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))
|X| Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Capital Associates, Inc.
--------------------------------------------
(Name of Registrant as Specified in Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| | $125 per Exchange Act Rules 0-11(c)(1)(ii) or 14a-6(i)(1), or 14a-6(i)(2)
| | $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6
(1)(3)
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(4)and 0-11
(1) Title of each class of securities to which transaction applies:
_______________________________________________
(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
| | Fee paid previously with preliminary materials
| | Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
CAPITAL ASSOCIATES, INC.
7175 WEST JEFFERSON AVENUE, SUITE 4000
LAKEWOOD, COLORADO 80235
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 3, 1999
To the Stockholders of
Capital Associates, Inc.:
The 1999 Annual Meeting of Stockholders (the "Annual Meeting") of
Capital Associates, Inc., a Delaware corporation (the "Company"), will be held
on Friday, December 3, 1999, starting at 8:30 a.m. (local time), in the
Huntington Room of the Holiday Inn, 7390 West Hampden Avenue, Lakewood, Colorado
80235, for the following purposes:
1. To elect five directors of the Company to serve until the next
annual meeting of stockholders or until their successors are duly elected and
qualified.
2. To ratify the selection by the Board of Directors of KPMG LLP
as independent auditors of the Company for the 2000 fiscal year.
3. To transact such other business as may properly come before the
Annual Meeting, or any adjournment(s) or postponement(s) thereof.
The Board of Directors has fixed the close of business on Friday,
October 15, 1999, as the record date for determining the stockholders entitled
to notice of, and to vote at, the Annual Meeting. A complete list of
stockholders entitled to vote at the Annual Meeting will be available for
examination during normal business hours by any stockholder of the Company, for
any purpose germane to the Annual Meeting, for a period of ten (10) days prior
to the Annual Meeting at the Company's offices located at the address set forth
above.
A copy of the Company's Annual Report for the fiscal year ended
May 31, 1999, a Proxy Statement and a proxy card accompany this notice. These
materials are first being sent to stockholders on or about November 1, 1999.
Stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, please
complete and sign the enclosed proxy card and return it promptly. If you choose,
you may still vote in person at the Annual Meeting even though you previously
submitted a proxy card.
By Order of the Board of Directors,
/s/John F. Olmstead
-------------------
John F. Olmstead
Assistant Secretary
Lakewood, Colorado
October 20, 1999
<PAGE>
CAPITAL ASSOCIATES, INC.
7175 WEST JEFFERSON AVENUE, SUITE 4000
LAKEWOOD, COLORADO 80235
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, DECEMBER 3, 1999
This Proxy Statement and the accompanying proxy card are being
furnished to the stockholders of the Company, in connection with the
solicitation of proxies by and on behalf of the Board of Directors of the
Company (the "Board") for use at the Company's 1999 Annual Meeting of
Stockholders to be held on Friday, December 3, 1999, at 8:30 a.m. (local time),
in the Huntington Room of the Holiday Inn, 7390 West Hampden Avenue, Lakewood,
Colorado 80235, and at any adjournment(s) or postponement(s) thereof (the
"Annual Meeting"). This Proxy Statement, the accompanying proxy card and the
Company's Annual Report (the "Annual Report") for the fiscal year ended May 31,
1999 ("Fiscal 1999"), are first being mailed to stockholders on or about
November 1, 1999. The Annual Report is not to be considered a part of the
Company's proxy solicitation materials.
PURPOSE OF ANNUAL MEETING
At the Annual Meeting, stockholders will be asked to (1) elect
five directors of the Company to serve until the next annual meeting of
stockholders or until their successors are duly elected and qualified; (2)
ratify KPMG LLP as the Company's auditors for the year ending May 31, 2000
("Fiscal 2000"); and (3) transact such other business as may properly come
before the Annual Meeting.
The Board recommends a vote "FOR" (1) the election of the five
nominees for directors of the Company listed below, and (2) ratification of KPMG
LLP as the Company's auditors for Fiscal 2000.
QUORUM AND VOTING RIGHTS
The presence, in person or by proxy, of the holders of a majority
of the outstanding shares of common stock, $.008 par value, of the Company (the
"Common Stock") is necessary to constitute a quorum at the Annual Meeting. Only
stockholders of record at the close of business on Friday, October 15, 1999 (the
"Record Date"), will be entitled to notice of, and to vote at, the Annual
Meeting. As of the Record Date, there were 5,303,551 shares of Common Stock
outstanding and entitled to vote. Holders of Common Stock as of the Record Date
are entitled to one vote for each share held.
All shares of Common Stock represented by properly executed
proxies will, unless such proxies have previously been revoked, be voted in
accordance with the instructions indicated in such proxies. If no such
instructions are indicated, such shares will be voted in favor of (i.e., "FOR")
(1) the election of the five nominees for directors of the Company listed below
and (2) ratification of KPMG LLP as the Company's auditors for Fiscal 2000. The
holders of a majority of the outstanding shares of Common Stock or the Company,
present at the Annual Meeting in person or represented by proxy, shall
constitute a quorum. If a quorum is present, directors are elected by a
plurality of the vote, i.e., the nominees receiving the highest number of votes
cast in favor of their election will be elected to the Board. As to all other
matters voted on at the Annual Meeting, the matter is approved if the votes cast
in favor of the matter exceed the votes cast opposing the matter. Broker
non-votes will not be counted as shares present for quorum purposes, for
purposes of the matters not voted on by the brokers, and will not be counted for
any purpose in determining whether such a proposal has been approved.
Abstentions will be counted as shares present for quorum purposes, but otherwise
will count as a vote against the applicable proposal.
1
<PAGE>
Any stockholder executing a proxy has the power to revoke such
proxy at any time prior to its exercise. A proxy may be revoked by (1) filing
with the Company a written revocation of the proxy, (2) appearing at the Annual
Meeting, revoking the proxy and casting a vote in person or (3) submitting a
duly executed proxy bearing a later date.
