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 ss. 240.14a-11(c) or ss. 240.14a-12
PLAYCORE, INC.
(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)(4) 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):
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5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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==========================
Logo
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PlayCore, Inc.
Riverfront Centre
Suite 204
15 West Milwaukee Street
Janesville, WI 53545
April 26, 1999
Dear Stockholder:
On behalf of PlayCore, Inc. ("PlayCore"), I cordially invite you to
attend the annual meeting of stockholders on Wednesday, May 26, 1999, at The
Standard Club, 320 South Plymouth Court, Chicago, Illinois, in the Continental
Room at 10:00 a.m., local time.
At the annual meeting, stockholders will vote on the election of seven
persons to the Board of Directors. Further information concerning the meeting
and the nominees for election as directors can be found in the accompanying
Notice and Proxy Statement. In addition, at the meeting there will be a report
on the status of PlayCore's business and an opportunity for you to express your
views on subjects related to PlayCore's operations.
The directors and officers of PlayCore hope that as many stockholders as
possible will be present at the meeting. We ask that you sign and return the
enclosed proxy card in the envelope provided, whether or not you now plan to
attend the meeting. If you attend the meeting, you may vote in person even if
you have previously mailed a proxy card.
We appreciate your cooperation and interest in PlayCore. To assist us in
preparation for the meeting, please return the proxy card at your earliest
convenience.
Sincerely yours,
/s/Frederic L. Contino
Frederic L. Contino
President and Chief Executive Officer
<PAGE>
PLAYCORE, INC.
Riverfront Centre
Suite 204
15 West Milwaukee Street
Janesville, Wisconsin 53545
April 26, 1999
To the Holders of Common Stock of
PlayCore, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of PlayCore, Inc. ("PlayCore") will be
held on Wednesday, May 26, 1999, at 10:00 a.m., local time, at The Standard
Club, 320 South Plymouth Court, Chicago, Illinois, for the following purposes:
1. To elect seven directors to hold office until the next annual
meeting of stockholders and until their respective successors
shall have been elected and qualified; and
2. To transact such other business as may properly come before such
meeting or any adjournment or postponement thereof.
Stockholders of record at the close of business on April 16, 1999, will
be entitled to vote at the meeting and any adjournment or postponement thereof.
A copy of PlayCore's Annual Report to Stockholders for the year ended
December 31, 1998, is enclosed.
This notice and the accompanying proxy materials are sent to you by order
of the Board of Directors.
/s/Richard E. Ruegger
Richard E. Ruegger
Vice President-Finance,
Chief Financial Officer,
Treasurer and Secretary
You are requested to fill in, sign, date and return the proxy submitted herewith
in the return envelope provided for your use. Stockholders who execute proxies
retain the right to revoke them at any time before they are actually voted. The
giving of such proxy will not affect your right to vote in person should you
later decide to attend the meeting.
<PAGE>
PLAYCORE, INC.
Riverfront Centre
Suite 204
15 West Milwaukee Street
Janesville, Wisconsin 53545
(608) 741-7183
April 26, 1999
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 26, 1999
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of PlayCore, Inc. ("PlayCore") of proxies to be used in
voting at the annual meeting of stockholders to be held at The Standard Club,
320 South Plymouth Court, Chicago, Illinois, on Wednesday, May 26, 1999, at
10:00 a.m., local time, and at any adjournment or postponement thereof. The
matters to be considered and acted upon at the annual meeting are referred to in
the preceding notice. If the enclosed proxy is properly executed and returned,
all shares represented thereby will be voted as indicated thereon.
Stockholders whose names appear of record on the books of PlayCore at the
close of business on April 16, 1999, will be entitled to vote at the meeting and
at any adjournment or postponement thereof. On the record date for the meeting,
PlayCore had outstanding and entitled to vote 7,911,214 shares of common stock,
par value $0.01 per share (the "Common Stock"), each of which is entitled to one
vote per share. Proxy materials are being mailed on or about April 26, 1999 to
stockholders of record as of the close of business on April 16, 1999.
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven directors. All seven
directors are to be elected at the upcoming annual meeting to serve until the
next annual meeting of stockholders and until their respective successors shall
have been elected and qualified. Unless authority to vote for one or more
directors is withheld, it is intended that shares represented by proxies in the
accompanying form will be voted for the election of the persons listed below or,
if any such person shall unexpectedly become unable or unwilling for good cause
to accept nomination or election, for the election of such other person as the
Board of Directors may recommend in his place. All of the persons listed below
are directors of PlayCore and are nominees for re-election. All nominees are
also directors of PlayCore Wisconsin, Inc., PlayCore's wholly owned operating
subsidiary ("PlayCore Wisconsin", and together with PlayCore, the "Company").
Information as to the directors' ownership of shares of Common Stock is provided
under the caption "Security Ownership of Management and Principal Stockholders."
<PAGE>
The following sets forth information, as of April 16, 1999, about the
nominees for re-election as directors:
Terence S. Malone, age 69, has served as a director of PlayCore since
September 1992 and Chairman since September 1997. Mr. Malone served as Acting
Chief Executive Officer of PlayCore from September 1997 to January 1998. Mr.
Malone was Chairman and Chief Executive Officer of Johnson Worldwide Associates,
Inc. (international manufacturer and marketer of outdoor recreational products)
from 1986 until his retirement in January 1994.
Frederic L. Contino, age 48, has served as a director of PlayCore and as
President and Chief Executive Officer of PlayCore since January 1998. Mr.
Contino was President of Anchor Hocking Plastics and Plastics, Inc., divisions
of Newell Companies (diversified manufacturers of consumer home products), from
January 1993 to January 1998. Mr. Contino served as Vice President-Merchandising
for Anchor Hocking's glass division from May 1988 to January 1993.
David S. Evans, age 35, has served as a director of PlayCore since
February 1996. Mr. Evans has been President and Chief Executive Officer of
Glencoe Investment Corporation (private equity investing) since March 1993.
