UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Section240.14a-12
SECURITY CAPITAL CORPORATION
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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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SECURITY CAPITAL CORPORATION
THREE PICKWICK PLAZA, SUITE 310
GREENWICH, CT 06830
(203) 625-0770
[LOGO]
April 30, 2001
Dear Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of Stockholders of
Security Capital Corporation (the "Company"), which will be held at The Field
Club of Greenwich, 276 Lake Avenue, Greenwich, Connecticut, on Thursday,
July 19, 2001, commencing at 9:30 a.m. (local time). We look forward to greeting
as many of our stockholders as are able to be with us.
At the meeting, you will be asked to consider and vote upon (i) the election of
four directors; and (ii) such other business as may properly come before the
meeting and any adjournment thereof. The CEO's of the Company's subsidiaries
will be making presentations at the meeting.
We hope you will find it convenient to attend the meeting in person. WHETHER OR
NOT YOU EXPECT TO ATTEND, TO ASSURE YOUR REPRESENTATION AT THE MEETING AND THE
PRESENCE OF A QUORUM, PLEASE COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY, for which a return envelope is provided. No postage need be affixed to
the Proxy if it is mailed in the United States.
The Company's Annual Report for the fiscal year ended December 31, 2000 is being
mailed to you together with the enclosed proxy materials.
Sincerely,
/s/ BRIAN D. FITZGERALD
Brian D. Fitzgerald
CHAIRMAN OF THE BOARD OF DIRECTORS, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
/s/ A. GEORGE GEBAUER
A. George Gebauer
VICE CHAIRMAN OF THE BOARD OF DIRECTORS AND
SECRETARY
SECURITY CAPITAL CORPORATION
THREE PICKWICK PLAZA, SUITE 310
GREENWICH, CT 06830
(203) 625-0770
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Security Capital Corporation (the "Company") will be held at The
Field Club of Greenwich, 276 Lake Avenue, Greenwich, Connecticut, on Thursday,
July 19, 2001, commencing at 9:30 a.m. (local time), for the following purposes:
(1) To elect four directors to hold office until the next annual meeting and
until their successors are duly elected and qualified; and
(2) To transact such other business as may properly come before the Annual
Meeting and any adjournment thereof.
Only holders of record of the Common Stock or the Class A Common Stock of
the Company at the close of business on May 25, 2001 are entitled to notice of
and to vote at the Annual Meeting and any adjournment thereof.
By Order of the Board of Directors,
/s/ A. GEORGE GEBAUER
A. George Gebauer
VICE CHAIRMAN OF THE BOARD OF
DIRECTORS AND SECRETARY
April 30, 2001
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE.
SECURITY CAPITAL CORPORATION
THREE PICKWICK PLAZA, SUITE 310
GREENWICH, CT 06830
(203) 625-0770
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the solicitation
of Proxies by and on behalf of the Board of Directors of Security Capital
Corporation (the "Company") to be used at the Annual Meeting of Stockholders to
be held on Thursday, July 19, 2001, and at any adjournment thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting. The Company's Annual Report for the fiscal year ended December 31, 2000
accompanies this Proxy Statement. This Proxy Statement and accompanying
materials are expected to be first sent or given to stockholders of the Company
on or about May 31, 2001.
The close of business on May 25, 2001 has been fixed as the record date for
the determination of the stockholders entitled to notice of and to vote at the
Annual Meeting. Only holders of record as of that date of shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock"), and of
the Company's Class A Common Stock, $.01 par value per share (the "Class A
Common Stock"), are entitled to notice of and to vote at the Annual Meeting. The
Common Stock and the Class A Common Stock are sometimes collectively referred to
herein as the "Common Equity."
Each share of the Common Stock or the Class A Common Stock entitles the
holder thereof to one vote per share on each matter presented to the
stockholders for approval at the Annual Meeting. On April 26, 2001, there were
380 shares of the Common Stock and 6,442,309 shares of the Class A Common Stock,
for a total of 6,442,689 shares of the Common Equity, outstanding and entitled
to vote.
Execution of a Proxy by a stockholder will not affect such stockholder's
right to attend the Annual Meeting and to vote in person. Any stockholder who
executes a Proxy has a right to revoke it at any time before it is voted by
advising A. George Gebauer, Vice Chairman of the Board and Secretary of the
Company, in writing of such revocation, by executing a later-dated Proxy which
is presented to the Company at or prior to the Annual Meeting, or by appearing
at the Annual Meeting and voting in person. Attendance at the Annual Meeting
will not in and of itself constitute revocation of a Proxy. The Board of
Directors has retained D.F. King & Co., Inc. to assist in the solicitation of
Proxies.
The presence, in person or by Proxy, of the holders of a majority of the
shares of the Common Equity entitled to vote at the Annual Meeting will
constitute a quorum. Assuming a quorum, the nominees receiving a plurality of
the votes of the shares of the Common Equity present in person or by Proxy at
the Annual Meeting and entitled to vote on the election of directors will be
elected as directors.
With regard to the election of directors, votes may be cast in favor or
withheld. Votes that are withheld and broker non-votes, if any, will be counted
for purposes of determining the presence or absence of a quorum, but will have
no effect on the election of directors.
UNLESS SPECIFIED OTHERWISE, THE PROXIES WILL BE VOTED FOR THE ELECTION OF
ALL THE NOMINEES TO SERVE AS DIRECTORS OF THE COMPANY UNTIL THE NEXT ANNUAL
MEETING AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED. IN THE
DISCRETION OF THE PROXY HOLDERS, THE PROXIES WILL ALSO BE VOTED FOR OR AGAINST
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING. MANAGEMENT IS
NOT AWARE OF ANY OTHER MATTERS TO BE PRESENTED FOR ACTION AT THE ANNUAL MEETING.
The principal executive offices of the Company are located at Three Pickwick
Plaza, Suite 310, Greenwich, Connecticut 06830, and the Company's telephone
number there is (203) 625-0770.
