COLONIAL TRUST COMPANY
5336 NORTH 19TH AVENUE
PHOENIX, ARIZONA 85015
(800) 486-6888
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 24, 1998
The Annual Meeting of Shareholders of Colonial Trust
Company, an
Arizona corporation(the "Company"), will be held at 10:00 a.m.
local time
on Thursday, September 24, 1998, at theCompany's headquarters
at 5336 North
19th Avenue in Phoenix, Arizona, for the following purposes:
l. Election of Directors. To elect four directors to
serve until
the next annual meetingof shareholders and until their
successors are
elected and qualified;
2. Reverse Stock Split. To approve a one-for-ten
reverse stock
split of the Company'sCommon Stock; and
3. Other Business. To transact such other business as
may properly
come before the meeting or any adjournment thereof.
The foregoing items of business are more fully described
in the
Proxy Statement accompanying this Notice.
Only shareholders of record at the close of business on
July 30,
1998 are entitled to notice of and to vote at the meeting.
<PAGE>
All shareholders are cordially invited to attend the
meeting in
person. To assure your representation at the meeting, however,
you are
urged to mark, sign, date and return the enclosed proxy as
promptly as
possible in the postage-paid envelope enclosed for that
purpose. Any
shareholder attending the meeting may vote in person even if
he or she
previously has returned a proxy.
The Company's Annual Report for the fiscal year ended March
31, 1998
accompanies this Notice and Proxy Statement.
Sincerely,
Cecil E. Glovier
Secretary
Phoenix. Arizona
August 17 , 1998
<PAGE>
COLONIAL TRUST COMPANY
PROXY STATEMENT
VOTING AND OTHER MATTERS
General
The enclosed proxy is solicited on behalf of Colonial Trust
Company,
an Arizona corporation (the "Company"), by the Company's
Board of Directors
(the "Board of Directors") for use at the Annual Meeting of
Shareholders to
be held at 10:00 a.m. local time on Thursday, September 24,
1998
(the "Meeting"), or at any adjournment thereof, for the
purposes set forth
in this Proxy Statement and in the accompanying Notice of
Annual Meeting of
Shareholders. The Meeting will be held at the Company's
headquarters at
5336 North 19th Avenue, Phoenix,Arizona.
These proxy solicitation materials were first mailed on or
about
August 17, 1998 to all shareholders entitled to vote at the
Meeting.
Voting Securities and Voting Rights
Shareholders of record at the close of business on July
30, 1998
(the "Record Date") are entitled to notice of and to vote at
the Meeting
("Shareholders"). On the Record Date, 7,698,099 shares of
Company Common
Stock were issued and outstanding. The presence, in person or
by
proxy, of the holders of a majority of the total number of
shares of
Common Stock outstanding
on the Record Date constitutes a quorum for the transaction of
business
at the Meeting.
At the Meeting, four persons are to be elected to serve as
directors
of the Company. Shareholders possess cumulative voting rights
in the
election of directors, and each Shareholder present at the
meeting either
in person or by proxy will have an aggregate number of votes
in the
election of directors equal to the number of directors to be
elected at the
Meeting (four) multiplied
by the number of shares of Company Common Stock held by such
Shareholder
on the record date. All such votes may be cast for one
director or
distributed among such directors up for election as the
Shareholder may
choose. Assuming that a quorum is present, in the election of
directors,
the nominees receiving the highest number of affirmative votes
shall be
elected as directors.
On all matters to be voted on at the Meeting other than
the election of
directors, each
<PAGE>
Shareholder voting at the Meeting, either in person or
represented by
proxy, may cast one vote per share of Common Stock held.
Because the
proposed one-for-ten reverse split of the Company's Common
Stock would be
effected pursuant to an amendment to the Company's Articles of
Incorporation, the reverse split proposal must be approved by
the
affirmative vote of
a majority of the outstanding shares of the Company's Common
Stock.
