SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
BLUEGREEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
[_] Fee paid previously with preliminary materials:
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[_] 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:
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<PAGE>
[LOGO]
BLUEGREEN
4960 Blue Lake Drive
Boca Raton, Florida 33431
Tel: (561) 912-8000 Fax: (561) 912-8100
June 28, 1999
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Bluegreen Corporation (the "Company") which will be held at the Hotel
Inter-Continental New York at 111 East 48th Street (between Park Avenue and
Lexington Avenue), New York, New York, on Wednesday, July 28, 1999, at 10:00
a.m., local time.
The accompanying Notice of the Annual Meeting and Proxy Statement describe
the formal business to be transacted at the meeting and contain certain
information about the Company and its officers and Directors. Following the
meeting we will also report on the operations of the Company. Directors and
executive officers of the Company will be present to respond to any questions
that you may have.
Please sign, date and return the enclosed proxy card promptly. If you
attend the meeting, and we sincerely hope you will, you may vote in person even
if you have previously mailed a proxy card.
Thank you for your attention and continued interest in our Company. We look
forward to seeing you at the meeting.
Very truly yours,
/s/ George F. Donovan
George F. Donovan
President and Chief Executive Officer
<PAGE>
BLUEGREEN CORPORATION
4960 Blue Lake Drive
Boca Raton, Florida 33431
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 28, 1999
The Annual Meeting of the Shareholders of Bluegreen Corporation will be
held at the Hotel Inter-Continental New York at 111 East 48th Street (between
Park Avenue and Lexington Avenue), New York, New York, on Wednesday, July 28,
1999, at 10:00 a.m., local time, to consider and act on the following matters:
(1) To elect three Directors;
(2) To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending April 2, 2000; and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
The close of business on June 11, 1999, has been fixed as the record date
for determining the shareholders entitled to notice of, and to vote at, the
annual meeting.
THE PRESENCE OF A QUORUM IS IMPORTANT. THEREFORE, YOU ARE URGED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY BY MAIL WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON, BUT WILL
ENSURE THAT YOUR VOTE IS COUNTED IF YOU ARE UNABLE TO ATTEND THE MEETING.
By order of the Board of Directors,
/s/ Patrick E. Rondeau
Patrick E. Rondeau
Clerk
June 28, 1999
<PAGE>
BLUEGREEN CORPORATION
4960 Blue Lake Drive
Boca Raton, Florida 33431
(561) 912-8000
----------------------------
Annual Meeting of Shareholders
July 28, 1999
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PROXY STATEMENT
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Information Concerning Solicitation
This Proxy Statement is furnished to the holders of common stock, par value
$.01 (the "Common Stock") of Bluegreen Corporation (the "Company") in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held at
the Hotel Inter-Continental New York at 111 East 48th Street (between Park
Avenue and Lexington Avenue), New York, New York, on Wednesday, July 28, 1999,
at 10:00 a.m., local time, and at any adjournment or postponement thereof. If
the enclosed proxy is signed and returned and is not revoked, it will be voted
at the Annual Meeting in accordance with the instructions of the shareholder(s)
who execute it. If no instructions are given, the proxy will be voted FOR the
election of the nominees for Director and FOR the other proposals set forth in
the Notice of Annual Meeting described herein. The proxy of any shareholder may
be revoked by such shareholder in writing addressed to Patrick E. Rondeau, the
Clerk of the Company, at the above address or in person at any time before it is
voted. Submission of a later dated proxy will revoke an earlier dated proxy.
All costs of solicitation will be borne by the Company. The solicitation is
to be principally conducted by mail and may be supplemented by telephone and
personal contacts by Directors, executive officers and regular employees of the
Company, without additional remuneration. Arrangements will be made with
brokerage houses, banks and custodians, nominees and other fiduciaries to
forward solicitation materials to the beneficial owners of shares held of
record. The Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred in connection with the distribution of proxy
materials.
It is anticipated that this Proxy Statement and the enclosed proxy,
together with the Company's annual report to shareholders, will first be mailed
to shareholders on or about June 28, 1999.
Outstanding Voting Securities
The Board of Directors has fixed the close of business on June 11, 1999
(the "Record Date") as the date for determining the shareholders entitled to
receive notice of, and to vote at, the Annual Meeting. The number of shares of
Common Stock outstanding and entitled to vote on that date was 23,301,277, with
each share being entitled to one vote. A majority of the issued and outstanding
shares as of the Record Date will constitute a quorum for the transaction of
business at the Annual Meeting.
The affirmative vote of the holders of a plurality of the votes cast at the
Annual Meeting is required for the election of Directors. Approval of other
matters that are before the meeting will require the affirmative vote of holders
of a majority of the Common Stock present or represented at the Annual Meeting.
Each holder of record of the Common Stock on the Record Date is entitled to
cast one vote per share in person or by proxy at the Annual Meeting. Shares as
to which a nominee (such as a broker holding shares in street name for a
beneficial owner) has no voting authority in respect of matters before the
Annual Meeting will be deemed represented for quorum purposes but will not be
deemed to be voting on such matters and, therefore, will not be counted as
negative votes as to such matters. The affirmative vote of a majority of the
shares of Common Stock
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represented in person or by properly executed proxies is required to approve the
proposals. Votes will be tabulated by the Company's transfer agent subject to
the supervision of persons designated by the Board of Directors as inspectors.
Shareholder Proposals for Next Annual Meeting
Proposals of shareholders of the Company intended to be presented at the
2000 Annual Meeting of Shareholders must be received by the Company not later
than February 29, 2000, to be included in the Company's proxy materials relating
to the 2000 Annual Meeting and on or before May 14, 2000 for matters to be
considered timely such that, pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company may not
exercise its discretionary authority to vote on such matters at that meeting.
Any such proposals should be sent to the Company at its principal office
addressed to Patrick E. Rondeau, Clerk of the Company. Other requirements for
inclusion are set forth under Rule 14a-8 under the Exchange Act.
