<PAGE> 1
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 sec. 240.14a-11(c) or sec.240.14a-12
REGENT COMMUNICATIONS, 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)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________________
5) Total fee paid:
___________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the 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:
______________________________________________
<PAGE> 2
REGENT COMMUNICATIONS, INC.
50 East RiverCenter Boulevard, Suite 180
Covington, Kentucky 41011
April 15, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of
Stockholders of Regent Communications, Inc. to be held on Thursday, April 29,
1999 at 10:00 a.m., local time, at the Metropolitan Club, 50 RiverCenter
Boulevard, 19th Floor, Covington, Kentucky.
Business items to be acted upon at the Annual Meeting are the election
of seven directors to serve for a one-year term, the approval of an amendment to
the Company's Amended and Restated Certificate of Incorporation and the
transaction of any other business properly brought before the meeting. We will
also be pleased to report on the affairs of the Company and to offer
stockholders the opportunity to present questions and comments of general
interest.
We encourage you to read the accompanying Proxy Statement carefully and
to complete, sign and return your Proxy in the postage prepaid envelope
provided, even if you plan to attend the Annual Meeting. Returning your proxy to
us will not prevent you from voting in person at the meeting, or from revoking
your proxy and changing your vote at the meeting, if you are present and wish to
do so.
The directors and officers of Regent Communications, Inc. appreciate
your continuing interest in the business of the Company and hope that you can
join us at the Annual Meeting.
Sincerely,
/S/ TERRY S. JACOBS
Terry S. Jacobs
Chairman of the Board and Chief Executive Officer
<PAGE> 3
REGENT COMMUNICATIONS, INC.
50 East RiverCenter Boulevard, Suite 180
Covington, Kentucky 41011
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 29, 1999
-----------------
The Annual Meeting of Stockholders of Regent Communications, Inc., a
Delaware corporation (the "Company"), will be held on Thursday, April 29, 1999
at 10:00 a.m., local time, at the Metropolitan Club, 50 RiverCenter Boulevard,
19th Floor, Covington, Kentucky, for the purpose of considering and acting on
the following:
1. A proposal to elect seven directors to serve until the next annual
meeting of stockholders and until their respective successors have been duly
elected and qualified.
2. A proposal to amend the Company's Amended and Restated Certificate
of Incorporation to increase the number of authorized shares of preferred stock
from 20,000,000 to 40,000,000 and the number of authorized shares of common
stock from 30,000,000 to 60,000,000. A copy of the proposed amendment to the
Amended and Restated Certificate of Incorporation is attached as Annex 1 to the
Proxy Statement.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
Holders of record of the Company's common stock and the Company's
Convertible Preferred Stock at the close of business on April 1, 1999 are
entitled to notice of and to vote at the Annual Meeting.
Enclosed herewith is a Proxy Statement, Proxy and the Company's Annual
Report for the year ended December 31, 1998.
By Order of the Board of Directors:
/S/ WILLIAM L. STAKELIN
April 15, 1999 William L. Stakelin
President and Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING POSTAGE PREPAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY IN WRITING OR AT THE ANNUAL MEETING IF YOU
WISH TO VOTE IN PERSON.
-2-
<PAGE> 4
REGENT COMMUNICATIONS, INC.
50 East RiverCenter Boulevard, Suite 180
Covington, Kentucky 41011
------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 29, 1999
The Board of Directors of Regent Communications, Inc. ("Regent" or "the
Company") is soliciting the enclosed Proxy from its stockholders for use at the
Annual Meeting of Stockholders to be held on April 29, 1999 and at any
adjournments thereof. This Proxy Statement and the accompanying Proxy are first
being mailed to stockholders on or about April 15, 1999. The record date for
purposes of determining those stockholders entitled to notice of and to vote at
the Annual Meeting has been fixed by the Board of Directors as April 1, 1999.
All properly executed proxies received pursuant to this solicitation
and not revoked before they are voted will be voted as designated at the Annual
Meeting, and those not designated will be voted FOR the director nominees named
therein, FOR the proposed amendment set forth therein, and, in the proxyholders'
best judgment, on any other matter that may properly come before the Annual
Meeting and any adjournments thereof. Any stockholder giving the enclosed Proxy
may revoke it at any time before it is voted by giving to the Company notice of
its revocation, in writing or in open meeting, or a duly executed proxy bearing
a later date.
The expense of this solicitation, which will include the cost of
assembling and mailing the Notice, the Proxy Statement and Proxy, will be borne
by the Company. Proxies will be solicited primarily by mail but may also be
solicited through personal interview, telephone and telecopy by directors,
officers and regular employees of Regent, without special compensation therefor.
The Company expects to reimburse banks, brokers and other persons for their
reasonable out-of-pocket expenses in handling proxy materials for beneficial
owners of the Company's Series C Convertible Preferred Stock.
The Annual Report for the year ended December 31, 1998, including
financial statements, is being mailed with this Proxy Statement.
As of April 1, 1999, there were outstanding 240,000 shares of Regent
Common Stock, 620,000 shares of Series A Convertible Preferred Stock, 1,000,000
shares of Series B Convertible Preferred Stock, 3,720,620 shares of Series C
Convertible Preferred Stock, 1,000,000 shares of Series D Convertible Preferred
Stock, 447,842 shares of Series E Convertible Preferred Stock, 3,083,652 shares
of Series F Convertible Preferred Stock and 372,406 shares of Series G
Convertible Preferred Stock, and each such share is entitled to one vote, either
in person or by proxy, on each matter of business to be considered at the Annual
Meeting, with the exception of the holder of the Series B Convertible Preferred
Stock, which is only entitled to vote on the proposed amendment to the Company's
Amended and Restated Certificate of Incorporation, and the holder of the Series
D Convertible Preferred Stock, which is entitled to .350136 vote for each
outstanding share of Series D Convertible Preferred Stock. A majority of the
outstanding shares entitled to vote at the Annual Meeting, present in person or
by proxy, will constitute a quorum.
-3-
<PAGE> 5
PROPOSAL 1
ELECTION OF DIRECTORS
The number of members of the Board of Directors of the Company has been
designated by the Board at seven in accordance with the Company's Bylaws. At the
Annual Meeting, seven directors will be elected and will hold office until the
next annual meeting of stockholders and until their respective successors are
duly elected and qualified. The Board of Directors and the holders of the Series
A, Series C and Series F Convertible Preferred Stock of the Company have
nominated the seven incumbent directors for election by the stockholders at the
Annual Meeting. All seven directors have agreed to serve if elected.
It is the intention of the persons named as proxy holders in the Proxy
to vote for the election of all nominees named. The Board of Directors does not
know of any nominee who will be unable to stand for election or otherwise serve
as a director. If for any reason any nominee shall be unable to serve, which is
not now contemplated, the shares represented by proxy will be voted for such
substitute nominee as the Board of Directors recommends, unless an instruction
to the contrary is indicated on the proxy card.
Delaware law, under which the Company is incorporated, does not require
a minimum number of votes for the election of a director. The Company's bylaws,
however, provide that the individuals receiving the greatest number of votes
shall be elected as directors. Thus, abstentions and shares not voted by brokers
and other entities holding shares on behalf of the beneficial owners will have
no effect in the election of directors.
In the event the number of individuals nominated for election exceeds
the number of directors to be elected, then the holders of the Series A, Series
C and Series F Convertible Preferred Stock will have the sole right to vote for
and elect the individual(s) nominated by them, as a class, and the further right
to vote for and elect any of the other directors who are not to be elected
solely by the holders of another class or series of preferred stock.
The holders of approximately 81% of the outstanding voting power of the
Company are parties to a certain Second Amended and Restated Stockholders'
Agreement dated as of June 15, 1998, pursuant to which they have agreed to
vote all of their shares for the election of a specific group of seven
individuals (to be identified from time to time) as the Board of
Directors of the Company. Currently, this group consists of Terry S. Jacobs,
William L. Stakelin, Joel M. Fairman, William H. Ingram, Richard H. Patterson,
R. Glen Mayfield, and John H. Wyant, and the voting agreements contained in the
Stockholders' Agreement will assure their election. See "Changes in Control."
Below please find, with respect to each nominee for director of the
Company, his age, principal occupation during the past five years, other
positions he holds with the Company, if any, and the year in which he first
became a director of Regent. Each of the nominees is currently a director of the
Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION
OF THE SEVEN NOMINEES FOR DIRECTOR.
INFORMATION REGARDING DIRECTOR NOMINEES
TERRY S. JACOBS (Age 56)
Mr. Jacobs has been Chairman of the Board, Chief Executive Officer,
Treasurer and a Director of Regent since its organization in November 1996. Mr.
Jacobs served as President and Chief Executive
-4-
<PAGE> 6
Office of a privately held radio broadcast company which he co-founded in 1993
under the name "Regent Communications, Inc." ("Regent I") and which acquired and
operated 16 radio stations until its merger into Jacor Communications, Inc. in
February 1997. Mr. Jacobs currently serves as a director of National Grange
Mutual Insurance Company.
