<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
JOHN Q. HAMMONS HOTELS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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>
JOHN Q. HAMMONS HOTELS, INC.
300 John Q. Hammons Parkway
Springfield, Missouri 65806
(417) 864-4300
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 4, 1999
----------
To the Shareholders of
John Q. Hammons Hotels, Inc.
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the
"Annual Meeting") of John Q. Hammons Hotels, Inc. (the "Company") will be held
on Tuesday, May 4, 1999, at 9:00 a.m., local time, at University Plaza
Convention Center, 730 E. St. Louis Street, Springfield, Missouri for the
following purposes:
1. Election of Directors. To elect three directors, each for a three-
year term (Proposal One);
2. Ratification of Appointment of Auditors. To ratify the appointment by
the Board of Directors of the firm of Arthur Andersen LLP as independent
auditors of the Company for the fiscal year ending December 31, 1999 (Proposal
Two); and
3. Other Business. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
March 19, 1999 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. Only shareholders of
record at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting or any adjournments or postponements thereof.
Sincerely,
John Q. Hammons
Chairman of the Board
Springfield, Missouri
March 31, 1999
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
JOHN Q. HAMMONS HOTELS, INC.
300 John Q. Hammons Parkway
Springfield, Missouri 65806
(417) 864-4300
PROXY STATEMENT
for
ANNUAL MEETING OF JOHN Q. HAMMONS HOTELS, INC. SHAREHOLDERS
TO BE HELD ON MAY 4, 1999
INTRODUCTION
As used herein, the term "Company" means (i) John Q. Hammons Hotels,
Inc., a Delaware corporation, (ii) John Q. Hammons Hotels, L.P., a Delaware
limited partnership of which John Q. Hammons Hotels, Inc. is the sole general
partner, and (iii) Hammons, Inc., a Missouri corporation, and predecessor
general partner, collectively, or, as the context may require, John Q. Hammons
Hotels, Inc. only. As used herein, the term "Partnership" means John Q.
Hammons Hotels, L.P., a Delaware limited partnership.
General
This Proxy Statement (the "Proxy Statement") is being furnished to the
shareholders of the Company as part of the solicitation of proxies by its
board of directors (the "Board of Directors" or the "Board") from holders of
the outstanding shares of the Company's class A common stock, par value $.01
per share (the "Class A Common Stock"), and class B common stock, par value
$.01 per share (the "Class B Common Stock", and, together with the Class A
Common Stock, the "Common Stock") for use at the Annual Meeting of
Shareholders of the Company to be held at University Plaza Convention Center,
730 E. St. Louis Street, Springfield, Missouri at 9:00 a.m. local time on May
4, 1999 and at any adjournments or postponements thereof (the "Annual
Meeting"). At the Annual Meeting, shareholders will be asked to elect three
(3) members of the Board of Directors (Proposal One), to ratify the
appointment by the Board of Directors of the firm of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending December 31,
1999 (Proposal Two) and to transact such other business as may properly come
before the meeting or any adjournments thereof. This Proxy Statement, together
with the enclosed proxy card, is first being mailed to shareholders of the
Company on or about March 31, 1999.
Solicitation, Voting and Revocability of Proxies
The Board of Directors has fixed the close of business on March 19, 1999
as the record date for the determination of the Company's shareholders
entitled to notice of and to vote at the Annual Meeting. Accordingly, only
holders of record of shares of Common Stock at the close of business on such
date will be entitled to vote at the Annual Meeting, with each share of Class
A Common Stock entitling its owner to one vote and each share of Class B
Common Stock entitling its owner to 50 votes on all matters properly presented
at the Annual Meeting. On the record date, there were approximately 268
holders of record of the 6,042,000 shares of Class A Common Stock then
outstanding. Based on the number of annual reports requested by brokers, the
Company estimates that it has approximately 2,000 beneficial owners of its
Class A Common Stock. There was one holder of record of the 294,100 shares of
Class B Common Stock then outstanding. The presence, in person or by proxy, of
holders of at least a majority of the total number of outstanding shares of
Common Stock entitled to vote at the Annual Meeting is necessary to constitute
a quorum at the Annual Meeting for the election of directors and other
matters. Shareholders' votes will be tabulated by the persons appointed by the
Board of
<PAGE>
Directors to act as inspectors of election for the Annual Meeting. Abstentions
and broker non-votes will be treated as shares that are present, in person or
by proxy, and entitled to vote for purposes of determining a quorum at the
Annual Meeting, but will not be counted as votes cast on or against any matter
presented at the Annual Meeting.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
Executed but unmarked proxies will be voted FOR the election of the three (3)
nominees for election to the Board of Directors and FOR the ratification of
the appointment of Arthur Andersen LLP as the Company's independent auditors
for the fiscal year ending December 31, 1999. The Board of Directors does not
know of any matters other than those described in the Notice of Annual Meeting
that are to come before the Annual Meeting. If any other matters are properly
brought before the Annual Meeting, the persons named in the proxy will vote
the shares represented by such proxy upon such matters as determined by a
majority of the Board of Directors.
The presence of a shareholder at the Annual Meeting will not
automatically revoke such shareholder's proxy. A shareholder may, however,
revoke a proxy at any time prior to its exercise by filing a written notice of
revocation with, or by delivering a duly executed proxy bearing a later date,
to Debra Mallonee Shantz, General Counsel, John Q. Hammons Hotels, Inc., 300
John Q. Hammons Parkway, Suite 900, Springfield, Missouri 65806, or by
appearing at the Annual Meeting and voting in person.
The cost of soliciting proxies will be borne by the Company. In addition
to use of the mails, proxies may be solicited personally or by telephone or
telegraph by directors, officers and employees of the Company. The Company
also will request persons, firms and companies holding shares in their names
or in the name of their nominees, which are beneficially owned by others, to
send proxy materials to and obtain proxies from such beneficial owners. The
Company will reimburse such persons for their reasonable expenses incurred in
that connection.