Proposal 1 - Election of Nominees for Director
There are currently nine members of the Board of Directors. The By-Laws of
the Company provide that the Directors are classified, with respect to the time
for which they hold office, into three classes, as nearly as equal in number as
possible, with terms expiring at the 1999, 2000 and 2001 annual meetings of the
stockholders (see "Amended and Restated By-Laws" below). At each annual meeting,
the successors to the class of Directors whose term expires at that meeting
shall be elected to hold office for a term continuing until the annual meeting
held in the third year following the year of their elections. At this Meeting,
the Board has fixed the number of Directors for the ensuing year at nine and has
nominated Joseph C. Abeles, Ralph A. Foote and Joseph M. Zuber for election in
the class, the term of which expires at the annual meeting in 2002. John A.
Henry, IV, whose term expires at the Meeting, will not seek re-election to the
Board.
The Purchase Agreement (as more fully described below under "Certain
Relationships and Other Transactions") between the Company and certain real
estate funds affiliated with Morgan Stanley Dean Witter and Co., Inc. (the
"Funds") requires that as long as the Funds or their Permitted Transferees (as
defined in the Purchase Agreement) own at least 70% of the aggregate number of
shares of Common Stock theretofore actually issued to the Funds (or their
Permitted Transferees) under the Purchase Agreement (the "Required Interest"),
the Funds will have the right to designate two directors on the management slate
of nominees to the Company's Board of Directors (the "Funds' Designees"). If the
Funds (and their Permitted Transferees) own less than the Required Interest but
own, in the aggregate, at least 50% of the aggregate number shares of Common
Stock theretofore actually issued to the Funds (or their Permitted Transferees)
under the Purchase Agreement (the "Minimum Interest"), the Funds will have the
right to designate one director on the management slate of nominees to the
Company's Board of Directors. The Funds' Designees have the right to serve on
any standing committee of the Board to the extent their participation on such
committee would not exceed their proportionate representation of the full Board.
Michael J. Franco, whose term expires at the 2001 Annual Meeting, and Mr. Henry,
whose term expires at the 1999 Annual Meeting, currently serve on the Board of
Directors as the Funds' Designees. Mr. Zuber, a nominee for Director at the 1999
Annual Meeting, is the Funds' Designee to replace Mr. Henry, who is not seeking
re-election.
The Funds have agreed to vote, and to cause any Permitted Transferees to
vote, all of their shares of Common Stock for the election of the management
slate of nominees (other than the Funds' Designees) to the Company's Board of
Directors for so long as the Funds (and their Permitted Transferees) own, in the
aggregate, at least the Minimum Interest and the Funds' Designees are serving on
the Company's Board of Directors.
Unless contrary instructions are received, the enclosed proxy will be voted
for the election of the three nominees listed herein. Messrs. Abeles and Foote
are currently serving as Directors of the Company, and were elected by the
shareholders at the 1998 Annual Meeting. Messrs. Abeles, Foote and Zuber have
consented to serve, if elected, for the term described herein. Although the
Board of Directors does not contemplate that any nominee will be unavailable for
election, in the event that vacancies occur unexpectedly, the enclosed proxy,
unless authority has been withheld as to such nominee, will be voted for such
substituted nominees, if any, as may be designated by
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the Board. If elected, the nominees listed below will serve until the 2002
Annual Meeting (or special meeting in lieu thereof) and until their successors
are duly elected and qualified.
The principal occupations and business experience of the nominees for
Director and each Director whose term will continue following the meeting for
the preceding five years along with any directorships of other publicly-owned or
registered investment companies are as follows:
Nominees for Election for a Term of Three Years Expiring at the 2002 Annual
Meeting
Joseph C. Abeles, a private investor, has been a Director of the Company
since 1987. Mr. Abeles has been a Director of Intermagnetics General Corporation
since 1986. He has also served as a Director of Igene Biotechnology, Inc. and
Ultralife Batteries, Inc. since 1991.
Ralph A. Foote has been a Director of the Company since 1987. Since 1955 he
has been a senior partner of Conley & Foote, a Middlebury, Vermont law firm
which serves as legal counsel to the Company with respect to various matters.
Mr. Foote has been a Director of the Cooperative Insurance Companies since 1965.
Joseph M. Zuber has been a Vice President of Morgan Stanley Dean Witter and
Co., Inc. ("Morgan Stanley") since December 1998. From July 1996 to December
1998, Mr. Zuber was a Senior Associate with Morgan Stanley and was responsible
for the principal investing activities of the Morgan Stanley Real Estate Funds.
Prior to July 1996, Mr. Zuber was an Associate with Merrill Lynch.
Directors Whose Term Expires at the 2000 Annual Meeting
Frederick M. Myers has been a Director of the Company since 1990 and has
served as Chairman of the Board since 1997. Since 1964 he has been a senior
partner of Cain, Hibbard, Myers & Cook, a Pittsfield, Massachusetts law firm
which serves as legal counsel to the Company with respect to various matters.
J. Larry Rutherford was elected to the Board of Directors in April 1997.
Since 1990, he has been President and Chief Executive Officer of Atlantic Gulf
Communities, a publicly traded real estate development company. In 1992, Mr.
Rutherford was named as a defendant in a three-count Information filed by the
State Attorney for Broward County, Florida. The charges in the Information,
which include a charge of vehicular homicide, relate to an April 1991 traffic
accident in which a passenger was killed. Following review of the circumstances
surrounding this accident and the charges, the Board determined that the
pendency of this proceeding likely will not adversely affect Mr. Rutherford's
ability to perform his duties as a Director of the Company.
Stuart A. Shikiar has been a Director since 1994. Mr. Shikiar is an
investment advisor and has served as President of Shikiar Asset Management, Inc.
since November 1994. From 1993 to 1994, Mr. Shikiar was a general partner of
Omega Advisors, a private investment partnership. From 1985 to 1993, Mr. Shikiar
served as a Managing Director for Prudential Securities Investment Management,
Inc. Mr. Shikiar has been a Director of Intermagnetics General Corporation since
1995.