The cost of preparing, printing, assembling and mailing this Proxy
Statement and other material furnished to stockholders in connection with the
solicitation of proxies will be borne by the Company. In addition to the
solicitation of proxies by use of the mails, officers, directors and regular
employees of the Company may solicit proxies by written communication,
telephone, telegraph or personal call. These persons are to receive no special
compensation for any solicitation activities. The Company will reimburse banks,
brokers and other persons holding Common Stock in their names, or those of their
nominees, for their expenses in forwarding proxy solicitation materials to
beneficial owners of Common Stock.
ELECTION OF DIRECTORS
NOMINEES
The Board currently consists of five members: William H. Buckland,
James D. Edwards, Gary M. Jacobs, Robert A. Sharpe II and James D. Walker. All
of the directors were elected at the prior annual meeting of stockholders of the
Company held on October 23, 1998 (the "1998 Annual Meeting").
The Board proposes that the five individuals listed below as
nominees be elected as directors of the Company to hold office until the next
annual meeting of stockholders or until their successors are duly elected and
qualified. Each nominee has consented to serve if elected to the Board. In the
event that any nominee is unable to serve as a director at the time of the
Annual Meeting (which is not expected), proxies with respect to which no
contrary direction is made will be voted "FOR" such substitute nominee as shall
be designated by the Board to fill the vacancy.
The names of the nominees, their ages at the Record Date and
certain other information about them are set forth below:
Name Age Position(s) with Company Director Since
- - ------------------- --- ------------------------ --------------
William H. Buckland 54 Director 1995
James D. Edwards 59 Director 1987
Gary M. Jacobs 52 Director 1978-1990 and 1994
Robert A. Sharpe II 41 Director 1996
James D. Walker 54 Chairman of the Board, 1994
President, Chief Executive
Officer and Director
Mr. Buckland has been Chairman of the Board, President and Chief
Executive Officer of MCC Financial Corporation, an aircraft and equipment lessor
("MCC"), since May 1998. From May 1988 to May 1998, Mr. Buckland was Chairman of
the Board, Secretary and Treasurer of MCC. From May 1988 to present, Mr.
Buckland has been and continues to be a director and 50% stockholder of MCC.
Immediately prior to the purchase of MCC in 1988, Mr. Buckland held, from 1978
to 1988, a number of executive positions at Fairchild Industries, Inc. Mr.
Buckland is also a director of MCC Aircraft Leasing I, Inc., MCC World Aviation
Associates, Inc., and Capital Associates International, Inc., a wholly-owned
subsidiary of the Company ("CAII").
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<PAGE>
Mr. Edwards has been retired since 1995. From May 1989 to May
1995, Mr. Edwards was President, Chief Executive Officer and a director of
Tricord Systems, Inc., a computer hardware and software development firm. From
1987 to 1989, Mr. Edwards was President and Chief Executive Officer of Telwatch,
Inc., a telecommunications firm. From 1983 to 1987, Mr. Edwards held various
executive positions with AT&T, including President of AT&T Computer Systems.
Prior to 1983, Mr. Edwards held executive positions with IBM Corporation, Xerox
Corporation and Bausch & Lomb. Mr. Edwards is also a director of Chatcom, Inc.,
Lexicor, Red Hill, Dezignz and CAII.
Mr. Jacobs has been Executive Vice President and Secretary of
Corporate Express, Inc., an office products supply company ("CEI"), since July
1995. From 1992 to July 1995, Mr. Jacobs was also Chief Financial Officer of
CEI. From 1990 through November 1992, Mr. Jacobs served as the President and
Chief Executive Officer of Boulder Retail Finance Corporation, an investment
firm controlled by Mr. Jacobs. From 1978 through mid-1990, Mr. Jacobs served as
Executive Vice President and in various other senior executive positions with
the Company and CAII. Prior to joining the Company, Mr. Jacobs served as a
director of finance for Storage Technology Corporation, a company which
manufactures computer peripheral devices. Mr. Jacobs served as a director of the
Company and CAII from 1978 through mid-1990 and is currently a director of
Boulder Retail Finance Corporation and CAII.
Mr. Sharpe has been Executive Vice President of Fairchild
Fasteners, a fastener manufacturer, since July 1996. From July 1994 through June
1996, Mr. Sharpe was Vice President, Corporate Development of Smithfield Foods,
Inc, a food processor. Prior to joining Smithfield Foods, Inc., Mr. Sharpe had a
ten year career in corporate banking. From 1987 through June 1994, Mr. Sharpe
served in a number of capacities at NationsBank Corporation, a bank holding
company, including Senior Vice President in charge of Mid-Atlantic Corporate
Banking relationships. Mr. Sharpe is also a director of the Fairchild
Corporation and CAII.
Mr. Walker has been the President and Chief Executive Officer of
the Company since April 1998. From May 1988 to May 1998, Mr. Walker was
President and Chief Executive Officer of MCC. From May 1988 to present, Mr.
Walker has been and continues to be a director and 50% stockholder of MCC. Prior
to that time, Mr. Walker was involved in equipment lease management with
Equipment Leasing and Financing Corp. (President 1987-1988),Thomson McKinnon
Securities, Regional Vice President - Lease Originations from 1986 to 1987 and
Finalco, Inc. starting as Marketing Representative in 1981 and becoming Senior
Vice President of Marketing. Prior to that, Mr. Walker held marketing and
engineering positions with IBM Corporation and TRW, Inc. Mr. Walker is also a
director of MCC Aircraft Leasing I, Inc., MCC World Aviation Associates, Inc.
and CAII. Mr. Walker is a Director on the Board of the Equipment Leasing
Association ("ELA") and serves as Chairman of the Association's Ethics
Committee.
BOARD COMMITTEES AND MEETINGS
The Board held a total of four (4) regular meetings during the
fiscal year ended May 31, 1999 ("Fiscal 1999") and one (1) special meeting. The
Board currently has an Audit and Finance Committee, Compensation and Operations
Committee, Nominating Committee, Executive Committee and Special Committee.
