<PAGE>
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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
(1) Title of each class of securities to which transaction applies:
N/A
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
------------------------------------------------------------------------
(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).
N/A
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
------------------------------------------------------------------------
(5) Total fee paid:
N/A
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
------------------------------------------------------------------------
(3) Filing Party:
N/A
------------------------------------------------------------------------
(4) Date Filed:
N/A
------------------------------------------------------------------------
<PAGE>
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
851 IRWIN STREET
SUITE 200
SAN RAFAEL, CALIFORNIA 94901
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1997
------------------------
To the Stockholders of
CHILDREN'S DISCOVERY CENTERS OF AMERICA, Inc.:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders ("Annual
Meeting") of Children's Discovery Centers of America, Inc., a Delaware
corporation ("CDC" or the "Company"), will be held on June 25, 1997 at 10:00
a.m. local time, in the Beekman I Room of the Hotel Inter Continental, 111 East
48th Street, New York, New York, for the following purposes:
(1) To elect seven directors to serve until the next annual meeting or
until their successors have been elected and qualify;
(2) To ratify the appointment of Arthur Andersen LLP as independent
public auditors for the 1997 fiscal year; and
(3) To transact such other business that may properly come before the
meeting or any adjournment or adjournments thereof.
Details respecting these matters are set forth in the accompanying proxy
statement.
The Board of Directors has fixed the close of business on May 5, 1997 as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting.
Date: May 8, 1997
By Order of the Board of Directors
[SIG]
Frank A. Devine,
SECRETARY
IMPORTANT--YOUR PROXY IS ENCLOSED
YOU ARE URGED TO SIGN, DATE AND MAIL YOUR PROXY EVEN THOUGH YOU MAY PLAN TO
ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE MEETING YOU MAY VOTE BY PROXY OR YOU MAY WITHDRAW YOUR PROXY AND
VOTE IN PERSON. BY RETURNING YOUR PROXY PROMPTLY, A QUORUM WILL BE ASSURED AT
THE MEETING WHICH WILL PREVENT COSTLY FOLLOW-UP AND DELAYS.
<PAGE>
PROXY STATEMENT
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
851 IRWIN STREET
SUITE 200
SAN RAFAEL, CALIFORNIA 94901
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Children's Discovery Centers
of America, Inc. ("CDC" or the "Company") in connection with the Annual Meeting
of Stockholders of the Company ("Annual Meeting") to be held in the Beekman I
Room of the Hotel Inter Continental, 111 East 48th Street, New York, New York,
at 10:00 a.m. local time on June 25, 1997, and at any adjournment or
adjournments thereof.
SOLICITATION OF PROXIES
The expense of preparing, assembling, printing, filing and mailing the
Notice of Meeting, this Proxy Statement, the proxy and other enclosures, and any
other material which may hereafter be used in the Board's solicitation of
proxies, will be borne by the Company. In addition to the solicitation of
proxies by mail, some of the officers, directors and employees of the Company
may (without receiving additional compensation for doing so) solicit proxies by
telephone, telegraph or personal interview, the cost of which will be borne by
the Company. The Company will also request brokerage houses and other
custodians, nominees and fiduciaries to forward the Board's proxy solicitation
materials to the beneficial owners of the Company's voting stock and will
reimburse such brokers and other nominees for their expenses in doing so.
All proxies in the accompanying form which are properly executed and
returned will be voted in accordance with the instructions therein specified for
the purposes set forth in the accompanying Notice of Annual Meeting. If no
instructions are given, such proxies will be voted in favor of (i) the nominees
for election to the Board as set forth below under "Proposal No. 1--Election of
Directors," (ii) the appointment of Arthur Andersen LLP as the independent
auditors for the 1997 fiscal year as set forth under "Proposal No. 2--Approval
of Independent Auditors", and (iii) to transact such other business as may
properly be brought before the meeting or any adjournment thereof. The proxy may
be revoked at any time by a stockholder prior to its exercise by written notice
to the Company, by submission of another proxy bearing a later date, or by
voting in person at the meeting. Such revocation will not affect a vote on any
matter taken prior thereto. The mere presence at the meeting of the person
appointing a proxy will not revoke the appointment. The approximate date of the
mailing of this Proxy Statement and form of proxy to security holders is May 8,
1997.
VOTING SECURITIES--RECORD DATE
Holders of the Company's Common Stock, $.01 par value (the "Common Stock"),
and holders of the Company's Special Stock, $.01 par value, denominated as
Series A Convertible Preferred Stock ("Preferred Stock"), of record at the close
of business on May 5, 1997 (the "Record Date") will be entitled to notice of and
to vote at the Annual Meeting or at any adjournment or adjournments thereof. As
of the Record Date, there were 6,306,958 shares of Common Stock and 2,135 shares
of Preferred Stock issued and outstanding. Each outstanding share of Common
Stock entitles the holder thereof to one vote with respect to all matters
proposed to be voted on by the stockholders at the Annual Meeting. The holders
of Preferred Stock are entitled to vote on all matters on which the holders of
Common Stock are entitled to vote, and each share of Preferred Stock entitles
the holder to that number of votes equal to the number of shares of Common Stock
into which the shares of Preferred Stock are convertible as of the Record Date.
The Common Stock and Preferred Stock shall vote as one class. As of the Record
Date, the Preferred Stock is entitled to 388,181 votes. The presence, in person
or represented by proxy, of shares constituting a majority of the combined
voting power of all issued and outstanding Common Stock and Preferred Stock
entitled to vote shall constitute a quorum at the Annual Meeting.
