/96-1/15/97 20% 12/15/97-1/15/98 20%
12/15/97-1/15/98 20% 12/15/98-1/15/99 20%
(3) Realizable value refers to the sum for all six annual installments of the
assumed appraised value of the underlying shares in each stock purchase
opportunity installment at the time such installment is exercisable minus
the exercise price for such installment.
The following table sets forth information with respect to the named
executive officers concerning the exercise of stock purchase opportunities in
fiscal 1993 and unexercised stock purchase opportunities held at October 1,
1993.
<PAGE>
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values (1)
(Stock Purchase Opportunities)
<TABLE>
<CAPTION>
Number Number of Options Held Current Value of Options Held (3)
of shares ------------------------- ---------------------------------
acquired on Value Currently Not Currently Currently Not Currently
Name Exercise Realized (2) Exercisable Exercisable Exercisable Exercisable
- ---- ------------ ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Joseph Neubauer 804,596 $6,871,000 26,752 181,052 $238,000 $1,128,000
Julian L. Carr, Jr. 87,100 $685,000 9,096 78,324 $75,000 $438,000
James E. Ksansnak 118,100 $975,000 20,064 83,408 $186,000 $503,000
William Leonard 64,400 $503,000 26,752 240,012 $238,000 $594,000
Richard H. Vent 74,048 $646,000 64,200 73,568 $572,000 $466,000
<FN>
- ------------------
(1) The information presented includes the effect of the November stock split.
(2) Value realized refers to the appraised value of the underlying shares at
the time the stock purchase opportunity was exercised minus the exercise
price of the stock purchase opportunity.
(3) Stock purchase opportunities currently exercisable and current values of
stock purchase opportunities are determined as of October 1, 1993. Current
value of a stock purchase opportunity refers to the appraised value of the
underlying shares as of October 1, 1993 minus the exercise price of the
stock purchase opportunity.
</TABLE>
<PAGE>
The following graph compares the five year cumulative return for the Class
B common stock (measured by the appraised value) to the Standard & Poor's 500
Stock Index and the Dow Jones Consumer Non-Cyclical Index.
Five Year Cumulative Total Shareholder Return
GRAPH FILED SEPARATELY UNDER COVER OF FORM S-E
Cumulative total return is stated as a percentage of the base year (1988)
stock price. Cumulative total return in a given year equals (i) the
cumulative amount of dividends paid since the base year, assuming dividend
reinvestment, plus the year-end stock price, (ii) divided by the base year
stock price.
ARA Dow Jones
Fiscal Year Consumer
Ended ARA S&P 500 Non-Cyclical
------------ --- ------- ------------
1988 100.00 100.00 100.00
1989 121.62 132.76 148.00
1990 149.19 121.55 159.10
1991 172.97 157.68 230.50
1992 205.41 173.49 251.50
1993 262.42 199.27 226.00
<PAGE>
Directors who are employees of the Company are not paid directors' fees.
Directors who are not employees receive an annual retainer of $25,000 for
serving on the board, $3,000 for services as chairman of a board committee and
$1,000 for otherwise serving on a committee, and they receive meeting fees of
$1,000 per day for attendance at meetings of the board, and for each committee
meeting.
The Company has employment agreements or arrangements with all of its
officers, under which they are currently being paid annual salaries ranging up
to $790,000. Generally, these are for indeterminate periods terminable by
either party upon notice ranging from eight weeks to six months. Mr.
Neubauer's agreement currently provides for services to February 17, 1995
(with automatic renewals for successive three year terms unless terminated) at
a current annual base salary of $790,000, and for fully vested supplemental
benefits upon his death of 25% of his highest base salary payable to his
surviving spouse, if any, annually for life or upon his retirement, disability
or termination for any other reason of 50% of his highest base salary payable
to him annually for life. Upon termination by the Company without cause, Mr.
Neubauer's management incentive bonus shall be prorated through the time of
termination; his base salary at time of termination shall continue for a
period of three years after termination; and, his supplemental benefits shall
commence at the end of such three year period. Messrs. Carr, Ksansnak,
Leonard, and Vent have current annual base salaries of $320,000, $330,000,
$345,000 and $345,000, respectively. Several agreements provide for the
deferral of a part of prior salary and bonus payments with interest, currently
at the Moody's long-term bond index rate, usually payable in equal monthly
installments beginning upon retirement, permanent disability, death or
termination of employment.
The Company currently has a severance pay policy, pursuant to which
severance payments are made to executive officers and certain other key
employees on the basis of continuous service, generally equal to between 3 and
18 months of pay if their employment is terminated for reasons other than
cause plus the continuation of certain other benefits during the period of
such payment.
Committee Report On Executive Compensation
The Company's compensation programs are designed to support the Company's
overall commitment to continued growth and quality services to customers. The
programs are intended, among other things, to enable ARA to recruit and retain
the best performers, to provide compensation levels consistent with the level
of contribution and degree of accountability, to use performance measures
consistent with the Company's goals, to provide compensation consistent with
competitive market rates, and to include a significant portion of incentive
compensation.
Salary. Salary levels for all salaried employees are generally reviewed
annually. Guideline increases are established, generally based upon overall
financial performance of the Company, the current rate of inflation and
general compensation levels in the industries in which the Company operates.
For fiscal 1993, the guideline increase for executive officers, including the
five named individuals, was 5%. The specific salary increases for each
individual executive officer is based upon a review of his or her individual
performance and development. In the case of Mr. Neubauer, the review is
conducted by the Human Resources, Compensation and Public Affairs Committee
without any officers present, subject to final review and approval by the
Board of Directors of the Company; for all other executive officers, the
individual's supervisor and more senior executives, along with the corporate
human resources department, conduct the review and make a recommendation to
the Committee. Mr. Neubauer's salary was increased by 3.9% during fiscal
1993.
Bonus. Senior executive officers participate in the Company's management
incentive bonus program. Bonuses are awarded annually based in part upon the
attainment of predetermined financial goals and in part upon the attainment of
individual operational and strategic objectives. Generally, non-financial
objectives represent 40% of the bonus potential and are established by the
supervisor of the executive. Financial goals generally represent 60% of the
bonus potential. An employee's bonus potential generally varies, as a
percentage of total cash compensation, dependent upon the level of
responsibility of the employee's position. The measures of financial
performance used are for the business unit which is either under the
managerial direction of the participant or, if a staff executive, is the unit
on which the participant impacts most frequently and significantly. In the
case of Mr. Neubauer, the Committee awards a bonus based on a general review
of the Company's and Mr. Neubauer's performance. The Committee believes this
is appropriate for Mr. Neubauer's position as chief executive officer, rather
than establishing specific financial goals or non-financial objectives.