The Audit and Finance Committee, consisting of Messrs. Buckland,
Jacobs, and Sharpe, held a total of four (4) meetings during Fiscal 1999. The
Audit and Finance Committee recommends selection of the Company's independent
auditors and is primarily responsible for reviewing recommendations made by the
Company's independent auditors, evaluating the Company's adoption of such
recommendations and evaluating, and making recommendations with respect to, the
Company's internal audit functions and certain finance matters. Mr. Jacobs
currently serves as the Chairman of the Audit and Finance Committee.
The Compensation and Operations Committee consisting of Messrs.
Edwards and Walker, held a total of four (4) meetings during Fiscal 1999. The
Compensation and Operations Committee is responsible for initiating, evaluating
and recommending to the Board amendments to the Company's compensation plans and
overseeing certain operations matters. Mr. Edwards currently serves as the
Chairman of the Compensation and Operations Committee.
3
<PAGE>
The Nominating Committee consisting of Messrs. Sharpe and Walker,
held one (1) meeting during Fiscal 1999. The Nominating Committee recommends to
the Board nominees for appointment to the Board and nominees for the slate of
directors to be voted on by the Company's stockholders at the annual meetings.
The Nominating Committee will not consider nominees recommended by stockholders.
Mr. Walker currently serves as the Chairman of the Nominating Committee.
The Executive Committee consisting of Messrs. Buckland and Walker
held a total of fourteen (14) meetings during Fiscal 1999. The Executive
Committee is responsible for (1) overseeing, reviewing and consulting with
senior management, and approving certain actions of senior management,
concerning the execution and implementation of the Company's business plan, (2)
approving certain material lease transactions, (3) approving promotions and
compensation adjustments for all employees below the senior vice president level
and (4) performing such other duties as may be assigned to it by the Board from
time to time.
On June 23, 1999, the Board formed a Special Committee, consisting
of Messrs. Edwards, Jacobs and Sharpe. The Special Committee did not meet during
Fiscal Year 1999. The Special Committee is responsible for reviewing, analyzing
and making recommendations to the full Board concerning strategic and financial
opportunities presented to the Board from time to time.
DIRECTOR COMPENSATION
The Board amended and restated the Company's Board of Directors
Compensation Policy in Fiscal 1996 (the "Amended Policy"), effective on and as
of October 26, 1995. Pursuant to the Amended Policy, the Company pays each
director (1) a $3,750 quarterly retainer ($5,000 for the Chairman of the Board),
(2) $1,000 for each Board meeting attended, (3) $1,000 for each committee
meeting (other than Executive Committee meetings) attended, (4) consulting fees
for consulting services at a rate approved by the Board, and (5) all reasonable
out-of-pocket expenses of attending such meetings and performing any consulting
services for the Company.
Pursuant to a Consulting Agreement with Mr. Buckland, dated as of
June 1, 1996, the Company paid Mr. Buckland $112,500 for services rendered
during Fiscal 1999. Mr. Walker became an employee of the Company effective April
7, 1998, at which time his Consulting Agreement with the Company, dated June 1,
1996, terminated and he entered into an Employment Agreement with the Company.
For Fiscal 1997, the Board's Special Compensation Committee
decided to provide incentive compensation to each of Messrs. Buckland and Walker
through the Company's assignment to each of a 2.70735 percent interest in the
residual proceeds derived from certain equipment leased to General Motors. Such
residual proceeds will be realized and paid over approximately seven (7) years.
The assignments of these interests is evidenced by non-recourse residual sharing
notes from the Company. In Fiscal 1997, the Company accrued estimated expenses
of $50,500 for each of the residual sharing notes, reducing the Company's book
value for these residuals to reflect this assigned interest to Messrs.
Buckland and Walker.
For Fiscal 1998 and 1999, the Consulting Agreements provide
incentive compensation of 4% (the "Base Incentive Payment Percentage") of the
Company's pre-tax earnings for each such fiscal year. The Base Incentive Payment
Percentage is to be adjusted up or down by the percentage change in the average
closing price of the Company's stock for the last four months of the applicable
fiscal year, as compared to the same period in the prior fiscal year, but in no
event will the Base Incentive Payment Percentage be adjusted lower than 3% or
higher than 6%.
For Fiscal 1998, the total incentive compensation earned by Mr.
Buckland was $96,000 and by Mr. Walker was $82,000. Mr. Walker's incentive
compensation payment was pro-rated to the date his Consulting Agreement was
terminated, April 7, 1998. Of those amounts, payment of one-third has been
deferred to June 1, 2001 so that Messrs. Buckland and Walker received for Fiscal
1998, $64,000 and $54,667, respectively, and will receive the balance of $32,000
and $27,333, respectively, on June 1, 2001, provided each is still a director
and/or employee on that date. Messrs. Buckland and Walker earned no incentive
compensation during Fiscal 1999.
4
<PAGE>
The following table sets forth the amount of quarterly retainer
fees, meeting fees, Executive Committee fees, consulting fees and total fees
paid to directors during Fiscal 1999:
<TABLE>
<CAPTION>
Quarterly Prior Year Consulting
Directors Retainer Meeting Fees Fees Fees Total (1)
- - -------------------- --------- ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
William H. Buckland $ 15,000 $ 9,000 (3) -0- $ 112,500 $ 136,500
James D. Edwards $ 15,000 $ 9,000 (3) -0- -0- $ 24,000
Gary M. Jacobs $ 15,000 $ 8,000 (4) -0- -0- $ 23,000
Robert A. Sharpe II $ 15,000 $ 8,000 (4) -0- -0- $ 23,000
James D. Walker $ 20,000 (2) $ 9,000 (3) $ 6,250 -0- $ 32,250
</TABLE>
(1) These amounts do not include (a) expense reimbursements paid to the
directors during Fiscal 1999 and (b) the value of stock options that were
granted in prior fiscal years.
(2) As Chairman of the Board, Mr. Walker's quarterly retainer is $5,000. At Mr.
Walker's instructions, the Company paid $5,000 of accrued Board fees
otherwise payable to Mr. Walker to MCC World Aviation Associates, Inc., a
corporation owned 50% by Mr. Buckland and 50% by Mr. Walker.
