<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
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 under Rule 14a-12
</TABLE>
PUBLICARD, INC.
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(Name of Registrant as Specified In Its Charter)
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(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:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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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:
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[ ] 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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<PAGE> 2
PubliCARD, Inc.
620 Fifth Avenue - 7th floor
Rockefeller Center
New York, NY 10020
Phone 212 489 8021
Fax 212 307 5781
www.publicard.com
August 21, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of PubliCARD, Inc. (the "Company") to be held on Tuesday, September 26, 2000 at
10:00 a.m. (New York City time) at the offices of Kaye, Scholer, Fierman, Hays &
Handler, LLP, 425 Park Avenue, New York, New York.
The attached Notice of Annual Meeting and Proxy Statement fully describe
the business to be conducted at the Annual Meeting, including the election of
directors and the ratification of the appointment of the Company's auditors.
Your Board of Directors recommends a vote "FOR" each of the listed nominees
for Director and "FOR" the other proposal.
Your vote is very important. We hope you will find it convenient to attend
the Annual Meeting in person. Whether or not you are personally able to attend,
it is important that your shares be represented at the meeting. Accordingly, you
are requested to sign, date and return the enclosed proxy promptly. If you do
attend the Annual Meeting, you may still revoke your proxy and vote in person.
Your cooperation is greatly appreciated.
Sincerely,
/s/ Jan-Erik Rottinghuis
JAN-ERIK ROTTINGHUIS
President and Chief Executive Officer
<PAGE> 3
PubliCARD, Inc.
620 Fifth Avenue - 7th floor
Rockefeller Center
New York, NY 10020
Phone 212 489 8021
Fax 212 307 5781
www.publicard.com
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 26, 2000
To the Shareholders of PubliCARD, Inc.
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders (the
"Annual Meeting") of PubliCARD, Inc. (the "Company") will be held at the offices
of Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New
York on Tuesday, September 26, 2000 at 10:00 a.m. for the following purposes:
1. To elect six directors to hold office until the annual meeting of
shareholders to be held in 2001 and until their respective successors
shall be duly elected and qualified;
2. To ratify the selection of Arthur Andersen LLP as auditors for the
fiscal year ending December 31, 2000; and
3. To transact such other business as may properly be brought before the
Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 16, 2000,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ Antonio L. DeLise
ANTONIO L. DELISE
Secretary
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE EVEN IF YOU INTEND TO BE PRESENT AT
THE ANNUAL MEETING. RETURNING THE PROXY WILL NOT LIMIT YOUR RIGHT TO VOTE IN
PERSON OR TO ATTEND THE ANNUAL MEETING, BUT WILL ENSURE YOUR REPRESENTATION IF
YOU CANNOT ATTEND. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO ATTEND AND VOTE AT THE ANNUAL MEETING, YOU MUST OBTAIN
FROM SUCH BROKER, BANK OR OTHER NOMINEE A PROXY ISSUED IN YOUR NAME.
<PAGE> 4
PUBLICARD, INC.
620 FIFTH AVENUE
SEVENTH FLOOR
ROCKEFELLER CENTER
NEW YORK, NY 10020
(212) 651-3102
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 26, 2000
------------------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PubliCARD, Inc., a Pennsylvania corporation
(the "Company" or "PubliCARD"), to be voted at the 2000 Annual Meeting of
Shareholders of the Company referred to in the foregoing Notice (the "Annual
Meeting").
RECORD DATE AND VOTING SECURITIES
Only holders of the Company's common stock, par value $0.10 per share (the
"Common Stock"), of record at the close of business on August 16, 2000 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. On
that date, the Company had outstanding and entitled to vote 23,474,400 shares of
Common Stock. Each outstanding share of Common Stock entitles the record holder
to one vote on each matter.
VOTING PROCEDURES
In order for any business to be conducted at the Annual Meeting, holders of
more than 50% of the shares entitled to vote must be represented at the Annual
Meeting, either in person or by proxy. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting. Each
is tabulated separately. Abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders, whereas broker non-votes are not.
All proxies received pursuant to this solicitation will be voted, and,
where a choice is specified as to the proposals described in the foregoing
Notice, they will be voted in accordance with that specification. If no choice
is specified with respect to any proposal, the proxy will be voted in favor of
such proposal. Shareholders who execute proxies may revoke them at any time
before they are voted either by delivering to the Secretary of the Company
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Annual Meeting and voting in person. This proxy statement and
accompanying material are being mailed to the Company's shareholders on or about
August 24, 2000.
COST OF SOLICITING MANAGEMENT PROXIES
The entire cost of soliciting management proxies will be borne by the
Company. Proxies will be solicited by mail and may be solicited personally by
directors, officers or regular employees of the Company, who will not be
compensated for their services. In order to support the Board of Directors'
nominees and the other proposals herein and to help ensure the presence of a
quorum, the Company has retained the services of D.F. King & Co., Inc. as proxy
solicitor to assist in the solicitation of proxies for the Annual Meeting. The
fees payable to D.F. King & Co., Inc. in connection with this solicitation are
estimated to be $10,000. The Company will reimburse banks, brokerage firms and
other custodians, nominees and fiduciaries for reasonable expenses incurred in
sending proxy materials to their principals and obtaining their proxies.
Accompanying this proxy statement is a copy of the Company's 1999 Annual Report.
<PAGE> 5
SHAREHOLDER PROPOSALS
If a shareholder wishes to have a proposal considered for inclusion in the
Company's proxy materials for the 2001 Annual Meeting of Shareholders, the
proposal must be stated in writing and be received by the Company at its
principal executive office on or before April 23, 2001.
