<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by 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 Materials Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
R.H. PHILLIPS, INC.
- ----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Board of Directors -- R.H. Phillips, Inc.
- ----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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):
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
R.H. PHILLIPS, INC.
26836 County Road 12A
Esparto, California 95627
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The 1998 Annual Meeting of Shareholders of R.H.
Phillips, Inc. will be held on Thursday, May 21, 1998, at 10:00
a.m. at the R.H. Phillips Winery, located at 26836 County Road
12A, Esparto, California, for the following purposes:
1. To elect directors, with the following persons to be
presented at the meeting by the current Board of
Directors for election to the Board of Directors: John
E. Giguiere, Karl E. Giguiere, Lane C. Giguiere, R.
Ken Coit and Victor L. Motto.
2. To consider and act upon the appointment of KPMG
Peat Marwick LLP as the independent public
accountants of R.H. Phillips, Inc.; and
3. To take action upon any other matters that may
properly come before the meeting or any
adjournments thereof.
The foregoing proposals are more fully described in the
accompanying Proxy Statement to which your attention is
invited.
In accordance with the Bylaws and the action of the
Board of Directors, only shareholders of record at the close of
business on April 1, 1998, are entitled to notice of and to vote
at the meeting.
BY ORDER OF
THE BOARD
OF
DIRECTORS
Lane C.
Giguiere,
Secretary
April 15, 1998
<PAGE> 3
R.H. PHILLIPS, INC.
26836 County Road 12A
Esparto, California 95627
PROXY STATEMENT
For the Annual Meeting of Shareholders
to be held on Thursday, May 21, 1998
This Proxy Statement and the accompanying proxy are
furnished to the shareholders of R.H. Phillips, Inc. (The
"Company") in connection with the solicitation of proxies by the
Board of Directors for use at the 1998 Annual Meeting of
Shareholders (the "Annual Meeting"). The Annual Meeting will
be held on Thursday, May 21, 1998, beginning at 10:00 a.m. at
the Company's headquarters, located at 26836 County Road
12A, Esparto, California, and at any postponements or
adjournments of the Annual Meeting. The Annual Report of the
Company for the year ended December 31, 1997, the Notice of
Annual Meeting, this Proxy Statement and the enclosed proxy
were initially mailed to the shareholders on or about April 15,
1998. The enclosed proxy is being solicited by the Board of
Directors of the Company.
The Company is paying all costs of preparing,
assembling and mailing this Proxy Statement. The Company
has made arrangement to forward copies of proxy materials to
brokerage houses, custodians, nominees and fiduciaries for
forwarding of proxy soliciting material to the beneficial owners
of the Common Stock of the Company at the Company's
expense. In addition to the solicitation of proxies by mail, some
of the officers, directors and regular employees of the
Company may without additional compensation solicit proxies
by telephone or personal interview. The Company will bear the
costs of the solicitations.
Voting and Revocability of Proxies
Shareholders are encouraged to complete the enclosed
proxy and return it to the Company as soon as possible. Any
person who completes the enclosed proxy may revoke it at any
time prior to its exercise by delivering to the Secretary of the
Company either a signed statement revoking the proxy or a
properly executed proxy bearing a later date. A shareholder
may also revoke a proxy by attending the Annual Meeting and
voting his or her shares personally. Proxies that have been
properly dated, signed and returned will be voted in
accordance with the instructions given by the shareholder. If a
proxy is signed and returned but no voting instructions are
given, each valid proxy will be voted in the election of directors
FOR those nominees presented by the Board of Directors, and
FOR approval of KPMG Peat Marwick LLP as the independent
auditors of the Company. Should any other business properly
come before the Annual Meeting, the person or persons
named as the proxy shall be allowed to vote on such matters
as that person or those persons determine in his, her or their
sole discretion.
Abstentions and broker non-votes will be counted as
shares present or represented and entitled to vote for the
purposes of determining whether a quorum exists at the Annual
Meeting.