(3) Consists of $1,000 per meeting for 4 regular Board meetings and 4 committee
meetings and 1 special board meeting.
(4) Consists of $1,000 per meeting for 3 regular Board meetings and 4 committee
meetings, and (c) 1 special board meeting.
For Fiscal 1999, the Company granted options under the
Non-Employee Director Plan to each of Messrs. Edwards, Jacobs and Sharpe to
acquire 5,000 shares each of Common Stock at an exercise price of $4.125 per
share and an option to Mr. Buckland to acquire 45,000 shares at an exercise
price of $4.125 per share (the "1999 Director Options"). All of the 1999
Director Options vested in full on May 31, 1999, provided each recipient remains
as a director and will expire in June 2009. Per Mr. Walker's Employment
Agreement, the Company granted Mr. Walker an option to acquire 10,000 shares of
Common Stock under the Employee Stock Option Plan, at an exercise price of
$4.125 per share, which vested in full on May 31, 1999 and will expire in June
2009.
In November 1998, Mr. Edwards exercised stock options for 86,250
shares of common stock with an average exercise price of $1.53 by paying the par
value in cash of $690.00 and issuing a note payable to the Company equal to
approximately $131,000, the remainder of the exercise price. The note bears
interest at the rate of 4.5% compounded semi-annually and is due November 3,
2002.
The Company believes that the transactions, described above, were
on terms no less favorable to the Company than could have been obtained in arm's
length transactions. All transactions or loans between the Company and its
directors, officers, principal stockholders and their affiliates have been, and
similar future transactions or loans will be, approved in advance by
disinterested directors and have been or will be on terms believed by the
Company to be no less favorable to the Company than those which could be
obtained in arm's length transactions.
COMPENSATION AND OPERATIONS COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Edwards and Walker are directors of the Company. In April
1998, Mr. Walker became an employee of the Company. Mr. Edwards has never been
an employee of the Company. Messrs. Edwards and Walker also are directors of
CAII. Messrs. Buckland and Walker are directors and 50% stockholders of MCC and
MCC World Aviation Associates, Inc. ("MCC World"), which own of record 2,833,369
and 23,706 shares, respectively, of Common Stock. Mr. Buckland is also an
officer of MCC and MCC World. See "Certain Transactions" below. The Company
leased from MCC office space for its Southeast Region Office and paid MCC rent
in the amount of $23,000 for Fiscal 1999. Mr. Walker is now President and Chief
Executive Officer and a director of CAII.
5
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth (i) the names of the executive
officers of the Company (ii) their ages as of the Record Date and (iii) their
positions with the Company:
Name of Individual Age Capacities in Which Served
- - -------------------- --- --------------------------
James D. Walker 54 Chairman of the Board, President, Chief Executive
Officer and Director
Anthony M. DiPaolo 40 Senior Vice President - Chief Financial Officer
and Treasurer
John F. Olmstead 56 Senior Vice President - Capital Markets Group and
Assistant Secretary
Richard H. Abernethy 45 Vice President - Portfolio Management
See "ELECTION OF DIRECTORS" above for a description of Mr.
Walker's background and the positions held by Mr. Walker with the Company.
Mr. DiPaolo has been Senior Vice President - Chief Financial
Officer and Treasurer of the Company since March 1997. Mr. DiPaolo joined the
Company in July 1990 and has held various positions in the accounting and
finance areas of the Company. Prior to July 1990, he held the offices of Chief
Financial Officer for the Mile High Kennel Club, Inc. and Vice President -
Controller for VICORP Restaurants, Inc. and was an audit manager for Coopers &
Lybrand. Mr. DiPaolo is an officer, but not a director, of CAII.
Mr. Olmstead has been Vice President - Capital Markets Group and
Assistant Secretary of the Company since September 1991. Mr. Olmstead joined the
Company as a Vice President in December 1988. From 1969 through 1983, Mr.
Olmstead was a co-owner of Finalco, Inc., an independent leasing company, and
served as a senior officer of Finalco Corporation. From 1983 through the
present, Mr. Olmstead has served as Chairman of the Board of Neo-Kam Industries,
Inc., Matchless Metal Polish Company, Inc., and ACL, Inc. Mr. Olmstead is an
officer, but not a director, of CAII.
Mr. Abernethy has been Vice President - Portfolio Management of
the Company since October 1997. Mr Abernethy joined CAII in April 1992, as the
Equipment Valuation Manager. From September 1994 to October 1997, Mr. Abernethy
was Vice President - Asset Management of the Company. Prior to joining CAII, Mr.
Abernethy was employed by Barclays Leasing for six years where he served as
Equipment Manager with similar duties. Mr. Abernethy is not an officer or
director of the Company but does serve as an officer of CAII.
EXECUTIVE COMPENSATION
COMPENSATION AND OPERATIONS COMMITTEE REPORT. The Compensation and
Operations Committee is composed currently of Messrs. Edwards and Walker. The
Company's compensation programs are designed to (1) relate the level of
compensation paid to individual executive officers and all executive officers as
a group to the Company's success in meeting its annual and long-term performance
goals and business plans, (2) reward individual, group and team achievement(s),
(3) attract and retain executives capable of leading the Company to meet its
performance and business plan goals and (4) motivate executive officers to
enhance long-term stockholder value.
The Compensation and Operations Committee annually evaluates the
total cash compensation (including base salary and incentive cash compensation)
paid to, Common Stock and stock option ownership of, the Company's executive
officers, including its Chief Executive Officer, in light of corporate
performance compared with the Company's business plan and the performance of
other independent leasing companies. The Company has considered and will
continue to consider the potential impact of Section 162(m) of the Internal
Revenue Code of 1986, as amended. Section 162(m) disallows a tax deduction for
any publicly-held corporation for individual compensation exceeding $1 million
in any taxable year for the named executive officers, unless compensation is
performance based. Since the targeted cash compensation of each of the named
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executive officers is well below the $1 million threshold and any stock options
granted under any employee stock option plan will meet the requirement of being
performance based, the Compensation and Operations Committee believes that this
section will not reduce the tax deduction available to the Company. The
Company's policy is to qualify to the maximum extent possible its executives'
compensation for deductibility under applicable tax laws.
