<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Business Resource Group
================================================================================
(Name of Registrant as Specified In Its Charter)
================================================================================
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
<PAGE> 2
[ ] 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> 3
[BUSINESS RESOURCE GROUP LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 4, 1999
TO THE SHAREHOLDERS OF BUSINESS RESOURCE GROUP:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Business Resource Group, a California corporation (the "Company"),
will be held at the Doubletree Hotel, 2050 Gateway Place, San Jose, California
95110, on Thursday, March 4, 1999, at 1:30 p.m., local time, for the following
purposes:
1. To elect the following directors to serve until the next Annual
Meeting of Shareholders or until their respective successors are
elected and qualified: Jack A. Bradley, Brian D. McNay, John W.
Peth, Harry S. Robbins and Jeffrey Tuttle.
2. To ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company for the fiscal year ending
October 31, 1999.
3. To transact such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement which is attached and made a part of this Notice.
Only shareholders of record at the close of business on February 5, 1999
will be entitled to notice of and to vote at the Annual Meeting and any
adjournment or postponement thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided in order to ensure
your representation and the presence of a quorum at the Annual Meeting. If you
send in your proxy card and then decide to attend the Annual Meeting to vote
your shares in person, you may still do so. Your proxy is revocable in
accordance with the procedures set forth in the Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JOHN W. PETH
-------------------------------------
John W. Peth
President and Chief Executive Officer
San Jose, California
February 12, 1999
IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE REQUESTED
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON. THANK YOU FOR ACTING PROMPTLY.
<PAGE> 4
LOGO
PROXY STATEMENT
FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Business Resource Group, a California corporation (the "Company"),
for use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held
Thursday, March 4, 1999, at 1:30 p.m., local time, or at any postponement or
adjournment thereof, for the purposes set forth in this Proxy Statement and in
the accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting
will be held at the Doubletree Hotel, 2050 Gateway Place, San Jose, California
95110. The Company's principal executive offices are located at 2150 N. First
Street, Suite 101, San Jose, California 95131. The Company's principal telephone
number at that location is (408) 325-3200.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report to Shareholders for the fiscal year ended October 31, 1998, including
financial statements, were first mailed on or about February 12, 1999 to all
shareholders entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Inspector of Elections) a written notice of revocation or a duly executed proxy
bearing a later date or by attending the Annual Meeting and voting in person.
RECORD DATE; VOTING SECURITIES
The close of business on February 5, 1999 has been fixed as the record date
(the "Record Date") for determining the holders of shares of Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting. At the close of
business on the Record Date, the Company had approximately 5,050,045 shares of
Common Stock outstanding held of record by approximately 241 shareholders.
VOTING AND SOLICITATION
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections with the assistance of the Company's transfer agent.
The Inspector of Elections will also determine whether a quorum is present.
Holders of Common Stock on the Record Date are entitled to one vote per
share on all matters and are entitled to cumulate votes for the election of
directors, subject to the conditions described below.
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares held by such
shareholder, or distribute the shareholder's votes on the same principle among
as many candidates as the shareholder thinks fit, provided that votes cannot be
cast for more than the number of directors authorized by the Company's Bylaws.
However, no shareholder shall be entitled to cumulate votes unless the
candidate's name has been placed in nomination prior to the voting and the
shareholder, or any
<PAGE> 5
other shareholder, has given notice at the meeting prior to the voting of the
intention to cumulate the shareholder's votes.
Except with respect to the election of directors, and except in certain
other specific circumstances, the affirmative vote of a majority of shares
represented and voting with respect to a particular item at a duly held meeting
at which a quorum is present (which shares voting affirmatively also constitute
a majority of the required quorum) is required under California law for approval
of proposals presented to shareholders. In general, California law also provides
that a quorum consists of a majority of the shares entitled to vote, represented
either in person or by proxy. The Inspector of Elections will treat abstentions
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as not voting for purposes of determining the approval
of any matter submitted to the shareholders for a vote.
The shares represented by the proxies received, properly marked, dated,
signed and not revoked, will be voted at the Annual Meeting. Where such proxies
specify a choice with respect to any matter to be acted upon, the shares will be
voted in accordance with the specifications made. Any proxy which is returned
using the form of proxy enclosed and which is not marked as to a particular item
will be voted FOR the election of directors, FOR ratification of the appointment
of the designated independent auditors and as the proxy holders deem advisable
on other matters that may come before the meeting, as the case may be, with
respect to the item not marked. If a broker indicates on the enclosed proxy or
its substitute that it does not have discretionary authority as to certain
shares to vote on a particular matter ("broker non-votes"), those shares will
not be considered as voting with respect to that matter. While there is no
definitive specific statutory or case law authority in California concerning the
proper treatment of abstentions and broker non-votes, the Company believes that
the tabulation procedures to be followed by the Inspector of Elections are
consistent with the general statutory requirements in California concerning
voting of shares and determination of a quorum.