1
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table and the notes thereto set forth information, as of
April 26, 2001, with respect to the beneficial ownership of shares of each class
of equity securities of the Company by the only persons known to the Company to
have beneficial ownership of more than 5% of such class, by each director of the
Company, by each executive officer of the Company and by the directors and
executive officers of the Company as a group. Except as otherwise indicated,
each person is believed to exercise sole voting and dispositive power over the
shares reported.
CLASS A COMMON STOCK
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ACQUIRABLE PERCENTAGE
NAME AND ADDRESS COMMON PERCENTAGE CURRENTLY WITHIN PERCENTAGE OF COMMON
OF BENEFICIAL OWNER STOCK OF CLASS OWNED 60 DAYS OF CLASS EQUITY
- ------------------- -------- ---------- --------- ---------- ---------- ----------
Brian D. Fitzgerald ......................... 128 33.7% 5,177,306 -- 80.4% 80.4%
Three Pickwick Plaza
Suite 310, Greenwich,
CT06830 (1)(2)
FGS, Inc. ................................... 128 33.7% 4,983,361 -- 77.4% 77.4%
Three Pickwick Plaza
Suite 310, Greenwich,
CT06830 (1)(2)
Capital Partners, Inc. ...................... -- -- 4,455,672 -- 69.2% 69.2%
Three Pickwick Plaza
Suite 310, Greenwich,
CT06830 (1)(2)
CP Acquisition, No. 1 ....................... -- -- 4,455,672 -- 69.2% 69.2%
Three Pickwick Plaza
Suite 310, Greenwich,
CT06830 (1)(2)
FGS Partners, L.P. .......................... -- -- 4,455,672 -- 69.2% 69.2%
Three Pickwick Plaza
Suite 310, Greenwich,
CT06830 (1)(2)
A. George Gebauer (1)(2) .................... -- -- 89,198 -- 1.4% 1.4%
M. Paul Kelly (4) ........................... -- -- -- 8,000 * *
William R. Schlueter......................... -- -- -- -- -- --
Craig R. Stapleton (3)(4).................... -- -- 46,499 8,000 * *
All Directors and Executive Officers as a 128 33.7% 5,313,003 16,000 82.5% 82.5%
Group (5 persons)..........................
- --------------------------
*Less than one percent
(1) The following related entities are generally referred to as "Capital
Partners": (a) Capital Partners, Inc., a Connecticut corporation
("CP Inc."), of which Brian D. Fitzgerald is the sole stockholder and
director, and A. George Gebauer and William R. Schlueter are officers;
(b) FGS, Inc., a Delaware corporation ("FGS"), of which Messrs. Fitzgerald
and Gebauer are executive officers; (c) Capital Partners Holdings II A & II
B, Delaware limited partnerships; and (d) 9 related Delaware limited
partnerships as follows: (i) CP Acquisition, L.P. No. 1 ("CP Acquisition");
(ii) CP Acquisition, L.P. No. 4A; (iii) CP Acquisition, L.P. No. 4B;
(iv) CP Acquisition, L.P. No. 6A; (v) CP Acquisition, L.P. No. 6B; (vi) CP
Acquisition, L.P. No. 7A; (vii) CP Acquisition, L.P. No. 7B; (viii) CP
Acquisition, L.P. No. 8A; and (ix) CP Acquisition, L.P. No. 8B. CP Inc.,
FGS, Inc. of which Mr. Fitzgerald is the controlling stockholder, president,
treasurer and a director, and FGS Partners, L.P., a Connecticut limited
partnership, of which CP Inc. is the general partner, are the general
partners of the 9 related partnerships.
2
Brian D. Fitzgerald owns of record 193,945 shares of the Class A Common
Stock. CP Acquisition owns of record 4,455,672 shares of the Class A Common
Stock and FGS owns of record 527,689 shares of the Class A Common Stock and
128 shares of the Common Stock.
(2) Mr. Fitzgerald may be deemed to own beneficially the 193,945 shares of the
Class A Common Stock owned of record by him, the 4,455,672 shares of the
Class A Common Stock owned of record by CP Acquisition and the 527,689
shares of the Class A Common Stock and the 128 shares of the Common Stock
owned of record by FGS. Mr. Fitzgerald has shared authority to vote and
dispose of the FGS-owned shares of the Class A Common Stock and the Common
Stock and disclaims beneficial ownership of such FGS-owned shares for all
other purposes. Mr. Gebauer is also a stockholder, officer and director of
FGS and an officer of CP Inc., but he disclaims beneficial ownership of
shares of the Class A Common Stock and the Common Stock owned of record by
such corporations for any purpose. The ownership noted above excludes the
82,453 shares of Class A Common Stock owned by the Fitzgerald Trust (of
which Mr. Fitzgerald's brother and father are the trustees and
Mr. Fitzgerald's minor children are sole beneficiaries), as to which
beneficial ownership is disclaimed for all purposes.
(3) Includes 5,600 shares registered in the name of Mr. Stapleton's children
with respect to which Mr. Stapleton has investment power but not voting
power and 2,800 shares held as trustee of a family trust with respect to
which Mr. Stapleton also has investment power but not votingpower.
(4) The amounts shown in the "Acquirable Within 60 Days" column for
Messrs. Kelly and Stapleton relate to options issued in July 2000 as part of
the 2000 Long-Term Incentive Plan.
3
PROPOSAL 1--ELECTION OF DIRECTORS
The Company's Board of Directors is comprised of four members. The names of
the four nominees for election as directors are set forth below. All of the
nominees are to be elected at the Annual Meeting and serve until their
successors are duly elected and qualified. All of the nominees listed below are
expected to serve as directors if they are elected. If any nominee should
decline or be unable to accept such nomination or to serve as a director, the
Board of Directors reserves the right to nominate another person or to vote to
reduce the size of the Board of Directors. In the event another person is
nominated, the Proxy holders intend to vote the shares to which the Proxy
relates for the election of the person nominated by the Board of Directors.
There is no cumulative voting for directors.