Directors Whose Term Expires at the 2001 Annual Meeting
George F. Donovan joined the Company as a Director in 1991 and was
appointed President and Chief Operating Officer in October 1993. He became Chief
Executive Officer in December 1993. Mr. Donovan has served as an officer of a
number of other recreational real estate corporations, including Leisure
Management International, of which he was President from 1991 to 1993, and
Fairfield Communities, Inc., of which he was President from April 1979 to
December 1985.
Michael J. Franco has been a Director of the Company since August 1998.
Since December 1997, Mr. Franco has been the Vice President and Director of U.S.
Acquisitions for the Morgan Stanley Real Estate Funds. Mr. Franco was an
Associate with Morgan Stanley from July 1990 to December 1997.
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Bradford T. Whitmore has been a Director of the Company since 1990. Mr.
Whitmore has been a general partner of Grace Brothers, Ltd., an investment
partnership and securities broker-dealer, since 1986. He has been a trustee of
Aerospace Creditors Liquidating Trust since 1993.
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of May 1, 1999, by (a) each Director,
(b) each nominee for Director, (c) each of the executive officers listed in the
Summary Compensation Table below, (d) all current Directors and executive
officers as a group and (e) all persons known to be the beneficial owners of
more than five percent of the Company's outstanding Common Stock. A nominal
amount of Common Stock held by certain executive officers under the Company's
401(k) profit sharing plan has been excluded from the table. Unless otherwise
noted, each stockholder has sole voting and investment power with respect to the
shares of Common Stock listed.
<TABLE>
<CAPTION>
Shares of Common
Stock
Issuable Upon
Options Conversion Percent
Common Exercisable Of Debentures Total Shares Of Shares
Name Age Stock Within 60 Days and Notes(1) Beneficially Owned Outstanding(2)
---- --- ----- -------------- ------------ ------------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Joseph C. Abeles (3) 84 443,601 15,250 442,066 900,917 3.8%
John F. Chiste 43 -- 11,872 -- 11,872 *
George F. Donovan 60 102,074 355,095 -- 457,169 1.9%
Ralph A. Foote 76 13,832 112,185 -- 126,017 *
Michael J. Franco 30 -- -- -- -- --
L. Nicolas Gray 52 -- 24,150 -- 24,150 *
John A. Henry IV 33 -- -- -- -- --
Daniel C. Koscher 41 1,218 128,514 -- 129,732 *
Frederick M. Myers (4) 76 34,398 106,223 -- 140,621 *
Patrick E. Rondeau 52 11,339 111,010 -- 122,349 *
J. Larry Rutherford 53 -- 5,000 -- 5,000 *
Stuart A. Shikiar (5) 52 506,456 47,288 139,491 693,235 2.9%
Bradford T. Whitmore (6) 41 758,146 100,261 -- 858,407 3.7%
Joseph M. Zuber 36 -- -- -- -- --
All Directors and named
executive officers as a
group (17 persons) -- 1,879,884 1,074,685 581,557 3,536,126 14.2%
Morgan Stanley Dean
Witter & Co, Inc.
1221 Avenue of the Americas
New York, N 10020(7)(8) -- 4,117,648 -- -- 4,117,648 17.6%
Grace Brothers, Ltd.
1560 Sherman Avenue
Suite 900
Evanston, IL 60201 (8) -- 1,676,826 -- 1,782,184 3,459,010 13.8%
</TABLE>
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* Less than 1%.
(1) The conversion prices of $8.24 per share and $3.92 per share (the
conversion prices on May 1, 1999) are used to determine the shares of
Common Stock into which the Company's 8.25% convertible subordinated
debentures due 2012 (the "Debentures") and the Company's 8.00% convertible
subordinated notes payable due 2002 (the "Convertible Notes") are
convertible, respectively.
(2) The denominator used to calculate the percent of shares outstanding
includes shares issuable upon conversion of any Debentures and Notes held
by the applicable stockholder or group and upon exercise of any options
that are exercisable within 60 days and held by the applicable stockholder
or group, plus 23,332,838 shares outstanding on May 1, 1999.
(3) Includes 11,574 shares of Common Stock and 36,407 shares issuable upon the
conversion of $300,000 aggregate principal amount of Debentures held by Mr.
Abeles' wife and 50,000 shares of Common Stock and 16,019 shares issuable
upon the conversion of $132,000 aggregate principal amount of Debentures
held by family trusts for which he disclaims beneficial ownership.
(4) Includes 34,398 shares of Common Stock held by Mr. Myers' wife for which he
disclaims beneficial ownership.
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(5) Includes 3,034 shares of Common Stock issuable upon the conversion of
$25,000 aggregate principal amount of Debentures held by a family trust for
which Mr. Shikiar disclaims beneficial ownership. Also includes 319,980
shares of Common Stock and 74,515 shares issuable upon the conversion of
$614,000 aggregate principal amount of Debentures over which Mr. Shikiar
exercises voting and investment power.
(6) Mr. Whitmore is a general partner of Grace Brothers, Ltd. Mr. Whitmore
exercises shared voting and investment power with respect to shares held by
Grace Brothers, Ltd. and disclaims beneficial ownership of such shares
except to the extent of his proportionate interest therein.
(7) Reflects the aggregate investment by the following affiliates of Morgan
Stanley Dean Witter & Co., Inc., Morgan Stanley Real Estate Fund ("MSREF")
III, L.P., Morgan Stanley Real Estate Investors III, L.P., MSP Real Estate
Fund, L.P. and MSREF III Special Fund, L.P.
(8) Based on the most recent (as of May 1, 1999) Form 13G or 13D (as
applicable) filed with the Securities and Exchange Commission.
Board of Directors and its Committees
The Board of Directors of the Company held eleven meetings during the
fiscal year ended March 28, 1999. Each Director attended at least 75% of the
meetings of the Board of Directors and meetings of the Committees of the Board
on which he served during that portion of fiscal 1999 which he served as a
Director.