The deadline for delivering a notice of any shareholder proposal which does
not seek to nominate a director(s) of the Company or is not to be included in
the proxy materials for the 2001 Annual Meeting of Shareholders will be July 10,
2001. Any notice of such a shareholder proposal received after July 10, 2001
will be considered untimely. The persons named as proxies in the proxy materials
for the 2001 Annual Meeting of Shareholders may exercise discretionary voting
authority with respect to any matter that is not submitted to the Company by
such date. Additionally, even if proper notice is received on or prior to July
10, 2001, the individuals named as proxies on the proxy card for that meeting
may nevertheless exercise their discretionary authority in voting such proxies
with respect to such proposal by advising the shareholders of the proposal and
how they intend to exercise their discretion to vote on such proposal, unless
the shareholder making the proposal solicits proxies with respect to the
proposal to the extent required by Rule 14a-4(c)(2) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
PROPOSAL 1 -- ELECTION OF DIRECTORS
At the Annual Meeting, six directors are to be elected to hold office until
the next annual meeting of shareholders and until their respective successors
have been elected and qualified. In order to be elected, each nominee must
receive a plurality of the votes cast at the Annual Meeting.
Unless otherwise directed, proxies given to the persons named in the
enclosed proxy pursuant to this solicitation will be voted for the election as
directors of Messrs. Freund, Goldsmith, Rottinghuis, Cohn, Schafran and Tyabji.
If any such nominee should become unavailable for any reason, which the Board of
Directors has no reason to anticipate, the proxy holders reserve the right to
substitute another person of their choice in his place.
The Company currently has six directors, all of whom were elected at the
Annual Meeting of Shareholders held on December 13, 1999. David L. Herman
resigned as a member of the Board of Directors on May 15, 2000. All directors
serve until the next election of directors or until their successors have been
elected and have qualified. All of the persons named in the enclosed proxy are
currently directors of the Company. See "Executive Compensation -- Employment
and Change in Control Agreements."
Set forth below as to each director nominated for reelection as a director
of the Company is information regarding age (as of August 15, 2000), position
with the Company, principal occupation, business experience, period of service
as a director of the Company and directorships currently held.
HARRY I. FREUND: Age 60; Director of PubliCARD since April 12, 1985,
Chairman of the Board of Directors since December 1985 and Chairman of PubliCARD
since October 1998. Since 1975, Mr. Freund has been Chairman of Balfour
Investors Inc., a merchant banking firm that had previously been engaged in a
general brokerage business ("Balfour").
JAY S. GOLDSMITH: Age 56; Director of PubliCARD since April 12, 1985, Vice
Chairman of the Board of Directors since December 1985 and Vice Chairman of
PubliCARD since October 1998. Since 1975, Mr. Goldsmith has been President of
Balfour.
JAN-ERIK ROTTINGHUIS: Age 52; Director of PubliCARD since December 13,
1999, President and Chief Executive Officer of PubliCARD effective in March
2000. Prior to joining PubliCARD, since 1993, Mr. Rottinghuis had been employed
by VeriFone, Inc., a subsidiary and part of the Internet Business Unit of
Hewlett Packard Company, most recently as Vice President, Worldwide Sales. Prior
to joining VeriFone, he was responsible for sales, marketing and business
development with Polaroid Europe, acting as General Manager of Polaroid France
and as Director of European Sales and Marketing. Prior to that, Mr. Rottinghuis
held various positions in international marketing and business development for
Wang Laboratories in Boston and France, and provided strategic management
consultancy to the diverse clientele of Bain & Company, also in Boston.
2
<PAGE> 6
CLIFFORD B. COHN: Age 48; Director of PubliCARD since July 31, 1980, and
was Vice President of Government Affairs of PubliCARD from April 1, 1982 to
November 20, 1984. Since 1977, Mr. Cohn has been engaged in the private practice
of law in Philadelphia, Pennsylvania.
L.G. SCHAFRAN: Age 62; Director of PubliCARD since December 3, 1986. Mr.
Schafran is the Managing General Partner of L.G. Schafran & Associates, a real
estate investment and development firm established in 1984. He was Chairman of
the Executive Committee of Dart Group Corporation ("Dart") from 1994 to October
1997 and a director of Dart (and its publicly-traded subsidiaries) from 1993 to
October 1997. Mr. Schafran is a director of Tarragon Realty Advisors, Inc.,
Chairman of the Board of Directors and Co-Chief Executive Officer of Delta-Omega
Technologies, Inc. and a trustee of Banyan Strategic Realty Trust.
HATIM A. TYABJI: Age 55; Director of PubliCARD since March 16, 1999. Mr.
Tyabji is Chairman of the Board of DataCard and was the Chairman and Chief
Executive Officer of Saraide.com from September 1998 until December 1999. Mr.
Tyabji was also the Chairman, President and Chief Executive Officer of VeriFone,
Inc. from September 1986 until March 1998. Mr. Tyabji is a director of each of
Best Buy, eFunds, Impresse, SmartDisk Corporation and Ariba Technologies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF MESSRS. FREUND,
GOLDSMITH, ROTTINGHUIS, COHN, SCHAFRAN AND TYABJI FOR ELECTION AS DIRECTORS OF
THE COMPANY.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Directors who are not officers of the Company are paid $2,500 per month for
services as directors and, in addition, $750 per day for each meeting of the
Board or of shareholders that they attend without regard to the number of
meetings attended each day.
David L. Herman resigned as a member of the Board of Directors on May 15,
2000.
Messrs. Freund and Goldsmith are each party to an agreement with the
Company providing for payments to them under certain circumstances following a
change in control of the Company. See "Executive Compensation -- Employment and
Change in Control Agreements."
The Company and Balfour are parties to a License Agreement, dated as of
October 26, 1994 (the "License Agreement"), with respect to a portion of the
office space leased by the Company in New York City. Messrs. Freund and
Goldsmith are Chairman and President, respectively, and the only shareholders of
Balfour. The term of the License Agreement commenced on January 1, 1995 and will
expire on June 30, 2004, unless sooner terminated pursuant to law or the terms
of the License Agreement. The License Agreement provides for Balfour to pay the
Company a portion of the rent paid by the Company under its lease, including
base rent, electricity, water, real estate tax escalations and operation and
maintenance escalations. Balfour's share of rent and other costs is 10%. The
base rent payable by Balfour under the License Agreement is $2,000 per month.
Directors of the Company are elected at each annual meeting of shareholders
to hold office until the next annual meeting of shareholders and until their
respective successors are duly elected and qualified. Executive officers are
elected to hold office until the first meeting of directors following the next
annual meeting of shareholders or until their successors are sooner elected by
the Board and qualified.