Shareholders of record as of the close of business on
April 1, 1998, are entitled to notice of the Annual Meeting and
to vote in person or by proxy. The Common Stock of the
Company (the"Common Stock") is the only class of outstanding
securities entitled to vote at the Annual Meeting. As of the
close of business on April 1, 1998, there were 6,483,760
shares of Common Stock outstanding and entitled to vote. The
presence of a majority of the outstanding shares of Common
Stock, either in person or by proxy, will constitute a quorum at
the Annual Meeting.
<PAGE> 4
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of
Directors shall consist of between four and seven members,
with the exact number of directors between four and seven to
be determined by the Board of Directors. The Board of
Directors has set the number of directors at five, and there are
currently five members of the Board of Directors.
Persons may be nominated for election to the Board of
Directors by the shareholders upon the making of a proper
motion at the Annual Meeting.
Five directors are to be elected at the Annual Meeting to
serve until the following annual meeting of shareholders. The
Board of Directors will present at the Annual Meeting for
election and recommends a vote FOR the following
nominees: John E. Giguiere, Karl E. Giguiere, Lane C.
Giguiere, R. Ken Coit and Victor L. Motto. Each nominee
was recommended unanimously by the Board of Directors for
presentation to the shareholders for election at the Annual
Meeting. Each nominee is currently a member of the Board of
directors.
Persons receiving a plurality of the votes cast at the
Annual Meeting will be elected to the Board of Directors. A
"plurality" means that the individuals who receive the largest
number of votes cast are elected as directors up to the
maximum number of directors to be chosen. Votes against any
candidate and any shares not voted (such as by abstention or
broker non-votes) will have no impact on the election of
directors. All proxies will be voted FOR the election of each of
these nominees unless authority to vote for the election of any
nominee or nominees is withheld by the shareholder giving the
proxy. If any nominee should unexpectedly decline or be
unable to act as a director, the proxies may be voted for a
substitute nominee to be designated by the Board of Directors.
The Board of Directors does not believe that any nominee will
decline to serve.
Shareholders are entitled to one vote for each share
held; however, in the election of directors, each shareholder
has cumulative voting rights if those rights are properly
exercised at the Annual Meeting. If a shareholder wishes to
vote share cumulatively, that shareholder is entitled to as many
votes as the number of shares held multiplied by the number of
directors to be elected. Under cumulative voting, each
shareholder may cast all of his or her votes for a single
candidate or distribute those votes among any or all candidates
he or she chooses. No shareholder will be entitled to cumulate
votes for any candidate unless that candidate's name has been
placed in nomination prior to the voting and the shareholder
has given notice at the Annual Meeting of an intention to
cumulate votes. If any shareholder has given such a notice, all
shareholders may cumulate their votes for candidates who
have been nominated. Shareholders will be given an
opportunity to announce their intention to cumulate their votes
prior to voting. Proxy holders are given discretionary authority
to cumulate votes on shares for which they hold a proxy.
Shareholders who do not wish to cumulate their votes in
elections of directors will be entitled to cast one vote per share
held for any candidate.
Background information with respect to the five
nominees for election to the Board of Directors is set forth
below.
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
John E. Giguiere. John Giguiere is the Co-President,
Co-Chief Executive Officer and Chairman of the Board of
Directors of the Company, in which capacities he has served
since the Company was incorporated in 1994. Prior to that
time, Mr. Giguiere was Co-President of R.H. Phillips Partners, a
limited partnership that operated the R.H. Phillips vineyard and
winery business prior to its merger into the Company, from
1989 until 1994. Raised on the Giguiere family farm where the
R.H. Phillips winery is located, John Giguiere has spent his
entire professional life in agribusiness. Together with his
brother, Karl, John Giguiere founded the R.H. Phillips vineyard
and winery business in 1981. John Giguiere is the President of
the R.H. Phillips Vineyard, Inc., the second largest shareholder
of the Company, and has managed the sales and marketing
aspects of R.H. Phillips since 1983. Mr. Giguiere attended
Willamette University in Salem, Oregon and California State
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<PAGE> 5
University at San Jose. He is 46 years old.