Voting of Proxies
Votes cast in person or by proxy at the Meeting will be
tabulated by
the election
inspector(s) appointed for the Meeting. When a proxy is
properly executed
and returned, the shares it represents will be voted at the
Meeting as
directed. A Shareholder may indicate on the enclosed proxy or
its
substitute that it does not have discretionary authority as to
certain
shares to vote on a particular matter (a "broker non-vote").
Abstentions
and broker non-votes are each tabulated separately. The
election
inspector(s) will determine whether a quorum is present at the
Meeting.
In general, Arizona law provides that a majority of the shares
entitled to
vote, whether present in person or represented by proxy,
constitutes a
quorum. Abstentions and broker non-votes of shares that are
entitled to
vote are treated as shares that are present in person or
represented by
proxy for purposes of determining the presence of a quorum.
In determining
whether a proposal has been approved, abstentions of shares
that are
entitled to vote are treated
as present in person or represented by proxy, but not as
voting for such
proposal and hence have the same effect as votes against such
proposal,
while broker non-votes of shares that are entitled to vote are
not treated
as present in person or represented by proxy, and hence have
no effect on
the vote for such proposal.
Revocability of Proxies
Any person giving a proxy may revoke the proxy at any time
before its
use by delivering to the Company written notice of revocation
or a duly
executed proxy bearing a later date or by attending the
Meeting and voting
in person.
Solicitation
The Company will pay all expenses of this solicitation.
In addition,
the Company may reimburse brokerage firms and other persons
representing
beneficial owners of shares for expenses incurred in
forwarding solicitation
materials to such beneficial owners. Proxies also may be
solicited by
certain of the Company's directors and officers, personally or
by telephone
or facsimile, without additional compensation.
ELECTION OF DIRECTORS
Nominees
<PAGE>
A board of four directors is to be elected at the Meeting.
Shareholders
possess cumulative voting rights in the election of directors,
and each
Shareholder present at the Meeting either in person or by
proxy will have
an aggregate number of votes in the election of directors
equal to the
number of directors to be elected (four) multiplied by the
number of
shares of Company Common Stock held by such Shareholder on the
record date.
All such votes may be cast for one director or distributed
among such
directors up for election as the Shareholder may choose.
Unless
otherwise instructed, the proxy holders will vote the proxies
received
by them equally for each of the nominees named below. All of
the nominees
are currently directors of the Company. In the event that any
such nominee
is unable or declines to serve as a director at the time of
the Meeting,
the proxies will be voted for any nominee designated by the
current Board
of Directors to fill the vacancy. It is not expected that any
nominee will
be unable or will decline to serve as a director. The term of
office of
each person elected as a director at the Meeting will continue
until the
next annual meeting of shareholders and until a successor has
been elected
and qualified.
The following table sets forth certain information
regarding the
nominees for directors of the Company:
<TABLE>
<S> <C> <C>
Name Age Positions Held
Lynn R. Camp 61 Chairman of the Board
Michael W. Borger 43 Director
Gerald G. Morgan, Jr. 42 Director
John K. Johnson 40 President, Chief Executive
Officer and
</TABLE>
Director
Mr. Johnson is currently, and has been since August 1991,
President and
Chief Executive Officer of the Company. Prior to being named
President and
Chief Executive Officer, Mr.Johnson served as Vice President
of the Company
from June 1990 to August 1991. He has served as a director of
the Company
since November 1995, when he was appointed by the Company's
directors to
fill a vacancy on the Board of Directors.
Mr. Camp is currently, and has been since October 1990,
Chairman of the
Board of Directors. He has served as a director since June
1990. Since
1977, he has served as President, Chief Executive Officer and
a director
of Turnkey Computer Systems, Inc. ("Turnkey Computer").
Turnkey Computer sells computer equipment and software, and
furnishes
computer maintenance and repair services, in Amarillo, Texas.