The solicitation of proxies will be conducted by mail and the Company shall
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and other persons representing beneficial owners of
shares of the Company Common Stock for their expenses in forwarding solicitation
materials regarding the Annual Meeting to such beneficial owners. Proxies may be
solicited by certain of the Company's directors, officers and regular employees,
without additional compensation, personally or by telephone, facsimile or
telegram.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
The Company's Bylaws currently provide for five directors. At the Annual
Meeting, five directors are to be elected to serve until the next Annual Meeting
of Shareholders or until their respective successors are elected and qualified.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them FOR the Company's five nominees named below, all of whom are presently
directors of the Company. In the event that any nominee of the Company is unable
or unwilling to serve as a director at the time of the Annual Meeting, the
proxies may be voted for the balance of those nominees named and for any
substitute nominee who shall be designated by the present Board or the proxy
holders to fill the vacancy, or for the balance of the nominees named without
nomination of a substitute, or the size of the Board may be reduced in
accordance with the Bylaws of the Company. The Board does not believe that any
of the persons named below will be unable or unwilling to serve as a nominee or
as a director if elected. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received by
them in such a manner in accordance with cumulative voting as will assure the
election of as many of the nominees listed below as possible, and, in such
event, the specific nominees to be voted for will be determined by the proxy
holders. Assuming a quorum is present, the five nominees for director receiving
the greatest number of votes cast at the
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Annual Meeting will be elected. The term of office of each person elected as a
director will continue until the next Annual Meeting of Shareholders or until
his or her successor has been elected and qualified.
In voting for directors, each shareholder is entitled to cast that number
of votes equal to the number of directors to be elected multiplied by the number
of shares of Common Stock held by such shareholder. Such votes may be cast for
one candidate or distributed in any manner among the nominees for directors;
provided that votes may not be cast for more than five candidates. However, the
right to cumulate votes in favor of one or more candidates may not be exercised
unless the candidate or candidates have been nominated prior to the voting, and
a shareholder has given notice at the Annual Meeting, prior to the voting, of
the shareholder's intention to cumulate such shareholder's votes. If any one
shareholder gives such notice, all shareholders may cumulate their votes for
candidates in nomination. The persons authorized to vote shares represented by
proxies in the enclosed form will (if authority to vote for the election of
directors is not withheld) have full discretion and authority to vote
cumulatively and to allocate votes among any or all of the nominees as they may
determine or, if authority to vote for a specified candidate or candidates has
been withheld, among those candidates for whom authority to vote has not been
withheld.
The nominees' names, ages as of October 31, 1998, and certain information
about them are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE POSITION WITH THE COMPANY SINCE
--------------- --- ------------------------- --------
<S> <C> <C> <C>
Jack A. Bradley................ 50 Director 1997
Brian D. McNay................. 42 Director, Executive Vice President of Sales 1987
John W. Peth................... 50 Director, President and Chief Executive Officer 1995
Harry S. Robbins............... 50 Director 1995
Jeffrey Tuttle................. 42 Director, Executive Vice President of Marketing 1987
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years. There is no
family relationship between any director or executive officer of the Company.
Mr. Bradley has served as a member of the Board since February 1997. Since
April 1998, Mr. Bradley has served as General Manager of the Video Internet Unit
of Cisco Systems, Inc., a supplier of internetworking products. From October
1996 to March 1998, Mr. Bradley served as Vice President of Finance and
Administration and Chief Financial Officer of Neuron Data, a software
development company. Prior to joining Neuron Data, Mr. Bradley served as Vice
President of Finance and Chief Financial Officer of Network Computing Devices, a
manufacturer of network computers, from 1988 to 1996. Mr. Bradley received his
BS degree in Finance from the University of San Francisco in 1970.
Mr. McNay has served as Executive Vice President of Sales since April 1995,
and as a member of the Board since the Company's inception in April 1987. Mr.
McNay also served as President of the Company between April 1987 and April 1995.
Mr. McNay was also the founder and owner of Business Interiors, a sole
proprietorship sold to the Company in April 1987. In addition, Mr. McNay served
as a sales executive at various office furniture dealerships from 1979 to 1986,
including the Contract Source Center, the Contract Office Group and Design
Performance.
Mr. Peth has served as President and Chief Executive Officer of the Company
since December 1997 and also served as Chief Financial Officer of the Company
from December 1997 to February 1998 and as a member of the Board since April
1995. From July 1997 to December 1997, Mr. Peth was a consultant to the Company.
From June 1996 to March 1997, Mr. Peth served as Acting President and Chief
Executive Officer of Tab Products Co. ("TAB"), an office filing and furniture
systems manufacturer and distributor. From April 1991 until June 1997, Mr. Peth
served as Executive Vice President and Chief Operating Officer of TAB. From
August 1984 to April 1991, Mr. Peth served as the managing partner of the San
Jose region of Deloitte & Touche LLP and one of its predecessor public
accounting firms. Mr. Peth is also a director of Aspect Telecommunications,
Inc., a provider of transaction processing systems. Mr. Peth received his BA
degree in
3
<PAGE> 7
Economics in 1970 from the University of California at Santa Barbara, and an MBA
from the University of California at Los Angeles in 1972.
Mr. Robbins has served as a member of the Board since May 1995. Since March
1994, Mr. Robbins has served as President, Chief Executive Officer and Chairman
of the Board of Symphonix Devices, Inc., an implantable hearing device company.
From January 1991 to December 1993, Mr. Robbins was President and a member of
the Board of Directors of Cardiorhythm, an electrophysiology catheter company.
