<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Salton, 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:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(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 offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[SALTON LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Salton, Inc., will be held on
Wednesday, December 13, 2000 at 3:00 p.m. local time, at the Four Seasons Hotel,
120 E. Delaware Place, Chicago, Illinois, 60611.
The purposes of the Annual Meeting are:
1. To elect two Class III Directors for a term expiring in 2003;
2. To ratify the appointment of Deloitte & Touche LLP as our auditors
for the 2001 fiscal year; and
3. To transact any other business that may properly be presented at
the meeting.
You must be a holder of Common Stock or Series A Voting Convertible
Preferred Stock of record at the close of business on November 8, 2000 to vote
at the Annual Meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE VOTE BY SIGNING AND RETURNING THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE. RETURNING THE PROXY CARD WILL NOT AFFECT YOUR RIGHT TO ATTEND THE
MEETING AND VOTE.
By Order of the Board of Directors
/s/ David C. Sabin
David C. Sabin
Secretary
Chicago, Illinois
November 11, 2000
<PAGE> 3
SALTON, INC.
550 BUSINESS CENTER DRIVE
MOUNT PROSPECT, ILLINOIS 60056
PROXY STATEMENT
The Board of Directors of the Company solicits your proxy for use at the
Annual Meeting of Stockholders on Wednesday, December 13, 2000, or at any
adjournment thereof. We will begin sending this Proxy Statement, the attached
Notice of Annual Meeting and the enclosed proxy card on or about November 11,
2000 to all stockholders entitled to vote.
INFORMATION ABOUT THE MEETING AND VOTING
WHO MAY VOTE AT THE MEETING?
Stockholders of record at the close of business on November 8, 2000 are
entitled to notice of and to vote at the Annual Meeting. At the record date,
12,183,775 shares of common stock of the Company (the "Common Stock") were
issued and outstanding. In addition, on the record date, 40,000 shares of Series
A Voting Convertible Preferred Stock of the Company (the "Series A Preferred
Stock"), were issued and outstanding, which were convertible on the record date
into 3,529,412 shares of Common Stock.
HOW MANY VOTES DO I HAVE?
Each share of Common Stock that you own entitles you to one vote. Each
share of Series A Preferred Stock that you own entitles you to 88.2 votes (the
number of shares of Common Stock into which such share of Series A Preferred
Stock is convertible on the record date). The Common Stock and the Series A
Preferred Stock vote as a single class and are identical in all respects with
respect to matters subject to the vote of stockholders.
HOW DO I VOTE BY PROXY?
Whether you plan to attend the Annual Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
the Annual Meeting and vote.
If you properly fill in your proxy card and send it to us in time to vote,
your "proxy" (one of the individuals named on your proxy card) will vote your
shares as you have directed. If you sign the proxy card but do not make specific
choices, your proxy will vote your shares as recommended by the Board as
follows:
- "FOR" the election of the two nominees for Class III Directors, and
- "FOR" ratification of the appointment of independent auditors for fiscal
2001.
If any other matter is presented, your proxy will vote in accordance with
his best judgment. At the time this Proxy Statement went to press, we knew of no
matters which needed to be acted on at the Annual Meeting, other than those
discussed in this Proxy Statement.
MAY I REVOKE MY PROXY?
If you give a proxy, you may revoke it at any time before it is exercised.
You may revoke your proxy in any one of three ways:
- You may send in another proxy with a later date.
- You may notify the Company's Secretary in writing before the Annual
Meeting that you have revoked your proxy.
- You may vote in person at the Annual Meeting.
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<PAGE> 4
HOW DO I VOTE IN PERSON?
If you plan to attend the Annual Meeting and vote in person, we will give
you a ballot when you arrive. However, if your shares are held in the name of
your broker, bank or other nominee, you must bring an account statement or
letter from the nominee indicating that you are the beneficial owner of the
shares on November 8, 2000, the record date for voting.
WHAT CONSTITUTES A QUORUM?
A quorum of stockholders is necessary to hold a valid meeting. If
stockholders entitled to cast at least a majority of all the votes entitled to
be cast at the Annual Meeting are present in person or by proxy, a quorum will
exist. Abstentions and broker non-votes (i.e., when a broker does not have
authority to vote on a specific issue) are counted as present for establishing a
quorum.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
PROPOSAL 1: ELECT TWO CLASS
III
DIRECTORS The nominees for director in Class III who
receive the most votes will be elected. So, if
you do not vote for a particular nominee, or
you indicate "withhold authority to vote" for a
particular nominee on your proxy card, your
vote will not count either "for" or "against"
the nominee.
A broker non-vote will also have no effect on
the outcome since only a plurality of votes
actually cast is required to elect a director.
PROPOSAL 2: RATIFY SELECTION
OF
AUDITORS The affirmative vote of a majority of the votes
cast at the Annual Meeting is required to
ratify the selection of independent auditors.
So, if you "abstain" from voting, it has the
same effect as if you voted "against" this
proposal.
THE EFFECT OF BROKER NON-VOTES If your broker does not vote your shares on
Proposal 2, such "broker non-votes" do not
count as "shares present." This means that a
broker non-vote would reduce the number of
affirmative votes that are necessary to approve
this proposal.
WHAT ARE THE COSTS OF SOLICITING THESE PROXIES?
The Company will pay all the costs of soliciting these proxies. In addition
to mailing proxy soliciting material, our directors and employees may also
solicit proxies in person, by telephone or by other electronic means of
communication. We will ask banks, brokers and other institutions, nominees and
fiduciaries to forward the proxy material to their principals and to obtain
authority to execute proxies. We will then reimburse them for expenses.