Directors of the Company who are employees of the Company do not receive
fees or retainers for serving as Directors. For fiscal 1999, each employee
Director received an annual retainer of $17,500, an $800 fee for each Board
meeting attended and reimbursement of reasonable out-of-pocket travel expenses
to attend Board of Director meetings. The Chairman of the Board also receives an
additional annual fee of $15,000. In addition, the Company's non-employee
Directors are entitled to receive a stock option covering 15,000 shares of
Common Stock under the Company's 1998 Non-Employee Directors Stock Option Plan
on the first business day after the first trading day after each annual meeting
of the Company's shareholders or any special meeting held in lieu thereof. The
exercise price is equal to the closing market price of the Company's Common
Stock on the New York Stock Exchange on the date of grant.
Audit Committee
The Audit Committee, which met twice during fiscal 1999, consists of
Messrs. Foote, Myers and Whitmore. Mr. Whitmore will serve on the Audit
Committee until the July 28, 1999 meeting, after which time the Board of
Directors will appoint a replacement. The Committee's responsibilities include:
(a) recommending to the full board the selection of the Company's independent
auditors, (b) discussing the arrangements for the proposed scope and the results
of the annual audit with management and the independent auditors, (c) reviewing
the scope of non-audit professional services provided by the independent
auditors, (d) obtaining from both management and the independent auditors their
observations on the Company's system of internal accounting controls and (e)
reviewing the overall activities and recommendations of the Company's internal
auditors.
Nominating Committee
The Nominating Committee, which met once during fiscal 1999, consists of
Messrs. Abeles, Donovan, Rutherford and Shikiar. The Committee is responsible
for the selection of potential candidates for membership on the Board of
Directors and the periodic review of compensation of Directors. The committee
will consider nominees recommended by shareholders. Recommendations should be
submitted in writing to: Nominating Committee, Bluegreen Corporation, 4960 Blue
Lake Drive, Boca Raton, Florida 33431.
Compensation Committee
The Compensation Committee met four times during fiscal 1999. The
Committee: (a) monitors compensation arrangements for management employees for
consistency with corporate objectives and shareholders' interests, (b) approves
incentive distributions and grants of stock options to officers, employees and
independent contractors of the Company and its subsidiaries and (c) advises
management on matters pertaining to management development and corporate
organizational planning.
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Compensation Committee Interlocks and Insider Participation
During fiscal 1999, Messrs. Abeles, Foote, Shikiar and Whitmore served as
members of the Compensation Committee of the Board of Directors. Mr. Whitmore is
a general partner of Grace Brothers, Ltd., an investment partnership and
broker-dealer. In September, 1997, the Company borrowed an aggregate $6,000,000
from Mr. Abeles and Grace Brothers, Ltd. pursuant to a Note Purchase Agreement,
which amount was used to fund a portion of the purchase price in connection with
the Company's acquisition of Resort Development International Group, Inc. and
Resort Title Agency, Inc. (collectively, "RDI"). Pursuant to the Note Agreement,
the Company executed 8% convertible notes in the aggregate principal amount of
$6,000,000 (the "Convertible Notes"). The Convertible Notes have a maturity date
of September 11, 2002, and the outstanding balances of the Convertible Notes are
convertible into the Company's Common Stock. The Convertible Notes bear interest
at 8%. In December 1997, Mr. Shikiar acquired $200,000 of Convertible Notes from
Mr. Abeles in a private transaction. The Convertible Notes are subordinated to
the Company's 10 1/2% Senior Secured notes due 2008, (the "Senior Notes") in the
aggregate principal amount of $110 million, to the same extent the Debentures
are subordinated to the Senior Notes; the Convertible Notes are not
contractually subordinated to any other indebtedness of the Company.
Compensation Committee Report on Executive Compensation
General
The Compensation Committee of the Board of Directors is composed of four
outside (i.e., non-management) Directors of the Company and, as indicated above,
the Compensation Committee's duties include reviewing and making recommendations
to the Board generally with respect to the compensation of the Company's
executive officers. The Board of Directors reviews these recommendations and
approves all executive compensation action.
Compensation Principles
The Company's executive compensation program is designed to align
compensation with the Company's business strategy, values and management
initiatives. The program:
o Integrates compensation programs with the Company's annual and long-term
strategic planning and measurement processes.
o Reinforces strategic performance objectives through the use of incentive
compensation programs.
o Rewards executives for long-term strategic management and the enhancement
of shareholder value by delivering appropriate ownership interest in the
Company.
o Seeks to attract and retain quality talent, which is critical to both the
short-term and long-term success of the Company.
In March, 1998, the Company entered into employment agreements with each of
its senior executive officers. See "Employment Agreements" below for further
details.
The three components of the Company's compensation program for executive
officers are (i) base compensation, (ii) annual bonus plan and (iii) incentive
stock options.
Base Compensation
The Committee has evaluated and determined appropriate ranges of pay for
all categories of management to facilitate a Company-wide systematic salary
structure with appropriate internal alignment. In determining appropriate pay
ranges, the Committee annually examines market compensation levels for
executives who are currently employed in similar positions in public companies
with comparable revenues, net income and market capitalization. This market
information is used as a frame of reference for annual salary adjustments and
starting salaries. The Compensation Committee determined to grant salary
increases ranging from 0% to 9.4% for the
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executive officers named in the "Summary Compensation Table" during fiscal 1999.
This decision reflects the Committee's recognition of the executive officers'
contributions to the Company's performance during fiscal 1999 as well as the
Committee's assessment that the executive officers' base salaries after the
current year increases, if applicable, were comparable to companies involved in
similar operations and of similar size.