The Company's Fiscal 1999 executive officer compensation program
was composed entirely of salary compensation. The salary compensation of each of
the Company's executives was established with survey data of compensation paid
by other independent leasing companies and was within the salary range for
executives performing similar duties and having similar responsibilities at such
other companies. The Compensation and Operations Committee also relied, in part,
on other subjective considerations in setting executive officer compensation
levels based on the Company's overall performance goals.
In April 1998, the Special Compensation Committee, consisting of
Messrs. Edwards, Jacobs and Sharpe, set Mr. Walker's Fiscal 1998 compensation on
becoming an employee of the Company and assuming the additional responsibilities
of President and Chief Executive Officer of the Company. The Special
Compensation Committee also negotiated on behalf of the Company an Employment
Agreement with Mr. Walker that commenced in April 1998 and continues until May
31, 2001, unless sooner terminated pursuant to its terms, which is described in
detail in "Executive Officers - Executive Employment Agreements" below. The
employment agreement with Mr. Walker is based on both quantitative and
qualitative factors directly linked to the Company's performance, achievement of
short-term and long-term objectives, the enhancement of stockholder value.
For Walker's base compensation and cash bonuses, see "Executive
Officers - Summary Compensation Table" below.
The Compensation and Operations Committee believes the Company's
executive officer compensation programs serve the Company's best interests by
attracting and retaining qualified professionals and providing those persons
incentives to attain financial and other goals which benefit the Company and its
stockholders.
Compensation and Operations Committee
James D. Edwards
James D. Walker
EXECUTIVE EMPLOYMENT AGREEMENTS.
THE WALKER EMPLOYMENT AGREEMENT. The Company entered into an
Employment Agreement with Mr. Walker, dated as of April 7, 1998 (the "Walker
Employment Agreement"), whereby: (1) Mr. Walker's employment with the Company as
President and Chief Executive Officer (in addition to his existing office as
Chairman of the Board) commenced on April 7, 1998, and continues until May 31,
2001 and, thereafter, the term will be automatically renewed for successive one
year terms unless either provides the other notice to terminate 60 days prior to
the end of the then current term; (2) Mr. Walker's annual base salary is
$325,000; (3) Mr. Walker is to receive incentive compensation equal to 4% of the
Company's pre-tax earnings (subject to the Company achieving certain
profitability targets) which percentage can be increased or decreased by the
percentage change in the average closing price of the Company's common stock for
the last four months of the current fiscal year as compared to the same period
in the prior fiscal year, but in no event will it be adjusted lower than 3% or
higher than 6% (he earned no incentive compensation for fiscal 1999); (4) Mr.
Walker will be granted stock options annually, equal to those granted to the
non-employee Directors (see Part III, Item 10, above); (5) Mr. Walker's
Director's fees will continue, including the additional fee for Mr. Walker's
service as Chairman of the Board; (6) payments are to be made to MCC to
reimburse it for certain group benefit plans and MCC's SEP/IRA plans provided to
Mr. Walker; (7) reimbursement is made to Mr. Walker of his reasonable expenses
7
<PAGE>
incurred in carrying out his duties; and (8) payment is to be made to Mr. Walker
of severance benefits in the event of his involuntary termination without cause
or due to a change of control of the Company, equal to the greater of (i) three
times his annual base salary or (ii) his base salary to the end of the term of
the Walker Employment Agreement, plus the pro rated amount of the incentive
compensation Mr. Walker would have received for the fiscal year in which such
termination occurs. The Walker's Employment Agreement also acknowledges Mr.
Walker's duties as an officer and director of MCC and his duties in the event of
a conflict of interest between the Company and MCC, and requires Mr. Walker to
abide by certain non-disclosure and non-use of the Company's confidential
information and his agreement not to solicit employees or customers of the
Company.
SUMMARY COMPENSATION TABLE. The following table provides certain
summary information for Fiscal 1999, Fiscal 1998 and Fiscal 1997, concerning
compensation awarded or paid to, or earned by, the Company's current Chief
Executive Officer, each of the three other highest paid executive officers of
the Company and one executive officer who resigned in April 1999 (collectively
referred to herein as the "Named Executive Officers"):
<TABLE>
<CAPTION>
| LONG-TERM COMPENSATION
|-----------------------------------------------
ANNUAL COMPENSATION | AWARDS (17) |
FISCAL --------------------------------------------|---------------------------- | ----------------
YEAR OTHER | RESTRICTED SECURITIES |
ENDED ANNUAL | STOCK UNDERLYING | LTIP
NAME AND POSITION 5/31 SALARY BONUS (4) COMPENSATION | AWARDS OPTIONS | PAYOUTS
- - ------------------------- ------ ------------- ------------ ------------ |----------- ---------- | ---------------
| |
<S> <C> <C> <C> <C> | <C> <C> <C>
James D. Walker, 1999 $ 250,000 (1) $ -0- $ 1,600 (8) | -0- 10,000 | $ -0-
President and Chief 1998 $ 42,500 $ 14,000 (5) $ -0- | -0- 35,000 | $ -0-
Executive Officer 1997 $ -0- $ -0- $ -0- | -0- -0- | $ -0-
| |
Anthony M. DiPaolo | |
Senior Vice President 1999 $ 156,800 (3) $ -0- $ -0- | -0- -0- | $ -0-
Chief Financial Officer 1998 $ 138,030 (3) $ 45,000 (6) $ -0- | -0- 25,000 | $ -0-
and Treasurer 1997 $ 110,722 (3) $ 20,000 $ -0- | -0- -0- | $ 45,335 (9)
| |
John F. Olmstead, | |
Senior Vice President 1999 $ 174,300 (3) $ -0- $ -0- | -0- -0- | $ -0-
Capital Markets Group 1998 $ 173,304 (3) $ 45,000 (7) $ 1,600 (8) | -0- 25,000 | $ -0-
and Assistant Secretary 1997 $ 164,300 (3) $ 40,000 $ -0- | -0- -0- | $ 81,527 (10)
| |
Richard H. Abernethy, 1999 $ 105,000 (2) $ -0- $ -0- | -0- -0- | $ -0-
Vice President, Portfolio 1998 N/A N/A N/A | N/A N/A | N/A
Management 1997 N/A N/A N/A | N/A N/A | N/A
| |
John A. Reed, 1999 $ 170,715 (12) $ -0- $ -0- | -0- -0- (15)| $ -0-
Senior Vice President, 1998 $ 152,045 (13) $ 6,000 $ 1,600 (14)| -0- 15,000 | $ -0-
Administration (11) 1997 $ 88,126 $ 17,000 $ -0- | -0- -0- | $ 21,225 (16)
</TABLE>
8
<PAGE>
(1) For fiscal 1999, Mr. Walker elected to permanently forego $75,000 of base
compensation.