1
<PAGE>
With respect to the two matters to come before the stockholders at the
Annual Meeting, directors shall be elected by a plurality of the voting power
present in person or represented by proxy at the Annual Meeting and entitled to
vote, and the affirmative vote of the holders of shares representing a majority
of the voting power present in person or represented by proxy at the Annual
Meeting and entitled to vote shall be required for the approval of the
independent public auditors. With respect to the election of directors, only
shares that are voted in favor of a particular nominee will be counted towards
such nominee's achievement of a plurality. Accordingly, abstentions and broker
non-votes will not affect the outcome of the election. With respect to the
appointment of independent public auditors, if the stockholder abstains from
voting, the shares are considered present at the meeting for such matter but,
since they are not affirmative votes for the matter, they will have the same
effect as votes against the matter. With respect to broker non-votes on these
two matters, the shares are not considered present at the Annual Meeting for
such matters and, therefore, are not counted in respect of such matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information, as of the Record Date,
with respect to the beneficial ownership of Common Stock by (i) each person
known by the Company to own beneficially more than 5% of the outstanding shares
of Common Stock, (ii) all directors of the Company individually and (iii) all
executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER* NUMBER PERCENT**
- -------------------------------------------------------------------------------- ---------- ------------
<S> <C> <C>
(A) 5% STOCKHOLDERS
Gruber & McBaine Capital Management, Inc., et al.
50 Osgood Place
San Francisco, CA 94133......................................................... 1,124,400(1) 17.8%
Wellington Management Company
75 State Street
Boston, Massachusetts 02109..................................................... 620,000(2) 9.8%
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, Wisconsin 53202...................................................... 529,500(3) 8.4%
LN Investment Capital Limited Partnership
1675 Broadway
New York, NY 10019.............................................................. 450,908(4) 6.7%
Kennedy Capital Management, Inc.
425 N. New Ballas Road, Suite 181
St. Louis, Missouri 63141....................................................... 356,000(5) 5.6%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue
Santa Monica, California 90401.................................................. 337,900(6) 5.4%
(B) DIRECTORS
Richard A. Niglio............................................................... 425,898(7) 6.4%
Elanna S. Yalow................................................................. 63,567(8) 1.0%
W. Wallace McDowell, Jr......................................................... 26,812(9) ***
Robert E. Kaufmann.............................................................. 23,650(10) ***
Mark P. Clein................................................................... 26,650(11) ***
Michael J. Connelly............................................................. 502,139(12) 7.9%
Myron A. Wick, III.............................................................. 796,550(13) 12.6%
(C) ALL EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP
(includes 10 persons)........................................................... 1,981,416(14) 28.8%
</TABLE>
FOOTNOTES ON FOLLOWING PAGE
2
<PAGE>
- ------------------------------
* Except as noted below, each beneficial owner has sole voting and investment
power with respect to the shares reported.
** Except with respect to LN Investment Capital Limited Partnership ("LNIC")
and Michael J. Connelly, the Managing General Partner of LNIC, as well as
all executive officers and directors as a group, the percentages do not give
effect to any shares of Common Stock issuable upon conversion of shares of
issued and outstanding Preferred Stock, all of which are held by LNIC.
*** Represents less than 1% of the outstanding Common Stock.
(1) According to information supplied to the Company by Gruber & McBaine Capital
Management, Inc. ("GMCM"), an investment adviser, Jon D. Gruber and J.
Patterson McBaine, the executive officers, directors and stockholders of
GMCM, Lagunitas Partners, L.P. ("Lagunitas"), an investment partnership for
which GMCM and Messrs. Gruber and McBaine are the general partners,
Proactive Investment Managers, L.P. ("PIM") as the general partner of
Proactive Partners, L.P. ("PP") and Fremont Proactive Partners, L.P.
("FPP"), two investment partnerships, and Charles C. McGettigan and Myron A.
Wick, III, who are general partners (along with Messrs. Gruber and McBaine),
in PIM, and GMJ Investments, Inc. ("GMJ" and, collectively with each of the
foregoing and certain other related persons and entities, the "G&M Group"),
members of the G&M Group own, in the aggregate, the number of shares set
forth in the chart above. The shares reported by the G&M Group do not
include shares issuable upon exercise of options exercisable within 60 days
after the Record Date which Mr. Wick has received in his capacity as a
director of the Company.
(2) Based on information set forth in a Schedule 13G (Amendment No. 1) dated
January 24, 1997.
(3) Based on information set forth in a Schedule 13G dated February 12, 1997.
(4) Includes of 388,181 shares of Common Stock issuable upon conversion of 2,135
shares of Preferred Stock owned by LNIC. Does not include shares of Common
Stock owned directly by certain of the partners of LNIC.
(5) Based on information set forth in a Schedule 13G dated February 7, 1997.
(6) Based on information set forth in a Schedule 13G dated February 5, 1997.
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 337,900 shares of
Children's Discovery Centers of America, Inc.'s stock as of December 31,
1996, 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, all of which Dimensional Fund Advisors
Inc., serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(7) Consists of 92,900 shares owned directly by Mr. Niglio, 2,000 shares owned
by Mr. Niglio's wife and 330,998 shares issuable upon exercise of currently
exercisable options and options exercisable within 60 days after the Record
Date. Mr. Niglio disclaims beneficial ownership of shares owned by his wife.
