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
FIRST INVESTORS FINANCIAL SERVICES GROUP, INC.
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
(3) Filing Party:
________________________________________________________________________________
(4) Date Filed:
________________________________________________________________________________
<PAGE>
First Investors Financial Services Group, Inc.
675 Bering Drive, Suite 710
Houston, Texas 77057
____________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
SEPTEMBER 8, 1999
____________________________________________
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
Investors Financial Services Group, Inc., a Texas corporation (the "Company"),
will be held at Bank of America Center, 700 Louisiana, 5th Floor, Houston, Texas
77002, on Wednesday, September 8, 1999 at 10:00 a.m. local time, for the
following purposes:
1. To elect eight directors to serve for the ensuing year or until their
respective successors have been elected and qualified.
2. To transact any other business as may properly come before the annual
meeting or any adjournment thereof.
The close of business on July 30, 1999 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
annual meeting.
The Company's Annual Report to Shareholders, including the Company's
Annual Report on Form 10-K for the fiscal year ended April 30, 1999, accompanies
the enclosed Proxy Statement.
By Order of the Board of Directors
/s/ BENNIE H. DUCK
Houston, Texas Bennie H. Duck, Secretary
August 4, 1999
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
SELF-ADDRESSED RETURN ENVELOPE FURNISHED FOR THAT PURPOSE AS PROMPTLY AS
POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER
DESCRIBED IN THE ATTACHED PROXY STATEMENT.
<PAGE>
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
SEPTEMBER 8, 1999
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of First
Investors Financial Services Group, Inc. (the "Company") to be voted at the
Annual Meeting of Shareholders of the Company to be held at Bank of America
Center, 700 Louisiana, 5th Floor, Houston, Texas 77002, on September 8, 1999 at
10:00 a.m. local time and at any adjournments thereof, and this Proxy Statement
is furnished in connection therewith. When such proxy is properly executed and
returned, the shares of the Company's Common Stock, par value $.001 per share
("Common Stock"), it represents will be voted at the Annual Meeting as directed.
If no specification is indicated, the shares will be voted "FOR" the election of
the nominees to serve as Directors for the term designated. The Board of
Directors knows of no other matters to be brought before the Annual Meeting;
however, should any other matters be properly raised at the Annual Meeting, it
is the intention of each of the persons named in the proxy to vote in accordance
with his judgment. A proxy may be revoked at any time prior to its exercise by
giving written notice of revocation to the Secretary of the Company at or before
the Annual Meeting, by duly executing a subsequent proxy relating to the same
number of shares or by attending the Annual Meeting and voting in person.
It is anticipated that this Proxy Statement and accompanying notice,
proxy card and the Company's Annual Report to Shareholders, which includes the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1999
will first be sent to the shareholders of the Company on or about August 4,
1999.
The address of the Company's principal executive offices is 675 Bering
Drive, Suite 710, Houston, Texas 77057, and the telephone number is (713)
977-2600.
VOTING SECURITIES
The Company has only one class of voting securities outstanding, its
Common Stock, of which 5,566,669 shares were outstanding as of July 30, 1999.
Each share entitles its holder to one vote. Only shareholders of record at the
close of business on July 30, 1999, which has been fixed as the record date for
the Annual Meeting, will be entitled to vote at the Annual Meeting or any
adjournments thereof.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock, as of June 30, 1999, by: (i) each
person who is known by the Company to own beneficially more than 5% of the
issued and outstanding shares of Common Stock, (ii) each director, and (iii)
each executive officer named in the Summary Compensation Table elsewhere herein.
Unless otherwise indicated, each of the persons has sole voting and dispositive
power over the shares of Common Stock shown as beneficially owned by such
person.