(2) Mr. Abernethy became a named Executive Officer for the first time in Fiscal
1999.
(3) Includes an accrual of $6,800 in each of Fiscal 1999, 1998 and 1997 for
premium paid on behalf of the Executive Officer, for a universal life
insurance policy pursuant to an insurance benefit plan.
(4) All bonuses earned in each Fiscal Year are paid in the following Fiscal
Year. No bonuses were earned or paid in Fiscal Year 1999.
(5) $9,333 paid in Fiscal 1999 and payment of the remaining one-third ($4,667)
is deferred to June 1, 2001, provided Mr. Walker continues as an employee
of the Company through that date.
(6) $30,000 paid in Fiscal 1999 and payment of the remaining one-third
($15,000) is deferred to June 1, 2001, provided Mr. DiPaolo continues as an
employee of the Company through that date.
(7) $30,000 paid in Fiscal 1999 and payment of the remaining one-third
($15,000) is deferred to June 1, 2001, provided Mr. Olmstead continues as
an employee of the Company through that date.
(8) Travel expense paid with respect to employee's spouse accompanying employee
on business travel.
(9) In Fiscal 1997, Mr. DiPaolo received $45,335 of proceeds (net of the option
exercise prices) from the sale of options to acquire 40,000 shares of
Common Stock to the Company pursuant to the Stock Option Repurchase
Program. See "Stock Option Repurchase Program" below.
(10) In Fiscal 1997, Mr. Olmstead received $81,527 of proceeds (net of the
option exercise prices) from the sale of options to acquire 56,250 shares
of Common Stock to the Company pursuant to the Stock Option Repurchase
Program. See "Stock Option Repurchase Program" below.
(11) In April 1999, Mr. Reed resigned from the Company.
(12) Includes $39,082 in commissions and $21,635 in separation pay.
(13) Includes $54,526 in commissions
(14) Travel expense paid with respect to employee's companion accompanying
employee on business travel.
(15) During 1999, Mr. Reed exercised options to acquire 5,000 shares of Common
Stock and sold all of the shares.
(16) In Fiscal 1997, Mr. Reed received $21,255 of proceeds (net of the option
exercise prices) from the sale of options to acquire 20,000 shares of
Common Stock to the Company pursuant to the Stock Option Repurchase
Program. See "Stock Option Repurchase Program" below.
(17) There were no stock option grants to Named Executive Officers in Fiscal
1999.
9
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1999. The following table sets forth
information concerning stock option grants made in Fiscal 1999 to the Named
Executive Officers. There were no grants of stock appreciation rights ("SARs")
to said individuals during Fiscal 1999.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SHARES GRANTED TO ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES EXERCISE PRICE APPRECIATION FOR
GRANTED IN PRICE EXPIRATION OPTION TERM (2)
NAME OPTIONS (1) FISCAL 1998 ($/SHARE) DATE 5% 10%
- - -------------------- ----------- ----------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
James D. Walker 10,000 100% $ 4.125 06/01/09 $ 25,942 $ 65,742
Anthony M. DiPaolo -0- - - - - -
John F. Olmstead -0- - - - - -
Richard H. Abernethy -0- - - - - -
John A. Reed -0- - - - - -
</TABLE>
(1) The options vested in full on May 31, 1999.
(2) The indicated 5% and 10% rates of appreciation are provided to comply with
Securities and Exchange Commission regulations and do not necessarily
reflect the views of the Company as to the likely trend in the stock price.
Actual gains, if any, on stock option exercises and the sale of Common
Stock holdings will be dependent on, among other things, the future
performance of the Common Stock and overall stock market conditions. There
can be no assurance that the amounts reflected in this table will be
achieved.
OPTION EXERCISES AND HOLDINGS. The following table provides
information with respect to the Named Executive Officers concerning the exercise
of stock options during Fiscal 1999 and unexercised stock options held as of the
end of Fiscal 1999:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999 AND FISCAL YEAR 1999 YEAR END OPTION VALUES
-------------------------------------------------------------------------------------------
Number of Value of Unexercised
Number of Unexercised Options In-the-Money Options
Shares Value Options at Year End at Year End (2)
Acquired on Realized on ---------------------------- -----------------------------
Name Exercise (1) Exercise (1) Exercisable Unexercisable Exercisable Unexercisable
- - -------------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James D. Walker -0- $ -0- 81,367 -0- $ 35,100 -0-
Anthony M. DiPaolo -0- $ -0- 16,250 18,750 $ 27,000 -0-
John F. Olmstead -0- $ -0- 25,000 18,750 $ 39,200 -0-
Richard H. Abernethy -0- $ -0- 7,500 11,250 $ 5,200 -0-
John A. Reed (3) 5,000 $ 16,600 -0- -0- $ -0- -0-
</TABLE>
10
<PAGE>
(1) See "Executive Officers - Summary Compensation Table" above for information
concerning sales of stock options by Named Executive Officers to the
Company during Fiscal 1999.
(2) The value of unexercised in-the-money options at the end of Fiscal 1999 is
based on the closing price of the Common Stock as reported on the
NASDAQ/NMS at May 31, 1999 ($3.375 per share), less the exercise price per
share of the options.