PRINCIPAL OCCUPATIONS DURING
DIRECTOR THE LAST FIVE YEARS;
NAME AGE SINCE OTHER DIRECTORSHIPS
- ---- -------- ---------- ------------------------------------------------------------
Brian D. Fitzgerald... 56 1990 Chairman of the Board of the Company since January 1990 and
President and CEO of the Company since July 2000;
President, Treasurer and a director of FGS since
March 1989; and a partner, general partner, stockholder,
officer and/or director of various Capital Partners
entities for more than five years. Mr. Fitzgerald was a
director of Bryant Universal Roofing, Inc. ("Bryant"), a
privately-held Delaware corporation that on May 17, 1996
filed a petition for bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code in the United States Bankruptcy Court
for the District of Arizona.
A. George Gebauer..... 68 1990 Vice Chairman of the Board of the Company since July 2000
and Secretary of the Company since February 1994; Vice
President, Secretary and a director of FGS since
March 1989; and a partner, general partner, stockholder,
officer and/or director of various Capital Partners
entities for more than five years. Mr. Gebauer was also
the President of the Company from January 1990 to
July 2000. Mr. Gebauer was also a director of Bryant, a
privately-held Delaware corporation that on May 17, 1996
filed a petition for bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code in United States Bankruptcy Court for
the District of Arizona.
Craig R. Stapleton.... 56 2000 President of Marsh & McLennan Real Estate, Advisors, Inc., a
wholly-owned subsidiary of Marsh & McLennan Co., since
1982; presently serving as a director of Alleghany
Properties, Inc.; Sonoma West, Inc. and T.B. Wood.
Mr. Stapleton was previously a director of Cornerstone
Properties, Inc. from whose board he resigned during 2000.
M. Paul Kelly......... 57 2000 Founder and President of PK Enterprises, an equity
investment and operational consulting practice, since 1990.
VOTE REQUIRED FOR APPROVAL
The four nominees receiving a plurality of the votes of the shares of the
Common Equity present in person or by Proxy at the Annual Meeting and entitled
to vote on the election of directors will be elected as directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE FOUR NOMINEES
AS DIRECTORS.
4
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held four meetings and acted by written consent three
times during the year ended December 31, 2000. Each of the directors attended at
least 75% of the aggregate number of meetings of the Board and all committees on
which such director served that were held during the year ended December 31,
2000. The Board has a Compensation Committee and an Audit Committee. The Board
does not have a nominating committee.
COMPENSATION COMMITTEE
The Board of Directors has a Compensation Committee whose charge is to
develop and make recommendations to the Board of Directors with respect to
compensation for executive officers and other key employees of the Company and
to administer the Company's 2000 Long-Term Incentive Plan (the "Plan"). The
present members of the Compensation Committee are Craig R. Stapleton and M. Paul
Kelly, both of whom are independent board members.The Compensation Committee
held one meeting during the year ended December 31, 2000.
REPORT OF THE COMPENSATION COMMITTEE
During 2000, the Board appointed a Compensation Committee in conjunction
with the adoption of the Plan. The Compensation Committee is responsible for
developing and making recommendations to the Board of Directors with respect to
the Company's executive compensation policies and administering the Plan.The
Committee is comprised of two independent, non-employee directors.
The Company did not pay any cash compensation to any executive officer for
service as an officer of the Company in 2000. However, the Plan was put in place
so that the Company can award stock options and other long-term incentives to
its executive officers and other key personnel to align their interests with
those of the Company's long-term investors and to help attract, retain and
motivate these persons.
During 2000, the Company granted options under the Plan.Options granted to
executive officers of the Company are set forth on the "Option/SAR Grants in
Last Fiscal Year" table contained in the "Executive Compensation" section of
this Proxy Statement.Options granted to directors are under "Compensation of
Directors" in the same section.
The Compensation Committee is authorized to take the following actions with
respect to any future award grants and the administration of the Plan on an
ongoing basis:
(i) to select each person to whom awards may be granted;
(ii) to determine the type or types of awards to be granted to each such
person;
(iii) to determine the number of awards to be granted, the number of shares
of stock to which an award will relate, the terms and conditions of any
award granted under the Plan and all other matters to be determined in
connection with an award;
(iv) to determine whether, to what extent and under what circumstances an
award may be settled, canceled, forfeited or surrendered;
(v) to determine whether, to what extent and under what circumstances cash,
stock, other awards or other property payable with respect to an award
will be deferred;
(vi) to determine the restrictions, if any, to which stock received upon
exercise or settlement of an award will be subject;
(vii) to prescribe the form of each award agreement, which need not be
identical for each participant;
(viii) to adopt, amend, suspend, waive and rescind such rules and regulations
and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan; and
5
(ix) to make all other decisions and determinations as may be required under
the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
The options granted under the Plan provide value to the recipients only if
and when the market price of the Class A Common Stock increases above the option
exercise price. To that end, there will be ongoing reviews by the Compensation
Committee of the market price of the Class A Common Stock and the exercise price
of options. It is the Compensation Committee's goal to preserve this incentive
as an effective tool in attracting, retaining and motivating key personnel and
to evaluate the need to add other components to the executive compensation
package if it feels it is warranted at some future date.
Section 162(m) of the Internal Revenue Code generally disallows a public
company's deduction for compensation to any one employee in excess of
$1.0 million per year unless the compensation is pursuant to the plan approved
by the public company's stockholders. The Compensation Committee believes that
the Plan will not be adversely impacted by Section 162(m) of the Code.
The Company's Chief Executive Officer's compensation during 2000 consisted
of 400,000 options to purchase shares of the Company's Class A Common Stock.
Mr. Fitzgerald's options are exercisable in five equal annual installments
commencing in July 2001 at a price of $6.125, the market price at the date of
grant.
The Compensation Committee considered several factors in establishing the
Company's Chief Executive Officer's incentive compensation package, including
incentive market pay practices of similar holding companies, his past and
anticipated future performance level, his past and anticipated future
contributions toward achievement of strategic goals and the Company's past as
well as anticipated future overall financial and operating success.
The Company did not pay Mr. Fitzgerald any cash compensation during 2000.
However, CP Inc., a corporation controlled by Mr. Fitzgerald, is paid a
management fee by the Company pursuant to a management advisory agreement.