Mr. Borger has served as a director of the Company since
June 1990.
From June 1990 to August 1991, he served as President of the
Company.
Mr. Borger has been President, Chief Executive Officer and a
director of
Turnkey Leasing Corp. ("Turnkey Leasing") since 1979. Turnkey
Leasing,
located in Amarillo, Texas, leases computers, general office
equipment and
construction equipment, and makes business loans.
<PAGE>
Mr. Morgan has served as a director of the Company since
October 1990.
Mr. Morgan is a partner in the law firm of Burdett, Morgan and
Thomas in
Amarillo, Texas, where he has practiced since 1985.
Meetings and Committees of the Board of Directors
The Company's Board of Directors met 12 times during the
fiscal year
ended March 31, 1998. The Company does not maintain a
compensation
committee. However, the Company's Board of Directors met in
March 1998 to
review the performance of the Company's executive officers and
make
decisions regarding fiscal goals for the fiscal year ending
March 31, 1999
and compensation of such individuals.
The Company's Bylaws authorize the Board of Directors to
appoint from
its members one or more committees composed of one or more
directors. The
Board of Directors has appointed a standing Trust and
Investment Committee
and a standing Prohibited Transactions Committee.
The Trust and Investment Committee must be comprised of at
least two
directors, at least one of which must be a non-employee
director. The
members of the Trust and Investment Committee are currently
Messrs. Camp,
Borger, Morgan and Johnson. The Trust and Investment
Committee is
responsible for overseeing the Company's investment and
disposition of
property and funds held in a fiduciary capacity. The Trust
and Investment
Committee met 12 times during the fiscal year ended March 31,
1998.
The Prohibited Transactions Committee must be comprised of
at least two
directors, one of which must be a non-employee director. The
members of the
Prohibited Transactions Committee are Messrs. Camp and
Johnson. The
Prohibited Transactions Committee is responsible for reviewing
all Company
transactions involving IRA or SEP accounts to determine the
Company's
compliance with Internal Revenue Code rules and regulations
applicable to
such accounts. The Prohibited Transactions Committee met 12
times during
the fiscal year ended March 31, 1998.
The Personal Trust and Investment Committee is comprised
of three or
more members, at least one of which must be a director of the
Company.
The members of the Personal Trust and Investment Committee are
Messrs. A. R. Olson, Chris Olson and Johnson. The Personal
Trust and
Investment Committee is responsible for approving the opening
and closing
of accounts, reviewing investment sales and purchases, and
reviewing and
approving discretionary distributions for accounts serviced by
the
Company's Personal Trust Division. The Personal Trust and
Investment
Committee met 12 times during the fiscal year ended March 31,
1998.
Director Compensation and Other Information
The Company's non-employee directors receive $200 per
month and $100
for each Board meeting attended for their services as Board
members. Each
non-employee director receives $100 for each Committee meeting
attended.
Such compensation for Mr. Camp, the Company's
<PAGE>
Chairman, totaled $6,400 for the fiscal year ended March 31,
1998.
Compensation to Messrs. Borger and Morgan, the Company's other
non-employee
directors, totaled $5,100 to each director in the fiscal year
ended
March 31, 1998.
On January 1, 1998, each of the Company's non-employee
directors
received options to purchase 15,000 shares of Common Stock at
an exercise
price of $.30 per share.