HOW DO I OBTAIN AN ANNUAL REPORT ON FORM 10-K?
IF YOU WOULD LIKE A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED JULY 1, 2000, THAT WE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WE WILL SEND YOU ONE WITHOUT CHARGE. PLEASE WRITE TO:
SALTON, INC.
550 BUSINESS CENTER DRIVE
MOUNT PROSPECT, ILLINOIS 60056
ATTENTION: WILLIAM B. RUE
PRESIDENT AND CHIEF OPERATING OFFICER
2
<PAGE> 5
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, having three-year
terms that expire in successive years. The Board is comprised of three Class I
Directors (David C. Sabin, William B. Rue and Robert A. Bergmann), two Class II
Directors (Bert Doornmalen and Bruce G. Pollack) and two Class III Directors
(Leonhard Dreimann and Frank Devine).
We are seeking your vote on the selection of two Class III Directors at
this Annual Meeting. The Class I and II Directors are not up for election this
year and will continue in office for the remainder of their term.
The Board of Directors has nominated Messrs. Dreimann and Devine to stand
for reelection as the Class III Directors. The term of the Class III Directors
ends upon the election of Class III Directors at the 2003 annual meeting of
stockholders.
We know of no reason why any nominee may be unable to serve as a director.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the Board, or the Board may reduce the number of directors to be
elected.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY DIRECTOR SINCE
---- --- ------------------------- --------------
<S> <C> <C> <C>
CLASS III DIRECTORS: (NOMINEES)
Leonhard Dreimann.................... 51 Chief Executive Officer and 1988
Director
Frank Devine......................... 55 Director 1994
CLASS I DIRECTORS:
David C. Sabin....................... 50 Chairman of the Board of 1988
Directors
William B. Rue....................... 52 President, Chief Operating 1998
Officer and Director
Robert A. Bergmann................... 33 Director 1998
CLASS II DIRECTORS:
Bert Doornmalen...................... 55 Director 1994
Bruce G. Pollack..................... 40 Director 1998
</TABLE>
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
CLASS III DIRECTORS
LEONHARD DREIMANN has served as Chief Executive Officer and a director of
the Company since its inception in August 1988 and is a founder of the Company.
From 1988 to July 1998, Mr. Dreimann served as President of the Company. From
1987 to 1988, Mr. Dreimann served as president of the Company's predecessor
Salton, Inc., a wholly-owned subsidiary of SEVKO, Inc. Prior to 1987, Mr.
Dreimann served as managing director of Salton Australia Pty. Ltd., a
distributor of Salton brand kitchen appliances. From 1988 to December 1993, Mr.
Dreimann served as an officer and a director of Glacier Holdings, Inc., a
publicly-held company, and as a director of its wholly-owned subsidiary Glacier
Water Systems, Inc. from 1987 to December 1993. Glacier Water developed,
manufactured and marketed an in-home water filtration system. From 1989 to
December 1993, Mr. Dreimann served as an officer and a director of Salton Time.
During 1994, Glacier Holdings and its subsidiaries ceased operations and were
liquidated.
FRANK DEVINE has been a director of the Company since December 1994. Mr.
Devine serves as a business consultant for various entities. He has founded or
co-founded Bachmann-Devine, Incorporated, a venture capital firm, American Home,
Inc., an importer of hand-loomed rugs and decorative accessories, World Wide
Digital Vaulting, Inc., an on-line digital data storage company and Shapiro,
Devine & Craparo, Inc., a household goods manufacturers representation company
serving the retail industry. Mr. Devine also serves on the board of directors of
these companies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES.
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<PAGE> 6
DIRECTORS CONTINUING UNTIL 2001 ANNUAL MEETING
CLASS I DIRECTORS
DAVID C. SABIN has served as Chairman of the Company since September 1991
and has served as Secretary and a director of the Company since its inception in
August 1988 and is a founder of the Company. Mr. Sabin served as the president
and a director of Glacier Holdings from December 1988 through May 1994 and as a
director of Salton Time Inc., a wholly-owned subsidiary of Glacier Holdings,
since 1989. Salton Time was an importer and distributor of quartz wall and alarm
clocks. From 1991 through May 1994, Mr. Sabin was an officer and a director of
Stylemaster, Inc., a wholly-owned subsidiary of Glacier Holdings, which was
engaged in the manufacture and distribution of plastic housewares articles.
Stylemaster, Inc. filed for protection under Chapter 11 of the United States
Bankruptcy Code in March 1994. During 1994, Glacier Holdings and its
subsidiaries ceased operations and were liquidated.
WILLIAM B. RUE has been a director of the Company since August 1998. Mr.
Rue has served as President of the Company since August 1998, as Chief Operating
Officer of the Company since December, 1994 and as Chief Financial Officer and
Treasurer of the Company from September, 1988 to January 1999. From 1985 to
1988, he was Treasurer of SEVKO, Inc. and from 1982 to 1984 he was Vice
President-Finance of Detroit Tool Industries Corporation. Prior to that time,
Mr. Rue had been employed since 1974 by the accounting firm of Touche Ross & Co.
ROBERT A. BERGMANN has been a director of the Company since August 1998.
Mr. Bergmann has been a Principal of Centre Partners Management LLC since 1998.