(8) Consists of 10,600 shares of Common Stock owned by Dr. Yalow and 52,967
shares issuable upon exercise of currently exercisable options and options
exercisable within 60 days after the Record Date.
(9) Consists of 5,262 shares of Common Stock owned by Mr. McDowell and 21,550
shares issuable upon exercise of currently exercisable options and options
exercisable within 60 days after the Record Date.
(10) Consists of 2,100 shares of Common Stock owned by Mr. Kaufmann and 21,550
shares issuable upon exercise of currently exercisable options and options
exercisable within 60 days after the Record Date.
(11) Consists of 5,100 shares of Common Stock owned by Mr. Clein and 21,550
shares issuable upon exercise of currently exercisable options and options
exercisable within 60 days after the Record Date.
(12) Consists of 28,182 shares owned directly by Mr. Connelly, 67,727 shares of
Common Stock owned by LNIC and 388,181 shares of Common Stock issuable upon
conversion of 2,135 shares of Preferred Stock and 18,050 shares issuable
upon exercise of currently exercisable options and options exercisable
within 60 days after the Record Date. Mr. Connelly is the Managing General
Partner of LNIC. Mr. Connelly disclaims beneficial ownership of shares of
Common Stock owned by LNIC and issuable to LNIC upon conversion of the
Preferred Stock, except to the extent of his proportionate interest therein.
3
<PAGE>
(13) Consists of 45,000 shares owned by four trusts for benefit of Mr. Wick or
members of his family, 4,000 shares owned by Mr. Wick as custodian for his
children, 729,500 shares owned by two investment partnerships which are part
of the G&M Group and for which Mr. Wick may be deemed to have shared voting
and dispositive power, and 18,050 shares issuable upon exercise of currently
exercisable options and options exercisable within 60 days after the Record
Date.
(14) Includes 581,024 shares of Common Stock issuable upon exercise of currently
exercisable options and options exercisable within 60 days after the Record
Date
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, a board of seven (7) directors is to be elected.
Unless a proxy specifies that it is not to be voted for the election of
directors or for any particular director, it is intended that shares represented
by each duly executed and returned proxy will be voted FOR the election as
directors of the persons named below. Each of the persons named below is now a
director of CDC and was elected at the last annual meeting of stockholders. The
directors elected will hold office until the next annual meeting of stockholders
or until their respective successors are duly elected and qualify. If any
nominee subsequently withdraws or is otherwise unable to serve as a candidate
for election at the Annual Meeting, an event which the Board of Directors does
not anticipate, the proxies will be voted for a substitute nominee and the
others named below.
<TABLE>
<CAPTION>
NAME AND YEAR FIRST ELECTED
PRINCIPAL OCCUPATION AGE AS A DIRECTOR
- ------------------------------------------------------------------------------------------ --- -------------------
<S> <C> <C>
Richard A. Niglio* **..................................................................... 54 1987
Chairman & Chief Executive Officer
of the Company
Elanna S. Yalow........................................................................... 42 1996
President & Chief Operating
Officer of the Company
W. Wallace McDowell, Jr.****.............................................................. 60 1984
Private Investor
Robert E. Kaufmann***..................................................................... 56 1985
Consultant
Michael J. Connelly* ** ***............................................................... 46 1992
President of Lepercq
Capital Management, Inc.
Mark P. Clein**........................................................................... 37 1991
Chief Financial Officer,
PMR Corporation
Myron A. Wick, III* ****.................................................................. 53 1993
Managing Director,
McGettigan, Wick & Co., Inc.
</TABLE>
- ------------------------
*Member of the Executive Committee
**Member of the Audit Committee
***Member of the Quality Committee
****Member of the Compensation Committee
Richard A. Niglio was appointed Chief Executive Officer of CDC in March
1987. From 1982 until joining CDC, he was President, Chief Executive Officer and
a director of Victoria Station Incorporated, a restaurant chain based in
Larkspur, California. From 1971 until 1982, Mr. Niglio was President of
4
<PAGE>
Mr. Donut of America, Inc., a wholly-owned subsidiary of International
Multifoods Corp. Mr. Niglio is currently a director of PMR Corporation, a
manager of psychiatric partial hospitalization services.
Elanna S. Yalow has been President and a director of the Company since
January 1996. Dr. Yalow was retained by the Company from 1989 until 1992 as a
consultant to develop the Company's employee-sponsored business, and was
appointed as a Vice President in 1992 and was promoted to Executive Vice
President in 1994.
W. Wallace McDowell, Jr. has been a director of CDC since November 1984. Mr.
McDowell is currently a private investor. From January 1991 until October 1994,
Mr. McDowell was a Managing Director of Morgan Lewis Githens & Ahn, the general
partner of an investment partnership concentrating on leveraged transactions.
Mr. McDowell was Chairman and Chief Executive Officer of The Prospect Group,
Inc., from November 1983 to January 1990. Mr. McDowell is a director of U.S.
HomeCare Corporation, a provider of comprehensive home health care services,
Excelsior Funds, a group of mutual funds, and I.T.I. Technologies, Inc., a
manufacturer of home security devices.
Robert E. Kaufmann has been a director of CDC since July 1985. Since June 1,
1995, Mr. Kaufmann has been an executive search consultant for Spencer Stuart.
From 1980 until July 1994, Mr. Kaufmann was Headmaster of Deerfield Academy,
Deerfield, Massachusetts. From 1971 to 1975, he was Assistant Dean and from 1975
to 1980 Associate Dean for Finance and Administration, Faculty of Arts and
Sciences, Harvard University.