During 1999, there were 13 meetings of the Board of Directors of the
Company. The Board of Directors has various committees, including an Audit
Committee, a Compensation Committee, a Directors Compensation Committee and a
Nominating Committee. During 1999, each of the Directors attended at least 75%
of the total number of meetings held by the Board of Directors and the
committees of which he was a member.
The Audit Committee of the Board of Directors reviews with the Company's
independent public accountants the plan and scope of the audit for each year, as
well as the results of each audit when completed and the accountants' fee for
services performed. The Audit Committee also reviews with management and with
the independent accountants the Company's internal control procedures. The Audit
Committee is composed of members of the Board of Directors who are not otherwise
officers or employees of the Company. The present members of the Audit Committee
are L. G. Schafran (Chairman), Clifford B. Cohn and Hatim
3
<PAGE> 7
A. Tyabji. David L. Herman was a member of the Audit Committee until his
resignation on May 15, 2000. The Audit Committee met once during 1999.
The Compensation Committee of the Board of Directors, which consists
entirely of members of the Board of Directors who are not otherwise officers or
employees of the Company, reviews the compensation of key employees of the
Company. The present members of the Compensation Committee are Clifford B. Cohn
(Chairman) and L.G. Schafran. David L. Herman was Chairman of the Compensation
Committee until his resignation on May 15, 2000. The Compensation Committee did
not meet during 1999.
The Directors Compensation Committee of the Board of Directors reviews the
compensation of directors of the Company. The present members of the Directors
Compensation Committee are L.G. Schafran (Chairman) and Clifford B. Cohn. David
L. Herman was the Chairman of the Directors Compensation Committee until his
resignation on May 15, 2000. The Directors Compensation Committee did not meet
during 1999.
The Nominating Committee of the Board of Directors advises and makes
recommendations to the Board of Directors on the selection of candidates as
nominees for election as directors. The members of the Nominating Committee are
Jay S. Goldsmith (Chairman), Harry I. Freund and Clifford B. Cohn. David L.
Herman was the Chairman of the Nominating Committee until his resignation on May
15, 2000. The Nominating Committee met once during 1999. The Nominating
Committee will consider nominees recommended by shareholders pursuant to
procedures described in "Shareholder Nominations."
SHAREHOLDER NOMINATIONS
Nominations for election of directors may be made by any shareholder
entitled to vote for the election of directors, provided that written notice
(the "Notice") of such shareholder's intent to nominate a director at the
meeting is given by the shareholder and received by the Secretary of the Company
in the manner and within the time specified herein. The Notice shall be
delivered to the Secretary of the Company not less than 14 days nor more than 50
days prior to any meeting of the shareholders called for the election of
directors; provided, however, that if less than 21 days notice of the meeting is
given to shareholders, the Notice shall be delivered to the Secretary of the
Company not later than the earlier of the seventh day following the day on which
notice of the meeting was first mailed to shareholders or the fourth day prior
to the meeting. In lieu of delivery to the Secretary of the Company, the Notice
may be mailed to the Secretary of the Company by certified mail, return receipt
requested, but shall be deemed to have been given only upon actual receipt by
the Secretary of the Company.
The Notice shall be in writing and shall contain or be accompanied by:
(a) the name and residence of the shareholder submitting the
nomination;
(b) a representation that such shareholder is a holder of record of
the Company's voting stock and intends to appear in person or by proxy at
the meeting to nominate the persons specified in the Notice;
(c) such information regarding each nominee as would have been
required to be included in a proxy statement filed pursuant to Regulation
14A of the rules and regulations established by the Securities and Exchange
Commission (the "SEC") under the Exchange Act (or pursuant to any successor
act or regulation) had proxies been solicited with respect to such nominee
by the management or Board of Directors of the Company;
(d) a description of all arrangements or understandings among such
shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which such nomination or nominations are to
be made by the shareholder; and
(e) the consent of each nominee to serve as director of the Company if
so elected.
Unless a judge or judges of election shall have been appointed pursuant to
the Company's By-Laws, the Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that any nomination made at the meeting was
not made in accordance with the foregoing procedures and, in such event, the
nomination shall be disregarded. Any decision by the Chairman of the meeting
shall be conclusive and binding upon all shareholders of the Company for any
purpose.
4
<PAGE> 8
PRINCIPAL SHAREHOLDERS
The following table sets forth as of August 15, 2000 the beneficial
ownership of the Company's Common Stock by each person who beneficially owns
more than 5% of the Common Stock of the Company, all directors, nominees and
executive officers individually and all directors, nominees and executive
officers as a group. All information with respect to beneficial ownership has
been furnished to the Company by the respective shareholders of the Company.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF SHARES
OF COMMON STOCK AS OF PERCENT OF
NAME POSITION AUGUST 15, 2000(1) CLASS(1)
---- -------- ------------------------------ -----------
<S> <C> <C> <C>
Taube Hodson
Stonex............. N/A 2,720,000(2) 11.6%
Partners Limited
27 St. James Place
London SW1A INR
United Kingdom
Harry I. Freund...... Director, Chairman of 2,136,430(3) 8.8%
the
c/o PubliCARD, Inc. Board and Chairman
620 Fifth Avenue
Rockefeller Center
New York, NY 10020
Jay S. Goldsmith..... Director, Vice Chairman 2,153,620(4) 8.8%
c/o PubliCARD, Inc. of the Board and Vice
620 Fifth Avenue Chairman
Rockefeller Center
New York, NY 10020
Jan-Erik
Rottinghuis........ Director, President and 200,000(5) Less than 1%
Chief Executive Officer
Clifford B. Cohn..... Director 239,373(6) 1.0%
L.G. Schafran........ Director 366,159(7) 1.5%
Hatim A. Tyabji...... Director 185,000(8) Less than 1%
M. Richard
Phillimore......... Executive Vice 150,000(9) Less than 1%
President/Strategy
Antonio L. DeLise.... Vice President, Chief 152,000(10) Less than 1%
Financial Officer and
Secretary
James J. Weis........ Former President, Chief 430,181(11) 1.8%
Executive Officer and
Director
All directors and
officers as a group
(8 persons)........ 5,582,582(12) 21.3%
</TABLE>
---------------
(1) Calculated in accordance with Rule 13d-3 adopted by the SEC under the
Exchange Act.