Prior to such date, Mr. Evans was a Merchant Banking/Mergers and Acquisitions
Specialist at Donaldson, Lufkin & Jenrette Securities Corporation (full service
investment banking) from 1988 to March 1993
George N. Herrera, age 65, has served as a director of PlayCore since
February 1996. Mr. Herrera has been Director of International Sales of Masco
Corporation (diversified manufacturer of home products) since 1982.
Timothy R. Kelleher, age 36, has served as director of PlayCore since
April 1996. Mr. Kelleher has been Senior Vice President of Desai Capital
Management Incorporated (institutionally funded private equity investment firm)
since May 1992. From 1989 to May 1992, he was an associate at Entrecanales, Inc.
(private equity investing). Mr. Kelleher is also a director of several privately
held companies.
Gary A. Massel, age 59, has served as a director of PlayCore since
September 1996. Mr. Massel has been Vice President-Logistics of Boise Cascade
Office Products since September 1997. From August 1995 to September 1997, Mr.
Massel was an independent consultant. Previously, Mr. Massel was a Senior Vice
President of Ply-Gem Industries (building products manufacturer) from February
1994 to August 1995. From 1989 to February 1994, Mr. Massel was Vice
President-Operations Specialty Packaging of Packaging Corp. of America
(packaging manufacturer).
Ronald D. Wray, age 39, has served as a director of PlayCore since
February 1999. Mr. Wray has been a Principal and Chief Financial Officer of
Glencoe Capital, L.L.C. since January 1999. Prior to such date, Mr. Wray was
Executive Vice President of the Pritzker Family Business Office (investment
management) from 1990 to January 1999.
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COMMITTEES OF THE BOARD
The Board of Directors currently has three standing committees: the Audit
Committee, the Compensation Committee and the Executive Committee. The Board
does not currently have a standing Nominating Committee. The members and
functions of the standing committees are described briefly below.
Audit Committee
The Audit Committee is currently comprised of Messrs. Herrera and Massel
(Chairman). The Audit Committee makes recommendations to the Board of Directors
regarding the independent auditors to be retained to audit the Company's
accounts and reviews the independence of such auditors, approves the scope of
the annual audit activities of the independent auditors, approves the audit fee
payable to the independent auditors and review such audit results. Ernst & Young
LLP presently serves as the independent auditors of the Company. The Audit
Committee met two times during 1998.
Compensation Committee
The Compensation Committee is currently comprised of Messrs. Evans
(Chairman), Malone and Wray. The Compensation Committee reviews and makes
recommendations as to compensation, bonuses, stock plans and other benefits and
policies respecting such matters for the officers and employees of the Company.
The Compensation Committee met two times during 1998.
Executive Committee
The Executive Committee is currently comprised of Messrs. Contino, Evans,
Kelleher and Malone. The Executive Committee has the authority to exercise all
of the powers of the Board during intervals between meetings of the Board. The
Executive Committee met four times during 1998.
Directors' Attendance
The Board of Directors of PlayCore held four meetings in 1998. Each
director attended not less than 75% of the total number of meetings of (1) the
Board of Directors and (2) all committees of the Board on which he served,
during the period that he served.
Director Compensation
Each non-employee director of PlayCore who is not an employee of
GreenGrass Capital LLC, a Delaware limited liability company that is an
affiliate of a principle stockholder of the Company ("GGC"), or any of GGC's
affiliates ("Non-affiliated Directors"), receives an annual retainer of $15,000
paid in quarterly installments of $3,750 and options to purchase 5,000 shares of
Common Stock with a per share exercise price equal to the fair market value of
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a share of Common Stock on the day after the annual meeting of stockholders. In
addition, any Non-affiliated Director who serves as the Chairman of the Board
receives an annual retainer of $5,000, as chairman of a standing committee of
the Board receives an annual retainer of $3,000 and as a committee member of a
standing committee of the Board receives an annual retainer of $1,000. All
directors are reimbursed for out-of-pocket costs related to PlayCore's business.
No additional compensation is paid to directors for serving on PlayCore
Wisconsin's Board of Directors.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to
Company compensation earned in the last three completed fiscal years by Mr.
Contino, Chief Executive Officer, Mr. Caldwell, President of the Swing-N-Slide
Division of PlayCore Wisconsin, Mr. Farnsworth, President of the GameTime
Division of PlayCore Wisconsin, Mr. Hammelman, Vice President-Human Resources
and Administration and Mr. Ruegger, Vice President-Finance and Chief Financial
Officer, the only executive officers whose salary and bonus exceeded $100,000
during the most recently completed fiscal year (the "Named Executive Officers").
A list of all current executive officers of the Company is attached hereto as
Exhibit A.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
--------------
Annual Compensation Awards
--------------------------- ----------
Other Securities
Annual Underlying All Other
Salary Bonus Comp. Options Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)
- ------------------------------ ---------- ------------- ----------------- ------------ -------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Frederic L. Contino 1998 $288,462 $585,000 (1) 375,000 $7,625(2)
Chief Executive Officer 1997 - - (1) - -
1996 - - (1) - -
John E. Caldwell 1998 $170,000 $123,930 (1) - $16,595(3)
President of the 1997 159,423 35,000 (1) 100,000 63,728
Swing-N-Slide Division 1996 8,942 1,431 (1) - -
of PlayCore Wisconsin
Robert A. Farnsworth 1998 $111,154 $117,823 (1) 50,000 $49,594(4)
President of the 1997 - - (1) - -
GameTime Division of 1996 - - (1) - -
PlayCore Wisconsin
David H. Hammelman 1998 $105,000 $95,550 (1) - $3,874(2)
Vice President-Human 1997 93,961 7,893 (1) 78,219 3,947
Resources and 1996 86,283 12,809 (1) 14,676 4,137
Administration
Richard E. Ruegger 1998 $115,000 $104,650 (1) - $4,371(2)
Vice President-Finance 1997 104,077 8,706 (1) 164,046 4,695
and Chief Financial 1996 90,540 13,309 (1) 16,152 3,622
Officer
- ---------------
(1) The Company also provides its Named Executive Officers certain additional
non-cash benefits that are not described in this Proxy Statement because
such compensation is below the Securities and Exchange Commission's
required disclosure thresholds.
