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 Section 240.14a-11(c) or Section 240.14a-12
HCIA INCOPORATED
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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>
[HCIA LOGO HERE]
March 22, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
HCIA Inc. (the "Company"), which will be held at the offices of the Company,
300 East Lombard Street, Baltimore, Maryland, on Wednesday, May 5, 1999 at
10:00 a.m., Baltimore time. Holders of the Company's common stock as of March
8, 1999 are entitled to vote at the meeting.
The matters proposed for consideration at the meeting are the election of
two directors and the ratification of the appointment of KPMG LLP as the
Company's independent public accountants. The accompanying Notice of Meeting
and Proxy Statement discuss these matters in further detail. We urge you to
review this information carefully.
Your Board of Directors unanimously believes that the election of the
nominees as directors and the ratification of the appointment of the
independent accountants, are each in the best interests of the Company and its
stockholders and, accordingly, recommends a vote FOR all of the Items on the
enclosed form of proxy. After reviewing the enclosed materials, please complete
the proxy card and return it using the enclosed envelope. If you decide to
attend the meeting, you may vote in person even if you have previously sent in
a proxy card.
In addition to the formal business to be transacted, management will make
a presentation on developments during the past fiscal year and respond to
questions of interest to stockholders.
On behalf of the Board of Directors and all of the employees of the
Company, I wish to thank you for your continued support.
Sincerely yours,
/s/ GEORGE D. PILLARI
-------------------
George D. Pillari
Chairman & CEO
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<PAGE>
HCIA INC.
300 East Lombard Street
Baltimore, Maryland 21202
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 5, 1999
- --------------------------------------------------------------------------------
TO THE STOCKHOLDERS OF HCIA INC.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of HCIA Inc., a Maryland corporation (the "Company"), will be
held at 300 East Lombard Street, Baltimore, Maryland, on Wednesday, May 5, 1999
at 10:00 a.m., Baltimore time, for the following purposes:
1. To elect two directors in Class II for a three year term ending in
2002.
2. To ratify the selection of KPMG LLP as the Company's independent public
accountants.
3. To act upon any other matter which may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of business on
March 8, 1999, as the record date for determining stockholders of the Company
entitled to notice of and to vote at the Annual Meeting.
Your attention is directed to the attached Proxy Statement and the
enclosed Annual Report of the Company for the year ended December 31, 1998.
By Order of the Board of Directors,
/s/ CHARLES A. BERARDESCO
-----------------------
Charles A. Berardesco
Secretary
Baltimore, Maryland
March 22, 1999
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>
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<PAGE>
HCIA INC.
300 East Lombard Street
Baltimore, Maryland 21202
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is being furnished to stockholders of HCIA Inc., a
Maryland corporation (the "Company"), in connection with the solicitation by
the Board of Directors of the Company of proxies for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the offices of the
Company, 300 East Lombard Street, Baltimore, Maryland, on Wednesday, May 5,
1999 at 10:00 a.m., Baltimore time, and at any adjournments thereof.
SOLICITATION
The solicitation is being made primarily by the use of the mail, but
directors, officers and employees may also engage in the solicitation of
proxies by telephone. The cost of soliciting proxies will be borne by the
Company, and no compensation will be paid by the Company in connection with the
solicitation of proxies, except that the Company may reimburse brokers,
custodians, nominees and other recordholders for their reasonable out-of-pocket
expenses in forwarding proxy material to beneficial owners.
This Proxy Statement and the accompanying form of proxy are being sent to
stockholders on or about March 22, 1999.
REVOCATION OF PROXIES
A proxy may be revoked at any time prior to its exercise by the filing of
a written notice of revocation with the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. However, if you are a stockholder whose
shares are not registered in your own name, you will need additional
documentation from your record holder to vote personally at the Annual Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
The close of business on March 8, 1999 has been fixed by the Board of
Directors of the Company as the record date (the "Record Date") for determining
the stockholders of the Company entitled to notice of and to vote at the Annual
Meeting. As of the Record Date, the Company had outstanding 11,851,125 shares
of common stock, $.01 par value per share (the "Common Stock"). Each share of
Common Stock entitles the holder thereof to one vote on each matter to be voted
upon at the Annual Meeting. There is no cumulative voting for the election of
directors.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock entitled to vote is necessary to constitute a
quorum at the Annual Meeting. In the event there are not sufficient votes for a
quorum or to approve any proposal at the Annual Meeting, the Annual Meeting may
be adjourned in order to permit the further solicitation of proxies.
All outstanding shares of the Company's Common Stock represented by
properly executed and unrevoked proxies received in the accompanying form in
time for the Annual Meeting will be voted. A stockholder may, with respect to
the election of directors (i) vote for the election of the named director
nominees, (ii) withhold authority to vote for all such director nominees, or
(iii) vote for the election of all such director nominees other than any
nominee with respect to whom the stockholder withholds authority to vote by
striking a line through such nominee's name on the proxy. A stockholder may,
with respect to the ratification of the appointment of KPMG LLP as the
Company's independent public accountants (i) vote "FOR" the matter, (ii) vote
"AGAINST" the matter, or (iii) "ABSTAIN" from voting on the matter. Shares will
be voted as instructed in the accompanying proxy on each matter submitted to
stockholders. If no instructions are given, the shares will
1
<PAGE>
be voted FOR the election of the named director nominees and FOR the
ratification of the appointment of KPMG LLP as the Company's independent public
accountants.