Karl E. Giguiere. Karl Giguiere is the Co-President, Co-
Chief Executive Officer and Vice-Chairman of the Board of
Directors of the Company, in which capacities he has served
since 1994. Karl Giguiere was the Co-President of R.H. Phillips
Partners from 1989 through 1994. Karl Giguiere was also
raised on the Giguiere family farm and has spent his entire
career in agribusiness. He has managed the farming and
vineyard operations of R.H. Phillips since it was founded in
1981. Karl Giguiere is the President of RHP vineyards, Inc., the
largest shareholder of the Company. Mr. Giguiere graduated
from California State Polytechnic University with a B.A. in
Agribusiness. He is 52 years old.
Lane C. Giguiere. Ms. Giguiere has served on the
Board of Directors and has been Vice-President, Sales
Administration of the Company since its incorporation in 1994.
She was Sales Administration Manager of R.H. Phillips
Partners beginning in 1989 and has managed sales of the R.H.
Phillips vineyard and winery business since 1983. Ms. Giguiere
attended California State University at San Jose and California
State University at Chico. Ms. Giguiere is 44 years old.
R. Ken Coit. Mr. Coit was elected a director of the
Company soon after its incorporation in 1994 and served on
the limited partners' Advisory Committee of R.H. Phillips
Partners from 1989 through 1994. Mr. Coit is the owner of Coit
Financial Group, a firm which specializes in real estate
investments. Mr. Coit is also a licensed broker-dealer affiliated
with Sequoia Equity Securities Corporation of Walnut Creek,
California and is a registered representative of American
Investors Company of Hayward, California. Mr. Coit received
an M.B.A. from Pepperdine University and a B.S. in Pharmacy
from the University of Arizona. Mr. Coit is 54 years old.
Victor L. Motto. Mr. Motto was elected to the Board of
Directors in June 1996. Mr. Motto is a founding partner of
Motto, Kryla & Fischer LLP, an accounting and business
consulting firm devoted exclusively to the wine industry. Mr.
Motto is also partner of MKF Systems, a wine industry
computer systems business. Mr. Motto serves as a director of
Grgich Hills Cellars, Hanzell Vineyards and S. Anderson
Vineyard. He is also a director of the St. Helena Office
Association and the Napa County Land Trust. Mr. Motto
teaches university courses and is a frequent lecturer on wine
industry issues. Mr. Motto is a Certified Public Accountant and
received a B.A. in Business from the University of South
Florida. Mr. Motto is 58 years old.
Directors are elected at annual meetings of the
shareholders to terms which extend until the following annual
meeting. Officers are appointed by, and serve at the discretion
of, the Board of Directors.
The Board of Directors met four times in 1997. Each
director has attended at least 75% of all meetings of the Board
of Directors during such period as that director has been a
member of the Board of Directors.
Victor Motto receives compensation of $1,000 per
meeting plus travel expenses for attending meetings of the
Board of Directors, and an annual retainer of $5,000. He also
received options to purchase 20,000 shares of Common Stock
at a price equal to the fair market value of the Company's
Common Stock on the date the option was granted. The total
compensation paid Victor Motto in 1997 for attending meetings
of the Board of Directors was $4,000. R. Ken Coit received
options to purchase 20,000 shares of Common Stock at a price
equal to the fair market value of the Company's Common Stock
on the date the option was granted. No other members of the
Board of Directors are currently compensated for attending
meetings of the Board of Directors or Board committees. The
Board of Directors may institute a policy of compensating
directors for attending such meetings in the future.
Under the terms of the Company's loan agreements with
its major creditors, all principal and interest owing to that loan
creditor shall be due and payable, at the creditor's option, if
John or Karl Giguiere, or both, cease to be members of the
Board of Directors and officers of the Company or cease to be
in control of the day-to-day management of Company
operations.
3
<PAGE> 6
Board Committees, Meetings
The Board of Directors has an Audit Committee, a
Compensation Committee and a Stock Option Committee. The
members of the committees are selected by the full Board of
Directors and serve until they are replaced by the Board of
Directors or until their earlier resignation or removal from such
committee or the Board of Directors.
Audit Committee. The Board of Directors created the
Audit Committee in May 1996. The Audit Committee is to
review the financial results of the Company with the Company's
outside auditors and to discuss with the outside auditors the
scope of the annual audit and other services the Company's
outside auditors are to perform. The members of the Audit
Committee are John Giguiere, Victor Motto and R. Ken Coit.
The Audit Committee met once in 1997.