Annual Bonus Plan
The objectives of the annual bonus plan are to motivate and reward the
accomplishment of corporate annual objectives, reinforce strong performance with
differentiation in individual awards based on contributions to business results
and provide a fully competitive compensation package with the objective of
attracting, rewarding and retaining individuals of the highest quality. As a
pay-for-performance plan, year-end cash bonus awards are paid upon the
achievement of performance goals established for the fiscal year. Participants
are measured on two performance components: (1) corporate financial performance
(specific measurements are defined each year and threshold, target and maximum
performance levels are established to reflect the Company's objectives) and/or
(2) key individual performance which contributes to critical results for the
management position. A weighting is established for each component taking into
account the relative importance of each based on each executive officer's
position. Appropriate performance objectives are established by the Compensation
Committee for each fiscal year in support of the Company's strategic plan.
Incentive Stock Options
Stock options align the interests of employees and shareholders by
providing value to the employee when the stock price increases. All options are
granted at an exercise price of at least 100% of the fair market value of the
Common Stock on the date of grant except incentive options issued to employees
who own more than 10% of the Company's Common Stock, in which case the option
price may not be less than 110% of the market value of the Common Stock on the
date of grant. Incentive stock options were granted to the five named executive
officers during fiscal 1999. See "Option Grants in Last Fiscal Year".
Section 162(m) of the Interval Revenue Code of 1986, as amended (the
"Code"), limits an employer's income tax deduction for compensation paid to
certain key executives of a public company to $1,000,000 per executive per year.
The Company has no executives whose salaries currently approach this level and,
accordingly, has not addressed what approach it will take with respect to
section 162(m), except to the extent the 1995 Stock Incentive Plan contains
standard limits and provisions on awards which are extended to enable such
awards to be exempt from the section 162(m) deduction limits.
Compensation of Chief Executive Officer
During 1999, the base salary of Mr. George F. Donovan, President and Chief
Executive Officer, was increased approximately 7% to $375,000. As detailed below
in the "Summary Compensation Table", Mr. Donovan was awarded an annual bonus of
$300,000 and stock options entitling him to purchase 256,793 shares of the
Company's Common Stock, vesting over a five year period for fiscal 1999.
Additionally, the Company has purchased term life insurance for Mr. Donovan's
benefit, at a premium cost during 1999 of $56,808. This compares to the award of
an annual bonus of $200,000 and stock options entitling him to purchase 146,775
shares of the Company's Common Stock vesting over a five year period for 1998.
The increase in Mr. Donovan's annual bonus and option awards was due to certain
pre-determined strategic goals and financial performance objectives being
successfully accomplished during fiscal 1999. The Committee concluded that Mr.
Donovan's total 1999 compensation is competitive and aligned in the mid-range of
total compensation for other chief executives of publicly held companies in
similar businesses and of similar size. Furthermore, the Committee believes that
total 1999 compensation reflects its confidence in Mr. Donovan's ability to lead
the Company to execute the Company's strategic plans, including the continued
development and expansion of the Resorts Division. The Committee's knowledge of
Mr. Donovan's successful background, including his service as the chief
executive officer of another publicly-held real estate company, together with
its observations of Mr. Donovan's performance during his tenure with the
Company, served equally to assure the Committee of his ability to lead the
Company as its chief executive.
7
<PAGE>
Compensation Committee
Joseph C. Abeles
Ralph A. Foote
Stuart A. Shikiar
Bradford T. Whitmore
Executive Compensation
Summary Compensation Table
The following table sets forth compensation for the past three fiscal years
for the Company's Chief Executive Officer and the other four most highly
compensated executive officers (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Securities All Other
Fiscal Salary Bonus Underlying Compensation
Name and Principal Position Year ($) ($)(1) Options (#)(2) ($)(3)
--------------------------- ------ ------ ----- -------------- ------------
<S> <C> <C> <C> <C> <C>
George F. Donovan 1999 $375,000 $300,000 256,793 $ 84,704
President and Chief Executive 1998 $350,000 $200,000 146,775 $ 60,772
Officer 1997 $300,000 $ 86,000 30,000 $ 59,183
Patrick E. Rondeau 1999 $175,000 $110,000 101,778 $ 18,197
Senior Vice President, Director 1998 $175,000 $100,000 59,362 $ 20,431
of Corporate Legal Affairs and Clerk 1997 $160,000 $ 38,000 15,000 $ 17,666
Daniel C. Koscher 1999 $175,000 $175,000 153,449 $ 9,293
Senior Vice President, Land Division 1998 $175,000 $100,000 73,500 $ 13,973
1997 $150,000 $ 38,000 15,000 $ 8,369
L. Nicolas Gray 1999 $175,000 $140,000 153,449 $ 22,250
Senior Vice President, Resorts 1998 $160,000 $115,000 73,500 $ 22,920
Division 1997 $130,000 $ 38,000 15,750 $ 20,582
John F. Chiste (4) 1999 $175,000 $125,000 101,778 $ 8,234
Senior Vice President, 1998 $113,846 $ 75,000 59,362 $ --
Treasurer and Chief Financial Officer 1997 $ -- $ -- -- $ --
</TABLE>
- ----------
(1) Amounts represent bonuses earned for each fiscal year and paid during the
subsequent fiscal year.
(2) Figures represent incentive or nonqualified stock options, as applicable,
granted under the Company's 1995 Stock Incentive Plan.
(3) Other compensation for 1999 consists of contributions to the Company's
Section 401(k) Retirement Savings Plan for the benefit of each Named
Executive Officer (Mr. Donovan - $3,415; Mr. Rondeau - $3,299; Mr. Koscher
- $3,299; Mr. Gray - $3,291 and Mr. Chiste - $1,278), dollar amounts of
premiums paid on life insurance policies for the benefit of the Named
Executive Officer (Mr. Donovan - $56,808; Mr. Rondeau - $14,898; Mr.
Koscher - $5,994; Mr. Gray - $18,959 and Mr. Chiste - $6,956) and
forgiveness of debt to the Company (Mr. Donovan - $24,481)
(4) Mr. Chiste became the Company's Treasurer and Chief Financial Officer on
July 1, 1997.
8
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning stock options
granted to the Named Executive Officers during fiscal 1999.