A proxy submitted by a stockholder may indicate that all or a portion of
the shares represented by such proxy are not being voted by such stockholder
with respect to a particular matter. This could occur, for example, when a
broker is not permitted to vote Common Stock held in street name on certain
matters in the absence of instructions from the beneficial owner of the Common
Stock. The shares subject to any such proxy which are not being voted with
respect to a particular matter (the "non-voted shares") will be considered
shares not present and entitled to vote on such matter, although such shares
may be considered present and entitled to vote for other purposes and will
count for purposes of determining the presence of a quorum.
The affirmative vote of a plurality of the shares of Common Stock voted at
the Annual Meeting is required to elect directors. Accordingly, if a quorum is
present at the Annual Meeting, the two persons receiving the greatest number of
votes will be elected to serve as directors. Therefore, withholding authority
to vote for a director(s) and non-voted shares with respect to the election of
directors will not affect the outcome of the election of directors.
The ratification of the approval of KPMG LLP will require the approval of
a majority of the shares of Common Stock voted at the Annual Meeting. As a
result, abstentions in connection with these proposals will have the effect of
a vote against such proposals, while non-votes will not be considered to have
voted on the proposal.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof, subject to the requirements of Rule 14a-4(c) promulgated under the
Securities Exchange Act of 1934. Proxies solicited hereby will be returned to
the Company's transfer agent, and will be tabulated by inspectors of election
designated by the Board of Directors.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors is divided into
three classes, each class consisting, as nearly as possible, of one-third of
the total number of directors. Each year the directors in one class are elected
to serve for a term of three years. The Board of Directors is presently
composed of six members. Directors in Class II -- Messrs. Berman and Lassiter,
have a term of office scheduled to expire at the Annual Meeting. Each of
Messrs. Berman and Lassiter has been nominated for a three year term expiring
at the Annual Meeting of Stockholders in 2002 and until their respective
successors are elected and qualify. Mr. Lassiter was previously included in
Class III, but was transferred to Class II to replace a director who resigned
in 1998.
Directors in Class III -- Mr. Gregory and Dr. Schramm, have terms of
office expiring at the 2000 annual meeting and until their successors are
elected and qualify. Directors in Class I -- Messrs. Dulude and Pillari, have
terms of office expiring at the 2001 annual meeting and until their successors
are duly elected and qualify.
THE PERSONS NAMED IN THE ENCLOSED PROXY INTEND TO VOTE PROPERLY EXECUTED
AND RETURNED PROXIES FOR THE ELECTION OF ALL NOMINEES PROPOSED BY THE BOARD OF
DIRECTORS UNLESS AUTHORITY TO VOTE IS WITHHELD. In the event that any of the
nominees is unable or unwilling to serve, the persons named in the proxy will
vote for such substitute nominee or nominees as they, in their discretion,
shall determine. The Board of Directors has no reason to believe that any
nominee named herein will be unable or unwilling to serve.
Set forth below is information concerning the nominees for election and
those directors whose term continues beyond the date of the Annual Meeting.
NOMINEES FOR DIRECTOR FOR A THREE YEAR TERM EXPIRING AT THE 2002 ANNUAL
MEETING.
RICHARD A. BERMAN, age 54, has been a director of the Company since
October 1995. He has served as President of Manhattanville College in New York
since January 1995. Prior to that time, Mr. Berman held several positions in
educational institutions, government and the private sector, including serving
as President and Chief Executive Officer of Howe-Lewis International, an
executive search and management consulting firm, from November 1992 to January
1995.
2
<PAGE>
PHILLIP B. LASSITER, age 55, has been a director of the Company since
October 1992. He has served as Chairman and Chief Executive Officer of AMBAC
Inc. ("AMBAC") since April 1991, and as President since August 1992. From 1969
to July 1991, Mr. Lassiter served in various capacities with Citibank, N.A.,
including Deputy Section Head for North American investment, corporate banking
and institutional insurance activities. He is also a director of Diebold Inc.
DIRECTORS WHOSE TERM WILL EXPIRE AT THE 2000 ANNUAL MEETING.
W. GRANT GREGORY, age 58, has been a director of the Company since
December 1994. He has served as Chairman of Gregory & Hoenemeyer, Inc.,
merchant bankers, since 1988. Mr. Gregory retired as Chairman of the Board of
Touche Ross, Inc. in 1987. He is also a director of AMBAC and InaCom Corp.
CARL J. SCHRAMM, PH.D., age 52, has served as a director of the Company
since January 1995. He is presently serving as President of Greenspring
Advisors, Inc., which provides strategic, financial and other advice to
businesses. From January 1993 to May 1995, Dr. Schramm served as Executive Vice
President of Fortis, Inc., and from May 1987 to December 1992, served as
President of the Health Insurance Association of America. He was Director of
the Johns Hopkins Center for Hospital Finance and Management from January 1980
to May 1987. Dr. Schramm co-founded the Company in 1985, and served as an
officer and director of the Company until 1988.
DIRECTORS WHOSE TERM WILL EXPIRE AT THE 2001 ANNUAL MEETING.
GEORGE D. PILLARI, age 36, co-founded the Company in 1985 and has served
as its Chief Executive Officer since 1987, also serving as President from 1987
to April 1992 and from October 1992 to September 1998. He has served as
Chairman of the Board since April 1992.