Craig R. Stapleton Compensation Committee Chairman
M. Paul Kelly Compensation Committee Member April 23, 2001
AUDIT COMMITTEE
The Board of Directors has an Audit Committee currently consisting of two
independent Board members. The Audit Committee, which is presently composed of
Messrs. Kelly and Stapleton, selects the independent auditors, consults with
such auditors and with management with regard to the adequacy of the Company's
internal accounting controls, considers any non-audit functions to be performed
by the independent auditors and carries out such activities related to the
financial statements of the Company as the Board of Directors shall from time to
time request. The Audit Committee held five meetings and acted by written
consent once with respect to the year ended December 31, 2000. It is anticipated
that a third independent Board member will be named to the Audit Committee by
the Board on or before June 14, 2001 to comply with the new audit committee
composition rules of the Securities and Exchange Commission and the American
Stock Exchange. The Audit Committee is governed by a written charter approved by
the Board of Directors. A copy of this charter is attached as Exhibit A to this
Proxy Statement.
REPORT OF THE AUDIT COMMITTEE
Management has the primary responsibility for the Corporation's financial
statements being prepared in accordance with generally accepted accounting
principles. Additionally, management has responsibility for the Company's
financial reporting process as well as the related system of internal controls.
The independent auditors are responsible for auditing the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and for issuing an opinion regarding the compliance
6
with generally accepted accounting principles. The Audit Committee has the
responsibility for overseeing the Company's financial reporting process on the
behalf of the Board of Directors.
In discharging its oversight responsibility, the Audit Committee, consistent
with Independence Standards Board No. 1, "Independence Discussions with the
Audit Committees," obtained from the Company's independent auditors a formal
written statement describing all relationships between the independent auditors
and the Company that might bear on the auditors' independence. The Audit
Committee has met and held discussions with management and the independent
auditors. Management represented to the Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Committee has reviewed and discussed the
consolidated financial statements with management and the independent auditors.
The Committee has discussed with the independent auditors matters required to be
discussed by the Statement on Auditing Standards No. 61.
The Audit Committee has reviewed with the Company's independent auditors
their overall audit scope, audit plans and identification of audit risks. The
Audit Committee has met with the independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting.
Based on the above-mentioned reviews and discussions with management and the
independent auditors, the Audit Committee recommended to the Board of Directors
that the Company's audited financial statements be included in its Annual Report
on Form 10-K for the year ended December 31, 2000. The Audit Committee also
recommended the reappointment of the Company's independent auditors and the
Board of Directors has concurred with such recommendations.
M. Paul Kelly Audit Committee Chair
Craig R. Stapleton Audit Committee Member March 30, 2001
EXECUTIVE OFFICERS
The Company's executive officers are Messrs. Fitzgerald and Gebauer and
William R. Schlueter. Information regarding Messrs. Fitzgerald and Gebauer is
contained in "Proposal 1--Election of Directors."
OFFICER PRINCIPAL OCCUPATIONS DURING
NAME AGE SINCE THE LAST FIVE YEARS
- ---- -------- -------- -----------------------------------------------------
William R. Schlueter... 35 1999 Vice President and Chief Financial Officer of the
Company since 1999 and Assistant Secretary of the
Company since July 2000; Vice President and Chief
Financial Officer of Capital Partners since 1998;
Chief Financial Officer of Flavor House, Inc., a
private-label snack nut processor, from 1997 to
1998 and a Certified Public Accountant in public
practice in Alabama from 1991 to June 1997.
EXECUTIVE COMPENSATION
1. SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth certain information
about the annual and long-term compensation earned by or awarded to the chief
executive officer of the Company and the other two executive officers of the
Company.
7
1. SUMMARY COMPENSATION TABLE (Continued)
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION
--------------------------- ----------- -------- -------- -------------
Brian D. Fitzgerald ...... 2000 (1) (1) (1)
Chairman of the Board, 1999 (1) (1) (1)
President and CEO 1998 (1) (1) (1)
A. George Gebauer ........ 2000 (1) (1) (1)
Vice Chairman of the 1999 (1) (1) (1)
Board and Secretary 1998 (1) (1) (1)
William R. Schlueter .....
Vice President, Chief
Financial Officer and 2000 (1) (1) (1)
Assistant Secretary 1999 (1) (1) (1)
LONG-TERM COMPENSATION
-------------------------------------------------------------
AWARDS PAYOUTS
------------------------------------ ---------- ALL OTHER
RESTRICTED SECURITIES LTIP COMPEN-
STOCK AWARD(S) UNDERLYING OPTIONS/ PAYOUTS SATION
NAME AND PRINCIPAL POSITIO ($) SARS (#) ($) ($)
-------------------------- -------------- ------------------- ---------- ---------
Brian D. Fitzgerald ...... -- 400,000 -- --
Chairman of the Board, -- -- -- --
President and CEO -- -- -- --
A. George Gebauer ........ -- 50,000 -- --
Vice Chairman of the -- -- -- --
Board and Secretary -- -- -- --
William R. Schlueter .....
Vice President, Chief
Financial Officer and -- 50,000 -- --
Assistant Secretary -- -- -- --
- ------------------------------
(1) Messrs. Fitzgerald, Gebauer and Schlueter receive no compensation from the
Company for their services as officers of the Company. CP Inc., a
corporation controlled by Mr. Fitzgerald and for which Mr. Gebauer and
Mr. Schlueter serve as officers, is paid a management fee pursuant to an
Advisory Services Agreement, dated as of April 27, 1990 and effective as of
January 26, 1990 (the "Management Advisory Agreement"), between the Company
and CP Inc. Pursuant to the Management Advisory Agreement, CP Inc. provides
certain advisory services to the Company in the areas of investments,
general administration, corporate development, strategic planning,
stockholder relations, financial matters and general business policy for a
fee of $150,000 per year. Upon the acquisition of Possible Dreams Ltd., the
Management Advisory Agreement was amended to increase the annual fee for
such services by an amount equal to the greater of $175,000 and 5% of the
annual EBITDA of Possible Dreams Ltd. (calculated as provided in the Asset
Purchase Agreement, dated as of May 17, 1996, effecting such purchase). Upon
the acquisition of Pumpkin Ltd., the Management Advisory Agreement was
further amended to increase the annual fee for such services by an amount
equal to the greater of $100,000 and 5% of the annual EBITDA of
Pumpkin Ltd. (calculated as provided in the Asset Purchase Agreement, dated
as of June 27, 1997, effecting such purchase). The Management Advisory
Agreement was amended for the third time in connection with the acquisition
of the Primrose Companies on April 6, 1999 to increase the fee by $200,000.