(2) The Compensation reported is comprised of matching contributions made by
the Company pursuant to its 401(k) plan.
(3) The Compensation reported is comprised of $6,595 of matching
contributions made by the Company pursuant to its 401(k) plan and $10,000
of relocation expenses paid by the Company in connection with Mr.
Caldwell's December 1996 employment by the Company.
(4) The Compensation reported is comprised of relocation expenses paid by the
Company in connection with Mr. Farnsworth's May 1998 employment with the
Company.
</TABLE>
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Stock Option Grants
The following table shows option grants in 1998 to the Named Executive
Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Individual Grants Rate of Stock Price
Appreciation for Option
Term(1)
- ------------------------------------------------------------------------------------------ --------------------------
% of Total
Number of Options
Securities Granted to Exercise or
Underlying Employees in Base Price Per Expiration 5%
Name Options Granted Fiscal Year Share Date 10%
- ---- --------------- ---------------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Frederic L. Contino 375,000(2) 83.6% $4.0000 01/05/2008 $414,422 $915,765
Robert A. Farnsworth 50,000(3) 11.1% $4.6875 05/04/2008 $129,218 $318,269
- ---------------
(1) This presentation is intended to disclose the potential value that would
accrue to the optionee if the option were exercised the day before it
expires and if the per share value has appreciated at the compound annual
rate indicated in each column. The assumed rates of appreciation of 5%
and 10% are prescribed by the rules of the Securities and Exchange
Commission regarding disclosure of executive compensation. The assumed
annual rates of appreciation are not intended to forecast possible future
appreciation, if any, with respect to the Common Stock.
(2) Options granted under the 1996 Incentive Stock Plan. Twenty-five thousand
of these options vested on the January 5, 1998 grant date, 50,000 of
these options will become exercisable after each successive anniversary
of the grant date through January 5, 2001, 150,000 of these options will
become exercisable on the first date that the average closing trade
prices of the Company's Common Stock for the fifteen consecutive trading
days ending on such date shall have been $6.50 or higher and 50,000 of
these options will become exercisable on the first date that the average
closing trade prices of the Company's Common Stock for the fifteen
consecutive trading days ending on such date shall have been $11.00 or
higher.
(3) Twenty percent of the options are exercisable 12 months after the May 5,
1998 grant date and an additional 20% of the options become exercisable
after each successive anniversary, with full vesting occurring after the
fifth anniversary date.
</TABLE>
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Aggregate Options Exercised in 1998 and 1998 Year-End Option Value
Set forth below is certain information regarding the number and value of
unexercised stock options held by the Named Executive Officers at the end of
1998. No options were exercised by the Named Executive Officers in 1998.
<TABLE>
<CAPTION>
Aggregate Fiscal Year-End Option Values
- ---------------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money Options at
December 31, 1998 December 31, 1998(1)
----------------- --------------------
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Frederic L. Contino 25,000 350,000 $14,063 $196,875
John E. Caldwell 30,000 70,000 - -
Robert A. Farnsworth - 50,000 - -
David H. Hammelman 40,395 52,500 $19,747 -
Richard E. Ruegger 63,948 116,250 $21,733 -
- ---------------
(1) For valuation purposes the amounts shown are based upon the December 31,
1998 $4.5625 closing price per share of the Common Stock on the American
Stock Exchange.
</TABLE>
Agreements With Executive Officers
PlayCore entered into an Employment Agreement in January 1998 with Mr.
Contino that sets forth certain terms and conditions of his employment with
PlayCore. The Employment Agreement runs for three years and automatically
extends from year to year thereafter unless terminated prior to any such
extension. The Employment Agreement provides for an annual base salary of
$300,000, subject to increases each year at the discretion of the Board of
Directors, and for an annual bonus based generally upon increases in PlayCore's
earnings before interest, taxes, depreciation and amortization ("EBITDA"). The
Employment Agreement also provides for the grant of options shown on the "Option
Grants in Last Fiscal Year" table. In the event Mr. Contino is terminated
without cause, in addition to certain other benefits, (i) his annual base salary
continues for a minimum of two years if such termination occurs before July
1999, and a minimum of one year, subject to extension to up to two years if
certain financial goals have been achieved by the Company, after July 1999, and
(ii) he is entitled to certain bonus replacement payments if certain levels of
EBITDA have been achieved prior to such termination. If such termination occurs
in connection with a change of control, in certain circumstances Mr. Contino may
be entitled to certain additional payments, the amount of which are generally
based upon the bonus paid to Mr. Contino in the previous year. The Employment
Agreement also provides for certain perquisites and benefits commensurate with
Mr. Contino's employment as President and Chief Executive Officer of the
Company. The Employment Agreement contains provisions requiring Mr. Contino to
keep certain information with respect to the Company confidential during his
employment and for two years thereafter and provisions providing that Mr.
Contino will not compete with the Company's business for 18 months following any
termination of his employment.
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<PAGE>
In December 1996, the Company entered into a Severance and Change of
Control Agreement with Mr. Caldwell. Under the terms of such Severance and
Change of Control Agreement, in the event that Mr. Caldwell is terminated
without cause within one year after a change of control of the Company, he shall
be entitled to receive an amount based upon a multiple of his last month's base
salary. Mr. Caldwell shall also be entitled to receive an amount based upon a
multiple of his last month's base salary if he remains employed during the
one-year period after such change of control and elects to terminate employment
within 30 days of the end of such one-year period.
In June 1998, the Company entered into a Severance and Change of Control
Agreement with Mr. Farnsworth. Under the terms of such Severance and Change of
Control Agreement, in the event that Mr. Farnsworth is terminated without cause
within one year after a change of control of the Company, he shall be entitled
to receive an amount based upon a multiple of his last month's base salary.