(3) In April 1999, Mr. Reed resigned from the Company.
STOCK OPTION REPURCHASE PROGRAM. Effective as of May 31, 1996, the
Company adopted and implemented its Stock Option Repurchase Program, pursuant to
which it repurchased 401,367 stock options granted under its employee stock
option plan from 33 employees at a price of $2.45 per option share less the
exercise price of the repurchased stock options (a total repurchase price, net
of option exercise amounts, of $557,240). See "Executive Compensation - Summary
Compensation Table" to determine the Named Executive Officers who participated
in this program during Fiscal Year 1997. The Company repurchased no stock
options under its Stock Repurchase Program in Fiscal Year 1998 or Fiscal Year
1999.
LONG-TERM INCENTIVE PLANS ("LTIPS"). The Company made no LTIP
awards in Fiscal Year 1999, and there were no LTIP payouts in Fiscal Year 1999.
PERFORMANCE GRAPH. The following graph is a comparison of
cumulative total return on investment among the Company, the NASDAQ Composite
Index (the "NASDAQ Index") and a peer group index consisting of certain
independent leasing companies (the "Peer Group Index"):
[PERFORMANCE GRAPH APPEARS HERE)
11
<PAGE>
================================================================================
1994 1995 1996 1997 1998 1999
================================================================================
NASDAQ $100 $119 $173 $195 $247 $347
- - --------------------------------------------------------------------------------
SELECTED PEER $100 $133 $183 $241 $366 $443
- - --------------------------------------------------------------------------------
CAI $100 $ 82 $171 $200 $229 $193
================================================================================
* Assumes $100 Investment on January 1, 1994 and reinvestment of dividends
into additional shares of same class.
* Select Peer Group is comprised of the following independent leasing
companies:
Amplicon
Comdisco, Inc.
Leasing Solutions, Inc.
Sunrise Leasing
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") requires the Company's directors, officers and persons who
own more than ten percent of a registered class of the Company's equity
securities ("10% Holders") to file with the SEC initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Directors, officers and 10% Holders are required by SEC regulations
to furnish the Company with copies of all of the Section 16(a) reports they
file.
To the Company's knowledge, during Fiscal 1999 all Section 16(a)
filing requirements applicable to its directors, officers and 10% Holders were
timely made by such persons.
CERTAIN TRANSACTIONS
During the period November 1995 through January 1999, MCC acquired
voting control of the Company through a private stock purchase transaction.
Messrs. Buckland and Walker are each 50% owners of MCC. Pursuant to these Stock
Purchase Agreements, MCC acquired 65,120 shares of Common Stock for a purchase
price of $3.30 per share, or an aggregate amount of $214,896.
During Fiscal 1999, the Company paid the following amounts to the
Messrs. Buckland and Walker, who are each 50% stockholders of MCC, for Executive
Committee fees and under their consulting and employment agreements:
Fiscal 1999
-----------
Mr. Buckland $ 112,500
Mr. Walker *
*In April 1998, Mr. Walker became an employee of the Company and was paid for
the balance of 1998 and 1999 pursuant to the terms of his employment agreement.
On August 11, 1999, the Company borrowed $350,000 from Messrs.
Buckland and Walker and issued a subordinated note to each in the face amount of
$175,000. The notes bear interest at 7% per year plus additional contingent
interest at 9% per year based on the performance of certain residual interests
owned by the Company. Principal and interest (which accrues quarterly) are due
on August 11, 2002, subject to certain prepayment obligations.
The notes are subordinated to all existing recourse bank debt.
12
<PAGE>
The following table sets forth, as of the Record Date, the number
of shares and percentage of the outstanding Common Stock beneficially owned by
each person known by the Company to own more than 5% of the outstanding Common
Stock ("Major Stockholders"):
Beneficial Ownership(4)
--------------------------------
Number of Shares Percent
---------------- -------
James D. Walker (1) 1,509,905 28.21%
7175 West Jefferson Avenue, Suite 4000
Lakewood, Colorado 80235
William H. Buckland (1) 1,507,205 28.17%
8180 Greensboro Drive, Suite 1000
McLean, Virginia 22102
ROI Capital Management, Inc. (2) 700,550 13.29%
17 East Sir Francis Drake Boulevard - #225
Larkspur, California 94939
Gary M. Jacobs (3) 355,904 6.71%
2995 Baseline Road
Boulder, Colorado 80303
(1) Messrs. Buckland and Walker, who otherwise are unrelated to each other,
each own 50% of the issued and outstanding capital stock of MCC and MCC
World Aviation Associates, Inc. ("MCC World"). MCC and MCC World, each
having the address of 8180 Greensboro Drive, Suite 1000, McLean, Virginia
22102, are record owners of 2,833,369 and 23,706 shares, respectively, of
Common Stock, which represents 53.74% and 0.4% respectively of the issued
and outstanding Common Stock. Messrs. Buckland and Walker also own 78,667
and 81,367 vested stock options, respectively, for the purchase of Common
Stock.
(2) As disclosed in the Schedule Forms 13G filed with the United States
Securities and Exchange Commission on February 19, 1999.
(3) Includes (a) 30,971 shares of Common Stock that Mr. Jacobs is entitled to
acquire upon the exercise of vested stock options, (b) 3,000 shares held in
the name of Mr. Jacobs' minor children for which he disclaims beneficial
ownership and (c) 321,933 shares held of record.
(4) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within sixty (60) days from the Record Date upon
the exercise of options. The record ownership of each beneficial owner is
determined by assuming that stock options that are held by such person and
that are exercisable within sixty (60) days from the Record Date have been
exercised. The total outstanding shares used to calculate each beneficial
owner's percentage includes such stock options.
