SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SPELLING ENTERTAINMENT GROUP
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(4) Date Filed:
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Notes:
SPELLING ENTERTAINMENT GROUP INC.
5700 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90036
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1996
----------------
You are cordially invited to attend the Annual Meeting of Shareholders of
Spelling Entertainment Group Inc. (the "Company") which will be held at The
Regent Beverly Wilshire, 9500 Wilshire Boulevard, Champagne Room, Beverly
Hills, California, at 2:00 p.m., Pacific Time on May 21, 1996, for the
following purposes:
Proposal 1. To elect directors.
Proposal 2. To transact such other business as may properly come before the
Annual Meeting.
Only shareholders of record at the close of business on March 22, 1996 are
entitled to vote at the Annual Meeting or any postponements or adjournments
thereof. A list of such shareholders will be available for examination by any
shareholder for any purpose germane to the meeting, during normal business
hours, at the principal office of the Company, 5700 Wilshire Boulevard, Los
Angeles, California, for a period of ten days prior to the Annual Meeting.
It is important that your shares be represented at the Annual Meeting
regardless of the size of your holdings. Whether or not you intend to be
present at the meeting in person, we urge you to please mark, date and sign
the enclosed proxy and return it in the envelope provided for that purpose,
which does not require postage if mailed in the United States.
SALLY SUCHIL
Secretary
Los Angeles, California
April 19, 1996
YOU ARE URGED TO MARK, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY.
SPELLING ENTERTAINMENT GROUP INC.
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Spelling Entertainment Group Inc. (the "Company") of
proxies for use at the Annual Meeting of Shareholders of the Company to be
held at The Regent Beverly Wilshire, 9500 Wilshire Boulevard, Champagne Room,
Beverly Hills, California, at 2:00 p.m., Pacific Time, on May 21, 1996, and at
any postponements or adjournments thereof. Proxies properly executed and
returned in a timely manner will be voted at the Annual Meeting in accordance
with the directions noted thereon. If no direction is indicated, they will be
voted for the election of the nominees named herein as directors, and, on
other matters presented for a vote, in accordance with the judgment of the
persons acting under the proxies. If for any reason (which the Board of
Directors does not expect) a nominee is unable to serve, the proxies may use
their discretion to vote for a substitute proposed by the Board of Directors.
Any shareholder giving a proxy has the power to revoke it any time before it
is voted, by giving written notice to the Secretary of the Company at the
address below so that it is received no later than the closing of the polls at
the Annual Meeting, or by attending the Annual Meeting in person and voting,
or by executing a later-dated proxy delivered prior to the closing of the
polls at the Annual Meeting.
The Company's executive offices are located at 5700 Wilshire Boulevard, Los
Angeles, California 90036 (telephone 213-965-5700). Proxy materials are being
mailed to shareholders beginning on or about April 19, 1996.
SHARES OUTSTANDING AND VOTING RIGHTS
Only shareholders of record at the close of business on March 22, 1996 (the
"Record Date"), are entitled to vote at the Annual Meeting. The only voting
stock of the Company outstanding is its common stock, $.001 par value per
share (the "Common Stock"), of which 90,300,904 shares were outstanding of
record as of the close of business on March 22, 1996. Each share of Common
Stock issued and outstanding is entitled to one vote on each matter to be
presented at the Annual Meeting.
The presence, in person or by proxy, of the holders of a majority of the
total issued and outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum for the transaction of
business at the Annual Meeting. Votes cast by proxy or in person at the Annual
Meeting will be tabulated by the election inspectors appointed for the Annual
Meeting, who will also determine whether or not a quorum is present. A proxy
submitted by a shareholder may indicate that all or a portion of the shares
represented by such proxy are not being voted by such shareholder with respect
to a particular matter. This could occur, for example, when a broker is not
permitted to vote shares held in street name on certain matters in the absence
of instructions from the beneficial owner of the shares. The shares subject to
any such proxy which are not being voted with respect to a particular matter
will be considered shares not present and entitled to vote on such matter,
although such shares may be considered present and entitled to vote for other
purposes and will count for purposes of determining the presence of a quorum.
Shares voted to abstain as to a particular matter, and directions to "withhold
authority" to vote for directors, will be considered voted shares, and will
count for purposes of determining the presence of a quorum. Directors will be
elected by a plurality of the votes of the shares present or represented by
proxy at the meeting and entitled to vote on the election of directors. If a
quorum is present, non-votes and abstentions will have no effect on the voting
for the election of directors.
As of the Record Date, Viacom Inc. ("Viacom") was the beneficial owner of
approximately 67,673,702 shares of Common Stock representing approximately 75%
of the outstanding shares. Viacom has advised the
Company of its intention to vote such shares in favor of the below listed
nominees for directors. Such action by Viacom is sufficient to elect such
directors without any action on the part of any other holder of Common Stock.
ELECTION OF DIRECTORS
By resolution of the Board of Directors of the Company, the number of
directors constituting the Board is set at six directors. Proxies may not be
voted for more than six persons. In the election of directors, shareholders do
not have cumulative voting rights.
The persons named below have been designated by the Board as nominees for
election as directors for terms expiring at the Company's Annual Meeting of
Shareholders in 1997. All nominees are currently serving as directors.
SUMNER M. REDSTONE, age 72, has been Chairman of the Board since January
1996 and has been a Director of the Company since November 1994. Mr. Redstone
has served as Chairman of the Board of Viacom since June 1987 and Chief
Executive Officer since January 1996. He has also served as a member of its
Board since 1986. He has served as President, Chief Executive Officer of
National Amusements, Inc. ("NAI") since 1967 and as Chairman of the Board of
NAI since 1986. He served as the first Chairman of the Board of the National
Association of Theater Owners, and is currently a member of the Executive
Committee of that organization. During the Carter Administration, Mr. Redstone
was appointed a member of the Presidential Advisory Committee on the Arts for
the John F. Kennedy Center for the Performing Arts and, in 1984, he was
appointed a Director of the Kennedy Presidential Library Foundation. Since
1982, Mr. Redstone has been a member of the faculty of Boston University Law
School, where he has lectured in entertainment law, and since 1994, he has
been a Visiting Professor at Brandeis University.