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
POSITION BENEFICIAL PERCENT OF
NAME AND ADDRESS WITH COMPANY OWNERSHIP CLASS
---------------- --------------- --------------- ------------
<S> <C> <C>
Fentress Bracewell Director and Chairman of the Board 216,666 3.9%
2900 Pennzoil Place
700 Louisiana
Houston, Texas 77002
Tommy A. Moore, Jr. Director, President and Chief 800,000 14.4%
675 Bering, Suite 710 Executive Officer
Houston, Texas 77057
Joseph A. Pisano Senior Vice President 2,000(1) *
675 Bering, Suite 710 And Chief Operating Officer
Houston, Texas 77057
Bennie H. Duck Vice President, Secretary, 8,000(2) *
675 Bering, Suite 710 Treasurer and Chief Financial
Houston, Texas 77057 Officer
Bradley F. Bracewell Director 271,999(3) 4.9%
2417 Maconda
Houston, Texas 77027
Walter A. Stockard, Jr. Director 360,000(4) 6.5%
2001 Kirby, Suite 901
Houston, Texas 77019
J. W. Smelley Director 250,002 4.5%
4550 Post Oak Place
Houston, Texas 77027
Walter A. Stockard Director 75,000 1.3%
2001 Kirby, Suite 901
Houston, Texas 77019
Roberto Marchesini Director and Vice President - 16,000(5) *
675 Bering, Suite 710 Portfolio Risk Management
Houston, Texas 77057
Robert L. Clarke Director 63,000(6) 1.1%
2900 Pennzoil Place
700 Louisiana
Houston, Texas 77002
J. Randal Roberts 366,669(7) 6.6%
15 Sundown Parkway
Austin, Texas 78746
JAM Partners, Ltd. 359,500 6.5%
One Fifth Avenue
New York, New York 10003
All executive officers and 2,062,667(8) 37.1%
directors as a group (10 persons)
</TABLE>
2
<PAGE>
- --------------------
* Less than 1% of the Common Stock outstanding.
(1) Reflects the currently exercisable portion of stock options held by Mr.
Pisano covering 10,000 shares in the aggregate.
(2) Reflects the currently exercisable portion of stock options held by Mr.
Duck covering 30,000 shares in the aggregate.
(3) Includes 19,999 shares held by the Malachi Fund as to which Mr. Bracewell
disclaims beneficial ownership.
(4) Consists entirely of shares held by Mr. Stockard as custodian for two
minor children, as to which shares he disclaims beneficial ownership.
(5) Reflects the currently exercisable portion of stock options held by Dr.
Marchesini covering 30,000 shares in the aggregate.
(6) Includes 20,000 shares that may be acquired pursuant to the exercise of a
stock option.
(7) Includes 20,000 shares held by a trust for a minor child of Mr. Roberts,
as to which shares he disclaims beneficial ownership.
(8) Includes 46,000 shares issuable upon exercise of stock options that are
currently exercisable. Does not include an aggregate of 829,654 shares
(constituting 14.9% of the outstanding Common Stock) that are owned
beneficially by various adult members of the families of Walter A.
Stockard, Walter A. Stockard, Jr., Fentress Bracewell, Bradley F.
Bracewell and J. W. Smelley. Accordingly, the current Directors of the
Company and such respective family members, taken together, beneficially
own approximately 52% of the Common Stock outstanding. This enables such
persons, acting together, to determine the outcome of all matters
submitted to a majority vote of shareholders, including the election of
all Directors.