RICHARD DULUDE, age 66, has been a director of the Company since December
1994. He retired as Vice Chairman of Corning Incorporated in April 1993, having
served in that capacity since November 1990, and as Group President of Corning
Incorporated from 1983 to November 1990. Mr. Dulude is also a director of
AMBAC, Raychem Corporation and Landec Corp.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has an Audit Committee and Compensation Committee,
each consisting of Messrs. Berman, Dulude, Gregory and Lassiter and Dr.
Schramm. The Board of Directors does not have a nominating committee, or a
committee performing similar functions.
The Audit Committee is primarily concerned with the effectiveness of the
audits of the Company by the Company's independent public accountants. Its
duties include recommending the selection of independent accountants, reviewing
the scope and results of their audits, and reviewing the organization and scope
of the Company's internal system of accounting and financial controls. The
Audit Committee met four times during 1998.
The Compensation Committee is responsible for the overall administration
of the Company's compensation policies and practices, including the
recommendation of compensation for executive officers of the Company and for
matters relating to compensation plans and arrangements. In addition, the
Compensation Committee approves awards under and administers the Company's 1994
Stock and Incentive Plan. The Compensation Committee met four times during
1998.
The Board of Directors met four times during 1998. No director attended
fewer than 75% of the total number of meetings of the Board and of the
Committees of which he was a member during 1998.
DIRECTOR COMPENSATION
DIRECTORS' FEES. The Company pays its directors who are not officers or
employees of the Company or its affiliates, an annual retainer of $12,000, fees
of $1,000 for each Board meeting attended and $500 for each committee meeting
attended, and an annual fee of $1,500 for service as a Board committee chair.
Under the Company's Deferred Compensation Plan for Outside Directors (the
"Deferred Compensation Plan"), non-employee directors may elect to defer all or
part of their director compensation (including both annual fees and meeting
fees) that is paid in cash. Deferrals will be credited to a bookkeeping account
maintained on the director's behalf as a cash credit, which periodically will
be credited with interest at the 90-day United States Treasury Bill rate. The
Deferred Compensation Plan is unfunded. Settlement of accounts will be made
only in cash.
DIRECTORS OPTION PLAN. Under the 1995 Non-Employee Directors Stock Option
Plan (the "Directors Option Plan"), each director who is not an officer or
employee of the Company or its affiliates (an "outside director") is granted an
option
3
<PAGE>
at each annual meeting of stockholders to purchase 5,000 shares of Common Stock
at an exercise price equal to the fair market value of the Common Stock on the
date of grant. This annual award vests as of the first annual meeting of
stockholders held following the date of the award, provided that the outside
director continues in service as a member of the Board until the relevant
vesting date.
PROPOSAL 2. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of KPMG LLP to serve as
independent public accountants for the year ending December 31, 1999, subject
to the ratification of such appointment by the stockholders. Representatives of
KPMG LLP are expected to be present at the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED
PROXY, IF PROPERLY EXECUTED AND RETURNED, WILL BE VOTED FOR THE RATIFICATION OF
THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 1999.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth as of February 26, 1999, certain
information with respect to the beneficial ownership of the Common Stock by:
(i) each of the Named Executive Officers (as defined below) of the Company;
(ii) each of the directors of the Company and nominees for directors; (iii) all
directors and executive officers of the Company as a group; and (iv) each
person known to the Company who beneficially owns 5% or more of the outstanding
shares of Common Stock. The Company believes that the beneficial owners of the
Common Stock listed below, based on information furnished by such owners, have
sole voting and investment power with respect to such shares, except as noted
below:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
---------------------
NAME NUMBER PERCENT
- ---------------------------------------------------------------- ------------ --------
<S> <C> <C>
George D. Pillari(2) ........................................... 422,466 3.5%
Richard A. Berman(3) ........................................... 19,500 *
Richard Dulude(3) .............................................. 20,500 *
W. Grant Gregory(3)(4) ......................................... 141,200 1.2%
Phillip B. Lassiter(3) ......................................... 50,500 *
Carl J. Schramm, Ph.D.(3)(5) ................................... 20,900 *
Donald S. Good, Jr.(6) ......................................... 11,509 *
Barry C. Offutt(6) ............................................. 50,702 *
Charles A. Berardesco(6) ....................................... 6,568 *
Massachusetts Financial Services Company(7) .................... 1,264,737 10.7%
Merrill Lynch & Co.(8) ......................................... 1,322,000 11.6%
T. Rowe Price Associates, Inc.(9) .............................. 1,232,100 10.4%
Dimensional Fund Advisors Inc.(10) ............................. 622,300 5.3%
All directors and executive officers as a group (9 persons)(11) 743,845 6.1%
</TABLE>
- ---------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Commission and includes voting or investment power with respect to the
shares. Shares of Common Stock subject to options currently exercisable or
exercisable within 60 days of the Record Date are deemed outstanding for
computing the percentage of the person holding such options, but are not
deemed outstanding for computing the percentage of any other person.
(2) Includes (i) 233,830 shares as to which Mr. Pillari shares beneficial
ownership with his wife, (ii) 1,950 shares held as custodian for minor
children, (iii) 4,186 shares for Mr. Pillari's benefit in the HCIA Savings
Incentive Plan ("SIP") and (iv) exercisable options to acquire 182,500
shares of Common Stock.
(3) Includes 19,500 shares subject to options under the Directors Option Plan.
(4) Includes 4,000 shares owned through a partnership of which Mr. Gregory is a
partner.