AARON SPELLING, age 73, has been Vice Chairman of the Board of the Company
since April 1993 and a Director since October 1992. Mr. Spelling has been
Chairman of the Board of Aaron Spelling Productions, Inc. ("ASP"), a
subsidiary of the Company, since its formation in 1965, and has served as its
Chief Executive Officer since July 1986. Mr. Spelling also serves as the
Chairman of the Board and Chief Executive Officer of Spelling Television Inc.
("Spelling Television") and most of the Company's other significant television
production subsidiaries. Mr. Spelling's career includes involvement as a
writer, creator and producer of over 100 movies-for-television and over 30
television series including "The Danny Thomas Hour," "The Guns of Will
Sonnett," "The Mod Squad," "Charlie's Angels," "The Rookies," "Starsky &
Hutch," "Hart to Hart," "Fantasy Island," "Family," "The Love Boat," "Vegas,"
"Matt Houston," "Hotel," "Dynasty," "The Colbys," "Beverly Hills, 90210,"
"Melrose Place" and "Savannah," encompassing more than 3,000 hours of
television programming over more than 30 years.
PHILIPPE P. DAUMAN, age 42, has been a Director of the Company since
November 1994. Mr. Dauman has served as Executive Vice President, General
Counsel, Chief Administrative Officer and Secretary of Viacom since March 1994
and as Deputy Chairman of the Board of Viacom since January 1996. From
February 1993 to March 1994, Mr. Dauman served as Senior Vice President,
General Counsel and Secretary of Viacom. Prior thereto, Mr. Dauman was a
partner in the law firm of Shearman & Sterling in New York, which he joined in
1978. Mr. Dauman also serves on the Board of Directors of Viacom and NAI.
THOMAS E. DOOLEY, age 39, was appointed a Director of the Company in April
1996. Mr. Dooley has served as Executive Vice President-Finance, Corporate
Development and Communications of Viacom since March 1994 and as Deputy
Chairman of the Board of Viacom since January 1996. From July 1992 to March
1994, Mr. Dooley served as Senior Vice President, Corporate Development of
Viacom. From August 1993 to March 1994, he also served as President,
Interactive Television of Viacom. Prior thereto, he served as Vice President,
Treasurer of Viacom since 1987. Mr. Dooley also serves on the Board of
Directors of Viacom and Starsight Telecast, Inc.
J. BRIAN MCGRATH, age 53, has been a Director of the Company since November
1994. Mr. McGrath is a private investor and also currently serves as an
independent consultant to the entertainment, sports and
2
investment banking industries. Mr. McGrath served as Commissioner of the
Thoroughbred Racing Associations from March 1994 to September 1995. He has
also served as President of TRA Enterprises, which is the managing general
partner of Equibase Holding Partners, LP, during the same period. Prior
thereto, he was President and Chief Executive Officer of ISL Marketing AG, a
sports marketing firm, from August 1991 to November 1993. Prior to August
1991, Mr. McGrath was an independent consultant in entertainment and
investment banking. Mr. McGrath also serves on the Board of Directors of
Discovery Zone Inc.
JOHN L. MUETHING, age 74, has been a Director of the Company since October
1992. He has been, for more than five years, Of Counsel to the law firm of
Keating, Muething & Klekamp, located in Cincinnati, Ohio.
EXECUTIVE OFFICERS
Set forth below is information regarding those persons who serve as
executive officers of the Company, but who do not serve as directors of the
Company.
PETER H. BACHMANN, age 38, has been Executive Vice President-Office of the
President of the Company since October 1994. From August 1993 to October 1994,
he served as Senior Vice President-Business and Legal Affairs of the Company
and of Spelling Television. From June 1987 to August 1993, Mr. Bachmann served
in various executive positions at Imagine Films Entertainment, Inc., most
recently as Executive Vice President, Business Affairs.
THOMAS P. CARSON, age 49, has been Executive Vice President-Office of the
President of the Company since October 1994. Mr. Carson has also served as the
Chief Financial Officer of the Company since September 1993 and Treasurer
since February 1994. He also served as Senior Vice President of the Company
from November 1993 to November 1994. Prior thereto, he served as Executive
Vice President-Chief Financial Officer of Metro-Goldwyn-Mayer Inc. ("MGM")
from May 1991 to September 1993 and Senior Vice President-Chief Financial Of-
ficer of MGM from December 1985 to November 1990.
KATHLEEN COUGHLAN, age 43, has been Senior Vice President and Corporate
Controller of the Company since November 1994. Prior thereto, she served as
Vice President and Corporate Controller of the Company from January 1994 to
November 1994. From May 1991 to December 1993, Ms. Coughlan served as Senior
Vice President and Controller of MGM. From January 1986 to November 1990, Ms.
Coughlan served as Vice President and Controller of MGM.
SALLY SUCHIL, age 45, has been Senior Vice President, General Counsel and
Secretary of the Company since January 1995. Ms. Suchil served as Senior Vice
President and Assistant General Counsel of MGM from June 1992 to December
1994. Prior thereto, she served as Senior Vice President-Corporate Legal
Affairs of MGM from July 1991 to June 1992, and Vice President-Corporate Legal
Affairs of MGM from 1986 to July 1991.
Under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Company's directors, executive officers and any persons
holding more than ten percent of the Common Stock are required to report their
initial ownership of Common Stock and any changes in that ownership to the
Securities and Exchange Commission (the "Commission"), the New York Stock
Exchange ("NYSE") and the Pacific Stock Exchange ("PSE"). Specific due dates
have been established and the Company is required to disclose in this Proxy
Statement any failure to file by these dates. Based solely on a review of the
copies of the forms furnished to the Company, or written representations that
no Form 5's were required, the Company believes that in 1995 and through the
date of this Proxy Statement, all Section 16(a) filing requirements applicable
to its directors, executive officers and greater than ten percent shareholders
were complied with.
