SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant: |X|
Filed by a Party other than the Registrant: |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
MATRIX CAPITAL CORPORATION
(Name of Registrant as Specified in Its Charter)
MATRIX CAPITAL CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing 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:
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<PAGE>
MATRIX CAPITAL CORPORATION
1380 LAWRENCE STREET, SUITE 1410
DENVER, COLORADO 80204
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 1, 1997
To the Shareholders of Matrix Capital Corporation:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders
(the "Annual Meeting") of Matrix Capital Corporation, a Colorado corporation
(the "Company"), will be held at the Denver Marriott Tech Center, 4900 South
Syracuse Street, Denver, Colorado 80237, on the 1st day of May, 1997, at 2:00
p.m. (local time) for the following purposes:
1. To elect two (2) directors to hold office until the 2000 Annual
Meeting of Shareholders or until their respective successors shall have
been duly elected and shall have qualified;
2. To ratify the appointment of Ernst & Young LLP as independent
auditors for the Company for the 1997 fiscal year; and
3. To transact any and all other business that may properly come
before the meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on March 21,
1997 as the record date (the "Record Date") for the determination of
shareholders entitled to notice of and to vote at such meeting or any
adjournment(s) thereof. Only shareholders of record at the close of business on
the Record Date are entitled to notice of and to vote at such meeting. The stock
transfer books will not be closed. A list of shareholders entitled to vote at
the Annual Meeting will be available for examination at the offices of the
Company for ten (10) days prior to the Annual Meeting.
You are cordially invited to attend the meeting; WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, HOWEVER, YOU ARE URGED TO MARK, SIGN,
DATE, AND MAIL THE ENCLOSED FORM OF PROXY PROMPTLY SO THAT YOUR SHARES OF STOCK
MAY BE REPRESENTED AND VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT
THE PRESENCE OF A QUORUM MAY BE ASSURED AT THE MEETING. Your proxy will be
returned to you if you should be present at the meeting and should request its
return in the manner provided for revocation of proxies on the initial page of
the enclosed proxy statement.
BY ORDER OF THE BOARD OF DIRECTORS
James G. Panero, Secretary
March 28, 1997
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<PAGE>
MATRIX CAPITAL CORPORATION
1380 LAWRENCE STREET, SUITE 1410
DENVER, COLORADO 80204
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 1, 1997
---------------------------
SOLICITATION AND REVOCABILITY
OF PROXIES
The accompanying proxy is solicited by the Board of Directors on behalf
of Matrix Capital Corporation, a Colorado corporation (the "Company"), to be
voted at the 1997 Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held on May 1, 1997, at the time and place and for the purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders (the
"Notice") and at any adjournment(s) thereof. WHEN PROXIES IN THE ACCOMPANYING
FORM ARE PROPERLY EXECUTED AND RECEIVED, THE SHARES REPRESENTED THEREBY WILL BE
VOTED AT THE ANNUAL MEETING IN ACCORDANCE WITH THE DIRECTIONS NOTED THEREON; IF
NO DIRECTION IS INDICATED, SUCH SHARES WILL BE VOTED FOR THE ELECTION OF THE
DIRECTOR NOMINEES NAMED HEREIN, IN FAVOR OF PROPOSAL 2 SET FORTH IN THE NOTICE,
AND THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTERS REFERRED
TO IN PROPOSAL 3 SET FORTH IN THE NOTICE.
The executive offices of the Company are located at, and the mailing
address of the Company is, 1380 Lawrence Street, Suite 1410, Denver, Colorado
80204.
Management does not intend to present any business at the Annual
Meeting for a vote other than the matters set forth in the Notice and has no
information that others will do so. If other matters requiring a vote of the
shareholders properly come before the Annual Meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the shares represented
by the proxies held by them in accordance with their judgment on such matters.
This proxy statement (the "Proxy Statement") and accompanying form of
proxy are being mailed on or about March 28, 1997. The Company's Annual Report
is enclosed herewith, but does not form any part of the materials for
solicitation of proxies.
Any shareholder of the Company giving a proxy has the unconditional
right to revoke his proxy at any time prior to the voting thereof either in
person at the Annual Meeting by delivering a duly executed proxy bearing a later
date or by giving written notice of revocation to the Company addressed to James
G. Panero, Secretary, Matrix Capital Corporation, 1380 Lawrence Street, Suite
1410, Denver, Colorado 80204; no such revocation shall be effective, however,
until such notice of revocation has been received by the Company at or prior to
the Annual Meeting.
In addition to the solicitation of proxies by use of the mail, officers
and regular employees of the Company may solicit the return of proxies, either
by mail, telephone, telegraph, or through personal contact. Such officers and
employees will not be additionally compensated but will be reimbursed for
out-of-pocket expenses. Brokerage houses and other custodians, nominees, and
fiduciaries will, in connection with shares of voting Common Stock, par value
$.0001 per share (the "Common Stock"), registered in their names, be requested
to forward solicitation material to the beneficial owners of such shares of
Common Stock.
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<PAGE>
The cost of preparing, printing, assembling, and mailing the Annual
Report, the Notice, this Proxy Statement, and the enclosed form of proxy, as
well as the cost of forwarding solicitation materials to the beneficial owners
of shares of the Common Stock, and other costs of solicitation, are to be borne
by the Company.
QUORUM AND VOTING
The record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting was the close on business of March
21, 1997 (the "Record Date"). On the Record Date, there were 6,681,031 shares of
Common Stock issued and outstanding.