(5) Includes 1,400 shares held as custodian for minor children.
(6) Includes 10,000, 46,499 and 5,000 shares subject to options held by Messrs.
Good, Offutt and Berardesco, respectively. Also includes 609 and 2,703
shares held for Messrs. Good and Offutt, respectively, in the SIP.
(7) Based on a Schedule 13G filed by the listed entity. According to the
Schedule 13G, there is sole dispositive power with respect to all shares
and sole voting power with respect to 1,238,637 shares. The address of
Massachusetts Financial Services Company is 500 Boylston Street, Boston,
Massachusetts 02116.
(8) Based on a Schedule 13G filed by listed entity. The address of Merrill
Lynch & Co. is World Financial Center, North Tower, 250 Vesey Street, New
York, New York 10381. According to the Schedule 13G, there is shared
voting and dispositive power with respect to all shares. In addition, the
Schedule 13G indicates that Merrill Lynch Special Value Fund, Inc. holds
shared voting and dispositive power as to 859,500 shares. The address of
Merrill Lynch Special Value Fund, Inc. is 800 Scudders Mill Road,
Plainsboro, New Jersey 08536.
(9) Based on a Schedule 13G filed by the listed entity. The address of T. Rowe
Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.
According to the Schedule 13G, there is sole dispositive power as to all
shares and sole voting power as to 21,800 shares.
(10) Based on a Schedule 13G filed by the listed entity. The address of
Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401.
(11) Includes 341,499 shares subject to options and 7,498 shares held in the
SIP.
4
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth certain information regarding the Company's
Chief Executive Officer and each of the other executive officers during 1996,
1997 and 1998 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
FISCAL ------------------------- OPTIONS/SARS OTHER
NAME AND TITLE YEAR SALARY($) BONUS($)(1) (#)(2) COMPENSATION($)(3)
- ------------------------------------- -------- ----------- ------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
George D. Pillari 1998 265,000 -- 149,500 4,800
Chairman and 1997 265,000 -- 120,000 4,750
Chief Executive Officer ............ 1996 265,000 -- 50,000 4,500
Donald S. Good 1998 208,738 10,000 110,250 3,400
President and 1997 160,471 21,844 40,000 2,711
Chief Operating Officer(4) ......... 1996 82,715 23,436 25,000 --
Barry C. Offutt 1998 175,000 9,400 61,550 4,800
Senior Vice President and 1997 165,000 18,563 70,000 4,750
Chief Financial Officer ............ 1996 155,000 37,500 22,500 4,500
Charles A. Berardesco 1998 160,000 8,000 37,300 4,600
Senior Vice President and 1997 145,000 11,238 30,000 2,175
General Counsel(4) ................. 1996 84,749 17,063 20,000 --
</TABLE>
- ---------
(1) The amounts shown in this column include bonuses accrued under the
Company's management incentive program during 1996, 1997 and 1998.
(2) See " -- Option Grants," and " -- Option Exercises and Year-End Values" for
disclosure regarding outstanding stock options.
(3) Consists of matching contributions under the Company's Savings Incentive
Plan for all Named Executive Officers.
(4) Messrs. Good and Berardesco each joined the Company in May 1996.
OPTION GRANTS
Options granted to the Named Executive Officers during 1998 are set forth
in the following table. No stock appreciation rights ("SARs") were granted
during 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES
PERCENT OF OF STOCK PRICE
NUMBER OF TOTAL APPRECIATION FOR
SHARES OPTIONS OPTION
UNDERLYING GRANTED TO EXERCISE TERM(4)
OPTIONS EMPLOYEES IN PRICE --------------------
NAME GRANTED(#)(1) 1997 (%) ($/SHARE)(1) EXPIRATION DATE 5%($) 10%($)
- --------------------------- --------------- -------------- ------------- ------------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
George D. Pillari ......... 90,000 (2) 9.1 15.87 February 4, 2008 898,757 2,278,188
59,500 (3) 6.1 6.125 September 2, 2006 174,743 417,156
Donald S. Good ............ 101,500 (2) 10.3 6.125 September 2, 2008 391,372 992,015
8,750 (3) 0.9 6.125 September 2, 2006 297,068 711,619
Barry C. Offutt ........... 38,800 (2) 3.9 6.125 September 2, 2008 149,608 379,214
22,750 (3) 2.3 6.125 September 2, 2006 66,584 159,501
Charles A. Berardesco ..... 26,800 (2) 2.7 6.125 September 2, 2008 103,233 261,613
10,500 (3) 1.1 6.125 September 2, 2006 30,706 73,547
</TABLE>
- ---------
(1) The exercise price of each option was equal to at least the fair market
value of the underlying Common Stock on the date of grant, as determined
in accordance with the Stock Option Plan.
(2) This option vests annually over a four year period.
(3) This option, granted in exchange for the cancellation of certain
outstanding options, vests based on increases in the market value of the
Company's Common Stock. See "Compensation Committee Report on Executive
Compensation -- Option Cancellations and Replacements."
(4) Future value of current-year grants assuming appreciation of 5% and 10% per
year over the applicable option term. The actual value realized may be
greater than or less than the potential realizable values set forth in the
table.
5
<PAGE>
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth certain information regarding the fiscal
year-end value of unexercised options held by the Named Executive Officers.