3
SECURITIES OWNERSHIP OF MANAGEMENT
Information concerning the Common Stock of the Company beneficially owned by
each director, each Named Officer in the Summary Compensation Table below,
each person (or group) known to the Company to beneficially own more than five
percent of the outstanding Common Stock, and the directors and executive
officers as a group on April 5, 1996, is shown in the following table:
Number of Shares
Name of Director, Executive Officer or of Common Stock Percent
Shareholder Beneficially Owned(1) of Class
-------------------------------------- --------------------- --------
Sumner M. Redstone.................... 69,010,850(2)(3) 76%
Aaron Spelling........................ 467,250(4)(5) *
Steven R. Berrard(6).................. -- --
Philippe P. Dauman(7)................. -- --
Thomas E. Dooley(7)................... -- --
J. Brian McGrath...................... 5,000 *
John L. Muething...................... 2,000(8) *
Peter H. Bachmann..................... 77,800(9) *
Thomas P. Carson...................... 108,000(9) *
Kathleen Coughlan..................... 28,750(9) *
Sally Suchil.......................... 10,000(9) *
Viacom Inc............................ 69,010,850(10) 76%
All directors and executive officers
as a group
(11 persons)......................... 69,709,650(5)(9)(10) 77%
- --------
* Less than one percent of the class of securities.
(1) Unless otherwise indicated, each holder named has sole voting and
investment power with respect to the shares of Common Stock owned by such
holder.
(2) Consists of shares of Common Stock owned by Viacom. NAI owns
approximately 61% of Viacom's Class A Common Stock and approximately 16%
of Viacom's Class B Common Stock. Mr. Redstone is the controlling
shareholder of NAI and is its Chairman of the Board, President and Chief
Executive Officer.
(3) Includes 1,337,148 shares of Common Stock which may be acquired by Viacom
pursuant to a warrant converted to a right to acquire shares of Common
Stock.
(4) Of this amount, 48,500 shares are held jointly with his wife.
(5) Includes 418,750 shares of Common Stock which may be acquired within 60
days of April 5, 1996 by Mr. Spelling upon exercise of stock options.
(6) Mr. Berrard resigned as President and Chief Executive Officer, and as a
Director, of the Company in March 1996.
(7) Does not include any shares of Common Stock beneficially owned by Viacom.
(See "Election of Directors.")
(8) Held jointly with his wife.
(9) Consists of shares of Common Stock which may be acquired within 60 days
of April 5, 1996 upon exercise of stock options.
(10) Includes shares of Common Stock owned by Viacom and attributed to Mr.
Redstone.
4
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has, pursuant to its powers, designated several
committees of the Board, including an Executive Committee, Audit Committee,
Compensation Committee and Nominating Committee, the functions and membership
of which are described below.
The Executive Committee is permitted under Delaware law and the Company's
bylaws to perform substantially all of the functions of the Board of
Directors, except: to approve a merger, sale of substantially all of the
assets, recommendation of dissolution or declaration of dividends, to approve
or recommend to shareholders actions or proposals required to be approved by
shareholders, to adopt, amend or repeal the certificate of incorporation or
the bylaws, or to determine rights of the Company's shares, except within
limits specifically prescribed by the Board. The Audit Committee is
responsible for certain financial affairs of the Company and its subsidiaries,
including the selection of the Company's auditors, the review of the adequacy
of internal controls and reporting, and the performance of any other duties or
functions deemed appropriate by the Board. The Compensation Committee is
responsible for the matters discussed under the heading "Report of the
Compensation Committee" set forth below. The Nominating Committee's function
is to identify and propose to the full Board nominees to fill vacancies as
they occur. The Nominating Committee will consider persons brought to its
attention by officers, directors and shareholders. Proposals may be addressed
to the Nominating Committee at the address shown on the cover of this Proxy
Statement, attention of the Secretary of the Company. Mr. Spelling is
currently a member of the Executive Committee (prior to their resignations,
Messrs. Huizenga and Berrard were also members of the Executive Committee);
Messrs. McGrath and Muething are currently members of the Audit Committee and
the Nominating Committee; Messrs. Dauman, Muething and McGrath are currently
members of the Compensation Committee (prior to his resignation, Mr. Berrard
was also a member of the Compensation Committee). During 1995, the Executive
Committee took action by unanimous written consent one time, the Compensation
Committee met two times and the Audit Committee met one time. In addition, a
Special Committee of the Board, consisting of the independent directors, met
or took action by unanimous written consent three times during 1995 to
consider Viacom's proposed purchase of Virgin Interactive Entertainment
Limited ("VIEL").
During 1995, the Board of Directors took action by unanimous written consent
on two occasions and held four Board meetings. Each director attended all of
the meetings held by the Board of Directors and the committee(s) thereof on
which each such director served.
5
EXECUTIVE COMPENSATION
The following table sets forth the compensation for services rendered in all
capacities to the Company for the years ended December 1995, 1994 and 1993, of
those persons who were (i) the Company's Chief Executive Officer during 1995
and (ii) certain executive officers of the Company at December 31, 1995 whose
1995 salary and bonus exceeded $100,000 (such persons being referred to herein
collectively as the "Named Officers").
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
-------------------- ------------
Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary Bonus Compensation(d) Options Compensation
- ------------------ ---- -------- -------- --------------- ------------ ------------
Steve R. Berrard(a) 1995 $300,000(b) $ -- $ -- -- $ --
President and Chief 1994 200,000(b) -- -- -- --
Executive Officer 1993 43,987(b) 7,763(b) -- -- --
Peter H. Bachmann 1995 398,077 166,250(c) 3,000 -- 6,750(e)
Executive Vice
President- 1994 281,250 150,000 6,000 260,000 3,780(e)
Office of the President 1993 96,154 10,000 -- 40,000 --
Thomas P. Carson 1995 398,077 166,250(c) 3,000 -- 6,750(e)
Executive Vice
President- 1994 289,424 150,000 6,000 200,000 --
Office of the
President, 1993 67,308 -- -- 100,000 --
Chief Financial Officer
and Treasurer
Kathleen Coughlan 1995 208,654 63,000(c) 3,000 -- 6,750(e)
Senior Vice President 1994 168,270 52,500 6,000 65,000 --
and Corporate
Controller
Sally Suchil 1995 196,154 70,000(c) 3,000 40,000 4,505(e)
Senior Vice President,
General Counsel and
Secretary
- --------
(a) Mr. Berrard resigned as President and Chief Executive Officer of the
Company in March 1996.