In February 1999, the Company entered into Severance and Change of
Control Agreements with Messrs. Hammelman and Ruegger. Under the terms of such
Severance and Change of Control Agreements, in the event that any such employee
is terminated without cause within one year after a change of control of the
Company, such employee shall be entitled to receive an amount based upon a
multiple of his last month's base salary. Each such employee shall also be
entitled to receive an amount based upon a multiple of his last month's base
salary if the employee remains employed during the one-year period after such
change of control and the employee elects to terminate employment within 30 days
of the end of such one-year period.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Messrs. Evans,
Malone and Wray. No present or former executive officer of the Company serves as
a member of the Compensation Committee. Furthermore, there are no interlocking
relationships between any executive officer of the Company and any entity whose
directors or executive officers serve on the Compensation Committee.
Mr. Evans is a stockholder and director and the President and Chief
Executive Officer of Glencoe Investment Corporation ("GIC"), which is an
affiliate of an institutional investor in GGC and an institutional investor in
GreenGrass Capital II LLC, a Delaware limited liability company ("GGCII"). GGC
and GGCII are two of the three partners of GreenGrass Holdings, a Delaware
general partnership ("GreenGrass Holdings"), which beneficially owns
approximately 72% of the outstanding shares of Common Stock. Mr. Evans is also
one of the three persons appointed to the Members Operating Board of GGC, which
entity controls voting and investment making decisions of GreenGrass Holdings,
and one of the three persons appointed to the Members Operating Board of GGCII.
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<PAGE>
Agreement with respect to Consulting Services
Under the terms of the Management Consulting Agreement dated February 16,
1996, PlayCore pays to GIC and Desai Capital Management Incorporated ("DCMI"),
affiliates of two GGC institutional investors, consulting fees in the aggregate
amount of $300,000 per year, payable in quarterly installments of $75,000, plus
reimbursement of reasonable expenses incident to their consulting services. The
Management Consulting Agreement is automatically renewed for successive one-year
terms unless either party gives notice to the other of its intention not to
renew the agreement. The consulting fee is reviewed annually by the Board of
Directors of PlayCore.
Agreement with respect to Acquisition Advisory Services
Under the terms of an engagement letter dated September 6, 1996, GIC and
DCMI agreed to act as acquisition advisors to PlayCore with respect to two
potential acquisitions (the "Acquisitions"). In this regard, GIC and DCMI agreed
to provide advice to PlayCore with respect to valuation, due diligence,
negotiation, financing techniques and alternatives, and related matters
involving the Acquisitions. The initial term of the engagement is for one year
with automatic renewal for successive one-year periods unless either party
provides notice of its desire not to renew at least 30 days before the renewal
date. As compensation for such services, PlayCore agreed to pay to GIC and DCMI
a fee equal to 4.0% of the gross proceeds from any new equity raised, plus
1.125% of any senior loan financing related to the Acquisitions (less fees paid
to other parties) plus 1.0% of the transaction of value for either of the
Acquisitions consummated by PlayCore. PlayCore also agreed to reimburse GIC and
DCMI for certain expenses incurred by them in performing such services. The
aggregate amount paid by PlayCore to GIC and DCMI under this agreement is
$790,398 (relating to the GameTime acquisition detailed below).
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In addition to the matters described under the heading "Compensation
Committee Interlocks and Insider Participation," PlayCore has been party to
certain other related party transactions which are described below.
Agreement with respect to Election of Directors
Under the terms of a Transaction Agreement dated January 4, 1996, as
amended, pursuant to which Green Grass Holdings acquired it's equity holdings in
PlayCore, GreenGrass Holdings is entitled to designate five members of the Board
of Directors of PlayCore (Mr. Contino is not counted as one of such five
directors). To date, GreenGrass Holdings has designated four current directors,
Messrs. Evans, Herrera, Kelleher and Wray.
Registration Rights
Under certain agreements, Code Hennessy & Simons Limited Partnership,
formerly a significant investor in PlayCore, GreenGrass Holdings and certain of
their
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associates, and various officers and directors and, in some cases, their spouses
or trusts for their benefit or the benefit of their children, were granted
certain rights to have shares of Common Stock registered and/or included in
registrations initiated by PlayCore or its stockholders (the "registration
rights"). Expenses incurred in connection with the exercise of such registration
rights shall be, subject to limited exceptions, borne by the Company.
REPORT OF THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") of the Board of Directors of
PlayCore is responsible for all aspects of the compensation package offered to
the executive officers of PlayCore, including the Named Executive Officers. The
following report was authorized by the members of the Committee.
Executive Compensation Policies
The Committee bases its review and recommendations regarding the
Company's executive compensation with the goal of attaining the following
objectives: (1) to attract, motivate and retain the highest quality executives,
(2) to align both the short-term and the longer-term interests of executives
with those of the Company's stockholders, and (3) to encourage executives to
achieve their assigned tactical and strategic business objectives as well as
overall corporate financial results. The executive compensation program for 1998
was generally comprised of base salary, and variable cash incentive awards based
on current corporate and individual performance.
Base Salaries
All executive base salaries are within established salary ranges that are
generally based on the base salaries for similar positions in companies of
comparable size and complexity. The Committee determines those companies which
are comparable to the Company from the information contained in various national
surveys obtained through a third-party consultant. The exact base salary for
each executive is based upon a variety of factors; the most important of which
are experience and performance.
With respect to the 1998 base salary granted to the Chief Executive
Officer, Mr. Contino, the Committee took into account a comparison of base
salaries of chief executive officers of peer companies of similar size. Mr.
Contino was granted a base salary of $300,000 for 1998. This base salary of
$300,000 was near the median of the peer group range.
Management Incentive Compensation Program
Managers whom the Committee determines have a significant impact on the
Company's financial results through their positions and performance, including
the Named Executive Officers, are eligible to participate in the Company's
Management Incentive Compensation ("MIC") Program. Awards under the MIC Program
are based upon achievement of corporate earnings targets for the fiscal year, as
well as individually assigned
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objectives. Approximately 80% of the incentive compensation award of each
executive officer is tied to the achievement of the corporate financial
objectives while the remaining 20% is awarded based on meeting individual
objectives. For 1998, the program utilized a threshold percentage of the actual
budgeted earnings before interest, taxes, depreciation and amortization
("EBITDA") which had to be achieved before the portion of the incentive
compensation based on corporate financial objectives would begin to accrue. The
incentive compensation awards ranges were 0% to 195% of base salary for the
Chief Executive Officer, Mr. Contino, and 0% to a maximum of 106% of base salary
for the other executives. For 1998, the Company exceeded its budgeted EBITDA
thereby maximizing the portion of the incentive compensation that is based on
the achievement of corporate financial objectives. Based on exceeding corporate
financial objectives and meeting certain individual objectives, aggregate
incentive compensation of $1,026,953 was granted to the Named Executive Officers
in 1998 out of a potential maximum management incentive compensation pool of
$1,087,073.