There were no options exercised by the Named Executive Officers, and no SARs
outstanding, during 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS
SHARES (#) AT FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE ----------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ------------- ------------ ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
George D. Pillari ......... -- -- 160,000 149,500 -- --
Donald S. Good ............ -- -- 10,000 140,250 -- --
Barry C. Offutt ........... -- -- 46,499 91,650 -- --
Charles A. Berardesco ..... -- -- 5,000 52,300 -- --
</TABLE>
- ---------
(1) Calculated based on the last sales price of the Common Stock on December
31, 1998 of $4.25 per share, less the exercise price.
OPTION CANCELLATIONS AND REPLACEMENTS
As discussed in the "Compensation Committee Report on Executive
Compensation," in September 1998 the Compensation Committee canceled certain
options and granted new options, at a ratio of .35 share to each outstanding
option share canceled, with an exercise price equal to the then fair market
value of $6.125 (the "Replacement Options"). The Replacement Options have a
vesting schedule which is tied to increases in the market price of the
Company's common stock. The following table sets forth, for executive officers
of the Company, certain information relating to the Replacement Options, the
options which were canceled upon receipt of the Replacement Options and
previous option cancellations and replacements.
TEN YEAR OPTIONS/SAR REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS/SARS
REPRICED OR
NAME DATE AMENDED (#)
- ------------------------------- ---------------------- --------------
<S> <C> <C>
September 2, 1998 17,500
George D. Pillari September 2, 1998 21,000
Chairman & CEO .............. September 2, 1998 21,000
September 2, 1998 8,750
Donald S. Good November 13, 1996(1) 12,500
President & COO. ............ November 13, 1996(1) 12,500
Jean Chenoweth September 2, 1998 3,500
Senior Vice President ....... September 2, 1998 4,375
September 2, 1998 7,875
Barry C. Offutt September 2, 1998 10,500
Senior Vice President ....... September 2, 1998 4,375
September 2, 1998 3,500
September 2, 1998 7,000
Charles A. Berardesco November 13, 1996(1) 5,000
Senior Vice President ....... November 13, 1996(1) 15,000
EJay Lockwood
Senior Vice President ....... November 13, 1996(2) 5,000
<CAPTION>
MARKET PRICE
OF STOCK AT EXERCISE PRICE ORIGINAL TERM
TIME OF AT TIME OF NEW REMAINING AT
REPRICING OR REPRICING OR EXERCISE DATE OF
NAME AMENDMENT ($) AMENDMENT ($) PRICE ($) REPRICING
- ------------------------------- --------------- ---------------- ----------- -----------------
<S> <C> <C> <C> <C>
6.125 59.875 6.125 8 yrs., 1 month
George D. Pillari 6.125 48.68 6.125 3 yrs., 5 months
Chairman & CEO .............. 6.125 38.94 6.125 3 yrs., 5 months
6.125 28.69 6.125 8 yrs., 2 months
Donald S. Good 28.65 59.875 28.69 9 yrs., 9 months
President & COO. ............ 28.69 50.88 28.69 9 yrs., 6 months
Jean Chenoweth 6.125 59.875 6.125 8 yrs., 1 month
Senior Vice President ....... 6.125 26.25 6.125 7 yrs.
6.125 59.875 6.125 8 yrs., 1 month
Barry C. Offutt 6.125 38.94 6.125 8 yrs., 5 months
Senior Vice President ....... 6.125 26.25 6.125 7 yrs.
6.125 38.94 6.125 8 yrs., 5 months
6.125 28.69 6.125 8 yrs., 2 months
Charles A. Berardesco 28.69 59.875 28.69 9 yrs., 9 months
Senior Vice President ....... 28.69 50.88 28.69 9 yrs., 6 months
EJay Lockwood
Senior Vice President ....... 28.69 59.875 28.69 9 yrs., 9 months
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS/SARS
REPRICED OR
NAME DATE AMENDED (#)
- ------------------------------- ---------------------- --------------
<S> <C> <C>
Lawrence F. Byrne
Senior Vice President ....... November 13, 1996(2) 105,000
Kevin J. Hicks
Senior Vice President ....... November 13, 1996(2) 105,000
<CAPTION>
MARKET PRICE
OF STOCK AT EXERCISE PRICE ORIGINAL TERM
TIME OF AT TIME OF NEW REMAINING AT
REPRICING OR REPRICING OR EXERCISE DATE OF
NAME AMENDMENT ($) AMENDMENT ($) PRICE ($) REPRICING
- ------------------------------- --------------- ---------------- ----------- -----------------
<S> <C> <C> <C> <C>
Lawrence F. Byrne
Senior Vice President ....... 28.69 59.875 28.69 9 yrs., 9 months
Kevin J. Hicks
Senior Vice President ....... 28.69 59.875 28.69 9 yrs., 9 months
</TABLE>
- ---------
(1) Each of these options was subsequently cancelled and replaced with the
Replacement Options.
(2) Each of these executive officers subsequently terminated his employment
with the Company and all of these options have terminated.
EMPLOYMENT AGREEMENT
Effective as of January 1, 1995, the Company entered into an employment
agreement with Mr. Pillari pursuant to which the Company continued his
employment as Chairman of the Board and Chief Executive Officer. Pursuant to
the employment agreement, Mr. Pillari receives an annual base salary of
$265,000 and is entitled to participate in bonus arrangement under which he is
eligible to earn an annual bonus based on the Company's achieving certain
performance goals to be established by the Board of Directors. The employment
agreement has an initial term of two years, and unless the Board of Directors
notifies Mr. Pillari otherwise, the term of the agreement automatically renews
daily for succeeding two year periods.