(2) Based on a statement on Schedule 13G filed with the SEC on October 11,
1999. Taube Hodson Stonex Partners Limited is a discretionary investment
advisor to J. Rothschild Assurance Life Fund, St. James Place International
Unit Trust, J. Rothschild Assurance Pension Fund, J. Rothschild
International Assurance Managed Fund, J. Rothschild International Assurance
U$ Managed Fund, TDG Funds Limited, GAM Worldwide Fund and The Partners
Fund. Taube Hodson Stonex Partners has power to vote and direct the vote
and power to dispose and direct the disposition of shares held by such
funds.
(3) Includes shares of Common Stock which may be acquired by Mr. Freund within
60 days as follows: 216,912 shares through the exercise of stock options
and 688,861 shares through the exercise of stock purchase warrants. Also
includes 5,454 shares of Common Stock held by Mr. Freund's spouse over
which Mr. Freund has shared voting and investment power but as to which he
disclaims any beneficial ownership interest, and includes 273,625 shares of
Common Stock that may be deemed to be owned beneficially by Mr. Freund
which are held by Balfour for its clients in discretionary accounts, as to
which Mr. Freund disclaims beneficial ownership. Messrs. Freund and
Goldsmith are Chairman and
5
<PAGE> 9
President, respectively, and the only shareholders of Balfour. The
discretionary clients of Balfour have the sole power to vote and direct the
vote of the shares held in their account. Balfour and its discretionary
clients have shared power to dispose of or direct the disposition of the
shares held in such clients' accounts. At present, Balfour has the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of the Company's Common Stock for all of its
discretionary clients. Also includes 13,000 shares of Common Stock that may
be deemed to be owned beneficially by Mr. Freund which are held by the
Balfour Defined Benefit Pension Plan (the "Balfour Plan"), for which Mr.
Freund is a Trustee and Plan Administrator and in which he participates.
Mr. Freund disclaims ownership of 5,850 of such 13,000 shares.
(4) Includes shares of Common Stock which may be acquired by Mr. Goldsmith
within 60 days as follows: 216,912 shares through the exercise of stock
options and 744,930 shares through the exercise of stock purchase warrants.
Also includes 1,250 shares of Common Stock held by Mr. Goldsmith's spouse
over which Mr. Goldsmith has shared voting and investment power but as to
which he disclaims any beneficial interest, and includes 273,625 shares of
Common Stock that may be deemed to be owned beneficially by Mr. Goldsmith
which are held by Balfour for its clients in discretionary accounts as to
which Mr. Goldsmith disclaims beneficial ownership (see Note 3 above). Also
includes 13,000 shares of Common Stock that may be deemed to be owned
beneficially by Mr. Goldsmith which are held by the Balfour Plan, of which
Mr. Goldsmith is a Trustee and Plan Administrator and in which he
participates. Mr. Goldsmith disclaims ownership of 7,280 of such 13,000
shares.
(5) Pursuant to the employment agreement between Mr. Rottinghuis and the
Company, the Company issued 200,000 shares of Common Stock to Mr.
Rottinghuis on November 2, 1999. See "Executive Compensation -- Employment
and Change in Control Agreements."
(6) Includes 172,059 shares of Common Stock which may be acquired by Mr. Cohn
within 60 days through the exercise of stock options.
(7) Includes 212,059 shares of Common Stock which may be acquired by Mr.
Schafran within 60 days through the exercise of stock options. Also
includes 114,050 shares of Common Stock, and 40,050 shares of Common Stock
that may be acquired through the exercise of stock purchase warrants, held
by Mr. Schafran's spouse as to which Mr. Schafran disclaims any beneficial
interest.
(8) Includes 185,000 shares of Common Stock which may be acquired by Mr. Tyabji
within 60 days through the exercise of stock options.
(9) Includes 100,000 shares of Common Stock which may be acquired by Mr.
Phillimore within 60 days through the exercise of stock options.
(10) Includes 137,500 shares of Common Stock which may be acquired by Mr. DeLise
within 60 days through the exercise of stock options.
(11) Mr. Weis was President and Chief Executive Officer of the Company through
November 3, 1999 and a director through November 5, 1999. Includes 119,000
shares of Common Stock which may be acquired by Mr. Weis within 60 days
through the exercise of stock options.
(12) Includes shares of Common Stock which may be acquired by such persons
within 60 days as follows: 1,240,442 shares through the exercise of stock
options and 1,473,841 shares through the exercise of stock purchase
warrants.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following tables set forth information concerning the cash
compensation, stock options and retirement benefits provided to PubliCARD's
executive officers. The notes to these tables provide more specific information
concerning compensation. The Company's compensation policies are discussed in
the Compensation Committee Report on Executive Compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ----------------------------------------
-------------------------- RESTRICTED OPTIONS/SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) STOCK (#)(2) COMPENSATION
--------------------------- ---- -------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Harry I. Freund(3)............ 1999 $325,000 $ -- -- -- $ 15,000(7)
Chairman of the Board of 1998 325,000 -- -- -- 15,000(7)
Directors and Chairman 1997 325,000 -- -- 91,912 15,000(7)
Jay S. Goldsmith(3)........... 1999 325,000 -- -- -- 22,966(7)
Vice Chairman of the Board
of 1998 325,000 -- -- -- 22,966(7)
Directors and Vice Chairman 1997 325,000 -- -- 91,912 17,000(7)
Jan-Erik Rottinghuis(4)....... 1999 25,228 -- -- 800,000(8) 1,475,000(8)
President, Chief Executive
Officer and Director
James J. Weis(5).............. 1999 325,000 227,500(12) -- -- 10,378(9)
Former President, Chief
Executive Officer 1998 325,000 250,000 -- 140,000 7,604(9)
and Director 1997 325,000 162,500 -- -- 7,958(9)
M. Richard Phillimore(6)...... 1999 311,458 100,000 50,000(10) 200,000(10) 143,781(10)
Executive Vice
President/Strategy
Antonio L. DeLise............. 1999 195,000 100,000 -- -- 5,713(11)
Vice President, Chief
Financial 1998 183,611 100,000 -- 75,000 5,861(11)
Officer and Secretary 1997 163,700 67,000 -- -- 6,036(11)
</TABLE>
---------------
(1) Reflects bonus earned during the fiscal year. In some instances, all or a
portion of the bonus was paid during the next fiscal year.