13
<PAGE>
The following table sets forth, as of the Record Date, the number
of shares and percentage of the outstanding Common Stock beneficially owned by
directors who are not Major Stockholders, the Named Executive Officers and the
directors and executive officers as a group:
Management Ownership (6)
-------------------------------
Holder Number of Shares Percent
------ ---------------- -------
Richard H. Abernethy (1) 7,550 0.14%
Anthony M. DiPaolo (2) 23,250 0.44%
James D. Edwards (3) 86,250 1.63%
John F. Olmstead (4) 47,500 0.90%
Robert A. Sharpe II (5) 17,959 0.34%
Directors and Executive Officers
(other than Major Stockholders)
as a Group (5 persons) 182,459 3.46%
(1) Includes 7,500 shares of Common Stock that Mr. Abernethy is entitled to
acquire upon the exercise of vested stock options. This does not include
11,250 shares subject to unvested stock options granted to Mr. Abernethy.
(2) Includes 16,250 shares of Common Stock that Mr. DiPaolo is entitled to
acquire upon the exercise of vested stock options. This does not include
18,750 shares subject to unvested stock options granted to Mr. DiPaolo.
(3) In November 1998, Mr. Edwards exercised stock options for 86,250 shares of
common stock with an average exercise price of $1.53 by paying the par
value in cash of $690.00 and issuing a note payable to the Company equal to
approximately $131,000, the remainder of the exercise price. The note bears
interest at the rate of 4.5% compounded semi-annually and is due November
3, 2002.
(4) Includes 25,000 shares of Common Stock that Mr. Olmstead is entitled to
acquire upon the exercise of vested stock options. This does not include
18,750 shares subject to unvested stock options granted to Mr. Olmstead.
(5) Includes 17,959 shares of Common Stock that Mr. Sharpe is entitled to
acquire upon the exercise of vested stock options.
(6) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within sixty (60) days from the Record Date upon
the exercise of options. The record ownership of each beneficial owner is
determined by assuming that options that are held by such person and that
are exercisable within sixty (60) days from the Record Date have been
exercised. The total outstanding shares used to calculate each beneficial
owner's percentage includes such options.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has appointed KPMG LLP, certified public accountants, as
auditors to examine the financial statements of the Company for Fiscal 2000 and
to perform other appropriate accounting services and is requesting ratification
of such appointment by the stockholders. KPMG LLP has served as the Company's
auditors since May 3, 1993.
In the event that the stockholders do not ratify the appointment
of KPMG LLP, the adverse vote will be considered as a direction to the Board to
select other auditors for the next fiscal year. However, because of the
difficulty and expense of making any substitution of auditors after the
beginning of the current fiscal year, it is contemplated that the appointment
for Fiscal 2000 will be permitted to stand unless the Board finds other reasons
for making a change.
14
<PAGE>
It is understood that even if the selection of KPMG LLP is
ratified, the Board, in its discretion, may direct the appointment of a new
independent accounting firm at any time during the year if the Board feels that
such a change would be in the best interests of the Company and its
stockholders.
A representative of KPMG LLP is expected to attend the Annual
Meeting and will have an opportunity to make a statement if he or she desires to
do so and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for
stockholder action at the Company's annual meetings consistent with regulations
adopted by the Securities and Exchange Commission. For such proposals to be
considered for inclusion in the proxy statement and form of proxy relating to
the 2000 annual meeting, they must be received by the Company not later than May
29, 2000. Such proposals should be addressed to the Company at 7175 West
Jefferson Avenue, Suite 4000, Lakewood, Colorado 80235, Attention: Corporate
Secretary.
Proxies which confer discretionary authority will be able to be
voted on stockholder proposals that the stockholders do not request be included
in the Company's Proxy Statement but plan to present at the Company's next
Annual Meeting of Stockholders, unless the Company receives notice of the
proposals by no later than May 29, 2000.
OTHER MATTERS
Management does not intend to present, and has no information as
of the date of preparation of this Proxy Statement that others will present, any
business at the Annual Meeting other than business pertaining to matters
required to be set forth in the Notice of Annual Meeting of Stockholders and
Proxy Statement. However, if other matters requiring the vote of the
stockholders properly come before the Annual Meeting, it is the intention of the
persons named in the enclosed proxy to vote the proxies held by them in
accordance with their best judgment on such matters.
15
<PAGE>
FORM OF PROXY
CAPITAL ASSOCIATES, INC.
7175 WEST JEFFERSON AVENUE, SUITE 4000
LAKEWOOD, COLORADO 80235
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
December 3, 1999
The undersigned hereby appoints each of James D. Walker and John F.
Olmstead as proxies and attorneys-in-fact for the undersigned with full power of
substitution to vote on behalf of the undersigned at the 1999 Annual Meeting of
Stockholders of Capital Associates, Inc. ("Company") to be held on December 3,
1999, starting at 8:30 a.m. (local time), in the Huntington Room of the Holiday
Inn, 7390 West Hampden, Lakewood, Colorado 80235 and at any adjournment(s) or
postponement(s) thereof, all shares of the Common Stock $.008 par value, of the
Company standing in the name of the undersigned or which the undersigned may be
entitled to vote.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" ITEMS 1 AND 2. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the Annual Meeting or
any adjournments or postponements thereof. The undersigned hereby revokes any
proxy or proxies heretofore given by the undersigned.
It is understood that this proxy confers discretionary authority in respect
to matters not known or determined at the time of the mailing of the Notice of
Annual Meeting of Stockholders to the undersigned. The proxies and attorneys
intend to vote the shares represented by this proxy on such matters, if any, as
determined by the Board of Directors.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
1. ELECTION OF DIRECTORS FOR all nominees____ WITHHOLD AUTHORITY____
(except as indicated to the contrary) to vote for all nominees
Nominees: William H. Buckland, James D. Edwards, Gary M. Jacobs, Robert A.
Sharpe, II and James D. Walker
To withhold authority to vote for any individual nominee, write that
individual's name in the space provided below.
- - --------------------------------------------------------------------------------
2. Ratification of KPMG LLP as auditors for the Company for the 2000 fiscal
year:
FOR____ AGAINST____ ABSTAIN____
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and the Proxy Statement and Annual Report furnished herewith.
Please sign exactly as name appears at below:
Dated: __________________________ ________________________________
Signature
--------------------------------
Signature (if held jointly)
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 the corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