The employment agreement provides that in the event of the termination of
Mr. Pillari's employment for certain reasons, including certain terminations
resulting from a change in control of the Company (as defined in the employment
agreement), Mr. Pillari would be entitled to receive for the remainder of the
employment term contemplated in the agreement, compensation at an annualized
rate equal to the sum of his base annual salary and target bonus at the time of
termination (such sum being not less than 140% of such base annual salary). In
addition, he would continue to participate in all Company benefit plans until
the earlier of two years from the date of termination or such time as he is
covered by a comparable plan of a subsequent employer. Mr. Pillari is also
subject to certain restrictions under the agreement prohibiting him from
competing with the Company or any of its subsidiaries and from divulging any
confidential proprietary information obtained by him while in the employ of the
Company and for a period of time thereafter.
MANAGEMENT RETENTION AGREEMENTS
The Company has entered into a management retention agreement with each of
its officers (other than Mr. Pillari). These agreements provide for payments
and other benefits if there is a change in control (as defined in the
agreement) of the Company and, within two years of such change in control, the
officer's employment is terminated by the Company or its successor other than
for cause (as defined in the agreement), or the officer resigns for good reason
(as defined in the agreement). Under each agreement, the officer would receive,
following termination of employment under such circumstances, cash payments
equal to up to two times the sum of (i) the officer's highest annual rate of
base salary and (ii) the product of the officer's highest bonus percentage (as
a percentage of base salary) times his highest base salary (such sum being the
"Reference Amount"). The officer may elect to receive payment either in a lump
sum or in the form of periodic payments following his termination of
employment. For certain officers, amounts in excess of one times the Reference
Amount will be made in the form of periodic payments, and will be subject to
reduction, on a dollar-for-dollar basis, by any compensation the officer earns
from a subsequent employer unrelated to the Company.
In addition to the payments described above, the officer would be fully
vested in all stock options and other Awards under the Stock Option Plan upon a
change in control and receive following termination of employment a lump-sum
payment equal to the amount that the Company would have contributed for the
officer's account under the Company's Savings Incentive Plan during the two
years following termination of employment. The officer and his family will
remain eligible to participate in the Company's medical and other welfare
benefits programs for two years from the officer's termination of employment
(except that coverage will end to the extent the officer begins coverage under
the plans of a subsequent employer).
SAVINGS INCENTIVE PLAN
The Company maintains the Savings Incentive Plan, a profit sharing plan
qualified under Section 401(a) of the Internal Revenue Code of 1986. All
employees of the Company who have completed one year of service are eligible to
participate in the Savings Incentive Plan. Subject to certain limitations on
individual contributions and allocations and Company
7
<PAGE>
deductions, the Savings Incentive Plan allows participants to defer up to 15%
of their pay on a pre-tax basis and up to 7% of their pay on an after-tax
basis. The Company also makes matching contributions equal to 50% of the amount
a participant defers, up to 6% of the participant's pay. The Savings Incentive
Plan also provides for discretionary contributions by the Company. All
participants are fully vested in all of their accounts in the Savings Incentive
Plan. The Company's contributions to the Savings Incentive Plan during 1997 and
1998 were approximately $624,000 and $641,000 respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors of the Company has a Compensation Committee
consisting of Messrs. Berman, Dulude, Gregory and Lassiter and Dr. Schramm.
Except for Mr. Pillari, the Company's Chairman of the Board, President and
Chief Executive Officer, no officer or employee of the Company has participated
in deliberations of the Board of Directors concerning executive officer
compensation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for developing and administering
the compensation program for the executive officers of the Company. The
Committee's compensation recommendations with respect to salaries and bonuses
are then approved by the entire Board of Directors. The Compensation
Committee's executive compensation policies are designed to offer competitive
compensation opportunities for all executives based on personal performance and
achievement, as well as overall corporate performance. The Committee's
philosophy is to establish an executive's total compensation at a level that
compares favorably with overall pay levels at companies comparable in size and
business operations to the Company. The Committee also bases its decisions on
overall corporate results, which supports the Company's objective of creating
stockholder value by encouraging and rewarding superior efforts by the
Company's employees. This is primarily accomplished through the Company's
incentive compensation program, which provides quarterly bonuses to executive
officers, other than Mr. Pillari, based on meeting objective financial and
other goals.
The Compensation Committee also is of the view that stock ownership by
management and stock-based compensation arrangements are beneficial in aligning
management's and stockholders' interests in the enhancement of stockholder
value and approves the grant of stock options to executive officers whose
performance has had a significant effect on the success of the Company.
Compensation paid to the Company's executive officers generally consists
of the following elements -- base salary, bonuses and the grant of stock
options. Mr. Pillari's base compensation and bonus arrangements are determined
under his employment agreement with the Company. The compensation of the other
executive officers of the Company is determined by consideration of each
officer's initiative and contribution to overall corporate performance and the
officer's managerial abilities and performance in any special projects that the
officer may have undertaken. Competitive base salaries that reflect the
individual executive's level of responsibility are important elements of the
Company's executive compensation philosophy. Mr. Good's base salary was
increased during 1998 in recognition of his promotion to President of the
Company.
During 1998, executive officers were also eligible to receive a quarterly
and annual bonuses equal to a percentage of the executives' base salary upon
achievement of specific Company-wide net income targets. Executive officers
other than Mr. Pillari were eligible to receive a bonus of up to 50% of their
base compensation for each quarter (the "incentive compensation percentage").