From September 1986 to December 1990, Mr. Robbins served in a variety of
positions at Laserscope, a surgical systems company, including Executive Vice
President, Vice President of Sales, Marketing and Service and Director of Sales.
Mr. Robbins received his BA degree from Pennsylvania State University in 1969.
Mr. Tuttle has served as Executive Vice President of Marketing of the
Company since April 1995, and as a member of the Board since the Company's
inception in 1987. Mr. Tuttle also served as the Company's Vice President of
Sales between April 1987 and April 1995. From 1978 to 1987, Mr. Tuttle served as
a sales executive with KBM Office Furniture, an office furniture dealership. He
received his BS degree in Marketing in 1980 from Santa Clara University.
BOARD MEETINGS AND COMMITTEES
The Board held a total of four formal meetings during the fiscal year ended
October 31, 1998. No director attended fewer than 75% of the aggregate number of
meetings of the Board and meetings of the committees of the Board on which he
serves. The Board has an Audit Committee and a Compensation Committee. The Board
does not have a nominating committee or a committee performing the functions of
a nominating committee.
The Audit Committee consists of Messrs. Bradley and Robbins and held two
formal meetings during the fiscal year ended October 31, 1998. The Audit
Committee recommends engagement of the firm of certified public accountants to
audit the financial statements of the Company and monitors the effectiveness of
the audit effort, the Company's financial and accounting organization and its
system of internal accounting controls.
The Compensation Committee consists of Messrs. Bradley and Robbins and held
one formal meeting during the fiscal year ended October 31, 1998. The
Compensation Committee's functions are to establish and administer the Company's
policies regarding annual executive salaries and cash incentives and long-term
equity incentives, and make recommendations to the Board regarding the Company's
executive compensation policy.
COMPENSATION OF DIRECTORS
Non-employee members of the Board are eligible to receive a retainer of
$2,000 per quarter, $500 per meeting of the Board attended and $250 for each
committee meeting attended, and may be reimbursed for out-of-pocket costs of
attending Board and committee meetings. In addition, non-employee members of the
Board receive options to purchase shares of the Company's Common Stock pursuant
to the 1995 Directors' Stock Option Plan (the "1995 Directors' Option Plan").
The 1995 Directors' Option Plan provides for the grant of non-statutory stock
options to non-employee directors of the Company at an exercise price equal to
the fair market value of the Company's Common Stock on the date of grant. Each
current non-employee member of the Board was automatically granted an option to
purchase 20,000 shares of Common Stock (the "Initial Option") on the date on
which such person first became a non-employee director of the Company. In
addition, each non-employee director who joins the Board is similarly granted an
Initial Option on the date on which such person first becomes a director,
whether through election by the shareholders of the Company or appointment by
the Board to fill a vacancy. Thereafter, on the first calendar day of the
Company's fiscal year, each non-employee director is automatically granted an
option to purchase 5,000 shares of Common Stock (each, a "Subsequent Option")
if, on such date, he or she shall have served on the Board for at least three
months. Options granted under the 1995 Directors' Option Plan have a term of ten
years. The Initial Options become exercisable cumulatively to the extent of 25%
of the shares subject to the option on each of the first four anniversaries of
the date of grant. Each Subsequent Option becomes exercisable in full on the
fourth
4
<PAGE> 8
anniversary of the date of grant. Directors who are employees of the Company do
not receive any additional compensation for their services as a director.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ALL OF THE NOMINEES LISTED
ABOVE.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected Deloitte & Touche LLP, independent auditors, to
audit the financial statements of the Company for the fiscal year ending October
31, 1999 and recommends that the shareholders vote for ratification of such
appointment. In the event of a negative vote on such ratification, the Board
will reconsider its selection. Deloitte & Touche LLP has audited the financial
statements of the Company since 1994. Representatives of Deloitte & Touche LLP
are expected to be present at the meeting and will have the opportunity to make
a statement if they desire to do so. They are also expected to be available to
respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS VOTING IN FAVOR OF THE RATIFICATION OF
THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE
COMPANY.
5
<PAGE> 9
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of January 31, 1999 as to (i) each of the Company's directors,
(ii) each of the executive officers named in the Summary Compensation Table of
this Proxy Statement (the "Named Executive Officers"), (iii) each person who is
known by the Company to own beneficially more than five percent of the Company's
Common Stock, and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)(2)
5% SHAREHOLDERS, DIRECTORS, NAMED ----------------------------
EXECUTIVE OFFICERS, AND DIRECTORS AND PERCENT OF
EXECUTIVE OFFICERS AS A GROUP NUMBER TOTAL CLASS
------------------------------------- --------- -----------
<S> <C> <C>
Jack A. Bradley........................................... 5,000 *
Brian D. McNay............................................ 633,390 12.6%
John M. Palmer............................................ 54,688 1.1%
John W. Peth.............................................. 279,125 5.3%
Harry S. Robbins.......................................... 15,000 *
Jeffrey D. Tuttle......................................... 960,000 19.0%
Charles J. Winter......................................... 316,480(3) 9.9%
25111 Summerhill Avenue
Los Altos, California 94024
Ronda Lee McNay........................................... 631,390(4) 12.5%
200 Summerhill Drive
Santa Cruz, California 95066
Heartland Advisors........................................ 557,500(5) 11.1%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
T. Rowe Price Associates, Inc............................. 380,000(6) 7.5%
100 East Pratt Street
Baltimore, Maryland 21202
All directors and executive officers as a group (6
persons).................................................. 1,947,203(7)(8) 36.2%
</TABLE>
- ---------------
* Less than 1%
(1) To the Company's knowledge, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws where
applicable and the information contained in the footnotes to this table.