Mr. Neubauer was awarded 84% of his maximum bonus potential for fiscal 1993.
Performance measures. The Company uses various financial measures to
evaluate the performance of the Company and its business units, with the
specific measures in some cases varying depending upon the line of business
involved. Generally, the measures used are EBIT, RONA and, in addition, for
overall corporate performance net income and ATROI. EBIT is Earnings Before
Interest and Taxes. RONA is Return on Net Assets. ATROI is After Tax Return
on Investment. Targets for each of these performance measures are established
annually in the Company's business plan, which is approved at the beginning of
the fiscal year by the Board of Directors.
Stock Purchase Opportunities. The Committee believes that management
ownership contributes to the Company's success, and accordingly grants stock
purchase opportunities to selected management employees. The terms of the
installment stock purchase opportunities are generally described under "The
ARA Ownership Program." Individual grants are generally made by the Committee
in connection with hires, promotions and other recognition of performance.
The amount of a grant generally varies depending upon the level of
responsibility of the employee's position, the number of purchase
opportunities previously granted, and the number of shares owned. The
individual's supervisor and other senior executives, along with the corporate
human resources department, make recommendations to the Committee. The
Company has in the past also made broad-based grants to management employees
Compensation Committee Interlocks and Insider Participation. Mr. Neubauer,
who is Chairman and President, served as an ex officio member of the Committee
until May 1993. Mr. Campbell, who was an Executive Vice President until his
retirement in September 1990, is a member of the Committee.
Members of the Committee:
Robert J. Callander, Chair Mitchell S. Fromstein
Alan K. Campbell Edward G. Jordan
Ronald R. Davenport
Security Ownership of Certain Beneficial Owners and Management
The following table presents certain information as of December 30, 1993
with respect to shares of the Common Stock and Preferred Stock of the Company
beneficially owned by each person known to the Company to be the beneficial
owner of more than 5% of the Common Stock (on a Class B equivalent basis), by
each director and by each named executive officer.
<TABLE>
<CAPTION>
Common Stock
------------------------------------------------
Percent Preferred Stock
------------------------- ---------------------------
Number of Voting Total Number of Percent of
Shares (3) Power Outstanding Shares Outstanding
---------- ------ ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
Trustees for various ARA
employee benefit plans(1)(2) 9,625,080 3.6 21.1 7,330 21.3
Joseph Neubauer(1) 4,935,312 18.4 10.8 3,665 10.6
Robert J. Callander 117,160 * * 88 *
Alan K. Campbell 230,160 * * 172 *
Ronald R. Davenport 60,000 * * 45 *
Davre J. Davidson 4,040 * * 3 *
Philip L. Defliese 96,000 * * 72 *
Lee F. Driscoll, Jr. 2,839 * * 102 *
Mitchell S. Fromstein 73,680 * * 36 *
Edward G. Jordan 120,000 * * 90 *
Reynold C. MacDonald 108,000 * * 90 *
James E. Preston 14,000 * * 0 *
Julian L. Carr, Jr. 585,304 2.2 1.3 415 1.2
James E. Ksansnak 662,056 2.5 1.5 468 1.4
William Leonard 453,151 1.7 1.0 295 *
Richard H. Vent 904,952 3.4 2.0 613 1.8
All directors and executive
officers as a group (27
persons) 11,999,194 44.1 26.1 8,481 24.6
All employees**, directors
and employee benefit
plans as a group 37,889,253 96.4 78.0 25,588 74.2
<FN>
- -------------------
(1) The address of this stockholder is ARA Services, Inc., The ARA Tower, 1101
Market Street, Philadelphia, PA 19107
(2) The trustees are Alan K. Campbell, James E. Ksansnak and Martin W. Spector.
(3) Includes shares issuable upon the exercise of currently exercisable stock
options.
* Less than 1%.
** Includes children and other transferees for estate planning purposes.
</TABLE>
The sale of 1,824 Class A shares (adjusted for the November 1993 stock
split) by Mr. Driscoll to the Company in April 1993, as part of the Company's
repurchase of shares from various Class A stockholders, was not reported to
the Securities and Exchange Commission by the Company on Mr. Driscoll's behalf
until October 1993.
The ARA Ownership Program
The ARA Ownership Program (the "Program") is designed to provide an
opportunity for selected management employees of the Company and its
subsidiaries to acquire an ownership interest in the Company and thereby give
them a more direct and continuing interest in the future success of the
Company's business. Under the Program, direct ownership in the Company has
increased from 62 original management investors in December 1984 to
approximately 900 management investors today owning more than 50% of the
equity. In addition, at December 30, 1993, management employees and directors
held installment stock purchase opportunities for 10,290,944 shares and stock
options for an additional 1,665,696 shares.
The Company's senior management believes that management ownership has
significantly contributed to the Company's success, and intends to continue to
use the Program to expand both the number of management investors and their
percentage ownership.
Through installment stock purchase opportunities, the Company granted to
more than 900 management employees an opportunity to invest in, or increase
their investment in, the Company.
The purchase price for shares subject to purchase opportunities is the fair
market value of the shares (based upon the most recent available independent
appraisal) on the date of the grant. Shares issued pursuant to the exercise
of purchase opportunities are subject to the Stockholders' Agreement.
Purchase opportunities are not transferrable. Each purchase opportunity is
exercisable only by the employee to whom it is granted and only while an
employee of the Company or a subsidiary.
Each purchase opportunity has an installment schedule that limits the number
of shares of common stock that may be purchased during each annual installment
exercise period. Unless the first installment is exercised by its expiration
date for a minimum number of shares, the entire purchase opportunity is
cancelled. Thereafter, subsequent annual installments may be exercised
(subject to exercise of a minimum number of shares) for up to the maximum
number of shares specified in the certificate for that installment. Any
portion of an annual installment not exercised by the appropriate expiration
date is cancelled.