Finally, the Management Advisory Agreement was further amended in connection
with the acquisition of the Health Power companies on December 20, 2000 to
increase the fee by an additional amount equal to the greater of $420,000
and 5% of EBITA of Health Power annually.During 2000, CP Inc. was paid
advisory fees of $700,000 and investment banking fees of $453,000. CP Inc.
was also reimbursed for expenses incurred by it of approximately $79,000.
2. OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth the option/SAR grants awarded to the chief
executive officer and the other two executive officers of the Company during the
year ended December 31, 2000.
INDIVIDUAL GRANTS (A)
- --------------------------------------------------------------------------------------------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/ GRANTED EXERCISE
SARS TO OR BASE GRANT
GRANTED EMPLOYEES PRICE EXPIRATION DATE PRESENT
NAME (#) IN 2000 ($/SH) DATE VALUE ($)
- ---- ---------- --------- -------- ---------- ------------
Brian D. Fitzgerald............................ 400,000 79.84% 6.125 7/13/10 1,104,000(b)
A. George Gebauer.............................. 50,000 9.98% 6.125 7/13/10 138,000(b)
William R. Schlueter........................... 50,000 9.98% 6.125 7/13/10 138,000(b)
- --------------------------
(a) The executive officers of the Company received options to purchase Class A
Common Stock on July 13, 2000pursuant to the 2000 Long-Term Incentive Plan.
The options are exercisable at $6.125, the market price on
8
2. OPTION/SAR GRANTS IN LAST FISCAL YEAR (CONTINUED)
the date of the grant, and, subject totermination of employment, expire
10 years from the date of grant., are not transferable other than on death
and are exercisable in five equal annual installments commencing one year
from the date of grant.
(b) Option values reflect Black-Scholes model output for options. The
assumptions used in the model were expected volatility of .32, risk-free
rate of return of 5.16%, dividend yield of 0% and time to exercise of
10 years.
3. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
No Options or SARs were exercised by any executive officer of the Company
during the year ended December 31, 2000. The following table represents the
value of unexercised options and SARs held by the chief executive officer and
the other two executive officers of the Company at December 31, 2000.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTION/SARS AT OPTIONS/SARS AT
SHARES FISCAL YEAR-END (#) FISCAL YEAR-END ($)
ACQUIRED ON VALUE REALIZED EXERCISABLE (E)/ EXERCISABLE (E)/
NAME EXERCISE(#) ($) UNEXERCISABLE (U) UNEXERCISABLE (U)
- ---- ----------- -------------- ---------------------- --------------------
Brian D. Fitzgerald............. -- -- 400,000 U $550,000 U
-- -- 0 E $ 0 E
A. George Gebauer............... -- -- 50,000 U $ 68,750 U
-- -- 0 E $ 0 E
William R. Schlueter............ -- -- 50,000 U $ 68,750 U
-- -- 0 E $ 0 E
4. LONG-TERM INCENTIVE PLAN ("LTIP") AWARDS IN LAST FISCAL YEAR
No LTIP Awards were made to any executive officer of the Company during the
year ended December 31, 2000.
5. COMPENSATION OF DIRECTORS
Messrs. Kelly and Stapleton receive an annual fee of $8,000 plus a fee of
$2,000 per Board meeting and reimbursement of reasonable expenses in connection
with attendance at Board meetings. In addition to fees, the directors received
options to purchase Class A Common Stock on July 13, 2000. Messrs. Kelly and
Stapleton each received grants of 24,000 options. The directors' options are
exercisable at $6.125, the market price on the date of the grant, and, subject
to termination of directorship, expire 10 years from the date of grant. The
options are not transferable other than on death and are exercisable in three
equal annual installments commencing on the date of grant. Messrs. Fitzgerald
and Gebauer do not and will not receive any annual fee or any fees for
attendance at meetings.
6. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 2000, the Company's Compensation Committee consisted of
Messrs. Stapleton and Kelly. Both of the Compensation Committee members are
non-employee directors and not former officers.During 2000,no executive officer
served as a member of a board of directors or compensation committee of a
corporation where any of its executive officers served on the Company's
Compensation Committee or Board of Directors.
9
PERFORMANCE GRAPH
The performance graph below shows a comparison of the cumulative total
return, on a dividend reinvestment basis, measured at each fiscal year end and
calendar year end for the last five years assuming $100 invested on January 1,
1996 in the Class A Common Stock, the Company's selected peer group, and the
American Stock Exchange Market Index. The Company's peer group consists of
seasonal products companies and educational services companies. Since Health
Power Inc., the Company's subsidiary comprising the employer cost
containment-related service segment of our business, was not acquired until
December 21, 2000, the Company has not included comparable competitor companies
from this new business segment in the selected peer group for the 2000 fiscal
year. The Company will update its graphical presentation next year to include
this segment in its peer group.
The seasonal products companies are Department 56 Inc., Enesco Group Inc.