Each holder of Common Stock shall be entitled to one vote for each
share of Common Stock on all matters to be acted upon at the meeting. Neither
the Company's Amended and Restated Articles of Incorporation, as amended, nor
its Bylaws, as amended, allow for cumulative voting rights. The Company's
Amended and Restated Articles of Incorporation specifically prohibit cumulative
voting in an election of directors or for any other matter(s) to be voted upon
by the shareholders of the Company. The presence, in person or by proxy, of the
holders of a majority of the issued and outstanding Common Stock entitled to
vote at the meeting is necessary to constitute a quorum to transact business at
the Annual Meeting. If a quorum is not present or represented at the Annual
Meeting, the shareholders entitled to vote thereat, present in person or
represented by proxy, may adjourn the Annual Meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present or
represented. Assuming the presence of a quorum, the affirmative vote of the
holders of a plurality of the shares of Common Stock voting at the meeting is
required for the election of directors and the affirmative vote of the holders
of at least a majority of the issued and outstanding shares of Common Stock
represented in person or by proxy at the Annual Meeting and entitled to vote is
required for the approval of Proposal 2.
An automated system administered by the Company's transfer agent
tabulates the votes. Abstentions will be included in vote totals and, as such,
will have the same effect on each proposal other than the election of directors
as a negative vote. Broker non-votes, if any, will not be included in vote
totals and, as such, will have no effect on any proposal.
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<PAGE>
PRINCIPAL SHAREHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Stock as of the Record Date by (i) each person known by the
Company to own beneficially five percent or more of the outstanding Common
Stock; (ii) each of the Company's directors and advisory directors; (iii) each
of the executive officers named in the Summary Compensation Table (the "Named
Executive Officers"); and (iv) all directors, advisory directors and executive
officers of the Company as a group. The address of each person listed below is
1380 Lawrence Street, Suite 1410, Denver, Colorado 80204.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED (1)
---------------------
Percent
Name Number of Class
- ----------------------------------------------- ------------- --------
<S> <C> <C>
Guy A. Gibson.................................. 1,280,858(2) 19.2%
Richard V. Schmitz............................. 1,280,858(3) 19.2
D. Mark Spencer................................ 878,910(2)(3) 13.2
Thomas M. Piercy............................... 234,375 3.5
David W. Kloos................................. 139,438 2.1
Stephen Skiba.................................. 7,500(4) *
David A. Frank................................. 7,500(4) *
Peter G. Weinstock............................. 5,000(4) *
All directors, advisory directors and executive 3,957,473(4) 59.2
officers as a group (13 persons)............
- -----------
<FN>
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission") and generally
includes voting or investment power with respect to securities. Except
as indicated in the footnotes to this table and subject to applicable
community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock
beneficially owned.
(2) On June 24, 1993, Mr. Gibson granted Mr. Spencer an option to purchase
133,983 of Mr. Gibson's shares of Common Stock at any time on or prior
to June 23, 1998, at an exercise price of $2.41 per share. The amount
shown in this table as beneficially owned by Mr. Spencer does not
reflect these 133, 983 shares of Common Stock.
(3) On June 24, 1993, Mr. Schmitz granted Mr. Spencer an option to purchase
133,983 of Mr. Schmitz's shares of Common Stock, at any time prior to
June 23, 1998, at an exercise price of $2.41 per share. The amount
shown in this table as beneficially owned by Mr. Spencer does not
reflect these 133, 983 shares of Common Stock.
(4) Includes options that are currently exercisable, or become exercisable
within 60 days of the Record Date, to purchase the number of shares of
Common Stock indicated for the following persons:Stephen Skiba (2,500),
David A. Frank (2,500), and Peter G. Weinstock (2,500).
</FN>
</TABLE>
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<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL 1)
GENERAL
Matrix Capital Corporation ("Matrix Capital") is a unitary thrift
holding company that operates principally through six operating subsidiaries:
United Financial, Inc. ("United Financial"), Matrix Financial Services
Corporation ("Matrix Financial"), Matrix Capital Bank ("Matrix Bank"), United
Special Services, Inc. ("USS"), Sterling Trust Company ("Sterling") and First
Matrix Investment Services Corporation, f/k/a Vintage Financial Services
Corporation ("First Matrix").
The Bylaws, as amended, of the Company provide that the number of
directors that shall constitute the whole board shall be as fixed from time to
time by the Board of Directors. By resolution of the Board of Directors, the
number of directors comprising the Board of Directors has been set at seven (7).
The Board of Directors is divided into three classes. Directors for
each class are elected at the annual meeting held in the year in which the term
for such class expires and serve thereafter for three years or until their
successors are elected and qualified. All advisory directors serve at the
pleasure of the Board of Directors. Subject to any applicable employment
agreement provisions, all officers are appointed by, and serve at the discretion
of, the Board of Directors of the Company. There are no family relationships
between any directors or officers of the Company or any of its subsidiaries.
NOMINEES AND CONTINUING DIRECTORS
Unless otherwise directed in the enclosed proxy, it is the intention of
the persons named in such proxy to nominate and to vote the shares represented
by such proxy for the election of the following named nominees for the office of
director of the Company, to hold office until the 2000 Annual Meeting of
Shareholders or until their respective successors shall have been duly elected
and shall have qualified. Proxies cannot be voted for a greater number of
persons than the nominees named.