(2) Options to acquire shares of Common Stock.
(3) On November 1, 1998, Messrs. Freund and Goldsmith were appointed executive
officers of PubliCARD with the titles of Chairman and Vice Chairman,
respectively. Prior to such time, Messrs. Freund and Goldsmith were
directors of PubliCARD with the titles of Chairman of the Board and Vice
Chairman of the Board, respectively, titles and positions which they still
hold in addition to their positions as executive officers of PubliCARD. For
the period prior to November 1, 1998, Messrs. Freund and Goldsmith received
compensation from PubliCARD in their capacities as directors of PubliCARD
and for serving as Chairman of the Board and Vice Chairman of the Board,
respectively, at the rate of $325,000 per year. Commencing November 1,
1998, Messrs. Freund and Goldsmith have received compensation from
PubliCARD at the same rate in their capacities as executive officers.
(4) Mr. Rottinghuis was appointed President and Chief Executive Officer of the
Company by the Company's Board of Directors on November 5, 1999, effective
in March 2000.
(5) Mr. Weis was President and Chief Executive Officer of the Company through
November 3, 1999 and a Director through November 5, 1999.
(6) Mr. Phillimore was appointed Executive Vice President of the Company
effective January 19, 1999.
(7) Represents life insurance premiums paid on behalf of Mr. Freund and Mr.
Goldsmith for 1997, 1998 and 1999.
(8) Pursuant to an employment agreement dated November 2, 1999, Mr. Rottinghuis
was awarded 200,000 shares of Common Stock and options to purchase a total
of 800,000 shares of Common Stock. The
7
<PAGE> 11
dollar value as of the date of the award of the 200,000 shares of Common
Stock has been included under the caption "All Other Compensation."
(9) Consists of $4,750, $4,800 and $4,800 in contributions to PubliCARD's
401(k) plan for 1997, 1998 and 1999, respectively, and $3,208, $2,804 and
$5,578 for term life and disability insurance premiums paid on behalf of
Mr. Weis for 1997, 1998 and 1999, respectively.
(10) Pursuant to an employment agreement, Mr. Phillimore was awarded 50,000
shares of restricted Common Stock, options to purchase 200,000 shares of
Common Stock and a $140,000 signing bonus. The restricted shares vested on
January 19, 2000. The caption "All Other Compensation" includes the
$140,000 signing bonus and $3,781 in contributions to PubliCARD's 401(k)
plan.
(11) Consists of $4,750, $4,800 and $4,800 in contributions to PubliCARD's
401(k) plan for 1997, 1998 and 1999, respectively, and $1,286, $1,061 and
$913 for term life and disability insurance payments paid on behalf of Mr.
DeLise for 1997, 1998 and 1999, respectively.
(12) Pursuant to a separation and termination agreement dated December 3, 1999,
Mr. Weis received 32,500 shares of Common Stock. The dollar value of the
32,500 shares of Common Stock has been included under the caption "Bonus."
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning grants to
purchase shares of Common Stock to the following persons during the fiscal year
ended December 31, 1999:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
PERCENT OF APPRECIATION FOR FIVE
TOTAL OPTIONS EXERCISE YEAR OPTION TERM(1)
OPTIONS GRANTED TO PRICE PER EXPIRATION -----------------------
NAME GRANTED EMPLOYEES SHARE DATE 5% 10%
---- ------- ------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Harry I. Freund............... -- -- $ -- -- -- --
Jay S. Goldsmith.............. -- -- -- -- -- --
Jan-Erik Rottinghuis.......... 800,000 33.5% 6.75 11/2/2004 $1,491,920 $3,296,754
James J. Weis................. -- -- -- -- -- --
M. Richard Phillimore......... 100,000 4.2% 5.50 1/19/2006 151,955 355,780
100,000 4.2% 5.50 1/19/2005 151,955 355,780
Antonio L. DeLise............. -- -- -- -- -- --
</TABLE>
---------------
(1) The potential gain is calculated from the closing price of Common Stock on
the date of grant to executive officers. These amounts represent certain
assumed rates of appreciation only. Actual gains, if any, on stock option
exercises and Common Stock holdings are dependent on the future performance
of the Common Stock and overall market conditions. There can be no assurance
that the amounts reflected in this table will be achieved.
8
<PAGE> 12
AGGREGATE STOCK OPTION EXERCISES IN FISCAL YEAR 1999 AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information as of December 31, 1999
concerning stock option exercises during 1999 and exercisable and unexercisable
stock options held by the following persons:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry I. Freund............. 125,000 $1,046,875 541,912(2) -- $2,451,288 --
Jay S. Goldsmith............ 125,000 1,046,875 541,912(2) -- 2,451,288 --
Jan-Erik Rottinghuis........ -- -- -- 800,000 -- --
James J. Weis............... 234,333 1,137,874 165,667 -- 798,189 --
M. Richard Phillimore....... -- -- -- 200,000 -- 212,500
Antonio L. DeLise........... -- -- 150,000 -- 731,250 --
</TABLE>
---------------
(1) These values are based on the December 31, 1999 closing price for
PubliCARD's Common Stock on the Nasdaq National Market of $6.5625 per share.
(2) Excludes shares of Common Stock which may be acquired by Messrs. Freund and
Goldsmith through the exercise of Common Stock purchase warrants in the
amounts of 668,861 and 744,930, respectively.
RETIREMENT INCOME PLAN
Effective December 31, 1993, benefits under the Publicker Industries Inc.
Retirement Plan (the "Retirement Plan") were frozen. Accordingly, Retirement
Plan participants will accumulate no additional credited service, and earnings
subsequent to December 31, 1993 will no longer have an impact on accumulated
benefits. The annual benefit payable upon retirement for Mr. Weis is $23,831.
