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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 Section 240.14a-12
First Investors Financial Services Group
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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First Investors Financial Services Group, Inc.
675 Bering Drive, Suite 710
Houston, Texas 77057
===================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
SEPTEMBER 10, 2002
===================================================
Dear Shareholder:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
Investors Financial Services Group, Inc., a Texas corporation, will be held
at the offices of the Company located at 675 Bering Drive, Suite 710,
Houston, Texas 77057, on Tuesday, September 10, 2002 at 10 a.m., local time,
for the following purposes:
1. To elect seven directors to serve for the ensuing year or until their
respective successors have been elected and qualified.
2. To consider and vote upon a proposal to increase by 200,000 shares
the number of shares of common stock available for issuance under the
1995 Employee Stock Option Plan.
3. To consider and vote upon the establishment of the 2002 Non-Employee
Director Stock Option Plan.
4. To consider and vote upon a proposal to ratify the appointment of Grant
Thornton LLP as our independent accountants for the fiscal year ended
April 30, 2003.
5. To transact any other business as may properly come before the annual
meeting or any postponement or adjournment of the meeting.
The close of business on July 31, 2002, has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at,
the annual meeting.
The Company's Annual Report on Form 10-K for the fiscal year ended April
30, 2002, accompanies the enclosed proxy statement.
By Order of the Board of Directors
Houston, Texas
August 5, 2002 Bennie H. Duck, Secretary
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED SELF-ADDRESSED RETURN ENVELOPE AS PROMPTLY AS POSSIBLE, WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU LATER DESIRE TO REVOKE
YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE
ATTACHED PROXY STATEMENT.
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FIRST INVESTORS FINANCIAL SERVICES, INC.
675 BERING DRIVE, SUITE 710
HOUSTON, TEXAS 77057
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 10, 2002
We are soliciting the accompanying proxy in connection with our annual
meeting of shareholders to be held at our offices located at 675 Bering
Drive, Suite 710, Houston, Texas 77057, on September 10, 2002 at 10 a.m.,
local time. When the proxy is properly executed and returned, the shares of
common stock it represents will be voted at the annual meeting as directed.
Unless otherwise specified, the shares will be voted "FOR" the proposals. As
of the date of this proxy statement, management does not know of any matters
to be brought before the annual meeting other than the proposals set forth in
the notice accompanying this proxy statement; however, should any other
matters be properly raised at the annual meeting, it is the intention of each
of the persons named in the proxy to vote the shares represented by the proxy
in accordance with his judgment.
A proxy may be revoked at any time prior to its exercise by giving
written notice of revocation to our corporate Secretary at or before the
annual meeting, by duly executing a subsequent proxy relating to the same
number of shares or by attending the annual meeting and voting in person.
We are sending this proxy statement and accompanying notice, proxy card
and our Annual Report on Form 10-K for the fiscal year ended April 30, 2002,
to shareholders on or about August 5, 2002.
VOTING SECURITIES
Only holders of record of our common stock at the close of business on
July 31, 2002, are entitled to receive notice of and to vote at the annual
meeting or at any postponement or adjournment of the meeting. On the record
date there were 5,026,269 shares of our common stock outstanding. Each
share of common stock entitles its holder to one vote. Shareholders may not
cumulate their votes.
The presence at the annual meeting, in person or by proxy, of holders of
a majority of the outstanding shares of common stock on the record date is
necessary to constitute a quorum for the transaction of business. A
plurality vote of the outstanding shares of common stock represented at the
annual meeting is required for the election of directors. The affirmative
vote of a majority of the outstanding shares of common stock represented at
the annual meeting is required to approve each other proposal. If a share of
common stock is represented for any purpose at the annual meeting, it is
deemed to be present for all other matters. Abstentions and shares held of
record by a broker or nominee that are voted on any matter are included in
determining the number of votes present. Shares with respect to which
authority is witheld, abstentions and shares held by brokers or nominees that
are not voted are treated as shares as to which voting authority has been
witheld by the holder of those shares and, therefore, as shares not voting on
the proposal.
PROPOSAL 1:
ELECTION OF DIRECTORS
At the annual meeting, seven directors will be elected to hold office
until the 2003 annual meeting of shareholders or until their respective
successors are duly elected and qualified. Each of the nominees is presently
a member of the Board of Directors, has consented to being named in this
proxy statement and has notified us that he intends to serve, if elected.
The seven nominees receiving the highest number of affirmative votes will
be elected to the Board. Shareholders may withhold authority to vote for any
or all nominees for director. If any nominee becomes unavailable for
election for any reason, then the shares represented by the proxy will be
voted for the remainder
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of the listed nominees and for such other nominees as may be designated by
the Board as replacements for those who become unavailable. Discretionary
authority to do so is included in the proxy.
The following table sets forth certain information concerning the persons
who have been nominated for election as directors.
<Table>
<Caption>
Name Age Position
---- --- --------
Tommy A. Moore, Jr. 45 Chairman of the Board, President and Chief
Executive Officer
Roberto Marchesini 58 Director and Vice President - Portfolio Risk Management
Walter A. Stockard (1) 90 Director
Robert L. Clarke (1)(2) 60 Director
Walter A. Stockard, Jr. (1)(2) 50 Director
Seymour M. Jacobs (2) 41 Director
John H. Buck 59 Director
</Table>
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(1) Member of the Compensation Committee
(2) Member of the Audit Committee
TOMMY A. MOORE, JR., a co-founder of the Company in 1989, has served as
its President and Chief Executive Officer and a director since that time.