Information regarding each nominee, each of the continuing directors of
the Company, and each advisory director of the Company is set forth in the table
and text below:
PRESENT DIRECTOR'S
NAME AGE OFFICE(S) HELD TERM EXPIRES
NOMINEES:
Thomas M. Piercy 32 Matrix Capital: Director 2000
United Financial: President
Stephen G. Skiba(1)(2) 42 Matrix Capital: Director 2000
CONTINUING DIRECTORS:
Guy A. Gibson 32 Matrix Capital: President, Chief 1998
Executive Officer and Director
Matrix Financial: Chairman of the
Board and President
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<PAGE>
PRESENT DIRECTOR'S
NAME AGE OFFICE(S) HELD TERM EXPIRES
David W. Kloos 35 Matrix Capital: Senior Vice President, 1998
Chief Financial Officer and Director
Matrix Bank: Executive Vice President
and Chief Financial Officer
David A. Frank(1)(2) 49 Matrix Capital: Director 1998
Richard V. Schmitz 34 Matrix Capital: Chairman of the Board 1999
United Financial: Chairman of the
Board
D. Mark Spencer 37 Matrix Capital: Vice Chairman and 1999
Director
Matrix Bank: Chairman of the Board
ADVISORY DIRECTOR:
Peter G. Weinstock 35 Matrix Capital: Advisory Director --
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
GUY A. GIBSON has served as the Chief Executive Officer and a director of
Matrix Capital since its formation in June 1993. Mr. Gibson has served as
Chairman of the Board of Matrix Financial since August 1990 and as its President
since August 1994. Mr. Gibson was one of the original founders of Matrix
Financial and acted as its Chief Executive Officer during 1990. Prior to his
tenure with the Company, Mr. Gibson held the position of Account Executive with
the investment banking firms of PaineWebber from 1987 to 1989 and Lincoln
Financial Group, a Denver-based servicing brokerage firm, from 1989 to 1990.
RICHARD V. SCHMITZ has served as a director of Matrix Capital since its
formation in June 1993 and was elected Chairman of the Board of Matrix Capital
in February 1996. Mr. Schmitz was one of the original founders of United
Financial, held the position of Chief Executive Officer of United Financial from
1990 until early 1997, and has been Chairman of the Board of United Financial
since that time.
D. MARK SPENCER served as Chairman of the Board of Matrix Capital from June
1993 until February 1996. Mr. Spencer has also served as an executive officer of
the Company since June 1993. Mr. Spencer has served as Chairman of the Board of
Matrix Bank since October 1993, and has served as director of Matrix Financial
since August 1990. From 1985 through July 1990, Mr. Spencer served as Vice
President of Secondary Marketing for Austin Federal Savings and Loan, an Austin,
Texas savings and loan association.
THOMAS M. PIERCY served as Senior Vice President of United Financial from
October 1990 to June 1996, when he was elected President of United Financial.
Mr. Piercy has served as a director of Matrix Capital since June 1993. From 1986
to 1990, Mr. Piercy served as Managing Director of Lincoln Financial Group.
DAVID W. KLOOS has served as a Vice President and Chief Financial Officer
of Matrix Capital since June 1993, and he has served as a director of Matrix
Capital also since June 1993. Mr. Kloos was appointed as Senior Vice President
of Matrix Capital in September 1996. Mr. Kloos has served as Executive Vice
President and Chief
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<PAGE>
Financial Officer of Matrix Bank since October 1993. From 1989 through 1993, Mr.
Kloos served as Senior Vice President and Chief Financial Officer of Argo
Federal Savings Bank, a Summit, Illinois federal savings bank. From 1985 to
1989, Mr. Kloos, a certified public accountant, was employed by the Chicago
office of KPMG Peat Marwick LLP.
STEPHEN G. SKIBA, a director of Matrix Capital since March 1996, is Senior
Vice President and Senior Analyst, focusing on banks and thrifts, for the ABN
Amro Chicago Corporation, an investment banking firm in Chicago, Illinois. From
November 1990 to June 1996, Mr. Skiba was Senior Vice President, Chief Financial
Officer and Treasurer of N.S. Bancorp, Inc. in Chicago, Illinois. Prior to
joining N.S. Bancorp, Inc., Mr. Skiba was an audit partner with the Chicago
office of KPMG Peat Marwick LLP, primarily responsible for financial
institutions and real estate audit engagements.
DAVID A. FRANK was elected director of Matrix Capital in September 1996.
Mr. Frank is President, Chief Executive Officer and founder of America's
Mortgage Source, a mortgage company based in Marlton, New Jersey that is
primarily involved in the origination of residential mortgage loans and which
was formed in 1995. From 1994 to 1995, Mr. Frank served as President and Chief
Executive Officer of Chemical Residential Mortgage Corporation in Edison, New
Jersey, and as a director of Chemical Bank, N.A. Chemical Residential Mortgage
Corporation was the primary mortgage banking operation of Chemical Banking
Corporation. Prior to joining Chemical Residential Mortgage Corporation, Mr.
Frank served from 1989 to 1994 as President and Chief Operating Officer of
Margaretten Financial Corporation, a publicly traded national mortgage banking
company based in Perth Amboy, New Jersey. From 1977 to 1989, Mr. Frank held
various positions with Primerica Corporation/American Can Company (now known as
Travelers, Inc.), where he was primarily involved in mergers, acquisitions,
capital market activities and in restructuring a manufacturing-based concern
into a diversified financial services company.
PETER G. WEINSTOCK has served as an advisory director to Matrix Capital
since September 1996. In his capacity as advisory director, Mr. Weinstock is
invited to attend meetings of the Board of Directors and to participate in its
discussions. However, Mr. Weinstock is not entitled to vote in matters submitted
for approval and is not involved in the administration or management of the
Company. Mr. Weinstock is a member of the law firm of Jenkens & Gilchrist, a
Professional Corporation, where he has been employed for more than five years.
Jenkens & Gilchrist, a Professional Corporation, serves as outside general
counsel to the Company.