WILLIAM L. STAKELIN (Age 56)
Mr. Stakelin has been President, Chief Operating Officer, Secretary and
a Director of Regent since its organization in November 1996. He served as
Executive Vice President and Chief Operating Officer of Regent I from 1995 until
its merger into Jacor Communications, Inc. in February 1997. Mr. Stakelin served
as President and Chief Executive Officer of Apollo Radio, Ltd., a privately-held
radio broadcast company which he co-founded in 1988 and which acquired and
operated nine radio stations until its sale to Regent I in 1995. He currently
serves as a member of the Board of Directors of the National Advertising
Council, the Associated Press and the Radio Advertising Bureau.
JOEL M. FAIRMAN (Age 70)
Mr. Fairman has been Vice Chairman of the Board of Directors of Regent
since the merger of Faircom Inc. into a subsidiary of Regent in June 1998. Mr.
Fairman founded and organized Faircom Inc. ("Faircom") in April 1984 and was its
Chairman of the Board, Chief Executive Officer and Treasurer from its inception
to the date of the merger with Regent. Prior thereto, he was an investment
banking executive, and a practicing attorney focusing on corporate transactions.
R. GLEN MAYFIELD (Age 57)
Mr. Mayfield has served as a Director of Regent since May 1997, elected
pursuant to the terms of Regent's Series A Convertible Preferred Stock to
represent the holders of such stock. Since 1978, he has been President of
Mayfield & Robinson, Inc. a management and financial consulting firm in
Cincinnati, Ohio. Since August 1994, Mr. Mayfield has served as Vice President
and a director of Mayson, Inc., a corporation 50% owned by him which serves as
the general partner of River Cities Management Limited Partnership, the general
partner of River Cities Capital Fund Limited Partnership, which holds 50% of the
outstanding shares of Regent's Series A Convertible Preferred Stock. Mr.
Mayfield is also a director of NS Group, Inc.
WILLIAM H. INGRAM (Age 59)
Mr. Ingram has served since its formation in early 1997 as Chairman of
the Board of Directors of Waller-Sutton Management Group, Inc., which manages
Waller-Sutton Media Partners, L.P., an investment partnership focused on the
media, communications, and entertainment industries ("Waller-Sutton"). Mr.
Ingram has also served since 1973 as President and Chief Executive Officer of
Sutton Capital Associates, Inc., an investment management firm co-founded by
him, specializing in cable television, wireless telephony and related
industries. Mr. Ingram has responsibility for all of such firm's activities,
including identifying investments and determining and securing the financing
needs of such investments. Mr. Ingram has been a member of the Board of
Directors of Regent since June 1998.
RICHARD H. PATTERSON (Age 40)
Mr. Patterson has served since its formation in early 1997 as a Vice
President of Waller-Sutton Management Group, Inc. Since January 1, 1999, he has
served as a principal of Fairway Advisors, LLC, a firm providing advisory
services. From 1986 through 1998, Mr. Patterson was a partner of Waller Capital
Corporation, a privately-owned cable television brokerage firm. Mr. Patterson
has been a director of Regent since June 1998. He also serves as a director of
KMC Telecom, Inc.
-5-
<PAGE> 7
JOHN H. WYANT (Age 52)
Mr. Wyant has served since its formation in 1992 as President of Blue
Chip Venture Company, a venture capital investment firm which, together with its
affiliates, manages an aggregate of approximately $180 million of committed
capital for investment in privately held high growth companies. He has been a
member of the Board of Directors of Regent since June 1998. Mr. Wyant is also a
director of Zaring Homes, Inc., Delicious Brands, Inc. and a number of
privately-held companies.
There are no family relationships among any of the above named nominees
for directors nor among any of the nominees and any executive officers of the
company.
BOARD OF DIRECTORS AND COMMITTEES
During the year ended December 31, 1998, the Board held three regularly
scheduled meetings and two special meetings. Each director attended or
participated in at least 75% of the meetings of the Board of Directors and all
committees on which he served in 1998. The Board of Directors currently has two
standing committees of the Board of Directors, the Compensation Committee and
the Audit Committee.
COMPENSATION COMMITTEE
The Compensation Committee consists of three directors, Messrs. Ingram,
Patterson and Wyant. The Compensation Committee held one meeting during 1998.
The basic function of the Compensation Committee is to review salaries, bonuses
and other elements of compensation of executive officers and other key
employees, as well as to determine stock option grants to executive officers and
other key employees and make recommendations on such matters to the full Board
of Directors.
AUDIT COMMITTEE
The Audit Committee consists of three directors, Messrs. Ingram,
Mayfield, and Wyant. The Audit Committee reviews the financial statements of the
Company, consults with the Company's independent auditors and considers such
other matters with respect to the internal and external audit of the affairs of
the Company as may be necessary or appropriate in order to facilitate accurate
financial reporting. The Audit Committee held two meetings during 1998.
COMPENSATION OF DIRECTORS
Each of the director nominees is either an employee of the Company or
serves as a director pursuant to the terms of a series of the Company's
Preferred Stock representing the holders thereof and, as such, does not receive
compensation for his services as a director; however, each director is
reimbursed for the reasonable out-of-pocket expenses incurred by him in
connection with his duties as a director, including attending meetings of the
Board and any committees thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1998, the Compensation
Committee consisted of three members, Messrs. Ingram, Patterson and Wyant.
As part of the June 1998 Transactions, River Cities Capital Fund
Limited Partnership ("River Cities") purchased from the Company 100,000 shares
of the Company's Series F Convertible Preferred Stock for $5.00 per share and
received, in connection therewith, a five-year warrant to purchase 20,000 shares
of the Company's common stock at an exercise price of $5.00 per share. River
Cities' acquisition on June 15, 1998 of such Series F Convertible Preferred
Stock and related warrant was part of the placement of a total of 2,050,000
shares of the Series F Convertible Preferred Stock made pursuant to the terms of
a certain Stock Purchase Agreement, dated as of June 15, 1998 among the Company,
River Cities, Waller-Sutton, William H. Ingram and the other purchasers named
therein (the "Series F Purchase Agreement"), and was on the same terms as the
other purchasers under the Series F Purchase Agreement.
The Company has subsequently issued a total of 1,033,652 additional
shares of its Series F Convertible Preferred Stock to the existing Series F
holders pursuant to the terms of the Series F Purchase Agreement at the
prescribed purchase price of $5.00 per share. Of these additional shares, a
total of 400,000 shares were issued on November 30, 1998 and a total of 633,652
shares were issued on February 23, 1999. The additional Series F shares issued
to Waller-Sutton, River Cities and William H. Ingram are as follows:
<TABLE>
<CAPTION>
Waller-Sutton River Cities William H. Ingram
------------- ------------ -----------------
<S> <C> <C> <C>
November 30, 1998 195,123 shares 19,512 shares 9,756 shares
February 23, 1999 286,022 shares 75,910 shares 14,301 shares
</TABLE>
William H. Ingram and Richard H. Patterson, who are directors of the Company,
are managing members of the general partner of Waller-Sutton and directors and
executive officers of the managing agent of Waller-Sutton.
Pursuant to the terms of the Series F Purchase Agreement, Waller-Sutton
Management Group, Inc. receives an annual monitoring fee of $75,000. William H.
Ingram is a stockholder of Waller-Sutton Management Group, Inc.
On January 11, 1999, the Company entered into an agreement to sell
372,406 shares of its Series G Convertible Preferred Stock at a purchase price
of $5.00 per share to the following existing stockholders:
<TABLE>
<CAPTION>
Shareholder No. of Shares
----------- -------------
<S> <C>
Blue Chip Capital Fund II Limited Partnership 315,887
Terry S. Jacobs 50,000
William L. Stakelin 3,200
Joel M. Fairman 3,319
</TABLE>
Messrs. Jacobs, Stakelin and Fairman are executive officers and directors of the
Company. Jack H. Wyant, a director of the Company, is a beneficial owner and
manager of the general partner of Blue Chip Capital Fund II Limited Partnership.
The Company's Board of Directors, with Messrs. Jacobs, Stakelin, Fairman and
Wyant abstaining, determined the fair market value of the Series G shares on
January 11, 1999 to be $5.00 per share.
-6-
<PAGE> 8
PROPOSAL 2
PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF PREFERRED STOCK AND COMMON STOCK
At its meeting on February 25, 1999, the Board of Directors of the
Company approved resolutions declaring it advisable to amend the Company's
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") to increase the number of authorized shares of preferred stock
from 20,000,000 to 40,000,000 and the number of authorized shares of common
stock from 30,000,000 to 60,000,000, and directing that the proposed amendment
be submitted to the stockholders for their approval at the annual meeting to be
held on April 29, 1999. The full text of the proposed amendment to the Company's
Certificate of Incorporation is attached as Annex 1 to this Proxy Statement.