ELECTION OF DIRECTORS
At the Annual Meeting eight Directors will be elected to hold office until
the 2000 annual meeting of shareholders or until their respective successors are
duly elected and qualified. Each of the nominees is presently a member of the
Board of Directors, has consented to being named in this Proxy Statement and has
notified the Company that he intends to serve, if elected. The following table
sets forth certain information concerning the persons who have been nominated
for election as Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
------- ------ ----------
<S> <C> <C>
Fentress Bracewell (1) 77 Director and Chairman of the Board
Tommy A. Moore, Jr. 42 Director, President and Chief Executive Officer
Roberto Marchesini (2) 55 Director and Vice President - Portfolio Risk Management
J. W. Smelley (1) 77 Director
Walter A. Stockard 87 Director
Robert L. Clarke 57 Director
Bradley F. Bracewell (2) 46 Director
Walter A. Stockard, Jr. (1)(2) 47 Director
</TABLE>
- --------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
A description of the business experience of each of the nominees is as
follows:
3
<PAGE>
Mr. Fentress Bracewell, a Director of the Company since 1992 and the
Chairman of the Board since 1994, is one of the founders and a former managing
partner of the law firm of Bracewell & Patterson, Houston, Texas, where he
practiced law as a senior partner from 1945 until 1988 and is presently Senior
Counsel. Mr. Bracewell previously served as a director of the following
publicly-held companies: Southdown, Inc., Frontier Airlines, Inc., First
Continental Life Group, Inc., American Funeral Services, Inc. (Chairman of the
Board) and The Mischer Corporation. He was formerly a member of the Board of
Trustees, and is presently an honorary trustee, of the Institute of
International Education (New York) and served as Chairman of the Port of Houston
Authority from 1970 to 1985.
Mr. Moore, a co-founder of the Company in 1989, has served as its
President and Chief Executive Officer and a Director since that time. Prior to
organizing the Company, Mr. Moore was employed in commercial banking in Houston,
Texas where his responsibilities included retail and commercial lending, and
also served for a time as manager of finance and leasing for a Houston auto
dealership.
Dr. Marchesini, who became a Director in June 1995, served as the
Treasurer, Secretary and Chief Financial Officer of the Company from its
inception in 1989 until May 1, 1996, when his duties were reduced to enable him
to resume his teaching pursuits. He remains a Director and also continues to
serve the Company as its Vice President - Portfolio Risk Management. Prior to
June 1995 and subsequent to May 1, 1996, he has also been employed as a
Professor of Finance at the University of Houston, Clear Lake, where he has
taught in the areas of finance, economics and accounting since 1974 and has
served as the Associate Director of the University's Center for Economic
Development and Research. Dr. Marchesini holds a Ph.D. degree in economics
conferred by the University of Texas in 1974 and a degree in accounting received
from the Technical Institute of Rome in 1963.
Mr. Smelley, a Director of the Company since 1992, is the founder of First
Continental Life Group, Inc., a publicly-held life insurance holding company,
and First Continental Life and Accident Insurance Company, its life, health and
accident insurance subsidiary. Mr. Smelley was the President and Chief Executive
Officer of those companies from 1955 until his retirement when they were sold in
1987. He was also a founder and former director of First Continental Mortgage
Company and National Acceptance Corporation. Mr. Smelley is a past president and
director of the Texas Legal Reserve Association and the National Association of
Life Companies.
Mr. Stockard, a certified public accountant, co-founded the Company with
Mr. Moore in 1989 and has been a Director since that time. Mr. Stockard is an
independent oil operator and an investor in oil and gas properties. He founded
Alamo Barge Lines, Inc. in 1947 and was a substantial shareholder of that
company until its sale in 1980. Mr. Stockard was also a founder of Big Six
Drilling Company in 1945 and served as its vice president until 1992.
Mr. Clarke, who became a Director in June 1995, is a senior partner of the
law firm of Bracewell & Patterson, Houston, Texas. From 1985 to 1992, he served
as the Comptroller of the Currency of the United States. Mr. Clarke also serves
as a director of Centex Construction Products, Inc., a publicly-held company.
Mr. Bradley Bracewell has been a Director of the Company since 1992. Prior
to its sale to Compass Bancshares in early 1998, Mr. Bracewell served as
Chairman of the Board and President of First University Corporation, a bank
holding company, and Chairman of the Board and Chief Executive Officer of West
University Bank, N.A., its banking subsidiary. He served as a director of the
Texas Bankers Association from 1990 to 1993 and has previously been a director
of First Continental Life Group, Inc., a publicly-held life insurance holding
company, and First National Bank of Missouri City. Mr. Bracewell is an attorney
and, prior to practicing with his own firm from 1983 to 1989, was associated
with the Houston law firm of Vinson & Elkins L.L.P.