In connection with the exercise of installment purchase opportunities and
non-qualified stock options, ARA has adopted a deferred payment program
whereby a portion of the purchase price for certain installments can be
deferred at the election of the employee for approximately three years. The
deferred payment obligation accrues interest and is secured by a pledge of the
shares of ARA Common Stock purchased. The interest rate for deferred payment
obligations incurred in fiscal 1993 has been set at 6%. Approximately 344
employees (including executive officers) participated in the program in fiscal
1993. At fiscal year end, the amount of the deferred payment obligations of
Messrs. Neubauer, Carr, Ksansnak, Leonard, and Vent were $1,327,482, $134,465,
$254,264, $79,852, and $27,960, respectively.
Certain Relationships and Related Transactions
During fiscal 1993, the Company repurchased 23,364 shares of common stock
from an executive officer at a price per share of $10.45 (as adjusted for the
recent stock split). The Company anticipates that it will continue to
repurchase shares held by officers and directors, through the Company's
internal market, and following their termination of employment or cessation as
a director.
The Company, the members of management who are equity investors in the
Company and certain other investors (collectively, "Restricted Investors") are
parties to an amended and restated stockholders' agreement dated as of April
7, 1988 pursuant to which, among other things, the current Board of Directors
has the right to select its succeeding Board of Directors. Certain Restricted
Investors (none of whom are members of management) also have certain
registration rights and all Restricted Investors are subject to certain
restrictions on transfer, with the Company having certain rights of first
offer in the event of any sales or dispositions by Restricted Investors or
their estates. In addition, upon death, complete disability or normal
retirement of management investors or upon death or complete disability of
other individual Restricted Investors, such persons or their estates may cause
the Company to repurchase for cash up to 30% of their shares at the then
appraised value but only to the extent such repurchase by the Company is
permitted under the Company's credit agreement. Such repurchased shares may
be resold to others, including replacement personnel. In addition, it is
contemplated that shares which may be issued pursuant to exercise of employee
stock options and stock purchase opportunities would also be subject to the
stockholders' agreement.
Relationship with Independent Public Accountants
The Board of Directors is expected to reappoint the firm of Arthur Andersen
& Co. as independent auditors for the Company for the 1994 fiscal year. A
representative of Arthur Andersen & Co. is expected to be present at the
annual meeting and will be offered the opportunity to make a statement if
desiring to do so and will be available to respond to appropriate questions.
Financial Statements
A copy of the Company's annual report on Form 10-K for the fiscal year ended
October 1, 1993 has been delivered to stockholders. Stockholders are referred
to the report for financial and other information about the Company.
General
Proxies will be solicited by mail. Proxies may be solicited by directors,
officers and a small number of regular employees of the Company personally or
by mail, telephone or telegraph, but such persons will not be specially
compensated for such services. The entire cost of solicitation will be borne
by the Company.
Management does not intend to present, and does not have any reason to
believe that others will present, any item of business at the annual meeting
other than those specifically set forth in the notice of the meeting.
However, if other matters are presented for a vote, the proxy agents will have
the right to vote the shares represented by proxy cards on such matters in
accordance with their discretion.
Stockholder Proposals
Stockholders may submit proposals on matters appropriate for stockholder
action at future annual meetings of the Company in accordance with regulations
adopted by the Securities and Exchange Commission. For such proposals to be
considered for inclusion in the Company's proxy statement and form of proxy
for next year's annual meeting, they must be received by the Company not later
than September 13, 1994. Proposals should be directed to the attention of the
Corporate Secretary.
<PAGE>
ANNEX A
MARKED TO SHOW CHANGES
RESTATED CERTIFICATE OF INCORPORATION
OF
THE ARA GROUP, INC.
(Originally Incorporated on September 7, 1984
under the name "ARA Acquiring Company")
FIRST: The name of the Corporation is The ARA Group, Inc.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of the Corporation's registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 185,000,000 shares,
consisting of (i) 10,000,000 shares of Series Preferred Stock, $1.00 par value
per share (the "Series Preferred Stock"), and (ii) 25,000,000 shares of
Common Stock, Class A, $.01 par value per share (the "Class A Common Stock"),
and (iii) 150,000,000 shares of Common Stock, Class B, $.01 par value per
share (the "Class B Common Stock"). The Class A Common Stock and the Class B
Common Stock are referred to collectively as the "Common Stock".
The Board of Directors shall have the full authority permitted by law to
fix full or limited, or no voting power, and such other designations, powers,
preferences, and relative, participating, optional, special or other rights
(including, as examples and not as a limitation, multiple voting powers and
conversion rights), and qualifications, limitations or restrictions of any
series of the class of Series Preferred Stock that may be desired//, by
resolution or resolutions adopted by the affirmative vote by a Supermajority
(as defined in Article SIXTH) of the Board of Directors//.
4A. Common Stock
A statement of the designations, powers, preferences, and rights of the
Common Stock, and the qualifications, limitations and restrictions in respect
thereof, is as follows:
1. Classes.
The Common Stock shall be divided into two classes, the Class A
Common Stock and the Class B Common Stock. The Common Stock shall be issuable
only in whole shares. The powers, preferences and rights of the Class A Common
Stock and the Class B Common Stock, and the qualifications, limitations and
restrictions thereon, shall be in all respects identical, except as otherwise
provided in this Part 4A.
2. Dividends.
Subject to any provision in this Article FOURTH with respect to any
stock of the Corporation to the contrary, out of the assets of the Corporation
which are by law available for the payment of dividends, dividends and other
distributions may be, but shall not be required to be, declared and paid upon
shares of Common Stock, and the holders of shares of Class A Common Stock and
Class B Common Stock shall be entitled to receive the same dividends and other
distributions, ratably with the holder of one share of Class A Common Stock
entitled to receive ten times what the holder of one share of Class B Common
Stock is entitled to receive; provided, however, that in the case of dividends
or other distributions payable in Common Stock, only shares of Class B Common
Stock shall be distributed with respect to Class B Common Stock and only
shares of Class A Common Stock shall be distributed with respect to Class A
Common Stock, and any such distribution shall be made ratably, with the holder
of one share of Class A Common Stock entitled to receive the same number of
shares of Class A Common Stock as the number of shares of Class B Common Stock
the holder of one share of Class B Common Stock shall be entitled to receive;
and provided further, that the Board of Directors, //by Supermajority vote,//
may declare and pay dividends and other distributions with respect to the
Class A Common Stock without declaring or paying any dividend or other
distribution with respect to the Class B Common Stock.