A copy of the Annual Report to Stockholders for the fiscal year ended
January 1, 1999 accompanies this Proxy Statement. The Company is required to
file an Annual Report for its fiscal year ended January 1, 1999 on Form 10-K
with the Securities and Exchange Commission (the "SEC"). Shareholders may
obtain, free of charge, a copy of the Form 10-K (without exhibits) by writing
to Investor Relations, John Q. Hammons Hotels, Inc., 300 John Q. Hammons
Parkway, Suite 900, Springfield, Missouri 65806.
A list of shareholders of record entitled to vote at the Annual Meeting
will be available for inspection by any shareholder for any purpose germane to
the meeting during ordinary business hours for a period of 10 days prior to
the meeting at the Company's office at 300 John Q. Hammons Parkway,
Springfield, Missouri 65806.
ELECTION OF DIRECTORS
(Proposal One)
At the Annual Meeting, three directors will be elected, each for a
three-year term. Unless otherwise specified on the proxy, it is the intention
of the persons named in the proxy to vote the shares represented by each
properly executed proxy for the election as directors of the persons named
below as nominees. The Board of Directors believes that the nominees will
stand for election and will serve if elected as directors. However, if any of
the persons nominated by the Board of Directors fails to stand for election or
is unable to accept election, the proxies will be voted for the election of
such other person as the Board of Directors may recommend.
Under the Company's Bylaws, the Board of Directors currently is
comprised of nine persons divided into three classes. The term of office of
only one class of directors expires in each year, and their successors are
2
<PAGE>
elected for terms of three years and until their successors are elected and
qualified. There is no cumulative voting for election of directors. The three
nominees receiving the greatest number of votes cast for the election of
directors at the Annual Meeting will become directors at the conclusion of the
tabulation of votes.
Information as to Nominees and Continuing Directors
The following table sets forth the names of the Board of Directors'
nominees for election as a director and those directors who will continue to
serve after the Annual Meeting. Also set forth is certain other information
with respect to each person's age, principal occupation or employment during
the past five years, the periods during which they have served as a director
of the Company and positions currently held with the Company.
<TABLE>
<CAPTION>
Director Expiration
Age Since of Term Position(s) Held with Company
--- -------- ---------- ----------------------------------------------
<C> <C> <S> <C> <C>
Nominees for 3-year term
Jacqueline A. Dowdy..... 55 1989 2002 Director and Secretary
William J. Hart......... 58 1993 2002 Director
David C. Sullivan....... 59 2002
Continuing Directors:
Daniel L. Earley........ 56 1994 2000 Director
John Q. Hammons......... 80 1989 2000 Director, Chairman and Chief Executive Officer
James F. Moore.......... 56 1995 2000 Director
John E. Lopez-Ona....... 41 1996 2001 Director
Kenneth J. Weber........ 53 1998 2001 Director, Executive Vice President and Chief
Financial Officer
</TABLE>
Jacqueline A. Dowdy has been the Secretary and director of the Company
since 1989. She has been active in Mr. Hammons' hotel operations since 1981.
She is an officer of several affiliates of the Company.
Daniel L. Earley has been a director of the Company since February 1994.
Since 1985, Mr. Earley has been President, Chief Executive Officer and a
director of Clermont Savings Bank, FSB, a community bank located in Milford,
Ohio, which is owned by Mr. Hammons.
John Q. Hammons is the Chairman, Chief Executive Officer, a director and
the founder of the Company. Mr. Hammons has been actively engaged in the
acquisition, development and management of hotel properties since 1959. From
1959 through 1969, Mr. Hammons and a business partner developed 34 Holiday Inn
franchises, 23 of which were sold in 1969 to Holiday Inns, Inc. Since 1969,
Mr. Hammons has developed 81 hotels on a nationwide basis, primarily under the
Holiday Inn and Embassy Suites tradenames. Mr. Hammons is the controlling
shareholder of the Company. See "Security Ownership of Management."
William J. Hart has been a director of the Company since December 1993.
He is a partner in the law firm of Husch & Eppenberger, LLC, formerly
Farrington & Curtis, P.C., a position he has held since 1970. Mr. Hart's firm
performs legal services on a regular basis for the Company and personally for
Mr. Hammons. Mr. Hart has also been a director since 1981 of Johnson
Industries, Inc., a commercial textiles company listed on the New York Stock
Exchange.
John E. Lopez-Ona became a director of the Company in May 1996. He was a
managing director of Kidder Peabody & Company, Inc., an investment banking
firm, from March 1990 through March 1995. Since June 1995, Mr. Lopez-Ona has
been the President of Anvil Capital, Inc., a firm owned by him which
specializes in principal investment.
James F. Moore became a director of the Company in May 1995. Since 1987,
Mr. Moore has been Chairman, Chief Executive Officer and a Director of
Champion Products, Incorporated, a privately owned
3
<PAGE>
manufacturing company serving the telecommunications industry located in
Strafford, Missouri. Prior to 1987, Mr. Moore had served as President of the
Manufacturing Division of Service Corporation International, a company listed
on the New York Stock Exchange.
David C. Sullivan is a nominee for election as a director of the
Company. Mr. Sullivan has been Chairman, Chief Executive Officer and a
Director of ResortQuest International, a company listed on the New York Stock
Exchange that provides vacation rental and property management services, since
May 1998. From April 1995 to December 1997, Mr. Sullivan was Executive Vice
President and Chief Operating Officer of Promus Hotel Corporation, a publicly
traded hotel franchiser, manager and owner of hotels whose brands include
Hampton Inn, Homewood Suites and Embassy Suites. From 1993 to 1995, Mr.