The Board of Directors does not contemplate that any of the nominees for
director will refuse or be unable to accept election as a director of the
Company, or be unable to serve as a director of the Company. Should any of them
become unavailable for nomination or election or refuse to be nominated or to
accept election as a director of the Company, then the persons named in the
enclosed form of proxy intend to vote the shares represented in such proxy for
the election of such other person or persons as may be nominated or designated
by the Board of Directors.
EXECUTIVE OFFICERS
The following sets forth the name, age, current position with the Company,
and the principal occupation during the last five years of each executive
officer of the Company. Information with respect to Messrs. Gibson, Schmitz,
Spencer, Piercy and Kloos is set forth above under the caption "--Nominees and
Continuing Directors."
THOMAS P. CRONIN, age 51, joined the Company as a senior executive officer
effective March 1, 1997. Mr. Cronin will assume the management position of Vice
Chairman of the Company and Chief Executive Officer of United Financial. Prior
to joining the Company, Mr. Cronin held various positions with MCA Financial
Corporation, a Michigan-based financial services company, and its wholly owned
subsidiary, MCA Mortgage Corporation. Mr. Cronin's most recent management
position with MCA Financial Corporation was Vice
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<PAGE>
Chairman; however, Mr. Cronin continues to serve as a director of MCA Financial
Corporation. Mr. Cronin has over 30 years of experience in the mortgage banking
industry and currently is the Legislative Vice Chairman and board member for the
Mortgage Bankers Association of America.
GARY LENZO, age 46, has served as President and Chief Executive Officer and
a director of Matrix Bank since October 1993. From 1987 to 1992, Mr. Lenzo
served as Vice President of Austin Savings Association and Great Western Savings
Bank, both Austin, Texas based savings associations. From 1984 to 1986, Mr.
Lenzo served as Vice President of Unifirst American Mortgage Corporation, an
Austin, Texas mortgage company.
THOMAS J. OSSELAER, age 38, has served as Executive Vice President and
Chief Financial Officer of Matrix Financial since July 1993, Chief Operating
Officer since August 1994, and was Vice President from March 1992 to July 1993.
From January 1990 to February 1992, Mr. Osselaer served as Treasurer and Finance
Division Manager for the receivership of MeraBank Federal Savings Bank, a
Resolution Trust Corporation controlled savings bank in Phoenix, Arizona. From
1985 to 1990, Mr. Osselaer served as Vice President, Assistant Treasurer and
Investment Manager for MeraBank Federal Savings Bank.
JAMES G. PANERO, age 34, has served as Senior Vice President, General
Counsel and Secretary of Matrix Capital since January 1996. From 1994 to 1995,
Mr. Panero served as Senior Counsel of Chemical Residential Mortgage Corporation
of Edison, New Jersey, the mortgage banking subsidiary of Chemical Bank. From
1992 to 1994, Mr. Panero served as Associate Counsel of Margaretten and Co.,
Inc., a publicly traded national mortgage banking company in Edison, New Jersey,
which was acquired by Chemical Bank in 1994. From 1988 to 1992, Mr. Panero
served as an associate with the law firm of Gurfein & Graubard in New York City
where he specialized in commercial and real estate litigation.
PAUL E. SKRETNY, age 52, has served as Chief Executive Officer of Sterling
since May 1993 and as Chairman of the Board of First Matrix since March 1994.
Prior to his association with Sterling, Mr. Skretny was Senior Vice President of
APS Securities Corporation and Masterson, Moreland, Sauer, Whisman Inc. from
June 1988 to February 1993, providing investment services and assistance to
individual and institutional investors. From May 1975 to April 1988, Mr. Skretny
was employed by Jefferson Bancshares, Inc. and its subsidiaries serving as
President and Chief Executive Officer from 1984 to 1988. From June 1964 to 1975,
he was employed by the Manufacturers & Traders Trust Company and the Bank of
Buffalo in various positions as Assistant Manager, Operations Officer, Assistant
Vice President and Vice President of Branch Office Administration. Mr. Skretny
holds professional certifications and licenses as a fully registered general
securities representative, general securities principal and uniform securities
agent.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors currently has two standing committees: the
Compensation Committee and the Audit Committee. The Compensation Committee and
the Audit Committee are each comprised of Mr. Skiba and Mr. Frank. The
Compensation Committee is responsible for recommending to the Board of Directors
the Company's executive compensation policies for senior officers and
administering the 1996 Amended and Restated Stock Option Plan (the "Plan") and
the Employee Stock Purchase Plan (the "Purchase Plan"). The Compensation
Committee held no meetings during 1996, although it did act on several occasions
during 1996 by unanimous consent. The Audit Committee is responsible for
recommending independent auditors, reviewing the audit plan, the adequacy of
internal controls, the audit report and management letter, and performing such
other duties as the Board of Directors may from time to time prescribe. The
Audit Committee held no meetings during 1996.
The Board of Directors does not have a standing Nominating Committee.
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<PAGE>
The Board of Directors held six meetings during 1996. During 1996, each
director attended all of the meetings of the Board of Directors during the time
that he served as director.
DIRECTOR COMPENSATION
The Company pays each nonemployee director of the Company a $3,750
quarterly retainer and a fee of $1,000 ($250 if such director's attendance is
via teleconference) for each meeting of the Board of Directors of the Company
that he attends. The Company also reimburses each director for ordinary and
necessary travel expenses related to such director's attendance at Board of
Directors and committee meetings. Nonemployee directors are also eligible for
stock option grants under the Plan.
Each advisory director of the Company is paid a $2,500 quarterly retainer
and a fee of $1,000 ($250 if such advisory director's attendance is via
teleconference) for each meeting of the Board of Directors of Matrix Capital
that he attends. The Company also reimburses each advisory director for ordinary
and necessary travel expenses related to such advisory director's attendance at
Board of Directors meetings. Advisory directors are also eligible for stock
option grants under the Plan.