Compensation Committee. The Compensation
Committee was created in May 1996, at the same time as the
Audit Committee. The Compensation Committee is to make
recommendations concerning salaries and incentive
compensation for the Company's officers and employees. The
members of the Compensation Committee are John Giguiere,
Victor Motto and R. Ken Coit. The Compensation Committee
met eight times in 1997.
Stock Option Committee. The Stock Option Committee
was formed in July 1995, to administer the Company's 1995
Stock Option Plan. The Stock Option Committee consists of R.
Ken Coit and Victor Motto. The Stock Option Committee did
not meet during the year.
Transactions Concerning Board of Directors
The Company is the holder of a promissory note
payable by RHP Vineyards, Inc. The note evidences a loan to
that corporation by R.H. Phillips Partners and the assumption
in 1993 of payment obligations of certain persons to R.H.
Phillips Partners. The amount payable under the note as of
December 31, 1997 was $155,352. Unpaid amounts under the
note bear interest at a rate of 7% per annum. The note and
other obligations are payable in full on July 30, 2000. The
Company is the holder of a promissory note payable by Karl
Giguiere. The amount payable under the note as of December
31, 1997, was $27,724. The note bears interest at 7% per
annum and is due July 20, 2000.
The Board of Directors has adopted a policy pursuant to
which all future material transactions and loans with affiliated
parties will be made or entered into on terms no less favorable
than those that can be obtained from unaffiliated third parties.
All future material affiliated transactions and loans, and any
forgiveness thereof, must be approved by a majority of
independent outside members of the Board of Directors who
do not have an interest in the transaction.
Relationships Between Directors and Executive Officers
John and Karl Giguiere are brothers. John and Lane
Giguiere are husband and wife. There are no other familial
relationships between the directors and executive officers of
the Company.
Reports under Section 16(a) of the Exchange Act.
The Company's officers, directors and principal
shareholders are required to file with the Security and
Exchange Commission reports of their acquisitions and
dispositions of equity securities of the Company. The Company
believes that for the fiscal year ended December 31, 1997,
director R. Ken Coit, Board of Directors advisor David L.
Gemmer, and officers Steven Crosta and Barry Bergman did
not file their annual Form 5 on a timely basis due to an
administrative error caused by the Company. The Forms 5
were promptly filed once the error was discovered. The
Company's officer's, directors and principal shareholders filed
all other required reports on a timely basis.
4
<PAGE> 7
EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following is a summary of all compensation paid for
services rendered to R.H. Phillips during 1995, 1996 and 1997
by John and Karl Giguiere, the Company's current Co-Chief
Executive Officers (the "Named Executive Officers"). Other
than the Named Executive Officers, no employee or officer
received a salary and bonus in excess of $100,000 in 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
------------------------------------------------
Other
Annual Securities Annual Securities
Compen- Underling
Name and Principal Position Year Salaries ($) Bonus($) sation ($) Options(#)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John Giguiere, Co-President 1997 150,000 48,768 20,000(1) 0
Co-Chief Executive Officer
1996 80,625 26,662 20,000(1) 0
1995 80,625 662 20,000(1) 54,480
Karl Giguiere, Co-President, 1997 150,000 48,768 0 0
Co-Chief Executive Officer
1996 80,625 26,662 0 0
1995 80,625 662 0 81,720
</TABLE>
(1) The amounts listed under "Other Compensation" consist of
a $500 per month automobile allowance for John Giguiere
and the fair rental value of the farm house located at the
R.H. Phillips winery where John and Lane Giguiere reside
on a rent-free basis. The Company estimates that the fair
rental value of the housing is approximately $14,000 per
year.
Employment Agreements
In March 1998, the Company entered into employment
agreements with John Giguiere and Karl Giguiere. The
agreements provide that John and Karl Giguiere (the
"Executives" or individually, the "Executive") will each receive
annual compensation of $150,000, subject to annual
adjustment based on the Consumer Price Index, plus a
payment of $69,375 attributable to services rendered in 1997.
The agreements expire on December 31, 1999.
In addition, Nonstatutory Stock Options for 75,000 shares
of Common Stock were granted to each Executive. The options
were granted at a premium to market, with 50,000 shares
immediately exercisable and an additional 25,000 shares
exercisable in January 1999. The options expire in March
2008.