Mr. Moore was elected to the additional position of Chairman of the Board in
July, 2000. Prior to organizing the Company, Mr. Moore was employed in
commercial banking in Houston, Texas where his responsibilities included
retail and commercial lending, and also served for a time as manager of
finance and leasing for a Houston auto dealership.
DR. ROBERTO MARCHESINI became a director in June 1995, and served as the
Treasurer, Secretary and Chief Financial Officer of the Company from its
inception in 1989 until May 1, 1996, when his duties were reduced to enable
him to resume his teaching pursuits. He remains a director and also
continues to serve the Company as its Vice President - Portfolio Risk
Management. Prior to June 1995 and subsequent to May 1, 1996, he has also
been employed as a Professor of Finance at the University of Houston, Clear
Lake, where he has taught in the areas of finance, economics and accounting
since 1974 and has served as the Associate Director of the University's
Center for Economic Development and Research. Dr. Marchesini holds a Ph.D.
degree in economics conferred by the University of Texas in 1974 and a degree
in accounting received from the Technical Institute of Rome in 1963.
WALTER A. STOCKARD, a certified public accountant, co-founded the Company
with Mr. Moore in 1989 and has been a director since that time. Mr. Stockard
is an independent oil operator and an investor in oil and gas properties. He
founded Alamo Barge Lines, Inc. in 1947 and was a substantial shareholder of
that company until its sale in 1980. Mr. Stockard was also a founder of Big
Six Drilling Company in 1945 and served as its vice president until 1992.
ROBERT L. CLARKE became a director in June 1995, and is a senior partner
of the law firm of Bracewell & Patterson LLP, Houston, Texas. From 1985 to
1992, he served as the Comptroller of the Currency of the United States. Mr.
Clarke also serves as a director of Centex Construction Products, Inc., a
publicly-held company.
WALTER A. STOCKARD, JR. has been a director of the Company since 1989 and
has been an investor in oil and gas properties and real estate for more than
the past five years.
SEYMOUR M. JACOBS became a director in November 2000 and is the founder
and General Partner of JAM
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Partners, L.P., a hedge fund based in New York City and the managing member
of Jacobs Asset Management LLC, an investment management firm also located in
New York City. Prior to founding these firms, Mr. Jacobs worked as an
investment securities analyst from 1983-1995, including most recently with
Alex. Brown and Sons which served as the lead underwriter of the Company's
initial public offering. Mr. Jacobs also serves as a director of BYL
Bancorp, a publicly-held bank holding company.
JOHN H. BUCK is a retired founding partner of the Houston law firm of
Buck, Keenan and Gage and served as corporate legal counsel to the Company
from 1992 until his retirement. Mr. Buck is a graduate of Yale Law School
and has over 31 years experience in general corporate and securities law and
commercial litigation including transactional work in corporate finance and
mergers and acquisitions. Mr. Buck serves on the Board of Directors of
Sterling Bancshares, a Houston-based bank holding company.
RECOMMENDATION REGARDING ELECTION OF DIRECTORS
The Board of Directors recommends that you vote FOR the seven named
nominees to be elected as our directors.
PROPOSAL 2:
INCREASE IN SHARES AVAILABLE UNDER
1995 EMPLOYEE STOCK OPTION PLAN
The Board of Directors has approved an amendment to the 1995 Employee
Stock Option Plan to increase the shares of common stock available for
issuance under the plan by 200,000 and has directed that the amendment to the
plan be submitted to our shareholders for approval. If this increase is
approved by our shareholders, a total of 500,000 shares of common stock would
be available for issuance under the plan.
PURPOSE AND PARTICIPATION. The 1995 Employee Stock Option Plan was
initially adopted in June 1995 and was thereafter approved by our
shareholders. As approved by our shareholders, the plan provides for 300,000
shares of common stock, subject to adjustment in the event of certain changes
in capitalization, to be issued under the plan to officers and key employees.
As reflected in the table appearing below, as of April 30, 2002, the
Compensation Committee had granted options covering a total of 260,500 shares
of common stock, and 39,500 shares were available for issuance under the
plan. If an option expires unexercised, is terminated, or is canceled or
forfeited, the shares of common stock allocable to the unexercised portion of
that option may again be subject to grant under the plan.
In the opinion of the Board of Directors, it is appropriate to approve
amending the 1995 Employee Stock Option Plan to increase the number of shares
available for issuance so as to permit us the flexibility necessary to
attract, retain and motivate qualified personnel for the benefit of our
shareholders.
ADMINISTRATION. The 1995 Employee Stock Option Plan is administered by
the Compensation Committee of the Board of Directors. Options may be granted
either as incentive stock options (which are intended to qualify for certain
favorable tax treatment) or as non-qualified stock options.
OPTION TERMS. The Compensation Committee selects the persons to receive
options and determines the exercise price, the duration, any conditions on
exercise and other terms of the options. In the case of options intended to
be incentive stock options, the exercise price may not be less than 100% of
the fair market value per share of common stock on the date of grant. With
respect to non-qualified stock options, the exercise price may be fixed as
low as 50% of the fair market value per share at the time of grant. In no
event may the duration of an option exceed 10 years and no option may be
granted after the expiration of 10 years from the adoption of the plan.
The exercise price of the option is payable in full upon exercise and
payment may be in cash or, with our
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consent, by delivery of shares of common stock (valued at their fair market
value at the time of exercise), or by a combination of cash and shares. At
the discretion of the Compensation Committee, options may be issued in tandem
with stock appreciation rights entitling the option holder to receive an
amount in cash or in shares of common stock, or a combination of cash and
shares of common stock, equal in value to any increase in the fair market
value of the common stock covered by the option since the date of grant.