Unless otherwise indicated, the address of each of the named individuals
is: c/o Business Resource Group, 2150 North First Street, Suite 101, San
Jose, California 95131.
(2) In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of Common Stock subject to
options or warrants held by that person that are currently exercisable or
exercisable within 60 days after January 31, 1998 are deemed outstanding.
Such shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of any other person.
(3) Based solely on information contained in the Schedule 13G dated January 28,
1999 filed by the named shareholder with the Securities and Exchange
Commission. Mr. Winter resigned as President and Chief Executive Officer of
the Company in December 1997 and as a director of the Company in February
1998.
(4) Based solely on information contained in the Stipulation and Order Re:
Family Support filed November 10, 1998 in the Superior Court of the State
of California in and for the County of Santa Cruz.
(5) Based solely on information contained in the Schedule 13G dated January 27,
1998 filed by the named shareholder with the Securities and Exchange
Commission.
(6) Based solely on information contained in the Schedule 13G dated February 9,
1998 filed by the named shareholder with the Securities and Exchange
Commission.
(7) Includes the following number of shares subject to stock options
exercisable within 60 days of January 31, 1998: Mr. Bradley, 5,000; Mr.
Palmer, 49,688; Mr. Peth, 268,125; Mr. Robbins, 15,000; all directors and
officers as a group, 337,813.
(8) Excludes Mr. Winter. See footnote 3.
6
<PAGE> 10
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph set forth in this Proxy Statement shall not be
incorporated by reference into any such filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is a report of the Compensation Committee of the Board of
Directors (the "Compensation Committee") describing the compensation policies
applicable to the Company's executive officers and other compensation matters
during the fiscal year ended October 31, 1998. The Compensation Committee is
responsible for establishing and monitoring the general compensation policies
and compensation plans of the Company, as well as the specific compensation
levels for executive officers. Executive officers who are also directors have
not participated in deliberations or decisions involving their own compensation.
All decisions relating to executive compensation are also reviewed by the full
Board.
General Compensation Policy
The Company's compensation policy is designed to attract and retain
qualified key executives to contribute to the Company's growth and long-term
success. It is the objective of the Compensation Committee to have a portion of
each executive's compensation contingent upon the Company's performance as well
as upon the individual's personal performance. Accordingly, each executive
officer's compensation package is comprised of three elements: (i) base salary
which reflects individual performance and expertise; (ii) variable bonus awards
payable in cash and tied to the achievement of certain performance goals that
the Board establishes from time to time for the Company; and (iii) long-term
stock-based incentive awards which are designed to strengthen the mutuality of
interests between the executive officers and the Company's shareholders.
The summary below describes in more detail the factors which the
Compensation Committee considers in establishing each of the three primary
components of the compensation package provided to the executive officers.
Base Salary
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete with the Company for business and executive talent, and the incentives
necessary to attract and retain qualified management. Base salary is adjusted as
necessary each year to take into account the individual's performance and to
maintain a competitive salary structure. The Company's overall performance plays
a significant role in the determination of base salary. See also "Compensation
of Other Executives" below.
Cash-Based Incentive Compensation
Cash bonuses are awarded to executive officers on the basis of their
success in achieving designated individual goals and the Company's success in
achieving specific company-wide goals, such as customer satisfaction, revenue
growth and earnings growth. See also "Compensation of Other Executives" below.
Long-Term Incentive Compensation
The Company has utilized its stock option plans to provide executives and
other key employees with incentives to maximize long-term shareholder value.
Grants under the Company's stock option plans by the Compensation Committee take
the form of stock options designed to give the recipient a significant equity
stake in the Company and thereby closely align his or her interests with those
of the Company's shareholders. Factors considered in making such awards include
the individual's position in the Company, his or her
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<PAGE> 11
performance and responsibilities, and internal comparability considerations. See
also "Report on Repriced Stock Options for Employees of the Company."
Each option grant allows the executive officer to acquire shares of Common
Stock at a fixed price per share (the fair market value on the date of grant)
over a specified period of time (up to five years). The options typically vest
in periodic installments over a four-year period, contingent upon the executive
officer's continued employment with the Company. Accordingly, the option will
provide a return to the executive officer only if he or she remains in the
Company's service, and then only if the market price of the Common Stock
appreciates over the option term.
Compensation of the Chief Executive Officer
John W. Peth has served as the Company's President and Chief Executive
Officer since December 1997. His annualized base salary for fiscal 1998 was
$225,000. Mr. Peth received $206,250 in base salary actually paid for the period
from the commencement of his employment with the Company on December 1, 1997 to
October 31, 1998, and he received a performance bonus in the amount of $80,000
and a stock option grant exercisable for up to 400,000 shares of Common Stock.