Mr. Walter Stockard, Jr. has been a director of the Company since 1989 and
has been an investor in oil and gas properties and real estate for more than the
past five years.
Shareholders may not cumulate their votes in the election of directors.
The eight nominees receiving the
4
<PAGE>
highest number of affirmative votes will be elected to the Board. Shareholders
entitled to vote for the election of directors may withhold authority to vote
for any or all nominees for directors. If any nominee becomes unavailable for
election for any reason, then the shares represented by the proxy will be voted
for the remainder of the listed nominees and for such other nominees as may be
designated by the Board as replacements for those who become unavailable.
Discretionary authority to do so is included in the proxy.
OTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the fiscal year ended April 30, 1999, the Board of Directors met 12
times. All Directors attended 75 percent or more of the meetings of the Board of
Directors and of the Committees of the Board on which they served during the
past fiscal year.
The Board of Directors has two committees: the Audit Committee and the
Executive Compensation Committee. The Audit Committee, which met one time during
the past fiscal year, acts as a direct liaison between the Board and the
Company's independent auditors, and its functions include recommending the
engagement of auditors, reviewing the scope and results of the annual audit and
reviewing, as appropriate, the Company's accounting policies, internal controls
and financial reporting practices. The Executive Compensation Committee, which
did not meet during the past fiscal year, is responsible for formulating
recommendations to the Board concerning salaries, bonuses and other compensation
arrangements for senior management and key employees. The Board of Directors has
no nominating committee.
The Company pays a monthly fee in the amount of $500 to each Director who
is not an officer or employee of the Company, and reimburses their out-of-pocket
expenses incurred in connection with their services as such, including travel
expenses.
In August 1995, when Robert L. Clarke joined the Board of Directors, he
was granted a non-transferable option to purchase up to 20,000 shares of Common
Stock, in recognition of the fact that he was the only member of the Board who
was neither an executive officer nor a substantial shareholder of the Company.
The option is exercisable in whole at any time or in part from time to time at
an exercise price of $11.00 per share. The option will terminate one year after
Mr. Clarke ceases to be a member of the Board of Directors, except that in the
event of Mr. Clarke's death while serving as a Director the option would be
exercisable by his heirs or representatives of his estate for a period of two
years after the date of death.
Bradley F. Bracewell is the son of Fentress Bracewell and Walter A.
Stockard, Jr. is the son of Walter A. Stockard.
OTHER EXECUTIVE OFFICERS
Other executive officers of the Company, each of whom serves at the
pleasure of the Board of Directors, are as follows:
NAME AGE POSITION
------- ------ -----------
Joseph A. Pisano 53 Senior Vice President and Chief Operating
Officer
Bennie H. Duck 35 Vice President, Secretary, Treasurer and
Chief Financial Officer
Mr. Pisano joined the Company in March 1998 as its Senior Vice President
and Chief Operating Officer. He was previously employed by Gulf States
Acceptance Company, a sub-prime auto finance company where he served for three
years as Vice President of Operations. Prior to that, he served two years as
General Manager of Nissan Motor Acceptance Corporation. In addition, he has 27
years of experience in lending and loan operations, including seven years as a
Deputy Division Manager with National Westminster Bank and 18 years in business
5
<PAGE>
development positions at General Electric Credit Corporation.
Mr. Duck joined the Company in May 1996 as its Vice President, Secretary,
Treasurer and Chief Financial Officer. Mr. Duck was previously employed for ten
years by NationsBank in various capacities and most recently as a Vice President
of Corporate Finance.