EXECUTIVE COMPENSATION
Summary of Cash and Other Compensation
The following table sets forth certain information
concerning
compensation paid during each of the Company's last three
fiscal years to
the Company's Chief Executive Officer (the "Named Executive
Officer"). The
Company has no executive officer whose salary, bonuses and
other
compensation earned during the fiscal year ended March 31,
1998 exceeded
$100,000:
<TABLE>
Summary Compensation Table
Annual Compensation Long-Term Compensation
<S> <C> <C> <C>
Salary Bonus Securities
Underlying All Other
Name and Position Year ($) ($)
Options/SAR's (#)
John K. Johnson-- 1998 $80,000 $19,444 --
President and 1997 80,000 12,872 300,000(a)
Chief Executive 1996 55,000 8,811 --
Officer
</TABLE>__________________________________
(a) On July 1, 1996, Mr. Johnson was granted incentive stock
options to
purchase 300,000 shares of the Company's Common Stock at an
exercise price
of $ .25 per share. Options to purchase 150,000 shares vested
immediately upon grant, and options to purchase 50,000 shares
vested on
July 1, 1997 and July 1,1998. Options to purchase the
remaining 50,000
shares vest on July 1, 1999.
The following table sets forth information concerning (a)
stock option
exercises during the fiscal year ended March 31, 1998 by the
Company's
Named Executive Officer and (b) the value of unexercised stock
options held
by the Named Executive Officer at March 31, 1998.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION
VALUES AS OF MARCH 31, 1998
<PAGE>
<TABLE>
<S> <C> <C> <C>
<C>
Securities Underlying
ValueofUnexercised
Unexercised Options In-the
Money Options
Shares at Fiscal Year End at
Fiscal Year End($)
Name and Aquired on Value (#)Exercisable/
Exercisable/
Position Exercise(#) Realized($) Unexercisabl
Unexercisable
John K. Johnson-- 0 $0 200,00/100,000
$10,000/$5,000
President
and Chief Executive
</TABLE>
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS,
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information
regarding the
beneficial ownership of the Company's Common Stock as of March
1, 1998 by
(i) each director and nominee for director, (ii) each
executive officer
listed in the "Summary Compensation" table above, (iii) all
directors and
executive officers as a group, and (iv) each person who is
known to the
Company to own beneficially more than five percent of the
Company's Common
Stock:
<PAGE>
<TABLE>
<S> <C> <C>
Name and Address Shares Percent
of Beneficial Owner Owned Owned
Lynn R. Camp 151,604 shares 2.0%
3517 Tripp
Amarillo, Texas 79121
Michael W. Borger 100,718 shares 1,3%
1602 S. Travis
Amarillo, Texas 79102
Gerald G. Morgan, Jr. 100,100 shares 1.3%
4705 Olsen
Amarillo, Texas 79106
John K. Johnson (2) 330,781 shares 4.3%
2414 E. Clark Road
Phoenix, Arizona 85024
William and Sue Johnson 436,581 shares 5.7%
14001 Interstate 27
Amarillo, Texas 79119
Directors and Executive 1,676,572 shares 21.8%
Officers as a
Group (4)
</TABLE>__________________________________
(1) A person is deemed to be the beneficial owner of
securities that
can be acquired within 60 days from the date set forth above
through the
exercise of any option, warrant, or right. Shares of Common
Stock subject
to options, warrants, or rights which are currently
exercisable within 60
days are deemed outstanding for computing the percentage of
the person
holding such options, warrants or rights, but are not deemed
outstanding
for computing the percentages of any other person. The
amounts and
percentages are based upon 7,698,099 shares of Common Stock
outstanding on
July 30, 1998.
(2) The total for Mr. Johnson includes 250,000 shares of
Common Stock
subject to immediately exercisable options which have an
exercise price of
$ .25 per share.
(3) Includes 350,323 shares owned by Amberwood Management
Company
("Amberwood"). Mr. and Mrs. Johnson, through trusts of which
they are the
sole trustees, own all of the issued and outstanding shares of
capital
stock of Amberwood. Mr. and Mrs. Johnson control the
disposition of the
shares owned by Amberwood and may be deemed to be the
beneficial owners of
the shares owned by Amberwood.
(4) The total for all directors and executive officers as
a group
includes 578,290 shares
<PAGE>
subject to unexercised options that are exercisable on July
30, 1998 or
within 60 days thereafter.