3. Voting Rights.
(a) Subject to the special voting rights of the holders of any
other stock of the Corporation, the Common Stock (and any other stock of the
Corporation which may be entitled to vote with the holders of Common Stock),
voting as a single class except where the Class A Common Stock and the Class B
Common Stock (and such other stock) are required by law to vote as separate
classes, shall possess all of the voting power of the Corporation with respect
to the election of directors and for all other purposes.
(b) Each share of Common Stock, whether Class A Common Stock or
Class B Common Stock, shall be entitled to one vote on all matters submitted
to a vote of the Corporation's stockholders.
4. Liquidation.
Upon the liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, after provision for the payment of creditors
and after provision shall be made for holders of all shares of stock of the
Corporation having a preference upon liquidation, dissolution or winding up,
the remaining assets of the Corporation shall be distributed among the holders
of Common Stock, ratably, with the holder of one share of Class A Common Stock
entitled to receive ten times what the holder of one share of Class B Common
Stock is entitled to receive, and, to the extent provided in this Article
FOURTH, the holders of any other stock of the Corporation which may be
entitled to share in such distribution.
5. Conversion of Class B Common Stock.
(a) Each share of Class B Common stock may at any time, but only
with the prior approval of the Board of Directors, be converted at the
election of the holder thereof into one-tenth of a fully paid and
nonassessable share of Class A Common Stock. Subject to the terms of any such
approval, the holder of shares of Class B Common Stock may elect to convert
any or all of such shares at one time or at various times in such holder's
discretion. Such right shall be exercised by the surrender of the certificate
representing each share of Class B Common Stock to be converted to the agent
for the registration of transfer of shares of Class B Common Stock at its
office, or to the Corporation at its principal executive offices, accompanied
by a written notice of the election by the holder thereof to convert and (if
so required by the transfer agent or by the Corporation) by instruments of
transfer, in form satisfactory to the transfer agent and to the Corporation,
duly executed by such holder or the holder's duly authorized attorney.
(b) If a holder of Class B Common Stock ceases to be either a
director or full-time employee of the Corporation or any of its Subsidiaries
(a "Management Investor") or a Permitted Transferee of a person who is then a
Management Investor, then each share of Class B Common Stock held by such
holder shall thereupon be converted into one-tenth of a share of Class A
Common Stock effective immediately. No share of Class B Common Stock may be
issued other than to a Management Investor or a person who would be a
Permitted Transferee of a Management Investor, and any such share issued to
any other person shall ipso facto be converted into one-tenth of a share of
Class A Common Stock effective at the time of the purported issuance.
(c) At any time when the Board of Directors, //by Supermajority
vote,// authorizes and directs the conversion of all the Class B Common Stock
into Class A Common Stock, then, at the time designated by the Board for the
occurrence of such event, each outstanding share of Class B Common Stock shall
be converted into one-tenth of a share of Class A Common Stock and no further
shares of Class B Common Stock may be issued thereafter.
(d) In the event of any such conversion pursuant to paragraph
(a), (b) or (c), the certificate or certificates representing shares of Class
B Common Stock held by such holder shall thereupon and thereafter be deemed to
represent the number of whole shares of Class A Common Stock issuable upon
such conversion and the right to receive cash in lieu of fractional shares
pursuant to paragraph (f) hereof. Upon the surrender of any such certificate
to the agent for the registration of transfer of shares of Class B Common
Stock at its office, or to the Corporation at its principal executive offices,
such certificate shall be cancelled and a certificate for the number of whole
shares of Class A Common Stock to which he shall be entitled, together with a
cash adjustment for any fraction of a share if not evenly convertible pursuant
to paragraph (f) hereof, shall be issued and delivered to the holder thereof
as hereinafter provided.
(e) The issuance of a certificate for shares of Class A Common
Stock upon conversion of shares of Class B Common Stock shall be made without
charge for any stamp or other similar tax in respect of such issuance.
However, if any such certificate is to be issued in a name other than that of
the holder of the share or shares of Class B Common Stock converted, the
person or persons requesting issuance thereof shall pay to the transfer agent
or to the Corporation the amount of any tax which may be payable in respect of
any such transfer, or shall establish to the satisfaction of the transfer
agent or of the Corporation that such tax has been paid. As promptly as
practicable after the surrender for conversion of a certificate representing
shares of Class B Common Stock and the payment of any tax as herein before
provided, the Corporation will deliver or cause to be delivered at the office
of the transfer agent to, or upon the written order of, the holder of such
certificate, a certificate or certificates representing the number of whole
shares of Class A Common Stock issuable upon such conversion, issued in such
name or names as such holder may direct together with a cash adjustment for
any fraction of a share as provided pursuant to paragraph (f) hereof, if not
evenly convertible. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of the surrender of the
certificate representing shares of Class B Common Stock (if on such date the
transfer books of the Corporation shall be closed, then immediately prior to
the close of business on the first date thereafter that said books shall be
open) or, in the case of a conversion under paragraph (b) or (c) of this
Section, immediately upon the event giving rise to the conversion, and all
rights of such holder arising from ownership of shares of Class B Common Stock
shall cease at such time, and the person or persons in whose name or names the
certificate representing shares of Class A Common Stock are to be issued shall
be treated for all purposes as having become the record holder or holders of
such shares of Class A Common Stock at such time and shall have and may
exercise all the rights and powers appertaining thereto. No adjustments in
respect of any past dividends and other distributions shall be made upon the
conversion of any share of Class B Common Stock; provided, however, that if
any share of Class B Common Stock shall be converted subsequent to the record
date for the payment of a dividend or other distribution on shares of Class B
Common Stock but prior to such payment, the registered holder of such shares
at the close of business on such record date shall be entitled to receive the
dividend or other distribution payable to holders of Class B Common Stock. The
Corporation shall at all times reserve and keep available, solely for the
purpose of issue upon conversion of outstanding shares of Class B Common
Stock, such number of shares of Class A Common Stock as may be issuable upon
the conversion of all such outstanding shares of Class B Common Stock,
provided that the Corporation may deliver shares of Class A Common Stock held
in the treasury of the Corporation.
(f) No fractions of shares of Class A Common Stock are to be
issued upon conversion, but in lieu thereof the Corporation will pay therefor
in cash, a sum equal to the number of shares of Class B Common Stock not
evenly convertible multiplied by the per share fair market value of the Class
B Common Stock, as determined by an Appraiser according to the most recent
existing appraisal; provided, however, that such appraisal shall be as of a
date not more than six months prior to its use hereunder.