The foregoing amount is based on a straight life annuity. Retirement benefits
are payable at age 65 to married employees in the form of a 50% joint and
survivor annuity with their spouses, at a reduced amount, unless they elect to
receive a straight life annuity. Single employees receive a straight life
annuity. The foregoing benefit amount is not subject to any deduction for
Federal Insurance Contributions Act or other offset amounts.
STOCK OPTION PLANS
Under the 1993 Long-Term Incentive Plan and the Non-employee Director Stock
Option Plan adopted by shareholders of the Company in 1994 and the 1999
Long-Term Incentive Plan and 1999 Stock Option Plan for Non-employee Directors
adopted by shareholders of the Company in 1999, the Company may grant stock
options, restricted stock options, stock appreciation rights, performance awards
and other stock-based awards equivalent to up to 7,300,000 shares of Common
Stock. As of December 31, 1999, a total of 3,175,500 shares of Common Stock in
the aggregate are currently available for grant under the stock option plans.
The 1993 and 1999 Long-Term Incentive Plans are administered by the
Compensation Committee of the Board of Directors and the 1993 and 1999
Non-employee Director Stock Option Plans are administered by the Board of
Directors of the Company. Subject to the express provisions of each plan, the
Compensation Committee or the Board of Directors, as applicable, has full and
final authority to determine the terms of all awards granted under each plan
including (a) the purchase price of the shares covered by each award, (b)
whether any payment will be required upon grant of the award, (c) the
individuals to whom, and the time at which, awards shall be granted, (d) the
number of shares to be subject to each award, (e) when an award can be exercised
and whether in whole or in installments, (f) whether the exercisability of the
awards is subject to risk of forfeiture or other condition and (g) whether the
stock issued upon exercise of an award is subject to repurchase by the Company,
and the terms of such repurchase.
During the year ended December 31, 1999, no stock options were granted to
executive officers of the Company under the 1993 Long-Term Incentive Plan or the
1999 Long-Term Incentive Plan.
9
<PAGE> 13
STOCK OPTION AGREEMENTS
In April 1985, the Company issued 1.6 million shares of Common Stock at
$2.50 per share in a private placement. Under the terms of the related
agreement, Balfour, the agent for the purchasers, received options to buy
400,000 shares of PubliCARD's Common Stock at a price of $2.50 per share for
five years, which period was subsequently extended by ten years. Balfour
subsequently transferred the options to Messrs. Freund and Goldsmith, who
currently hold them. In January 1996, PubliCARD issued options to Messrs. Cohn
and Schafran to buy a total of 200,000 shares of PubliCARD's Common Stock at a
price of $2.50 per share for five years. None of these options had been
exercised as of December 31, 1999.
On January 18, 1999, the Company granted stock options to purchase an
aggregate of 200,000 shares of Common Stock to Mr. Phillimore. 100,000 of those
options are exercisable for five years beginning January 19, 2000 at $5.50 per
share. The remaining 100,000 of those options are exercisable for five years
beginning January 19, 2001 at $5.50 per share.
On March 16, 1999, the Company granted stock options to purchase an
aggregate of 250,000 shares of Common Stock to Mr. Tyabji. 125,000 of those
options are exercisable for four years beginning March 16, 2000 at $9.75 per
share. The remaining 125,000 of those options are exercisable for three years
beginning March 16, 2001 at $9.75 per share.
On November 2, 1999, the Company entered into an option agreement with Mr.
Rottinghuis in connection with his appointment as the Company's President and
Chief Executive Officer, effective in March 2000. Pursuant to the option
agreement, the Company granted options to purchase 400,000 shares of Common
Stock at an exercise price equal to $6.75 per share. These options become
exercisable 133,333 on November 2, 2000, 133,333 on November 2, 2001 and 133,334
on November 2, 2002. If Mr. Rottinghuis' employment is terminated by Mr.
Rottinghuis for good reason or by the Company other than for cause (as each such
term is defined in Mr. Rottinghuis' employment agreement), these options will
become exercisable in full. See "Employment and Change in Control Agreements."
Unless sooner terminated, these options will expire on November 2, 2004.
Also on November 2, 1999, the Company entered into another option agreement
with Mr. Rottinghuis in connection with his appointment as the Company's
President and Chief Executive Officer. Pursuant to this option agreement, Mr.
Rottinghuis was granted an option to purchase from the Company up to 400,000
shares of Common Stock at an exercise price equal to $6.75 per share. This
option will become exercisable in accordance with, in such installments as may
be provided in and upon satisfaction of performance criteria that will be
established by mutual agreement of the Company and Mr. Rottinghuis. This option
will be exercisable for the periods specified in such performance criteria. If
Mr. Rottinghuis' employment agreement is terminated by the Company other than
for cause or by Mr. Rottinghuis for good reason, this option will be exercisable
for a number of shares of Common Stock equal to the sum of (i) the number of
shares for which it was exercisable immediately prior to such termination and
(ii) the number of shares for which it could become exercisable after such
termination if all performance criteria applicable to the period after
termination were met. Unless sooner terminated, this option will expire on
November 2, 2004.
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
On November 2, 1999, the Company entered into an employment agreement with
Mr. Rottinghuis, pursuant to which he serves as President and Chief Executive
Officer of the Company. The employment agreement provides that Mr. Rottinghuis'
compensation will consist of $350,000 per year plus an annual bonus in an amount
to be determined by the Company's Board of Directors, but not less than
$100,000.
Pursuant to the employment agreement, on November 2, 1999, the Company
issued to Mr. Rottinghuis (i) 200,000 shares of Common Stock to compensate him
for economic losses he suffered as a result of terminating his prior employment
and (ii) options to acquire 400,000 shares of Common Stock. The employment
agreement also provides that Mr. Rottinghuis will be eligible to receive an
option to acquire 400,000 additional shares of Common Stock, which will become
exercisable upon the achievement of certain performance-based goals. See "Stock
Option Agreements."
10
<PAGE> 14
The term of Mr. Rottinghuis' employment with the Company is three years,
unless sooner terminated in accordance with the terms of the employment
agreement. The employment agreement may be terminated (a) upon the death of Mr.
Rottinghuis, (b) upon the disability of Mr. Rottinghuis, (c) for cause or (d)
for good reason (as each such term is defined in the employment agreement).