The terms of the shares of preferred stock to be authorized, including
dividend or interest rates, conversion prices, voting rights, redemption prices,
maturity dates, and similar matters will be determined by the Board of
Directors.
The Board of Directors believes the proposed amendment is desirable
because it would provide the Board the ability to issue shares for future
acquisitions or for other purposes when the Board deems such issuance to be
advantageous. The additional shares of common and preferred stock could be
issued in connection with public offerings or private placements or other
financial transactions, acquisitions, stock dividends, employee stock plans and
for other general corporate purposes. The Board has no current plans,
arrangements, agreements or understandings regarding the issuance of the
additional authorized common or preferred shares, should the proposed amendment
be approved and adopted.
VOTE REQUIRED FOR APPROVAL
The proposed amendment to the Company's Certificate of Incorporation to
increase the number of authorized preferred shares and common shares will be
submitted to the Company's stockholders for their approval at the Annual
Meeting. Approval and adoption of the proposed amendment requires the vote of
the holders of a majority of the outstanding shares of common stock and
preferred stock entitled to vote at the Annual Meeting, voting together as a
class.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE
"FOR" APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION.
EXECUTIVE OFFICERS
The executive officers of the Company, their ages, and the positions
they hold with the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Terry S. Jacobs 56 Chairman of the Board,
Chief Executive Officer, Treasurer
William L. Stakelin 56 President, Chief Operating Officer,
Secretary
</TABLE>
-7-
<PAGE> 9
<TABLE>
<S> <C> <C>
Joel M. Fairman 70 Vice Chairman
Fred L. Murr 51 Senior Vice President
Anthony A. Vasconcellos 34 Vice President and
Chief Financial Officer
Matthew A. Yeoman 32 Vice President-Finance
</TABLE>
Executive officers are elected annually by the Board of Directors and
serve at the discretion of the Board. Information with respect to the business
experience, principal occupations during the past five years and affiliations of
the executive officers of Regent who are not also directors is set forth below.
Information regarding Messrs. Jacobs, Fairman and Stakelin is set forth above.
Fred L. Murr has been employed by Regent as Senior Vice President since
June 1997. Mr. Murr entered broadcasting in 1972 as a sales representative for
radio station WINN in Louisville, Kentucky, which at that time was owned by
Bluegrass Broadcasting Co., a company operated by Mr. Stakelin. Mr. Murr
joined Apollo Radio Ltd. when that company was formed
by Mr. Stakelin in 1988, serving in the capacity as Vice President/General
Manager of KUDL/KMXV in Kansas City, Missouri. In October 1995, he joined Regent
I upon the sale of Apollo to that company and become Vice President/General
Manager of a five-station group in Las Vegas, where he served until Regent I was
acquired by Jacor Communications, Inc. in February 1997.
Anthony A. Vasconcellos, a Certified Public Accountant, joined Regent
in September 1998 as Vice President and Chief Financial Officer. Mr.
Vasconcellos served as an auditor for the international accounting firm of
Coopers & Lybrand from July 1987 to September 1991. From October 1991 to
September 1998, he was a senior financial and accounting manager with
LensCrafters, Cincinnati, Ohio and Toronto, Ontario, Canada, a company with 800
retail stores and $1.2 billion in revenues. His duties included oversight of the
general accounting function, external and internal reporting and analysis,
development and maintenance of financial systems. From February 1992 to March
1994, Mr. Vasconcellos served as Controller of LensCrafters' Canadian
subsidiary.
Matthew A. Yeoman has been Vice President - Finance and Assistant
Secretary of the Company since March 1997. In 1993, he left his position with
Jacor Communications, Inc. to assist Mr. Jacobs in the formation and operation
of Regent I, where he held the position of Controller until its merger into
Jacor Communications, Inc in February 1997.
-8-
<PAGE> 10
EXECUTIVE COMPENSATION
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, the Company's Chief Executive
Officer and each of the Company's other four most highly compensated executive
officers (the "named executives") during each of the last two fiscal years
(three fiscal years in the case of Mr. Fairman).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
---------------------------------------------------------- ------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
- ------------------------ ---------------------------------------------------------- ------------------------------------
SECURITIES
NAME AND PRINCIPAL SALARY BONUS OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR ($)(a) ($) COMPENSATION ($)(b) OPTIONS (#) COMPENSATION ($)
- ------------------------ -------- -------------- ------------- -------------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Terry S. Jacobs
Chairman and 1998 214,038 --- --- 608,244(c) ---
Chief Executive 1997 10,500 --- --- --- ---
Officer
- ------------------------ -------- -------------- ------------- -------------------- ----------------- ------------------
William L. Stakelin
President and 1998 192,884 --- --- 608,244(c) ---
Chief Operating 1997 10,500 --- --- --- ---
Officer
- ------------------------ -------- -------------- ------------- -------------------- ----------------- ------------------
Joel M. Fairman (d) 1998 224,928 --- --- 177,492(e) 13,905(f)
Vice Chairman 1997 125,438 28,000 --- --- 29,574(f)
1996 102,672 28,000 --- --- 26,639(f)
- ------------------------ -------- -------------- ------------- -------------------- ----------------- ------------------
Fred L. Murr (g) 1998 110,692 --- --- 25,000(c) ---
Senior Vice 1997 34,615 --- --- --- ---
President
- ------------------------ -------- -------------- ------------- -------------------- ----------------- ------------------
Matthew A. Yeoman 1998 81,154 25,000 --- 15,000(c) ---
Vice President - 1997 56,539 --- --- --- ---
Finance
- ------------------------ -------- -------------- ------------- -------------------- ----------------- ------------------
<FN>
(a) Includes amounts deferred at the election of the recipient under the
Company's 401(k) plan.
(b) Management believes that the aggregate amount of perquisites and
other personal benefits for each year for each named executive did not
exceed the lesser of $50,000 or 10% of his total salary and bonus for that
year.
(c) Represents the number of shares of the Company's common stock issuable upon
exercise of options granted to the named executive under the Company's 1998
Management Stock Option Plan.
(d) Mr. Fairman became an executive officer of the Company in June 1998 at the
time of the Company's merger with Faircom Inc. Compensation set forth for
Mr. Fairman includes his total 1998 compensation both from the Company and
from Faircom Inc. Compensation set forth for Mr. Fairman for 1997 and 1996
was paid by Faircom Inc.
(e) Represents the number of shares of Series C Convertible Preferred Stock of
the Company issuable upon exercise of options granted to Mr. Fairman under
the Regent Communications, Inc. Faircom Conversion Stock Option Plan in
connection with the merger with Faircom Inc. in June 1998.
(f) Represents premiums paid by the Company or Faircom Inc. with respect to a
life insurance policy owned by Mr. Fairman and tax "gross up" amounts with
respect thereto.
(g) Mr. Murr joined the Company in June 1997.
</TABLE>
REPORT OF BOARD OF DIRECTORS AND COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
Regent became subject to the reporting requirements of the
Securities Exchange Act of 1934 on June 15, 1998. On that date, Regent's
Board of Directors was expanded to its current
-9-
<PAGE> 11
seven members. In August 1998, the Board of Directors established the
Compensation Committee. The Compensation Committee met one time during the
latter part of 1998 and, to date, has not adopted compensation policies
applicable to the Company's executive officers, although it is the intention of
the Committee to adopt such policies in 1999. The Board of Directors served the
function of a compensation committee until August 1998 when the Board
established the Compensation Committee.
During 1998, Terry S. Jacobs, the Company's Chairman and Chief
Executive Officer, received a base salary as established by his employment
agreement with the Company dated effective March 1, 1998. Mr. Jacobs' employment
agreement was approved by the Company's Board of Directors on February 16, 1998.
See "Executive Compensation - Employment Agreements." At the time of such
approval, the Board was comprised of Messrs. Jacobs, Stakelin and Mayfield. Mr.
Jacobs abstained from voting on approval of his employment agreement.
In establishing Mr. Jacobs' base salary for purposes of his employment
agreement, the Company's Board of Directors considered his 20 years of
experience in the broadcasting industry, as well as how his salary and incentive
bonus structure related to compensation he received from his prior broadcasting
companies and what it perceived to be fair and competitive with those of
executives with similar responsibilities at broadcasting companies that are
considered to be comparable in terms of assets and revenue.