SUMMARY COMPENSATION TABLE
The following table sets forth, for the past three fiscal years, the
compensation of the President, Chief Executive Officer, and Chief Operating
Officer of the Company and of the Company's other executive officer whose salary
and bonus exceed $100,000.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
NAME AND ------------------- ---------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS STOCK OPTIONS COMPENSATION
- -------------------- ------ -------- --------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Tommy A. Moore, Jr. 1997 $150,000 $109,000 $ -0-
President and Chief 1998 $150,000 $ -0- $ -0-
Executive Officer 1999 $150,000 $ 96,400 $ -0-
Joseph A. Pisano 1997 $ -0- $ -0- $ -0-
Senior Vice President and 1998 $ 15,577 $ -0- $ -0-
Chief Operating Officer 1999 $150,000 $ -0- 10,000(1) $ -0-
Bennie H. Duck 1997 $125,000 $ -0- $ -0-
Secretary, Treasurer and 1998 $125,000 $ -0- 10,000(2) $ -0-
Chief Financial Officer 1999 $140,000 $ -0- 20,000(3) $ -0-
</TABLE>
- --------------------
(1) Consists of options under the Company's 1995 Employee Stock Option Plan
granted effective March 19, 1998 and covering 10,000 shares of Common
Stock. See "Stock Option Plan".
(2) Consists of options under the Company's 1995 Employee Stock Option Plan
granted effective June 20, 1996 and covering 10,000 shares of Common
Stock. See "Stock Option Plan".
(3) Consists of options under the Company's 1995 Employee Stock Option Plan
granted effective July 15, 1997 and covering 20,000 shares of Common
Stock. See "Stock Option Plan".
EMPLOYMENT AGREEMENTS
The Company had an employment agreement with Tommy A. Moore, Jr., its
President and Chief Executive Officer, that extended until March 1997. This
agreement provided for an annual salary of $70,000 until it was amended,
effective October 1995, to increase the annual salary to $150,000. The agreement
also provided for an annual incentive bonus not to exceed 5% of the consolidated
pre-tax net income of the Company subject to deferral for a reasonable period of
time at the discretion of the Board of Directors depending on the liquidity
position and cash requirements of the Company at the time of payment. The
employment agreement expired in March, 1998. Effective July 16, 1997, the
Company entered into a new employment agreement with Mr. Moore providing for an
annual salary of $150,000 and an annual incentive bonus payable subsequent to
fiscal year end 1998 in an amount to be determined by the Board of Directors
based on the financial performance of the Company. The agreement expired July
15, 1998.
Effective May 1, 1996, the Company entered into an employment agreement
with Bennie H. Duck in connection with Mr. Duck's joining the Company as Vice
President, Secretary, Treasurer and Chief Financial Officer. This agreement was
for a term of two years and provided for an annual salary of $125,000. In
addition,
6
<PAGE>
Mr. Duck was entitled to receive a bonus each fiscal year covered under the term
of the agreement (the fiscal year ending April 30, 1997 and April 30, 1998) in
an amount varying from $6,667 to $40,000 depending upon the results of
operations of the company. Mr. Duck earned no bonus under the employment
agreement for the fiscal year ending April 30, 1997 or 1998. Effective May 1,
1998, Mr. Duck's employment agreement was renewed, extending the maturity date
to July 31, 2000, increasing the annual salary to $140,000. In addition, Mr.
Duck may be entitled to receive an annual bonus, varying from $6,667 to $40,000
depending on the results of operations of the Company for the fiscal years
ending April 30, 1999 and 2000.
Effective March 19, 1998, the Company entered into an employment
agreement with Joseph A. Pisano in connection with Mr. Pisano's joining the
Company as Senior Vice President and Chief Operating Officer. The agreement
expires July 31, 2000 and provides for an annual salary of $150,000. In
addition, Mr. Pisano may be entitled to receive an annual bonus varying from
$6,667 to $40,000 depending on the results of the Company for the fiscal years
ending April 30, 1999 and 2000.
STOCK OPTION PLAN
In June 1995, the Board of Directors adopted the Company's 1995 Employee
Stock Option Plan (the "Plan"), which was thereafter approved by the
shareholders of the Company. The Plan is administered by the Compensation
Committee of the Board of Directors and provides that options may be granted to
officers and other key employees for the purchase of up to 300,000 shares of
Common Stock, subject to adjustment in the event of certain changes in
capitalization. Options may be granted either as incentive stock options (which
are intended to qualify for certain favorable tax treatment) or as non-qualified
stock options.