In August 1987, the Company entered into change of control agreements with
each of Messrs. Freund and Goldsmith, which provide for payments to them under
certain circumstances following a change of control of the Company. These
agreements were not adopted in response to any specific acquisition of shares of
PubliCARD or any other event threatening to bring about a change of control of
the Company. For purposes of the agreements, a change of control is defined as
any of the following: (a) the Company ceasing to be a publicly owned corporation
having at least 2,000 shareholders, (b) any person or group acquiring in excess
of 30% of the voting power of the Company's securities, (c) Messrs. Freund,
Goldsmith, Cohn and Schafran and any other director designated as a "continuing
director" prior to his election as a director by a majority of the foregoing
persons (the "Continuing Directors") ceasing for any reason to constitute at
least a majority of the board of directors, (d) the Company merging or
consolidating with any entity, unless approved by a majority of the Continuing
Directors, or (e) the sale or transfer of a substantial portion of PubliCARD's
assets to another entity, unless approved by a majority of the Continuing
Directors.
In the event one of the above-named individuals (a) is terminated as an
employee of the Company for any reason other than conviction of a felony or any
act of fraud or embezzlement, (b) is disabled for six consecutive months or
dies, (c) is not elected and maintained in the office which he now occupies, (d)
is not included by the Board of Directors in the slate of directors recommended
to stockholders, (e) receives a reduction in his salary or fringe benefits, (f)
experiences a change in his place of employment or is required to travel
excessively or (g) experiences other substantial, material and adverse changes
in conditions under which the individual's services are to be rendered, within
three years following a change of control, the individual will be entitled to
receive in a lump sum within 10 days of the date of discontinuance, a payment
equal to 2.99 times the individual's average annual compensation for the shorter
of (x) the five years preceding the change of control, or (y) the period the
individual received compensation from PubliCARD for personal services. Assuming
a change of control of the Company and the discontinuance of an individual's
services were to occur at the present time, payments in the following amounts,
assuming there are no "excess parachute payments" as defined in the Internal
Revenue Code of 1986, as amended (the "Code"), would be made pursuant to the
change of control agreements: Mr. Freund $972,000 and Mr. Goldsmith $972,000. In
the event any such payment, either alone or together with others made in
connection with the individual's discontinuance, is considered to be an "excess
parachute payment," the individual is entitled to receive an additional payment
in an amount which, when added to the initial payment, results in a net benefit
to the individual, after giving effect to excise taxes imposed by Section 4999
of the Code and income taxes on such additional payment, equal to the initial
payment before such additional payment. Since the change of control agreements
would require large cash payments to be made by any person or group effecting a
change of control of PubliCARD, absent the assent of a majority of the
Continuing Directors, these agreements may discourage hostile takeover attempts
of PubliCARD.
The change of control agreements would have expired on December 1, 1999 but
have been and will continue to be automatically extended for a period of one
year on each December 1, unless terminated by either party prior to any December
1. In the event a change of control occurs while the change of control
agreements are in effect, the term of such agreements will automatically be
extended to three years from the date of the change of control and the foregoing
renewal option will become inapplicable.
In December 1999, the Company entered into a separation and termination
agreement with Mr. Weis, former President and Chief Executive Officer. Pursuant
to the agreement, Mr. Weis will receive salary and benefit continuation through
June 2001. In certain circumstances, the salary payment by the Company may be in
the form of Common Stock instead of cash. In addition, in January 2000, Mr. Weis
received 32,500 shares of Common Stock and the exercise period of certain stock
options, which otherwise would have accelerated in connection with his
termination, was extended.
11
<PAGE> 15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, consisting entirely
of outside directors, approves all of the policies under which compensation is
paid or awarded to the Company's executive officers. The present members of the
Compensation Committee are Clifford B. Cohn (Chairman) and L. G. Schafran. The
objectives of the Company's executive compensation program are to attract and
retain highly talented and productive executives and to align the interests of
the executive officers with the interests of the Company's shareholders by
basing a significant portion of their compensation upon the Company's
performance and achievement of strategic goals.
The Company's compensation program for executive officers currently
consists of base salary, annual bonus and long-term incentive compensation
consisting of periodic grants of qualified and nonqualified stock options. Each
element of this program serves a specific purpose in meeting the Company's
objectives.
Base salary. The Compensation Committee annually reviews the salaries of
the executive officers. In establishing the base salary, the Compensation
Committee considers level of responsibility, individual performance, Company
performance, competitive market conditions for executive compensation, prior
experience and contributions made to the Company's success. The Compensation
Committee has not found it practicable, nor has it attempted, to assign relative
weights to the specific factors used in determining base salary levels.
Annual bonus. The Company's cash bonus program represents an at-risk
component of pay designed to motivate executives to work effectively to achieve
the Company's performance objectives and to reward them when objectives are met.
In determining the annual bonus payments for 1999, the Compensation Committee
was guided less on quantitative measures of operating results than on other
goal-directed endeavors such as executing the Company's entry into the broadband
market and bringing about improvements in the operations of the Company's
subsidiaries.
Long-term incentives. The Compensation Committee believes that option
grants (a) align executive interests with shareholder interests by creating a
direct link between compensation and shareholder return, (b) give executives a
significant long-term interest in the Company's success and (c) help retain key
executives in a competitive market for executive talent. Option grants are made
from time to time to executives whose contributions have or will have a
significant impact on the Company's long-term performance. The determination of
whether option grants are appropriate each year is based upon performance of
each individual. All options granted to executive officers were granted at the
fair market value of the Common Stock on the date of grant, are exercisable for
five years and are generally forfeited should the executive officer leave the
Company before retirement, unless already exercised. All stock option grants are
made under the Company's stock option plans which have been approved by the
Company's shareholders. Because the option grants have been made at option
prices equal to the fair market value on the dates of grant, the stock options
have value only if the stock price appreciates from the value on the grant date.
This design is intended to focus executives on the enhancement of shareholder
value over the long-term.
BASES FOR CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Rottinghuis became the President and Chief Executive Officer of the
Company effective in March 2000. In order to induce Mr. Rottinghuis to join the
Company, in 1999, pursuant to his employment agreement with the Company, Mr.