Mark P. Clein has been a director of CDC since April 1991. Since May 1996,
Mr. Clein has been Chief Financial Officer of PMR Corporation, a manager of
psychiatric partial hospitalization services. Mr. Clein was a Managing Director
of Jefferies & Co., Inc., an investment banking firm from August 1995 to May
1996. Mr. Clein was a Managing Director of Mabon Securities Corp., an investment
banking firm, from March 1993 until March 1995, and a director of Rodman &
Renshaw Inc., an investment banking firm, from March to August 1995. Mr. Clein
was a Vice President of Sprout Group, the venture capital affiliate of
Donaldson, Lufkin & Jenrette, Inc., from May 1991 until March 1993. From January
1989 to April 1991, Mr. Clein served as acting Chief Executive Officer of Magic
Years Child Care & Learning Centers, Inc., an operator of child care centers
located in the Northeast acquired by CDC in April 1991, and served as Chairman
of the Board from March 1990 to September 1990. From 1982 until February 1990
and from August 1990 to May 1991, Mr. Clein was a Vice President of Merrill
Lynch Venture Capital, Inc.
Michael J. Connelly has been a director of CDC since November 1992. Since
April 1987, Mr. Connelly has been President of Lepercq Capital Management, Inc.,
the venture capital subsidiary of Lepercq de Neuflize & Co. Inc., a New
York-based portfolio management and investment banking firm, and the Managing
General Partner of LN Investment Capital Limited Partnership ("LNIC"). He is
also Chairman, Chief Executive Officer and a director of The MNI Group, Inc., a
public company engaged in the weight-control and health and beauty aid
businesses. Mr. Connelly was nominated for election as a director pursuant to an
agreement entered into in connection with the Company's acquisition of American
Family Service Corporation ("AFSC") in November 1992. See "Certain Relationships
and Related Transactions."
Myron A. Wick, III has been a director of CDC since June 1993. Since 1988,
Mr. Wick has been a Managing Director of McGettigan, Wick & Co., Inc., a private
investment banking firm. Since 1991, Mr. Wick has been a general partner of
Proactive Investment Managers, L.P., which is the general partner of Proactive
Partners, L.P., a merchant banking fund. Mr. Wick is a director of the following
public companies: NDE Environmental Corporation, which provides systems and
services to detect leaks in underground storage tanks, Phoenix Network, Inc., a
reseller of long distance telephone service, Sonex Research, Inc., which is
engaged in development of fuel combustion technology, WrayTech Instruments,
Inc., which manufactures and sells industrial weighing gauges, Modtech, Inc.,
which designs, manufactures and installs modular relocatable classrooms, and
DIGITAL DICTATION, INC., a medical transcription firm which supplies services to
hospitals and medical groups. Mr. Wick was Chairman of the Board of Stat-Tech
International Corporation, which filed for bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code in
5
<PAGE>
June 1992; the assets of Stat-Tech International Corporation have been acquired
by Electro-Static Devices, Inc., for which Mr. Wick serves as a director.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1996, CDC's Board of Directors met four times and took actions once
by unanimous consent. There are four standing committees of the Board of
Directors, the functions of which are described below.
THE AUDIT COMMITTEE. The functions of the Audit Committee are to recommend
to the Board the appointment of independent public accountants for CDC and the
terms of their engagement, and to review, coordinate, analyze and assess
financial information presented to it by the independent public accountants and
the Chief Financial Officer of CDC. The Audit Committee is comprised of Messrs.
Connelly, Clein and Niglio. The Audit Committee met once during 1996.
THE COMPENSATION COMMITTEE. The task of the Compensation Committee is to
review and determine levels of executive compensation for CDC, as well as to
administer CDC's Stock Option Plan. The Compensation Committee is currently
comprised of Messrs. McDowell and Wick. The Compensation Committee took action
by unanimous written consent three times during 1996.
THE EXECUTIVE COMMITTEE. During intervals between the meetings of the Board
of Directors, the Executive Committee exercises all the powers of the Board
(except those specifically reserved by Delaware law to the full Board of
Directors) in the management and direction of the business of CDC in all cases
in which specific directions have not been given by the Board. The Executive
Committee is comprised of Messrs. Connelly, Wick and Niglio. The Executive
Committee did not meet during 1996.
THE QUALITY COMMITTEE. This committee is charged with the task of
establishing and implementing policies and procedures in the following areas:
curriculum, training, safety and remediation. The Quality Committee consists of
Mr. Kaufmann and Mr. Connelly. The Quality Committee did not meet during 1996.
There is no nominating committee or any committee performing similar
functions. The Board determines nominees for election to the Board, subject to
any applicable agreements giving certain persons the right to designate a
nominee.
During 1996, no director attended fewer than 75% of the aggregate of the
total number of meetings of the Board or the total number of meetings of the
Committees on which any individual director served, except Mr. McDowell who was
unable to attend two meetings of the Board.
DIRECTORS FEES AND OPTIONS
Directors of CDC are reimbursed for actual expenses incurred in connection
with attendance at CDC Board and Committee meetings. Directors who are employed
by CDC receive no director fees, while other directors each receive a retainer
of $10,000.00 a year, plus $1,000.00 for attendance at each Board meeting and
$500.00 for attendance at each Committee meeting.