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<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The Summary Compensation Table below provides certain summary information
concerning compensation paid or accrued during 1995 and 1996 by the Company to
or on behalf of the Chief Executive Officer and the four other highest paid
executive officers of the Company whose salary and bonus for 1996 was in excess
of $100,000:
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION (1) COMPENSATION
------------------------------------- ----------------------------
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS COMPENSATION SARS COMPENSATION
- ------------------------------------------- ------- ----------- ---------- --------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Guy A. Gibson 1996 $ 250,000 $ -- $47,514(2) -- $ 8,375(3)(4)
President, Chief Executive Officer and 1995 250,000 -- 46,552(2) -- 8,300(3)(4)
Director of Matrix Capital; President
and Chairman of the Board of Matrix
Financial
Richard V. Schmitz 1996 250,000 -- -- -- 8,375(3)(4)
Chairman of the Board of Matrix Capital; 1995 250,000 100,000 -- -- 8,300(3)(4)
Chief Executive Officer of United
Financial
D. Mark Spencer 1996 250,000 -- -- -- 8,375(3)(4)
Vice Chairman of the Board of Matrix 1995 250,000 -- -- -- 8,300(3)(4)
Capital
Thomas M. Piercy 1996 293,626 -- -- -- 2,375(4)
Director of Matrix Capital; President 1995 271,372 -- -- -- 2,300(4)
of United Financial
David W. Kloos 1996 100,000 30,000 -- 35,000(5) 84,772(3)(4)(6)
Senior Vice President, Chief Financial 1995 100,000 20,000 -- 109,300(3)(4)(7)
Officer and Director of Matrix Capital;
Executive Vice President and Chief
Financial Officer of Matrix Bank
<FN>
(1) Annual compensation does not include the cost to the Company of benefits
certain executive officers receive in addition to salary and cash bonuses.
The aggregate amounts of such personal benefits, however, did not exceed
the lesser of either $50,000 or 10% of the total annual compensation of
such executive officer.
(2) Each amount specified represents payments made to Mr. Gibson during the
year shown in respect of Mr. Gibson's accrued tax liability during prior
periods in which the Company operated as an "s" corporation.
(3) Of this amount, $6,000 represents directors fees paid by Matrix Bank for
such person's service on that entity's board of directors for each of 1995
and 1996.
(4) Of this amount, $2,300 and $2,375, respectively, represents the Company's
contribution to such person's account maintained under the 401(k) savings
plan during 1995 and 1996, respectively.
(5) The exercise price per share for these options is $10.00. These options
become exercisable ratably over five years, with the first 20% becoming
exercisable on October 18, 1997.
(6) Of this amount, $76,397 represents the amount paid to Mr. Kloos during
1996 to provide for the income taxes owed by Mr. Kloos in connection with
the $101,000 payment disclosed in footnote (7).
(7) Of this amount, $101,000 represents the estimated value of a stock bonus of
138,938 shares awarded to Mr. Kloos on January 1, 1995 for services
rendered.
</FN>
</TABLE>
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<PAGE>
GRANTS OF OPTIONS
The following table sets forth details regarding stock options granted
to the Named Executive Officers during 1996. In addition, there are shown the
"option spreads" that would exist for the respective options granted based upon
assumed rates of annual compound stock appreciation of 5% and 10% from the date
the options were granted over the full option term.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------------
NAME GRANTED FISCAL YEAR OR BASE PRICE DATE 5% 10%
- ----------------------------- ------------- ------------- ------------- -------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Guy A. Gibson................ -- -- -- -- $ -- $ --
Richard V. Schmitz........... -- -- -- -- -- --
D. Mark Spencer.............. -- -- -- -- -- --
Thomas M. Piercy............. -- -- -- -- -- --
David W. Kloos(1)............ 35,000 30.5% $10.00 10/18/06 220,150 557,900
<FN>
(1) Options were granted under the Plan. The exercise price of each option is
the fair market value of the Common Stock on the date of grant. Options
vest in one-fifth increments over a five-year term. The options have a
term of 10 years, unless they are exercised or expire upon certain
circumstances set forth in the Plan, including retirement, termination in
the event of a change in control, death or disability. See footnote (4) to
the Summary Compensation Table.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent upon the future
performance of the Company's Common Stock, overall market conditions and
the executive's continued employment with the Company. The amounts
represented in this table may not be achieved.
</FN>
</TABLE>
EXERCISES OF OPTIONS
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during fiscal 1996, and
unexercised options held as of December 31, 1996. No options were exercised by
the Named Executive Officers during 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS OPTIONS
ACQUIRED AT FY-END: AT FY-END:
ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
- ---------------------------------- -------- -------------- ------------- ----------------
<S> <C> <C> <C> <C>
Guy A. Gibson..................... -- -- --/-- $ --/--
Richard V. Schmitz................ -- -- --/-- --/--
D. Mark Spencer................... -- -- --/-- --/--
Thomas M. Piercy.................. -- -- --/-- --/--
David W. Kloos.................... -- -- --/35,000 --/205,625
<FN>
- ---------------------
(1) Values are stated based upon the closing price of $15.875 per share of the
Common Stock on the Nasdaq National Market on December 31, 1996, the last
trading day of the Company's fiscal year.