and Russ Berrie & Co. Inc. These companies are considered by the Company's
management to be competitors of the Company's seasonal products segment. The
educational services companies are Nobel Learning Communities, Inc. and
Childtime Learning Centers, Inc. These companies are considered by management to
be competitors of the Company's educational services segment. The returns of
each peer group company have been weighted according to its stock market
capitalization for purposes of arriving at a peer group average.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG SECURITY CAPITAL CORPORATION,
AMEX MARKET INDEX AND PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS
SECURITY CAPITAL CORP. PEER GROUP AMEX MARKET INDEX
1/1/96 100 100 100
9/30/96 225 87.83 104.09
12/31/96 283.33 86.73 105.72
12/31/97 200 103.3 127.21
12/31/98 275 110.22 125.48
12/31/99 392 83.2 156.44
12/31/00 500 54.19 154.52
10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT ADVISORY AGREEMENT; ACQUISITION CRITERIA AND PROCEDURES
On April 27, 1990, effective as of January 26, 1990, the Company entered
into the Advisory Services Agreement (the "Management Advisory Agreement") with
CP Inc., an entity controlled by Mr. Fitzgerald and for which Mr. Gebauer and
Mr. Schlueter serve as officers. Pursuant to the Management Advisory Agreement,
CP Inc. provides certain advisory services in the areas of investments, general
administration, corporate development, strategic planning, stockholder
relations, financial matters and general business policy for a fee of $150,000
per year. Upon the acquisition of Possible Dreams Ltd., the Management Advisory
Agreement was amended to increase the annual fee for such services by an amount
equal to the greater of $175,000 and 5% of the annual EBITDA of Possible
Dreams Ltd. (calculated as provided in the Asset Purchase Agreement, dated as of
May 17, 1996, effecting such purchase). Then upon the acquisition of
Pumpkin Ltd., the Management Advisory Agreement was amended again to increase
the annual fee for such services by an amount equal to the greater of $100,000
and 5% of the annual EBITDA of Pumpkin Ltd. (calculated as provided in the Asset
Purchase Agreement, dated as of June 27, 1997, effecting such purchase). The
Management Advisory Agreement was further amended in connection with the
acquisition of the Primrose Companies on April 6, 1999 to increase the fee by
$200,000. Finally, the Management Advisory Agreement was further amended in
connection with the acquisition of the Health Power companies on December 20,
2000 to increase the fee by an additional amount equal to the greater of
$420,000 and 5% of EBITA of Health Power annually. Such fee is subject to
appropriate adjustment should the scope of operations of the Company change
again, whether from an acquisition or otherwise. In this regard, CP Inc. would
likely be paid an annual fee for ongoing advisory services following an
acquisition of no more than 4% to 5% of the acquired company's annual EBITDA.
Pursuant to the Management Advisory Agreement and otherwise, no compensation is
paid by the Company to the current Chairman of the Board, President, and CEO
(Mr. Fitzgerald), Vice Chairman of the Board and Secretary (Mr. Gebauer) or Vice
President, Chief Financial Officer, and Assistant Secretary (Mr. Schlueter) in
their respective capacities as such. During 2000, CP Inc. was paid $700,000 in
fees and reimbursed for expenses incurred by it of approximately $79,000.
The initial term of the Management Advisory Agreement was for one year
commencing on January 26, 1990. Thereafter, the agreement has been automatically
extended for additional one-year periods and will be automatically extended for
additional one-year periods unless either party gives 30 days' written notice to
the other of its intention to terminate. The Management Advisory Agreement was
automatically renewed for a one-year period commencing January 26, 2001.
The Management Advisory Agreement confirms that, from time to time, CP Inc.
may present acquisition opportunities to the Company that it believes may be
appropriate for the Company, but that CP Inc. is under no obligation to present
any or all acquisition candidates of which it is aware to the Company except for
insurance agency businesses. If the Company or any of its subsidiaries completes
any acquisition which was presented by CP Inc., the Company is obligated to pay
CP Inc. an investment banking fee at the usual and customary rate for
transactions of such size and complexity. This fee is likely to be in the range
of 1% to 1 1/2% of the aggregate purchase price for the acquisition. The Company
paid CP Inc. an investment banking fee of $453,000 for the Health Power
acquisition during 2000.
While enterprises proposed for acquisition may be in any line of business,
to date the acquisitions in which CP Inc. and its affiliates have participated
have been primarily in the manufacturing, distribution and service fields.
Consistent with the investment strategies and principles utilized by CP Inc.,
the Company currently intends in general to focus upon, as potential targets,
established companies of medium size with histories of earnings and cash flow
stability, favorable earnings growth prospects, good management and strong
competitive positions. It is currently the Company's plan that acquisitions will
be undertaken directly or by one or more subsidiaries of the Company, with
financing achieved through equity contributed by the Company and debt and
subordinated debt raised at the subsidiary or parent level. It
11
may be necessary to issue preferred stock, common equity or warrants or options
to purchase common equity of the Company or of the acquired entity to one or
more lenders in order to obtain the financing. In some instances, it may be
possible to obtain financing from the sellers of the acquired entity in the form
of subordinated notes or earn-outs. Such sellers may also receive shares of
common equity or warrants or options to purchase the same of the Company or the
acquired entity. Typically, certain members of management of the acquired entity
will be granted incentives (usually equity-based) to remain with the acquired
entity following the acquisition. The companies targeted for direct acquisition
by the Company usually will have annual operating profits of $5,000,000 to
$20,000,000. Consequently, purchase prices should range from approximately
$20,000,000 to $100,000,000. Add-on acquisitions by existing subsidiaries may,
however, be of a smaller size. Under such acquisition strategy, significant
uncertainties involving product life cycles, volatile market demand,
organization changes and other major turnaround aspects will generally
disqualify a prospect. The acquisition criteria set forth above are only
guidelines and may change from time to time in response to market conditions,
the Company's financial condition and results of operations and other factors.
In connection with its acquisition activities on behalf of the Company,
other portfolio companies and for its own account, CP Inc. maintains ongoing
relationships with hundreds of merger and acquisition intermediary firms,
ranging from large investment banks and accounting firms to small business
brokerages. In a typical year, CP Inc. receives over 500 leads on companies
which are or might be for sale. Of these, perhaps 50 are sufficiently close to
the Company's acquisition criteria set forth above to merit further
consideration.
CP Inc. may decide at some future date to present one of its portfolio
companies to the Company for possible acquisition. Any such acquisition would be
submitted to the Company's independent directors for their approval.
INDEPENDENT AUDITORS
On December 13, 2000, the Company engaged Ernst & Young LLP ("Ernst &
Young") as its independent auditors for the fiscal year ending December 31,
2000, to replace the firm of Deloitte & Touche, LLP ("Deloitte & Touche"), which
were dismissed as the independent auditors of the Company effective on such
date. The decision to change independent auditors was approved by the Company's
Board of Directors and Audit Committee.