During 1993, the Company established a Non-Employee Directors' Stock Option
Plan ("Directors' Plan") and authorized the reservation of 180,000 shares of
Common Stock for issuance thereunder. Pursuant to the Directors' Plan, effective
as of December 9, 1993 (the date on which an underwritten public offering of its
Common Stock was commenced (the "1993 Public Offering"), each of the non-
employee directors of the Company (consisting of Messrs. McDowell, Kaufmann,
Clein, Connelly and Wick) received an option to purchase 11,500 shares of Common
Stock at an exercise price of $8.00 per share, which was the offering price of
the Common Stock in the 1993 Public Offering. In addition, pursuant to the
Directors' Plan, upon reelection to the Board following the Company's annual
meeting in 1995 and 1996, each non-employee director received an option to
purchase 3,500 shares of Common Stock at exercise prices of $16.38 and $7.63 per
share, respectively. No director is entitled to receive, in the
6
<PAGE>
aggregate, options to purchase more than 30,000 shares of Common Stock under the
Directors' Plan. In August 1996, the Directors' Plan was amended to eliminate
the automatic grant of stock options upon reelection to the Board of Directors
of any person and to authorize the Board or the Compensation Committee to grant
options on a discretionary basis to non-employee directors in such amounts as
the Board or the Committee deems appropriate and with no individual limitation.
Simultaneously each non-employee director was granted options for 6,000 shares
under the Directors' Plan, one-third of which were immediately exercisable and
an additional one-third of which are exercisable on each of the first two
anniversaries of the date of grant. Options granted under the Directors' Plan
have an exercise price equal to the fair market value of the Common Stock on the
date of grant. All options granted under the Directors' Plan will expire ten
years from the date of grant.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission (the
"SEC") initial reports of ownership of Common Stock on Form 3 and reports of
changes in ownership of Common Stock on Forms 4 or 5 and to furnish the Company
with copies of all forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than ten percent
beneficial owners were complied with in 1996.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR election of
the seven persons nominated for election. The seven persons who have the highest
number of votes for election as directors will be elected.
EXECUTIVE COMPENSATION
The following table summarizes, for the years ended December 31, 1996, 1995,
and 1994, all compensation paid to the Company's Chief Executive Officer and any
other executive officer of the Company whose total compensation (i.e., salary
plus bonus) for 1996 exceeded $100,000 (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING
NAME AND POSITION YEAR SALARY BONUS OPTIONS
- ------------------------------------------------------- --------- ---------- --------- -------------------
<S> <C> <C> <C> <C>
Richard A. Niglio...................................... 1996 $ 295,000 $ 0 40,000
Chairman and 1995 295,000 $ 0 0
Chief Executive Officer 1994 227,000 $ 54,200 80,280
Elanna S. Yalow........................................ 1996 $ 125,000 $ 0 20,000
President and 1995 95,000 $ 0 0
Chief Operating Officer 1994 95,000 $ 17,400 16,055
</TABLE>
7
<PAGE>
EMPLOYMENT AGREEMENTS AND SEVERANCE AGREEMENTS
There are currently no employment or severance agreements between the
Company and any of its executive officers. Mr. Niglio was party to an employment
agreement which provided for his employment as Chairman, President and Chief
Executive Officer of the Company for a term expiring on December 31, 1996. The
agreement expired by its terms and a new agreement is being negotiated.
CDC STOCK OPTION PLAN
CDC has one stock option plan pursuant to which options may be granted to
its officers and employees, the CDC Stock Option Plan (herein referred to as the
"Option Plan"). Options for a total of 800,000 shares of Common Stock may be
granted under the Option Plan; as of the Record date, options for a total of
775,714 shares were issued and outstanding.
OPTION GRANTS IN 1996
The following table sets forth for each of the Named Executive Officers,
information regarding grants of stock options made by the Company to such
persons during the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR
GRANTED TO OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED (#) (1) FISCAL YEAR (1) ($/SH) DATE 5% ($) 10% ($)
- ----------------------------------------- --------------- ----------------- ----------- ------------- ---------- ----------
Richard A. Niglio
Chief Executive Officer................ 40,000 33.6% $ 4.625 2006 $ 301,346 $ 479,842
Elanna S. Yalow
President.............................. 20,000 16.8% $ 4.625 2006 $ 150,673 $ 239,921
</TABLE>
- ------------------------
(1) The option vests 30% on the date of grant and then 23- 1/3% of the total
grant on the first, second, and third anniversaries of the date of grant,
respectively.
The following table sets forth for each of the Named Executive Officers
information regarding stock options exercised by such executive officer during
the fiscal year ended December 31, 1996, together with the number and value of
stock options held by such officer as of December 31, 1996.
<TABLE>
<CAPTION>
SECURITIES UNDERLYING
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT 1996 YEAR IN-THE-MONEY OPTIONS AT
SHARES END 1996 YEAR-END(1)
ACQUIRED ON VALUE ----------------------- -----------------------
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------------- ----------------- --------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Richard A. Niglio...................... 0 0 330,988/59,282 $ 448,112/$115,570
Chairman of the Board and
Chief Executive Officer
Elanna S. Yalow........................ 0 0 48,309/17,746 $ 78,915/$9,880
President, and
Chief Operating Officer
</TABLE>
- ------------------------
(1) Based on the closing price of Common Stock on December 31, 1996, which was
$7.00 per share.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Company's compensation program for executive officers is administered by
the Compensation Committee of the Board of Directors (the "Committee"), which
consists of two non-employee members of the Board of Directors, W. Wallace
McDowell, Jr. and Myron A. Wick, III. The compensation program is comprised of
three elements: (i) base salary, (ii) annual incentive compensation, and (iii)
long-term incentive compensation in the form of stock options. Generally, the
philosophy of the program is to set base salaries somewhat below competitive
levels to permit the Company to rely to a large degree on the annual and
long-term incentive compensation components, which are more closely linked to
Company performance; each year's annual incentive compensation is directly
linked to the Company's earnings in that year, while stock options indirectly
reflect the Company's performance through changes in the market price of the
Common Stock.