Sullivan was the Executive Vice President and Chief Operation Officer of the
Hotel Division of The Promus Companies Incorporated ("PCI"). He was the Senior
Vice President of Development and Operations of the Hampton Inn/Homewood
Suites Division of PCI from 1991 to 1993. From 1990 to 1991, Mr. Sullivan was
the Vice President of Development of the Hampton Inn Hotel Division of PCI.
Kenneth J. Weber has been the Chief Financial Officer of the Company
since April 1998 and became a director of the Company in May 1998. Prior to
joining the Company, Mr. Weber was the Executive Vice President and Chief
Financial Officer of Chartwell Leisure, a New York based hotel company. From
1992 to 1996, Mr. Weber was the Senior Vice President and Chief Financial
Officer of Omni Hotels, based in Hampton, New Hampshire. From 1986 to 1992,
Mr. Weber worked with Red Lion Hotels, based in Vancouver, Washington, holding
the positions of Senior Vice President, Chief Accounting Officer and Corporate
Controller. Mr. Weber began his career in the hotel industry with the Marriott
Corporation, holding positions in several of Marriott's divisions, including
President and Chief Executive Officer of Farrell's Ice Cream Parlour
Restaurants from 1983 to 1986.
The Board of Directors unanimously recommends that shareholders vote FOR
the election of its nominees as directors.
Corporate Governance and Other Matters
Selection of Nominees and Nominations by Shareholders. The Board of
Directors of the Company acts as a nominating committee for selecting nominees
for election as directors. The Company's Bylaws also permit shareholders
eligible to vote at the Annual Meeting to make nominations for directors if
such nominations are made pursuant to timely notice in writing to the
Secretary of the Company. To be timely such notice must be delivered to, or
mailed to and received at, the principal executive offices of the Company not
less than 120 days nor more than 180 days prior to the date of the meeting,
provided that at least 130 days' notice or prior public disclosure of the date
of the Annual Meeting is given or made to shareholders. If less than 130 days'
notice or prior public disclosure of the date of the meeting is given or made
to shareholders, notice by the shareholder must be received by the Company not
later than the close of business on the 10th day following the day on which
such notice of the date of the Annual Meeting was mailed or such public
disclosure was made. A shareholder's notice of nomination must also set forth
certain information specified in Section 3.5 of the Company's Bylaws
concerning each person the shareholder proposes to nominate for election and
the nominating shareholder. The Company has not received any nominations for
directors from shareholders.
Board of Directors Committees. The Board of Directors appointed a
standing Audit Committee in February 1995. In 1998 the Audit Committee was
composed of Messrs. Earley and Moore. The members of the Audit Committee
currently are Messrs. Moore and Lopez-Ona. During the fiscal year ended
January 1, 1999, they met four times. The Audit Committee reviews the scope
and results of the independent annual audit. The Audit Committee also reviews
the scope and results of audits performed by the Company's internal auditor.
The Compensation Committee of the Board of Directors reviews employee
compensation and makes recommendations to the Board regarding changes in
compensation and also administers the Company's stock option plan and makes
grants of options thereunder. During the fiscal year ended January 1, 1999,
the
4
<PAGE>
Compensation Committee held two meetings. In 1998 the Compensation Committee
was composed of Messrs. Earley, Moore and Robert Trent Jones, Jr. In September
1998 Mr. Jones resigned as a director and committee member. The members of the
Compensation Committee currently are Messrs. Earley, Moore, and Lopez-Ona.
The Board of Directors of the Company eliminated the Finance Committee
in May, 1998. That Committee was established in February, 1996. The members of
the Finance Committee were Messrs. Earley, Hart and Lopez-Ona. The Finance
Committee did not meet during the fiscal year ended January 1, 1999.
Board Meetings. During the fiscal year ended January 1, 1999, the
Company's Board of Directors held six meetings.
Meeting Attendance. During the fiscal year ended January 1, 1999, all
current directors attended at least 75% of all meetings of the Board of
Directors and of the committees of the Board on which they served, except
Robert Trent Jones, Jr.
Compensation of Directors. Non-employee directors of the Company
received $1,000 for each regular Board meeting attended during the fiscal year
ended January 1, 1999. No compensation was paid to non-employee directors for
attending meetings of committees of the Board. Employee directors are not
compensated for their services as directors or committee members.
At a meeting held on February 23, 1999 the Board of Directors adopted a
new compensation package for its non-employee directors. The package provides
each non-employee director with the following payments for service on the
Board: (1) $1,000 for each regular Board meeting attended and (2) $500 for
each regular committee meeting attended ($750 per meeting for the committee
chair). In addition, the package provides each non-employee director with the
following annual payments for service on the Board, payable on the day
following the election of directors at the annual meeting: (1) a cash payment
of $10,000, (2) that number of shares of the Company's Class A Common Stock
with a fair market value equal to $10,000 on the date of payment (the
"Director Stock"), and (3) an option to purchase 10,000 shares of the
Company's Class A Common Stock (the "Director Options"). The Director Stock
and Director Options will be issued pursuant to the 1999 Non-Employee Director
Stock and Stock Option Plan.
5
<PAGE>
EXECUTIVE COMPENSATION
Cash Compensation
The following table sets forth the salary compensation, cash bonus and
certain other forms of compensation paid by the Company and its subsidiaries
for services rendered in all capacities during the 1998, 1997 and 1996 fiscal
years to the Chief Executive Officer of the Company and the four most highly
compensated executive officers of the Company other than the Chief Executive
Officer serving at the end of the 1998 fiscal year (the "Named Executive
Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual
Compensation
Name and ------------------
Principal Fiscal Salary All Other Long Term Compensation Awards
Positions Year ($) Bonus ($) Compensation ($) Securities Underlying Options (#)
--------- ------ ------ --------- ---------------- ---------------------------------
<S> <C> <C> <C> <C> <C>
John Q.
Hammons 1998 $200,000 $50,000 $ -- 200,000 (b)
Chairman of
the Board and 1997 150,000 -- -- --
Chief
Executive
Officer 1996 100,000 -- -- --
Kenneth J.