From 1995 to 1998, Mr. Bergmann served as a Principal of Centre Partners
Management LLC and from 1989 to 1995 he held various positions at Centre
Partners L.P. Mr. Bergmann serves as a director of Rembrandt Photo Services and
a number of other private corporations.
DIRECTORS CONTINUING UNTIL 2002 ANNUAL MEETING
CLASS II DIRECTORS
BERT DOORNMALEN has been a Director of the Company since July 1994. Mr.
Doornmalen is the former Managing Director of Markpeak Ltd., a Hong Kong company
which represents the Company in the purchase and inspection of products in the
Far East, since 1981.
BRUCE G. POLLACK has been a Director of the Company since August 1998. Mr.
Pollack has been a Managing Director of Centre Partners Management LLC since
1995. Mr. Pollack is also a Partner of Centre Partners L.P. which he joined in
1991. Mr. Pollack serves as a director of Music Holdings Corp., KIK Corp.
Holdings Inc., Rembrandt Photo Services, Johnny Rockets Group, Inc. and a number
of other private corporations.
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company held six meetings during the fiscal
year ended July 1, 2000.
The Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee held three meetings during fiscal 2000. The Compensation
Committee held two meetings during fiscal 2000. The Committees received their
authority and assignments from the Board of Directors and report to the Board of
Directors. Each director attended at least 75% of the meetings of the Board of
Directors and 75% of the meetings of the Committees on which he served.
The Audit Committee recommends the engagement of the Company's independent
auditors and is primarily responsible for approving the services performed by
the Company's independent auditors. The Committee also reviews and evaluates the
Company's accounting principles and its system of internal accounting controls.
The Committee currently consists of Frank Devine, Bert Doornmalen and Bruce
Pollack.
4
<PAGE> 7
The Audit Committee has adopted a written charter, which is attached to
this Proxy Statement as Appendix A. Each member of our Audit Committee is
"independent" as defined under the New York Stock Exchange listing standards.
The Compensation Committee reviews and approves the Company's executive
compensation policy, makes recommendations concerning the Company's employee
benefit policies for executives, and has authority to administer the Company's
stock option plans. The Committee currently consists of Frank Devine, Bert
Doornmalen and Robert Bergmann.
COMPENSATION OF DIRECTORS
We compensate directors who are not employees of the Company with a fee in
the amount of $7,500 per annum and $1,000 per meeting he or she attends (plus
reimbursement for out-of-pocket expenses incurred in connection with attending
such meetings).
EXECUTIVE OFFICERS' COMPENSATION
The following table shows the total compensation received by the Company's
Chief Executive Officer and its other executive officers for each of the fiscal
years ending July 1, 2000, June 26, 1999 and June 28, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------- --------------------- -------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ LTPP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR $ $ ($)(1) (#) (#) ($) ($)
------------------ ---- ------- ------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonhard Dreimann........ 2000 500,000 -- 52,212 18,939 184,768(2) -- --
(Chief Executive 1999 500,000 625,000 48,642 -- 94,768(3) -- --
Officer)
1998 350,000 191,552 55,364 -- 70,721(4) -- 37,500(8)
David C. Sabin........... 2000 500,000 -- 28,153 18,939 184,768(2) --
(Chairman and 1999 500,000 625,000 20,295 -- 94,768(3) -- --
Secretary)
1998 350,000 191,552 11,087 -- 70,721(4) -- 37,500(8)
William B. Rue........... 2000 425,000 -- 17,382 16,099 184,768(2) -- --
(President and Chief 1999 170,000 437,500 13,886 -- 94,768(3) -- --
Operating Officer) 1998 240,000 142,296 11,453 -- 70,721(4) -- 37,500(8)
John E. Thompson(5)...... 2000 220,000 -- -- -- 34,000(7) -- --
(Chief Financial 1999 90,000 -- -- -- 7,500(6) -- --
Officer)
</TABLE>
---------------
(1) Consists primarily of reimbursement for costs associated with use and
maintenance of an automobile.
(2) Options to purchase 94,768 shares were awarded on December 17, 1999 at an
exercise price equal to the fair market value of the Common Stock on the
date of grant ($34.25) in accordance with the executives' employment
agreements and options to purchase 90,000 shares were awarded on January 12,
2000 at an exercise price equal to the fair market value of the Common Stock
on the date of grant ($29.25).
(3) Options were awarded on December 18, 1998 under the Company's 1998 Employee
Stock Option Plan at an exercise price equal to the fair market value of the
Common Stock on the date of grant ($13.92).
(4) Options were awarded on May 6, 1998 under the Company's 1995 Employee Stock
Option Plan at an exercise price equal to the fair market value of the
Common Stock on the date of grant ($8.16).
(5) Mr. Thompson joined the Company on January 7, 1999.
(6) Options were awarded on January 7, 1999 under the Company's 1998 Employee
Stock Option Plan at an exercise price equal to the fair market value of the
Common Stock on the date of grant ($15.92).
(7) Options to purchase 4,000 shares were awarded on December 6, 1999 at an
exercise price equal to the fair market value on the date of grant ($27.38),
and options to purchase 30,000 shares were awarded on
5
<PAGE> 8
January 12, 2000 at an exercise price equal to the fair market value of the
Common Stock on the date of grant ($29.25).
(8) Represents retroactive adjustment to compensation to December 19, 1997 in
accordance with the executives' employment agreements.
The following table sets forth certain information concerning options
granted to the named executive officers during the fiscal year ended July 1,
2000.