With respect to base salary for executive officers other than Mr. Niglio,
the Committee reviews and generally accepts recommendations of Mr. Niglio, who
is in the best position to evaluate performance, competitive salaries and
relative company rank. The Committee reserves the right, however, to question
Mr. Niglio's recommendation and to discuss with him the bases for his
recommendations.
The base salary of Mr. Niglio is determined by the Committee upon an
evaluation of his overall job performance, with consideration given to both
quantitative and qualitative factors. Quantitative factors include the growth in
Company revenues, achievement of forecasted working capital position and the
progress made in expansion of the business through acquisition of additional
child care centers. Qualitative factors include Mr. Niglio's leadership
qualities, his impact on employee morale and his ability to enhance the
Company's industry reputation. Mr. Niglio's base salary for 1996 of $295,000 was
not increased over his 1995 base salary. The Committee has not increased Mr.
Niglio's base salary for 1997.
With respect to the annual incentive compensation component, in 1992 the
Company established an incentive plan which provides for the creation of an
incentive bonus pool in each year from which payments are made to executive
officers based on the Company's earnings in that year. The portion of the
incentive pool each officer is eligible to receive is based on the officer's
base salary as a percentage of the aggregate base salary of all participating
officers. In 1996, the Company's level of earnings did not reach the minimum
requirements of the incentive plan; consequently no bonuses were earned.
The third component of the compensation program consists of the awarding of
options to purchase Common Stock under the Company's Stock Option Plan (the
"Option Plan"). Stock options may be granted under the Option Plan with an
exercise price of no less than 85% of the fair market value of the Common Stock
on the date of grant, although all options granted under the Option Plan to date
have been granted at exercise prices which are not less than 100% of the fair
market value on the respective dates of grant. In addition, options granted
under the Option Plan are generally subject to a three year vesting period.
Accordingly, an optionee will realize value from the grant only if the market
value of the Common Stock increases over an extended period following the date
of grant. Because the compensation element of stock options is dependent on
increases over time in market value of such shares, stock options represent
compensation tied to the Company's long-term performance. The Committee believes
compensation in the form of stock options serves to align the interests of the
executive officers directly with the interests of the Company's stockholders.
Options granted to the Named Executive Officers during 1996 are disclosed above.
The number of options granted to any officer under the Option Plan is
determined by the Committee based on a number of factors, including that
officer's corporate level of responsibility and performance, the frequency and
number of options granted to that officer in the past and compensation paid or
awarded to that officer under other aspects of the compensation program. In
granting options for 40,000 shares to Mr.
9
<PAGE>
Niglio in 1996, the Committee considered that he had not been granted any
options in 1995 and that no bonuses were paid under the Company's incentive plan
for 1995.
COMPENSATION DEDUCTION LIMITATION
As part of the 1993 Omnibus Budget Recirculation Act, Congress enacted
Section 162(m) of the Internal Revenue Code of 1986 (the "Code"), which limits
to $1 million per year the federal income tax deduction available to public
companies of compensation paid to its chief executive officers and, in certain
cases, its four other highest paid executive officers, unless that compensation
qualifies for certain "performance-based" exceptions provided for in that
section. Although it is anticipated that cash compensation payable to the
Company's executive officers for the next several years will not exceed the $1
million limitation, the Company's strategy, nevertheless, is to qualify
compensation paid to its executive officers for deductibility for federal income
tax purposes to the extent feasible. Notwithstanding the foregoing, to maximize
its flexibility with regard to executive compensation arrangements, the Company
reserves the right to take actions which it deems to be in the best interests of
the Company and its stockholders but which may not always qualify for tax
deductibility under Section 162(m) or other sections of the Code.
COMPENSATION COMMITTEE
W. Wallace McDowell, Jr.
Myron A. Wick, III
COMPENSATION COMMITTEE REPORT ON REPRICING OF STOCK OPTIONS
On August 27, 1996 upon recommendation of the Compensation Committee, the
Board of Directors of the Company reduced the exercise price of all previously
granted options with exercise prices greater than $6.00 to $5.25, which was the
closing market price of the Company's Common Stock as reported on the NASDAQ
National Market as of that date. The Compensation Committee, in making its
recommendation to the Board of Directors, and the Board of Directors, in acting
to reduce the exercise price of the stock options considered several factors.
One was the decline in the price of the Common Stock over a period of
approximately [one year] prior to the date of the repricing, which resulted in
many of the previously granted stock options having exercise prices well in
excess of the prevailing market price for the Common Stock at the time of the
repricing. As a consequence, the impact of the stock options as a motivational
tool and as a reward to the recipients was significantly eroded. In addition,
the Committee and the Board considered that no payments were made to the
Company's executive officers under the Company's incentive plan for 1995 and,
based on information available to management at the time of the repricing, it
appeared that no payments would be made for 1996 as well. In view of the
Company's reliance on stock options as a major component of its compensation
program, and that another component of the program, the incentive plan, had not
been a source of income to the Company personnel in 1995 and would not be a
source of income in 1996, the Committee and Board believed that the reduction in
the exercises prices of the options was critical to retaining and motivating the
executive personnel and others who are in a position to contribute substantially
to the progress and success of the Company. Exercise prices for options to
purchase an aggregate of 387,244 shares outstanding on August 27, 1996 were
reduced by the Board.