FEDERAL INCOME TAX CONSEQUENCES OF INCENTIVE STOCK OPTIONS. No income
will be recognized by a holder of an incentive stock option qualified under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
for federal income tax purposes upon the grant or exercise of the option.
The basis of shares received by the option holder upon exercise of the option
is the price paid for the shares. If the option holder holds the shares for
at least one year after exercise and two years after the date of the option's
grant, the option holder will recognize capital gain or loss upon sale of the
shares equal to the difference between the amount realized on the sale and
the exercise price. Generally, if the shares are not held for that period,
the option holder will recognize ordinary income upon sale in an amount equal
to the excess of the fair market value of the shares on the date of exercise
over the exercise price of such shares, or if less, the gain on disposition.
Any additional gain realized by the option holder upon sale will be a capital
gain.
The excess of the fair market value of shares received upon the exercise
of the option over the exercise price for the shares is an item of adjustment
for the option holder for purposes of the alternative minimum tax.
We are not entitled to a deduction upon the exercise of an incentive
stock option. If the option holder disposes of the shares of stock received
on exercise prior to the expiration of one year following the exercise or two
years after the grant of the option, however, we may deduct an amount equal
to the ordinary income recognized by the option holder upon sale of the
shares at the time such income is recognized by the option holder, subject to
certain limitations on the deductibility of compensation imposed by the Code.
If an option holder uses already owned shares of common stock to pay the
purchase price for shares, the resulting tax consequences will depend upon
whether the already owned shares of common stock are "statutory option
stock," and, if so, whether the statutory option stock has been held by the
option holder for the applicable holding period required by the Code. In
general, "statutory option stock" is any stock acquired through the exercise
of an incentive stock option or an option granted pursuant to an employee
stock purchase plan, but not restricted stock or stock acquired through the
exercise of a nonstatutory stock option. If the stock is statutory option
stock and the applicable holding period has been satisfied, no income will be
recognized by the option holder upon transfer in payment of the purchase
price of an incentive stock option. If the stock is not statutory option
stock, no income will be recognized by the option holder upon transfer unless
the stock is not substantially vested within the meaning of the Code (in
which event the option holder will recognize ordinary income equal to the
amount by which the fair market value of the transferred shares exceeds their
basis). If the stock used to pay the exercise price of an incentive stock
option is statutory option stock and the applicable holding period has not
been satisfied, the transfer of the stock will result in the recognition of
ordinary income by the option holder in an amount equal to the excess of the
fair market value of the statutory option stock at the time the option
covering the stock was exercised over the exercise price.
FEDERAL INCOME TAX CONSEQUENCES OF NONQUALIFIED STOCK OPTIONS.
Nonqualified stock options granted under the plan are not intended to meet
the requirements of Section 422 of the Code. No income will be recognized by
an option holder for federal income tax purposes upon the grant of a
nonqualified stock option. Upon exercise of the option, the option holder
will recognize ordinary income in an amount equal to the excess of the fair
market value of the shares on the date of exercise over the purchase price of
the shares.
Income recognized by an option holder who is an employee will be
considered compensation subject to withholding at the time the income is
recognized. We generally will be entitled to a deduction equal to the amount
of ordinary income recognized by the option holder at the time of recognition.
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The basis of shares acquired by an option holder upon exercise of the
option is the price paid for the shares plus the amount of any income
recognized as a result of the exercise. If an option holder thereafter sells
the shares, any amount realized over his basis will be capital gain for
federal income tax purposes.
If an option holder uses already owned shares of common stock to pay the
purchase price for shares, the number of shares received which is equal to
the number of shares delivered in payment of the purchase price will be a
nontaxable exchange, and the fair market value of the remaining shares
received by the option holder will be taxable as ordinary income. If the
already owned shares of common stock are not statutory option stock or are
statutory option stock and the applicable holding period under the Code has
been satisfied, the shares received on exercise of the option will not be
statutory option stock and the option holder's basis in the number of shares
received will be equal to the basis of the shares delivered in payment. The
basis of any remaining shares received upon exercise will be equal to the
fair market value of such shares. If the already owned shares of common stock
are statutory option stock and the applicable holding period has not been
satisfied, it is not presently clear whether the exercise will be considered
a disqualifying disposition of the statutory option stock, whether the shares
received upon such exercise will be statutory option stock or how the option
holder's basis will be allocated among the shares received.
OTHER TAX CONSEQUENCES. For United States federal estate tax purposes,
the fair market value of an option held by an option holder at the time of
his or her death will normally be includible in his or her gross estate. The
acquisition, ownership or disposition of an option or shares acquired upon
the exercise of an option may also have tax consequences under various state
and foreign laws which may be applicable to certain option holders. These
tax consequences, as well as the federal income and estate tax consequences
described above, may vary from person to person depending upon the particular
facts and circumstances involved.
SHARES OF COMMON STOCK AVAILABLE FOR GRANT. As of April 30, 2002, the
Compensation Committee had granted options covering a total of 260,500 shares
of common stock to 17 of our officers and key employees.
The following table summarizes pertinent information covering the options
granted under the 1995 Employee Stock Option Plan. All options become
exercisable in cumulative annual increments of 20% beginning one year from
the date of each grant and, if not exercised, expire ten years from the date
of each grant.
<Table>
<Caption>
Number of Shares
Grant Date Underlying Options Granted Exercise Price ($/Share)
---------- -------------------------- ------------------------
7/6/95 30,000(1) 11.00
6/20/96 10,000(2) 11.00
7/15/97 41,000(3) 7.38
3/19/98 10,000(4) 6.75
6/1/98 2,500(5) 7.25
10/31/98 5,000(5) 4.75
3/31/00 5,000(6) 5.25
8/2/00 94,500(7) 4.75
4/5/01 62,500(8) 4.00
</Table>
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(1) Granted to three officers .