BOARD OF DIRECTORS AND COMPENSATION COMMITTEE MEMBERS:
TERRY S. JACOBS
WILLIAM L. STAKELIN
R. GLEN MAYFIELD
JOEL M. FAIRMAN
WILLIAM H. INGRAM (Committee Member)
RICHARD H. PATTERSON (Committee Member)
JOHN H. WYANT (Committee Member)
-10-
<PAGE> 12
OPTION GRANTS IN 1998
The following table sets forth certain information with respect to
stock options to purchase shares of the Company's common stock awarded during
1998 to the Chief Executive Officer and the named executives.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
FOR OPTION TERM
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE MARKET
OPTIONS EMPLOYEES IN PRICE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR(a) ($/sh) ($/sh) DATE 5%($) 10%($) 0%($)(e)
- -------------------- ------------- --------------- --------- --------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Terry S. Jacobs 608,244(b) 46% 5.00 5.00 06/15/08 1,912,606 4,846,921 0
- -------------------- ------------- --------------- --------- --------- ---------- ------------- --------- ---------
William L. Stakelin 608,244(b) 46% 5.00 5.00 06/15/08 1,912,606 4,846,921 0
- -------------------- ------------- --------------- --------- --------- ---------- ------------- --------- ---------
Joel M. Fairman 25,635(c) 1.9% 1.10 5.00 05/23/00 112,950 126,729 99,812
16,662(c) 1.3% 1.20 5.00 12/04/01 76,352 90,796 63,221
135,195(c) 10.2% 3.73 5.00 07/01/02 317,307 485,350 171,630
- -------------------- ------------- --------------- --------- --------- ---------- ------------- --------- ---------
Fred L. Murr 25,000(d) 1.9% 5.00 5.00 08/10/08 78,612 199,218 0
- -------------------- ------------- --------------- --------- --------- ---------- ------------- --------- ---------
Matthew A. Yeoman 15,000(d) 1.1% 5.00 5.00 08/10/08 47,167 119,531 0
- -------------------- ------------- --------------- ---------- --------- ---------- ------------- --------- ---------
<FN>
(a) Total options granted to all executive officers and other employees of the
Company in 1998 were for an aggregate of 1,321,488 shares of Regent's
common stock, excluding 274,045 options exercisable for the Company's
Series C Convertible Preferred Stock issued to employees of Faircom Inc. in
replacement of their outstanding Faircom stock options upon the merger with
Faircom Inc. in June 1998.
(b) Represents the number of shares of the Company's common stock issuable upon
the exercise of options granted to the named executive effective June 15,
1998 under the Company's 1998 Management Stock Option Plan. The options are
exercisable in three annual installments (up to 1/3 each year) commencing
on June 15, 1999 or, if deemed to be incentive stock options, in ten annual
installments (up to 1/10 each year) commencing on June 15, 1998.
(c) Represents the number of shares of the Company's Series C Convertible
Preferred Stock issuable upon the exercise of options granted under the
Regent Communications, Inc. Faircom Conversion Stock Option Plan in
connection with the merger with Faircom Inc. in June 1998. All of these
options are currently exercisable.
(d) Represents the number of shares of the Company's common stock issuable upon
the exercise of options granted to the named executive on August 11, 1998
under the Company's 1998 Management Stock Option Plan. The options are
exercisable in five annual installments (up to 1/5 each year) commencing on
August 11, 1999.
(e) Represents the value of options at grant-date market price.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has employment agreements with Terry S. Jacobs and William
L. Stakelin, pursuant to which Mr. Jacobs is employed as Chairman and Chief
Executive Officer of Regent and Mr. Stakelin is employed as President and Chief
Operating Officer of Regent, each for an initial term
-11-
<PAGE> 13
commencing March 1, 1998 and ending April 30, 2001. Under their employment
agreements, Mr. Jacobs and Mr. Stakelin are entitled to base salaries of
$250,000 and $225,000, respectively, which amounts are subject each 12-month
period to an increase in the discretion of the Board of Directors and to a
mandatory cost-of-living increase tied to the Consumer Price Index-All Items.
The employment agreements also provide for Messrs. Jacobs and Stakelin to
receive a discretionary annual bonus. Such bonus, if any, is to be determined by
the Board of Directors of Regent and based on performance of the employee and
Regent and the achievement of certain goals established for each year. As a
guideline, the employment agreements reflect the expectation of the parties that
performance during a fiscal year that is rated as "good" should merit a
discretionary bonus equal to 50% of the employee's base salary for that fiscal
year, with an unspecified higher percentage for performances of "excellent" or
"outstanding," an unspecified lower percentage for performances of only
"satisfactory," and no bonus for performances of "poor." In addition, the
employment agreements entitle Messrs. Jacobs and Stakelin each to receive grants
of incentive and non-qualified options to acquire capital stock of Regent in the
discretion of the Board of Directors to purchase such number of shares of
Regent's common stock as would equal 5.5% of Regent's common stock outstanding
from time to time (assuming the exercise of all then outstanding warrants and
options covering Regent's capital stock and the conversion of all securities
then convertible into Regent capital stock) provided, however, that such number
shall not exceed 733,333 without further approval of the Company's Board of
Directors and Waller-Sutton. All options are to have an exercise price per share
determined by the Company's Board of Directors (but not less than the greater of
the per share fair market value of the underlying common stock on the date of
grant and $5.00 per share). Grants of incentive stock options are to vest over a
period of ten years (10% per year) and are to be exercisable for ten years from
the date of grant. Grants of non-qualified stock options are to vest over a
period of three years (33% per year) and have an exercise period of ten years
from the date of grant. All unvested options will fully vest immediately upon a
change of corporate control of Regent or a sale of substantially all of its
assets. The employment agreements also provide for Messrs. Jacobs and Stakelin
to receive use of an automobile, parking and automobile insurance coverage at
Regent's expense and other benefits available to key management employees
generally.
The employment agreements of Messrs. Jacobs and Stakelin are terminable
by them upon six months' notice which may not be given until December 15, 1999
and are terminable by Regent at any time. In the event of a termination by
reason of the employee's death or disability or in the event of a termination by
Regent without cause, then (a) Regent is required to purchase, and the employee
is required to sell to Regent, (i) all shares of Regent stock owned by him at a
price equal to its fair market value as of the date of termination and (ii) all
vested stock options held by him at a price equal to the excess of the fair
market value of the underlying stock over the exercise price, (b) all unvested
options will terminate, and (c) the employee is entitled to receive his base
salary through the termination date and, in the event of disability, for up to
one year after termination during the continuation of disability. In the case of
termination due to death or disability, the employee is also entitled to a
prorated portion of any bonus to which he otherwise would have been entitled. If
employment is terminated by Regent without cause, the employment agreements
entitle Mr. Jacobs or Mr. Stakelin, as the case may be, to receive, in addition
to base salary and bonus prorated through the date of termination, the greater
of his current base salary for an additional 12-month period or his current base
salary throughout the remaining portion of the current three-year term of the
employment agreement. Messrs. Jacobs and Stakelin are subject to customary
non-competition and non-solicitation covenants during their period of employment
with Regent and for an 18-month period thereafter (12 months in the case of a
termination of employment by Regent without cause where severance is being paid)
as well as customary confidentiality covenants.
Joel M. Fairman is currently employed by Regent as Vice Chairman of the
Board under a two-year employment agreement, commencing on June 15, 1998. As
part of the merger with Faircom Inc. in June 1998, Regent agreed to continue to
engage Mr. Fairman as a consultant for the one-year period thereafter in
accordance with the terms of a standard consulting agreement to be entered into
between Regent and Mr. Fairman at that time. During the term of the employment
agreement and the consulting agreement, Mr. Fairman is entitled to receive
annual base compensation equal to $190,000.
-12-
<PAGE> 14
The employment and consulting agreements provide for Mr. Fairman to receive
a discretionary annual bonus which, if awarded, would be in such amount as may
be determined by the Board of Directors of Regent and would be based on the
performance of Mr. Fairman and of Regent and the achievement of certain goals
established for each year. In addition, Mr. Fairman is entitled to receive
grants of incentive or non-qualified options to acquire capital stock of Regent
under Regent's 1998 Management Stock Option Plan in the discretion of the
Compensation Committee of the Board of Directors. The employment agreement also
contains Regent's agreement to seek to cause Mr. Fairman to be elected and
re-elected to the Board of Directors of Regent to serve throughout the term of
his employment and consultancy with Regent and for two years thereafter, except
if his employment has been terminated for cause. The employment agreement
obligates Regent to continue the lease formerly utilized by Faircom at Suite
220, Old Brookville, New York, pursuant to the existing lease terms through the
end of the employment and consultation periods. The employment and consulting
agreements also provide for Mr. Fairman to own a term life insurance policy paid
for by Regent and to receive use of an automobile and automobile insurance
coverage at Regent's expense and other benefits available to key management
employees generally.