The factors discussed above in "Base Salaries," "Cash-Based Incentive
Compensation," and "Long-Term Incentive Compensation" were also applied in
establishing the amounts of Mr. Peth's salary and bonus and number of shares
subject to his stock option grant. Mr. Peth's compensation was the result of
arm's length negotiation between the Company and Mr. Peth and was approved by
the Compensation Committee. Significant factors in establishing Mr. Peth's
compensation included: (i) an assessment of the scope of his responsibilities;
(ii) an evaluation of Mr. Peth's level of experience; and (iii) a review of the
compensation of Chief Executive Officers for competitive companies in the office
furniture industry. See also "Summary Compensation Table" below.
During the fiscal year ended October 31, 1998, Charles J. Winter served as
the Company's President and Chief Executive Officer from November to December
1998. His annualized base salary for fiscal year 1998 was $120,000. Mr. Winter
received $20,000 in base salary actually paid during fiscal year 1998, and he
received $100,000 in severance payments during such period. See also
"Transactions With Management."
Compensation of Other Executives
The President and Chief Executive Officer annually assesses the performance
of all other executive officers and recommends compensation increases to the
Compensation Committee based on a number of factors, such as performance
evaluations, comparative data and other relevant factors. The Compensation
Committee then reviews and approves increases, if any, for each executive
officer. In fiscal 1998, the Compensation Committee changed the compensation
structure of Messrs. McNay and Tuttle, the Company's Executive Vice President of
Sales and Vice President of Marketing, respectively, from a primarily
commission-based compensation plan to a base salary and bonus arrangement based
upon corporate performance. Messrs. McNay and Tuttle continue to be responsible
for their own sales to customers.
During fiscal 1997 and fiscal 1996, Messrs. McNay and Tuttle were
compensated by commissions earned on their respective sales of the Company's
products and services and participated in the same commission plan as other
Company sales personnel. The Company's commission structure limited sales
representatives who hold more than five percent of the Company's outstanding
Common Stock (or options therefor) to a maximum commission level of $480,000 per
fiscal year. Mr. McNay obtained the maximum commission level during fiscal 1997
and fiscal 1996.
Neither Mr. McNay nor Mr. Tuttle received any stock option grants during
fiscal 1998, as the Compensation Committee did not believe such action was
necessary given their existing ownership positions in the Company.
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<PAGE> 12
Deductibility of Executive Compensation
The Compensation Committee has considered the impact of Section 162(m) of
the Internal Revenue Code adopted under the Omnibus Budget Reconciliation Act of
1993, which section disallows a deduction for any publicly-held corporation for
individual compensation exceeding $1 million in any taxable year for the Chief
Executive Officer and four other most highly compensated executive officers,
respectively, unless such compensation meets the requirements for the
"performance-based" exception to Section 162(m). As the cash compensation paid
by the Company to each of its executive officers is expected to be below $1
million annually and the Compensation Committee believes that options granted
under the Company's 1995 Stock Option Plan to such officers will meet the
requirements for qualifying as performance-based, the Compensation Committee
believes that Section 162(m) will not affect the tax deductions available to the
Company with respect to the compensation of its executive officers. It is the
Compensation Committee's policy to qualify, to the extent reasonable, its
executive officers' compensation for deductibility under applicable tax law.
However, the Company may from time to time pay compensation to its executive
officers that may not be deductible.
Report on Repriced Stock Options for Employees of the Company
In March 1998, the Compensation Committee determined that it was in the
best interest of the Company to offer to reprice those then-outstanding stock
options of the Company granted to employees of the Company with exercise prices
in excess of the then-current fair market value of the Company's Common Stock.
No options held by the Company's executive officers or directors were included
in such repricing actions taken by the Company.
The objectives of the Company's 1995 Stock Option Plan are to promote the
interests of the Company by providing employees an incentive to acquire a
proprietary interest in the Company and to continue to render services to the
Company. It was the view of the Compensation Committee that stock options with
exercise prices substantially above the current market price of the Company's
Common Stock were viewed negatively by most employee optionees of the Company,
and provided little, if any, equity incentive to such optionees. In addition,
the Compensation Committee was advised by Company management that key employee
turnover was likely to increase in part because the Company's total compensation
package for long-term employees, which included stock options with exercise
prices well above the current trading price, was less attractive than
compensation packages offered by other companies in the same geographic location
in that options granted to new hires at other companies would be granted at
current trading prices, providing more opportunity for appreciation than the
Company's options. The Compensation Committee thus concluded that such option
grants seriously undermined the specific objectives of the 1995 Stock Option
Plan and should properly be repriced. In the opinion of the Compensation
Committee, the shareholders' long-term best interests are served by the
retention and motivation of employee optionees.
In this context, the Committee decided that, effective February 25, 1998
(the "Grant Date"), all employee optionees holding stock options with exercise
prices in excess of the fair market value of the Company's Common Stock on the
Grant Date could elect to receive a one-for-one repricing of their then-
existing unexercised stock options with a new exercise price set at $3.187 per
share, the fair market value of the Company's Common Stock on the Grant Date.