The reports of Deloitte & Touche on the Company's consolidated financial
statements for each of the two years in the period ended December 31, 1999 did
not contain an adverse opinion or a disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of the Company's consolidated financial
statements for each of the two years in the period ended December 31, 1999, and
in the subsequent interim period through December 13, 2000, there were no
disagreements ("Disagreements") as defined in Item 304 (a) (1) (iv) and the
instructions to Item 304 of Regulation S-K, as amended, promulgated by the
Securities and Exchange Commission ("Regulation S-K") with Deloitte & Touche on
any matters of accounting principles or practices, financial statement
disclosure, or auditing scope and procedures which, if not resolved to the
satisfaction of Deloitte & Touche, would have caused Deloitte & Touche to make
reference to the matter in their reports. In addition, during each of the two
years in the period ended December 31, 1999 and in the subsequent interim period
through December 13, 2000, there were no reportable events ("Reportable Events")
as defined in Item 304 (a) (1) (v) of Regulation S-K. Deloitte & Touche has
furnished a letter addressed to the Securities and Exchange Commission, stating
that it agrees with the above statements.
On December 13, 2000, the Company engaged Ernst & Young as its independent
auditors for the fiscal year ending December 31, 2000. At no time preceding
December 13, 2000 has the Company (or anyone on behalf of the Company) consulted
with Ernst & Young on matters regarding (i) the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit
12
opinion that might be rendered on the Company's consolidated financial
statements, or (ii) any matter that was the subject of a Disagreement with
Deloitte & Touche or a Reportable Event.
Upon the recommendation of the Audit Committee, the Board of Directors
selected Ernst & Young as independent auditors of the Company for the fiscal
year ending December 31, 2001. One or more representatives of Ernst & Young,
which has served as the Company's independent auditors since December 13, 2000,
are expected to be available at the Annual Meeting to respond to appropriate
questions. They will have an opportunity to make a statement if they so desire.
INDEPENDENT AUDITORS' FEES
In addition to retaining Ernst & Young to audit the consolidated financial
statements for 2000, the Company and its subsidiaries retained Ernst & Young to
provide tax services in 2000.The aggregate fees for professional services by
Ernst & Young in 2000 for these various services were:
AUDIT FEES: The Company was charged $275,600 for services rendered for the
annual audit of the Company's consolidated financial statements for 2000.No fees
were charged for the quarterly reviews of the financial statements as these
reviews were performed by the predecessor auditors during 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: No fees for
financial information systems design and implementation were billed or paid
during 2000.
ALL OTHER FEES: The aggregate Ernst & Young fees for 2000 for services other
than as set forth above were $47,450 for tax services for the Company and its
subsidiaries. The Audit Committee considered that the provision of these
services was compatible with maintaining Ernst & Young's independence.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and persons who own more than 10% of the
Class A Common Stock to file initial reports of ownership and reports of changes
in ownership with the Securities and Exchange Commission (the "SEC"). Such
persons are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms received by
the Company with respect to fiscal 2000 and written representations from certain
reporting persons, to the best of the Company's knowledge, all reports were
filed on a timely basis.
EXPENSES OF SOLICITATION
The total cost of the Proxy solicitation will be borne by the Company. In
addition to the mails, Proxies may be solicited by directors and officers of the
Company by personal interviews, telephone and telegraph. The Company has
retained D.F. King & Co., Inc., New York, New York, to assist in the
solicitation of Proxies for a fee estimated to be $2,000 plus reimbursement of
out-of-pocket expenses. It is anticipated that banks, brokerage houses and other
custodians, nominees and fiduciaries will forward soliciting material to the
beneficial owners of shares of Common Equity entitled to vote at the Annual
Meeting and that such persons will be reimbursed for their out-of-pocket
expenses incurred in this connection.
STOCKHOLDER PROPOSALS
Stockholders are hereby notified that, if they intend to submit proposals
for inclusion in the Company's Proxy Statement and Proxy for its 2002 Annual
Meeting of Stockholders, such proposals must be received by the Company no later
than December 28, 2001 and must otherwise be in compliance with applicable
Securities and Exchange Commission regulations.
13
MISCELLANEOUS
The Board of Directors knows of no other business to be presented at the
Annual Meeting. If, however, other matters properly do come before the Annual
Meeting, it is intended that the Proxies in the accompanying form will be voted
thereon in accordance with the judgment of the person or persons holding such
Proxies.
REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2000, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS
AVAILABLE TO THE COMPANY'S STOCKHOLDERS, WITHOUT CHARGE, UPON WRITTEN REQUEST.
EXHIBITS TO THE COMPANY'S FORM 10-K WILL BE FURNISHED UPON PAYMENT OF $.50 PER
PAGE, WITH A MINIMUM CHARGE OF $5.00. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
SECURITY CAPITAL CORPORATION, THREE PICKWICK PLAZA, SUITE 310, GREENWICH,
CONNECTICUT 06830, ATTENTION: SECRETARY.
STOCKHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED. PROMPT RESPONSE WILL GREATLY FACILITATE
ARRANGEMENTS FOR THE ANNUAL MEETING, AND YOUR COOPERATION WILL BE APPRECIATED.
By Order of the Board of Directors,
/s/ A. GEORGE GEBAUER
A. George Gebauer
VICE CHAIRMAN OF THE BOARD AND
SECRETARY
Greenwich, CT
April 30, 2001
14
EXHIBIT A
SECURITY CAPITAL CORPORATION
CHARTER OF
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
1. PURPOSE.
The Audit Committee (the "Committee") of the Board of Directors (the
"Board") ofSecurity Capital Corporation (the "Company") assists the Board in
ensuring that a proper system of accounting, internal controls and reporting
practices are maintained by the Company and the quality and integrity of the
Company's financial statements. In performing its duties, the Committee will
maintain effective working relationships with the Board and the Company's
management.