The employment agreement of Mr. Fairman is terminable by him upon 90 days'
prior written notice and is terminable by Regent at any time. In the event of a
termination by reason of Mr. Fairman's death or disability or in the event of a
termination by Regent without cause, Mr. Fairman would be entitled to receive
his base salary through the termination date and, in the event of disability,
for up to one year after termination during the continuation of disability. In
the case of termination due to death or disability, Mr. Fairman would also be
entitled to a prorated portion of any bonus to which he otherwise would have
been entitled. If employment is terminated by Regent without cause, the
employment and consulting agreements entitle Mr. Fairman to receive, in addition
to his base salary and any bonus prorated through the date of termination, the
greater of his base salary for an additional 12-month period or his base salary
throughout the remaining portion of the current term of his employment and
consulting agreements. Mr. Fairman is subject to customary non-competition and
non-solicitation covenants during his period of employment and consultancy with
Regent and for an 18-month period thereafter (except in the case of a
termination of employment by Regent without cause), as well as customary
confidentiality covenants.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's stock, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
Based solely on its review of the copies of such reports received by
it, and upon written representations from certain reporting persons, the Company
believes that, for the period from June 15, 1998 (the date the Company's Series
C Convertible Preferred Stock was deemed registered under Section 12 of the
Securities Exchange Act of 1934) through December 31, 1998, all Section 16(a)
filing requirements applicable to the Company's officers, directors and greater
than ten percent stockholders were complied with on a timely basis except that
each of Terry S. Jacobs, William L. Stakelin, R. Glen Mayfield, Joel M. Fairman,
John H. Wyant, William H. Ingram, Richard H. Patterson, Fred L. Murr, Anthony A.
Vasconcellos, Matthew A. Yeoman, Blue Chip Venture Company, Ltd., Waller-Sutton
Media Partners, L.P. and Waller-Sutton Media, L.L.C. filed one report late. In
each case, the late filing was the initial ownership report required to be filed
on Form 3.
-13-
<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 6, 1999, Terry S. Jacobs, the Chairman and Chief Executive
Officer and a director of the Company, made a $250,000 unsecured loan to the
Company. The promissory note evidencing the loan provided for interest on the
unpaid principal balance to be paid to Mr. Jacobs at the rate per annum equal to
the effective annual percentage rate paid by Mr. Jacobs to third parties for
such funds. The purpose of the loan was to provide the Company with funds on a
short-term basis to cash collateralize a letter of credit used by the Company as
an escrow deposit in connection with its pending acquisition of radio stations
in the St. Cloud, Minnesota market. The principal amount of the loan was repaid
in full on February 26, 1999, with interest of $4,125.
The Company obtains all of its property and casualty insurance and
director and officer liability insurance coverages through Jacobs Insurance
Agency, Inc., an insurance brokerage firm 90% owned by Mr. Jacobs and members of
his immediate family. In 1998, the Company paid $221,500 in insurance premiums
to Jacobs Insurance Agency, Inc. Of that amount, $37,500 constituted commission
income retained by the agency. The Company believes that its insurance cost is
comparable to or less than the cost of insurance which the Company would be able
to obtain through unaffiliated third parties for comparable coverages.
On June 15, 1998, the Company issued to River Cities a five-year
warrant to purchase 80,000 shares of the Company's common stock at an exercise
price of $5.00 per share. This warrant was issued as an inducement to River
Cities, as a holder of the Company's Series A Convertible Preferred Stock, to
approve the merger transaction with Faircom Inc. consummated as part of a
series of mergers, acquisitions, borrowings and issuances of additional equity
(the "June 1998 Transactions"). R. Glen Mayfield, a director of the Company, is
the general partner of River Cities Management Limited Partnership, which is the
general partner of River Cities Management Limited Partnership, the general
partner of River Cities.
-14-
<PAGE> 16
CHANGES IN CONTROL
As part of the June 1998 Transactions, the Company acquired control of
31 radio stations located in California, Arizona, Michigan and Ohio. The cash
needed for these transactions was provided by bank financing from the Company's
senior credit facility with Bank of Montreal, Chicago Branch, General Electric
Capital Corporation and Bank One, Indianapolis, NA, and by the proceeds from the
sale of shares of the Company's convertible preferred stock, most of which
have full voting rights. Additional shares of the Company's convertible
preferred stock with full voting rights were issued in the merger transactions.
Prior to the June 1998 Transactions, approximately 51.5% of the
Company's outstanding voting stock was held by Terry S. Jacobs. As a result of
these transactions and a subsequent purchase by Mr. Jacobs of 50,000 shares of
Series G Convertible Preferred Stock in January 1999, Mr. Jacobs now holds
approximately 5.3% of the outstanding voting power of the Company. The Company's
voting stock is now dispersed among numerous stockholders with no single
stockholder holding a majority. The Company's largest single stockholder is Blue
Chip Capital Fund II Limited Partnership ("Blue Chip"), which holds 1,702,718
shares of the Company's Series C Convertible Preferred Stock and 315,887 shares
of the Company's Series G Convertible Preferred Stock, representing
approximately 22.8% of the Company's outstanding voting power. John H. Wyant is
a beneficial owner and manager of the general partner of Blue Chip as well as a
beneficial owner and manager of the general partner of Miami Valley Venture Fund
L.P. ("Miami Valley"), which holds 300,479 shares of the Company's Series C
Convertible Preferred Stock. All of the shares of Series C Convertible Preferred
Stock were issued in exchange for shares of common stock of Faircom Inc. in the
merger with Faircom consummated as part of the June 1998 Transactions, and the
shares of Series G Convertible Preferred Stock were issued in a placement of
preferred stock by the Company in February 1999. The Faircom Inc. common stock
was acquired by Blue Chip and Miami Valley upon conversion prior to the merger
of $7,500,000 in principal amount of subordinated notes of Faircom Inc.
Together, Blue Chip and Miami Valley hold approximately 26.2% of the Company's
outstanding voting power.
The Company's next largest stockholder is Waller-Sutton, which
purchased, as part of the June 1998 Transactions, 1,000,000 shares of the
Company's Series F Convertible Preferred Stock for $5,000,000 and acquired an
additional 400,640 shares of the Company's Series C Convertible Preferred Stock
by having purchased for $1,500,000 certain subordinated notes of Faircom Inc.
which were
-15-
<PAGE> 17
ultimately converted into the Company's Series C Convertible Preferred Stock in
the merger with Faircom. Waller-Sutton subsequently acquired an additional
195,123 shares of the Company's Series F Convertible Preferred Stock in a
placement of preferred stock by the Company in November 1998 and an additional
286,022 shares of the Company's Series F Convertible Preferred Stock in a
placement of preferred stock in February 1999. Waller-Sutton is managed by
Waller-Sutton Management Group, Inc., of which William H. Ingram is Chairman of
the Board of Directors. Mr. Ingram holds personally 74,057 shares of the
Company's Series F Convertible Preferred Stock, 50,000 shares of which he
acquired as part of the June 1998 Transactions, 9,756 shares of which he
acquired in November 1998 and 14,301 shares of which he acquired in February
1999, all at $5.00 per share. These combined holdings of Waller-Sutton and Mr.
Ingram constitute approximately 22.1% of the outstanding voting power of the
Company, not including warrants held by Waller-Sutton and Mr. Ingram to purchase
a total of 660,000 shares of the Company's common stock for $5.00 per share. The
exercise of these warrants could increase Waller-Sutton's and Mr. Ingram's
combined voting interest in the Company to approximately 29.6%. Waller-Sutton
and Mr. Ingram have agreed, subject to certain conditions, to purchase an
additional 544,798 shares of the Company's Series F Convertible Preferred Stock
at $5.00 per share to finance future acquisitions. Should this purchase occur,
Waller-Sutton's and Mr. Ingram's combined voting interest in the Company,
assuming exercise of their warrants in full (and assuming no other exercises of
outstanding warrants by the holders thereof), could increase to approximately
35.8%.
In conjunction with the June 1998 Transactions, the holders of
approximately 81% of the outstanding voting power of the Company entered into a
Second Amended and Restated Stockholders' Agreement (the "Stockholders'
Agreement") by which they agreed to vote all of their shares for the election of
a specific group of seven individuals (to be identified from time to time) as
the Board of Directors of the Company. Currently, this group consists of Terry
S. Jacobs, William L. Stakelin, Joel M. Fairman, William H. Ingram, Richard
Patterson, R. Glen Mayfield and John H. Wyant, and the voting agreements
contained in the Stockholders' Agreement will assure their election. These
voting agreements are to remain in effect until terminated by the Company,
Waller-Sutton and the stockholders beneficially owning more than 50% of the
Company's Common Stock or until the Company has completed an underwritten public
offering of the Company's common stock at not less than $12.00 per share
(equitably adjusted for any stock splits, reverse stock splits, or stock
dividends), which generates not less than $25,000,000 of gross proceeds to the
Company (excluding the effect of any over-allotment option).