The following table sets forth for Mr. Niglio, Dr. Yalow and the Company's
other executive officers a summary of all repricing of options previously
granted to them which was effected during the ten year period ending December
31, 1996 (including the repricing which occurred in August 1996).
10
<PAGE>
<TABLE>
<CAPTION>
TEN YEAR OPTION REPRICING
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LENGTH OF
EXERCISE ORIGINAL
# OF MARKET PRICE AT OPTION
SECURITIES PRICE OF TIME TERM
DATE UNDERLYING STOCK AT OF NEW REMAINING
OF OPTIONS TIME OF REPRICING EXERCISE AT DATE OF
NAME REPRICING REPRICED REPRICING PRICE PRICE REPRICING
- --------------------------------------- --------- ----------- ----------- ----------- ----------- -----------
Richard A. Niglio...................... 8/27/96 72,500 $ 5.25 $ 8.00 $ 5.25 6.5 yrs.
8/27/96 37,500 $ 5.25 $ 8.00 $ 5.25 6.5 yrs.
8/27/96 66,391 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
8/27/96 13,889 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
10/19/92 38,750 $ 6.00 $ 10.00 $ 6.00 5.0 yrs.
Elanna S. Yalow........................ 8/27/96 13,277 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
8/27/96 17,500 $ 5.25 $ 8.00 $ 5.25 6.5 yrs.
8/27/96 2,778 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
10/19/92 3,125 $ 6.00 $ 10.00 $ 6.00 5.0 yrs.
Randall J. Truelove.................... 8/27/96 13,277 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
8/27/96 17,500 $ 5.25 $ 8.00 $ 5.25 6.5 yrs.
8/27/96 2,778 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
10/19/92 2,500 $ 6.00 $ 10.00 $ 6.00 5.0 yrs.
Frank A. Devine........................ 8/27/96 13,277 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
8/27/96 17,500 $ 5.25 $ 8.00 $ 5.25 6.5 yrs.
8/27/96 2,778 $ 5.25 $ 10.25 $ 5.25 8.3 yrs.
10/19/92 2,500 $ 6.00 $ 10.00 $ 6.00 5.0 yrs.
</TABLE>
COMPENSATION COMMITTEE
W. Wallace McDowell, Jr.
Myron A. Wick, III
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Niglio, Chairman and Chief Executive Officer of the Company, is a
director and member of the Compensation Committee of PMR Corporation. Mark P.
Clein, a director of the Corporation, is Chief Financial Officer of PMR
Corporation.
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective November 5, 1992, CDC acquired American Family Service Corporation
("AFSC") pursuant to the merger of a wholly-owned subsidiary of CDC with and
into AFSC. Pursuant to the terms of a Shareholders Agreement with LNIC, the
principal stockholders of AFSC, entered into simultaneously with the Agreement
and Plan of Merger, LNIC was granted the right to designate one person as a
director of CDC upon consummation of the acquisition of AFSC, and to thereafter
require CDC to include in the slate of nominees for election of directors at any
meeting of stockholders of CDC at which directors are elected, and to solicit
proxies for, one nominee selected by LNIC for so long as the shares owned by
LNIC, including shares issuable upon conversion of the Preferred Stock,
constitute more than 5% of the total number of shares of Common Stock issued and
outstanding. Michael J. Connelly is LNIC's designee on the Board.
In 1993 and 1994, the Company furnished loans to each of its executive
officers in connection with their purchases of shares of Common Stock. In
connection with a private placement of shares in 1993, the Company loaned
$200,200 to Mr. Niglio and $20,075 to each of Dr. Yalow, Randall J. Truelove,
Vice President, Finance, Frank A. Devine, Secretary and General Counsel and one
other executive officer who is no longer employed by the Company, constituting
the purchase price for their respective shares. Each of the loans bears interest
at 5.5% annum and is payable in 36 equal monthly installments of principal and
interest, commencing on May 1, 1996. The Board of Directors of the Company has
deferred indefinitely the payment of interest and principal of those loans. In
connection with their purchases of publicly registered shares in 1994, the
Company loaned $224,475 to Mr. Niglio and $33,825 to each of Dr. Yalow, Mr.
Truelove, Mr. Devine and the former executive officer, constituting
substantially all of the purchase price for their respective shares. Those loans
bear interest at the rate of 7.3% per annum, and are payable in 36 monthly
installments of principal and interest commencing in December 1997. As of March
31, 1997, the aggregate amount of indebtedness of each of the executive officers
to the Company pursuant to the 1993 and 1994 loans was $505,932 for Mr. Niglio
and $64,016 for each of Dr. Yalow, Mr. Truelove and Mr. Devine.