Weber (a) 1998 169,840 57,500 -- 100,000 (b)
Executive Vice
President and 1997 -- -- -- --
Chief
Financial
Officer 1996 -- -- -- --
Debra M.
Shantz 1998 135,000 47,500 1,544(c) 70,000 (b)
Corporate
Counsel 1997 97,500 40,000 1,139(c) --
1996 93,000 30,000 -- --
Steven E.
Minton 1998 130,000 45,000 1,563(c) 40,000 (b)
Senior Vice
President, 1997 118,000 40,000 1,275(c) --
Architecture 1996 106,000 25,000 1,490(c) --
Pat A. Shivers 1998 124,000 40,000 1,553(c) 35,000 (d)
Senior Vice
President, 1997 120,000 37,500 1,296(c) --
Administration
and Control 1996 112,125 30,000 2,072(c) --
</TABLE>
- --------------
(a) Mr. Weber joined the Company in April of 1998.
(b) Comprised of options with an exercise price of $7.375 per share.
(c) Matching contributions to Company's 401(k) Plan.
(d) Comprised of 25,000 options granted to replace cancelled options and
10,000 additional options, all with an exercise price of $7.375 per
share. See "Option Grants".
6
<PAGE>
Option Grants
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term(1)
------------------------------------------------ ---------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options Granted Employees in Price Expiration
Name (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---- --------------- ------------ -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
John Q.
Hammons 200,000 19.4% $7.375 6/5/08 $2,288,000 $3,478,000
Kenneth
J.
Weber 100,000 9.7% 7.375 6/5/08 1,144,000 1,739,000
Debra M.
Shantz 70,000 6.8% 7.375 6/5/08 800,800 1,217,300
Steven
A.
Minton
(2) 40,000 3.9% 7.375 6/5/08 457,600 695,600
Pat A.
Shivers
(2) 35,000 3.4% 7.375 6/5/08 400,400 608,650
</TABLE>
(1) Potential realizable value assumes the stock price will appreciate at
the annual rates shown. These rates are compounded annually from the
date of grant until the end of the 10-year term of the option. The
potential realizable value is:
-the potential stock price at the end of the term based on the 5 percent
and 10 percent assumed rates of appreciation,
-less the exercise price,
-times the number of shares subject to the option.
These numbers are calculated based on the requirements of the Securities
and Exchange Commission and do not reflect the Company's estimate of
future stock price growth.
(2) On June 5, 1998, options originally granted in 1994 were cancelled and
new options were granted at an exercise price of $7.375, an amount equal
to the fair market value on that date. The options granted on that date
also included a new vesting schedule, with none of the new options being
exercisable until June 5, 1999, at which point 25% vest, with the rest
vesting 25% on each succeeding June 5th. See "Ten-Year Option/SAR
Repricing" and "Report of the Compensation Committee--Stock Options."
Option Holdings
<TABLE>
<CAPTION>
Fiscal Year-End Option
Values Number of
Unexercised Value of Unexercised
Options In-the-Money Options
------------------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John Q. Hammons -- 200,000 -- --
Kenneth J. Weber -- 100,000 -- --
Debra M. Shantz -- 70,000 -- --
Steven A. Minton -- 40,000 -- --
Pat A. Shivers -- 35,000 -- --
</TABLE>
The $7.375 exercise price per share of the stock options granted on June
5, 1998 (which comprise all of the options held by the Named Executive
Officers) is greater than the $3.6875 closing price of the Company's Class A
Common Stock as reported on the New York Stock Exchange on December 31, 1998,
thus no options are "In the Money." As discussed above, none of the options
are exercisable until June 5, 1999, with 25% becoming exercisable on that
date, with the rest vesting 25% on each succeeding June 5th.
7
<PAGE>
Ten-Year Option/SAR Repricings
<TABLE>
<CAPTION>
Length of
Number of Original
Securities Market Price Option Term
Underlying of Stock at Exercise Price Remaining at
Options/SARs Time of at Time of New Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended (#) Amendment ($) Amendment ($) Price ($) Amendment
- ---- ---- ------------ ------------- -------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Steven 6/5/98 40,000 $7.375 $16.50 $7.375 6 years,
E. 6 months
Minton
Pat A. 6/5/98 25,000 7.375 16.50 7.375 6 years,
Shivers 6 months
</TABLE>
401(k) Plan
Effective January 1, 1996, the Company adopted a contributory retirement
plan (the "401(k) Plan") for its employees age 21 and over with at least one
year of service to the Company. The 401(k) Plan is designed to provide tax-
deferred income to the Company's employees in accordance with the provisions
of Section 401(k) of the Internal Revenue Code of 1986. The 401(k) Plan
provides that the Company will make a matching contribution to each
participant's account equal to 50% of such participant's eligible
contributions up to a maximum of 3% of such participant's annual compensation.
Employment Agreements
The Company entered into an employment agreement with Kenneth J. Weber,
effective April 27, 1998. Under that agreement, Mr. Weber's annual base salary
is $250,000, plus a discretionary bonus of up to 35% of his base salary, with
such annual increases in compensation as may be determined by the Compensation
Committee of the Company. The agreement contains significant non-competition
provisions extending for a period of one year following termination of the
agreement. The initial term of the agreement is for three years.
The Company entered into an employment agreement with Debra M. Shantz,
dated as of May 1, 1995 as amended on October 31, 1997. Under the agreement,
Ms. Shantz's annual base salary is $135,000, plus a discretionary bonus, with
such annual increases in compensation as may be determined by the Compensation
Committee of the Company. The term of the agreement is for 3 years.
Notwithstanding anything to the contrary set forth in any of the
Company's filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate other
filings with the Securities and Exchange Commission ("SEC"), including this
Proxy Statement, in whole or in part, the following Report of the Compensation
Committee and Comparative Company Performance Graph shall not be incorporated
by reference into any such filings.