During 1998, executive officers other than Mr. Pillari had target bonuses under
the incentive compensation plan ranging from 40% to 50% of annual salary and
received bonuses equal to 5% of annual salary. The difference between the
target bonuses and actual bonuses paid, as well as the reduction in bonus
payments from 1997 to 1998, was in recognition of the fact that the Company's
total revenue and operating income fell short of the Company's targets for
1998.
The Company has adopted the Stock Option Plan to provide officers and
employees with stock options and other stock-based compensation. The number and
terms of awards under the Stock Option Plan are determined by the Committee.
The awards made to the Named Executive Officers during 1998 were deemed by the
Committee to be appropriate in light of the executives' performance and
responsibilities, and appropriate to provide incentives for future performance.
The vesting of the options commences one year after the date of the grant and
is complete four years after the date of the grant. The Compensation Committee
believes that the grant of options that vest over an extended period of time
provides an incentive for executive officers to continue their efforts on
behalf of the Company and to create long-term value for the Company's
stockholders. The Committee intends to continue to recommend stock-based
compensation awards as a significant part of the Company's overall compensation
program.
8
<PAGE>
The Company has certain broad-based employee benefit plans in which all
employees, including the Named Executives Officers, are permitted to
participate on the same terms and limitations on amounts that may be
contributed. In 1998, the Company also made matching contributions to the
Savings Incentive Plan for those participants.
OPTION CANCELLATIONS AND REPLACEMENTS
In September 1998, following a substantial decline in the price of the
Common Stock, the Compensation Committee determined to cancel outstanding
options which had an exercise price in excess of $25.00 per share, and to
replace those options with the Replacement Options at a ratio of .35 share for
each outstanding option share cancelled. The Committee took this action after a
comprehensive review of the total options outstanding and individual grant
levels.
The Committee determined that while it was important to maintain an
incentive for employees to work towards rebuilding the price of the Common
Stock, it was in the best interests of the Company and its stockholders to
provide employees with incentives which could be recognized in the relatively
short term. Absent such incentives, the Committee was concerned that there
would be a decrease in employee morale and a potential loss of valued employees
to organizations which could provide stock based compensation with a value that
could be recognized in the near term.
While the Committee determined that it was appropriate to take this
action, it also concluded that the Replacement Options should have a new
vesting period which would be tied to the increase in the market value of the
Company's common stock. One-half of the Replacement Options will vest upon the
closing price for the Company's Common Stock reaching $12.00 per share for 10
consecutive trading days. The remaining one-half will vest upon the closing
price for the Company's Common Stock reaching $18.00 per share for 10
consecutive trading days. Notwithstanding the foregoing, all Replacement
Options will vest on September 2, 2005, and will expire on September 2, 2006.
MR. PILLARI'S 1998 COMPENSATION
Mr. Pillari's compensation is determined principally by the terms of his
employment agreement, which was approved by the Compensation Committee and the
Board of Directors effective January 1, 1995. The employment agreement provides
for a base salary of $265,000 per year, subject to increase, but not decrease,
and an annual bonus. The Compensation Committee has established Mr. Pillari's
base salary at a level it believes is necessary to retain Mr. Pillari in his
executive position with the Company and is comparable with the base salaries of
chief executive officers of comparable companies. Mr. Pillari received no bonus
for 1996, 1997 or 1998, and has not had his base salary increased since 1995,
in recognition of the fact that the Company's total revenue and operating
income fell short of the Company's targets in 1996, 1997 and 1998. The
Compensation Committee generally considers option grants to Mr. Pillari in
February of each year, based on prior year performance. Mr. Pillari was
granted, in February 1998, options to purchase 90,000 shares of the Company's
Common Stock at a exercise price of $15.87 per share, which was the fair market
value of the Common Stock plus 25%. These options were granted based on the
Company's results during 1997, and a survey of comparable company data, and
were designed to provide Mr. Pillari with additional incentives to continue his
efforts on behalf of the Company and to create long-term value for the
Company's stockholders. The Compensation Committee has not yet considered stock
options for Mr. Pillari for 1999.
POLICY REGARDING SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1.0 million paid to the Chief Executive Officer and
the four most highly compensated officers of the Company (other than the Chief
Executive Officer) in any fiscal year, unless the compensation qualifies as
"performance based compensation." The Compensation Committee's policy with
respect to Section 162(m) is to make every reasonable effort to cause
compensation to be deductible by the Company while simultaneously providing
executive officers of the Company with appropriate and competitive
compensation. The aggregate base salaries and bonuses of the Company's
executive officers have not historically exceeded, and are not in the
foreseeable future expected to exceed, the $1.0 million limit, and options
under the Company's Stock Option Plan are intended to qualify as
performance-based compensation.
COMPENSATION COMMITTEE
Richard Berman Richard Dulude W. Grant Gregory Phillip B. Lassiter
Carl J. Schramm, Ph.D.
9
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON
The chart set forth below shows the value of an investment of $100.00 on
February 22, 1995 (the day trading of the Company's Common Stock commenced on
the Nasdaq National Market) in each of the Company's Common Stock, the Nasdaq
Stock Market and the Nasdaq Computer and Data Processing index for the period
February 22, 1995 to December 31, 1998. All values assume reinvestment of the
pre-tax value of dividends.