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENT OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------- --------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Leonhard Dreimann.......... 94,768(1) 34.25 12/17/09 2,041,269 5,172,976
90,000(2) 25% 29.25 01/12/10 1,655,565 4,195,527
David C. Sabin............. 94,768(1) 34.25 12/17/09 2,041,269 5,172,976
90,000(2) 25% 29.25 01/12/10 1,655,565 4,195,527
William B. Rue............. 94,768(1) 34.25 12/17/09 2,041,269 5,172,976
90,000(2) 25% 29.25 01/12/10 1,655,565 4,195,527
John E. Thompson........... 4,000(3) 27.38 12/06/09 68,864 174,515
30,000(3) 4.6% 29.25 01/12/10 551,855 1,398,509
</TABLE>
---------------
(1) Options vest 33 1/3% on each anniversary of December 19, 1997.
(2) If the executive is employed when the closing price of the Common Stock for
20 consecutive working days exceeds $40, 50% of the options vest; the
remaining 50% of the options vest if the executive is employed when the
closing price of the Common Stock for 20 consecutive working days exceeds
$45.
(3) Options to purchase 14,000 shares vested immediately and options to purchase
20,000 shares vest 50% on each anniversary of grant.
The following table sets forth certain information with respect to the
unexercised options to purchase the Common Stock held by the named executive
officers at July 1, 2000. None of the named executive officers exercised any
stock options during the fiscal year ended July 1, 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
OPTIONS/SARS AT FY-END (#) FY-END ($)(1)
--------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Leonhard Dreimann................... 312,756 90,000 5,975,358 687,600
David C. Sabin...................... 365,256 90,000 8,157,079 687,600
William B. Rue...................... 395,255 90,000 9,023,751 687,600
John E. Thompson.................... 21,500 20,000 271,740 152,800
</TABLE>
---------------
(1) Based on the fair market value of the Common Stock on July 1, 2000 ($36.89
share) less the option exercise price.
EMPLOYMENT AGREEMENTS
David C. Sabin (Chairman of the Board), Leonhard Dreimann (Chief Executive
Officer), and William B. Rue (President, Chief Operating Officer), each has an
employment agreement (collectively, the
6
<PAGE> 9
"Employment Agreements"), effective as of December 19, 1997 and as amended on
January 12, 2000, which provide for his continued employment in his present
capacity with the Company through December 31, 2002.
Each of the executives is entitled to an annual salary at the rate of
$550,000 effective July 1, 2000. In addition, each of the executives is entitled
to an annual bonus each calendar year during the term of the Employment
Agreements ranging from 25% of his base salary (if the Company achieves
threshold performance goals) to 100% of his salary (if the Company achieves
target performance goals) to 150% of his salary (if the Company achieves maximum
performance goals).
Under the terms of the Employment Agreements, if the executive is
terminated without cause or resigns with good reason, he is entitled to receive
a lump-sum payment equal to his salary for the remainder of the term, plus the
bonuses he would have received if the Company achieved target performance goals
for the remainder of the term and other benefits which he would have been
entitled to for the remainder of the term. The termination of employment by the
executive during the 30-day period immediately following the one-year
anniversary of a change of control constitutes good reason under the executive's
Employment Agreement. In addition, if the executive voluntarily terminates his
employment within two years after a change of control of the Company, he is
entitled to receive a lump sum payment equal to his salary and other benefits
for the remainder of the term. The termination without cause of the executive or
resignation for good reason by the executive constitutes good reason for the
other executives to resign under the Employment Agreements.
Under the Employment Agreements, the Company granted to each of the
executives on December 18, 1998 options to purchase 94,769 shares of Common
Stock with an exercise price equal to $13.92 per share and on December 17, 1999
options to purchase an additional 94,768 shares of Common Stock with an exercise
price equal to $29.25.
John E. Thompson (Chief Financial Officer) has an employment agreement
effective as of November 24, 1999, and as amended on January 12, 2000 which
provides for his continued employment in his present capacity with the Company
through December 31, 2002. Mr. Thompson is entitled to an annual salary at the
rate of $220,000 and annual bonuses at the discretion of the Board. If Mr.
Thompson is terminated without cause or resigns with good reason, he is entitled
to receive a lump-sum payment equal to his salary for the remainder of the term
and other benefits which he would have been entitled to for the remainder of the
term. The termination of employment by Mr. Thompson during the 30-day period
immediately following the one-year anniversary of a change of control
constitutes good reason. In addition, if Mr. Thompson voluntarily terminates his
employment within two years after a change of control of the Company, he is
entitled to receive a lump sum payment equal to his salary and other benefits
for the remainder of the term.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for administering the
compensation program for the executive officers of the Company.
Set forth below is a discussion of the Company's compensation philosophy,
together with a discussion of the factors considered by the Committee in
determining the compensation of the Company's Chief Executive Officer and other
executive officers for the fiscal year ended July 1, 2000.
OBJECTIVES AND POLICIES. The Company's executive compensation program is
designed to enable the Company to recruit, retain and motivate the high quality
employees it needs. As a result, the Committee has determined that executive
compensation opportunities, including those for Mr. Dreimann, should create
incentives for superior performance and consequences for below target
performance.
The Company's executive compensation mix includes a base salary, annual
bonus awards and long-term compensation in the form of stock options. Through
this compensation structure, the Company aims to:
- attract and retain highly qualified and talented executives,
- provide appropriate incentives to motivate those individuals to maximize
stockholder returns by producing sustained superior performance, and
- reward them for outstanding individual contributions to the achievement
of the Company's near-term and long-term business objectives.