<TABLE>
<CAPTION>
Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation for
Underlying Granted to Exercise Option Term (2)
Options Employees Price Expiration ----------------------------
Granted(#)(1) in Fiscal Year ($ Per Share) Date 5% 10%
------------- -------------- ------------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
George F. Donovan 256,793 21% $9.50 7/28/08 $1,534,467 $3,888,616
Patrick E. Rondeau 101,778 8% $9.50 7/28/08 $608,174 $1,541,224
Daniel C. Koscher 153,449 12% $9.50 7/28/08 $916,934 $2,323,678
L. Nicolas Gray 153,449 12% $9.50 7/28/08 $916,934 $2,323,678
John F. Chiste 101,778 8% $9.50 7/28/08 $608,174 $1,541,224
</TABLE>
(1) These options become exercisable in five equal annual installments
commencing one year from the respective dates of grant.
(2) As required by the rules promulgated by the Securities and Exchange
Commission, potential realizable values are based on the prescribed
assumption that the Company's Common Stock will appreciate in value from
the date of grant to the end of the option term at rates (compounded
annually) of 5% and 10%, respectively, and therefore are not intended to
forecast possible future appreciation, if any, in the price of the
Company's Common Stock.
Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The following table sets forth information regarding the number of shares
acquired and value realized upon the exercise of stock options during fiscal
1999 and the number and unrealized value of unexercised options, adjusted to
give effect to Common Stock dividends, and held by the Named Executive Officers
as of March 28, 1999. Unrealized values are computed by multiplying the number
of shares by the amount by which the closing market price of the Company's
Common Stock on the New York Stock Exchange as of March 26, 1999, exceeds the
exercise price.
<TABLE>
<CAPTION>
Number of
Securities Underlying
Unexercised Value of Unexercised
Options at In-the-Money Options
Year End (#) at Fiscal Year End ($)
------------------- ----------------------
Shares Acquired Value Exerciseable (E) vs. Exerciseable (E) vs.
Name On Exercise (#) Realized ($) Unexerciseable (U) Unexerciseable (U)
---- --------------- ------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
George F. Donovan 17,887 $140,502 355,095 E $705,117 E
426,443 U $275,297 U
Patrick E. Rondeau -- -- 108,010 E $318,027 E
175,383 U $118,733 U
Daniel C. Koscher -- -- 125,514 E $367,632 E
238,364 U $127,216 U
L. Nicolas Gray -- -- 24,150 E $31,967 E
218,549 U $93,062 U
John F. Chiste -- -- 11,872 E $21,654 E
149,268 U $86,617 U
</TABLE>
Employment Agreements
In March 1998, the Company entered into employment agreements with each of
George F. Donovan, John F. Chiste, L. Nicolas Gray, Daniel C. Koscher and
Patrick E. Rondeau. Each employment agreement is for a three year period (six
years in the case of Mr. Donovan) (subject to extension) and provides that the
employee will receive a base salary ($375,000 for Mr. Donovan and $175,000 for
each of Messrs. Chiste, Gray, Koscher and Rondeau) and certain other benefits
and will be eligible to receive a cash bonus as determined by the Board of
Directors. Under the
9
<PAGE>
employment agreements, if the Company terminates any employee without cause, the
Company will pay the employee his base salary for the 12 months (24 months in
the case of Mr. Donovan) following such termination (which shall be reduced by
the amount of any compensation the employee receives from subsequent employment
during such period). A termination of the employee without cause shall be deemed
to occur upon, among other things, a significant decrease of the employee's
position, duties or responsibilities, the failure by the Company to obtain the
assumption of the employment agreement by any successor to the Company's
business, or the sale of all or substantially all of the business or assets of
the Company or the Company's liquidation. Upon any termination by the Company
for cause (as defined in the employment agreements) or by the employee, the
employee shall be entitled only to amounts then due to him. In the event the
employee is disabled, the employee's employment shall be terminated and the
employee shall be entitled to receive his base salary for 12 months (24 months
in the case of Mr. Donovan) following such termination. Pursuant to his
employment agreement, each employee agrees, for 12 months (24 months in the case
of Mr. Donovan) following his termination, not to compete with the Company,
disclose confidential information about the Company, or solicit the Company's
current or former employees. In addition, Mr. Donovan's employment agreement
provides that $130,000 of indebtedness owing by Mr. Donovan to the Company will
be forgiven on a pro rata basis (20% per year) over the five year period
commencing on April 1, 1998.
Performance Graph
The following graph assumes an investment of $100 on March 28, 1994 and
thereafter compares the yearly percentage change in cumulative total return to
shareholders of the Company with an industry peer group (consisting of Atlantic
Gulf Communities, Avatar Holdings, Fairfield Communities, ILX Resorts, Sunterra
Corporation, Silverleaf Resorts and Vistana, Inc.) and a broad market index (the
S&P 500). The graph shows performance on a total return (dividend reinvestment)
basis. The graph lines connect fiscal year-end dates and do not reflect
fluctuations between those dates.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
5 YEAR CUMULATIVE TOTAL RETURN SUMMARY
================================================================================
STARTING
BASIS
DESCRIPTION 1994 1995 1996 1997 1998 1999
- --------------------- ------- ------- ------- ------- ------- -------
BLUEGREEN CORP ($) $100.00 $105.27 $139.21 $ 98.26 $282.51 $159.68
S&P 500 ($) $100.00 $115.57 $152.67 $182.93 $270.74 $320.71
PEER GROUP ONLY ($) $100.00 $100.33 $107.23 $119.68 $190.65 $ 89.04
NOTE: Data complete through last fiscal year.
NOTE: Corporate Performance Graph with peer group uses peer group only
performance (excludes your company).
NOTE: Peer group indices use beginning of period market capitalization
weighting.
The Compensation Committee Report on Executive Compensation and the
Performance Graph above shall not be deemed "soliciting material" or
incorporated by reference into any of the Company's filings with the Securities
and Exchange Commission by implication or by any reference in any such filing to
this Proxy Statement.