The Company completed this repricing through a one-for-one stock option exchange
of "underwater" stock options for all employee optionees. Optionees who
participated in the option repricing received a lower exercise price in exchange
for forfeiting the accrued vesting of their repriced options. Accordingly, the
vesting commencement date of the new options is the Grant Date, thus employee
optionees participating in the repricing have additional incentive to remain
with the Company. One-half of the shares subject to such repriced options vest
on the first anniversary of the Grant Date, and 25% of the shares subject to
such repriced options vest on each of the second and third anniversaries of the
Grant Date. The exchange was completed in February 1998 with options exercisable
for an aggregate of 361,992 shares of Common Stock having exercise prices of
$3.375 to $7.00 per share being repriced for options exercisable for an equal
number of shares at an exercise price of $3.187 per share.
9
<PAGE> 13
It is the opinion of the Compensation Committee that this repricing program
helped build optionee morale and provided new incentives for the Company's
employees.
COMPENSATION COMMITTEE
Jack A. Bradley
Harry S. Robbins
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are currently no employee directors serving on the Compensation
Committee and no member of the Compensation Committee or executive officer of
the Company has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.
See "Proposal No. 1 -- Election of Directors -- Compensation of Directors"
for a discussion of certain information with respect to all non-employee
directors, including directors serving on the Compensation Committee.
10
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares, for the period that the Company's Common
Stock has been registered under Section 12 of the Securities Exchange Act of
1934, as amended, (which commenced June 27, 1995) the cumulative total
shareholder return for the Company, the CRSP Total Return Index for the Nasdaq
Stock Market (U.S. companies) (the "Nasdaq Composite Index"), and a group
consisting of publicly-traded U.S. companies in the Company's industry (the
"Industry Group"). The Industry Group consists of four companies compiled from
Standard & Poor's CompuStat as follows: Hon Industries, Kimball International,
Herman Miller, Inc. and TAB Products Co. Measurement points are June 27, 1995
and the last trading day of the Company's fiscal years ended October 31, 1998,
October 31, 1997, October 31, 1996 and October 31, 1995. The graph assumes that
$100 was invested on June 27, 1995 (at the initial offering price of $7.00 per
share) in the Common Stock of the Company, the Nasdaq Composite Index and the
Industry Group, and further assumes reinvestment of dividends. The stock price
performance on the following graph is not necessarily indicative of future stock
price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, THE NASDAQ COMPOSITE INDEX
AND THE INDUSTRY GROUP
<TABLE>
<CAPTION>
BRG NASDAQ PEER GROUP
--- ------ ----------
<S> <C> <C> <C>
6/27/95 100 100 100
10/31/95 68 113 104
10/31/96 57 134 145
10/31/97 56 176 254
10/31/98 30 197 222
</TABLE>
- ---------------
* Assumes $100 invested on June 27, 1995 in stock or index, including
reinvestment of dividends.
11
<PAGE> 15
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by (i) the Company's
current Chief Executive Officer; (ii) the three other most highly compensated
individuals who served as an executive officer of the Company during the fiscal
year ended October 31, 1998; (iii) the Company's former Chief Executive Officer;
and (iv) the compensation received by each such individual for the Company's two
preceding fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------- ------------------------- -------
OTHER RESTRICTED SECURITIES ALL
ANNUAL STOCK UNDERLYING LTIP OTHER
FISCAL BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY (1) ($) ($) (#)(2) ($) (3)
--------------------------- ------ -------- -------- ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John W. Peth................... 1998 $206,250 $ 80,000 -- -- 400,000 -- $16,544
President and Chief Executive 1997 -- -- -- -- 55,000 -- --
Officer(4) 1996 -- -- -- -- 5,000 -- --
Brian D. McNay................. 1998 $515,000 $ 80,000 -- -- -- -- $ 5,680
Executive Vice President of
Sales 1997 -- $480,000 -- -- -- -- $ 4,337
1996 -- $480,000 -- -- -- -- $ 4,669
John M. Palmer................. 1998 $ 96,028 $ 60,000 -- -- 125,000 -- $ 5,603
Vice President, Finance and
Chief...................... 1997 -- -- -- -- -- -- --
Financial Officer(5) 1996 -- -- -- -- -- -- --
Jeffrey Tuttle................. 1998 $271,485 $ 80,000 -- -- -- -- $ 5,680
Executive Vice President of 1997 -- $381,801 -- -- -- -- $ 4,337
Marketing 1996 -- $221,982 -- -- -- -- $ 4,500
Charles J. Winter.............. 1998 $ 20,000 -- -- -- -- -- $16,025
Former President and 1997 $120,000 -- -- -- -- -- $ 8,819
Chief Executive Officer(6) 1996 $120,000 -- -- -- -- -- $ 9,888
</TABLE>
- ---------------
(1) Stated amounts for fiscal 1998 include amounts earned by Mr. Peth, Mr.
McNay, Mr. Tuttle and Mr. Palmer as performance bonuses under the provisions
of the Company's Fiscal 1998 Top Management Bonus Program. In fiscal 1997
and fiscal 1996, the stated amounts include amounts earned by Mr. McNay and
Mr. Tuttle as sales commissions, and exclude amounts paid during each
referenced year relating to amounts earned in prior years. During fiscal
1997 and 1996, Company sales representatives, including Messrs. McNay and
Tuttle, who hold more than five percent of the Company's outstanding Common
Stock (or options therefor), were limited to a maximum commission level of
$480,000 per fiscal year.