</FN>
</TABLE>
CORPDAL:61850.4 26059-00016
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<PAGE>
COMPENSATION AND EMPLOYMENT AGREEMENTS
In January 1996, the Company entered into a five-year employment agreement
with Mr. Kloos. Under the terms of such agreement, Mr. Kloos is paid an annual
salary as agreed to by Mr. Kloos and Matrix Capital and, in addition, he is to
receive five annual installment payments of $25,000 each. This employment
agreement is terminable without advance notice by the Company for good cause,
which is generally defined to include a breach by Mr. Kloos of the employment
agreement, a breach by Mr. Kloos of his fiduciary duties owed to the Company,
and fraud, embezzlement or theft from the Company by Mr. Kloos. In addition, the
employment agreement terminates upon the death or disability of Mr. Kloos and
Mr. Kloos may resign upon 30 days' notice to the Company.
The Company has also entered into an employment agreement with Mr. Lenzo.
Under the terms of such agreement, Mr. Lenzo is employed as the President and
Chief Executive Officer of Matrix Bank until January 1, 1999 at a base salary of
$110,000 per annum. In addition, Mr. Lenzo is eligible to participate in an
equitable manner in all discretionary bonuses authorized to be paid the
employees of Matrix Bank. The Company may, without notice, terminate this
employment agreement for just cause (which is generally defined to include
personal dishonesty, incompetence, willful misconduct or a breach of fiduciary
duty) and, in such case, the Company shall be obligated to pay Mr. Lenzo his
compensation accrued through the date of such termination. The Company may also,
upon 60-days' notice to Mr. Lenzo, terminate Mr. Lenzo's employment agreement
for any reason other than just cause and, in such a case, the Company will be
obligated to pay Mr. Lenzo his compensation through January 1, 1999. In
addition, the Regional Director of the Office of Thrift Supervision (the "OTS")
may terminate Mr. Lenzo's employment agreement in certain instances, including
if the Federal Deposit Insurance Corporation (the "FDIC") enters into an
agreement to provide assistance to Matrix Bank under its authority granted by
the Federal Deposit Insurance Act (the "FDI Act") or if the Regional Director
determines that Matrix Bank is in an unsafe or unsound position. Mr. Lenzo is
entitled to certain change in control payments if, after a change in control of
Matrix Bank or Matrix Capital, Mr. Lenzo's employment is terminated prior to
January 1, 1999. The amount of such change in control payments, if required to
be paid, would generally be the balance of Mr. Lenzo's salary through January 1,
1999 plus an additional amount that is equal to the amount of Mr. Lenzo's annual
compensation paid to Mr. Lenzo by Matrix Bank for the year prior to his
termination. The payments to Mr. Lenzo upon a change in control, however, may
not exceed 2.99 times Mr. Lenzo's "base amount" (as defined in Section
280G(b)(3) of the Code) without adverse tax consequences.
In connection with the acquisition by the Company of The Vintage Group,
Inc. ("Vintage"), the parent company of First Matrix and Sterling, the Company
entered into an employment agreement with Mr. Skretny. This employment agreement
provides for a term of three years during which Mr. Skretny shall be employed as
President and Chief Executive Officer of Vintage, Sterling and First Matrix at
an annual base salary, subject to periodic review by the Board of Directors of
the Company, of $135,500. Mr. Skretny is also eligible for a performance bonus
if the Board of Directors of the Company determines in good faith that Mr.
Skretny has met the performance standards consistent with his position. Under
the terms of his employment agreement, Mr. Skretny was granted options to
purchase 25,000 shares of Common Stock at $14.25 per share. Such options will
generally become exercisable in 20% increments on the first through fifth
anniversary dates of the date of grant of such options. Mr. Skretny's employment
agreement may be terminated by Mr. Skretny or the Company upon 30 days' notice,
but in the event of such termination by the Company, the Company must pay Mr.
Skretny a one-time payment equal to the base salary that would be due Mr.
Skretny for the remainder of the three-year term. The Company may also terminate
the employment agreement for cause (which is generally defined to include
continued failure by Mr. Skretny to perform his assigned duties, a material
breach by Mr. Skretny of any of the terms of his employment agreement, or
intentional dishonest, fraudulent or felonious acts committed by Mr. Skretny).
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<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In connection with the Company's initial public offering in October 1996,
the Board of Directors established a Compensation Committee to review and
approve the compensation levels of executive officers of the Company, evaluate
the performance of the executive officers, consider senior management succession
issues and any related matters for the Company. The Compensation Committee is
charged with reviewing with the Board of Directors in detail all aspects of the
cash compensation for the executive officers of the Company. Stock option
compensation for the executive officers is also considered by the Compensation
Committee.
Because the Compensation Committee was formed in October 1996, it was not
charged with establishing or passing upon the 1996 compensation for the
executive officers of the Company. Such determinations were made by the entire
Board of Directors, which was comprised at the time of such determination of
several of the Company's executive officers, including Mr. Gibson, the Company's
Chief Executive Officer, Mr. Schmitz, the Company's Chairman of the Board, Mr.
Kloos, the Company's Chief Financial Officer, Mr. Spencer, a Vice Chairman of
the Company, and Mr. Piercy, the President of United Financial. The Compensation
Committee, however, did meet during early 1997 to, among other things, review
the executive compensation paid by the Company during 1996. In making such
review, the Compensation Committee considered a number of factors, including the
34.6% increase in net income of the Company for 1995 versus 1994, the
compensation paid to comparable officers in a peer group of publicly-traded
competitors of the Company and the employment agreements existing with several
of the Company's executive officers. The Compensation Committee concluded in its
review that such compensation was reasonably related to the performance of the
Company and those individuals during fiscal 1996.