7
<PAGE> 10
The Committee's policy is that a significant portion of the executive's
compensation opportunities must be tied to achievement of annual objectives of
the Company.
BASE SALARY. The base salary for Mr. Dreimann and the other executive
officers are established by employment agreements between the Company and these
executives. The Board of Directors approved the Employment Agreements entered
into by the executives effective December 19, 1997 after reviewing data derived
from compensation surveys and other advisory services provided by an independent
consultant and other publicly available competitive compensation data. The
Committee may in its discretion make salary increases based on an assessment of
each executive's performance against the underlying accountabilities of each
executive's position.
ANNUAL INCENTIVES. Payments of bonuses to executives are tied to the
Company's level of achievement of annual pretax earnings targets, establishing a
direct link between executive pay and Company profitability. Annual pretax
earnings targets are based upon the earnings budget for the Company as reviewed
by the Board of Directors. Annual incentive payments are paid only when earnings
exceed those set forth in the budget. Each of Messrs. Sabin, Dreimann and Rue is
entitled to receive an annual cash bonus for each calendar year during the term
of the Employment Agreement based on achievement of performance goals.
STOCK OPTIONS. The Company's long-term incentives are in the form of stock
option awards. The objective of these awards is to advance the longer term
interests of the Company and its stockholders and complement incentives tied to
annual performance. These awards provide rewards to executives upon the creation
of incremental stockholder value and the attainment of long-term earnings goals.
Stock options only produce value to executives if the price of the Company's
stock appreciates, thereby directly linking the interests of executives with
those of stockholders. The Committee decides on the number and timing of stock
option grants to executive officers based on its assessment of the performance
of each executive. The Committee weighs any factors it considers relevant and
gives such factors the relative weight it considers appropriate under the
prevailing circumstances. The Committee does not take into account the size of
previous option grants and the number of options currently held by an executive
in determining the number of stock options granted. The executive's right to the
stock options generally vest over a period and each option is exercisable, but
only to the extent it has vested, over a ten-year period following its grant.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. Mr. Dreimann's base salary for the
fiscal year ended July 1, 2000 was based on his rights under his Employment
Agreement, as described above. The bonuses, perquisites and other benefits
received by Mr. Dreimann that are reported in the Summary Compensation Table
were provided pursuant to such Employment Agreement (as amended). The Committee
awarded Mr. Dreimann the restricted stock bonus for calendar 1999 because the
Company's financial performance significantly exceeded budgeted performance in
1999.
LIMITS TO TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. The Committee has
reviewed the potential consequences for the Company of Section 162(m) of the
Internal Revenue Code, which imposes a limit on tax deductions for annual
compensation in excess of one million dollars paid to any of the five most
highly compensated executive officers. The Committee is aware that this
provision could apply to the Company in years, such as fiscal 2000, when the
executives are paid bonuses based on the Company's financial performance
significantly exceeding budgeted performance. The Committee will review from
time to time in the future the potential impact of Section 162(m) on the
deductibility of executive compensation. However, the Committee intends to
maintain the flexibility to take actions that we consider to be in the best
interests of the Company and our stockholders and which may be based on
considerations in addition to tax deductibility.
Compensation Committee
Frank M. Devine
Bert Doornmalen
Robert Bergmann
8
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Bert Doornmalen, a director of the Company, is the former Managing
Director of Markpeak, Ltd., a Hong Kong company. The Company recorded inventory
purchases and paid commissions to Markpeak, Ltd. of approximately $184,955,000,
$187,925,000, and $15,971,000 in fiscal years 2000, 1999 and 1998, respectively.
Markpeak acts as a buying agent on behalf of the Company with certain suppliers
in the Far East.
Mr. Frank M. Devine, a director of the Company, is a co-founder of the firm
Shapiro, Devine and Craparo, Inc. ("SDC"), a manufacturers representation firm.
The firm represents many major manufacturers of household products (including
the Company) to the retail industry. The Company recorded commissions with SDC
of approximately $413,000, $498,000 and $290,000 in fiscal years 2000, 1999, and
1998, respectively. Mr. Devine also provided consulting services to the Company
during fiscal 2000, for which he received approximately $52,000.
AUDIT COMMITTEE REPORT
Our Audit Committee currently consists of three members. In connection with
the audited financial statements contained in our 2000 Annual Report on Form
10-K, the Audit Committee:
-- reviewed the audit financial statements with our management;
-- discussed with Deloitte & Touche LLP, our independent auditors, the
materials required to be discussed by Statement of Auditing Standard 61,
or SAS 61;
-- reviewed the written disclosures and the letter from Deloitte & Touche
required by Independent Standards Board No. 1 and discussed with
Deloitte & Touche their independence; and
-- based on the foregoing review and discussion, recommended to our Board
of Directors that the audited financial statements be included in our
2000 Annual Report on Form 10-K.
The Audit Committee has adopted a written charter, which is attached to
this proxy statement as Appendix A.
AUDIT COMMITTEE
Bruce Pollack
Frank Devine
Bert Doornmalen
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph compares the performance of the Company with the
performance of the Standard & Poor's 500 Stock Index (S&P 500) and the average
performance of a group consisting of the Company's peer corporations which are
industry competitors for the period from June 27, 1995 to July 1, 2000. The
corporations making up the peer companies group (the "old" peer), are Craftmade
International Inc., Helen of Troy Corp., National Presto Industries Inc.,
Global-Tech Appliances, Sunbeam-Oster Company Inc. and Applica, Inc. (formerly
known as Windmere-Durable Holdings, Inc.). The following graph also separately
shows the peer group with the addition of the following new companies which are
industry competitors: Royal Appliance Manufacturing and Fantom Technologies (the
"new" peer group). Next year's performance graph will be prepared using the
"new" peer group. The graph assumes that the value of the investment in the
Common Stock and each index was $100 at June 27, 1995 and that all dividends, if
any, were reinvested.