Report of the Compensation Committee
The Company's executive compensation program provides competitive levels
of compensation designed to integrate pay with the Company's annual and long
term performance goals. Underlying this objective are the following concepts:
supporting an individual pay-for-performance policy that differentiates
compensation levels based on corporate and individual performance; motivating
key senior officers to achieve strategic business objectives and rewarding
them for that achievement; providing compensation opportunities which are
competitive to those offered in the market place, thus allowing the Company to
compete for and retain talented executives who are critical to the Company's
long term success; and aligning the interest of executives with the long term
interest of the Company's shareholders.
In the interest of balancing all key shareholder interests, the
Compensation Committee believes that the compensation of the Chief Executive
Officer and Chief Financial Officer of the Company, along with the
8
<PAGE>
compensation of other officers, should be comprised of a combination of base
pay, short-term annual incentive bonus and long-term stock options. While
these elements are balanced in total in comparison to other comparable
organizations, the Compensation Committee believes that potential compensation
in the form of performance-related variable compensation should be emphasized.
Variable compensation will be both short-term and long-term based. The
resulting total package has been designed to reward officers for the creation
of long-term shareholder value in excess of other comparable organizations.
Base Salary. In determining the appropriate amount of fixed base pay for
officers, the Compensation Committee compared the officers' base salaries with
those paid to other executives in the hotel industry.
Incentive Bonus. The bonus component paid to officers is structured to
generally pay bonuses upon fulfillment of predetermined corporate and
individual goals. Full bonus payouts to officers will be made only if the
Company's performance goals are exceeded. There are also certain discretionary
bonuses paid when deemed appropriate by the Compensation Committee.
Stock Options. To encourage growth and shareholder value, stock options
are granted under the Company's option plan to officers and other key
employees who are in a position to make substantial contributions to the long-
term success of the Company. The Compensation Committee believes that the
grant of options focuses attention on managing the Company from the
perspective of an owner with an equity stake in the business. The Compensation
Committee granted certain options to officers and other key employees during
the fiscal year ended January 1, 1999. All options granted during and prior to
1998 were at exercise prices at or above the fair market value, as of the date
of grant. Since the value of an option bears a direct relationship to the
Company's stock price, it serves as an effective long-term incentive, which is
highly compatible with the interests of shareholders, and is therefore an
important element of the Company's compensation policy.
On June 5 1998, options originally granted in 1994 were cancelled and
new options were granted with an exercise price of $7.375 per share, an amount
equal to the fair market value on that date. Optionees whose old options were
cancelled and received new options had to accept a new vesting schedule, with
none of the new options being exercisable until June 5, 1999, at which point
25% vest with the rest vesting 25% on each succeeding June 5th. The basis for
the new options was the Company's desire to grant replacement options on the
same basis and at the same price as those granted to new employees. There were
significant management changes in 1998 and the Company desired to incent all
key employees to achieve shareholder value via stock appreciation and to have
all executives be on a level playing field in this regard.
Chief Executive Officer Compensation. Mr. Hammons' compensation as
Chairman of the Board and Chief Executive Officer for the fiscal year ended
January 1, 1999 was $200,000, and will be $250,000 for the fiscal year ending
December 31, 1999. This continues to be below comparable compensation for
other chief executive officers in the hotel industry.
1998 Compensation Committee*
James F. Moore, Director
Daniel L. Earley, Director
* Robert Trent Jones, a former Director of the Company,
was a member of the Committee at the time the above
actions were taken.
Comparative Company Performance
The following table sets forth comparative information regarding the
Company's cumulative shareholder return on its Class A Common Stock from
November 23, 1994 (the date of the Company's initial public offering) to
January 1, 1999. Total shareholder return is measured by dividing total
dividends (assuming dividend reinvestment), if any, plus share price change
for a period by the share price at the beginning of the measurement period.
The Company's cumulative shareholder return is based on an investment of $100
on
9
<PAGE>
November 23, 1994 and is compared to the cumulative total return on the S&P
500 Index and the Lodging Peer Group. The graph displayed below is presented
in accordance with SEC requirements. Shareholders are cautioned against
drawing any conclusions from the data contained therein, as past results are
not necessarily indicative of future performance. These graphs in no way
reflect the Company's forecast of future financial performance.
Comparison of Cumulative Total Return Among
John Q. Hammons Hotels, Inc., S&P 500 Index and Lodging Peer Group
<TABLE>
<CAPTION>
November
Company 1994 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John Q. Hammons 100.00 84.85 56.06 52.27 54.55 22.35
- ------------------------------------------------------------------------------------
Peer Group 100.00 93.01 123.93 145.52 171.31 140.20
- ------------------------------------------------------------------------------------
Broad Market 100.00 101.48 139.62 171.68 228.46 294.39
</TABLE>
The Lodging Peer Group prior to 1998 consists of three companies: La
Quinta Inns, Host Marriott and Prime Hospitality. La Quinta Inns merged into
Meditrust Companies in 1998. Therefore, for the fiscal year ending on December
31, 1998, La Quinta Inns has been replaced in the Index by Felcor Lodging
Trust, Inc.
ASSUMES $100 INVESTED ON NOVEMBER 24, 1994
ASSUMES DIVIDENDS REINVESTED
This Section is not "soliciting material," is not deemed filed with the
SEC and is not to be incorporated by reference in any filing of the Company
under the Securities Act of 1933, as amended, or the Exchange Act.
10
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee for the fiscal year ended January 1, 1999,
was comprised of three directors--Daniel L. Earley, James F. Moore and Robert
Trent Jones, Jr. Mr. Jones resigned his position as a Director of the Company
and from the Compensation Committee on September 4, 1998.