(2) Granted to Bennie H. Duck in connection with his joining us as Vice
President, Secretary, Treasurer and Chief Financial Officer.
(3) Granted to three officers and one key employee.
(4) Granted to Joseph A. Pisano in connection with his joining us as Senior
Vice President and Chief Operating Officer.
(5) Granted to two officers.
(6) Granted to an officer.
(7) Granted to thirteen officers and two key employees.
(8) Granted to eleven officers.
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RECOMMENDATION REGARDING THE AMENDMENT OF THE 1995 EMPLOYEE STOCK OPTION PLAN
The Board of Directors recommends that you vote FOR the amendment of the
1995 Employee Stock Option Plan to increase the number of shares of common
stock available for issuance under the plan from 300,000 to 500,000.
PROPOSAL 3:
APPROVAL OF THE
2002 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
We believe that stock options can further align the interests of our
directors with the interests of our shareholders, as well as help us attract
and retain qualified directors. In order to accomplish these objectives, the
Board of Directors has approved, subject to ratification by our shareholders,
the establishment of the 2002 Non-Employee Director Stock Option Plan.
PURPOSE AND PARTICIPATION. To promote the interests of our shareholders
by attracting and retaining qualified non-employee directors by giving them
the opportunity to acquire a proprietary interest in us and create increased
personal interest in our continued success and progress. Participants are
limited to persons who are non-employee directors at the time of grant.
ADMINISTRATION. The Board of Directors administers the plan. The
options granted under the plan will not be qualified as "incentive stock
options" within the meaning of Section 422 of the Code.
SHARES RESERVED. A total of 500,000 shares of common stock are available
for issuance under the plan, subject to adjustment for a division or
combination of the common stock and similar events. Shares underlying
options that expire or are canceled prior to exercise or relinquishment in
full, may again be subject to an option granted under the plan.
OPTION TERMS. Option grants under the plan are of two types: automatic
and discretionary. An automatic grant of an option to purchase 20,000 shares
shall be made to each non-employee director immediately following approval of
the plan by shareholders. Subsequent automatic grants of an option to
purchase 20,000 shares shall be made to each non-employee director on July
15th of each year, beginning July 15, 2003.
The plan also gives the Board of Directors discretionary authority to
provide for additional option grants if our annual financial performance
exceeds parameters established by the Board of Directors from time to time.
The plan gives the Board of Directors discretion to establish the financial
measures and targets that are prerequisites for a discretionary option grant,
as well as the number of shares that are subject to the option grant. The
Board of Directors intends to utilize this component of the plan to provide
incentives for achieving results that materially exceed our annual operating
budget. If earned, discretionary grants will be made on July 15th of each
year.
Additionally, the plan provides for a one-time grant of an option to
purchase 50,000 shares to Robert L. Clarke, which is intended to replace a
non-plan option previously issued to Mr. Clarke. This option will have terms
consistent with other options granted under the plan, except that its
purchase price shall be no less than $4.75 per share (the purchase price
under the previously granted option) and it will be fully vested upon
issuance. Each other option granted under the plan will vest in three equal
annual installments.
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The purchase price for each share of common stock subject to each other
option granted under the plan shall be equal to the fair market value on the
date of grant. The fair market value of a share of common stock on a
particular date will be the average of the high and low reported sales prices
or, if there are have been no sales, the average closing bid and asked prices
on the principal market on which the common stock is traded. If there are no
published quotes for a share of common stock, its fair market value will be
determined by the Board of Directors. As of July 19, 2002, the average of
the high and low sales prices per share of common stock was $3.32.
The purchase price may be paid in cash or in shares of common stock owned
by the holder of the option, or in a combination of cash and common stock.
The Board may permit the option holder to satisfy the purchase price by
delivery of a promissory note or cause us to lend funds to the option holder
sufficient for the holder to pay the purchase price of the shares. Also, the
Board may permit the option holder, in lieu of purchasing the entire number
of shares subject to purchase under the option, to relinquish all or any part
of the then unexercised portion of the option (to the extent then
exercisable) for a number of shares of common stock, for an amount of cash or
for a combination of common stock and cash equal to the excess of the fair
market value per share of common stock over the purchase price per share of
common stock specified in the option.
Each option will terminate ten years from the date of grant or such
earlier date as the Board of Directors may prescribe.
In the event we reorganize, merge or consolidate or are party to a plan
of exchange with another corporation and our shareholders receive any shares
of common stock or other securities or if we distribute ("Spin Off")
securities of another corporation to our shareholders, there shall be
substituted for the common stock subject to the unexercised portions of
outstanding options an appropriate number of shares of common stock or other
securities that were distributed to our shareholders or, in the case of a
Spin Off, the securities distributed to our shareholders together with shares
of common stock, in the number determined by the Board of Directors;
provided, that we may elect to cancel the options upon a reorganization,
merger, consolidation, plan of exchange or Spin Off or dissolution or
liquidation by giving advance written notice to each option holder and
permitting them at least thirty days to exercise the option in full.
FEDERAL INCOME TAX CONSEQUENCES OF NONQUALIFIED STOCK OPTIONS. Options
granted under the Non-Employee Directors Stock Option Plan are not intended
to qualify as incentive stock options under Section 422 of the Code. For a
discussion of the federal income tax consequences to recipients, and to us,
relating to these options, please read the section entitled "Federal Income
Tax Consequences of Nonqualified Stock Options" appearing under Proposal 2
above. For a discussion of the federal estate tax consequences to recipients
of options under the plan, please read the section entitled "Other Tax
Consequences" appearing under Proposal 2 above.