Under the terms of the Stockholders' Agreement, the Company has agreed
that, for so long as Waller-Sutton and the other purchasers of the Series F
Convertible Preferred Stock of the Company, and their permitted transferees, own
10% or more of the voting stock of the Company, the Company may not take or
permit to occur (and the parties to the Stockholders' Agreement will not consent
to, authorize or vote for) any of the following events or actions, unless such
has been approved in advance, in writing, by Waller-Sutton:
(a) any merger or consolidation of the Company with any other entity,
and any merger or consolidation of any subsidiary of the Company with any other
entity other than the Company or another wholly-owned subsidiary of the Company;
(b) the purchase or lease by the Company or any subsidiary thereof of
any business or assets, other than the purchase or lease of assets in the
ordinary course of business (not to include the purchase or lease of any radio
broadcasting station or Federal Communications Commission ("FCC") license), or
the execution of any agreement providing for the purchase, lease, construction
or management of or in respect of radio broadcasting stations (including time
brokerage agreements and local marketing agreements and the like);
(c) the sale of any assets of the Company or any subsidiary thereof, or
the execution of any agreement in respect thereof (other than the sale of
advertising time and excess or obsolete furniture, fixtures or equipment in the
ordinary course of business);
-16-
<PAGE> 18
(d) the issuance or sale of any equity or debt securities of the
Company or any subsidiary thereof or any rights to acquire any of such equity or
debt securities (including options and warrants) or the issuance or sale of
stock appreciation or other "phantom" stock rights, other than permitted
issuances pursuant to existing agreements, or the execution of any agreements in
respect thereof;
(e) the incurrence or assumption of any indebtedness for borrowed
money, secured by a lien, or pursuant to guaranties by the Company or any
subsidiary thereof, other than indebtedness permitted under the Company's
current senior debt facility;
(f) any change of control of the Company;
(g) any amendment to the Company's 1998 Management Stock Option Plan or
the adoption of any other stock option, stock purchase or restricted stock
appreciation right plan;
(h) any amendment to the Amended and Restated Certificate of
Incorporation or By-Laws of the Company;
(i) the execution by the Company or any party to the Stockholders'
Agreement of any voting, voting trust, registration rights or stockholders
agreements with respect to the Company or any of its shares of capital stock
(other than the Stockholders' Agreement and a Registration Rights Agreement of
even date therewith); or
(j) the execution by the Company of any contract or agreement for the
construction or management of radio stations.
Waller-Sutton has consented to the proposed amendment to the Company's
Certificate of Incorporation as described herein.
The Stockholders' Agreement also provides for the obligation of the
Company to repurchase shares of the Company's convertible preferred stock held
by the parties to the Stockholders' Agreement after five years from date of
issuance if Waller-Sutton requests that the Company repurchase the Eligible Put
Shares (as defined therein) held by Waller-Sutton. In the event the Company
should fail to repurchase such shares within the time requirements set forth in
the Stockholders' Agreement (from a minimum of six months to as long as one
year, depending on the circumstances), Waller-Sutton would have the right under
the Stockholders' Agreement to require the election of such additional designees
of Waller-Sutton to the Board of Directors of the Company such that, after
giving effect thereto, the designees of Waller-Sutton elected to the Board under
the terms of the Stockholders' Agreement would constitute a majority of the
members of the Board. The exercise of such "put" rights could likely result in a
change of control of the Company.
-17-
<PAGE> 19
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 1, 1999, the number and
percentage by class of the Company's securities held by (i) persons known to the
Company to be beneficial owners of more than 5% of a class of the Company's
securities, (ii) the Company's directors and director-nominees, (iii) those
executive officers of the Company named in the Summary Compensation Table
appearing under "Executive Compensation," and (iv) all such named executive
officers and all directors and director-nominees of the Company, as a group.
<TABLE>
<CAPTION>
COMMON STOCK
------------
Amount and Percent
Nature of of Class(a)
Beneficial
Name and Address of Beneficial Owner(a) Ownership(a)
--------------------------------------- ------------
<S> <C> <C>
Waller-Sutton Media Partners, L.P. 2,531,785 (b) 91.3%
Blue Chip Venture Company, Ltd. 2,319,084 (c) 90.6%
WPG Corporate Development
Associates V, L.L.C. and affiliated fund 1,092,743 (d) 82.0%
BMO Financial, Inc. 1,000,000 (e) 80.7%
General Electric Capital Corporation 970,285 (f) 80.2%
River Cities Capital Fund Limited Partnership 595,422 (g) 71.3%
Terry S. Jacobs 490,000 (h) 80.3%
William L. Stakelin 163,200 (i) 57.6%
Joel M. Fairman 350,000 (j) 59.3%
John H. Wyant 2,319,084 (c) 90.6%
William H. Ingram 84,057 (k)(b) 25.9%
Richard H. Patterson 0 (b) 0.0%
R. Glen Mayfield 595,422 (g) 71.3%
Fred L. Murr 0 0.0%
Matthew A. Yeoman 0 0.0%
PNC, National Association, Trustee 276,694 (l) 53.6%
Thomas P. Gammon 242,592 (m) 50.3%
Alta California Broadcasting, Inc. 194,750 (n) 44.8%
John E. Risher 54,253 (o) 18.4%
Jack M. Gertino 40,000 (p) 14.5%
Robert P. Quinn 18,892 (q) 7.3%
Homer Cutrubus 18,529 (r) 7.2%
John C. Jansing 18,823 (s) 7.3%
Anthony Pantaleoni 15,509 (s) 6.1%
Stephen C. Eyre 14,100 (s) 5.6%
David L. Durbano 15,290 (t) 6.0%
All named executive officers and
directors as a group (9 persons) 4,001,763 (u) 100.0%
</TABLE>
-18-
<PAGE> 20
<TABLE>
<CAPTION>
PREFERRED STOCK
---------------
Amount and Percent
Nature of of Class(a)
Beneficial
Name and Address of Beneficial Owner(a) Ownership(a)
--------------------------------------- ------------
<S> <C> <C>
Blue Chip Venture Company, Ltd. 2,319,084 (c) 22.6%
Waller-Sutton Media Partners, L.P. 1,881,785 (b) 18.4%
General Electric Capital Corporation 1,370,285 (f) 13.4%
BMO Financial, Inc. 1,000,000 (e) 9.8%
WPG Corporate Development
Associates V, L.L.C. and affiliated fund 962,743 (d) 9.4%
Terry S. Jacobs 350,000 (h) 3.4%
William L. Stakelin 23,200 (i) *
Joel M. Fairman 350,000 (j) 3.4%
John H. Wyant 2,319,084 (c) 22.6%
William H. Ingram 74,057 (k)(b) *
Richard H. Patterson 0 (b) 0.0%
R. Glen Mayfield 495,422 (g) 4.8%
Fred L. Murr 0 0.0%
Matthew A. Yeoman 0 0.0%
All named executive officers and
directors as a group (9 persons) 3,296,763 (u) 100.0%
<FN>
- ------------
* Less than 1%.
</TABLE>
(a) The Securities and Exchange Commission has defined "beneficial ownership"
to include sole or shared voting or investment power with respect to a
security or the right to acquire beneficial ownership within 60 days. The
number of shares indicated are owned with sole voting and investment
power unless otherwise noted and includes certain shares held in the name
of affiliated companies as to which beneficial ownership may be
disclaimed. Addresses of 5% beneficial owners appear in the notes below.
Shares issuable upon conversion of convertible securities or upon
exercise of options or warrants within 60 days are deemed to be
outstanding for the purpose of computing the percentage ownership and
overall voting power of persons believed to own beneficially such
securities, but have not been deemed to be outstanding for the purpose of
computing the percentage ownership of overall voting power of any other
person. In other words, the percent of class specified for each
beneficial owner represents the highest percentage of the class that
owner could own, assuming such owner converts all convertible securities
and exercises all options and warrants that are convertible or
exercisable by him within 60 days and assuming that no other beneficial
owner converts convertible securities or exercises options or warrants.
Calculation of percentage ownership is based upon a total of 240,000
shares of common stock and 10,244,520 shares of preferred stock currently
outstanding
(b) Represents the following securities held in the name of Waller-Sutton
Media Partners, L.P.: (A) 1,481,145 shares of the Company's Series F
Convertible Preferred Stock, convertible at any time into the Company's
common stock on a one-for-one basis; (B) 400,640 shares of the Company's
Series C Convertible Preferred Stock, convertible at any time into the
Company's common stock on a one-for-one basis; and (C) solely for
purposes of determining the amount and percentage ownership of the
Company's common stock, warrants currently exercisable for 650,000 shares
of
-19-
<PAGE> 21
the Company's common stock. William H. Ingram and Richard H. Patterson,
directors of the Company, are managing members of Waller-Sutton Media,
LLC, the general partner of Waller-Sutton Media Partners, L.P., and are
directors, executive officers and stockholders of Waller-Sutton
Management Group, Inc., the managing agent of Waller-Sutton Media
Partners, L.P. Each of Messrs. Ingram and Patterson has advised the
Company that he has neither sole nor shared voting or investment powers
with respect to the securities held by Waller-Sutton Media Partners, L.P.