REVERSE STOCK SPLIT PROPOSAL
Summary of Proposed Reverse Stock Split
The Company's Board of Directors has unanimously adopted a
resolution
recommending submission of a proposal to effect a reverse
split of the
Company's Common Stock (the "Reverse Split Proposal") to the
Company's
Shareholders for their authorization and approval. If
approved, the
Reverse Split Proposal would effect a one-for-ten reverse
split (the
"Reverse Split") of the Company's outstanding shares of Common
Stock
through an amendment to the Company's Articles of Incorporation
(the "Reverse Split Amendment") which maintains the Company's
Common Stock
as no par value capital stock and the authorized number of
Shares of Common
Stock at 25,000,000. The Reverse Split Proposal may be
abandoned by the
Board of Directors at any time before or after the Annual
Meeting and prior
to the effective date of the Reverse Split Amendment (the
"Effective Date")
if for any reason the Board of Directors deems it advisable.
Furthermore,
the Board may, in its discretion, delay the Effective Date for
such period
of time as it deems advisable. The Effective Date will be the
date the
Reverse Split Amendment is filed with the Arizona Secretary of
State.
As a result of the Reverse Split, the total number of
shares of Common
Stock held by each shareholder of record on the Effective Date
would be
automatically converted into an amount of whole shares of
Common Stock
equal to the number of shares owned prior to the Reverse Split
divided by
ten, together with cash based on the Market Value (hereinafter
defined) of
the Company's Common Stock in lieu of any fractional shares.
Each
Shareholder's percentage ownership interest in the Company and
proportionate voting power would remain unchanged except for
minor
differences resulting from the Company's purchase of
fractional shares.
The rights and privileges of the holders of Common Stock would
be
substantially unaffected by adoption of the Reverse Split
Proposal.
Cash Payment in Lieu of Fractional Shares
In lieu of issuing fractional shares resulting from the
Reverse Split,
the Company will purchase each such fractional share at the
average of the
closing prices of the Company's Common Stock for the 20
trading days
immediately preceding the Effective Date (the "Market Value").
No
brokerage commissions will be payable by the holders who
receive cash in
lieu of fractional shares.
Reasons for the Reverse Split Proposal
It is anticipated that, following consummation of the
Reverse Split,
the shares of Common Stock will trade at a price per share
which is
significantly higher than the market price to the Reverse
Split. However,
there can be no assurance that the shares will trade at a
price which is
<PAGE>
ten times the market price prior to the Reverse Split.
Although there can be no assurance in this regard, the
Company's Board
of Directors believes that the anticipated increased price
level resulting
from the Reverse Split should improve the marketability of the
Company's
Common Stock. Moreover, the Company's Board of Directors
believes that the
Reverse Split will significantly enhance the Company's ability
to
achieve a listing of its Common Stock on a regional securities
exchange
such as the Chicago Stock Exchange or the Philadelphia Stock
Exchange.
However, the Company's Board of Directors believes that the
Reverse Split
will not be sufficient to cause the Company to immediately
satisfy the
requirements for initial listing on any of the above regional
stock
exchanges. Based on the current listing standards for the
above exchanges,
however, the
Company's Board of Directors believes that (a) the Company's
Common Stock
will likely meet
the minimum price per share requirements of such exchanges,
provided the
Company's Common
Stock trades at a price at least ten times its existing per
share price
following the Reverse Split
(of which there may be no assurance), and (b) the Company will
likely meet
all of the current
requirements for listing on the Chicago Stock Exchange and the
Philadelphia
Stock Exchange at the conclusion of its fiscal year ending on
March 31,
1999, although there may be no assurance in this regard.
Additionally, one
or both of such Exchanges could increase their listing
requirements to
include criteria that the Company will not be able to satisfy
at the end of
its fiscal year ended March 31, 1999, or at any time in the
future. The
Company's Board of Directors may abandon the Reverse Split at
any time
prior to the Effective Date for any reason at the Board's
discretion.