The Partnership is controlled by Mr. Hammons through his control of the
Company, which is the sole general partner of the Partnership. His equity
interest in the Partnership (based on his beneficial ownership of 110,100
shares of Class A Common Stock of the Company, all 294,100 shares of Class B
Common Stock of the Company and all 16,043,900 limited partnership units of
the Partnership (the "LP Units") is 73.4%. There are significant potential
conflicts of interests between Mr. Hammons as a limited partner of the
Partnership, and the holders of Class A Common Stock of the Company, which
conflicts may be resolved in favor of Mr. Hammons.
Holders of LP Units have the right to require the redemption of their LP
Units. This redemption right will be satisfied, at the sole option of the
Company, by the payment of the then cash equivalent thereof or by the issuance
of shares of Class A Common Stock on a one-for-one basis. Mr. Hammons
beneficially owns all 16,043,900 LP Units. If Mr. Hammons, as a holder of LP
Units, requires the Partnership to redeem LP Units, the non-employee directors
of the Company would decide, consistent with their fiduciary duties as to the
best interests of the Company, whether to redeem the LP Units for cash or for
shares of Class A Common Stock. Mr. Hammons would not vote or otherwise
participate in the decision of the non-employee directors. Mr. Hammons has
informed the Company that he has no current plan to require the Partnership to
redeem his LP Units.
During 1998, the Partnership provided management services to five hotels
not owned by the Company (the "Managed Hotels") pursuant to management
contracts (the "Management Contracts"). Four of the Managed Hotels are owned
by Mr. Hammons and one is owned 50% by Mr. Hammons; 25% by Jacqueline A.
Dowdy, the Secretary and a director of the Company; and 25% by Daniel L.
Earley, a director of the Company. Management fees of approximately 3% of
gross revenues were paid to the Company by the Managed Hotels in the aggregate
amount of $715,000 in the fiscal year ended January 1, 1999. Each of the
Management Contracts is for an initial term of 20 years, which automatically
extends for four periods of five years, unless otherwise canceled. In addition
to the management fees paid by the Managed Hotels to the Partnership in that
year, the Managed Hotels reimbursed the Company for a portion of the salaries
paid by the Company to its five regional vice presidents, whose duties include
management services related to the Managed Hotels, and for certain marketing
and other expenses allocated to the Managed Hotels. Such reimbursed services
and expenses aggregated $145,000 in the fiscal year ended January 1, 1999.
The Partnership has an option granted by Mr. Hammons or persons or
entities controlled by him to purchase the Managed Hotels. The options are
effective until February 2009. If an option is exercised, the purchase price
is based on a percentage of the fair market value of the Managed Hotel as
determined by an appraisal firm of national standing. One hotel owned by the
Company and two Managed Hotels are located in Springfield, Missouri. These
hotels are potentially competing with one another for customers. The Company,
however, believes that these hotels do not significantly compete with one
another due to their respective locations and attributes.
Mr. Hammons has a 45% ownership interest in Winegardner & Hammons, Inc.
("WHI"). All of the hotels owned by the Company (the "Owned Hotels") have
contracted with WHI to provide accounting and other administrative services.
The accounting and administrative charges expensed by the Owned Hotels were
approximately $1,388,000 in the fiscal year ended January 1, 1999. The fee may
increase if the number of hotels for which accounting and administrative
services are performed drops below 35 hotels. The accounting services contract
expires in June 1999.
The Company leases space in the John Q. Hammons Building for its
headquarters from a Missouri general partnership, of which Mr. Hammons is a
50% partner and the remaining 50% is collectively held by other employees,
including Jacqueline A. Dowdy, the Secretary and a director of the Company,
who is a 9.5% partner. Pursuant to four lease agreements, expiring December
31, 1998, the Company paid monthly rental payments of approximately $19,250 in
1998. In December 1998, the Company entered into four new lease agreements,
expiring December 31, 2001. The Company made aggregate annual lease payments
to the Missouri general partnership of approximately $231,000 in 1998.
11
<PAGE>
Mr. Hammons also owns trade centers adjacent to three of the Owned
Hotels (the "JQH Trade Centers"). The Company leases the convention space in
the JQH Trade Center located in Portland, Oregon from Mr. Hammons pursuant to
a long-term lease expiring in 2004, requiring annual payments of approximately
$300,000. With respect to the other two JQH Trade Centers, the Company makes
nominal annual lease payments to Mr. Hammons. The Company has assumed
responsibility for all operating expenses of the JQH Trade Centers.
The Company leases the real estate for the Company's Chateau on the Lake
Resort, opened in mid-1997, in Branson, Missouri, from Mr. Hammons. Annual rent
was $120,000 in 1998. Thereafter, rent will be an amount based on adjusted gross
revenues from room sales on the property. The lease term is 50 years, with an
option to renew for an additional 10 years. The Company also has an option to
purchase the land after March 1, 2118 at a proposed transfer price of the
greater of $3,000,000 or the current appraised value.
The Company also leases the real estate for the Company's Embassy Suites
hotel in Little Rock, Arkansas which opened in the fall of 1997, from Mr.
Hammons. Annual rent is $100,000 in 1998, and $120,000 per year for the next
three years. The lease term is 40 years. The Company has an option to purchase
the land at any time during the first 10 years of the lease term, for the
greater of $1,900,000 or the current appraised value.
The Company also leases the real estate for the Company's Renaissance
Suites Hotel in Charlotte, NC, which will open in November, 1999 from Tulsa
Hills Investments, Inc., an Ohio corporation, of which Mr. Hammons is a 99%
owner and is a Jacqueline A. Dowdy 1% owner. The lease term is 99 years.
Commencing October 15, 1997, annual rent is $80,000 in years one and two,
$120,000 in years three through five, and $124,800 in years six through ten
with cost of living adjustments for each year thereafter.