The employment agreements provide that the Company
may terminate the Executive's employment at any time upon
granting notice to the Executive, or by the Executive for Good
Reason (as defined) under the terms of the agreements. If
employment is terminated by the Company other than for
Cause (as defined), or if the Executive terminates his
employment for Good Reason, the Company shall continue to
pay the Executive's salary and health insurance benefits for a
period of two years following the effective date of termination,
and
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<PAGE> 8
the Executive will continue to be allowed to exercise the
stock options until the scheduled expiration date.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year End Option Values
The following table provides information with respect to
the Named Executive Officers concerning unexercised options
held as of December 31, 1997.
Number of Securities Value of
Underlying Unexercised in-the
Unexercised Options Money Options at
at Fiscal Year End Fiscal Year End(1)
------------------ ------------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized Unexercisable Unexercisable
- -----------------------------------------------------------------------------
John Giguiere -- -- 27,240 $0.00(2)
27,240 $0.00(2)
Karl Giguiere -- -- 40,860 $0.00(2)
40,860 $0.00(2)
(1) Based upon the closing price of the Common Stock on
December 31, 1997, as reported by the Nasdaq National
Market ($3.125 per share).
(2) The closing price of the Common Stock on December 31,
1997, was below the exercise price per share.
SECURITIES OWNERSHIP OF MANAGEMENT AND
CERTAIN
BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of
Common Stock of the Company as of March 3, 1998, by each
director, by each executive officer shown in the Summary
Compensation Table (see "Executive Compensation"), by all
directors and officers as a group and by each person known by
the Company to be a beneficial owner of more than 5% of the
outstanding voting securities of the Company.
Shares Approximate
Name and Address of Beneficially Percent
Beneficial Owner (1) Position Owned Owned
- -----------------------------------------------------------------------------
John E. Giguiere (2)(3) Co-President, Co-Chief 1,702,374 26.0
26836 County Road 12A Executive Officer, Chairman of
Esparto, CA 95627 the Board, Director
Karl E. Giguiere (2)(4) Co-President, Co-Chief 1,670,736 25.6
26836 County Road 12A Executive Officer, Vice-
Esparto, CA 95627 Chairman of the Board,
Director
Lane C. Giguiere (2)(5) Vice-President, Director 1,702,374 26.0
26836 County Road 12A
Esparto, CA 95627
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Shares Approximate
Name and Address of Beneficially Percent
Beneficial Owner (1) Position Owned Owned
- -----------------------------------------------------------------------------
R. Ken Coit (6) Director 308,413 4.8
1655 North Main Street
Suite 270
Walnut Creek, CA 94596
Victor L Motto Director 8,667 *
899 Adams Street
St. Helena, CA 94574
All Executive Officers and Directors (7) 2,161,346 32.3
John Hancock Mutual Life 1,466,757 19.8
Insurance Company (8)
200 Clarendon Street
Boston, MA 02117
RHP Vineyards, Inc. 865,773 13.5
26836 County Road 12A
Esparto, CA 95627 (9)
The R.H. Phillips Vineyard, Inc. 714,103 11.1
26836 County Road 12A
Esparto, CA 95627 (9)
*less than 1%
(1) This table is based upon information supplied by officers,
directors and principal shareholders and Schedules 13D
and 13G filed with the Securities and Exchange
Commission (the "Commission"). Unless otherwise
indicated in the footnotes to this table and subject to
community property laws where applicable, the Company
believes that each of the shareholders named in this table
has sole voting and investment power with respect to the
shares indicated as beneficially owned. Percentages are
based on 6,433,182 shares of Common Stock outstanding
on March 3, 1998, adjusted as required by the rules of the
Commission.
(2) Includes 865,773 shares of Common Stock owned by RHP
Vineyards and 714,103 shares of Common Stock owned by
R.H. Phillips Vineyard. John and Karl Giguiere own a
majority of the outstanding stock of RHP Vineyards, Inc.,
constitute two of the three members of the Board of
Directors, and are the Secretary and President,
respectively, of that corporation. John and Karl Giguiere
also own a majority of the outstanding shares of R.H.