5 YEAR CUMULATIVE TOTAL RETURN SUMMARY
PERFORMANCE GRAPH
---------------
* The performance graph for the old and new peer groups are nearly identical
(see below).
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
STARTING
BASIS
1995 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C> <C>
Salton Inc ($) $100.00 $200.06 $342.21 $618.57 $2,105.68 $2,329.43
S&P 500 ($) $100.00 $126.00 $169.73 $220.92 $ 271.19 $ 290.85
Peer Group Only (Old) ($) $100.00 $111.77 $233.34 $139.44 $ 102.81 $ 55.70
Peer Group Only (New) ($) $100.00 $111.77 $232.11 $140.34 $ 105.75 $ 57.40
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of October 25, 2000 by (i) each person known to
the Company to beneficially own 5% or more of the Common Stock, (ii) each of the
directors and executive officers of the Company and (iii) all executive
10
<PAGE> 13
officers and directors of the Company as a group. The number of shares of Common
Stock shown as owned by the persons and group named below assumes the exercise
of all currently exercisable options and the conversion of all shares of Series
A Preferred Stock held by such persons and group, and the percentage shown
assumes the exercise of such options and the conversion of such shares and
assumes that no options held by others are exercised.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
SHARES OF SHARES
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL HOLDER OWNED(1) OWNED
------------------------- ------------ ------------
<S> <C> <C>
Centre Partners Group(2).................................... 3,899,762 24.2%
Mr. Leonhard Dreimann(3).................................... 795,574 4.9
Mr. William B. Rue(3)....................................... 533,086 3.2
Mr. David C. Sabin(4)....................................... 583,031 3.5
Mr. John E. Thompson(5)..................................... 29,000 *
Mr. Frank Devine(6)......................................... 45,450 *
Mr. Bert Doornmalen(6)...................................... 13,500 *
Mr. Robert A. Bergmann(2)................................... 0 *
Mr. Bruce G. Pollack(2)..................................... 0 *
All Directors and executive officers as a group (8
persons)(7)............................................... 1,999,641 11.6%
</TABLE>
---------------
* Less than 1%.
(1) Unless otherwise indicated below, the persons named in the table above have
sole voting and investment power with respect to the number of shares set
forth opposite their names. Beneficially owned shares include shares subject
to options exercisable within 60 days of December 25, 2000.
(2) Consists of an aggregate of 370,350 shares of Common Stock and 40,000 shares
of Series A Preferred Stock: (i) 113,994 shares of Common Stock and 12,312
shares of Series A Preferred Stock owned of record by Centre Capital
Investors II, L.P. ("Investors II"), (ii) 37,089 shares of Common Stock and
4,006 shares of Series A Preferred Stock owned of record by Centre Capital
Tax-Exempt Investors II, L.P. ("Tax-Exempt II"), (iii) 24,802 shares of
Common Stock and 2,679 shares of Series A Preferred Stock owned of record by
Centre Capital Offshore Investors II, L.P. ("Offshore II"), (iv) 1,751
shares of Common Stock and 189 of Series A Preferred Stock shares owned of
record by Centre Parallel Management Partners, L.P. ("Parallel"), (v) 19,602
shares of Common Stock and 2,117 shares of Series A Preferred Stock owned of
record by Centre Partners Coinvestment, L.P. ("Coinvestment") and (vi)
173,112 shares of Common Stock and 18,697 shares of Series A Preferred Stock
owned of record of the State Board of Administration of Florida (the
"Florida Board"). As of October 25, 2000, the 40,000 shares of Series A
Preferred Stock were convertible into 3,529,412 shares of the Common Stock.
Investors II, Tax-Exempt II and Offshore II are limited partnerships, of
which the general partner of each is Centre Partners II, L.P. ("Partners
II"), and of which Centre Partners Management LLC ("Centre Management") is
an attorney-in-fact. Parallel and Coinvestment are also limited
partnerships. In its capacity as manager of certain investments for the
Florida Board pursuant to a management agreement, Centre Management is an
attorney-in-fact of Parallel. Centre Partners II LLC is the ultimate general
partner of each of Investors II, Tax-Exempt II, Offshore II, Parallel and
Coinvestment. Bruce G. Pollack and Robert Bergmann are Managing Directors of
Centre Management and Centre Partners II LLC and as such may be deemed to
beneficially own and share the power to vote or dispose of the Common Stock
and Series A Preferred Stock held by Investors II, Tax-exempt II, Offshore
II, Parallel, Coinvestment and the Florida Board. Mr. Pollack and Robert
Bergmann disclaim the beneficial ownership of such Common Stock and Series A
Preferred Stock.
(3) Includes, with respect to Mr. Dreimann, 312,756 shares of Common Stock which
may be acquired upon the exercise of immediately exercisable options.
Includes, with respect to Mr. Rue, 395,255 shares of Common Stock which may
be acquired upon the exercise of immediately exercisable options.