STOCK PERFORMANCE GRAPH
The following stock performance graph reflects a comparison of the
cumulative total return on an investment in the Common Stock of the Company from
December 31, 1991 through December 31, 1996 with the Amex Market Value Index, an
old "Peer Group" of other publicly traded companies (KinderCare Learning
Centers, Inc., Sunrise Preschools, Inc., and Nobel Education Dynamics, Inc.) and
a new "Peer Group" which consists of members of the old "Peer Group" plus two
additional companies primarily engaged in child care services, Kiddie Academy
International, Inc. and New Horizon Kids Quest, Inc., both of which conducted
initial public offerings in 1995. The Company has elected to utilize a new Peer
Group because it believes that the new Peer Group constitutes a more
representative sample of publicly-owned companies which are competitive with the
Company. Dividend reinvestment has been assumed and, with respect to companies
in the old and new Peer Groups, the performance of each such company's stock has
been weighed to reflect relative stock market capitalization. The comparisons in
this table are required by the SEC and, therefore, are not intended to forecast
or be indicative of possible future performance of the Company's Common Stock.
12
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.,
THE AMEX MARKET VALUE INDEX AND AN OLD AND NEW PEER GROUP
[ART]
- ------------------------
* Assumes $100 was invested on December 31, 1991 in the applicable stock or
index, and that all dividends were reinvested.
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------------------------------
1991 1992 1993 1994 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Children's Discovery Centers of America, Inc. ....................... $ 100 $ 97 $ 189 $ 239 $ 108
Old Peer Group....................................................... 100 343 5754 5243 6392
New Peer Group....................................................... 100 343 5754 5243 6392
AMEX Market Value Index.............................................. 100 101 121 110 139
<CAPTION>
1996
---------
<S> <C>
Children's Discovery Centers of America, Inc. ....................... $ 147
Old Peer Group....................................................... 8178
New Peer Group....................................................... 8169
AMEX Market Value Index.............................................. 148
</TABLE>
13
<PAGE>
PROPOSAL NO. 2
APPROVAL OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee of the Board of Directors,
the Board has appointed Arthur Andersen LLP as the independent auditors of CDC
for the 1997 fiscal year, and has determined that it would be desirable to
request that CDC's stockholders ratify such appointment. If the appointment of
Arthur Andersen LLP is not ratified, the Audit Committee and Board of Directors
will reconsider the appointment.
Arthur Andersen LLP was the independent auditor for CDC's 1996 fiscal year,
and during such period provided audit services which included the examination of
consolidated financial statements of CDC. All fees paid by CDC to the
independent auditors are paid in respect of such auditing services at a rate
believed by CDC to be customary for companies similarly situated.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting and will be accorded an opportunity to make such statements as he
or she desires. In addition, such representative will be available to respond to
appropriate questions submitted by stockholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends a vote FOR the appointment of Arthur Andersen LLP as
independent auditors. The affirmative vote of the holders of shares representing
a majority of the combined voting power of Common Stock and Preferred Stock
present, in person or by proxy, at the Annual Meeting is required for approval
of Proposal No. 2.
GENERAL INFORMATION
STOCKHOLDER PROPOSALS. The date by which matters must be submitted for
inclusion in next year's Notice of Annual Meeting and Proxy Statement for voting
at the 1997 annual meeting of stockholders is January 8, 1998.
ANNUAL REPORT. The Company's Annual Report for the fiscal year ended
December 31, 1996 accompanies this Proxy Statement. Stockholders who wish to
obtain, free of charge, a copy of the Company's Form 10-K for the year ended
December 31, 1996, as filed with the SEC, may do so by writing or calling Frank
A. Devine, Secretary, Children's Discovery Centers of America, Inc., 851 Irwin
Street, Suite 200, San Rafael, California 94901, Telephone: (415) 257-4200.
OTHER MATTERS. As of the date of this Proxy Statement, the Board is not
aware of any other matters to be presented for action. However, if any other
matters are properly brought before the meeting, it is intended that the persons
voting the accompanying proxy will vote the shares represented thereby in
accordance with their best judgement.
Dated: May 8, 1997
BY ORDER OF THE BOARD OF DIRECTORS
[SIG]
FRANK A. DEVINE, Secretary
14
<PAGE>
CHILDERN'S DISCOVERY CENTERS OF AMERICA, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders, Wednesday, June 25, 1997.
The undersigned stockholder of CHILDERN'S DISCOVERY CENTERS OF AMERICA,
INC., a Delaware corporation, hereby appoints Richard A. Niglio and Frank A.
Devine, or either of them voting singly in the absence of the other, attorneys
and proxies, with full power of substitution and revocation, to vote, as
designated below, all shares of Common Stock of Childern's Discovery Centers of
America, Inc., which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of said Corporation to be held at the Beekman I Room of the
Hotel Inter Continental, 111 East 48th Street, New York, New York, on June 25,
1997, at 10:00 A.M. (local time) or any adjournment thereof, in accordance with
the instructions on the reverse side:
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED "FOR" ALL NOMINEES LISTED IN ITEM NO. 1 AND "FOR" ITEM NO. 2.
(CONTINUED ON REVERSE SIDE)
<PAGE>
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as withheld in the space pro- for all nominees listed below / /
vided) / /
</TABLE>
Richard A. Niglio, Elanna S. Yalow, W. Wallace McDowell, Jr., Robert E.
Kaufmann, Michael J. Connelly, Mark P. Clein, Myron A. Wick, III
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
______________________________________________________________________________
The Board of Directors recommends a vote "FOR" all nominees.
2. APPROVAL OF INDEPENDENT AUDITORS
FOR / / AGAINST / / ABSTAIN / /
The Board of Directors recommends a vote "FOR" Item No. 2.
Please sign exactly as name appears
hereon.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by an authorized
officer. If a partnership, please
sign in partnership name by an
authorized person.
Dated: ______________________, 1997
___________________________________
Signature
___________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