Phillips Vineyard, constitute two of the three members of
the Board of Directors and serve as the President and
Secretary, respectively, of that corporation. Because they
share majority ownership of the stock of those corporations
and constitute a majority of those corporations' directors,
John and Karl Giguiere may be deemed beneficial owners
of the shares held by those two corporations.
(3) Also includes 16,552 shares held as joint tenants with Lane
Giguiere, a warrant to purchase 8,276 shares which Mr.
Giguiere holds as joint tenants with Lane Giguiere, 20,430
shares subject to that portion of a stock option held by Lane
Giguiere which is exercisable within 60 days of March 3,
1998, and 77,240 shares subject to that portion of a stock
option held by Mr. Giguiere which is exercisable within 60
days of March 3, 1998.
(4) Also includes 90,860 shares subject to that portion of a
stock option which is exercisable within 60 days of March 3, 1998.
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<PAGE> 10
(5) Also includes 16,552 shares held as joint tenants with John
Giguiere, a warrant to purchase 8,276 shares which Lane
Giguiere holds as joint tenants with John Giguiere, 77,240
shares subject to that portion of a stock option held by John
Giguiere exercisable within 60 days of March 3, 1998, and
20,430 shares subject to that portion of a stock option held
by Ms. Giguiere exercisable within 60 days of the date of
March 3, 1998.
(6) Mr. Coit holds 254,058 shares as a joint tenant with Donna
Coit, his wife, and 47,688 shares are held individually by Mr.
Coit. Also includes 6,667 shares subject to that portion of a
stock option exercisable within 60 days of March 3, 1998.
(7) Includes shares purchasable upon exercise of stock options
within 60 days of March 3, 1998.
(8) Includes 1,381,321 shares of Common Stock purchasable
at $3.90 per share under the terms of stock purchase
warrants. The warrants are presently exercisable and expire
on March 27, 2006.
(9) John and Karl Giguiere own a majority of the outstanding
shares of RHP Vineyards, Inc. and R.H. Phillips Vineyard,
Inc. and constitute a majority of those corporations' boards
of directors. See footnote 2 above.
PROPOSAL NUMBER 2
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat
Marwick LLP ("KPMG Peat Marwick") as the Company's
independent auditors for the fiscal year ending December 31,
1998. KPMG Peat Marwick has audited the Company's annual
financial statements since the fiscal year ended December 31,
1995.
It is not anticipated that representatives of KPMG
Peat Marwick will be present at the Annual Meeting. If
representatives are present, they will be provided an
opportunity to make a statement should they wish to do so and
to respond to appropriate questions.
The Board of Directors recommends a vote "FOR"
approval of KPMG Peat Marwick as the Company's
independent auditors for the fiscal year ending December 31,
1998. Confirmation will require the affirmative vote by holders
of a majority of shares present or represented by proxy and
entitled to vote on the matter. In the event that confirmation
fails to receive the required majority vote, the Board of
Directors will reconsider its selection.
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<PAGE> 11
SUBMISSION OF SHAREHOLDER PROPOSALS FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
The 1999 Annual Meeting of Shareholders has been
scheduled to take place on May 20, 1999. Shareholder
proposals for presentation at that meeting must be received by
the Company by no later than January 19, 1999.
OTHER BUSINESS
It is not intended that any business other than that set
forth in the Notice of Annual Meeting and more specifically
described in this Proxy Statement will be brought before the
Annual Meeting. If any other business should properly come
before the Annual Meeting, it is the intention of the persons
named in the enclosed form of proxy to vote in accordance with
their best judgment on that business or any matters dealing
with the conduct of the Annual Meeting pursuant to the
discretionary authority granted in the proxy.
By Order of the
Board of Directors
Lane C.
Giguiere,
Secretary
April 15, 1998
Upon written request of any person whose proxy is being
solicited hereby, the Company will provide without charge a
copy of the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1997, which was filed with the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, including the financial statements and
schedule thereto, but without exhibits. All such requests may
be directed to: Michael J. Motroni, Chief Financial Officer, R.H.
Phillips, Inc., 26836 County Road 12A, Esparto, California
95627.
9