The address of Waller-Sutton Media Partners, L.P. is 18 Bank Street,
Suite 202, Summit, New Jersey 07901.
(c) Represents: (A) 1,702,718 shares of the Company's Series C Convertible
Preferred Stock held by Blue Chip Capital Fund II Limited Partnership
("Blue Chip II"), which preferred shares are convertible at any time into
shares of the Company's common stock on a one-for-one basis; (B) 315,887
shares of the Company's Series G Convertible Preferred Stock held by Blue
Chip II, which preferred shares are convertible at any time into shares
of the Company's common stock on a one-for-one basis; and (C) 300,479
shares of the Company's Series C Preferred Stock held by Miami Valley
Venture Fund L.P. ("Miami Valley"), which preferred shares are
convertible at any time into shares of the Company's common stock on a
one-for-one basis. Blue Chip Venture Company, Ltd., an Ohio limited
liability company, is the general partner of Blue Chip II and is an
affiliate of a special limited partner and portfolio manager of Miami
Valley. Blue Chip Venture Company, Ltd. has indicated that it exercises
sole voting and dispositive power over the indicated shares held by Blue
Chip II and Miami Valley. John H. Wyant, a director of the Company, is a
beneficial owner and manager of Blue Chip Venture Company, Ltd. Mr. Wyant
exercises shared voting and investment powers with respect to the
securities beneficially owned by Blue Chip Venture Company, Ltd., but
disclaims beneficial ownership of such securities. The address of Blue
Chip Venture Company, Ltd., Blue Chip II, Miami Valley and Mr. Wyant is
1100 Chiquita Center, 250 East Fifth Street, Cincinnati, Ohio 45202.
(d) Represents: (A) 833,736 shares of the Company's Series F Convertible
Preferred Stock held by WPG Corporate Development Associates V, L.L.C.
("WPG V") and 129,007 shares of the Company's Series F Convertible
Preferred Stock held by WPG Corporate Development Associates (Overseas)
V, L.P. ("WPG Overseas"), which preferred shares are convertible at any
time into shares of the Company's common stock on a one-for-one basis;
and (B) solely for purposes of determining the amount and percentage
ownership of the Company's common stock, warrants to purchase 112,580
shares of the Company's common stock held by WPG V and warrants to
purchase 17,420 shares of the Company's common stock held by WPG
Overseas. WPG V and WPG Overseas are private equity funds sponsored by
Weiss, Peck & Grear LLC. The address of WPG V and WPG Overseas is One New
York Plaza, New York, New York 10004.
(e) BMO Financial, Inc. currently holds 1,000,000 shares of the Company's
Series D Convertible Preferred Stock, which shares are convertible into
shares of the Company's common stock on a one-for-one basis; provided
that, except in certain limited circumstances, the shares of the
Company's common stock acquired by BMO Financial, Inc. on conversion
would not have voting rights in excess of 4.9% of the aggregate voting
power of the Company. The address of BMO Financial, Inc. is 430 Park
Avenue, New York, New York 10022.
(f) Represents: (A) 1,000,000 shares of the Company's Series B Senior
Convertible Preferred Stock, convertible at any time into the Company's
common stock on a one-half-for-one basis; (B) 370,285 shares of the
Company's Series F Convertible Preferred Stock, convertible at any time
into the Company's common stock on a one-for-one basis; and (C) solely
for purposes of determining the amount and percentage ownership of the
Company's common stock, warrants to purchase 100,000 shares of the
Company's common stock. The address of General Electric Capital
Corporation is 3379 Peachtree Road N.E., Suite 600, Atlanta, Georgia
30326.
-20-
<PAGE> 22
(g) Represents the following securities held by River Cities Capital Fund
Limited Partnership: (A) 300,000 shares of the Company's Series A
Convertible Preferred Stock, convertible at any time into the Company's
common stock on a one-for-one basis; (B) 195,422 shares of the Company's
Series F Convertible Preferred Stock, convertible at any time into the
Company's common stock on a one-for-one basis; and (C) solely for
purposes of determining the amount and percentage ownership of the
Company's common stock, warrants to purchase 100,000 shares of the
Company's common stock. R. Glen Mayfield, a director of the Company, is
the Vice President, a director and a 50% stockholder of Mayson, Inc., the
general partner of River Cities Management Limited Partnership, which is
the general partner of River Cities Capital Fund Limited Partnership. Mr.
Mayfield exercises sole voting and investment powers over the securities
held by River Cities Capital Fund Limited Partnership, but disclaims
beneficial ownership of such securities. The address of River Cities
Capital Fund Limited Partnership and Mr. Mayfield is 221 E. Fourth
Street, Suite 2250, Cincinnati, Ohio 45202.
(h) Includes: (A) 300,000 shares of the Company's Series A Convertible
Preferred Stock, convertible into shares of the Company's common stock at
any time on a one-for-one basis; (B) 50,000 shares of the Company's
Series G Convertible Preferred Stock, convertible into shares of the
Company's common stock at any time on a one-for-one basis; (C) solely for
purposes of determining the amount and percentage ownership of the
Company's common stock, options exercisable within 60 days for up to
20,000 shares of the Company's common stock. Mr. Jacobs's address is c/o
Regent Communications, Inc., 50 E. RiverCenter Boulevard, Suite 180,
Covington, Kentucky 41011.
(i) Includes: (A) 20,000 shares of the Company's Series A Convertible
Preferred Stock, convertible into shares of the Company's common stock at
any time on a one-for-one basis; (B) 3,200 shares of the Company's Series
G Convertible Preferred Stock, convertible into shares of the Company's
common stock at any time on a one-for-one basis; and (C) solely for the
purpose of determining the amount and percentage ownership of the
Company's common stock, options exercisable within 60 days for up to
20,000 shares of the Company's common stock. Mr. Stakelin's address is
c/o Regent Communications, Inc., 50 E. RiverCenter Boulevard, Suite 180,
Covington, Kentucky 41011.
(j) Represents: (A) 169,189 shares of the Company's Series C Convertible
Preferred Stock, convertible at any time into the Company's common stock
on a one-for-one basis; (B) 3,319 shares of the Company's Series G
Convertible Preferred Stock, convertible at any time into the Company's
common stock on a one-for-one basis; and (C) options exercisable within
60 days for up to 177,492 shares of the Company's Series C Convertible
Preferred Stock, which preferred shares are convertible at any time into
the Company's common stock on a one-for-one basis. Mr. Fairman's address
is 333 Glen Head Road, Old Brookville, New York 11545.
(k) Includes the following securities held by Mr. Ingram, a director of the
Company: (A) 74,057 shares of the Company's Series F Convertible
Preferred Stock, which shares are convertible at any time into the
Company's common stock; and (B) solely for the purpose of determining the
amount and percentage ownership of the Company's common stock, warrants
currently exercisable for 10,000 shares of the Company's common stock.
See also Note (b) above. Mr. Ingram's address is One Rockefeller Plaza,
New York, New York 10112.
(l) Represents 276,694 shares of the Company's Series C Convertible Preferred
Stock, convertible at any time into the Company's common stock on a
one-for-one basis. The address of PNC Bank, National Association,
Trustee, is PNC Center, 201 East Fifth Street, Cincinnati, Ohio 45202.
(m) Represents 242,592 shares of the Company's Series E Convertible Preferred
Stock, convertible at any time into shares of the Company's common stock
on a one-for-one basis. Mr. Gammon's address is 1476 Waterfront Road,
Suite 100, Reston, Virginia 22094.
-21-
<PAGE> 23
(n) Represents 194,750 shares of the Company's Series E Convertible Preferred
Stock, convertible at any time into shares of the Company's common stock
on a one-for-one basis. The address of Alta California Broadcasting, Inc.
is First Interstate Bank Plaza, 11 Sundial Circle, Suite 17, Carefree
Arizona 85377.
(o) Represents options exercisable within 60 days for up to 54,253 shares of
the Company's Series C Convertible Preferred Stock, which preferred
shares are convertible at any time into shares of the Company's common
stock on a one-for-one-basis. Mr. Risher's address is 800 Heather Lake
Drive, Clarkston, Michigan 48348.
(p) Based on the records of the Company's transfer agent, Mr. Gertino holds
40,000 shares of the Company's Series C Convertible Preferred Stock,
convertible at any time into shares of the Company's common stock on a
one-for-one basis. The address for Mr. Gertino is 10 N. 100 St., Suite
610, Crandall Building, Salt Lake City, Utah 84101.
(q) Based on the records of the Company's transfer agent, Mr. Quinn holds
18,892 shares of the Company's Series C Convertible Preferred Stock,
convertible at any time into shares of the Company's common stock on a
one-for-one basis. The address for Mr. Quinn is P.O. Box 1698, Quogue,
New York 11959.
(r) Based on the records of the Company's transfer agent, 15,996 shares of
the Company's Series C Convertible Preferred Stock are held by Mr.