NEW PLAN BENEFITS. Because the value of the options to be granted under
the 2002 Non-Employee Director Stock Option Plan depend upon the market price
of our common stock, which fluctuates, we cannot presently determine the
benefits to be received by any particular individual or group of individuals
under the plan.
RECOMMENDATION REGARDING APPROVAL OF THE 2002 NON-EMPLOYEE DIRECTOR STOCK
OPTION PLAN
The Board of Directors recommends that you vote FOR approval of the 2002
Non-Employee Director Stock Option Plan.
PROPOSAL 4:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected the accounting firm of Grant Thornton
LLP as our independent auditors to audit the books and records of us and our
subsidiaries for the fiscal year ending April 30, 2003, subject to
ratification by our shareholders.
A representative of Grant Thornton LLP is expected to be present at the
annual meeting and will have the
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opportunity to make a statement if he or she desires to do so and is expected
to be available to respond to appropriate questions.
Arthur Andersen LLP served as our independent auditor for the fiscal year
ended April 30, 2001. On May 13, 2002, upon the recommendation of the Audit
Committee, the Board of Directors formally dismissed Arthur Andersen as our
independent auditor for the fiscal year ended April 30, 2002, and retained
Grant Thornton LLP. On May 13, 2002 (amended May 21, 2002), we filed a Form
8-K reporting Arthur Andersen's dismissal and the engagement of Grant
Thornton.
The reports of Arthur Andersen on our consolidated balance sheets as of
April 30, 2000 and 2001, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years
in the period ended April 30, 2001, included in our annual report on Form
10-K filed July 24, 2001, contained no adverse opinion or disclaimer of
opinion and were not qualified as to uncertainty, audit scope or accounting
principles. During such fiscal years and the interim periods preceding the
date of dismissal, there were no disagreements with Arthur Andersen on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Arthur Andersen, would have caused them to make reference
thereto in their report on our consolidated financial statements for such
periods. Arthur Andersen has previously delivered a letter to the SEC
indicating that it agrees with the similar statements that we made in the
Form 8-K. We had not consulted with Grant Thornton on any accounting,
auditing or financial reporting issue prior to their engagement.
RECOMMENDATION REGARDING THE RATIFICATION OF THE APPOINTMENT OF GRANT
THORNTON LLP
The Board of Directors recommends that you vote FOR ratification of this
appointment.
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OTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the fiscal year ended April 30, 2002, the Board of Directors met
five times. All directors attended 75 percent or more of the meetings of the
Board of Directors and of the committees of the Board on which they served
during the past fiscal year.
The Board of Directors has two committees: the Audit Committee and the
Executive Compensation Committee. The Audit Committee, which met five times
during the past fiscal year, acts as a direct liaison between the Board and
our independent auditors, and its functions include recommending the
engagement of auditors, reviewing the scope and results of the annual audit
and reviewing, as appropriate, our accounting policies, internal controls and
financial reporting practices. The Audit Committee operates under a written
charter approved by the Board of Directors. Members of the Audit Committee
for the fiscal year ended April 30, 2002, were Robert L. Clarke, Chairman,
Seymour M. Jacobs and W.A. Stockard, Jr. Each member of the audit committee
meets the membership requirements and are independent as defined in Rule
4200(a)(14) of the National Association of Securities Dealers, Inc.
The Compensation Committee, which met one time during the past fiscal
year, is responsible for formulating recommendations to the Board concerning
salaries, bonuses and other compensation arrangements for executive
management and for administering the 1995 Employee Stock Option Plan. During
2002, the Executive Compensation Committee was composed of three non-employee
directors, Robert L. Clarke, W.A. Stockard and W.A. Stockard, Jr. The Board
of Directors has no nominating committee.
We pay a monthly fee in the amount of $500 to each director who is not
one of our officers or employees, and reimburse their out-of-pocket expenses
incurred in connection with their services as such, including travel expenses.
In August 1995, when Robert L. Clarke joined the Board of Directors, he
was granted a non-transferable option to purchase up to 20,000 shares of
common stock, in recognition of the fact that he was the only member of the
Board who was neither one of our executive officers nor a substantial
shareholder. The option is exercisable in whole at any time or in part from
time to time at an exercise price of $11.00 per share. On August 2, 2000, in
recognition of Mr. Clark's service as a board member, the Board of Directors
granted Mr. Clark a non-transferable option to purchase up to 50,000 shares
of common stock, which is exercisable in whole at any time or in part from
time to time at an exercise price of $4.75 per share Both options will
terminate one year after Mr. Clarke ceases to be a member of the Board of
Directors, except that in the event of Mr. Clarke's death while serving as a
director the options would be exercisable by his heirs or representatives of
his estate for a period of two years after the date of death.
Walter A. Stockard, Jr. is the son of Walter A. Stockard.
OTHER EXECUTIVE OFFICERS
Our executive officers that are not also directors, each of whom serves
at the pleasure of the Board of Directors, are as follows:
<Table>
<Caption>
Name Age Position
---- --- --------
Joseph A. Pisano 56 Senior Vice President and Chief Operating
Officer
Bennie H. Duck 38 Vice President, Secretary, Treasurer and
Chief Financial Officer
</Table>
JOSEPH A. PISANO joined us in March 1998 as Senior Vice President and
Chief Operating Officer. He was
9
<Page>
previously employed by Gulf States Acceptance Company, a sub-prime auto
finance company where he served for three years as Vice President of
Operations. Prior to that, he served two years as General Manager of Nissan
Motor Acceptance Corporation. In addition, he has 27 years of experience in
lending and loan operations, including seven years as a Deputy Division
Manager with National Westminster Bank and 18 years in business development
positions at General Electric Credit Corporation.