Stock Program
Long-Term incentives are provided through the grant of stock options or
the award of restricted stock under the PlayCore 1996 Incentive Stock Plan (the
"1996 Stock Plan"), which was approved by stockholders at the 1996 annual
meeting. The Committee believes that stock ownership provides significant
motivation to executives to maximize value for PlayCore's stockholders. Stock
options are to be granted at no less than the prevailing market price and,
therefore, will have value only if PlayCore's stock price increases after the
grant. The Committee believes that stock options and stock awards provide a
direct link between compensation and stockholder return, measured by the same
index used by stockholders to measure PlayCore's performance. The terms of
options granted as well as the terms of any restrictions on stock awarded are
determined at the time of the grant or award by the Employee Committee
established under the 1996 Stock Plan. The Employee Committee under the 1996
Stock Plan is comprised of the same directors who comprise the Committee.
An aggregate of 468,500 options were granted under the 1996 Stock Plan in
1998, including 425,000 options granted to Named Executive Officers. See
"Executive Compensation--Stock Option Grants."
Compensation for 1999
For 1999, the Committee intends to continue to focus on linking executive
compensation with corporate performance. Financial performance will continue to
be measured using EBITDA instead of operating income in order to align bonuses
with investors' focus.
Policy with Respect to the $1 Million Deduction Limitation
Section 162(m) of the Internal Revenue Code generally limits the annual
corporate deduction for compensation paid to an executive officer named in the
proxy statement to $1 million, unless such compensation meets certain
performance objective qualifications. The Company anticipates that all 1999
compensation to Named Executive
11
<PAGE>
Officers will be fully deductible under Section 162(m). Therefore, the Company
has determined that a policy with respect to qualifying compensation paid to
executive officers for deductibility is not necessary.
Conclusion
Through the programs described above, a significant portion of PlayCore's
executive compensation is linked directly to individual and corporate
performance and stock price appreciation. The Committee intends to continue the
policy of linking executive compensation to corporate performance and returns to
stockholders, recognizing that the ups and downs of the business cycle from time
to time may result in an imbalance for a particular period.
COMPENSATION COMMITTEE
David S. Evans
Terence S. Malone
Ronald D. Wray
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<PAGE>
STOCK PERFORMANCE
The following graph compares the percentage change in the cumulative
total stockholder return, including dividend reinvestment, on the Common Stock,
with that of the cumulative total return of the Wilshire 5000 Index (the
"Wilshire 5000") and the S & P Leisure Time (Products) Index (the "Leisure
Products Index") for the measurement period beginning December 31, 1993. The
graph is based on the assumption that $100 was invested on December 31, 1993 in:
(1) Common Stock; (2) the Wilshire 5000; and (3) the Leisure Products Index. The
Investor's Business Daily Leisure Products Index, which was included in the
stock performance graph in the Proxy Statement for the 1998 Annual Meeting of
Stockholders, is no longer maintained by Investor's Business Daily and has
therefore been replaced by the Leisure Products Index.
[GRAPHIC OMITTED]
(1) Does not reflect the purchase of 3.6 million outstanding shares of Common
Stock pursuant to a self-tender offer at $11.00 per share completed on
January 19, 1995.
<TABLE>
<CAPTION>
December 31, December 31, December 31, December 31, December 31, December 31,
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
PlayCore $100.00 $65.38 $30.77 $25.00 $30.77 $35.10
Leisure
Products Index 100.00 100.53 118.47 141.13 169.80 153.80
Wilshire 5000
Index 100.00 99.94 136.36 165.28 217.00 267.85
</TABLE>
13
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the PlayCore's Common Stock as of April
14, 1999, except as otherwise noted, by (i) each stockholder known by the
Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each director of the Company, (iii) the Named Executive Officers, and (iv) all
executive officers and directors as a group. Except as otherwise noted, the
persons named in this table have sole voting and investment power with respect
to all shares of Common Stock.
Shares Beneficially Owned
-------------------------
Name of Beneficial Owner (1) Number Percent
- --------------------------- ------ -------
John E. Caldwell (2) 51,128 *
Frederic L. Contino (3) 80,400 *
David S. Evans (4) 6,727,924 72.4%
Robert A. Farnsworth - -
GreenGrass Holdings and Related Parties (5) 6,727,924 72.4%
GGC (4,807,890 shares - 51.7%) (6)(8)(9)
GGCII (1,852,361 shares - 19.9%)(7)(8)(9)
GGM (67,673 shares - 0.7%) (10)
David H. Hammelman (11) 57,895 *
George N. Herrera (12) 15,000 *
Timothy R. Kelleher (13) 6,727,924 72.4%
Terence S. Malone (14) 57,181 *
Massachusetts Mutual Life Ins. Co. (15) 772,427 9.4%
Gary A. Massel (16) 10,000 *
Richard E. Ruegger (17) 102,698 1.3%
Ronald D. Wray - -
All executive officers and directors as a group
(12 persons) (18) 7,102,226 73.5%
- --------------------
*Less than 1%
(1) Except as otherwise indicated, the address of each stockholder is c/o
PlayCore, Inc., Riverfront Centre, 15 West Milwaukee Street, Suite 204,
Janesville, Wisconsin 53545.
(2) Includes 50,000 shares issuable upon the exercise of stock options which
are currently exercisable.
(3) Includes 75,000 shares issuable upon the exercise of stock options that
are currently exercisable.