[PERFORMANCE MEASUREMENT COMPARISON CHART APPEARS HERE]
<TABLE>
Research Data Group Peer Group Total Return Worksheet
Hcia Inc (HCIA)
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------------------------------
2/22/95 3/95 6/95 9/95 12/95 3/96 6/96 9/96 12/96 3/97 6/97 9/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HCIA INC. 100 175 223 184 334 336 450 429 246 120 239 96
NASDAQ STOCK MARKET (U.S.) 100 104 119 133 135 141 152 158 165 156 185 216
NASDAQ COMPUTER & DATA PROCESSING 100 108 128 140 146 153 170 174 180 168 215 235
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
------------------------------------
<S> <C> <C> <C> <C> <C>
12/97 3/98 6/98 9/98 12/98
HCIA INC. 85 105 92 40 30
NASDAQ STOCK MARKET (U.S.) 203 238 244 221 285
NASDAQ COMPUTER & DATA PROCESSING 222 293 325 306 397
</TABLE>
CERTAIN TRANSACTIONS
REGISTRATION RIGHTS
The Company has granted to Mr. Pillari certain rights with respect to the
registration under the Securities Act of 1933 of the shares of Common Stock
currently held by Mr. Pillari and the shares issuable pursuant to Mr. Pillari's
option to purchase 160,000 shares. In the event the Company proposes to
register any of its securities under the Securities Act for its own account or
for the account of any of its stockholders, subject to certain exceptions, Mr.
Pillari shall be entitled to include his shares in such registration.
Registration of Mr. Pillari's shares is subject, in an underwritten offering,
to the right of the managing underwriter to exclude for marketing reasons some
or all of the shares from such registration. All fees, costs and expenses
incurred with any such registration, except for underwriting discounts and
selling concessions, will be borne by the Company.
10
<PAGE>
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
The Company's Bylaws provide that a stockholder must provide written
notice to the Company describing any proposal or director nomination to be
brought before that meeting, even if such proposal or nomination is not to be
included in the Company's proxy material, by no later than March 8, 1999. The
Company has received no such notices. Copies of the relevant provision of the
Bylaws may be obtained by writing to the Secretary, HCIA Inc., 300 East Lombard
Street, Baltimore, Maryland 21202.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Any stockholder proposal intended for inclusion in the proxy material for
the 2000 Annual Meeting of Stockholders must be received in writing by the
Company, at the address set forth on the first page of this Proxy Statement, on
or before November 22, 1999. Any such proposal will be subject to Rule 14a-8
promulgated under the Securities Exchange Act of 1934.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business which will be presented for consideration at
the Annual Meeting. Execution of a proxy, however, confers on the designated
proxyholders discretionary authority to vote the shares in accordance with
their best judgment on such other business, if any, that may properly come
before the Annual Meeting or any adjournments thereof, subject to the
requirements of Rule 14a-4(c) promulgated under the Securities Exchange Act of
1934. Pursuant to Rule 14a-4(c), the enclosed proxy confers discretionary
authority to vote on any matter to come before the Annual Meeting if the
Company did not receive notice of such matter by no later than February 3,
1999. The Company has received no such notices.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON RECEIVING THIS
PROXY STATEMENT, UPON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1998. WRITTEN REQUESTS FOR A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K SHOULD BE DIRECTED TO HCIA INC., 300
EAST LOMBARD STREET, BALTIMORE, MARYLAND 21202, ATTENTION: CHARLES A.
BERARDESCO, SECRETARY.
By Order of the Board of Directors,
/s/ CHARLES A. BERARDESCO
-----------------------
Charles A. Berardesco
Secretary
March 22, 1999
11
<PAGE>
<PAGE>
HCIA INC.
ANNUAL MEETING OF STOCKHOLDERS, MAY 5, 1999
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints BARRY C. OFFUTT and CHARLES A. BERARDESCO, and
each of them, with full power of substitution as to each, as proxy, to vote all
shares which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of HCIA Inc. to be held at 10:00 a.m., Baltimore time, on May 5,
1999, and at any adjournments thereof:
1. Election of Directors
<TABLE>
<S> <C>
FOR the election of all nominees listed WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed below [ ]
</TABLE>
Richard Berman Phillip B. Lassiter
(TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME).
2. The ratification of the appointment of KPMG LLP to serve as the Company's
independent public accountants for the year ending December 31, 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournment thereof.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
<PAGE>
(CONTINUED FROM REVERSE SIDE)
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE PERSON SIGNING
IT. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES INDICATED AND FOR THE OTHER PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT MAY BE REVOKED
AT ANY TIME PRIOR TO ITS EXERCISE BY SENDING WRITTEN NOTICE TO THE SECRETARY OF
THE COMPANY, BY DELIVERING TO THE COMPANY A DULY EXECUTED PROXY BEARING A LATER
DATE OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
Receipt of notice of the meeting and proxy statement is hereby acknowledged,
and the terms of the notice and statement are hereby incorporated by reference
into this proxy. The undersigned hereby revokes all proxies heretofore given
for said meeting or any adjournment or adjournments thereof.
(Please sign exactly as your name
appears hereon. Executors,
administrators, guardians, officers
signing for corporations, trustees
and attorneys should give full
title. For joint owners, both
owners should sign.)
Dated:____________ , 1999
____________________________(SEAL)
____________________________(SEAL)
Please sign, date and promptly
return this proxy in the enclosed
envelope. No postage is required if
mailed in the United States.