10
<PAGE>
Certain Relationships and Other Transactions
In connection with George F. Donovan's appointment as the Company's Chief
Executive Officer and his relocation, on November 15, 1993, the Board of
Directors authorized a $130,000 loan which accrued interest at the prime lending
rate through June 1, 1996. The loan has been interest-free from June 2, 1996 to
date. The Board also approved the payment of $28,000 to Mr. Donovan's current
residential community for an equity membership. The equity membership is fully
refundable by the residential community in the event Mr. Donovan's home is sold.
Mr. Donovan's March 1998 employment agreement provides that the $130,000 loan
will be forgiven on a pro rata basis (20% per year) over a five-year period
commencing April 1, 1998.
On September 11, 1997, the Company borrowed an aggregate of $6,000,000 from
Joseph C. Abeles, a Director of the Company, and Grace Brothers, Ltd., an entity
with a 13.8% beneficial ownership interest in the Company and an affiliate of
Bradford T. Whitmore, a Director of the Company, and issued the Convertible
Notes. The proceeds from the issuance were used to fund a portion of the
purchase price of RDI. The Convertible Notes are convertible into shares of the
Company's common stock at a conversion price of $3.92 per share. In December
1997, Stuart A. Shikiar, a Director of the Company, acquired $200,000 of
Convertible Notes from Mr. Abeles in a private transaction. In March 1998, the
holders of the Convertible Notes agreed to subordinate such notes to the
Company's obligations under the Senior Notes.
Any existing loans to the Company's officers and employees other than in
the ordinary course of business have been approved, and any such future loans
will be approved, by a majority of disinterested, non-management Directors. It
is also the Company's policy that any transaction with an employee, officer,
Director or principal shareholder, or affiliate of any of them, involving in
excess of $1,000 (other than in the ordinary course of the Company's business)
shall be approved by a majority vote of disinterested Directors, and any such
transaction will be on terms no less favorable to the Company than those which
could reasonably be obtained from an independent third party.
On August 14, 1998, the Company entered into a Securities Purchase
Agreement (the "Purchase Agreement") by and among the Company, Morgan Stanley
Real Estate Investors III, L.P., Morgan Stanley Real Estate Fund III, L.P., MSP
Real Estate Fund, L.P., and MSREF III Special Fund, L.P., (collectively, the
"Funds") pursuant to which the Funds purchased 2.9 million shares of the
Company's Common Stock for an aggregate of $25 million. On March 26, 1999, the
Funds purchased an additional 1.2 million shares of Common Stock for an
aggregate of $10 million.
Pursuant to the Purchase Agreement, as amended, subject to certain
conditions thereto, the Company has the right to require the Funds, during the
18-month period commencing on August 14, 1998 (the "Commitment Period"), to
purchase from the Company up to an additional 1.8 million shares of Common Stock
(the "Remaining Shares"), after giving effect to the March 26, 1999 purchase, at
a purchase price equal to $8.50 per share. If, on or prior to the expiration of
the Commitment Period, the Company has not offered to sell to the Funds all of
the Remaining Shares and the Company has achieved certain earnings levels for
the 12-month period ended January 2, 2000, or if a Change of Control of the
Company occurs (as defined in the Purchase Agreement) during the Commitment
Period, the Funds will have the right to purchase any or all of the Remaining
Shares not previously sold to the Funds at a purchase price equal to $8.50 per
share.
Subject to certain exceptions, the Funds have agreed not to offer, sell,
transfer, assign, pledge or hypothecate any shares of Common Stock issued to
them, prior to the earlier of (i) August 14, 2000 or (ii) nine months following
the date on which the Funds have purchased all the shares of Common Stock to be
purchased by them under the Purchase Agreement, but in no event earlier than
February 14, 2000. See "Proposal 1 - Election of Nominees for Director" for
discussion of the Funds' right to designate up to two Directors (depending on
the number of shares of Common Stock held by the Funds) on the management slate
of nominees to the Company's Board of Directors.
For so long as the Funds own at least the Required Interest, certain
material actions by the Company or its subsidiaries, including: the
consolidation or merger of the Company; the sale of substantially all the assets
of the Company; the sale of assets of the Company (or certain Company
subsidiaries) or the purchase of the business, assets or securities of another
person where the aggregate consideration exceeds $50,000,000; the issuance of
certain
11
<PAGE>
securities of the Company senior or, in certain circumstances, on par with the
Common Stock; the issuance of stock of the Company's subsidiaries (other than
pursuant to certain employee option plans); the occurrence of indebtedness
having a material effect on the total market capitalization ratio of the
Company; the declaration or payment of dividends (other than stock dividends) on
the Common Stock; any amendment to the charter or bylaws of the Company that
would conflict with the Purchase Agreement; entry into a material line of
business materially different from the timeshare/residential land business and
the entry into transactions with certain affiliates (other than Company
subsidiaries) will require the affirmative vote of one of the Funds' Designees
or if the Funds so not have a representative on the Board of Directors as a
result of the failure of the Company to nominate the Funds' Designees or failure
of the shareholders of the Company to elect the Funds' Designees, then such
action shall require the approval of the Funds and Permitted Transferees holding
a majority of the shares on Common Stock issued pursuant to the Purchase
Agreement. Moreover, for so long as the Funds own at least the Required
Interest, Morgan Stanley Dean Witter & Co. or an affiliate thereof shall have
the exclusive right to act as advisor or underwriter to the Company in
connection with certain material transactions for which the Company elects to
use the services of an investment or financial advisor.
Each of the Funds (and their Permitted Transferees) have the right to
purchase their proportionate share of any issuance (subject to certain
exceptions) by the Company for cash of (i) any of its capital stock, (ii) any
rights, options or warrants to purchase any such capital stock or any securities
that are or may become convertible or exercisable into Common Stock and (iii)
any securities that are or may become convertible or exercisable into Common
Stock.