4B. Series C Stock
A statement of the powers, designations, preferences, rights,
qualifications, limitations and restrictions of 40,000 shares of Series
Preferred Stock is as follows:
1. Designation. There shall be a series of Series Preferred Stock
which shall consist of 40,000 shares and shall be designated as Adjustable
Rate Callable Nontransferable Series C Preferred Stock (the "Series C Stock").
The number of authorized shares of Series C Stock may be increased by
resolution of the Board of Directors.
2. Rank.
(a) Rank of Series C Stock. To the extent and in the manner
provided in this Part 4B, the Series C Stock shall, with respect to dividend
rights and rights on liquidation, rank (i) junior to or on parity with, as the
case may be, any other stock of the Corporation, the terms of which shall
specifically provide that such stock shall rank senior to, or on parity with,
as the case may be, the Series C Stock with respect to dividend rights or
rights on liquidation or both, and (ii) senior to any other stock of the
Corporation.
(b) Certain Definitions. The following terms as used in this
Part 4B, shall be deemed to have the meanings set forth in this section.
(i) The term "Participating Stock" shall mean the Class A
Common Stock and the Class B Common Stock and any other stock of the
Corporation of any class which has the right to participate in the
distribution of either earnings or assets of the Corporation without limit as
to the amount or percentage.
(ii) The term "Parity Stock" with respect to Series C Stock
shall mean the Series C Stock and all other stock of the Corporation ranking
equally therewith as to the payment of dividends or the distribution of assets
upon liquidation. The term "Dividend Parity Stock" with respect to Series C
Stock shall mean the Series C Stock and all other stock of the Corporation
ranking equally therewith as to the payment of dividends. The term
"Liquidation Parity Stock" with respect to Series C Stock shall mean the
Series C Stock and all other stock of the Corporation ranking equally
therewith as to distribution of assets upon liquidation.
(iii) The term "Junior Stock" with respect to Series C Stock
shall mean the Participating Stock and all other stock of the Corporation
ranking junior thereto as to the payment of dividends and the distribution of
assets upon liquidation. The term "Dividend Junior Stock" with respect to
Series C Stock shall mean the Participating Stock and all other stock of the
Corporation ranking junior thereto as to the payment of dividends. The term
"Liquidation Junior Stock" with respect to Series C Stock shall mean the
Participating Stock and all other stock of the Corporation ranking junior
thereto as to distribution of assets upon liquidation.
(iv) The term "Senior Stock" with respect to Series C Stock
shall mean all stock of the Corporation ranking senior thereto as to the
payment of dividends or distribution of assets upon liquidation.
3. Dividends.
(a) Cumulative Dividends. The holders of record of Series C
Stock shall be entitled to receive, as and if declared by the Board of
Directors, cumulative cash dividends thereon at the per annum rate per share
equal to the Established Dividend Rate (as defined in paragraph (c)), and no
more, but only out of funds legally available for the payment of such
distributions under the General Corporation Law of the State of Delaware.
Dividends on the Series C Stock shall be payable semi-annually on June 15 and
December 15 in each year. Dividends shall accrue from the date of original
issuance. Accumulations of dividends shall not bear interest.
(b) Limitations Upon Dividend Arrearage. Unless full
cumulative dividends upon the Series C Stock have been paid, no dividend or
other distribution (except in Junior Stock) shall be declared or paid on
Dividend Junior Stock and no amount shall be set aside for or applied to the
redemption, purchase or other acquisition of (i) any Dividend Junior Stock or
Liquidation Junior Stock other than by exchange therefor of Junior Stock or
out of the proceeds of a substantially concurrent sale of shares of Junior
Stock or (ii) any Parity Stock except in accordance with a purchase or
exchange offer made simultaneously by the Corporation to all holders of record
of Parity Stock which, considering the annual dividend rates and the other
relative rights and preferences of such shares, in the opinion of the Board of
Directors (whose determination shall be conclusive), will result in fair and
equitable treatment among all such shares. In the event that stated dividends
on all Dividend Parity Stock (including, by way of example and not as a
limitation, full cumulative dividends on the Series C Stock) are not paid in
full, all shares of Dividend Parity Stock shall participate ratably in the
payment of dividends, including accumulations, if any, in accordance with the
sums which would be payable thereon if all dividends thereon were declared and
paid in full.
(c) The "Established Dividend Rate" shall initially be $60.00,
and shall be reset as provided in this paragraph. On each December 16,
beginning December 16, 1993 and continuing so long as any shares of Series C
Stock shall be outstanding, the Established Dividend Rate shall be reset at a
rate equal to $1,000 multiplied by 80% of the Prime Rate that shall have been
in effect at the close of business on the December 1 next preceding (or if
such December 1 shall not have been a business day, the business day next
preceding such December 1), rounded up to the nearest $1.00; provided,
however, that the Established Dividend Rate shall in no event be less than
$60.00 nor greater than $100.00. For purposes of the preceding sentence, the
"Prime Rate" shall mean the rate of interest publicly announced from time to
time by Chemical Bank at its main office in New York City as its Prime Rate.
The Corporation shall file with the duly appointed transfer agent for the
Series C Stock a certificate stating the new Established Dividend Rate
determined as provided in this paragraph and showing the computation thereof,
and will cause a notice stating the new Established Dividend Rate and the
computation thereof to be mailed to the holders of shares of Series C Stock.
4. Liquidation Rights.
(a) Liquidation Value. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
holders of Series C Stock shall be entitled to receive from the assets of the
Corporation, payment in cash, of $1,000 per share, plus a further amount equal
to unpaid cumulative dividends on Series C Stock accrued to the date when such
payments shall be made available to the holders thereof, and no more, before
any amount shall be paid or set aside for, or any distribution of assets shall
be made to the holders of Liquidation Junior Stock. If, upon such liquidation,
dissolution or winding up, the amounts available for distribution to the
holders of all Liquidation Parity Stock shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled, then such amounts shall be paid ratably among the shares of
Liquidation Parity Stock in accordance with the respective preferential
amounts (including unpaid cumulative dividends, if any) payable with respect
thereto if paid in full.