(4) As one of the three persons appointed to the Members Operating Board of
GreenGrass Capital LLC, a Delaware limited liability company ("GGC"), Mr.
Evans has shared control of the voting and investment making decisions of
GreenGrass Holdings, which owns 5,345,056 shares of Common Stock,
Debentures convertible into 1,331,868 shares of Common Stock, and a
warrant to purchase 50,000 shares of Common
14
<PAGE>
Stock. Of such securities, Mr. Evans would be entitled to receive from
GreenGrass Holdings 7,078 shares of Common Stock, Debentures convertible
into 1,495 shares of Common Stock, and a warrant to purchase 86 shares of
Common Stock under certain circumstances as a result of his ownership of
a limited partnership interest in Glencoe Fund and Glencoe Growth
Partners, L.P., and his ownership of stock in GIC. The address of Mr.
Evans is c/o Glencoe Investment Corporation, 190 South LaSalle St., Suite
2830, Chicago, Illinois 60603.
(5) The address of GreenGrass Holdings, a Delaware general partnership
("GreenGrass Holdings"), is c/o Glencoe Investment Corporation, 190 South
LaSalle St., Suite 2830, Chicago, Illinois 60603. Includes 5,345,056
shares of Common Stock, Debentures convertible into 1,331,868 shares of
Common Stock, and a warrant to purchase 50,000 shares of Common Stock.
The general partners of GreenGrass Holdings consist of GGC, GreenGrass
Capital II LLC, a Delaware limited liability company ("GGCII"), and Green
Grass Management LLC, a Delaware limited liability company ("GGM"). Of
the 5,346,056 shares of Common Stock owned by GreenGrass Holdings,
3,494,509 shares are beneficially owned by GGC, 1,802,361 shares are
beneficially owned by GGCII, and 49,186 shares are beneficially owned by
GGM. Of the 1,331,868 shares which GreenGrass Holdings would receive upon
conversion of Debentures, 1,313,382 shares would be beneficially owned by
GGC and 18,486 shares would be beneficially owned by GGM. The 50,000
shares which GreenGrass Holdings would receive upon exercise of the
warrant would be beneficially owned by GGCII.
(6) The members of GGC are the following institutional investors: Glencoe
Fund, Equity-Linked Investors--II, a New York limited partnership
("ELI-II"), the State Treasurer of the State of Michigan, as Custodian
for the Michigan Public School Employee's Retirement System, the State
Employees' Retirement System, the Michigan State Police Retirement System
and the Michigan Judges Retirement System, each a trust organized by the
State of Michigan to provide pension benefits to eligible retirees
(collectively, the "Michigan Trusts"), Crescent/MACH I Partners, L.P., a
Delaware limited partnership ("Crescent"), Sahara Enterprises, Inc., a
Delaware corporation ("Sahara") and Baldwin & Lyons Insurance Company, an
Indiana corporation ("Baldwin").
(7) The members of GGCII are the following institutional investors: Glencoe
Growth Closely-Held Business Fund, L.P. ("Glencoe Growth"), ELI-II,
Baldwin, the Michigan Trusts, and Massachusetts Mutual Life Insurance
Company and certain of its affiliates ("MassMutual").
(8) ELI-II is a member of both GGC and GGCII. The general partner of ELI-II
is Rohit M. Desai Associates-II ("RMDA-II"). RMDA-II is a New York
general partnership and Rohit M. Desai is the managing partner of
RMDA-II. The investment advisor of ELI-II is Desai Capital Management
Incorporated ("DCMI"). ELI-II may be deemed to beneficially own 2,441,136
shares of Common Stock held by Green Grass Holdings (which represents
approximately 26.3% of the outstanding Common Stock and which includes
1,926,290 shares of Common Stock held by GreenGrass Holdings, 498,179
shares of Common Stock issuable upon conversion of Debentures held by
GreenGrass Holdings, and 16,667 shares of Common Stock issuable upon the
exercise of the warrant held by GreenGrass Holdings which it may be
entitled to receive under certain circumstances as a member of GGC and
GGCII). RMDA-II (as the general partner of ELI-II), DCMI (as the
investment advisor to ELI-II), and Rohit M. Desai each may be deemed to
be the beneficial owner of securities beneficially owned by ELI-II. The
address of ELI-II and its affiliates identified above is 540 Madison
Avenue, 36th Floor, New York, New York 10022.
(9) The Michigan Trusts are members of both GGC and GGCII. As a result, the
Michigan Trusts may be deemed to beneficially own 2,441,136 shares of
Common Stock held by GreenGrass Holdings (which represents approximately
26.3% of the outstanding shares of Common Stock and includes 1,926,290
shares of Common Stock held by GreenGrass Holdings, 498,179 shares of
Common Stock issuable upon conversion of Debentures held by GreenGrass
Holdings, and 16,667 shares of Common Stock issuable upon the exercise of
the warrant held by GreenGrass Holdings which they may be entitled to
receive under certain circumstances as members of GGC and GGCII). The
address of the Michigan Trusts is 430 West Allegan Street, Lansing,
Michigan 48901.
15
<PAGE>
(10) The members of GGM are the following former and current officers of
PlayCore: Messrs. Ruegger, Cole, Hammelman, Beebe and Jonas.
(11) Consists of 57,895 shares of Common Stock issuable upon the exercise of
stock options which are currently exercisable. Excludes 4,304 shares of
Common Stock and Debentures convertible into 1,618 shares of Common Stock
held by GreenGrass Holdings which securities, as a member of GGM may be
deemed to beneficially own because Mr. Hammelman would receive such
securities under certain circumstances (including upon termination of his
employment). Mr. Hammelman expressly disclaims beneficial ownership of
any other securities of PlayCore held by GreenGrass Holdings because he
neither is a controlling member of GGM nor has investment control of the
portfolio securities of either GGM or GreenGrass Holdings.
(12) Consists of 15,000 shares of Common Stock issuable upon exercise of stock
options which are currently exercisable.