Subsequent to its formation, the members of the Compensation Committee
also met to establish a philosophy in determining executive compensation for
fiscal 1997 and future years. The philosophy of the Company's compensation
program is to employ, retain and reward executives capable of leading the
Company in achieving its business objectives. These objectives include
preserving a strong financial posture, increasing the assets of the Company,
positioning the Company's assets and business operations in geographic markets
and industry segments offering long term growth opportunities, enhancing
stockholder value and ensuring the survival of the Company. The accomplishment
of these objectives is measured against conditions prevalent in the industry
within which the Company operates. In recent years these conditions reflect a
highly competitive market environment and rapidly changing regional, geographic
and overall industry market conditions. The Compensation Committee is also
mindful, however, of the fact that several of the Company's executive officers
have entered into employment agreements in connection with their agreements to
join the Company; accordingly, with respect to those executive officers, the
Compensation Committee recognizes that, to a large degree, compensation for such
persons is set by contract.
In general, the Compensation Committee has determined that the available
forms of executive compensation should include base salary, cash bonus awards
and stock options. Performance of the Company will be a key consideration (to
the extent that such performance can fairly be attributed or related to such
executive's performance), as well as the nature of each executive's
responsibilities and capabilities. The Company's compensation philosophy
recognizes, however, that stock price performance is only one measure of
performance and, given industry business conditions and the long term strategic
direction and goals of the Company, it may not necessarily be the best current
measure of executive performance. Therefore, the Company's compensation
philosophy also will give consideration to the Company's achievement of
specified business objectives when determining executive officer compensation.
The Compensation Committee will endeavor to compensate the Company's executive
officers based upon a Company-wide salary structure consistent for each position
relative to its authority and responsibility compared to industry peers.
CORPDAL:61850.4 26059-00016
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<PAGE>
An additional objective of the Compensation Committee in determining
compensation is to reward executive officers with equity compensation in
addition to salary in keeping with the Company's overall compensation
philosophy, which attempts to place equity in the hands of its employees in an
effort to further instill shareholder considerations and values in the actions
of all the employees and executive officers. In making its determinations, some
consideration will be given by the Compensation Committee to the number of
options already held by such persons and the existing amount of Common Stock
already owed by such persons. Stock option awards in 1996 were determined by the
Compensation Committee in connection with the initial public offering and were
used to reward certain executive officers and to retain each of them through the
potential of capital gains and additional equity buildup in the Company. The
number of stock options granted was determined, in part, by the subjective
evaluation of each executive's ability to influence the Company's long term
growth and profitability and by the amount of equity owed by such executive
officers prior to the Company's initial public offering in October 1996. The
Compensation Committee believes that the award of options represents an
effective incentive to create value for the shareholders.
In determining executive compensation for 1997, the Compensation Committee
reviewed several factors. Particular emphasis was placed upon the successful
completion of the Company's initial public offering and the overall growth
experienced during 1996 by the Company. After consideration, the Compensation
Committee determined to set the base salary for Messrs. Gibson, Schmitz and
Spencer at levels equivalent to the 1996 level. The remaining executive officers
each received moderate increases in base salary based upon the increased duties
and responsibilities associated with the growth of the Company and its status as
a publicly-traded entity.
The Compensation Committee is currently investigating the possibility of
implementing a formal bonus plan for the Company's executive officers and other
key employees. The Compensation Committee believes it will retain, in the near
future, the services of an outside consultant to recommend the form and terms of
the formal bonus plan, and it is anticipated that such plan will be implemented
prior to payment of bonuses, if any, in fiscal 1997.
Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to public companies for compensation over $1
million paid to any of the Chief Executive Officer and the four other most
highly compensated executive officers. Certain performance-based compensation,
however, is specifically exempt from the deduction imit. The Company does not
have a policy that requires or encourages the Compensation Committee to qualify
stock options or restricted stock awarded to executive officers for
deductibility under Section 162(m) of the Internal Revenue Code. However, the
Compensation Committee will consider the net cost to the Company in making all
compensation decisions.
COMPENSATION COMMITTEE
Stephen G. Skiba
David A. Frank
CORPDAL:61850.4 26059-00016
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, 1995 and most of 1996, the Company had no compensation
committee or other committee of the Board of Directors performing similar
functions. Decisions concerning executive compensation for fiscal 1996 were made
by the Board of Directors, including Messrs. Gibson, Kloos, Schmitz, Piercy and
Spencer, each of whom is an executive officer of the Company and participated in
deliberations of the Board of Directors regarding executive officer
compensation. The Board of Directors of the Company has established a
Compensation Committee. See "--Committees of the Board of Directors."
During the last completed fiscal year, no executive officer of the Company
served as a member of the compensation committee (or other board committee
performing equivalent functions or, in the absence of any such committee, the
entire Board of Directors) of another entity, one of whose executive officers
served on the Compensation Committee or, during the period in 1996 in which
there was no Compensation Committee, the entire Board of Directors) of the
Company.
During the last completed fiscal year, no executive officer of the Company
served as a director of another entity, one of whose executive officers served
on the Compensation Committee or, during the period in 1996 in which there was
no Compensation Committee, the entire Board of Directors) of the Company.
During the last completed fiscal year, no executive officer of the
registrant served as a member of the Compensation Committee or, during the
period in 1996 in which there was no Compensation Committee, the entire Board of
Directors) of another entity, one of whose executive officers served as a
director of the Company.
COMMON STOCK PERFORMANCE GRAPH
The following performance graph compares the cumulative return of the
Common Stock with that of the Broad Market (the NASDAQ Market Index) and a
published Industry Index (SIC Code 6162 - Mortgage Bankers and Loan
Correspondents). Each index assumes $100 invested at October 18, 1996 and is
calculated assuming quarterly reinvestment of dividends and quarterly weighting
by market capitalization.