The Compensation Committee selects the persons to receive options and
determines the exercise price, the duration, any conditions on exercise and
other terms of the options. In the case of options intended to be incentive
stock options, the exercise price may not be less than 100% of the fair market
value per share of Common Stock on the date of grant. With respect to
non-qualified stock options, the exercise price may be fixed as low at 50% of
the fair market value per share at the time of grant. In no event may the
duration of an option exceed 10 years and no option may be granted after the
expiration of 10 years from the adoption of the Plan.
The exercise price of the option is payable in full upon exercise and
payment may be in cash, by delivery of shares of Common Stock (valued at their
fair market value at the time of exercise), or by a combination of cash and
shares. At the discretion of the Compensation Committee, options may be issued
in tandem with stock appreciation rights entitling the option holder to receive
an amount in cash or in shares of Common Stock, or a combination thereof, equal
in value to any increase since the date of grant in the fair market value of the
Common Stock covered by the option.
As of April 30, 1999, the Compensation Committee had granted options
covering a total of 117,000 shares of Common Stock to nine officers and key
employees of the Company. The following table summarizes the pertinent
information covering options granted on specific dates. All options become
exercisable in cumulative annual increments of 20% beginning one year from the
date of each grant and, if not exercised, expire ten years from the date of each
grant.
NUMBER OF SHARES
GRANT DATE UNDERLYING OPTIONS GRANTED EXERCISE PRICE ($/SHARE)
---------- -------------------------- ------------------------
7/6/95 40,000(1) 11.000
6/20/96 10,000(2) 11.000
7/15/97 57,000(3) 7.375
3/19/98 10,000(4) 6.750
- --------------------
(1) Granted to five officers and key employees of the Company.
7
<PAGE>
(2) Granted to Bennie H. Duck in connection with his joining the Company as
Vice President, Secretary, Treasurer and Chief Financial Officer.
(3) Granted to seven officers and key employees of the Company.
(4) Granted to Joseph A. Pisano in connection with his joining the Company as
Senior Vice President and Chief Operating Officer.
The following table sets forth information concerning the grant of options
under the Plan to officers named in the Summary Compensation Table above.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENTAGE ANNUAL RATE OF
SECURITIES OF TOTAL STOCK PRICE
UNDERLYING OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERMS ($)(4)
GRANTED EMPLOYEES PRICE EXPIRATION ----------------------
NAME (SHARES) IN FISCAL YEAR ($/SHARE) DATE 5% 10%
---- --------- ---------------- ---------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bennie H. Duck 10,000 (1) 100% 11.000 06/20/06 $179,178 $285,312
20,000 (2) 30% 7.375 07/15/07 $240,262 $382,577
Joseph A. Pisano 10,000 (3) 15% 6.75 03/19/08 $109,950 $175,078
</TABLE>
- --------------------
(1) The options vest in cumulative annual increments of 20% beginning June 20,
1997.
(2) The options vest in cumulative annual increments of 20% beginning July 15,
1998.
(3) The options vest in cumulative annual increments of 20% beginning March
19, 1999.
(4) These amounts represent certain assumed rates of appreciation based on
actual option term and annual compounding from the date of grant. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall stock
market conditions. There can be no assurance that the stock appreciation
amounts reflected in this table will be achieved.
No stock options were exercised during the fiscal year ended April 30,
1999.
The Company has also granted a non-qualified stock option, covering 20,000
shares of Common Stock, to a Director who is neither an officer nor an employee.
The terms of this option, which was not issued under the Plan, are described
above under "Other Information Concerning the Board of Directors."