(b) Represents amounts received from Blockbuster (as defined below) allocable
to Mr. Berrard's services to the Company in 1995, 1994 and 1993,
respectively, which amounts were reimbursed to Blockbuster by the Company
(see "Certain Transactions").
(c) Bonuses were paid in January 1996 in respect of services performed in
1995.
(d) Amount accrued under a Company profit sharing plan.
(e) Company contribution under 401(k) Savings Plan.
6
STOCK OPTION GRANT TABLE
Set forth below is information with respect to grants of stock options
during the fiscal year ended December 31, 1995, to the Named Officers. Stock
appreciation rights are not available under the Company's stock option plans.
OPTION GRANTS IN 1995
Potential Realizable
Value At Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
------------------------------- ----------------------
Number of % of Total
Securities Options Granted
Underlying to Employees Exercise Expiration
Options Granted in Fiscal Year Price Date 5% 10%
--------------- --------------- -------- ---------- ---------- -----------
Steven R. Berrard....... -- -- -- -- -- --
Peter H. Bachmann....... -- -- -- -- -- --
Thomas P. Carson........ -- -- -- -- -- --
Kathleen Coughlan....... -- -- -- -- -- --
Sally Suchil............ 40,000(1) 26.23% $10.75 1/3/05 $ 270,425 $ 685,309
- --------
(1) Grant vests in equal amounts over a period of four years.
As required by the Commission, the dollar amounts in the last two columns
represent the hypothetical gain or "option spread" that would exist for the
options based on assumed 5% and 10% annual compounded rates of stock price
appreciation over the full option term. These prescribed rates are not
intended to forecast possible future appreciation, if any, of the Common
Stock.
STOCK OPTION EXERCISES AND YEAR-END HOLDINGS
The following table sets forth certain information pertaining to stock
options (i) exercised during the fiscal year ended December 31, 1995 and (ii)
held as of December 31, 1995 by the Named Officers. The Company has no plans
pursuant to which stock appreciation rights may be awarded.
AGGREGATED OPTION EXERCISES IN 1995 AND FISCAL YEAR END OPTION VALUES
Number of Unexercised Value of Unexercised
Options at In-The-Money Options at
December 31, 1995 December 31, 1995(1)
Shares Acquired Value ------------------------- -------------------------
Named Officers On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------- --------------- -------- ----------- ------------- ----------- -------------
Steven R. Berrard....... -- -- -- -- -- --
Peter H. Bachmann....... 20,000 $112,500 77,800 202,200 $208,750 $568,750
Thomas P. Carson........ -- -- 108,000 192,000 $409,375 $603,125
Kathleen Coughlan....... -- -- 16,250 48,750 $ 33,125 $ 99,375
Sally Suchil............ -- -- -- 40,000 -- $ 70,000
- --------
(1) The closing price of the Company's Common Stock on December 31, 1995 was
$12.50.
DIRECTOR COMPENSATION
Each member of the Board (excluding Messrs. Dauman, Dooley and Redstone) is
currently paid an annual fee of $15,000 plus $750 for each meeting attended,
including committee meetings.
7
EMPLOYMENT CONTRACTS
Pursuant to an Employment Agreement dated as of March 1, 1989, as amended
(the "Employment Agreement"), Aaron Spelling is employed as Chairman of the
Board and Chief Executive Officer of the Company's most significant
subsidiaries involved in television production, and serves as Executive
Producer or Producer of substantially all television programs and filmed
entertainment (as he may elect) produced by the Company's significant
subsidiaries. As compensation for serving as an officer of such subsidiaries,
Mr. Spelling currently receives an annual base salary of $1,197,000. As
compensation for serving as an Executive Producer or Producer, he also
receives certain producer fees (see "Certain Transactions"). Mr. Spelling is
also entitled to receive a bonus.
Mr. Spelling has the right to terminate the Employment Agreement effective
upon seven (7) days' written notice in the event that the Company materially
breaches its obligations under the Employment Agreement or upon certain
circumstances involving a change of control of the Company. If such
termination is premised solely on a change in control, the Company has the
right to retain Mr. Spelling as a consultant for a period of time thereafter.
Compensation for such consulting services would be based on a percentage of
the compensation that he would have received but for termination of the
Employment Agreement. If Mr. Spelling terminates the Employment Agreement
based on a material breach by the Company, he has the right to cease providing
services and receive a lump sum payment equal to the present value of his base
salary for the remainder of the term as well as service fees payable in
accordance with a formula provided in the Employment Agreement. The Employment
Agreement extends through April 30, 1996. The Company is finalizing the
details of a two year extension to Mr. Spelling's Employment Agreement.
The Company has a three-year employment agreement with Peter H. Bachmann,
dated as of September 26, 1994, wherein he is employed as Executive Vice
President, Office of the President at an annual salary of $375,000. His salary
increased to $475,000 on September 30, 1995 and will increase to $550,000 on
September 30, 1996. In addition, Mr. Bachmann received a $25,000 bonus upon
execution of his agreement. Further, he is entitled to receive, at the
Company's discretion, incentive compensation up to 35% of his salary based on
the Company's performance and his individual performance. Mr. Bachmann was
also granted 160,000 stock options vesting one-third each year over the term
of the agreement. However, if the Company engages in a going private
transaction (a "Rule 13e-3 transaction"), any outstanding options become
immediately exercisable one day prior to the closing of such transaction.