Mr. Hammons owns parcels of undeveloped land throughout the United
States. Although there are no current plans to do so, the Company may purchase
or lease one or more of these parcels in the future in order to develop
hotels. Since Mr. Hammons controls the Company, such transactions would not be
arms-length transactions but will be subject to restrictions contained in the
indentures relating to the Partnership's outstanding mortgage notes due in
2004 and 2005.
The Company receives no management fee or similar compensation in
connection with its management of the Partnership. The Company receives the
following remuneration from the Partnership; (i) distributions, if any, in
respect of its equity interest in the Partnership; and (ii) reimbursement for
all direct and indirect costs and expenses incurred by the Company for or on
behalf of the Partnership and all other expenses necessary or appropriate to
the conduct of the business of, and allocable to, the Partnership.
Certain Transactions
In the past, Mr. Hammons has engaged Anvil Capital an investment and
consulting firm owned by Mr. Lopez-Ona, a director of the Company, to provide
personal financial advisory services. Mr. Hammons and Anvil Capital also have
formed a limited liability company through which they have invested in
securities of one or more companies in industries unrelated to the Company's
business. Mr. Lopez-Ona has entered into a consulting agreement with a major
consulting firm to provide services to that firm in connection with their
hospitality practice. Under that contract, Mr. Lopez-Ona receives a percentage
of compensation from the Company to the firm in connection with services
provided to the Company by that firm, if any.
Mr. Hart is a non-employee director of the Company, and is a partner in
the law firm of Husch & Eppenberger, LLC, which performs legal services on a
regular basis for the Company and personally for Mr. Hammons. The Company paid
such firm approximately $303,500 in legal fees during the fiscal year ended
January 1, 1999.
For a description of other transactions regarding Mr. Hammons, Ms.
Dowdy, and Mr. Earley, and the Company, see "Compensation Committee Interlocks
and Insider Participation."
The Company is unaware of any other transactions to which the Company is
a party in which any director or executive officer of the Company has or will
have a direct or indirect material interest.
12
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 1, 1999 regarding
the beneficial ownership of Class A and Class B Common Stock of the Company by
each of the Company's executive officers and directors, and by the Company's
executive officers and directors as a group. The number of shares of Class A
Common Stock shown in the table gives effect to the conversion of all 294,100
shares of Class B Common Stock into an equal number of shares of Class A
Common Stock and also gives effect to the redemption of all 16,043,900 LP
Units of the Partnership for shares of Class A Common Stock on a one-for-one
basis. Except as indicated in the footnotes, all shares set forth in the table
are owned directly, and the indicated person has sole voting and investment
power with respect to all shares shown as beneficially owned by such person.
<TABLE>
<CAPTION>
Shares of Class A Common Stock Shares of Class B Common Stock
Name and Address of ------------------------------------- -----------------------------------
Beneficial Owner(a) Number of Shares Percentage Number of Shares Percentage
- ------------------- ------------------- ------------ ------------------ -------------
<S> <C> <C> <C> <C>
Executive Officers and
Directors:
John Q. Hammons......... 16,582,300(b) 74.1% 294,100 100%
Jacqueline A. Dowdy..... 21,335(c) *
Daniel L. Earley........ 2,000 *
William J. Hart......... 500 *
John E. Lopez-Ona....... 6,000 *
James F. Moore.......... 700 *
Stephen E. Minton....... 1076(d) *
Pat A. Shivers.......... -- *
John D. Fulton.......... -- *
Lawrence A. Welch....... 864(e) *
Debra M. Shantz......... 500 *
Kenneth J. Weber........ --
All executive officers 16,615,275 74.2 294,100 100%
and directors, as a (b)(c)(d)(e)
group (12)
</TABLE>
- --------
*Less than 1%
(a) The address of each of the executive officers and directors of the
Company is 300 John Q. Hammons Parkway, Suite 900, Springfield, Missouri
65806.
(b) Includes 244,300 outstanding shares of Class A Common Stock. Also
includes 294,100 shares of Class B Common Stock convertible into Class A
Common Stock on a share-for-share basis at any time and which will be
automatically converted into Class A Common Stock upon the occurrence of
certain events. Prior to conversion of the Class B Common Stock and
without giving effect to the redemption of the LP Units, the Class B
Common Stock (which has 50 votes per share) represents 70.88% of the
combined voting power of both classes of the Company's outstanding
Company Stock. Also includes 16,043,900 LP Units of the Partnership
redeemable, at the sole option of the Company, by payment of the then
cash equivalent of such LP Units or by the issuance of shares of Class A
Common Stock on a one-for-one basis. Remaining LP Units are owned for
Mr. Hammons' benefit through Hammons, Inc., of which the John Q. Hammons
Revocable Living Trust dated December 26, 1986, as amended, is the sole
shareholder.
(c) Includes 335 shares allocated to 401(k) Plan account as of the end of
1998.
(d) Includes 76 shares allocated to 401(k) Plan account as of the end of
1998.
(e) Includes 135 shares allocated to 401(k) Plan account as of the end of
1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information at December 31, 1998 with
respect to ownership of Class A Common Stock by each person believed by
management to be the beneficial owner of more than 5% of the
13
<PAGE>
outstanding Class A Common Stock. The information set forth below is based on
beneficial ownership information contained in the most recent Schedule 13D or
13G filed on behalf of such person with the SEC. The percentages shown are
based on the outstanding shares of Class A Common Stock after giving effect to
the conversion of all 294,100 shares of Class B Common Stock into an equal
number of shares of Class A Common Stock and to the redemption of all
16,043,900 LP Units for shares of Class A Common Stock.