Pursuant to the Voting and Cooperation Agreement (the "Voting Agreement"),
dated as of August 14, 1998, among the Funds and certain directors, officers and
certain related parties of the Company in their capacities as shareholders of
the Company (collectively, the "Stockholders"), each Stockholder has agreed (i)
to vote or cause to be voted all share of Common Stock which such Stockholder
has the power to vote or in respect of which such Stockholder has the power to
direct the vote in favor of the Funds' Designees, (ii) not to take any direct or
indirect action to remove either of the Funds' Designees, from the Company's
Board of Directors without cause and (iii) to vote all of the shares of Common
Stock which such Stockholder has the power to vote or in respect of which such
Stockholder has the power to direct the vote in a manner such that the Company's
Restated Articles of Organization and Amended and Restated Bylaws do not, at any
time, conflict with the provisions of the Voting Agreement or the Purchase
Agreement.
The shares of Common Stock issued and issuable to the Funds under the
Purchase Agreement have not been registered under the Securities Act of 1933 and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. Pursuant to the
Registration Rights Agreement, dated as of August 14, 1998, among the Funds and
the Company, after a specified period the Company is required to effect a shelf
registration of shares of Common Stock held by the Funds, any of their Permitted
Transferees and certain of their assignees (collectively the "Registration
Persons"). In addition, subject to certain conditions and limitations, the
Registration Persons have the right (i) to require the Company to register
shares of Common Stock held by such registration Person and (ii) when the
Company proposes to register Common Stock to include shares of Common Stock held
by such Registration Person in such registration of Common Stock.
Proposal 2 - Ratification of the Appointment of Ernst & Young LLP as Independent
Auditors of the Company
The Board of Directors has appointed the firm of Ernst & Young LLP ("E&Y")
as auditors for fiscal 2000, subject to final approval by the Audit Committee of
the scope of, and E&Y's fees for, performing the audit for such fiscal year. E&Y
and its predecessor, Arthur Young & Co., have served as the Company's auditors
since 1984. The Company has been informed that E&Y has no direct or indirect
financial interest in the Company and has no other connection with the Company
other than as independent auditors. Representatives of E&Y are expected to be
present at the Annual Meeting and will have the opportunity to make a statement
if they so desire and will be available to respond to appropriate questions.
12
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than ten percent of its Common Stock to file
reports with the Securities and Exchange Commission disclosing their ownership
of stock in the Company and changes in such ownership. Copies of such reports
are also required to be furnished to the Company. Based solely on a review of
the copies of such reports received by it, the Company believes that, during
fiscal 1999, all such filing requirements were complied with, except for one
report on Form 4 filed late by Mr. Donovan.
Amended and Restated By-Laws
The Board of Directors approved an amendment and restatement of the
Company's By-laws on August 13, 1998. The amended and restated By-Laws differ
from the previous by-laws in that they classify the Board of Directors pursuant
to Chapter 156B, Section 50A of the Massachusetts General Laws and limit the
ability to remove directors and fill vacancies. In addition, the amended and
restated By-Laws provide (i) for an increase in the ownership interest required
to call a special meeting of stockholders from 10% to 25% and that shares of
stock to which a nominee has no voting authority as to a particular question or
questions brought before a meeting of stockholders will not be deemed to be cast
with respect to such question or questions, but will counted for purposes of
determining if a quorum is present.
Other Matters
As of the date of this Proxy Statement, the Board of Directors knows of no
business to come before the meeting except as set forth above. If any other
matters should properly come before the meeting, it is expected that the
enclosed proxy will be voted on such matters in accordance with the best
judgment of the proxies. Discretionary authority with respect to any such
matters is conferred by the proxy.
By the order of the Board of Directors,
/s/ Patrick E. Rondeau
Patrick E. Rondeau, Clerk
June 28, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT AND/OR FORM 10-K FOR THE YEAR ENDED
MARCH 28, 1999, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO,
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE PROVIDED WITHOUT
CHARGE UPON WRITTEN REQUEST TO INVESTOR RELATIONS, BLUEGREEN CORPORATION, 4960
BLUE LAKE DRIVE, BOCA RATON, FLORIDA 33431.
13
<PAGE>
BLUEGREEN CORPORATION
4960 BLUE LAKE DRIVE
BOCA RATON, FLORIDA 33431
The undersigned shareholder of BLUEGREEN CORPORATION, a Massachusetts
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated June 28, 1999, and hereby appoints
Patrick E. Rondeau and John F. Chiste, and both of them, proxies and
attorneys-in-fact with full power of substitution, on behalf and in the name of
the undersigned, to represent the undersigned at the 1999 Annual Meeting of
Shareholders of BLUEGREEN CORPORATION to be held on Wednesday, July 28, 1999 at
10:00 a.m., local time at the Hotel Inter-Continental New York at 111 East 48th
Street (between Park Avenue and Lexington Avenue), New York, New York, and at
any adjournment(s) thereof and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth below. Such attorneys or substitutes shall have and may
exercise all of the powers of said attorneys-in-fact thereunder.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder, or IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENT(S) THEREOF.
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
<PAGE>
Please mark
your votes as |X|
indicated in
this example
1. ELECT DIRECTORS
WITHHOLD
FOR all nominees AUTHORITY
listed (except as
marked to the to vote for all
contrary) nominees listed
|_| |_|
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below)
Joseph C. Abeles, Ralph A. Foote, Joseph M. Zuber
2. RATIFY ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
OF THE COMPANY
FOR AGAINST ABSTAIN
|_| |_| |_|
In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before this meeting
and any adjournment(s) thereof.
Please sign exactly as your name appears on this proxy. When
shares are held by joint tenants or as community property,
both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title
as such. If a corporation, please sign the full corporate
name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
DATED: _______________________________________________, 1999
------------------------------------------------------------
Signature
------------------------------------------------------------
Signature
PLEASE VOTE, SIGN, DATE AND RETURN USING THE ENCLOSED
ENVELOPE
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