(13) As one of the three persons appointed to the Members Operating Board of
GGC, Mr. Kelleher has shared control of the voting and investment making
decisions of GreenGrass Holdings, which owns 5,346,056 shares of Common
Stock, Debentures convertible into 1,331,868 shares of Common Stock, and
a warrant to purchase 50,000 shares of Common Stock. The address of Mr.
Kelleher is c/o Desai Capital Management Incorporated, 540 Madison
Avenue, 36th Floor, New York, New York 10022.
(14) Includes 56,934 shares issuable upon the exercise of stock options which
are currently exercisable.
(15) The address of Massmutual is 1295 State Street, Springfield, MA
01111-0001. Includes 290,127 shares of Common Stock issuable upon the
exercise of warrants which are currently exercisable, and 40,203 shares
issuable upon the exercise of a warrant held by MassMutual Corporate
Value Partners Limited (of which an affiliate of MassMutual is a
Partner), which warrant is currently exercisable. Also includes 430,163
shares of Common Stock and 11,933 shares issuable upon the exercise of a
warrant held by GreenGrass Holdings which securities, as a member of
GGCII, MassMutual may be deemed to beneficially own because it would
receive such securities under certain circumstances. MassMutual disclaims
beneficial ownership of any other securities of PlayCore held by
GreenGrass Holdings because it neither is a controlling member of GGCII
nor has investment control of the portfolio securities of either GGCII or
GreenGrass Holdings. Also excludes 288,607 shares issuable upon the
exercise of warrants held by certain of its affiliates, including
MassMutual Corporate Investors, MassMutual Participating Investors, and
MassMutual Corporate Value Partners Limited, because the investments of
such affiliates are held for the benefit of unrelated third parties.
(16) Consists of 10,000 shares issuable upon the exercise of stock options
which are currently exercisable.
(17) Consists of 102,698 shares of Common Stock issuable upon the exercise of
stock options which are currently exercisable. Excludes 49,187 shares of
Common Stock and Debentures convertible into 18,486 shares of Common
Stock which Mr. Ruegger may be deemed to beneficially own as sole manager
and the controlling member of GCM, which indirectly beneficially owns
such securities as a general partner of GreenGrass Holdings, including
32,773 shares of Common Stock and Debentures convertible into 12,317
shares of Common Stock held by GreenGrass Holdings which securities, as a
member of GGM, Mr. Ruegger may be deemed to beneficially own because Mr.
Ruegger would receive such securities under certain circumstances
(including upon termination of his employment). Mr. Ruegger disclaims
beneficial ownership of these securities except to the extent of his
pecuniary interest therein.
(18) This group is comprised of the following executive officers: Messrs.
Caldwell, Contino, Farnsworth, Hammelman, and Ruegger; and the following
non-employee directors: Messrs. Evans, Herrera, Kelleher, Malone, Massel
and Wray. Includes Debentures convertible into 1,331,868 shares of Common
Stock and a warrant to purchase 50,000 shares of Common Stock, all of
which are held by GreenGrass Holdings, and
16
<PAGE>
415,225 shares issuable to certain executive officers and directors upon
the exercise of stock options which are currently exercisable.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has been reappointed by the Board of Directors as the
independent auditors for PlayCore for the fiscal year ending December 31, 1999
upon the recommendation of the Audit Committee. Ernst & Young LLP has served as
PlayCore's independent auditors since inception in January 1992, and served as
the predecessor company's independent auditors since June 1990.
Representatives of Ernst & Young LLP are expected to be present at the
annual meeting with an opportunity to make a statement if they so desire and are
expected to be available to respond to appropriate questions.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires PlayCore's
executive officers, directors, and more than 10 percent stockholders to file
with the Securities and Exchange Commission reports on prescribed forms of their
ownership and changes in ownership of Common Stock and furnish copies of such
forms to PlayCore. PlayCore believes that during and with respect to the fiscal
year ended December 31, 1998, all reports required by Section 16(a) to be filed
by PlayCore's officers, directors and more than 10 percent stockholders were
filed on a timely basis.
Information About the Solicitation
The Board of Directors of PlayCore does not know of any matters which may
be presented at the meeting other than those specifically set forth in the
Notice of Annual Meeting. If any other matters come before the meeting or any
adjournments or postponements thereof, the persons named in the accompanying
form of proxy will vote in accordance with their best judgment with respect to
such matters.
The expense of the Board of Directors' proxy solicitation will be borne
by PlayCore. In addition to the use of the mail, proxies may be solicited by
personal interview or by telephone. Banks, brokerage houses and other
institutions will be requested to forward the soliciting material to beneficial
owners and to obtain authorization of the execution of proxies; and, if they in
turn so request, PlayCore will reimburse such banks, brokerage houses and other
institutions, nominees and fiduciaries for their expenses in forwarding such
material. Directors, officers and regular employees of the Company may also
solicit proxies without additional remuneration therefor. PlayCore's transfer
agent, First Chicago Trust Company of New York, will aid in the solicitation of
proxies and, in addition to its annual retainer of $20,000, will be reimbursed
for out-of-pocket expenses.
17
<PAGE>
Stockholders are urged to sign the accompanying form of proxy, solicited
on behalf of the Board of Directors of PlayCore, and return it at once in the
envelope provided for that purpose. Proxies will be voted in accordance with the
stockholders' directions. If no directions are given, proxies will be voted
"For" the election of the nominees for directors' set forth in this Proxy
Statement. The proxy does not affect the right to vote in person at the meeting
and may be revoked at any time before it is voted by written notice of
revocation given to the Secretary of PlayCore.
Proxies, ballots and voting tabulations identifying stockholders are kept
private and will not be available to anyone except as actually necessary to meet
legal requirements. Access for proxies and other individual stockholder voting
records is limited to the inspectors of election appointed by PlayCore and
certain of PlayCore's employees who must acknowledge in writing their
responsibility to comply with this policy of confidentiality.
Vote Required for Approval
The presence at the annual meeting, in person or by proxy, by holders of
a majority of the shares of Common Stock entitled to vote shall constitute a
quorum. Shares will be voted as instructed in the accompanying proxy on every
matter submitted to the stockholders. Pursuant to applicable Delaware law, only
votes cast "For" a matter constitute affirmative votes. Shares represented by
proxies indicating "Withhold Authority" to vote for one or more nominees will be
counted as present for purposes of determining a quorum but as not entitled to
vote, and not voted, for the nominee(s) for which voting authority is withheld.