(2) All options were granted at an exercise price equal to the fair market value
as reported on the Nasdaq Stock Market on the date of grant.
(3) Stated amounts for fiscal years 1998, 1997 and 1996 represent the Company's
contributions to its 401(k) plan for the benefit of the named executives and
automobile expense allowances in the following amounts: 401(k) plan
contributions -- Mr. Peth ($1,969, $0 and $0), Mr. Winter ($125, $1,863 and
$1,725), Mr. McNay ($2,500, $2,250 and $2,250), Mr. Tuttle ($2,500, $2,250
and $2,250) and Mr. Palmer ($1,488, $0 and $0); automobile expense
allowances -- Mr. Peth ($14,575, $0 and $0), Mr. Winter ($15,900, $6,956 and
$8,163), Mr. McNay ($3,180, $2,087 and $2,449), Mr. Tuttle ($3,180, $2,087
and $2,250) and Mr. Palmer ($4,115, $0 and $0).
(4) Mr. Peth joined the Company as President and Chief Executive Officer in
December 1997.
(5) Mr. Palmer joined the Company as Vice President, Finance and Chief Financial
Officer in February 1998.
(6) Mr. Winter resigned as President and Chief Executive Officer in December
1997 and as a member of the Company's Board of Directors in February 1998.
Mr. Winter has no current relationship with the Company. In connection with
his resignation from the Company, Mr. Winter entered into a separation
agreement which provided, among other things, for payment of his regular
salary, automobile expense allowance and medical insurance premiums under
the Company's standard medical insurance program until December 31, 1998.
12
<PAGE> 16
STOCK OPTION GRANTS IN FISCAL YEAR 1998
The following table sets forth information for the Named Executive Officers
with respect to grants of options to purchase Common Stock of the Company made
in the fiscal year ended October 31, 1998 and the value of all options held by
such executive officers on October 31, 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
-------------------------- OF STOCK PRICE
% OF TOTAL APPRECIATION FOR OPTION
OPTIONS OPTIONS GRANTED TERM(1)
GRANTED TO EMPLOYEES IN EXERCISE PRICE EXPIRATION --------------------------
NAME (SHARES) FISCAL YEAR(2) (PER SHARE)(3) DATE 5% ($) 10% ($)
---- -------- --------------- -------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
John W. Peth(4)............ 400,000 34.4% $3.0000 12/08/02 $331,538 $732,612
Brian D. McNay............. -- -- -- -- -- --
John M. Palmer(5).......... 100,000 8.6% $3.1875 2/27/03 $ 88,065 $194,600
25,000 2.2% $2.6250 8/17/03 $ 18,131 $ 40,065
Jeffrey Tuttle............. -- -- -- -- -- --
Charles J. Winter(6)....... -- -- -- -- -- --
</TABLE>
- ---------------
(1) There is no assurance provided to any executive officer or any other holder
of the Company's securities that the actual stock price appreciation over
the five-year option term will be at the assumed levels set forth in the
table or at any other defined level. Unless the market price of the Common
Stock appreciates over the option term, no value will be realized from the
option grants made to the executive officers.
(2) The Company granted stock options to employees for an aggregate of 1,162,086
shares of Common Stock during the 1998 fiscal year, including 361,992 of
options granted pursuant to the Company's option repricing in March 1998.
See "Report on Repriced Stock Options for Employees of the Company" above.
(3) The exercise price may be paid in cash, in shares of Common Stock valued at
fair market value on the exercise date or through an exercise procedure
involving a same-day sale of the purchased shares. The Company may also
finance the option exercise by loaning the optionee sufficient funds to pay
the exercise price for the purchased shares and the federal and state income
tax liability incurred by the optionee in connection with such exercise.
(4) Mr. Peth joined the Company as President and Chief Executive Officer in
December 1997. Such option is exercisable, as to 250,000 of the shares
subject to the option, ratably over 24 months from the date of grant and, as
to 150,000 of the shares subject to the option, ratably over 48 months from
the date of grant. See also "Aggregated Option Exercises in Fiscal Year 1998
and Fiscal Year-End Option Values."
(5) Mr. Palmer joined the Company as Vice President, Finance and Chief Financial
Officer in February 1998. Such option is exercisable, as to 125,000 of the
shares subject to the option, ratably over 24 months from the date of grant
and, as to 55,000 of the shares subject to the option, ratably over 48
months from the date of grant. See also "Aggregated Option Exercises in
Fiscal Year 1998 and Fiscal Year-End Option Values."
(6) Mr. Winter resigned as President and Chief Executive Officer in December
1997 and as a member of the Company's Board of Directors in February 1998.
Mr. Winter has no current relationship with the Company.
13
<PAGE> 17
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998 AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth information for the Named Executive Officers
with respect to exercises in fiscal year 1998 of options to purchase Common
Stock of the Company.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
OCTOBER 31, 1998 OCTOBER 31, 1998
SHARES ---------------- ----------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
----------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
John W. Peth(2)....... -- -- 185,417/299,583 $0.00
Brian D. McNay........ -- -- -- --
John M. Palmer(3)..... -- -- 29,375/95,625 $0.00
Jeffrey Tuttle........ -- -- -- --
Charles J.