Principal Effects of the Reverse Split
Shareholders have no right under Arizona law or under the
Company's
Articles ofIncorporation or Bylaws to dissent from the Reverse
Split, or to
dissent from the payment of cash in lieu of fractional shares.
On the Effective Date, each Shareholder who owns fewer
than ten shares
of Common Stock will have only the right to receive cash based
on the
Market Value in lieu of receiving a fractional share. The
interest of each
such Shareholder in the Company will thereby be terminated,
and he or she
will have no further right to vote as a shareholder or share
in the assets
or any future earnings of the Company. Each Shareholder who
owns ten or
more shares of Common Stock on the Record Date will continue
as a
shareholder of the Company with respect to the whole shares of
Common Stock
that he or she receives following the Reverse Split, with only
the right to
receive cash based upon the Market Value with respect to any
fractional
shares resulting from the Reverse Split.
The Company currently has authorized 25,000,000 shares of
Common Stock.
The number of shares of authorized Common Stock will not be
changed by the
Reverse Split Proposal. As of July 30, 1998, 7,698,099 shares
of Common
Stock were issued, none of which shares were held by the
Company as
treasury stock. Based on the Company's best estimates, there
will be
approximately 769,809 shares of Common Stock outstanding
following the
Reverse Split.
<PAGE>
After the Reverse Split, the Company would have
25,000,000 authorized,
and approximately 24,230,191 authorized but unissued, shares
of Common
Stock. Accordingly, in effect, approval of the Reverse Split
Proposal
constitutes approval of an increase in the number of
authorized shares of
Common Stock available for issuance. Such shares could be
issued in the
future for such corporate purposes and on such terms and
conditions as the
Board deems advisable without further action by the Company's
shareholders,
unless shareholder action is required by applicable law. Such
corporate
purposes could include financings, acquisitions, stock splits,
stock
dividends, incentive and employee benefit plans, and other
purposes. The
Company has no plans to issue additional shares for the above
or other
purposes.
In addition to such corporate purposes, the authorized
shares of Common
Stock could be used to make more difficult a change in control
of the
Company. Under certain circumstances, the Board could create
impediments
to a takeover by causing such shares to be issued to a holder
or holders
who might side with the Board in opposing a takeover bid. In
this regard,
the Board could issue shares to a holder that would thereby
have sufficient
voting power to assure that certain types of proposals would
not receive
the requisite shareholder vote, including any proposal to
remove directors,
to accomplish certain business transactions opposed by the
Board, or to
alter,amend or repeal provisions in the Company's Articles of
Incorporation
or Bylaws relating to any such action. Furthermore, the
existence of such
shares could have the effect of discouraging any attempt by
any person or
entity to acquire control of the Company, since the issuance
of such shares
could dilute the Common Stock ownership interest of such
person or entity.
The Company is not aware of any existing or planned efforts to
take over
control of the Company.
Because there is no par value attributable to the
Company's Common
Stock, the Reverse Split Proposal, if approved, would have no
effect on the
allocation of capital on the Company's statement of
shareholder's equity.
The Company's Common Stock is presently registered under
Section 12(g)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"),
and, as a result, the Company is subject to the periodic
reporting and
other requirements of the Exchange Act. The Reverse Split
will not
significantly reduce the number of shareholders of the Company
or affect
the registration of the Common Stock under the Exchange Act,
and the
Company has no intention of terminating registration under the
Exchange
Act in order to become a "private" company.
Exchange of Stock Certificates
As soon as practicable after the Effective Date, the
Company will send
letters of transmittal to all shareholders of record on the
Effective Date
for use in transmitting stock certificates representing shares
outstanding
prior to the Reverse Split ("old certificates") to the
Company. Upon
proper completion and execution of the letter of transmittal
and return
thereof to the Company, holders of record on the Effective
Date will
receive certificates ("new certificates") representing the
number of whole
shares of Common Stock into which their shares
<PAGE>
have been converted as a result of the Reverse Split, together
with cash in
the amount to which they are entitled in lieu of any
fractional shares
resulting from the Reverse Split. Until surrendered, each
outstanding old
certificate held by a shareholder of record shall be deemed
for all purposes
as of the Effective date to represent only the number of whole
shares and
the right to receive cash, if any, to which such holder is
entitled as a
result of the Reverse Split.