Shares represented by proxies indicating "Abstain" as to a matter will be
counted as present for purposes of determining a quorum and as entitled to vote
with respect to that matter. Abstentions will have the effect of a vote
"Against" the item. Shares voted by a broker on a routine matter or matters
(such as election of directors) but as to which the broker indicates it lacks
authority to vote on non-routine matters will be counted as present for purposes
of determining a quorum and as entitled to vote, and voted, with respect to the
routine matter(s), but not entitled to vote, and not voted, with respect to the
non-routine matter(s). Shares as to which a broker indicates it lacks authority
to vote, or shares which the broker does not vote, will not be counted as
present for purposes of determining a quorum.
The seven nominees for director receiving a plurality of the votes cast
at the meeting in person or by proxy shall be elected. All other matters
required for approval the affirmative vote of a majority of the shares of Common
Stock represented and voted at the meeting in person or by proxy. GreenGrass
Holdings, as the holder of record of approximately 68% of the voting Common
Stock, has indicated that it intends to vote "For" the seven nominees for
directors.
Stockholder Proposals
Proposals which stockholders of the Company intend to present at and have
included in the Company's proxy statement for the 2000 annual meeting pursuant
to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (Rule
14a-8), must be received by the Company by the close of business on December 27,
1999. In addition, a stockholder who
18
<PAGE>
otherwise intends to present business at the 2000 annual meeting (including
nominating persons for election as directors) must comply with the requirements
set forth in the Company's By-laws. Among other things, to bring business before
an annual meeting, a stockholder must give written notice thereof, complying
with the By-laws, to the Secretary of the Company not less than 60 days and not
more than 90 days prior to the first anniversary of the preceding year's annual
meeting (subject to certain exceptions if the annual meeting is advanced or
delayed a certain number of days). Under the By-laws, if the Company does not
receive notice of a stockholder proposal submitted otherwise than pursuant to
Rule 14a-8 (i.e. proposals stockholders intend to present at the 2000 annual
meeting but do not intend to include in the Company's proxy statement for such
meeting) prior to March 27, 2000, then the notice will be considered untimely
and the Company will not be required to present such proposal at the 2000 annual
meeting. If the Board of Directors chooses to present such proposal at the 2000
annual meeting, then persons named in proxies solicited by the Board of
Directors for the 2000 annual meeting may exercise discretionary voting power
with respect to such proposal.
19
<PAGE>
EXHIBIT A
EXECUTIVE OFFICERS OF THE COMPANY
The following individuals are the current executive officers of the
Company, who are elected annually by the Board of Directors to serve until the
next annual election of officers and until their respective successors have been
elected and have qualified unless removed by the Board of Directors.
Name Age Position
---- --- --------
Frederic L. Contino 48 President and Chief Executive Officer,
and a director. See "Election of
Directors" on page 2 of the Proxy
Statement.
John E. Caldwell 56 President of the Swing-N-Slide Division
of PlayCore Wisconsin since December
1996. From 1990 to November 1996, Mr.
Caldwell was the President of the Retail
Division of Curtis Industries Inc.
(manufacturer of nuts, bolts and keys).
Robert A. Farnsworth 49 President of the GameTime Division of
PlayCore Wisconsin since May 1998. From
February 1993 to April 1998, Mr.
Farnsworth was the Executive Vice
President Marketing and Product Manager
of Pfaltzgraff Company (ceramics
manufacturing).
Richard E. Ruegger 39 Vice President-Finance, Secretary and
Treasurer since January 1992 and Chief
Financial Officer since June 1992.
David H. Hammelman 44 Vice President Human Resources and
Administration since July 1995 and prior
to such date was Director of Human
Resources and Administration since
October 1993. Director of Human Services
of Brach Van Houten, Andes Candies
Division (candy manufacturing) from
October 1992 through October 1993 and
Employee Relations Manager of Pepsico,
Frito-Lay division (snack food
manufacturing) from 1984 through
September 1992.
Exhibit A - Page 1
<PAGE>
PLAYCORE, INC.
JANESVILLE, WISCONSIN PROXY/VOTING INSTRUCTION CARD
- --------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors of the Annual
Meeting to be held on May 26, 1999.
The undersigned hereby constitutes and appoints Frederic L. Contino, Richard E.
Ruegger and David S. Evans, and each of them, his or her true and lawful agents
and proxies, with full power of substitution in each, acting by a majority of
those present and voting, or if only one is present and voting, then that one,
to vote the Common Stock of PlayCore, Inc. which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of PlayCore, Inc. to be held in the
Continental Room at the Standard Club, 320 South Plymouth Court, Chicago,
Illinois 60606, on Wednesday, May 26, 1999 at 10:00 a.m., local time, and at any
adjournment or postponement thereof, in the manner indicated on the reverse side
of this proxy, and in their discretion upon such other business as may properly
come before the meeting. IF NO DIRECTION AS TO THE MANNER OF VOTING THE PROXY IS
MADE, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AS INDICATED ON THE
REVERSE SIDE HEREOF.
Election of Directors:
Nominees: Terence S. Malone, Frederic L. Contino, David S. Evans, George N.
Herrera, Timothy R. Kelleher, Gary A. Massel and Ronald D. Wray
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE. The proxies cannot vote your shares unless you sign and return
this card.
-------------------
SEE REVERSE
SIDE
-------------------
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
<PAGE>
Please mark your
|X| Vote as in this
Example.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR Election of
Directors.
FOR WITHHELD
1. Election of
Directors (See |_| |_|
Reverse)
For, except vote withheld from the following nominee(s):
--------------------------------------------------------
2. In their discretion, the proxies are authorized
to vote upon such other business as may properly
come before the meeting.
Change of Address |_|
shown at left
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full title
as such. If the signer is a corporation,
please sign in full corporate name by duly
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
--------------------------------------------
--------------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