Rottinghuis received 200,000 shares of Common Stock and options to acquire up to
800,000 shares of Common Stock, subject to certain conditions. See "Employment
and Change in Control Agreements" and "Stock Option Agreements." The
Compensation Committee considered the 1999 compensation commensurate with Mr.
Rottinghuis' expertise in the technology industry and the anticipated value that
the Compensation Committee believes he will add by leading the Company in
establishing its broadband initiatives.
12
<PAGE> 16
SECTION 162(m)
Section 162(m) of the Code limits the tax deduction for compensation paid
to certain executives of public companies to $1.0 million. Having considered the
requirements of Section 162(m), the Compensation Committee believes that grants
made pursuant to the Company's stock option plans meet the requirements that
such grants be "performance based" and are, therefore, exempt from the
limitations on deductibility. Historically, the combined salary and bonus of
each executive officer has been below the $1.0 million limit. The Compensation
Committee's present intention is to comply with Section 162(m) unless the
Compensation Committee feels that required changes would not be in the best
interest of the Company or its stockholders.
This report is submitted by the members of the Compensation Committee of
the Board of Directors.
Compensation Committee
Clifford B. Cohn
L.G. Schafran
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors, which consists
entirely of outside directors, reviews the compensation of key employees of the
Company. The present members of the Compensation Committee are Clifford B. Cohn
(Chairman) and L.G. Schafran. David L. Herman served as Chairman of the
Compensation Committee until he resigned on May 15, 2000. See "Information
Concerning the Board of Directors," "Employment and Change of Control
Agreements" and Notes 6 and 7 to the table under "Principal Shareholders."
13
<PAGE> 17
FIVE-YEAR PERFORMANCE GRAPH: 1994-1999
The following performance graph compares the cumulative total return on the
common stock of PubliCARD for the five year period from December 31, 1994 to
December 31, 1999 to (i) the Hambrect & Quist Technology Index and (ii) the
Nasdaq Composite Stock Index. Prior to 1999, the Company's Common Stock
performance was compared to the Standard & Poor's 500 Stock Index. As required
by SEC rules, the following performance graph also provides a comparison to the
broad market index used in 1998.
The annual changes for the five year period from 1994 through 1999 are
based on the assumption that $100 had been invested in PubliCARD Common Stock
and each index on December 31, 1994 (as required by SEC rules), and that all
quarterly dividends were reinvested at the average of the closing stock prices
at the beginning and end of the quarters. The total cumulative dollar returns
shown in the graphs represent the value that such investments would have had on
December 31, 1999.
<TABLE>
<CAPTION>
PUBLICARD H&Q TECH. IND. NASDAQ COMP. S&P 500
--------- -------------- ------------ -------
<S> <C> <C> <C> <C>
1994 100 100 100 100
1995 100 150 140 138
1996 61 186 172 169
1997 58 218 210 226
1998 589 339 291 290
1999 276 757 543 351
</TABLE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement in
whole or in part, the foregoing report and the Performance Graph shall not be
incorporated by reference into any such filing.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
officers and persons who own more than 10 percent of a registered class of the
Company's equity securities to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based solely upon the
Company's review of the copies of such forms received by it during the fiscal
year ended December 31, 1999 and representations that no other reports were
required, the Company believes that each person who, at any time during such
fiscal year was a director, officer or beneficial owner of more than 10% of the
Company's Common Stock, complied with all Section 16(a) filing requirements
during such fiscal year.
14
<PAGE> 18
PROPOSAL 2 -- RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen LLP as
independent accountants to audit the books and accounts of the Company for the
year ending December 31, 2000, and recommends that the appointment of such
auditors be ratified by the shareholders.
Representatives of Arthur Andersen LLP, the Company's principal accountants
for the most recently completed and the current fiscal years, are expected to be
present at the Annual Meeting, will have the opportunity to make a statement,
and will be available to respond to questions.
GENERAL
Management of the Company does not know of any matters other than the
foregoing that will be presented for consideration at the Annual Meeting.
However, if other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy to vote thereon in
accordance with their judgment.
By Order of the Board of Directors
/s/ Antonio L. DeLise
ANTONIO L. DELISE, Secretary
August 21, 2000
15
<PAGE> 19
PROXY PUBLICARD, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Harry I. Freund and Jay S. Goldsmith, or
either of them, with full power of substitution, proxies to vote, unless such
authority is withheld, all shares registered in the name of the undersigned of
Common Stock of PubliCARD, Inc. (the "Company") that the undersigned would be
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
at the offices of Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue,
New York, New York at 10:00 a.m. on September 26, 2000, and any adjournments
thereof, with all powers the undersigned would possess if personally present,
for the election of directors and on all other matters described in the Proxy
Statement or which otherwise come before the Annual Meeting in the discretion of
the Board of Directors.
This Proxy, when properly executed, will be voted in the manner directed
herein. If no instruction to the contrary is indicated, this Proxy will be voted
FOR the election of the Directors named in proposal 1 and FOR proposal 2.
1. ELECTION OF DIRECTORS: Harry I. Freund, Jay S. Goldsmith, Clifford B. Cohn,
Jan-Erik Rottinghuis, L.G. Schafran and Hatim A. Tyabji
----------- FOR all nominees listed above (except as marked to the contrary
hereon).
----------- WITHHOLD AUTHORITY to vote for all nominees listed hereon.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
(Continued and to be signed and dated on the reverse side.)
<PAGE> 20
(Continued from other side)
2. To ratify the selection of Arthur Andersen LLP as auditors for the fiscal
year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, to act upon such other business as may properly be
brought before the Annual Meeting or any adjournment thereof.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Dated: ----------------------, 2000
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
NOTE: YOUR SIGNATURE SHOULD CONFORM
WITH YOUR NAME AS IT APPEARS
HEREON. IF SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH. IF STOCK IS OWNED BY
A PARTNERSHIP OR CORPORATION,
PLEASE INDICATE YOUR CAPACITY IN
SIGNING THE PROXY. IF STOCK IS HELD
IN JOINT OWNERSHIP, ALL CO-OWNERS
MUST SIGN.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