(4) Includes 365,256 shares of common stock which may be acquired upon the
exercise of immediately exercisable stock options. Also includes 110,539
shares owned by Duquesne Financial Corporation
11
<PAGE> 14
("Duquesne"), a corporation which is owned by Susan Sabin. Susan Sabin is
David Sabin's wife. Mr. Sabin disclaims beneficial ownership of all shares
owned by Duquesne.
(5) Includes 21,500 shares of Common Stock which may be acquired upon the
exercise of immediately exercisable options.
(6) Includes, with respect to each of Messrs. Doornmalen and Devine, 10,500
shares and 31,500 shares, respectively, of Common Stock which may be
acquired upon the exercise of immediately exercisable options.
(7) Includes an aggregate of 1,136,267 shares which may be acquired by Directors
and officers of the Company upon the exercise of immediately exercisable
options. See footnotes 3 through 6 above.
The addresses of the persons shown in the table above who are beneficial
owners of more than five percent of the Company's Common Stock are as follows:
Centre Partners Management LLC, 30 Rockefeller Plaza, Suite 5050, New York, New
York 10020; and Messrs. Dreimann, Rue and Sabin, 550 Business Center Drive,
Mount Prospect, Illinois 60056.
SECTION 16 REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than 10% of the outstanding Common
Stock, to file reports of ownership and changes in ownership of such securities
with the Securities and Exchange Commission. Officers, directors and
greater-than-10% beneficial owners are required to furnish the Company with
copies of all Section 16(a) forms they file. Based solely upon our review of the
copies of the forms furnished to the Company and other information, we believe
that all of these reporting persons complied with their filing requirement for
fiscal 2000, except that each of Messrs. Dreimann, Sabin and Rue filed a Form 5
to report certain dispositions of shares made during the year.
CERTAIN TRANSACTIONS
Reference is made to "Compensation Committee Interlocks and Insider
Participation" above for a discussion of the relationships between the Company
and each of Markpeak, Ltd. and Shapiro, Devine and Craparo, Inc.
The Company believes that each of the above transactions were on terms
which were no less favorable to the Company than would have been available in
similar transactions with unaffiliated third parties.
2. INDEPENDENT AUDITORS
We are asking you to ratify the Board selection of Deloitte & Touche LLP as
independent auditors for fiscal 2001.
Deloitte & Touche LLP has audited the Company's financial statements for
each fiscal year since the fiscal year ended July 1, 1989. Representatives of
Deloitte & Touche LLP are expected to be present at the meeting with the
opportunity to make a statement if they desire to do so, and are expected to be
available to respond to appropriate questions.
12
<PAGE> 15
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S AUDITORS FOR FISCAL 2001.
INFORMATION ABOUT STOCKHOLDER PROPOSALS
If you wish to submit proposals to be included in our 2000 proxy statement,
we must receive them on or before July 16, 2001. Please address your proposals
to: WILLIAM B. RUE, PRESIDENT AND CHIEF OPERATING OFFICER, SALTON, INC., 550
BUSINESS CENTER DRIVE, MOUNT PROSPECT, ILLINOIS 60058.
Under our By-laws, if you wish to nominate directors or bring other
business before the stockholders:
- You must notify the Secretary in writing not less than 60 days nor more
than 90 days before the first anniversary of the preceding year's annual
meeting. If, however, the date of the annual meeting is advanced by more
than 30 days or delayed by more than 60 days from such anniversary date,
you may notify us not earlier than 90 days before such annual meeting and
not later than the later of (1) the 60th day prior to such annual meeting
or (2) 10 days after the first public announcement of the meeting date.
- Your notice must contain the specific information required in our
By-laws.
Please note that these requirements relate only to matters you wish to
bring before your fellow stockholders at an annual meeting. They are separate
from the SEC's requirements to have your proposal included in our proxy
statement.
If you would like a copy of our By-laws, we will send you one without
charge. Please write to the Secretary of the Company.
By Order of the Board of Directors
David C. Sabin
David C. Sabin
Secretary
November 11, 2000
13
<PAGE> 16
SALTON, INC.
AUDIT COMMITTEE CHARTER
PURPOSE
The Audit Committee is appointed by the Board of Directors (the "Board") of
Salton, Inc. to assist the Board in monitoring (1) the integrity of the
financial statements of Salton, Inc. and its Subsidiaries ("Salton"), (2) the
compliance by Salton with legal and regulatory requirements and Salton policies,
and (3) the independence and performance of Salton's outside auditors.
ORGANIZATION
The Audit Committee shall be comprised of three members of the Board. The
members of the Audit Committee shall meet the independence and experience
requirements of the New York Stock Exchange. The members and the Chairman of the
Audit Committee shall be appointed by the Board. The Audit Committee shall meet
when called by the Chairman, but at least four times a year.
DUTIES AND RESPONSIBILITIES
While the Audit Committee has the responsibilities and powers set forth in
this Audit Committee Charter, it is not the duty of the Audit Committee to plan
or conduct audits or to determine that Salton's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations
(unless otherwise authorized to do so by the Board), to resolve disagreements,
if any, between management and the independent auditor or to assure compliance
with laws and regulations and Salton's policies.
The Board and Audit Committee have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the
independent auditor (or to nominate the independent auditor for stockholder
approval in any proxy statement). The independent auditor is ultimately
accountable to the Board and the Audit Committee, as representatives of Salton's
stockholders.
To fulfill its duties and responsibilities, the Audit Committee shall:
GENERAL RESPONSIBILITIES
- Make regular reports to the Board with such recommendations as the
Committee may deem appropriate.
- Review and reassess the adequacy of this Charter annually and recommend
changes to the Board for approval.