<TABLE>
<CAPTION>
Percent of Class A
Name and Address of Amount and Nature of Common Stock
Beneficial Owner Beneficial Ownership Outstanding
- ------------------- -------------------- ------------------
<S> <C> <C>
The Equitable Companies Incorporated 493,500(a) 8.2%
1290 Avenue of the Americas
New York, NY 10104
James M. Clark, Jr. 498,300(b) 8.3%
52 Vanderbilt Ave.
New York, NY 10017
</TABLE>
- --------------
(a) Based on Amendment to Schedule 13G dated February 16, 1999. According to
the Amendment, Alliance Capital Management, L.P. has sole dispositive
power as to all such shares and sole voting power as to 436,000 of such
shares. Alliance Capital Management, L.P. is a subsidiary of The
Equitable Companies Incorporated. The filing was also made on behalf of
AXA, which beneficially owns a majority interest in The Equitable
Companies Incorporated and the following four companies which, as a
group, beneficially own a majority interest in AXA: AXA Assurances
I.A.R.D. Mutuelle; AXA Assurances Vie Mutuelle; AXA Conseil Vie
Assurance Mutuelle; and AXA Courtage Assurance Mutuelle.
(b) Based on Schedule 13D dated April 16, 1998. According to the Schedule
13D, Mr. Clark has sole voting and dispositve power as to 445,00 shares
and shared voting and dispositive power as to 53,300 shares. The filing
was also made on behalf of Susanna L. Porter. Ms. Porter has sole voting
and dispositive power as to 7,050 shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers to file with the SEC initial
reports of ownership of the Company's equity securities and to file subsequent
reports when there are changes in such ownership. Based on a review of reports
submitted to the Company, the Company believes that all Section 16(a) filing
requirements applicable to the Company's directors and officers during the
fiscal year ended January 1, 1999, were complied with on a timely basis.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal Two)
The Board of Directors has appointed the firm of Arthur Andersen LLP to
act as independent auditors for the Company for the fiscal year ending
December 31, 1999, subject to ratification of such appointment by the
Company's shareholders. Representatives of Arthur Andersen LLP will be present
at the Annual Meeting, will have the opportunity to make a statement if they
so desire, and will be available to respond to appropriate questions.
Arthur Andersen LLP was retained by the Company in 1993 to act as
independent auditors for the Company in connection with an audit for the 1990,
1991, 1992 and 1993 fiscal years. The firm was subsequently retained on an
annual basis in connection with an audit for each fiscal year since that time.
The affirmative vote of the majority of the votes cast is required to
ratify the appointment of the independent auditors.
14
<PAGE>
Unless otherwise indicated, properly executed proxies will be voted in
favor of ratifying the appointment of Arthur Andersen LLP to audit the books
and accounts of the Company for the fiscal year ending December 31, 1999. No
determination has been made as to what action the Board of Directors would
take if the shareholders do not ratify the appointment.
The Board of Directors unanimously recommends that shareholders vote FOR
the ratification of the selection of the Company's independent auditors.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the Company's proxy
statement and form of proxy relating to the Company's 2000 annual meeting of
shareholders must be received by the Company by December 2, 1999, pursuant to
the proxy soliciting regulations of the SEC. In addition, the Company's Bylaws
require that notice of shareholder proposals and nominations for director be
delivered to the Secretary of the Company not less than 120 days nor more than
180 days prior to the date of an annual meeting, unless notice or public
disclosure of the date of the meeting occurs less than 130 days prior to the
date of such meetings, in which event, shareholders may deliver such notice
not later than the 10th day following the day on which notice of the date of
the meeting was mailed or public disclosure thereof was made. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement or the form of proxy for such meeting any shareholder proposal which
does not meet the requirements of the SEC in effect at the time.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be presented for action by the
shareholders at the 1999 Annual Meeting. If, however, any other matters not
now known are properly brought before the meeting, the persons named in the
accompanying proxy will vote such proxy in accordance with the determination
of a majority of the Board of Directors.
15
<PAGE>
JOHN Q. HAMMONS HOTELS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of John Q. Hammons Hotels, Inc. (the "Company")
hereby appoints Paul Muellner and Debra M. Shantz, or either of them, as
proxies to cast all votes which the undersigned shareholder is entitled to cast
at the annual meeting of shareholders (the "Annual Meeting") to be held on
Tuesday, May 4, 1999 at 9:00 a.m., local time, at the University Plaza
Convention Center, 730 E. St. Louis Street, Springfield, Missouri, and at any
adjournments or postponements thereof, upon the following matters. The
undersigned shareholder hereby revokes any proxy or proxies heretofore given.
This proxy will be voted as directed by the undersigned shareholder. UNLESS
CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED IN PROPOSAL 1, AND FOR PROPOSAL 2, AND IN ACCORDANCE WITH THE
DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO OTHER MATTERS. The
undersigned shareholder may revoke this proxy at any time before it is voted by
delivering to the General Counsel of the Company either a written revocation of
the proxy or a duly executed proxy bearing a later date, or by appearing at the
Annual Meeting and voting in person. The undersigned shareholder hereby
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement.
1.Election of Directors.
For three-year terms: Jacqueline A. Dowdy, William J. Hart, and David C.
Sullivan.
[_]FOR all nominees [_]WITHHOLD AUTHORITY to
listed above vote for all nominees
(except as marked listed above
to the contrary
below).
- --------------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual nominee, print
that nominee's name in the space provided.)
(continued and to be signed and dated on reverse side)
2.Ratification of appointment of Arthur Andersen LLP as independent auditors.
[_]FOR[_]AGAINST[_]ABSTAIN
3.In their discretion, the proxies, or either of them, are authorized to vote
upon such other business as may properly come before the meeting, or any
adjournments or postponements thereof.
If you receive more than
one proxy card, please sign
and return ALL cards in the
accompanying envelope.
Date: ______________________
----------------------------
Signature of Shareholder or
Authorized Representative
Please date and sign
exactly as name appears
hereon. Each executor,
administrator, trustee,
guardian, attorney-in-fact
and other fiduciary should
sign and indicate his or
her full title. Only one
signature is required in
the case of Stock ownership
in the name of two or more
persons, but all should
sign if possible.