Federal Tax Consequences of the Reverse Split
The following discussion describes certain federal income
tax
consequences of the proposed Reverse Split to shareholders of
the Company
who are citizens or residents of the United States, other than
shareholders
who received their Common Stock as compensation. In general,
the federal
income tax consequences of the Reverse Split will vary among
shareholders
depending upon whether they receive (1) solely cash for their
shares, (2)
solely new certificates, or (3) new certificates plus cash for
the
fractional shares, in exchange for old certificates. In
addition, the
actual consequences for each shareholder will be governed by
the specific
facts and circumstances pertaining to his or her acquisition
and ownership
of shares of the Company's Common Stock. Thus, the Company
makes no
representations concerning specific tax consequences for any
of its
shareholders and recommends that each shareholder consult with
his or her
tax advisor concerning the tax consequences (including
federal, state and
local income or other tax) of the Reverse Split. The Company
has not sought
and will not seek an opinion of counsel or a ruling from the
Internal
Revenue Service regarding the federal income tax consequences
of the Reverse
Split. However, the Company believes that because the Reverse
Split is not
part of a plan to periodically increase a shareholder's
proportionate
interest in the assets or earnings and profits of the Company,
the Reverse
Split should have the following federal income tax effects:
1. A shareholder who owns fewer than ten shares of the
Company's
Common Stock
before the Reverse Split, and who therefore receives only cash
as a result
of the Reverse Split, will generally be treated as having sold
his or her
shares of Common Stock represented by old certificates and
will recognize
gain to the extent that the cash received exceeds his basis in
suchshares
of Common Stock.
2. A shareholder who owns ten or more shares and whose
shares are
evenly divisible by ten before the Reverse Split (i.e., a
shareholder who
is entitled to receive solely new certificates) will not
recognize gain or
loss on the exchange. In the aggregate, the
shareholder'sbasis in the
shares of Common Stock represented by new certificates will
equal his or
her basis in the shares of Common Stock represented by the old
certificates.
3. A shareholder who owns ten or more shares and whose
shares are not
evenly divisible by ten before the Reverse Split (i.e., a
shareholder who
is entitled to receive both new certificates and cash in
exchange for his
old certificates) will not recognize gain or loss on the
exchange of old
certificates for new certificates. In the aggregate, the
shareholder's
basis in the shares of Common Stock represented by new
certificates will
equal his or her basis in the highest
<PAGE>
number of shares of Common Stock represented by old
certificates that was
evenly divisible by ten. A shareholder will generally be
treated as having
sold the shares not evenly divisible by ten, and will
recognize gain to the
extent the cash received exceeds the shareholder's basis in
the shares. If
the shareholder's basis in the shares is greater than the cash
received,
then no gain or loss will be recognized, and the shareholder's
basis in the
shares of Common Stock represented by new certificates will
equal the
shareholders's basis in the shares of Common Stock represented
by old
certificates less the amount of cash received.
4. The Reverse Split will constitute a reorganization
within the
meaning of Section 368(a)(E) of the Internal Revenue Code of
1986, and the
Company will not recognize any gain or loss as a result of the
Reverse Split.
Required Vote; Board Recommendation
THE REVERSE SPLIT PROPOSAL MUST BE APPROVED BY THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE
COMPANY'S COMMON STOCK. THE BOARD OF DIRECTORS OF THE
COMPANY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE REVERSE
SPLIT PROPOSAL.