CORPDAL:61850.4 26059-00016
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<PAGE>
COMPARATIVE RETURNS
MATRIX CAPITAL CORPORATION, BROAD MARKET AND PUBLISHED INDUSTRY INDEX
(PERFORMANCE RESULTS THROUGH 12/31/96)
[GRAPH APPEARS HERE]
Beginning Quarter Ended
October 18, 1996 December 31, 1996
- ------------------------------ -------------------- ----------------------
Matrix Capital Corporation 100.00 141.11
Industry Index 100.00 97.67
Broad Index 100.00 105.97
CORPDAL:61850.4 26059-00016
15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1995, the Company loaned Matrix Diversified, Inc.
("Diversified"), a company in which Messrs. Gibson, Schmitz, Piercy, Spencer,
Kloos and Osselaer, each of whom is an executive officer of the Company, and Mr.
Robert Fowls, an officer of United Financial, own all of the outstanding capital
stock, $750,000 in order to enable Diversified to purchase the assets of an
unaffiliated business. Such loan accrues interest at 13% per annum and is
secured by a secondary lien on the assets of Diversified. Principal and interest
on this loan is due and payable in one lump sum on October 1, 2000. In addition,
the Company leases approximately 7,400 square feet in its Phoenix office
building to a subsidiary of Diversified at a base rental of approximately $8,500
per month. The lease expires in September 1997, but the Company anticipates that
it will be renewed for successive one-year terms.
On December 31, 1996, the Company renewed a loan originally made to Mr.
Spencer, Vice Chairman of the Board and a shareholder of the Company, in
December 1994 in the amount of approximately $80,000. The loan to Mr. Spencer
accrues interest at the prime rate, is unsecured, and the entire principal and
all accrued interest is due and payable in one lump sum on December 31, 1997.
The Company has the option of extending the maturity of such loan to Mr. Spencer
in annual increments.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities (the
"10% Shareholders"), to file reports of ownership and changes of ownership with
the Commission and NASDAQ National Market. Officers, directors and 10%
Shareholders of the Company are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms so filed.
Based solely on review of copies of such forms received, the Company
believes that, during the last fiscal year, all filing requirements under
Section 16(a) applicable to its officers, directors and 10% Shareholders were
timely, except that Mr. Skretny filed his Form 3 late, and Messrs. Kloos,
Osselaer, Panero, Frank, and Lenzo failed to report on Form 4 one transaction
each (which transactions were reported on Form 5s that were each filed late).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
PROPOSAL TO RATIFY APPOINTMENT OF
INDEPENDENT AUDITORS
(PROPOSAL 2)
The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to be the principal independent auditors of the Company and to audit
its consolidated financial statements for the fiscal year ending December 31,
1997. Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended December 31, 1996, and has reported on the Company's
consolidated financial statements. Representatives of the firm will be present
at the Annual Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions from
shareholders.
The Board of Directors has the responsibility for the selection of the
Company's independent auditors. Although shareholder ratification is not
required for the selection of Ernst & Young LLP, and although such ratification
will not obligate the Company to continue the services of such firm, the Board
of Directors is submitting the selection for ratification with a view towards
soliciting the shareholders' opinion thereon, which
CORPDAL:61850.4 26059-00016
16
<PAGE>
may be taken into consideration in future deliberations. If the appointment is
not ratified, the Board of Directors must then determine whether to appoint
other auditors before the end of the current fiscal year, and in such case,
shareholders' opinions would be taken into consideration.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE 1997 FISCAL YEAR.
OTHER BUSINESS
(PROPOSAL 3)
The Board of Directors knows of no other business to be brought before
the Annual Meeting. If, however, any other business should properly come before
the Annual Meeting, the persons named in the accompanying proxy will vote the
proxy as in their discretion they may deem appropriate, unless they are directed
by the proxy to do otherwise.
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Proxy Statement for the
1997 Annual Meeting must be received by the Company no later than November 27,
1997.
BY ORDER OF THE BOARD OF DIRECTORS
James G. Panero, Secretary
March 28, 1997
Denver, Colorado
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING AND WISH THEIR STOCK TO BE VOTED ARE URGED
TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
CORPDAL:61850.4 26059-00016
17
<PAGE>
PROXY
MATRIX CAPITAL CORPORATION
1380 Lawrence Street
Suite 1410
Denver, Colorado 80204
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints David W. Kloos and James G. Panero, and
each of them, as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and vote, as designated below, all of the
shares of the common stock of Matrix Capital Corporation (the "Company"), held
of record by the undersigned on March 21, 1997, at the Annual Meeting of
Shareholders of the Company to be held on May 1, 1997, and any adjournment(s)
thereof.
[To Be Dated And Signed On Reverse Side]
CORPDAL:62578.1 26059-00017
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED AND DATED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES UNDER PROPOSAL
1, IN FAVOR OF PROPOSAL 2, AND THE PROXIES WILL USE THEIR DISCRETION WITH
RESPECT TO ANY MATTERS REFERRED TO IN PROPOSAL 3.
1. PROPOSAL TO ELECT AS DIRECTORS OF THE COMPANY THE FOLLOWING
PERSONS TO HOLD OFFICE UNTIL THE 2000 ANNUAL ELECTION OF DIRECTORS BY
SHAREHOLDERS OR UNTIL THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED.
[ ] FOR all nominees listed
(except as marked below to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
Thomas M. Piercy
Stephen Skiba
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
Withhold:
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR THE 1997 FISCAL YEAR.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated: , 1997
----------
-------------------------------------
Signature
-------------------------------------
Signature, If Held Jointly
Please execute this proxy as your name appears hereon. When
shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by the president or other
authorized officer. If a partnership, please sign in
partnership name by authorized person. PLEASE MARK, SIGN,
DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
CORPDAL:62578.1 26059-00017