PERFORMANCE GRAPH
Set forth below is a line graph comparing the quarterly percentage
change in the cumulative total shareholder return on the Company's (FIFS) Common
Stock, since the Company's initial public offering on October 4, 1995, against
the cumulative total return indices of the Nasdaq Stock (U.S.) Index and the
Nasdaq Financial Index for the period between October 4, 1995 and April 30,
1999. The historical stock price performance for the Company's stock shown on
the graph below is not necessarily indicative of future stock
8
<PAGE>
performance. The Company will not make nor endorse any predictions of future
stock performance.
STOCK QUARTERLY PERFORMANCE COMPARISON
FIFS vs NASDAQ and NASDAQ Financial Company Indexes
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
DATE NASDAQ US NASDAQ FINANCE FIFS MONTH END
-------- ----------- ---------------- ----------------
10/04/95 100.000 100.000 100.000
10/31/95 103.53 100.98 87.95
01/31/96 105.91 108.32 79.55
04/30/96 119.46 112.51 104.55
07/31/96 108.69 111.89 90.91
10/31/96 122.19 128.44 93.18
01/31/97 138.85 144.00 81.82
04/30/97 126.44 146.04 63.64
07/31/97 160.39 180.13 68.18
10/31/97 160.83 192.69 72.73
01/31/98 164.05 202.89 63.64
04/30/98 189.22 227.02 70.45
07/31/98 160.39 180.13 68.18
10/31/98 180.38 191.67 42.05
01/31/99 256.31 203.49 50.00
04/30/99 256.64 221.68 48.86
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for 1999.
Under the supervision of the Committee, the Company has developed and
implemented compensation policies, plans and programs designed to enhance the
profitability of the Company, and therefore shareholder value, by aligning
closely the financial interests of the Company's senior executives with those of
its shareholders. The Committee has adopted the following objectives as
guidelines for making its compensation decisions:
o Provide a competitive total compensation package that enables the
Company to attract and retain key executives.
o Integrate all compensation programs with the Company's annual and
long-term business objectives and strategy and focus executive
behavior on the fulfillment of those objectives.
o Provide variable compensation opportunities that are directly linked
to the performance of the Company and that align executive
remuneration with the interests of shareholders.
Executive base compensation for senior executives is intended to be
competitive with that paid in comparably situated industries and to provide a
reasonable degree of financial security and flexibility to those individuals
whom the Board of Directors regards as adequately performing the duties
associated with the various senior executive positions. In furtherance of this
objective, the Committee periodically, though not necessarily annually, reviews
the salary levels of a sampling of companies that are regarded by the Committee
as having sufficiently similar financial and operational characteristics to
provide a reasonable basis for comparison. Although the Committee does not
attempt to specifically tie executive base pay to that offered by any particular
sampling of companies, the review provides a useful gauge in administering the
Company's base compensation policy. In general, however, the Committee considers
the credentials, length of service, experience, and
9
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consistent performance of each individual senior executive when setting
compensation levels.
To ensure retention of qualified management, the Company has entered
into employment agreements with key management personnel. The employment
agreements establish annual base salary amounts that the Committee may increase
based on the foregoing criteria, as well as performance based incentive bonuses.
See "Employment Agreements".
The 1995 Employee Stock Option Plan is intended to provide key
employees, including the Chief Executive Officer and other executive officers of
the Company and its subsidiaries, with a continuing proprietary interest in the
Company, with a view to increasing the interest in the Company's welfare of
those personnel who share the primary responsibility for the management and
growth of the Company.
Date: July 28, 1999
1999 Compensation Committee
of the Board of Directors
Fentress Bracewell
J.W. Smelley
Walter A. Stockard, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the 1999 fiscal year, no executive officer of the Company served
as (i) a member of the compensation committee (or other board committee
performing equivalent functions) of another entity, one of whose executive
officers served on the Compensation Committee, (ii) a director of another
entity, one of whose executive officers served on the Compensation Committee, or
(iii) a member of the Compensation Committee (or other board committee
performing equivalent functions) of another entity, one of whose executive
officers served as a director of the Company. One of the members of the
Compensation Committee, Fentress Bracewell, is the Chairman of the Board of the
Company, but is not an employee.