BENNIE H. DUCK joined us in May 1996 as Vice President, Secretary,
Treasurer and Chief Financial Officer. Mr. Duck was previously employed for
ten years by Bank of America in various capacities and most recently as a
Vice President of Corporate Finance.
SUMMARY COMPENSATION TABLE
The following table sets forth, for the past three fiscal years, the
compensation of our President, Chief Financial Officer, and Chief Operating
Officer.
<Table>
<Caption>
Annual Compensation Long Term
Name and ------------------- Compensation All Other
Principal Position Year Salary Bonus Stock Options Compensation(1)
------------------ ---- ------ ----- ------------- ---------------
Tommy A. Moore, Jr. 2000 $150,000 $165,925 $ -0-
President and Chief 2001 $150,000 $233,349 $ -0-
Executive Officer 2002 $150,000 $ -0- $ 1,163
Joseph A. Pisano 2000 $150,000 $ 15,000 $ -0-
Senior Vice President and 2001 $150,000 $ -0- 30,000(2) $ -0-
Chief Operating Officer 2002 $150,000 $ 5,000 $ 1,125
Bennie H. Duck 2000 $140,000 $ 15,000 $ -0-
Secretary, Treasurer and 2001 $140,000 $ -0- 30,000(2) $ -0-
Chief Financial Officer 2002 $150,000 $ -0- $ 1,092
</Table>
- --------------------
(1) Reflects amounts contributed by us as regular matching contributions under
our 401(K) Plan.
(2) Consists of options under our 1995 Employee Stock Option Plan granted
effective August 2, 2000 and April 5, 2001 covering 20,000 shares of common
stock and 10,000 shares of common stock, respectively.
EMPLOYMENT AGREEMENTS
The employment agreements with Messrs. Duck and Pisano expired on July 31,
2000. No additional employment agreements have been entered into between the
Company and any executive officer or key employee.
10
<Page>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the annual percentage change in
the cumulative total shareholder return on the Company's (FIFS) Common Stock
from May 1, 1997 through April 30, 2002 against the cumulative total return
indices of the Nasdaq Stock (U.S.) Index and the Nasdaq Financial Index for
the comparable period. The historical stock price performance for the
Company's stock shown on the graph below is not necessarily indicative of
future stock performance. The Company will not make nor endorse any
predictions of future stock performance.
[GRAPH]
<Table>
03/31/01 612.559 713.3460 4.000 147.570 145.244
04/30/01 703.926 740.8740 3.600 169.581 150.849
05/31/01 702.905 772.751 3.2 169.335 157.340
06/30/01 721.917 805.837 3.4 173.915 164.076
07/31/01 676.065 823.239 3.7 162.869 167.620
08/31/01 602.473 795.551 3.6 145.140 161.982
09/30/01 500.958 773.29 3.25 120.685 157.450
10/31/01 565.28 750.298 3.15 136.180 152.768
11/30/01 645.742 785.065 3.101 155.564 159.847
12/31/01 651.174 816.586 3.497 156.873 166.265
01/31/02 646.237 829.017 3.451 155.683 168.796
02/28/02 579.043 839.925 3.55 139.496 171.017
03/31/02 617.016 887.766 3.55 148.644 180.758
04/30/02 566.005 920.139 3.7 136.355 187.350
</Table>
COMPENSATION COMMITTEE REPORT
The Compensation Committee establishes and administers the Company's
executive compensation programs. Executive officers of the Company whose
compensation is established by the Compensation Committee are Tommy A. Moore,
Jr., Joseph A. Pisano and Bennie H. Duck.
The Compensation Committee strives to establish and maintain a
competitive, fair and equitable compensation and benefits policy designed to
retain personnel and to stimulate their useful and profitable efforts on
behalf of the Company. Under the supervision of the Compensation Committee,
the Company develops and implements compensation policies, plans and programs
designed to enhance the profitability of the Company, and therefore
shareholder value, by aligning closely the financial interests of the
Company's senior executives with those of its shareholders. The Compensation
Committee has adopted the following guidelines for making its compensation
decisions:
- Provide a competitive total compensation package that enables the
Company to attract and retain key executives.
- Integrate all compensation programs with the Company's annual and
long-term business objectives and strategy and focus executive behavior
on the fulfillment of those objectives.
- Provide variable compensation opportunities that are directly linked
to the performance of the Company and that align executive remuneration
with the interests of shareholders.
The Compensation Committee establishes all components of executive pay
and reports and recommends its
11
<Page>
decisions to the Board for approval. During 2002, the primary components of
the Company's executive compensation program were (1) base salary, (2)
bonuses, and (3) stock option grants under the Company's 1995 Employee Stock
Option Program.
The Compensation Committee reviews the salary of each of these executive
officers annually. In determining each executive officer's base salary the
Compensation Committee considers the individual's performance, the
performance of the Company and the individual's contribution to that
performance, as well as the compensation practices of other companies. No
changes were made to the base salaries of Mr. Moore and Mr. Pisano after
consideration of these executives' salaries for 2002, and the overall
financial performance of the Company during 2002. Mr. Pisano was awarded a
bonus of $5,000 in August as a cost of living adjustment because his base
salary had remained constant since he joined the Company in 1998. Mr. Duck's
salary was increased from $140,000 to $150,000 to align his base compensation
with other members of the executive management team and in consideration of
the fact that Mr. Duck's base salary had not been increased since 1998.