2. MEMBERSHIP.
The Committee will consist of at least three members, including a
Chairperson, all of whom will be selected by, and who will serve at the pleasure
of, the Board. As of June 14, 2001, all members of the Committee must be
"independent directors". The term "independent director" means a person other
than an officer of the company or any other individual having a relationship
which, in the view of the Board, would interfere with the exercise of
independent judgment. A director will not be considered independent who:
(a) is employed by the company or any of its affiliates for the current
year or any of the past three years,
(b) accepts any compensation (other than compensation for service as a
director and certain other limited amounts) from the Company or any
of its affiliates in excess of $60,000 during the previous fiscal
year,
(c) is employed as an executive by another entity where any of the
Company's executives serves on that entity's compensation committee,
(d) is a partner in, or a controlling stockholder or an executive officer
of, any for-profit business entity to which the Company made, or from
which the Company received, payments exceeding 5% of the Company's or
such entity's consolidated gross revenues for that year, or $200,000,
whichever is more,in any of the past three years, or
(e) is a member of the immediate family of any individual who is, or has
been in any of the past three years, employed as an executive officer
by the Company or any of its affiliates.
Notwithstanding the foregoing, one director who is neither a current
employee nor an immediate family member of a current employee, but who otherwise
is not independent, may be appointed to the Committee if the Board, under
exceptional and limited circumstances, determines that membership is required by
the best interests of the Company and its stockholders. In such case, the Board
must disclose in its next annual proxy statement the nature of the relationship
and the reasons for the determination.
Each member of the Committee must be able to read and understand fundamental
financial statements or become able to do so within a reasonable period of time
after appointment to the Committee. In addition, at least one member of the
Committee must have past employment experience in finance or accounting,
requisite professional certification in accounting, or any other comparable
experience or background which results in the individual's financial
sophistication.
14
The Board may designate one or more Directors as alternative members of the
Committee, who may replace any absent or disqualified member or members at any
meetings of the Committee. In addition, no person may be made a member of the
Committee if his or her service on the Committee would violate any restriction
on service imposed by any rule of the United States Securities and Exchange
Commission ("SEC") or any exchange on which shares of the common stock of the
Company are traded.
3. MEETINGS.
The Committee will meet at least four times each year and more frequently if
circumstances warrant.The Committee may ask members of management or others
whose advice and counsel are relevant to the issues then being considered by the
Committee, to attend any meetings and to provide such pertinent information as
the Committee may request. The Committee will keep written minutes of its
meetings, which minutes will be recorded or filed with the books and records of
the Company. The Committee will submit the minutes of its meetings to, or
discuss the matters deliberated at each meeting with, the Board.
4. COMMITTEE RESPONSIBILITIES.
The Committee will have the following responsibilities:
1. Recommend annually to the Board the appointment of a firm of independent
certified public accountants to serve as auditors of the Company, giving
consideration to the firm's independence and effectiveness, and approve
the associated compensation to the independent auditors
2. Evaluate periodically the firm of independent certified public
accountants serving as auditors of the Company and, where appropriate,
recommend to the Board that the Board replace such firm of independent
certified public accountants as auditors of the Company.
3. Review significant accounting and reporting issues, including recent
professional and regulatory pronouncements, and understand the impact on
the financial statements.
4. Meet with management and the independent auditors to review and discuss
the scope and results of each annual audit of the financial statements.
5. Consider and review with the independent auditors the adequacy of the
Company's internal controls and any related significant findings and
recommendations of the independent auditors together with management.
6. Review and discuss with management and the independent auditors (i) the
financial statements contained in the annual report to stockholders to be
filed with the SEC, (ii) significant accounting policies and changes in
accounting principles and (iii) the results of the independent auditor's
audit of the financial statements and the report thereon, including
matters required to be discussed by Statement of Auditing Standards
No. 61.
7. Recommend to the Board, based on its review with management and the
independent auditors, the inclusion of audited financial statements in
the Company's Annual Report on Form 10-K for the last fiscal year for
filing with the SEC.
8. Meet with the independent auditors and financial management to review
interim financial statements to be filed with the SEC and the results of
the interim review by the independent auditors.The Chairman of the
Committee, or a member of the Committee designated by the Chairman, may
represent the entire Committee for purposes of this review.
9. Receive the written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1 and
discuss with the independent auditors the independent auditors'
independence.
15
10. Provide a report from the Audit Committee for inclusion in the annual
proxy statement to stockholders.
The Committee will review this Charter not less often than annually and will
recommend to the Board such changes therein as the Committee deems appropriate
5. INVESTIGATIONS AND STUDIES.
The Committee may conduct or authorize investigations into or studies of
matters within the Committee's scope of responsibilities as described above, and
may retain, at the expense of the Company, independent counsel or other
consultants necessary to assist in any such investigation or study.
16
SECURITY CAPITAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS--JULY 19, 2001
The undersigned hereby appoints Brian D. Fitzgerald and A. George Gebauer,
and each of them, proxies, with full power of substitution, to appear on behalf
of the undersigned and to vote all shares of Common Stock (par value $.01) and
Class A Common Stock (par value $.01) of Security Capital Corporation (the
"Company") that the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at The Field Club of Greenwich, 276 Lake
Avenue, Greenwich, Connecticut on Thursday, July 19, 2001, commencing at
9:30 a.m. (local time), and at any adjournment thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
LISTED NOMINEES AS DIRECTORS.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Please mark box / / or /X/ in blue or black ink.
1. Election of FOR all nominees listed WITHHOLD AUTHORITY to vote / / EXCEPTIONS / /
Directors: below / / WITHHOLD AUTHORITY to vote / / EXCEPTIONS / /
Nominees: BRIAN D. FITZGERALD, A. GEORGE GEBAUER, CRAIG R. STAPLETON, M. PAUL
KELLY
(Instructions: To withhold authority to vote for any nominee, mark the
"Exceptions" box and write that nominee's name in the space provided below.)
(Continued and to be signed on reverse side)
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting and any adjournment
thereof.
Please sign exactly as your name
appears on the left. When signing
as an attorney, executor,
administrator, trustee or guardian,
please give your full title. If
shares are held jointly, each
holder should sign.
PLEASE CHECK HERE IF YOU PLAN TO
ATTEND THE ANNUAL MEETING / /
Dated ______________________, 2001
__________________________________
Signature
__________________________________
Signature
Please sign, date and return the proxy card using the enclosed envelope.