The Company has a three-year employment agreement with Thomas P. Carson,
dated as of September 1, 1994, wherein he is employed as Executive Vice
President, Office of the President at an annual salary of $375,000. Such
salary increased to $475,000 on September 30, 1995 and will increase to
$550,000 on September 30, 1996. In addition, Mr. Carson received a $25,000
bonus upon execution of his agreement. Further, he is entitled to receive, at
the Company's discretion, incentive compensation up to 35% of his salary based
on the Company's performance and his individual performance. Mr. Carson was
also granted 100,000 stock options vesting one-third each year over the term
of the agreement. However, if the Company engages in a Rule 13e-3 transaction,
any outstanding options become immediately exercisable one day prior to the
closing of such transaction.
The Company has an agreement with Kathleen Coughlan, dated as of January 10,
1994, which was amended as of September 1, 1994 and February 8, 1996, and
terminates on January 9, 1998. Pursuant to such agreement (as amended), Ms.
Coughlan is employed as Senior Vice President-Corporate Controller of the
Company at a current annual salary of $225,000, which is subject to annual
review but shall in no event be less than $225,000. Ms. Coughlan is also
entitled to receive a bonus, at the Company's discretion. She was also granted
50,000 stock options vesting 25% each year over the term of the agreement (as
amended).
8
The Company has an agreement with Sally Suchil, dated as of January 1, 1995,
which terminates on December 31, 1997. Pursuant to such agreement, Ms. Suchil
is employed as Senior Vice President, General Counsel and Secretary of the
Company at an annual salary of $200,000 during the first year of the agreement
and $250,000 during the second and third years of the agreement. Ms. Suchil is
also entitled to receive a bonus at the Company's discretion. She was also
granted 40,000 stock options vesting 25% each year over the term of the
agreement.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors at March 31, 1996
consisted of three directors: Philippe P. Dauman, J. Brian McGrath (Chairman)
and John L. Muething. The Compensation Committee's functions include reviewing
and recommending compensation arrangements for executive officers of the
Company and administering the Company's stock option plans, including
determining eligibility, the number of shares to be granted under the options
and the terms of such grants.
General
The Company's executive compensation policies relating to executive officers
have been designed to provide a total compensation program that will attract,
retain and motivate superior executive personnel while integrating such
compensation with Company performance and shareholder interests. The Company's
compensation program for executive officers has three principal components:
annual base salary, annual incentive bonuses and stock option grants. Under
this program, a portion of an executive's compensation, in both the short term
and the long term, is linked to the Company's performance. In addition, each
of the Company's employees including its executive officers is permitted, when
eligible, to participate in the Company's 401(k) Savings Plan by making
voluntary contributions to his or her account. The Company contributes to
individual employee accounts based upon the amount of the employee's
contributions. In addition, the Company annually contributes to the plan an
amount equal to two percent of the total compensation (subject to a maximum of
$150,000) paid to participants in such plan, which amount is distributed
ratably to participants' individual accounts based on the participants' base
salaries.
Base Salary
Annual salaries are established after a review of industry, peer group and
national surveys of total compensation packages, as well as evaluation of the
individual executive's past and expected future performance. Annual salary
levels are generally targeted to, and in 1995 corresponded to, the lower end
of the range of salaries paid to executives with comparable qualifications,
experience and responsibilities at other similarly situated companies. In
establishing salary levels against such range, the competitiveness of the
executive's entire compensation package is considered. Certain executive
officers are employed pursuant to employment agreements.
Steven R. Berrard, President and Chief Executive Officer of the Company
until March 1996 was employed by BEG (as defined below) and furnished services
to the Company pursuant to a loan out agreement between the Company and BEG.
The Company reimbursed BEG for an allocable portion of the compensation paid
to Mr. Berrard by BEG. The Company believes that the amounts paid to BEG
pursuant to such loan-out agreement were lower than the amounts which the
Company would have had to pay in order to directly engage an executive officer
of comparable skill and experience.
Annual Incentive Bonuses
The Company's executive officers are eligible to receive annual incentive
bonuses. In approving such bonuses, consideration is given to the operating
results of the Company as a whole, the performance of the individual
executive's division and the contributions made by the individual during the
course of the year. In the case of corporate officers, consideration is given
to the Company's performance as a whole as well as to the
9
individual's performance during the year. The Company accords approximately
equal weight to each of these three factors. The Company does not have
specific performance criteria which are utilized to determine the amount of
annual bonuses which may be granted. Rather, the evaluation is conducted from
a more generalized consideration of each of the three factors with a view
towards rewarding outstanding performance and encouraging executives to
contribute to the overall success of their operating division and the Company
as a whole.
Stock Options
Stock options represent an important part of the Company's compensation
program. The Committee believes that the Company's shareholders' interests are
well served by aligning the Company's senior executives interests with those
of the shareholders through the grant of stock options. Options under the
Company's Stock Option Plan are granted at exercise prices equal to the fair
market value of the Common Stock on the date of the grant, and will only have
value if the Company's stock price increases. Options granted subsequent to
July 1993 generally become exercisable at the rate of 25% per year and
executives generally must be employed at the time options vest in order to
exercise the options. The Compensation Committee believes that these features
provide the optionee with substantial incentives to maximize the Company's
long term success. Grants of stock options generally are based upon the
executive's position with the Company and an evaluation of the executive's
past and expected future performance, without regard to the executive's stock
ownership or grants made to the executive in prior years. The number of shares
subject to a stock option grant is generally determined by dividing a multiple
of the executive's base salary by the market price of the Common Stock on the
date of the grant.
Compensation of the President and Chief Executive Officer
Mr. Berrard acted as President and Chief Executive Officer of the Company
until March 1996 pursuant to a loan-out agreement between BEG and the Company.
In 1995, the Company paid BEG $300,000 as reimbursement for Mr. Berrard's
services. The Company believes that the amount paid to BEG as reimbursement
for Mr. Berrard's services is substantially below the competitive market rates
for chief executive officers of companies of similar size that have achieved
operating results comparable to those of the Company in 1995.
Deductibility of Executive Compensation
The Omnibus Budget Reconciliation Act of 1993 added a provision to the
Internal Revenue Code limiting to $1,000,000 the deductibility of compensation
(including stock-based compensation, such as stock options) paid to certain
executives by public companies. The tax law change includes an exclusion for
"performance-based" compensation, provided such compensation meets certain
requirements, including outside director and shareholder approval of the
performance goals. The Company will continue to consider the deductibility of
compensation payments when establishing its compensation practices and
programs.
The Compensation Committee continually evaluates the Company's compensation
policies and procedures with respect to executives. Although the Compensation
Committee believes that current compensation policies have been successful in
aligning the financial interests of executive officers with those of the
Company's shareholders and with Company performance, it continues to examine
what modifications, if any, should be implemented to further link executive
compensation with both individual and Company performance.
The Compensation Committee
Philippe P. Dauman
J. Brian McGrath (Chairman)
John L. Muething
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Steven R. Berrard, Philippe P. Dauman, J. Brian McGrath (Chairman) and John
L. Muething were elected members of the Company's Compensation Committee in
November 1994. (Mr. Berrard resigned as President and Chief Executive Officer,
and as a Director, of the Company in March 1996.) Accordingly, Mr. Berrard has
served as a member of the Company's Compensation Committee while serving as its
President and Chief Executive Officer. In addition, Mr. Berrard served as a
Director of Viacom from November 1994 until March 1996. During the period from
November 1994, Philippe P. Dauman, an executive officer and Director of Viacom,
has served as a member of the Company's Compensation Committee. Mr. Berrard did
not receive compensation from the Company but the Company reimbursed BEG
$300,000 pursuant to a loan-out agreement described above in the "Report of the
Compensation Committee on Executive Compensation--Compensation of the Chief
Executive Officer." For further information regarding certain relationships of
Messrs. Berrard and Dauman see "Election of Directors" and "Certain
Transactions."
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return on investment (based on
change in year end stock price and assuming reinvestment of all dividends)
assuming a $100 investment in the Common Stock of the Company, the Standard &
Poor's 500 Stock Index and an index of peer companies selected by the Company
(the "Peer Group Index") for the five year period commencing January 1, 1991
and ending December 31, 1995.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG SPELLING
ENTERTAINMENT, PEER GROUP AND S&P 500 INDEX
PERFORMANCE GRAPH APPEARS HERE
SPELLING
Measurement Period ENTERTAINMENT PEER S&P 500
(Fiscal Year Covered) GROUP GROUP INDEX
- --------------------- ------------- --------- ----------
Measurement Pt-1990 $100.00 $100.00 $100.00
FYE 1991 $210.87 $125.23 $130.48
FYE 1992 $159.21 $201.07 $140.46
FYE 1993 $257.70 $267.72 $154.62
FYE 1994 $278.65 $193.72 $156.66
FYE 1995 $324.01 $234.71 $215.54
The Peer Group Index consists of the common stock of Acclaim Entertainment,
Dick Clark Productions, Electronic Arts, Inc., King World Productions, Kushner-
Locke Company, Savoy Pictures Entertainment, Samuel Goldwyn Company, New World
Communications Group, Inc. and Trimark Holding, Inc. The Peer Group Index used
in the Company's 1995 Proxy Statement ("the 1995 Index") consisted of the above
companies (except for New World and Trimark), and Silicon Graphics Inc.
Companies from the 1995 Index which continue to be publicly traded are
Acclaim Entertainment, Dick Clark Productions, Electronics Arts, Inc., King
World Productions, Kushner-Locke Co. and Silicon Graphics, Inc. If those
companies comprised the current peer group index, then the levels for that
index, instead of those reflected in the chart above, would have been as
follows: 1990, $100; 1991, $138; 1992, $212; 1993, $307, 1994, $290 and 1995,
$298.
11
CERTAIN TRANSACTIONS
In this section references to Blockbuster are to Blockbuster and its
subsidiaries for the period ending September 29, 1994 and to BEG and its
subsidiaries thereafter.
On July 30, 1994, the Company and Blockbuster entered into an exchange
agreement (the "Exchange Agreement") and consummated the transactions
contemplated thereby (the "Acquisition"). Pursuant to the Exchange Agreement,
Blockbuster delivered to the Company 8,686,984 ordinary shares (the "Ordinary
Shares") of VIEL and an option to acquire 550,000 Ordinary Shares of VIEL
(collectively, the "VIE Interests") in exchange for 22,015,062 shares of the
Company's Common Stock. Blockbuster had acquired a majority of the VIE
Interests from third parties on July 29, 1994. As a result of the Acquisition,
the Company acquired approximately 91% of VIEL's Ordinary Shares.
In connection with the Acquisition, the Company also entered into put- and
call-option agreements with Blockbuster with respect to the Ordinary Shares of
VIEL not owned by the Company. Under these agreements, the Company may
acquire, or be required by Blockbuster to purchase, these shares from
Blockbuster at an agreed-upon price. At the option of the Company, such
purchase price may be paid to Blockbuster in cash or shares of the Company's
Common Stock. On June 8, 1995, Blockbuster acquired the remaining Ordinary
Shares of VIEL not owned by the Company for approximately $22,973,000 plus
other costs associated with the transaction. Blockbuster and the Company have
executed amendments to extend the put- and call-option agreements through May
5, 1996.
In January 1994, the Company entered into a three-year credit agreement with
Blockbuster. As a result of the merger of Blockbuster with and into Viacom,
Viacom succeeded to Blockbuster's position under the credit agreement (the
"Viacom Facility"). This agreement was amended and restated in January 1995 to
reflect certain amendments to the facility which were effective as of December
7, 1994, including a $25,000,000 increase in the amount available under the
facility. In November 1995, the Viacom Facility was again amended to provide a
$40,000,000 increase in the amount available. The Viacom Facility, as amended,
provides for (i) a term loan of $100,000,000 which funded the Company's merger
with Republic and (ii) a revolving credit facility of $140,000,000 to fund the
Company's working capital and other requirements. All outstanding borrowings
mature on March 31, 1997. Viacom has agreed to provide a further increase of
up to $115,000,000 in the amount available under the Viacom Facility and it is
anticipated that an amendment reflecting such increase will be executed. Under
the Viacom Facility, the Company pays an annual fee (currently 0.375%) based
on the unused portion of the facility, as well as certain facility and
administration fees, all based on the similar fees payable by Viacom under its
separate credit facilities. Interest on all outstanding borrowings is payable,
at the Company's option, at LIBOR plus a spread (currently 1.0%) or at prime
rate; both rates are determined by reference to the corresponding rates
payable by Viacom under its separate credit facilities. Borrowings under the
Viacom Facility are secured by all of the assets of the Company and its
domestic subsidiaries, and the entire amount outstanding under the Viacom
Facility may be accelerated if Viacom's borrowings under its separate credit
facilities were to be accelerated. Borrowings under the Viacom Facility will
be accelerated in the event of a "change in control" of the Company, as
defined in the Viacom Facility.
On December 23, 1993, a wholly-owned subsidiary of VIEL established a multi-
currency credit agreement with a bank in the U.S. (the "Credit Agreement").
The Credit Agreement initially provided for maximum borrowings of $15,000,000,
subject to a borrowing base test. Following the Acquisition, the amount of
borrowings allowable under the Credit Agreement was increased to $75,000,000,
and the borrowing base test and other ratio tests were eliminated, based on
the guarantee of all borrowings under the Credit Agreement by Blockbuster.
During 1995, the borrowings allowable under the Credit Agreement were
increased to $100,000,000 and the term was extended to March 31, 1997.
Interest is payable monthly at the bank's reference rate or, at the Company's
option, certain alternative rates. Additionally, the Company must pay a
commitment fee of 0.125% on the unused portion of the available credit.
During the fiscal year ended December 31, 1995, Blockbuster was charged by
the Company approximately $5,779,000 for the purchase of prerecorded
videocassettes and interactive entertainment in connection with
12
Blockbuster's retailing business. At December 31, 1995, the Company had a net
receivable from BEG of approximately $1,876,000 related to these sales. The
Company believes that the terms of the sale of this product to Blockbuster
were as favorable to the Company as could have been obtained from an
unaffiliated party. The Company expects to continue to sell videocassettes and
interactive entertainment to Blockbuster upon similar terms in the future.
In 1995, Blockbuster provided the Company with various services such as
accounting, legal and tax services for which the Company was charged an
aggregate of $600,000, which amount includes amounts charged by Blockbuster
for services provided to the Company by Steven R. Berrard, the former
President and Chief Executive Officer of the Company (see "Executive
Compensation"). Mr. Berrard was an executive officer of Blockbuster and was
compensated by Blockbuster. The amount of his compensation charged to the
Company represents the allocable portion of their base salary and bonus
attributable to his services provided to the Company. At December 31, 1995,
the Company had a net payable to BEG of $1,264,000 with respect to such
expenses. The Company believes that the terms of the foregoing arrangement are
more favorable to the Company than terms that could be obtained from an
unaffiliated party.
Spelling Television has an agreement with Tori Spelling, Aaron Spelling's
daughter, wherein Spelling Television is granted the exclusive right and
property in and to Ms. Spelling's television series services in regard to the
production of "Beverly Hills, 90210" for a five-year aggregate term dating
from September 26, 1990. Spelling Television has a right of first
negotiation/first refusal to enter into a new contract beyond the five-year
aggregate term, and has an agreement for her services for the sixth year of
the series. Ms. Spelling is compensated: per program; for television re-runs,
theatrical re-runs, foreign telecasting and supplemental markets; for a
portion of the net profits derived from certain merchandising activities; and
if Ms. Spelling renders services for commercial announcements. Spelling
Television guarantees to employ and compensate or compensate Ms. Spelling for
all episodes produced in a season, but in no event for less than 22 episodes.
In fiscal year 1995, Ms. Spelling was paid approximately $961,562 pursuant to
such agreement.
Spelling Television has an agreement dated as of January 15, 1996 with Randy
Spelling, Aaron Spelling's son, wherein Spelling Television is granted the
exclusive right to Randy Spelling's services in regard to the production of
"Malibu Shores" during the 1995/1996 season. Spelling Television also has four
exclusive, successive options to extend the agreement for up to a total of
five years. Pursuant to such agreement, Randy Spelling is compensated per
episode and for a portion of certain net merchandising receipts, as well as
for certain guild required payments. Under such agreement, Randy Spelling will
receive a minimum of $45,000 during fiscal year 1996, and if the series
continues to be produced, his per episode compensation and the minimum
compensation due under the agreement increases during each of the above-
mentioned option years. In addition, Spelling Television had separate
agreements with Randy Spelling wherein he agreed to appear in two episodes of
"Beverly Hills, 90210" during the 1995/1996 season and with respect to his
services in the pilot for "Malibu Shores."
Spelling Television has an agreement with Aaron Spelling whereby it pays him
producer fees on a per episode or per hour basis on the product produced by
Spelling Television, including series, mini-series and movies for television.
Pursuant to such agreement, in fiscal year 1995, Mr. Spelling was paid
$3,080,000 in producer fees by Spelling Television.
Prior to the merger of Blockbuster into Viacom, the Company licensed certain
entertainment product to Showtime Networks Inc. ("Showtime"), a subsidiary of
Viacom, and certain television stations owned by Viacom. Sales to the
television stations consist of both cash and barter contracts. Revenue from
cash contracts was $710,000 and the Company has a receivable due from Viacom
of $2,942,000 for fiscal year 1995. The Company realized approximately
$437,000 in revenue from third party advertisers with respect to the sale of
advertising time received under the barter contracts. Additionally, prior to
the merger of Blockbuster into Viacom, the Company licensed certain
entertainment product to USA Network and Sci-Fi Channel in which Viacom has
equity interests. Revenue from such sales were $5,521,000 for the year ended
December 31, 1995
13
and the Company had receivables at December 31, 1995 from USA Network and Sci-
Fi Channel of approximately $4,541,000 related to these sales.
On March 8, 1995, Spelling Television entered into an agreement with 2301
S.E. 17th St., Ltd. (the "Partnership"), the owner of the Hyatt Regency Pier
Sixty Six Hotel (the "Hotel") in Ft. Lauderdale, Florida in connection with
the filming of a television pilot and series, if produced, entitled "Pier 66"
on location in and around the Hotel (the "Premises"). Messrs. Berrard and
Huezinga own a 8.33% and 16.66% interest, respectively, in a general
partnership which holds a 79.5% interest in the Partnership. In consideration
of the favorable publicity the Hotel will receive for being depicted in the
pilot and series, Spelling Television will not be charged fees for the use of
the Premises and the Hotel agrees to provide rooms during preproduction and
production of the pilot and series, if produced. The estimated value of (i)
the location filming rights and rooms provided on the Pilot is $103,000 and
(ii) the rooms provided on the potential series is $297,000.
In January 1995, Spelling Satellite Networks, Inc. ("SSN"), a subsidiary of
the Company, engaged Showtime for a period of nine months to furnish
consulting services to SSN with respect to various cable/satellite programming
services. Pursuant to such arrangement, Showtime received a consulting fee of
$25,000 per month. In fiscal 1995, Showtime received $200,000 pursuant to such
engagement.
In the ordinary course of business, the Company has and expects to continue
to do business with Viacom and its affiliates, including Blockbuster,
Showtime, Nickelodeon and Paramount.
INDEPENDENT PUBLIC ACCOUNTANTS
On November 1, 1994, the Company engaged the accounting firm of Price
Waterhouse LLP as its independent accountants for the fiscal year ending
December 31, 1995. This engagement was authorized by the Company's Board of
Directors upon the recommendation of the Board's Audit Committee. The
determination of the Company to select Price Waterhouse was made in order to
enable the Company to better coordinate financial reporting matters with
Viacom, its majority shareholder; Price Waterhouse LLP serves as independent
accountants to Viacom.
Representatives of Price Waterhouse LLP are expected to be present at the
1996 Annual Meeting of Shareholders. They will have the opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions.
FINANCIAL STATEMENTS
The Company is enclosing its Annual Report to Shareholders for the year
ended December 31, 1995. Shareholders are referred to such report for
financial and other information about the Company, but such report is not
incorporated into this Proxy Statement and is not a part of the proxy
soliciting material.
PROPOSALS BY SHAREHOLDERS
Any proposals by shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Company no later than December 1, 1996.
OTHER MATTERS
You are again urged to attend the Annual Meeting at which time management of
the Company will present a review of the Company's operations. Proxies will be
solicited by the Board of Directors through use of the mails. Proxies may also
be solicited by directors, officers and a small number of other employees of
the Company
14
personally or by mail, telephone, telegraph, or otherwise, but such persons
will not be compensated for such services. Brokerage firms, banks,
fiduciaries, voting trustees or other nominees will be requested to forward
the soliciting material to each beneficial owner of stock held of record by
them.
The Board of Directors does not intend to present, and does not have any
reason to believe that others will present, any item of business at the Annual
Meeting other than those specifically set forth in the notice of the meeting.
However, if other matters are presented for a vote, the proxies will be voted
for such matters in accordance with the judgment of the persons acting under
the proxies.
By Order of the Board of Directors
SALLY SUCHIL
Secretary
15
SPELLING ENTERTAINMENT GROUP INC.
5700 Wilshire Boulevard, Los Angeles, California 90036
PROXY
This Proxy is Solicited on Behalf of The Board of Directors
The undersigned hereby appoints Peter H. Bachmann and Thomas P. Carson and each
of them, proxies with the powers the undersigned would possess if personally
present, and with full power of substitution, to vote all common shares of the
undersigned in Spelling Entertainment Group Inc. at the Annual Meeting of
Shareholders to be held at The Regent Beverly Wilshire, 9500 Wilshire Boulevard,
Champagne Room, Beverly Hills, California, on May 21, 1996 at 10:00 a.m.,
Pacific Time, and at any adjournment thereof, upon all subjects that may
properly come before the meeting, including the matters described in the Proxy
Statement furnished herewith, subject to any directions indicated on the reverse
side of this card. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE FOR THE
ELECTION OF ALL LISTED NOMINEES, IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, AND AT THEIR DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY
COME BEFORE THE MEETING.
Your vote of the Election of Directors may be indicated on the reverse side of
this card. Nominees are Sumner M. Redstone, Aaron Spelling, Philippe P. Dauman,
Thomas E. Dooley, J. Brian McGrath and John L. Muething.
IF YOU DO NOT SIGN AND RETURN A PROXY, OR ATTEND THE MEETING AND VOTE BY BALLOT,
YOUR SHARES CANNOT BE VOTED.
(Continued and to be signed on the other side)
____________
Common
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES.
FOR all nominees WITHHOLD AUTHORITY
listed (except as marked to vote for all nominees
to the contrary) listed
1. ELECTION OF DIRECTORS __________ __________
Instructions: To withhold
authority for an individual
nominee draw a line through
his name.
Nominees: Sumner M. Redstone,
Aaron Spelling, Philippe P.
Dauman, Thomas E. Dooley,
J. Brian McGrath and John L.
Muething.
A vote FOR all nominees is
recommended by the Board of
Directors.
2. In their discretion, on
such other business as FOR AGAINST ABSTAIN
may properly come before
the meeting. __________ __________ __________
I Will Attend the Meeting ______
Please sign this proxy exactly as
your name appears below. When shares
are held jointly, each holder should
sign. When signing as attorney,
executor, administrator, trustee or
in another representative capacity,
please give full title as such. If a
corporation, please sign in full
corporate name by the president or
other authorized officer. If a
partnership, please sign in
partnership name by an authorized
person.
Date _________________________, 1996
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.