The bonus plan is formulated and paid on an annual basis following the
Company's fiscal year end. A determination of whether to pay a bonus and the
amount of any bonus is based primarily upon the overall performance of the
Company and secondarily on the individual performance of each executive
officer. During 2002, no bonuses were paid to executive officers as a
consequence of the Company's financial performance for the year falling below
internally generated plans.
Awards under the 1995 Employee Stock Option Plan to executive officers,
management and all other employees of the Company must be submitted to the
Compensation Committee for approval. The Compensation Committee believes
that grants of stock options to executive officers, management and other key
employees of the Company align the interests of these individuals with the
interests of stockholders. Stock options provide an ongoing, long-term,
incentive to executive officers, management and key employees as the value of
the stock options depends on the continued success of the Company. During
2002, the Compensation Committee elected not to award any stock options to
executive management as a consequence of the Company's financial performance
for the year falling below internally generated plans.
As of June 30, 2002, stock options covering a total of 260,500 shares of
common stock had been awarded under the 1995 Employee Stock Option Plan, with
39,500 shares remaining available for future grants. The Compensation
Committee proposed to the Board of Directors that at the 2002 Annual Meeting
the number of shares of common stock available under the 1995 Employee Stock
Option Plan be increased to permit the Company to award stock options to
executive officers, management and employees as both an incentive to achieve
operating objectives and as a recognition for individual performance and
contributions to the overall success of the Company. Specifically, the
Compensation Committee recommended that the number of shares available under
the Plan be increased from 300,000 to 500,000.
Date: July 18, 2002
2002 COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
W.A. Stockard
Robert L. Clarke
Walter A. Stockard, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the 2002 fiscal year, no executive officer of the Company served
as (i) a member of the compensation committee (or other board committee
performing equivalent functions) of another entity, one of whose executive
officers served on the Compensation Committee, (ii) a director of another
entity, one of whose executive officers served on the Compensation Committee,
or (iii) a member of the Compensation Committee (or other board committee
performing equivalent functions) of another entity, one of whose executive
officers served as a director of the Company.
12
<Page>
AUDIT COMMITTEE REPORT
To the Board of Directors of First Investors Financial Services Group, Inc.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the fiscal year ended April 30, 2002. We
have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, COMMUNICATIONS WITH THE
AUDIT COMMITTEES, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants. We have also received and
reviewed the written disclosures and the letter from the independenet
auditors required by Independent Standard No. 1, INDEPENDENT DISCUSSIONS WITH
AUDIT COMMITTEES, as amended, by the Independent Standards Board, and have
discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommend to
the Board of Directors that the financial statements referred to above be
included in the Company's Annual Report on Form 10-K for the year ended April
30, 2002.
FISCAL 2002 AUDIT FEE SUMMARY
In 2001, the Company appointed Arthur Andersen LLP as its independent
auditor for the fiscal year ended 2002. In conjunction with that
appointment, Arthur Andersen LLP performed certain reviews and other services
during the first three fiscal quarters ended January 31, 2002. In May 2002,
prior to commencement of the 2002 audit, the Company elected to dismiss
Arthur Andersen LLP and retained Grant Thornton LLP to perform the 2002
audit. Accordingly, the Company incurred fees for reviews of its quarterly
financial statements and other fees in connection with work performed by
Arthur Andersen LLP through the nine-month period ended January 2002, and
incurred fees in connection with the 2002 audit prepared by Grant Thornton.
The following is a description of those fees:
<Table>
Audit Fees (Arthur Andersen LLP) $55,000
Audit Fees (Grant Thornton LLP) $140,000
Financial Information Systems Design
And Implementation Fees $0
Income Tax Fees (Arthur Andersen LLP) $38,000
All Other Fees (Arthur Andersen LLP) $33,000
</Table>
The Audit Committee has considered whether the provision of the non-audit
services by the Company's principal auditor is compatible with maintaining
auditor independence and concluded that any non-audit services performed by
the principal auditor did not create a conflict of interest with respect to
the issuance of the 2002 audit opinion.
Date: July 18, 2002
2002 AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
Robert L. Clarke
W.A. Stockard, Jr.
Seymour M. Jacobs
13
<Page>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding beneficial
ownership of our common stock, as of July 22, 2002, by: (i) each person who
is known by us to own beneficially more than 5% of the issued and outstanding
shares of common stock, (ii) each director, and (iii) each executive officer
named in the Summary Compensation Table elsewhere herein. Unless otherwise
indicated, each of the persons has sole voting and dispositive power over the
shares of common stock shown as beneficially owned by such person.