(b) Actions Not Considered Liquidation. None of the following
shall be considered a liquidation, dissolution or winding up of the
Corporation within the meaning of this section: (1) a consolidation or merger
of the Corporation with or into any other corporation; (2) a merger of any
other corporation into the Corporation; (3) a reorganization of the
Corporation; (4) the purchase or redemption of all or part of the outstanding
shares of any class or classes of the Corporation; (5) a sale or transfer of
all or any part of the assets of the Corporation; or (6) a share exchange to
which the Corporation is a party.
5. Redemption.
(a) Optional Redemption. The Series C Stock may be called for
redemption and redeemed at the option of the Corporation by resolution of the
Board of Directors, in whole at any time or in part at any time or from time
to time upon the notice hereinafter provided for in paragraph (c), by the
payment therefor of the redemption price per share of $1,000 plus an amount
equal to the accrued and unpaid cumulative dividends thereon to the date fixed
by the Board of Directors as the redemption date. In addition, the
Corporation may so call for redemption at any time after January 1, 1994 all,
but not less than all, of the shares of Series C Stock held by any person, but
only if such person is not also a holder of shares of either Class A Common
Stock or Class B Common Stock.
(b) No Mandatory Redemption. There is no mandatory sinking fund
for, or other required redemption of, the Series C Stock.
(c) Manner of Redemption.
(i) If less than all of the outstanding shares of Series C
Stock shall be called for redemption (and such redemption is not pursuant to
the second sentence of paragraph (a)), the particular shares to be redeemed
shall be selected by lot or by such other equitable manner as may be
prescribed by resolution of the Board of Directors.
(ii) Notice of redemption of any shares of Series C Stock
shall be given by the Corporation by first-class mail, not less than 30 nor
more than 60 days prior to the date fixed by the Board of Directors of the
Corporation for redemption (the "redemption date"), to the holders of record
of the shares to be redeemed at their respective addresses then appearing on
the records of the Corporation. The notice of the redemption shall state:
(1) the redemption date; (2) the redemption price; (3) if less than all
outstanding shares of Series C Stock of the holder are to be redeemed, the
identification of the shares of Series C Stock to be redeemed; (4) that
dividends on the shares to be redeemed shall cease to accrue on the redemption
date; and (5) the place or places where such shares of Series C Stock to be
redeemed are to be surrendered for payment of the redemption price.
(iii) Notice having been mailed as aforesaid, from and
after the redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called
for redemption), dividends on the shares of Series C Stock so called for
redemption shall cease to accrue, and from and after the redemption date or
such earlier date as funds shall be set aside for payment of the redemption
price (unless default shall be made by the Corporation in providing money for
the payment of the redemption price of the shares called for redemption) said
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the redemption price
aforesaid.
(iv) Shares of Series C Stock redeemed by the Corporation
shall be restored to the status of authorized and unissued shares of Series
Preferred Stock, undesignated as to series, and, except as otherwise provided
by the express terms of the series redeemed or of any other outstanding
series, may be reissued by the Corporation as shares of one or more series of
Series Preferred Stock other than Series C Stock.
6. Voting Rights.
(a) No Voting Rights Generally. Except as expressly provided to
the contrary in this resolution or as otherwise required by law, the holders
of Series C Stock shall have no right to vote at, or to participate in, any
meeting of stockholders of the Corporation, or to receive any notice of such
meeting.
(b) Rights Upon Dividend Arrearage.
(i) In the event that dividends upon the Series C Stock shall
be in arrears in an amount equal to four full semi-annual dividends thereon,
the number of directors constituting the full board shall be increased by two,
and the holders of the Series C Stock voting noncumulatively and separately as
a single class together with the holders of any other shares of Series
Preferred Stock having the right to elect directors as a class under such
circumstances, shall be entitled to elect two members of the Board of
Directors of the Corporation at the next annual meeting of stockholders of the
Corporation or at a special meeting called as hereinafter provided in this
section. Such voting rights of the holders of Series C Stock shall continue
until all accumulated and unpaid dividends thereon shall have been paid in
full, whereupon such special voting rights of the holders of Series C Stock
shall cease (and the respective terms of the two additional directors shall
thereupon expire and the number of directors constituting the full board shall
be decreased by two) subject to being again revived from time to time upon the
recurrence of the conditions described in this section as giving rise thereto.
(ii) At any time when such right of holders of Series C Stock
to elect two additional directors shall have so vested, the Corporation may,
and upon the written request of the holders of record of not less than 10% of
the Series C Stock then outstanding (or 10% of all Series Preferred Stock
having the right to vote for such directors in case holders of shares of other
series of Series Preferred Stock shall also have the right to elect directors
as a class in such circumstances) shall, call a special meeting of holders of
such Series C Stock (and other series of Series Preferred Stock, if
applicable) for the election of directors. In the case of such a written
request, such special meeting shall be held within 60 days after the delivery
of such request, and, in either case, at the place and upon the notice
provided by law and in the bylaws of the Corporation; except that the
Corporation shall not be required to call such a special meeting if such
request is received less than 120 days before the date fixed for the next
ensuing annual meeting of stockholders of the Corporation.
(iii) Whenever the number of directors of the Corporation
shall have been increased by two as provided in this section, the number as so
increased may thereafter be further increased or decreased in such manner as
may be permitted by the bylaws of the Corporation and without the vote of the
holders of Series C Stock. No such action shall impair the right of the
holders of Series C Stock to elect and to be represented by two directors as
provided in this section.
(iv) The two directors elected as provided in this section
shall serve until the next annual meeting of stockholders of the Corporation
and until their respective successors shall be elected and qualified or the
earlier expiration of their terms as provided in this section. No such
director may be removed without the vote or consent of holders of a majority
of the shares of Series C Stock (or holders of a majority of shares of Series
Preferred Stock having the right to vote in the election of such director in
case holders of shares of other series of Series Preferred Stock shall also
have the right to elect such director as a class). If, prior to the
expiration of the term of any such director, a vacancy in the office of such
director shall occur, such vacancy shall, until the expiration of such term,
in each case be filled by appointment made by the remaining director elected
as provided in this section.
7. Restrictions on Transfer. The shares of Series C Stock shall
not be transferable prior to February 1, 1997 (other than by will or the laws
of descent), except that such shares may be transferred to the Corporation
pursuant to a redemption or purchase thereof. On and after February 1, 1997,
the shares of Series C Stock shall be freely transferable at any time, at the
option of the holder.