APPOINTMENT OF AUDITORS
The Board of Directors has selected the accounting firm of Arthur
Andersen LLP to be the Company's independent accountants to audit the books and
records of the Company and its subsidiaries for the fiscal year ending April 30,
2000. This firm has served as the Company's independent auditors for each fiscal
year since 1992.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting and will have the opportunity to make a statement if he or she
desires to do so and is expected to be available to respond to appropriate
questions.
COMPLIANCE WITH FILING REQUIREMENTS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, Directors, executive officers and beneficial owners of more than ten
percent of the outstanding Common Stock are required to file reports with the
Securities and Exchange Commission reporting their beneficial ownership of the
Common Stock at the time they become subject to the reporting requirements and
at the time of any changes in beneficial ownership occurring thereafter. Based
upon a review of reports submitted to the Company and representations of persons
known by the Company to be subject to these reporting requirements, the Company
believes that all such reports due in the fiscal year ended April 30, 1999 were
filed on a timely basis.
SHAREHOLDER PROPOSALS
Any proposals of Shareholders which are intended to be presented at the
2000 Annual Meeting of Shareholders must be received by the Secretary of the
Company by April 5, 2000 for consideration for inclusion in the proxy statement
and form of proxy for that meeting. Any such proposals should be submitted to
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the Secretary of the Company at 675 Bering Drive, Suite 710, Houston, Texas
77057.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company.
Solicitation will be made initially by mail. The Directors, officers and other
regular employees of the Company may, without compensation other than their
regular compensation, solicit proxies by mail, telephone or other form of direct
communication. The Company will also reimburse brokerage firms and other
custodians, nominees and fiduciaries for their reasonable expenses incurred in
forwarding solicitation material to beneficial owners.
By Order of the Board of Directors
/s/ BENNIE H. DUCK
Bennie H. Duck, Secretary
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FIRST INVESTORS FINANCIAL
SERVICES GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, SEPTEMBER 8, 1999
FIRST INVESTORS FINANCIAL SERVICES GOUP, INC. PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS SEPTEMBER 8, 1999
Fentress Bracewell, Tommy A. Moore, Jr., and Roberto Marchesini, and each or any
of them, with full power of substitution and revocation in each, are hereby
appointed as Proxies authorized to represent the undersigned, with all powers
which the undersigned would possess if personally present, to vote the Common
Stock of the undersigned at the Annual Meeting of Shareholders of FIRST
INVESTORS FINANCIAL SERVICES GROUP, INC. to be held at the Bank of America
Center, 700 Louisiana, 5th Floor, Houston, Texas on Wednesday, September 8, 1999
at 10:00 a.m., and at any postponements or adjournments of that meeting, as set
forth below, and in their discretion upon any other business that may properly
come before the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES NAMED AND FOR EACH OF THE OTHER PROPOSALS
SPECIFIED HEREIN.
(SEE REVERSE SIDE FOR VOTING INSTRUCTIONS.)
o PLEASE DETACH HERE o
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C>
1. Election of Directors: Fentress Bracewell J. W. Smelley [ ] Vote FOR [ ] Vote WITHHELD
Tommy A. Moore, Jr Walter A. Stockard all nominees from all nominees
Bradley F. Bracewell Robert L. Clarke
Walter A. Stockard, Jr. Roberto Marchesini
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, --------------------------------------------------
WRITE THAT NOMINEE(S) NAME IN THE BOX PROVIDED TO THE RIGHT.) | |
--------------------------------------------------
</TABLE>
2. In their discretion the proxies are authorized to vote upon such other
matters as may come before the meeting or any adjournment thereof.
Address Change? Mark Box [ ]
Indicate changes below: Date:_________________________________
______________________________________
SIGNATURE
______________________________________
SIGNATURE
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc., should
include title and authority.
Corporations should provide full name
of corporation and title of authorized
officer signing the proxy.