- Meet at least annually with the chief financial officer, the senior
accounting executive and the independent auditor in separate executive
sessions.
- Assist the Board in satisfying its responsibilities to the stockholders
with respect to matters relating to Salton's accounting, financial
reporting, audit, legal compliance, and internal control practices.
INTERNAL CONTROL
- Review with management and independent accountants the quality and
adequacy of internal controls.
FINANCIAL REPORTING PROCESS
- Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices
as well as the adequacy of internal controls that could significantly
affect Salton's financial statements.
A-1
<PAGE> 17
- Review with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation of
Salton's financial statements.
- Review with management and the independent auditor Salton's quarterly
financial statements and press release prior to release of quarterly
earnings.
- Review Salton's major financial risk exposures and the steps management
has taken to monitor and control such exposures.
- Review major changes to Salton's accounting principles and practices as
suggested by the independent auditor or management.
REVIEW OF PROCESS FOR COMPANY COMPLIANCE WITH LAWS, REGULATIONS AND POLICIES
- Review with Salton's counsel, at least annually, legal matters that may
have a material impact on the financial statements, Salton's compliance
policies and any material reports or inquiries received from regulators
or governmental agencies.
INDEPENDENT ACCOUNTANTS
- Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
- Receive from the independent auditors a formal written statement
delineating all relationships between the independent auditor and Salton
(consistent with Independence Standards Board Standard 1).
- Receive periodic reports, at least annually, from the independent auditor
regarding the auditor's independence, discuss such reports with the
auditor, including discussion of any disclosed relationships or services
that may impact the objectivity and independence of the auditor, and if
so determined by the Audit Committee, recommend that the Board take
appropriate action to satisfy itself of the independence of the auditor.
- Review with management and the independent auditor prior to the audit
planning, staffing and budget for the audit.
- Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the
audit.
- Review with the independent auditor any problems or difficulties
encountered in the course of the audit work, including any restrictions
on the scope of activities or access to required information and any
management letter provided by the auditor and Salton's response to that
letter.
- Obtain from the independent auditor assurance that Section 10A of the
Private Securities Litigation Reform Act of 1995 has not been implicated.
ADDITIONAL AUTHORITIES
- The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Audit Committee. The Audit
Committee may request any officer or employee of Salton or Salton's
outside counsel or independent auditor to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Audit
Committee.
REPORTING RESPONSIBILITIES
- Prepare the report required by the rules of the Securities and Exchange
Commission to be included in Salton's annual proxy statement.
Approved by the Audit Committee on June 26, 2000, for recommendation to the
Board at the June 26, 2000, Board meeting.
A-2
<PAGE> 18
PROXY
SALTON, INC.
ANNUAL MEETING/DECEMBER 13, 2000
SOLICITED BY THE BOARD OF DIRECTORS
Leonhard Dreimann, David C. Sabin and William B. Rue, or any one or
more of them, each with power of substitution, are authorized to vote the shares
of the undersigned at the annual meeting of stockholders of Salton, Inc. to be
held December 13, 2000 and at any adjournment of that meeting. They shall vote
on the matters described in the proxy statement accompanying the notice of
meeting in accordance with the instructions on the reverse side of this card,
and in their discretion on such other matters as may come before the meeting.
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED FOR
THE NOMINEE FOR DIRECTORS AND FOR PROPOSALS 2 AND 3.
PLEASE SIGN ON THE REVERSE SIDE
--------------------------------------------------------------------------------
SALTON, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
(CONTINUE FROM REVERSE SIDE)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of Class III Directors FOR WITHHOLD FOR ALL 2. Ratification of the selection of FOR AGAINST ABSTAIN
Nominees: Leonhard Dreimann, ALL EXCEPT Deloitte & Touche LLP as
Frank Devine independent accounts [ ] [ ] [ ]
FOR all nominees; Withhold my vote [ ] [ ] [ ]
from nominees; FOR all nominees 3. In their discretion, on any other
except any whose name I have crossed matter that may properly come FOR AGAINST ABSTAIN
out before the meeting
[ ] [ ] [ ]
Dated: , 2000
---------------------------
-------------------------------------------
-------------------------------------------
Please sign exactly as your name appears above and
return this proxy immediately in the enclosed
reply envelope. If signing for a corporation or
partnership, or as agent, attorney or fiduciary,
indicate the capacity in which you are signing.
</TABLE>
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY
FORM PROPERLY USING THE ENCLOSED ENVELOPE
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of Class III Directors FOR WITHHOLD FOR ALL 2. Ratification of the selection of FOR AGAINST ABSTAIN
Nominees: Leonhard Dreimann, ALL EXCEPT Deloitte & Touche LLP as
Frank Devine independent accounts [ ] [ ] [ ]
FOR all nominees; Withhold my vote [ ] [ ] [ ]
from nominees; FOR all nominees 3. In their discretion, on any other
except any whose name I have crossed matter that may properly come FOR AGAINST ABSTAIN
out before the meeting
[ ] [ ] [ ]
Dated: , 2000
---------------------------
-------------------------------------------
-------------------------------------------
Please sign exactly as your name appears above and
return this proxy immediately in the enclosed
reply envelope. If signing for a corporation or
partnership, or as agent, attorney or fiduciary,
indicate the capacity in which you are signing.
</TABLE>
--------------------------------------------------------------------------------
- Fold And Detach Here -
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY
FORM PROPERLY USING THE ENCLOSED ENVELOPE