COMPLIANCE WITH REPORTING REQUIREMENTS
Section 16(a) of the 1934 Act requires the Company's
directors,
executive officers, and any persons holding more than ten
percent of the
Company's Common Stock to report their initial ownership of
the Company's
Common Stock and any subsequent changes in that ownership to
the SEC.
Reports of changes in ownership generally are required to be
filed by the
tenth day of the month following the transaction.
Based solely on its review of such reports, the Company
believes that
during the fiscal year ended March 31, 1998, all filing
requirements
applicable to its directors and executive officers were
satisfied. The
Company is not aware of any beneficial owner of more than ten
percent of the
Company' s Common Stock.
OTHER MATTERS
The Board of Directors has no knowledge of any other
business to come
before the Meeting and does not intend to present any other
matters.
However, if any other business properly comes before the
Meeting or any
adjournment thereof, the persons named as proxies will have
discretionary
authority to vote the shares represented by the accompanying
proxy in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
<PAGE>
Any shareholder of the Company who wishes to present a
proposal to be
considered at the 1999 Annual Meeting of Shareholders, and who
wishes to
have the proposal included in the Company's proxy statement
and form of
proxy relating to that meeting, must deliver the proposal in
writing to the
Company at 5336 North 19th Avenue, Phoenix, Arizona 85015, no
later than
March 15, 1999.
This Proxy is Solicited on behalf of the Board of Directors
COLONIAL TRUST COMPANY
Annual Meeting of Shareholders Dated September 24, 1998
The undersigned shareholder of COLONIAL TRUST COMPANY, an
Arizona
corporation (the "Company"), hereby acknowledges receipt of
the Notice of
Annual Meeting of Shareholders and Proxy Statement of the
Company dated
August 17, 1998, and hereby appoints John K. Johnson and Lynn
R. Camp, and
each of them, proxies and attorneys-in-fact, with full power
to each of
substitution, on behalf of the undersigned, to represent the
undersigned
at the Annual Meeting of Shareholders to be held on September
24, 1998,
at 10:00 a.m. local time at the Company's offices at 5336
North 19th
Avenue, Phoenix, Arizona, and at any adjournment or
adjournments thereof,
and to vote all shares of Common Stock which the undersigned
would be
entitled to vote if then and there personally present, on the
matters set
forth below.
1. ELECTION OF DIRECTORS:
__ FOR all nominees listed below _____ WITHHOLD
AUTHORITY to vote
(except as indicated) for all nominees
listed below
If you wish to withhold authority to vote for any individual
nominee strike
a line through that nominee's name in the list below.
John K. Johnson Lynn R. Camp Michael Borger Gerald
G. Morgan, Jr.
2. REVERSE STOCK SPLIT PROPOSAL:
__ FOR reverse stock split proposal ___ AGAINST reverse stock
split proposal
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY
DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND AS
SAID
PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE
THE MEETING.
<PAGE>
A majority of such attorneys or substitutes as shall be
present and shall
act at said meeting or any adjournment or adjournments thereof
(or if only
on shall be present and act, then that one) shall have and may
exercise all
of the powers of said attorneys-in-fact hereunder.
Date: ____________, 1998
______________________________
________________________________
Signature Signature
(This Proxy should be dated, signed by
the shareholder(s) exactly as his or her
name appears hereon, and returned
promptly in the enclosed envelope.
Persons signing in a fiduciary capacity
should so indicate. If shares are held by
joint tenants or as community property,
both shareholders should sign)
SCHEDULE 14A
(Rule 14a-101
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check by the appropriate box:
Preliminary Proxy Statement Confidential For
Use of the
Commission Only
(as permitted
By Rule 14a-6 (e)
(2)
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COLONIAL TRUST COMPANY
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6 (I)
(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of
transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the
amount on which
the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(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 off
setting 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:
(2) Form , Schedule or registration Statement No.:
<PAGE>
(3) Filing Party:
(4) Date Filed:
