SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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 Section240.14a-12
STEINWAY MUSICAL INSTRUMENTS, INC.
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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)
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STEINWAY MUSICAL INSTRUMENTS, INC.
800 SOUTH STREET
SUITE 305
WALTHAM, MASSACHUSETTS 02453
(781) 894-9770
April 6, 2001
Dear Stockholder:
Our Annual Meeting of Stockholders will be held on Friday, May 4, 2001, at
10:00 a.m., at the Double Tree Guest Suites, 550 Winter Street, Waltham,
Massachusetts 02451. We urge you to attend this meeting to give us an
opportunity to meet you personally, to allow us to introduce to you the key
personnel responsible for management of your Company and to cover any questions
you may have.
The formal Notice of Meeting, the Proxy Statement and the proxy card are
enclosed. A copy of the Annual Report to Stockholders describing the Company's
operations during the year ended December 31, 2000 is also enclosed.
Messrs. Kirkland and Messina, who own 100% of the Class A Common Stock, have
advised the Company that they intend to vote their shares of Class A Common
Stock consistent with the recommendations of the Board of Directors set forth in
the attached Proxy Statement. The Class A Common Stock presently represents 85%
of the combined voting power of the Class A Common Stock and the Ordinary Common
Stock. Therefore, stockholder approval in accordance with the Board of
Directors' recommendations is assured.
We hope that you will be able to attend the meeting in person. Whether or
not you plan to attend the meeting, please sign and return the enclosed proxy
card promptly. A prepaid return envelope is provided for this purpose. Your
shares will be voted at the meeting in accordance with your proxy.
If you have shares in more than one name or if your stock is registered in
more than one way, you may receive more than one copy of the proxy material. If
so, please sign and return each of the proxy cards you receive so that all of
your shares may be voted. We look forward to meeting you at the Annual Meeting.
Very truly yours,
/s/ Dana D. Messina
Dana D. Messina
CHIEF EXECUTIVE OFFICER
STEINWAY MUSICAL INSTRUMENTS, INC.
800 SOUTH STREET
SUITE 305
WALTHAM, MASSACHUSETTS 02453
(781) 894-9770
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 2001
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The Annual Meeting of Steinway Musical Instruments, Inc. (the "Company")
will be held on May 4, 2001 at 10:00 a.m. at the Double Tree Guest Suites, 550
Winter Street, Waltham, Massachusetts 02451, for the following purposes:
1. To elect six (6) directors to hold office until the next annual meeting of
stockholders and until their successors are duly elected and qualified; and
2. To ratify the appointment of Deloitte & Touche LLP as independent auditors
for the fiscal year ending December 31, 2001; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Stockholders of record at the close of business on March 28, 2001 will be
entitled to vote at the Annual Meeting or any adjournment or postponement
thereof. All stockholders are urged to attend the meeting in person or by proxy.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED PREPAID RETURN ENVELOPE.
The proxy is revocable and will not affect your right to vote in person in the
event you attend the meeting.
By Order of the Board of Directors,
/s/ Dennis M. Hanson
Dennis M. Hanson
SECRETARY
Waltham, Massachusetts
April 6, 2001
STEINWAY MUSICAL INSTRUMENTS, INC.
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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Steinway Musical Instruments, Inc. (the "Company") for use in connection with
the Annual Meeting of Stockholders to be held on the 4th day of May, 2001 at
10:00 a.m. (the "Annual Meeting") and at any and all adjournments thereof.
The persons named as proxies were designated by the Board of Directors and
are officers and/or directors of the Company. Any proxy may be revoked or
superseded by executing a proxy bearing a later date or by giving notice of
revocation in writing prior to, or at, the Annual Meeting, or by attending the
Annual Meeting and voting in person. All proxies which are properly completed,
signed and returned to the Company prior to the meeting, and not revoked, will
be voted in accordance with the instructions given in the proxy. If a choice is
not specified in the proxy, the proxy will be voted FOR the election of the
director nominees listed below and FOR the ratification of the appointment of
Deloitte & Touche LLP as independent auditors for the Company.
This Proxy Statement and the accompanying proxy are being mailed to
stockholders on or about April 6, 2001. The entire cost of the solicitation of
proxies will be borne by the Company. Expenses will also include reimbursements
paid to brokerage firms and others for their reasonable expenses incurred in
forwarding solicitation material regarding the meeting to beneficial owners of
the Company's common stock. It is contemplated that this solicitation will be
primarily by mail. In addition, some of the officers, directors and employees of
the Company may solicit proxies personally or by telephone, facsimile or email.
Messrs. Kirkland and Messina have advised the Company that they intend to
vote all of their shares of Class A Common Stock in favor of the election of the
six nominees recommended by the Board of Directors and the appointment of
Deloitte & Touche LLP to serve as the Company's independent auditors to audit
the Company's financial statements for 2001. Such action by Messrs. Kirkland and
Messina is sufficient to elect such directors and to appoint the independent
auditors without any action on the part of any other holder of common stock.
VOTING AT THE MEETING
Only stockholders of record at the close of business on March 28, 2001 will
be entitled to vote at the Annual Meeting or any adjournment or postponement
thereof. The Company's Restated Certificate of Incorporation (the "Certificate
of Incorporation") authorizes two classes of common stock, designated as
Ordinary Common Stock and Class A Common Stock. Each share of Ordinary Common
Stock and Class A Common Stock entitles the record holder to one vote and 98
votes, respectively, on any action to be taken at the Annual Meeting, unless
Delaware law provides otherwise. As of January 31, 2001, there were 8,453,547
and 477,953 shares of Ordinary Common Stock and Class A Common Stock,
respectively, outstanding. As of that date, all shares of Class A Common Stock
were owned by Kyle R. Kirkland and Dana D. Messina, Chairman of the Board and
Chief Executive Officer of the Company, respectively, representing 85% of the
combined voting power of the Class A Common Stock and Ordinary Common Stock.
Neither the holders of the Ordinary Common Stock nor the holders of Class A
Common Stock have cumulative voting rights.
The stockholders of the Company have no dissenters or appraisal rights in
connection with any of the items scheduled to be presented to the stockholders
at the Annual Meeting.
VOTE REQUIRED
The election of director nominees requires a plurality of the votes cast in
person or by proxy at the Annual Meeting. Under Delaware law, the Certificate of
Incorporation and the Company's bylaws, shares as to which a stockholder
abstains or withholds from voting on the election of directors and shares as to
which a broker indicates that it does not have discretionary authority to vote
("broker non-votes") on the election of directors will not be counted as voting
thereon and therefore will not affect the election of the nominees receiving a
plurality of the votes cast.
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the 2001 fiscal year requires the affirmative vote
of the holders of at least a majority of the aggregate votes cast at the
meeting. Under Delaware law, the Certificate of Incorporation and the Company's
bylaws, shares as to which a stockholder abstains or withholds from voting on
the ratification of independent public accountants and broker non-votes have the
same effect as a vote against such ratification.
ELECTION OF DIRECTORS
The Certificate of Incorporation fixes the number of directors at not less
than three and not more than nine, with the exact number to be set by resolution
of the Board of Directors. Except as set forth below, persons named as proxies
may not vote for the election of any person to the office of director for which
a bona fide nominee is not named in the Proxy Statement. All nominees have
consented to serve as directors for the ensuing year and have previously served
as directors of the Company. Although the Board of Directors does not
contemplate that any of the nominees will be unable to serve, if any nominee
withdraws or otherwise becomes unavailable to serve, the persons named in the
enclosed proxy will vote for any substitute nominee designated by the Board of
Directors.
INFORMATION REGARDING THE NOMINEES
Set forth below are the names, ages, positions and offices held and a brief
account of the business experience for each of the persons to be nominated as a
director by the Board of Directors at the Annual Meeting.
NOMINEES FOR DIRECTORS FOR TERMS EXPIRING IN 2002
KYLE R. KIRKLAND, CHAIRMAN OF THE BOARD AND DIRECTOR (AGE
38). Mr. Kirkland has served as a director of the Company since 1993 and as
Chairman of the Board since 1996. Mr. Kirkland has been a principal of Kirkland
Messina, LLC since 1994. From 1991 to 1994, Mr. Kirkland was a Senior Vice
President of a Los Angeles-based investment bank where he was responsible for
its private placement financing activities. From 1990 to 1991, Mr. Kirkland was
employed by Canyon Partners as a Vice President. From 1988 to 1990, he was
employed by Drexel Burnham Lambert in its High Yield Bond Department.
DANA D. MESSINA, CHIEF EXECUTIVE OFFICER AND DIRECTOR (AGE
39). Mr. Messina has served as a director of the Company since 1993 and as
Chief Executive Officer since 1996. Mr. Messina has been a principal of Kirkland
Messina, LLC since 1994. From 1990 to 1994, Mr. Messina was a Senior Vice
President of a Los Angeles-based investment bank where he was responsible for
all of its corporate finance and merchant banking activities. From 1987 to 1990,
he was employed at Drexel Burnham Lambert in its High Yield Bond Department.
THOMAS T. BURZYCKI, PRESIDENT-SELMER AND DIRECTOR (AGE 57). Mr. Burzycki
has served as a director of the Company since 1993. Mr. Burzycki has served as
President of The Selmer Company, Inc. ("Selmer"), a wholly-owned subsidiary of
the Company, since 1990. From 1978 to 1990, Mr. Burzycki held various financial
and operational positions with United Musical Instruments, including President
from 1985 to 1990. He has served on numerous industry and music education
committees.
2
BRUCE A. STEVENS, PRESIDENT-STEINWAY AND DIRECTOR (AGE 58). Mr. Stevens has
served as a director of the Company since 1995. Mr. Stevens has served as
President of Steinway & Sons ("Steinway"), an indirect wholly-owned subsidiary
of the Company, since 1985 when Steinway was acquired from Columbia Broadcasting
System television network. Prior to that, he was employed by the Polaroid
Corporation for 18 years, where he held various positions including Director of
Marketing for all of Polaroid's international business. He has served on
numerous industry and music education committees.
A. CLINTON ALLEN, DIRECTOR (AGE 57). Mr. Allen has served as a director of
the Company since August 1999. Mr. Allen is Chairman and Chief Executive Officer
of A.C. Allen and Company, an investment banking consulting firm. He also serves
on the board of directors of Psychemedics Corporation, Inc., The DeWolfe
Companies, Swiss Army Brands Inc., Response U.S.A. Inc., Diversified Corporate
Resources, Inc., and Legal Club of America, Inc. Mr. Allen provided the original
financing for Blockbuster Entertainment Corporation, was its founding director
and served on the board until the company was acquired by Viacom/Paramount in
September of 1994.
PETER MCMILLAN, DIRECTOR (AGE 43). Mr. McMillan has served as a director of
the Company since 1996. Currently, Mr. McMillan is the Managing Partner of
Willow Brook Capital Group, LLC ("WBCG"), an asset management company based in
Los Angeles, CA. Prior to forming WBCG he served as Executive Vice President and
Chief Investment Officer of SunAmerica Investments, Inc., a wholly owned
subsidiary of American International Group, Inc. As Chief Investment Officer,
Mr. McMillan had overall investment management responsibility for the major
asset classes in SunAmerica's portfolio, including government securities,
mortgage-backed securities, public and private bonds, and commercial and
residential mortgages. Mr. McMillan joined SunAmerican Investments, Inc. in 1989
after managing the fixed-income portfolio for Aetna Life Insurance and Annuity
Company.
Each director of the Company is elected for a period of one year and serves
until his successor is duly elected and qualified. For information regarding the
beneficial ownership of Ordinary Common Stock and Class A Common Stock by each
nominee, see "Principal Stockholders."
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors took action on six separate occasions during 2000. In
addition to actions of the full Board, directors also took action through Board
committees. The Board of Directors has standing Audit, Compensation and Option
Committees. The Board of Directors does not have a standing Nominations
Committee. None of the members of the Board of Directors participated in less
than 75% of the meetings of the Board of Directors held or of the total number
of meetings held by all committees of the Board of Directors on which various
members served during the year ended December 31, 2000. The current members of
each of the Board of Directors' committees are listed below.
THE AUDIT COMMITTEE
The current members of the Audit Committee are Messrs. Allen and McMillan.
The Audit Committee assists the Board of Directors in fulfilling its
responsibilities for oversight of the quality and integrity of the accounting,
auditing, and financial reporting practices of the Company. The Audit Committee
operates under a written charter adopted by the Board, a copy of which is
attached as Appendix A to this Proxy Statement. The Audit Committee met four
times during 2000.
THE COMPENSATION COMMITTEE
The current members of the Compensation Committee are Messrs. Kirkland,
Messina and Allen. The Compensation Committee sets the compensation for the
executive officers of the Company and administers the Company's compensation
programs. The Compensation Committee took action three times during 2000.
3
THE OPTION COMMITTEE
The current members of the Option Committee are Messrs. Kirkland, Messina,
McMillan and Allen. The Option Committee was formed prior to the Company's
initial public offering of shares of Ordinary Common Stock, which occurred on
August 1, 1996 (the "IPO"), to administer the Steinway Musical
Instruments, Inc. 1996 Stock Plan (the "Stock Plan") and the Steinway Musical
Instruments, Inc. 1996 Employee Stock Purchase Plan (the "Purchase Plan"). The
Option Committee took action twice during 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION
OF EACH OF THE NOMINEES NAMED ABOVE.
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND SIGNIFICANT EMPLOYEES OF THE COMPANY
Set forth below are the names, ages, positions and offices held and a brief
account of the business experience for each executive officer, division
president and director of the Company.
NAME AGE POSITION
- ---- -------- --------
Kyle R. Kirkland.................. 38 Chairman of the Board and Director
Dana D. Messina................... 39 Chief Executive Officer and
Director
Dennis M. Hanson.................. 46 Sr. Executive Vice President
Thomas T. Burzycki................ 57 President-Selmer and Director
Bruce A. Stevens.................. 58 President-Steinway and Director
Robert W. Palmer.................. 49 President-United Musical
Instruments
Michael R. Vickrey................ 58 Executive Vice President
Thomas Kurrer..................... 52 Managing Director,
Steinway-Germany
A. Clinton Allen.................. 57 Director
Peter McMillan.................... 43 Director
For biographical information concerning Kyle R. Kirkland, Dana D. Messina,
Thomas T. Burzycki, Bruce A. Stevens, A. Clinton Allen, and Peter McMillan, see
"Nominees for Directors for Terms Expiring in 2002."
DENNIS M. HANSON, SR. EXECUTIVE VICE PRESIDENT. Mr. Hanson serves as the
Company's Chief Financial Officer, General Counsel and Secretary. Mr. Hanson
started his career in public accounting at Haskins and Sells in 1976. In 1980,
he joined Computervision Corporation, where he held various financial positions
including Vice President of Audit. He joined Steinway in 1988 as Vice President
Finance and assumed duties as General Counsel in 1993.
ROBERT W. PALMER, PRESIDENT-UNITED MUSICAL INSTRUMENTS. Mr. Palmer has
served as President of United Musical Instruments ("UMI"), an indirect
wholly-owned subsidiary of the Company, since 1990. Prior to his association
with UMI, Mr. Palmer was employed with the international accounting firm Coopers
and Lybrand for twelve years, where he last served as General Practice Manager.
Mr. Palmer is currently Vice President of the International Band and Orchestral
Products Association and has served on local boards of education and music
education support groups.
MICHAEL R. VICKREY, EXECUTIVE VICE PRESIDENT. Mr. Vickrey has been employed
by Selmer since 1970. He has held the positions of Controller, Accounting
Manager, Cost Accounting Manager and Regional Credit Manager. Prior to joining
Selmer, Mr. Vickrey spent seven years in the banking industry, specializing in
commercial finance.
4
THOMAS KURRER, MANAGING DIRECTOR, STEINWAY-GERMANY. Mr. Kurrer joined
Steinway in 1989 as Managing Director of the Hamburg facility. Mr. Kurrer was
employed by the German-American Chamber of Commerce in New York from 1976 to
1978. Between 1978 and 1989, he held various positions of increasing
responsibility with the Otto Wolff-Group, a conglomerate of steel and machinery
equipment companies. Mr. Kurrer's last position with the Otto Wolff-Group was
Managing Director of Wirth GmbH.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth the annual compensation paid and accrued by
the Company for services rendered during the fiscal years ended December 31,
2000, 1999 and 1998 to (i) the Company's Chairman of the Board and the Chief
Executive Officer and (ii) the four other most highly compensated executive
officers of the Company and the Managing Director of Steinway-Germany serving at
the end of the last completed fiscal year (each a "Named Executive Officer").
SUMMARY COMPENSATION TABLE(1)
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
-------------------------------------- SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION(6)
- --------------------------- -------- -------- -------- ------------ ------------ ---------------
Kyle R. Kirkland......... 2000 $250,000 $200,000(5) -- 9,000 $25,314
Chairman of the Board 1999 $229,615 -- -- -- $ 8,400
1998 -- -- (2) -- --
Dana D. Messina.......... 2000 $250,000 $600,000(5) -- 9,000 $25,314
Chief Executive Officer.. 1999 $229,615 -- -- -- $ 8,400
1998 -- -- (2) -- --
Dennis M. Hanson......... 2000 $274,100 $243,000(5) -- 7,500 $37,559
Senior Executive Vice 1999 $222,300 $177,000 -- 5,000 $ 9,780
President 1998 $211,000 $165,500 -- -- $ 9,420
Thomas T. Burzycki....... 2000 $268,000 $252,500(3)(5) -- -- --
President-Selmer 1999 $268,000 $180,000 -- -- --
1998 $268,000 $285,000 -- -- --
Bruce A. Stevens......... 2000 $422,625 $206,000 -- 9,000 $85,728
President-Steinway 1999 $404,425 $190,080 -- -- $15,083
1998 $387,000 $193,500 -- -- $14,977
Michael R. Vickrey....... 2000 $175,000 $160,500(3)(5) -- -- --
Executive Vice 1999 $100,000 $180,000 -- -- --
President 1998 $100,000 $190,000 -- -- --
Thomas Kurrer(4)......... 2000 $201,956 $ 77,677 -- 4,500 --
Managing Director, 1999 $228,390 $ 51,717 -- -- --
Steinway-Germany 1998 $238,408 $ 72,118 -- -- --
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(1) The table does not include the cost for personal benefits made available by
the Company. However, no executive officer named in the Summary Compensation
Table received such compensation in excess of the lesser of $50,000 or 10%
of such officer's cash compensation, nor did all executive officers together
receive such other compensation in excess of the lesser of $50,000 times the
number of such executive officers or 10% of such officers' aggregate cash
compensation.
5
(2) Prior to 1999 Messrs. Kirkland and Messina received compensation pursuant to
services agreements among themselves, the Company and Kirkland Messina, LLC
which allowed for a payment of $200,000 for each of Messrs. Kirkland and
Messina. Effective Jan. 1, 1999 these agreements were supplanted with
employment agreements between each of Messrs. Kirkland and Messina and the
Company. See "Employment Contracts" below.
(3) Amount includes an estimate for annual performance bonus. Final approval by
the Compensation Committee and disbursement has not yet been completed as of
the date of this statement.
(4) Mr. Kurrer's compensation information contained in this statement has been
converted from Deutsche marks to U.S. dollars based upon average foreign
exchange rates for the years presented.
(5) Amount shown includes separate bonus related to the United Musical
Instruments Holdings, Inc. acquisition. See the "Report of the Compensation
Committee on Executive Compensation" below.
(6) The Company provides the Named Executive Officers with certain health,
medical and other non-cash benefits generally available to all salaried
employees and not included in "Other Compensation" pursuant to SEC rules.
The table below presents the components of "Other Compensation" for 2000,
which represent (a) the value of Company contributions to one of its 401(k)
plans, (b) the value of Company contributions into the supplemental
executive retirement plan (SERP) on behalf of the Named Executive Officers,
(c) the value of premiums paid by the Company on group term life insurance,
and (d) in the case of Mr. Stevens the economic benefit received under the
terms of a Split Dollar Life Insurance Policy provided by the Company.
GROUP
COMPANY CONTRIBUTIONS TERM LIFE SPLIT DOLLAR
----------------------- INSURANCE LIFE
401(K) PLAN SERP PREMIUM INSURANCE
----------- --------- --------- ------------
Kyle R. Kirkland.................... $8,925 $16,389 -- --
Dana D. Messina..................... $8,925 $16,389 -- --
Bruce A. Stevens.................... $8,925 $69,991 $4,500 $2,312
Dennis M. Hanson.................... $8,925 $26,555 $2,079 --
OPTION GRANTS IN 2000
The following table provides information related to options to purchase the
Company's Ordinary Common Stock granted to the Named Executive Officers during
the year ended December 31, 2000 and the number and value of such options held
as of the end of such year.
INDIVIDUAL GRANTS
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NUMBER OF
SECURITIES PERCENT OF TOTAL EXERCISE
UNDERLYING OPTIONS GRANTED OR BASE GRANT
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION DATE
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE VALUE(2)($)
- ---- ------------- ---------------- --------- ---------- -----------
Dana D. Messina.................... 9,000 7.50% $18.84 3/16/2010 $68,738
Kyle R. Kirkland................... 9,000 7.50% $18.84 3/16/2010 $68,738
Dennis M. Hanson................... 7,500 6.25% $18.84 3/16/2010 $57,252
Bruce A. Stevens................... 9,000 7.50% $18.84 3/16/2010 $68,738
Thomas Kurrer...................... 4,500 3.75% $18.84 3/16/2010 $34,369
- ------------------------
(1) Each option reflected in this column was granted under the Stock Plan and
becomes exercisable for 20% of the total grant on each anniversary of
March 16, 2000 subject to acceleration upon the occurrence of certain events
as described in the Stock Plan.
(2) The fair value of options on their grant date was $7.64 per option, which is
measured using the Black/ Scholes option pricing model. Key assumptions used
to apply this pricing model in 2000 are as follows: (a) risk-free interest
rate of 6.41%; (b) expected life of option grants of six years;
(c) expected volatility of Ordinary Common Stock of 26.0%.
6
AGGREGATED OPTION EXERCISES IN 2000 AND YEAR END OPTION VALUES
There were no options exercised by the Named Executive Officers during 2000.
The following table provides information related to the number of options held
by the Named Executive Officers as of the year ended December 31, 2000. The fair
market value of the options on December 31, 2000 for the underlying securities
did not exceed the exercise price of the option. Accordingly, there were no
in-the-money options at December 31, 2000.
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT
DECEMBER 31, 2000
---------------------------------
NAME EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------
Kyle R. Kirkland.................................. 56,600 23,150
Dana D. Messina................................... 56,600 23,150
Thomas T. Burzycki................................ 12,000 4,000
Bruce A. Stevens.................................. 26,400 15,600
Dennis M. Hanson.................................. 22,200 16,800
Michael R. Vickrey................................ 11,600 2,900
Thomas Kurrer..................................... 19,600 9,400
EMPLOYMENT CONTRACTS
In January 1999, the Company entered into an Employment Agreement with Kyle
R. Kirkland which provides that until December 31, 2006, unless earlier
terminated in accordance with its terms, Mr. Kirkland will serve as Chairman of
the Company. In addition to a base salary, Mr. Kirkland may be entitled to
receive bonuses and certain other employment benefits each determined annually
by the Board of Directors in its discretion.
In January 1999, the Company entered into an Employment Agreement with Dana
D. Messina which provides that until December 31, 2006, unless earlier
terminated in accordance with its terms, Mr. Messina will serve as Chief
Executive Officer of the Company. In addition to a base salary, Mr. Messina may
be entitled to receive bonuses and certain other employment benefits each
determined annually by the Board of Directors in its discretion.
In July 1996, the Company entered into a Noncompete Agreement with each of
Thomas T. Burzycki, Bruce A. Stevens, Dennis M. Hanson and Michael R. Vickrey.
The Noncompete Agreements remain in effect for a period of ten years and bar the
individual parties thereto from competing with the Company in any geographic
region in which the Company then conducts business. Additionally, provided that
the individual party thereto refrains from engaging in certain restricted sales
of Ordinary Common Stock, each Noncompete Agreement commits the Company to renew
the individual party's employment agreement described below for successive
one-year periods over the life of the Noncompete Agreement.
On May 1, 1995, Steinway entered into an Employment Agreement with Bruce A.
Stevens. The agreement provides that Mr. Stevens will serve as President of
Steinway in consideration of an annual base salary, which may be increased
following the end of each year of service. In addition to a base salary,
Mr. Stevens is eligible to receive bonuses and certain other employment
benefits. Mr. Stevens' agreement provides that, in certain circumstances, the
Company is obligated to pay up to $340,000, plus the salary for the remainder of
his term, to Mr. Stevens upon termination of his employment. This Agreement was
subsequently assigned from Steinway to the Company and thereafter amended to
automatically renew on an annual basis unless affirmatively terminated.
On May 1, 1995, Steinway entered into an Employment Agreement with Dennis M.
Hanson. The agreement provides that Mr. Hanson will serve as Chief Financial
Officer and Secretary in consideration of an annual base salary, which may be
increased following the end of each year of service. In addition to a
7
base salary, Mr. Hanson is eligible to receive bonuses and certain other
employment benefits. Mr. Hanson's agreement provides that, in certain
circumstances, the Company is obligated to pay up to $210,000, plus the salary
for the remainder of his term, to Mr. Hanson upon termination of his employment.
This Agreement was subsequently assigned from Steinway to the Company and
thereafter amended to automatically renew on an annual basis unless
affirmatively terminated.
As of May 8, 1989, Steinway entered into an Employment Agreement with Thomas
Kurrer that provides that Mr. Kurrer will serve as Managing Director of
Steinway's German operations in consideration of an annual base salary, which
may be increased following the end of each year of service. In addition to a
base salary, Mr. Kurrer is eligible to receive bonuses and certain other
employment benefits. The agreement automatically renews every three years unless
at least 12 months' notice is given by either party.
RETIREMENT PLANS
The Company maintains separate pension plans for each of its major
divisions. The Pension Plan Table set forth below shows estimated annual
benefits payable upon retirement (based on the benefit formulas in effect and
calculated on a straight life annuity basis, as described below) to persons
covered under the Selmer division plan, including the Named Executive Officers,
in specified compensation and years of credited service classifications,
assuming employment until age 65.
PENSION PLAN TABLE
YEARS OF SERVICE
---------------------------------------------------------------
FINAL AVERAGE PAY 5 10 15 20 25 30
- ----------------- -------- -------- -------- -------- -------- --------
$100,000.............................. $ 5,634 $11,268 $16,902 $22,536 $28,169 $33,803
$110,000.............................. $ 6,384 $12,768 $19,152 $25,536 $31,919 $38,303
$120,000.............................. $ 7,134 $14,268 $21,402 $28,536 $35,669 $42,803
$130,000.............................. $ 7,884 $15,768 $23,652 $31,536 $39,419 $47,303
$140,000.............................. $ 8,634 $17,268 $25,902 $34,536 $43,169 $51,803
$150,000.............................. $ 9,384 $18,768 $28,152 $37,536 $46,919 $56,303
$160,000.............................. $10,134 $20,268 $30,402 $40,536 $50,669 $60,803
$170,000.............................. $10,884 $21,768 $32,652 $43,536 $54,419 $65,303
The Company maintains a qualified defined benefit pension plan for the
Selmer division. Benefits accrue on a straight life annuity basis, using a
formula that takes into account the five highest consecutive calendar years of
compensation (subject to the maximum allowable under the Internal Revenue Code)
within the prior ten years of plan participation times years of benefit service
up to 40 years. The plan is also integrated with Social Security so that
earnings in excess of the Social Security taxable wage base generate additional
benefits. The above table assumes a birth year of 1942 in order to calculate the
additional Social Security benefit. Mr. Burzycki has 10 years of credited
service and Mr. Vickrey has 12 years of service under this plan.
The primary benefit formula in the Steinway division domestic plan was
frozen as of June 30, 1993. The accrued benefit will be a monthly benefit amount
payable in the life annuity form equal to the sum of (a) the benefit accrued in
accordance with the formula as of June 30, 1993; plus (b) $9 multiplied by
benefit years of service completed after June 30, 1993. Mr. Stevens has
15 years of service under the plan with an estimated annual benefit of $29,784.
Assuming he continues his employment with the Company until age 65, his
estimated annual benefit would be $30,504. Mr. Hanson has 12 years of service
under the plan with an estimated annual benefit of $15,312. Assuming his
continued employment with the Company until age 65, his estimated monthly
benefit would be $17,316. These amounts are based on the pension being paid
during the participant's lifetime and would be reduced on an actuarially
equivalent basis in the event of a survivor benefit or optional form of payment.
8
Mr. Kurrer is entitled to benefits under the Steinway division foreign
pension plan. Based on the formula and his 12 years of credited service his
estimated annual benefit would be $62,607. At age 63 Mr. Kurrer would receive
36.5% of his annual base income earned in the year prior to retirement. Assuming
a 3% increase in annual salary, the estimated annual benefit at age 63 would be
$102,038. The figures presented have been converted from Deutsche marks to U.S.
dollars based on 2000 average foreign exchange rates.
Effective January 1, 2001, the Company implemented a non-qualified
supplemental executive retirement plan, or SERP, for certain key employees. The
Company, in its sole and absolute discretion, may make an annual SERP
contribution on behalf of the eligible participants. Total contributions and
earnings thereon are then payable in the form of fifteen substantially equal
yearly installments beginning at age 65. Participants become fully vested upon
the completion of 5 years of service. To date, every SERP participant is fully
vested.
COMPENSATION OF DIRECTORS
Prior to December 31, 2000 members of the Board of Directors of the Company
did not receive compensation for their services as directors, but were
reimbursed for out-of-pocket expenses incurred in attending meetings. Effective
January 1, 2001, the Company will compensate its non-employee directors in the
amount of $10,000 annually, $5,000 for every additional Committee and $500 for
each meeting attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Kirkland and Messina serve as the Chairman of the Board and Chief
Executive Officer, respectively, of the Company. Each serves on the Compensation
and Option Committees of the Board of Directors. See "Certain Relationships and
Related Transactions" below.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Company's UMI acquisition, Kirkland Messina, Inc, a
merchant banking firm founded by Messrs. Kirkland and Messina, received a fee of
$300,000 for assisting in the pre-acquisition due diligence and for providing
financial and market analyses and other similar consulting services.
LEGAL PROCEEDINGS INVOLVING DIRECTORS, OFFICERS, AFFILIATES OR BENEFICIAL OWNERS
No director, officer, affiliate or beneficial owner of the Company, or any
associate thereof, is a party adverse to the Company or any of its subsidiaries
in any lawsuit nor has a material adverse interest thereto.
The Company has been informed that the Securities and Exchange Commission's
Pacific Regional Office is conducting an investigation as to matters involving
Kyle R. Kirkland and other persons not associated with the Company. The Company
understands that the investigation is not related to the Company or
Mr. Kirkland's position with the Company.
REPORT OF THE AUDIT COMMITTEE(1)
The current members of the Audit Committee (the "Committee") are Chairman
Allen and Mr. McMillan each of whom is an "independent director" as defined in
Rule 4200 (a) (15) of the National Association of Securities Dealers, Inc.
listing standards. The Committee operates pursuant to a written charter (a copy
of which is attached hereto as Appendix A). The Committee assists the Board of
Directors (the "Board") in fulfilling its responsibilities for oversight of the
quality and integrity of the accounting, auditing, and financial reporting
practices of the Company.
In discharging its oversight responsibility as to the audit process, the
Committee obtained from the independent auditors, Deloitte & Touche LLP
("Deloitte & Touche"), a formal written statement describing all relationships
between the auditors and the Company that might bear on the auditors'
independence consistent with Independence Standards Board Standard No. 1
(Independent Discussion
9
with Audit Committee), discussed with the auditors any relationships that may
impact their objectivity and independence and satisfied itself as to the
auditors' independence. The Committee also discussed with management and
Deloitte & Touche the quality and adequacy of the Company's internal controls.
The Committee reviewed with Deloitte & Touche their audit plans, audit scope,
and identification of audit risks.
The Committee discussed and reviewed with Deloitte & Touche all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended
(Communication with Audit Committees) and, with and without management present,
discussed and reviewed the results of Deloitte & Touche's examination of the
financial statements.
During the fiscal year ended December 31, 2000 aggregate fees (including
expenses) for the annual audit of the Company's financial statements were
approximately $463,200 and other services, including income tax services, were
approximately $313,600. Deloitte & Touche did not provide any professional
services related to financial information design and implementation. The
Committee has considered the level of non-audit services provided by Deloitte &
Touche in its deliberation of auditor independence.
The Committee reviewed the audited financial statements of the Company as of
and for the year ended December 31, 2000, with management and Deloitte & Touche.
Management has the responsibility for the preparation of the Company's financial
statements and Deloitte & Touche have the responsibility for the examination of
those statements. Based on these reviews and discussions with management and the
Company's independent auditors, the Committee recommended that the Board include
the audited consolidated financial statements for the fiscal year ended
December 31, 2000 in the Company's Annual Report on Form 10-K for filing with
the Securities and Exchange Commission. The Committee also recommended the
reappointment, subject to shareholder approval, of Deloitte & Touche as the
Company's independent auditors and the Board concurred in such recommendation.
AUDIT COMMITTEE:
A. Clinton Allen, Chairman
Peter McMillan
- ------------------------
(1) Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Exchange
Act, the Report of the Audit Committee shall not be incorporated by
reference in any such filings.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION(1)
COMPENSATION PHILOSOPHY
The Compensation Committee's executive compensation philosophy is to provide
competitive levels of compensation while establishing a strong, explicit link
between executive compensation and the achievement of the Company's annual and
long-term performance goals, rewarding above-average corporate performance,
recognizing individual initiative and achievement, and assisting the Company in
attracting and retaining highly-skilled management. This philosophy has been
adhered to by developing incentive pay programs which provide competitive
compensation that mirrors Company performance. Both short-term and long-term
incentive compensation are based on direct, explicit links to Company
performance and the value received by stockholders.
2000 EXECUTIVE COMPENSATION
Cash compensation includes base salary and annual bonuses. Base salaries are
set at competitive levels, with reference to the responsibilities undertaken by
personnel, their experience and geographic market conditions. Annual salary
adjustments are determined by reference to the Company's and the
10
individual's performance, as well as marketplace conditions generally. Annual
bonuses are awarded based primarily on management's ability to achieve specified
earnings levels.
In September of 2000, the Company successfully completed the acquisition of
United Musical Instruments Holdings, Inc., ("UMI") a major U.S. manufacturer of
band and orchestral instruments. The Company's existing lender financed the
acquisition on highly favorable terms, doubling the Company's borrowing capacity
under its revolving line of credit. Based on these results, key employees,
including certain Named Executive Officers, were awarded special bonuses for
their contribution to this significant acquisition.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee does not control compensation decisions with
respect to the Chairman of the Board and the Chief Executive Officer. The Board
of Directors determines these decisions. During the last fiscal year the Board
took no action affecting the base salary paid to either the Chairman of the
Board or the Chief Executive Officer. Due to the contributions of the Chairman
of the Board and Chief Executive Officer in the Company's successful acquisition
of UMI, the Board approved special bonuses of $200,000 for Mr. Kirkland and
$600,000 for Mr. Messina.
SUMMARY
After its review of the Company's existing programs, the Compensation
Committee believes that the total compensation program for executives of the
Company is competitive with the compensation programs provided by other
corporations with which the Company competes for management talent. The
Compensation Committee also believes that the annual bonuses provide
opportunities to participants that are consistent with the returns that are
generated on behalf of the Company's stockholders.
LIMITATION OF TAX DEDUCTION FOR EXECUTIVE COMPENSATION
The Omnibus Budget Reconciliation Act of 1993 (the "Act") prevents publicly
traded companies from receiving a tax deduction on compensation paid to
proxy-named executive officers in excess of $1 million annually, effective for
compensation paid after 1993. Although the Compensation Committee has not
adopted a policy relating to the Act, the Compensation Committee believes that
there will be little, if any, impact from this limitation to the Company.
COMPENSATION COMMITTEE:
Kyle R. Kirkland
Dana D. Messina
A. Clinton Allen
- ------------------------
(1) Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Exchange
Act, the Report of the Compensation Committee on Executive Compensation
shall not be incorporated by reference in any such filings.
11
PERFORMANCE GRAPH(1)
The following graph compares the Company's cumulative total stockholder
return on its Ordinary Common Stock for the period from the Company's IPO on
August 1, 1996 to December 31, 2000, with the cumulative total return of the
Russell 2000 Stock Index ("The Russell 2000"), and the cumulative total return
of a peer group consisting of Baldwin Piano and Organ Co.,
Harley-Davidson Inc., Boosey & Hawkes PLC and Fleetwood Enterprises. This peer
group was selected by management based on the status of each as a manufacturer
and distributor of luxury goods. The performance graph assumes a $100 investment
on August 1, 1996 in each of the Company's Ordinary Common Stock, The Russell
2000 and the common stock of the selected peer group. The stock price
performance shown in this graph is neither necessarily indicative of nor
intended to suggest future stock price performance.
COMPARATIVE STOCK PRICE PERFORMANCE
AMONG STEINWAY MUSICAL INSTRUMENTS, INC.,
THE RUSSELL 2000 AND A PEER GROUP
COMPARISON OF CUMULATIVE TOTAL RETURNS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
STEINWAY MUSICAL INSTRUMENTS, INC. THE RUSSELL 2000 PEER GROUP
8/1/96 $100.00 $100.00 $100.00
12/31/96 $91.45 $113.52 $104.65
12/31/97 $121.71 $136.82 $130.19
12/31/98 $136.84 $132.10 $112.90
12/31/99 $106.58 $158.02 $120.52
12/31/00 $94.41 $151.38 $63.10
8/1/96 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
-------- -------- -------- -------- -------- --------
Steinway Musical Instruments, Inc..... $100.00 $ 91.45 $121.71 $136.84 $106.58 $ 94.41
The Russell 2000...................... $100.00 $113.52 $136.82 $132.10 $158.02 $151.38
Peer Group............................ $100.00 $104.65 $130.19 $112.90 $120.52 $ 63.10
- ------------------------
(1) Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Exchange
Act, this Performance Graph shall not be incorporated by reference in any
such filings.
12
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of voting securities of the Company as of January 31, 2001 by
(i) each person known by the Company to be the beneficial owner of more than 5%
of any class of the Company's voting securities, (ii) each of the directors and
Named Executive Officers of the Company and (iii) all executive officers and
directors of the Company as a group.
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL BENEFICIAL
OWNERSHIP OF OWNERSHIP
ORDINARY CLASS A COMMON
COMMON STOCK(1) PERCENT STOCK(1) PERCENT
--------------- -------- -------------- --------
American International Group, Inc............. 1,801,131 21.3% -- --
70 Pine Street
New York, New York 10270
John Hancock Financial Services, Inc.......... 1,543,553 18.3% -- --
200 Clarendon Street
John Hancock Place
Boston, MA 02117
Fort Hill Capital LLC......................... 752,090 8.9% -- --
2 Jericho Plaza
Jericho, NY 11753
State Street Research & Management Company.... 711,820 8.4% -- --
One Financial Center, 30th Floor
Boston, MA 02111
Directors
Kyle R. Kirkland(2)......................... 196,886 2.3% 226,949 47.5%
Dana D. Messina(2).......................... 217,571 2.6% 251,004 52.5%
Thomas T. Burzycki.......................... 83,349 1.0% -- --
Bruce A. Stevens............................ 86,273 1.0% -- --
Other Executive Officers
Dennis M. Hanson............................ 41,601 .5% -- --
Michael R. Vickrey.......................... 60,000 .7% -- --
Thomas Kurrer............................... 41,601 .5% -- --
All directors and executive officers as a
group (7 persons)(2)........................ 726,150 8.6% 477,953 100.0%
- ------------------------
(1) Each share of Ordinary Common Stock has one vote. Each share of Class A
Common Stock has 98 votes.
(2) Includes 1,131 shares owned by Kirkland Messina, LLC, which may be deemed to
be beneficially owned by both Kyle R. Kirkland and Dana D. Messina.
13
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of the Company's Ordinary Common Stock to file reports of ownership on Forms 3,
4 and 5 with the Securities and Exchange Commission (the "Commission").
Executive officers, directors and 10% stockholders are required by the
Commission to furnish the Company with copies of all Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such forms it has
received, the Company believes that all its executive officers, directors and
greater than 10% beneficial owners complied with all the filing requirements
applicable to them with respect to transactions during fiscal 2000.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP to serve as the
Company's independent auditors to audit the financial statements of the Company
for 2001. Deloitte & Touche LLP has served as the Company's independent auditors
since 1993. Representatives of Deloitte & Touche LLP will attend the Annual
Meeting, will be given an opportunity to make a statement if they desire to do
so and will be available to answer appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS, ON THE ADVICE OF ITS AUDIT COMMITTEE,
THAT THE STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE &
TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 2001.
Unless a contrary indication is made on the enclosed proxy card, it is the
intention of the persons named in the enclosed form of proxy to vote FOR the
selected accountants.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented at
the Annual Meeting. If any other matters should properly come before the Annual
Meeting, the persons named in the proxy will vote the proxies according to their
best judgment.
STOCKHOLDER PROPOSALS
Stockholder proposals, if any, which may be considered for inclusion in the
Company's proxy materials for the 2002 Annual Stockholders Meeting must be
received by the Company at its offices at 800 South Street, Suite 305, Waltham,
Massachusetts 02453 not later than January 31, 2002.
ANNUAL REPORT
The Annual Report to Stockholders for 2000 accompanies this Proxy Statement.
Stockholders may obtain a copy of this report without charge by writing to
Steinway Musical Instruments, Inc., 800 South Street, Suite 305, Waltham,
Massachusetts 02453, Attn: Corporate Communications, telephone number
(781) 894-9770.
14
AUDIT COMMITTEE CHARTER
APPENDIX A
OBJECTIVE:
To assist the board in fulfilling its responsibility for oversight of the
quality and integrity of the accounting, auditing and reporting practices of the
corporation by:
(1) Reviewing the procedures and results of the Company's external auditing
functions and acting as necessary on behalf of the board of directors
between board meetings with respect to the Company's audited financial
reports, accounting procedures, financial controls and ethical
practices.
(2) Providing a direct communications link to the board of directors from
the Company's external auditing staffs and the chief financial officer,
and assuring the quality of the company's financial reporting and
control systems.
DUTIES AND RESPONSIBILITIES
The Audit Committee, acting, where applicable, by unanimous consent, shall
have the following duties and responsibilities:
1) Review management's internal control procedures and practices for
safeguarding assets, authorizing and recording transactions and
complying with company policies and ethical practices and the comments
of the external auditors' staff with respect to such policies and
practices.
2) Approve any significant changes in the company's accounting principles
or financial reporting practices.
3) Review the Company's audited or unaudited financial statements including
those contained in its annual report on Form 10-K before public
distribution.
4) Review the annual audit plan of the independent auditors. Ensure the
receipt from the outside auditors of a formal written statement
delineating all relationships between such auditors and the Company,
consistent with Independence Standards Board Standard 1; actively engage
in a dialogue with such auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of such auditors; and take, or recommend that the full
board take, appropriate action to ensure the independence of such
outside auditors.
5) Meet with the independent auditors prior to the release to the general
public of any earnings information for fiscal quarters and year end.
6) Insure that the outside auditor's ultimate accountability remains to the
board of directors and the Audit Committee, as representatives of the
shareholders.
7) Review the Company's annual audit findings and management's
implementation of external auditors' recommendations.
8) Review the Company's organization to accomplish management's financial
reporting and control responsibilities.
9) Review compliance with applicable regulatory and financial reporting
requirements.
10) Conduct such other reviews as are necessary or advisable to discharge
the foregoing responsibilities.
11) Review and reassess, on an annual basis, the adequacy of this Audit
Committee Charter.
A-1
12) Recommend annually to the board of directors the firm of independent
auditors to examine the Company's financial statements.
13) Meet quarterly, or more frequently as needed, to carry out the foregoing
duties and responsibilities.
14) Report to the board of directors at the next meeting after each Audit
Committee meeting.
MEMBERSHIP
(1) The Audit Committee shall be comprised of directors (at least three in
number by June 30, 2001) who are generally knowledgeable in financial and
auditing matters, including at least one member with accounting or
related financial management expertise. Each member shall be free of any
relationship that, in the opinion of the board, would interfere with his
or her individual exercise of independent judgment, and shall meet the
director independence requirements for serving on audit committees as set
forth in the corporate governance standards of the New York Stock
Exchange.
(2) The board of directors shall appoint one member of the Audit Committee
as chairperson. He or she shall be responsible for leadership of the
committee, including preparing the agenda, presiding over the meetings,
making committee assignments and reporting to the board of directors.
The chairperson will also maintain regular liaison with the CEO, CFO and
the lead independent audit partner.
A-2
STEINWAY MUSICAL INSTRUMENTS INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 4, 2001
The undersigned stockholder of Steinway Musical Instruments, Inc. (the
"Company"), hereby appoints each of Dana D. Messina and Dennis M. Hanson
attorneys and proxies of the undersigned, each with full power of substitution,
to vote on behalf of the undersigned at the Annual Meeting of Stockholders of
the Company to be held at the Double Tree Guest Suites, 550 Winter St., Waltham,
Massachusetts 02451, on May 4, 2001 at 10:00 a.m., and at any adjournment of
said meeting, all of the shares of Ordinary Common Stock which the undersigned
may be entitled to vote.
The Board of Directors recommends a vote FOR the nominees named below and
FOR ratification of the accountants named on the reverse side, and if no
specification is made, the shares will be voted FOR the election of the nominees
named herein, and FOR the ratification of the accountants. The undersigned
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders, the
Proxy Statement and the Annual Report furnished herewith.
1. Election of Directors FOR all nominees WITHHOLD AUTHORITY *Exceptions / /
listed to vote for all nominees listed below / /
below / /
Nominees: Kyle R. Kirkland, Dana D. Messina, Thomas T. Burzycki,
Bruce A. Stevens, A. Clinton Allen, Peter McMillan
(*Instructions: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and strike a line through that nominee's name.)
- --------------------------------------------------------------------------------
(CONTINUED ON REVERSE SIDE)
2. Ratification of Deloitte & Touche LLP to serve as the Company's independent
public accountants to audit the financial statements of the Company for 2001.
/ / FOR / / AGAINST / / ABSTAIN
3. At their discretion regarding other matters presented at the Annual Meeting.
Dated _____________________________
___________________________________
(Signature)
___________________________________
(Signature)