Cutrubus, and 2,533 shares are held by members of his immediate family.
These shares of Series C Convertible Preferred Stock are convertible at
any time into shares of the Company's common stock on a one-for-one
basis. The address for Mr. Cutrubus is 895 West Riverdale Road, Ogden,
Utah 84405-3716.
(s) Includes for each of Messrs. Jansing, Pantaleoni and Eyre options
exercisable within 60 days for 14,100 shares of the Company's Series
C Convertible Preferred Stock, which preferred shares are convertible
into shares of the Company's common stock on a one-for-one basis. In
addition, the records of the Company's transfer agent reflect that Mr.
Jansing and Mr. Pantaleoni hold 4,723 shares and 1,409 shares,
respectively, of the Company's Series C Convertible Preferred Stock
convertible into shares of the Company's common stock on a one-for-one
basis. Mr. Jansing's address is 162 South Beach Road, Hobe Sound, Florida
33455. Mr. Pantaleoni's address is 666 Fifth Avenue, New York, New York
10103. Mr. Eyre's address is 69 Dogwood Lane, Locust Valley, New York
11560.
(t) Based on the records of the Company's transfer agent, 13,881 shares of
the Company's Series C Convertible Preferred Stock are held by Mr.
Durbano, and 1,409 shares are held by a member of his immediate family.
These shares of Series C Convertible Preferred Stock are convertible at
any time into shares of the Company's common stock on a one-for-one
basis. Mr. Durbano's address is given as P.O. Box 1544, Ogden, Utah
84405-1544.
(u) See Notes (c), (g), (h), (i), (j) and (k) above.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of PricewaterhouseCoopers LLP
(the "Auditors") was engaged by Regent to audit Regent's consolidated financial
statements for the year ended December 31, 1998. It is anticipated that a
representative of the Auditors will attend the Annual Meeting for the purpose of
responding to appropriate questions. At the meeting, a representative of the
Auditors will be afforded an opportunity to make a statement if the Auditors so
desire.
-22-
<PAGE> 24
Effective with the Company's acquisition by merger on June 15, 1998 of
all of the outstanding capital stock of Faircom, the Company disengaged the
accounting firm of BDO Seidman, LLP and retained the accounting firm of
PricewaterhouseCoopers LLP to perform the annual audit of Faircom's financial
statements for 1998. PricewaterhouseCoopers LLP (successor to Coopers & Lybrand
L.L.P.) has been the auditor for the Company and its subsidiaries for all
fiscal years since the Company's formation in 1996. The change in accountants
for Faircom's financial statements from BDO Seidman, LLP to
PricewaterhouseCoopers LLP was precipitated by the Company's acquisition of
Faircom as its wholly-owned subsidiary and by the desire to have one accounting
firm responsible for the consolidated audited financial statements of the
Company. This action was approved by the Company's Board of Directors.
The reports of BDO Seidman, LLP on the financial statements of Faircom
for 1997 and 1996 contained no adverse opinion or disclaimer of opinion, nor
were they qualified or modified as to uncertainty, audit scope or accounting
principles.
During the 1997 and 1996 fiscal years and the interim period prior to
June 15, 1998, there were no disagreements between Faircom and BDO Seidman, LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure or any reportable events which, if
not resolved to the satisfaction of BDO Seidman, LLP, would have caused BDO
Seidman, LLP to make reference to the subject matter of its disagreement in
connection with its report.
STOCKHOLDER PROPOSALS FOR 2000
ANNUAL MEETING
Stockholders may submit proposals to be voted on at the 2000 Annual
Meeting of Stockholders. At the time such proposal is submitted, the proponent
must be a record or beneficial owner of at least 1% or $2,000 in market value of
Regent's shares entitled to vote on the proposal and must have held such shares
for at least one year and continue to own such shares through the date of the
2000 Annual Meeting. In order for a stockholder proposal to be included in the
Proxy Statement and form of Proxy for the 2000 Annual Meeting, the proposal must
be received at Regent's principal executive offices no later than December 15,
1999, and must otherwise comply with applicable requirements established by the
Securities and Exchange Commission.
OTHER MATTERS
At the Annual Meeting it is intended that the election of directors and
the proposed amendment to the Company's Certificate of Incorporation attached
hereto as Annex 1, all as set forth in the accompanying Notice and described in
this Proxy Statement, will be presented. The Board of Directors of the Company
is not aware of any other matters which may be presented at the meeting. If any
other matters should be properly presented at the meeting, the persons named in
the enclosed Proxy intend to vote the Proxy according to their best judgment.
You are urged to complete, sign, date and return your Proxy promptly to
make certain that your shares will be voted at the 1999 Annual Meeting. For your
convenience in returning the Proxy, an addressed envelope is enclosed, requiring
no additional postage if mailed in the United States.
A COPY OF REGENT'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
MAILED WITHOUT CHARGE TO STOCKHOLDERS UPON REQUEST. REQUESTS SHOULD BE ADDRESSED
TO THE COMPANY AT 50 EAST RIVERCENTER BOULEVARD, SUITE 180, COVINGTON, KENTUCKY
41011. THE FORM 10-K INCLUDES
-23-
<PAGE> 25
CERTAIN EXHIBITS WHICH WILL BE PROVIDED ONLY UPON PAYMENT OF A FEE COVERING THE
COMPANY'S REASONABLE EXPENSES.
By Order of the Board of Directors:
/s/ WILLIAM L. STAKELIN
------------------------------------
William L. Stakelin, Secretary
-24-
<PAGE> 26
ANNEX 1
PROPOSED AMENDMENT TO REGENT COMMUNICATIONS, INC.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
RESOLVED, subsection A, Article FOURTH of the Amended and Restated
Certificate of Incorporation of Regent Communications, Inc. be hereby amended as
follows:
" A. Authorized Capital Stock. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is One
Hundred Million (100,000,000) shares, consisting of a class of Sixty Million
(60,000,000) shares of Common Stock, par value of $.01 per share, and a class of
Forty Million (40,000,000) shares of Preferred Stock, par value of $.01 per
share."
-25-
<PAGE> 27
Preliminary Copy
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
REGENT DIRECTORS.
COMMUNICATIONS,
INC. The undersigned hereby appoints Terry S. Jacobs,
William L. Stakelin and Anthony A. Vasconcellos,
and each of them, as Proxy Holders for the
undersigned, with full power of substitution, to
appear and vote all of the shares of Regent
Communications, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held at The
Metropolitan Club, 50 East RiverCenter Blvd.,
19th Floor, Covington, Kentucky, on April 29,
Annual Meeting of 1999 at 10:00 a.m., local time, and at any
Stockholders, adjournments thereof, and hereby revokes any and
April 29, 1999 all Proxies heretofore given.
I hereby authorize the above-named holders and any of them to vote all the
shares of the Company represented by this Proxy as follows:
1. Election of Directors (Not applicable to Series B holder).
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Series A Nominee Series C Nominee Series F Nominees At Large Nominees
---------------- ---------------- ----------------- -----------------
R. Glen Mayfield John H. Wyant William H. Ingram Terry S. Jacobs
Richard H. Patterson William L. Stakelin
Joel M. Fairman
</TABLE>
Mark only one:
[ ] VOTE FOR all nominees except those whose names are written in the space
provided below (if any):
[ ] VOTE WITHHELD on all nominees.
2. Proposal to amend the Company's Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of preferred stock
from 20,000,000 to 40,000,000 and to increase the number of authorized shares
of common stock from 30,000,000 to 60,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To act in accordance with their best judgement on any other business that may
properly come before the meeting and any adjournments thereof.
If this Proxy is properly marked, the shares represented by this Proxy will be
voted at the Annual Meeting, and at any adjournments thereof, in accordance with
the choices marked. IF NO DIRECTIONS ARE GIVEN ABOVE, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED "FOR" THE NOMINEES SET FORTH IN PARAGRAPH 1 ON THE
REVERSE SIDE HEREOF, "FOR" THE PROPOSAL SET FORTH IN PARAGRAPH 2 ON THE REVERSE
SIDE HEREOF AND, IN THE PROXYHOLDERS' BEST JUDGMENT, ON ANY MATTER THAT MAY
PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENTS THEREOF. In any
case, if at the time of the Annual Meeting there are more than seven director
nominees, your shares will not be voted for the director(s) to be elected solely
by the holders of shares of any series of preferred stock of which your shares
are not a part.
Please date, sign and promptly return in the
accompanying envelope.
[ ] I plan to attend the Annual Meeting.
----------------------------------------------
Signature of Stockholder
----------------------------------------------
(Title)
----------------------------------------------
Signature of Stockholder
Date: April___, 1999
----------------------------------------------
(Title)
Your signature to this Proxy should be exactly as the name imprinted above.
Persons signing as executors, administrators, trustees or in similar capacities
should so indicate. For joint accounts, the names of each joint owner must be
signed.