8. No Conversion Rights. The holders of shares of Series C Stock
shall not have the right to convert such shares into other securities of the
Corporation.
FIFTH: Subject to the rights of holders of Series Preferred Stock to
elect additional directors under certain circumstances, the Corporation shall
be governed in accordance with the following provisions:
5A. Number of Directors
//1.// The Board of Directors of the Corporation shall consist of not
less than nine and not more than 19 members and the Chief Executive Officer of
the Corporation shall always be one of the members. The exact number of
directors within such minimum and maximum shall be fixed by //a resolution
approved by the vote of a Supermajority of// the Board of Directors.
5B. Election
//1. Directors shall be elected at the annual meeting of the
stockholders, and each director shall be elected to serve until the next
annual meeting and until his successor shall be elected and shall qualify.//
//2.// Directors need not be elected by written ballot.
//5C. Vacancies
If the office of any director or directors becomes vacant by reason
of the death, removal or resignation of any director, no action, other than
actions to appoint a successor, may be taken except by concurring vote of a
Supermajority of the remaining directors.//
//5D. Actions-Quorum and Voting
1. Unless otherwise specified in paragraph 2 of this Part 5D, at
all meetings of the Board of Directors a majority of the Board of Directors
shall be necessary and sufficient to constitute a quorum for the transaction
of business; and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors. If a
quorum shall not be present at any meeting of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
2. Notwithstanding anything to the contrary in paragraph 1 of this
Part 5D, none of the corporate actions set forth below may be undertaken
without the affirmative vote of a Supermajority of the Board of Directors:
(a) Any proposal to authorize, issue or sell, or submit for
stockholder approval of the authorization, issuance or sale, of any shares of
any class of capital stock of the Corporation, or the authorization, issuance
or sale of any securities convertible into, or options with respect to (other
than employee options for shares of Common Stock), warrants to purchase or
rights to subscribe to, any shares of any class of capital stock of the
Corporation other than (i) sales of Common Stock pursuant to the exercise of
employee stock options for shares of Common Stock, and (ii) sales or other
dispositions of previously reacquired shares of Common Stock, or any
equivalent number of shares of either class of Common Stock.
(b) Declaration and payment of any dividend with respect to the
Common Stock.
(c) Redemption, retirement, purchase or other acquisition by the
Corporation of any of its securities of any class, other than (a) pursuant to
Puts exercised in accordance with the Stockholders' Agreement, dated as of
December 14, 1984, as amended and restated as of April 7, 1988, by and among
the Corporation and the persons named therein as the same may be amended
(the "Stockholders' Agreement") and a copy of which is on file with the
Secretary of the Corporation, and (b) repurchases from employee benefit plans
or from persons who received shares from an employee benefit plan in
accordance with the terms of such plan.
(d) Any acquisition of any business or assets for a consideration
in excess of the value of 10% of Capital Funds (including the acquisition of
any capitalized lease with a capitalized value, computed in accordance with
generally accepted accounting principles, in excess of the value of 10% of
Capital Funds) determined in each case (without aggregating unrelated business
or assets acquired) on the basis of the most recently available quarterly or
year-end consolidated financial statements of the Corporation.
(e) The sale, abandonment or other disposition in any single
transaction or, if applicable, in one or more related transactions of any of
the Corporation's properties or assets having a sales price or carrying value
on the books of the Corporation in excess of the value of 10% of the Capital
Funds (including the disposition of any capitalized lease with a capitalized
value, computed in accordance with generally accepted accounting principles,
in excess of the value of 10% of Capital Funds), determined in each case
(without aggregating unrelated properties or assets) on the basis of the most
recently available quarterly or year-end consolidated financial statements of
the Corporation.
(f) The making of or incurrence of obligations for any single
capital expenditure (including capitalized leases) in excess of the value of
10% of Capital Funds as determined in each case (without aggregating unrelated
obligations) on the basis of the most recently available quarterly or year-end
consolidated financial statements of the Corporation.
(g) The incurrence of indebtedness, in any individual transaction,
in an amount in excess of 10% of the Capital Funds.
(h) The creation, in any individual transaction, of any liens on
assets having a book value in excess of 10% of the Capital Funds.
(i) Any amendment of the Corporation's By-Laws or any
recommendation by the Board of Directors to the stockholders of any amendment
of this Restated Certificate of Incorporation.
(j) Any amendment of the Stockholders' Agreement or of the
Registration Rights Agreement, by and among the Corporation and the persons
named therein, as such agreements may be amended from time to time.
(k) Authorization and execution of any employment contract or
arrangement with the chief executive officer or the chief operating officer
(hereinafter referred to collectively as "Senior Management"), including but
not limited to any arrangements or obligations with respect to severance or
termination pay liabilities, salaries, fringe benefits, bonuses, pensions,
options, deferred compensation, retirement payments, profit sharing or similar
arrangements and excepting benefits generally applicable to all members of
management.
(l) The hiring, promotion or discharge for any reason of any member
of Senior Management.
<PAGE>
(m) Designation of any committee of the Board of Directors, the
number of directors to serve on such committee, its powers, or appointment of
directors to serve as members of any committee.
(n) Any agreement or resolution contemplating the dissolution,
liquidation, merger, consolidation or the sale of substantially all of the
assets of the Corporation or ARA Services, Inc.//
SIXTH: The following terms shall have the accompanying defined meanings:
1. "Appraiser" shall mean a firm headquartered in the United
States of nationally recognized standing in the business of appraisal or
valuation of securities which does not own any stock of the Corporation and
which has been selected by the Board of Directors to act as an independent
appraiser.
//2. "Capital Funds" shall mean the sum of Outstanding Equity (but
only if such amount shall be greater than zero) plus Subordinated Debt on a
consolidated basis.//
//3. "Outstanding Equity" shall mean the sum of the par value,
capital surplus and retained earnings attributable to the capital stock of the
Corporation.//
//3.1// +2.+ "Permitted Transferee" shall have the meaning as defined
in the Stockholders' Agreement.
//4. "Put" shall refer to the option of a holder of the
Corporation's Common Stock to require the Corporation to purchase such stock
as more fully described in the Stockholders' Agreement as such may be amended
from time to time.//
//4.1 "Registration Rights// +3. Stockholders' Agreement+ shall mean
the //Registration Rights// +Amended and Restated Stockholders' Agreement dated
as of April 7, 1988,+ //as of December 14, 1984 as amended and restated// by and
among the Corporation and the persons named therein as the same may be amended
and a copy of which is on file with the Secretary of the Corporation.