Winter(4)........... -- -- -- --
</TABLE>
- ---------------
(1) Based on the $2.625 per share closing price of the Company's Common Stock on
the Nasdaq Stock Market on October 30, 1998 (the last trading day of fiscal
1998) less the exercise price of the options.
(2) Mr. Peth joined the Company as President and Chief Executive Officer in
December 1997.
(3) Mr. Palmer joined the Company as Vice President, Finance and Chief Financial
Officer in February 1998.
(4) Mr. Winter, the Company's former President and Chief Executive Officer,
resigned in December 1997 and has no current relationship with the Company.
TRANSACTIONS WITH MANAGEMENT
John W. Peth, a member of the Company's Board of Directors since April 1995
and a consultant to the Company from July 1997 to December 1997, was appointed
as President and Chief Executive Officer in December 1997 and served as Chief
Financial Officer from December 1997 to February 1998.
Charles J. Winter resigned as President and Chief Executive Officer of the
Company in December 1997 and as a director of the Company in February 1998. Mr.
Winter has no current relationship with the Company. In connection with his
resignation from the Company, Mr. Winter entered into a separation agreement
which provided among other things, for payment of his regular salary, automobile
expense allowance and medical insurance premiums under the Company's standard
medical insurance program until December 31, 1998.
Non-employee members of the Company's Board of Directors are eligible to
receive cash compensation and options to purchase shares of Common Stock in
connection with their service on the Board of Directors. See "Proposal No.
1 -- Election of Directors -- Compensation of Directors."
The Company has entered into indemnification agreements with each of its
directors and officers, which may require the Company, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status or service as directors or officers, to advance their expenses incurred
as a result of any proceeding against them as to which they could be
indemnified, and to obtain directors' and officers' liability insurance if
available on reasonable terms.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
ten percent of the Company's Common Stock (collectively, "Reporting Persons") to
file with the Securities and Exchange Commission ("SEC") initial
14
<PAGE> 18
reports of ownership and changes in ownership of the Company's Common Stock.
Reporting Persons are required by SEC regulations to furnish the Company with
copies of all Section 16(a) reports that they file.
To the Company's knowledge, based solely on its review of the copies of
such reports received or written representations from certain Reporting Persons
that no other reports were required, the Company believes that during its fiscal
year ended October 31, 1998, all Reporting Persons complied with all applicable
filing requirements.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholder proposals for inclusion in the Company's Proxy Statement and
form of proxy relating to the Company's Annual Meeting of Shareholders for the
year 2000 must be received by October 15, 1999. If the Company is not notified
of a shareholder proposal by December 29, 1999, then the proxies held by
management of the Company may provide the discretion to vote against such
shareholder proposal, even though such proposal is not discussed in the Proxy
Statement. Shareholder proposals should be addressed to the President and Chief
Executive Officer of the Company at the Company's principal executive offices as
set forth herein.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting or any postponement(s) or adjournment(s) thereof, it is the intention of
the persons named in the enclosed form of Proxy to vote the shares they
represent as the Board of Directors or proxy holders may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JOHN W. PETH
-------------------------------------
JOHN W. PETH
President and Chief Executive Officer
Dated: February 12, 1999
San Jose, California
15
<PAGE> 19
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BUSINESS RESOURCE GROUP
1999 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Business Resource Group, a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated February 12, 1999, and hereby
appoints John Peth and John Palmer or either of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned to represent the undersigned at the 1998 Annual Meeting
of Shareholders of Business Resource Group to be held on March 4, 1999 at 1:30
p.m., local time, at the Doubletree Hotel, 2050 Gateway Place, San Jose,
California 95110 and at any postponement or adjournment thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below:
SEE REVERSE SIDE
<PAGE> 20
<TABLE>
<S> <C> <C> <C>
Please mark your
[X] votes as in this
example
FOR all nominees WITHHOLD authority to
listed to the right vote for all nominees
(except as indicated) listed to the right
1. Election of / / / / Nominees: Jack Bradley
Directors Brian D. McNay
John W. Peth
Harry S. Robbins
Jeffrey Tuttle
If you wish to withhold authority to vote for any individual
nominee, strike a line through that nominee's name in the list
to the right.
FOR AGAINST ABSTAIN
2. Proposal to approve the appointment of Deloitte & Touch / / / / / /
LLP as the independent auditors of the Company for the
fiscal year ending October 31, 1999.
</TABLE>
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS; (2) FOR
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF THE STOCK IS REGISTERED IN
THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS AND ATTORNEYS-IN-FACT SHOULD ADD THEIR TITLES. IF SIGNER IS
A CORPORATION, PLEASE GIVE FULL CORPORATE NAME AND HAVE A DULY AUTHORIZED
OFFICER SIGN, STATING TITLE. IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
SIGNATURE(S) ______________________________________ DATE ______________________
SIGNATURE(S) _____________________________________ DATE ______________________
NOTE: (This Proxy should be marked, dated, signed by the shareholder(s) exactly
as his or her name appears herein, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If shares
are held by joint tenants or as community property, both should sign.)