//5. "Subordinated Debt" shall mean the outstanding principal amount
of the Corporation's indebtedness which would be subordinate to or on a parity
with the Corporation's 16 1/2% Subordinated Debentures Due 1999, if such
Debentures were still outstanding.//
//6.// +4.+ "Subsidiary" shall mean any corporation or other entity of
which the Corporation shall, directly or indirectly, own 50% or more of the
equity, as determined by the Board of Directors +and any other corporation or
other entity in which the Corporation shall directly or indirectly have an
equity investment and which the Board of Directors shall in its sole
discretion designate.+
//7. "Supermajority" shall mean a number equal to (A) a majority of
the number of directors as last fixed by resolution of the Board of Directors
and otherwise increased in accordance with the terms of the Series Preferred
Stock, plus (B) one. The unanimous affirmative vote of a Committee of the
Board of Directors, where (1) the Committee was established, the authority
delegated and the members of the Committee selected by a Supermajority vote of
the Board of Directors, and (2) the Chief Executive Officer of the Corporation
is a member of the Committee, shall be the equivalent, for all purposes, of
the affirmative vote of a Supermajority of the Board of Directors in respect
of all matters which have been so delegated to the Committee.//
//SEVENTH: Parts 5B, 5C and 5D of this Restated Certificate of
Incorporation may be altered, amended, changed, added to or repealed only by
the affirmative vote of 66 2/3% of the votes of the Corporation's stockholders
entitled to vote.//
//EIGHTH:// +SEVENTH:+ The By-Laws of the Corporation may be made,
altered, amended, changed, added to or repealed by the Board of Directors of
the Corporation without the assent or vote of the stockholders.
//NINTH:// +EIGHTH:+ Each person who was or is made a party or is
threatened to be made a party to or is involuntarily involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or a person of whom he is the
legal representative is or was a director or officer of the Corporation or is
or was serving at the request of the Corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer or representative or in any other capacity
while serving as a director, officer or representative shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended, against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by him in connection
therewith; provided, however, that the Corporation shall indemnify any such
person seeking indemnity in connection with an action, suit or proceeding (or
part thereof) initiated by such person only if action, suit or proceeding (or
part thereof) was authorized by the Board of Directors. Such right shall be a
contract right and shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of its final
disposition upon delivery to the Corporation of an undertaking, by or on
behalf of such person, to repay all amounts so advanced if it should be
determined ultimately that such person is not entitled to be indemnified under
this section or otherwise.
If a claim under this Article is not paid in full by the Corporation
within ninety days after a written claim has been received by the Corporation,
the claimant unpaid may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and if successful in
whole or in part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the claimant has not
met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claim, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant had not met the applicable standard of
conduct.
The rights conferred by this Article shall not be exclusive of any other
right which such person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, By-Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
The Corporation may maintain insurance, at its expense, to protect itself
and any such director, officer or representative against any such expense,
liability or loss, whether or not the Corporation would have the power to
indemnify him against such expense, liability or loss under the Delaware
General Corporation Law.
//TENTH: Subject to the provisions of Article SEVENTH hereof, the//
+NINTH: The+ Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate of Incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power.
//ELEVENTH:// +TENTH:+ Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of the Corporation or of any creditor or stockholder thereof, or
on the application of any receiver or receivers appointed by the Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for the Corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said Court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the Court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all
stockholders or class of stockholders of the Corporation, as the case may be,
and also on the Corporation.
//TWELFTH:// +ELEVENTH:+ To the fullest extent permitted by the Delaware
General Corporation Law as the same exists or may hereafter be amended, a
director of this Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as director.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates +and further amends+ the Corporation's Certificate of
Incorporation, as heretofore amended and restated, having been duly adopted
pursuant to the provisions of Section+s 242 and+ 245 of the General
Corporation Law of the State of Delaware, has been duly executed this ____ day
of +February+ //October,// 199+4+//3//.
THE ARA GROUP, INC.
Attest:_____________________________ By:_____________________________
Donald S. Morton Martin W. Spector
Assistant Secretary Executive Vice President
==============================================
Throughout Annex A:
// Text contained within slashes is deleted.
+ Text contained within plus symbols is new.
<PAGE>
THE ARA GROUP, INC.
PROXY CARD
SOLICITED BY THE BOARD OF DIRECTORS
Joseph Neubauer, Martin W. Spector and Donald S. Morton (each with power of
substitution) are hereby authorized to vote all the shares which the
undersigned would be entitled to vote if personally present at the annual
meeting of stockholders of The ARA Group, Inc. (the "Company") to be held on
February 8, 1994 and at any adjournment, as follows:
1. Election of Directors.
___ FOR all nominees listed below ___ WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
R.J. Callander, A.K. Campbell, R.R. Davenport, D.J. Davidson, P.L. Defliese,
L.F. Driscoll, Jr., M.S. Fromstein, E.G. Jordan, T.H. Kean, R.C. MacDonald,
J. Neubauer, J.E. Preston
(To withhold authority to vote FOR, write name(s) on line:
________________________________________________________)
2. To consider and act upon a proposal to amend and restate the Certificate
of Incorporation of the Company to eliminate the requirement of a
supermajority vote of directors for certain Board actions and to provide
for certain other matters, as more fully described in the Company's
Proxy Statement dated January 11, 1994.
___ FOR ___ ABSTAIN ___ AGAINST
3. In their discretion upon such other matters as may properly come before
this meeting.
___ GRANT AUTHORITY ___ WITHHOLD AUTHORITY
Any of the above-named proxy agents or their substitutes present and acting at
the meeting shall have all the powers conferred hereby.
If no choice is specified and the card is properly signed and returned, the
shares represented by the proxy card will be voted FOR the election of
directors and the amendment and restatement of the Certificate of
Incorporation, and authority will be deemed GRANTED as to such other matters
that may properly come before the meeting.
Dated:___________________________ ____________________________________________
Signature of Stockholder
IMPORTANT: Please sign exactly as your name or names appear hereon. Joint
owners should each sign personally. If you sign as agent or in another
representative capacity, please state the capacity in which you sign.
**********************************
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
**********************************
PLEASE INDICATE ANY ADDRESS CORRECTIONS OR CHANGES ON THE LABEL ABOVE.