<Table>
<Caption>
Amount and
Nature of
Position Beneficial Percent of
Name and Address with Company Ownership Class
---------------- ------------ --------- -----
Tommy A. Moore, Jr. Chairman of the Board, President 400,000 7.7%
675 Bering, Suite 710 and Chief Executive Officer
Houston, Texas 77057
Joseph A. Pisano Senior Vice President 14,000(1) *
675 Bering, Suite 710 and Chief Operating Officer
Houston, Texas 77057
Bennie H. Duck Vice President, Secretary, 32,000(2) *
675 Bering, Suite 710 Treasurer and Chief Financial
Houston, Texas 77057 Officer
Walter A. Stockard, Jr. Director 360,000(3) 7.0%
2001 Kirby, Suite 901
Houston, Texas 77019
Walter A. Stockard Director 75,000 1.5%
2001 Kirby, Suite 901
Houston, Texas 77019
Roberto Marchesini Director and Vice President - 31,000(4) *
675 Bering, Suite 710 Portfolio Risk Management
Houston, Texas 77057
Robert L. Clarke Director 70,000(5) 1.4%
711 Louisiana, Suite 2900
Houston, Texas 77002
Seymour M. Jacobs Director 369,500(6) 7.1%
One Fifth Avenue
New York, New York 10003
John H. Buck Director 5,000(7) *
5100 Bank of America Center
700 Louisiana
Houston, Texas 77002
J. Randal Roberts 366,669(8) 7.1%
15 Sundown Parkway
Austin, Texas 78746
JAM Partners, Ltd. 324,000(6) 6.3%
One Fifth Avenue
New York, New York 10003
14
<Page>
John A. Levin & Company 279,300 5.4%
One Rockefeller Plaza, 19th Floor
New York, New York 10020
Dimensional Fund Advisors 457,400 8.8%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Kristene S. Moore 400,000 7.7%
P.O. Box 460445
Houston, Texas 77056
All executive officers and 1,356,500(9) 26.2%
directors as a group (10 persons)
</Table>
- --------------------
* Less than 1% of the Common Stock outstanding.
(1) Reflects the currently exercisable portion of stock options held by
Mr. Pisano covering 40,000 shares in the aggregate.
(2) Reflects the currently exercisable portion of stock options held by
Mr. Duck covering 60,000 shares in the aggregate.
(3) Consists entirely of shares held by Mr. Stockard as custodian for two
minor children, as to which shares he disclaims beneficial ownership.
(4) Reflects the currently exercisable portion of stock options held by
Dr. Marchesini covering 45,000 shares in the aggregate.
(5) Reflects 70,000 shares that may be acquired pursuant to the exercise of a
stock option.
(6) Includes 324,000 shares held by JAM Partners, L.P., 11,700 shares held by
Mr. Jabobs individually, 25,000 shares held by JAM Special Opportunities
Fund L.P. and 8,800 shares held by other affiliated individuals or entities
as to which Mr. Jacobs may be deemed to be a beneficial holder.
(7) Consists entirely of shares owned by J.H. Buck Descendants' Trust over which
Mr. Buck has sole voting and dispository powers.
(8) Includes 20,000 shares held by a trust for a minor child of Mr. Roberts, as
to which shares he disclaims beneficial ownership.
(9) Includes 147,000 shares issuable upon exercise of stock options that are
currently exercisable.
RELATED PARTY TRANSACTIONS
On December 3, 2001, we entered into an agreement with W.A. Stockard, a
member of our Board of Directors under which we may, from time to time,
borrow up to $2.5 million. The proceeds of the borrowings will be utilized
to fund certain private and open market purchases of our common stock
pursuant to a Stock Repurchase Plan authorized by the Board of Directors and
for general corporate purposes. Borrowings under the facility bear interest
at a fixed rate of 10 percent per annum. The facility is unsecured and
expressly subordinated to our senior credit facilities. The facility matures
on December 3, 2008, but may be repaid at any time unless we are in default
on one of our other credit facilities. As of July 23, 2002, $1,746,280 was
outstanding under this facility. Total interest expense incurred under this
facility during the fiscal year ended April 30, 2002, was $17,260.27.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, directors, executive officers and beneficial owners of more than ten
percent of the outstanding common stock are required to file reports with the
Securities and Exchange Commission reporting their beneficial ownership of
common stock at the time they become subject to the reporting requirements
and at the time of any changes in beneficial ownership occurring thereafter.
In November 2000, when Mr. Seymour Jacobs was elected to the Board of
Directors, Mr. Jacobs did not file a Form 3 disclosing that he beneficially
held ownership in 338,500 shares of common stock within the time period
required which, in the case of this Form 3 filing, was December 10, 2000.
Mr. Jacobs subsequently filed a Form 3 disclosing his ownership position in
November 2001.
Based upon a review of reports submitted to us and representations of
persons known by us to be subject to
15
<Page>
these reporting requirements, we believe that all such reports due in the
fiscal year ended April 30, 2002, other than those discussed herein, were
filed on a timely basis.
SHAREHOLDER PROPOSALS
Any proposals of shareholders which are intended to be presented at the
2003 Annual Meeting of shareholders must be received by the Secretary by
April 5, 2003, for consideration for inclusion in the proxy statement and
form of proxy for that meeting. Any such proposals should be submitted to us
at 675 Bering Drive, Suite 710, Houston, Texas 77057, attention: Corporate
Secretary.
Such proposals must also have complied with Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, if the proposal is to be
considered for inclusion in our proxy statement for such meeting. We must
receive notice of any shareholder proposal to be brought before the meeting
outside the process of Rule 14a-8 at the address noted above not less than 45
days prior to the meeting; provided, if we give notice or prior public
disclosure of the date of the annual meeting less than 50 days before the
meeting, such shareholder's notice must be received not later than the close
of business on the seventh day following the date on which our notice of the
date of the annual meeting was mailed or public disclosure made.
EXPENSES OF SOLICITATION
We will bear the cost of solicitation of proxies. Solicitation will be
made initially by mail. Our directors, officers and other regular employees
may, without compensation other than their regular compensation, solicit
proxies by mail, telephone or other form of direct communication. We will
also reimburse brokerage firms and other custodians, nominees and fiduciaries
for their reasonable expenses incurred in forwarding solicitation material to
beneficial owners.
By Order of the Board of Directors
Bennie H. Duck, Secretary
16
<Page>
FIRST INVESTORS FINANCIAL
SERVICES GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, SEPTEMBER 10, 2002
- --------------------------------------------------------------------------------
FIRST INVESTORS FINANCIAL SERVICES GROUP, INC. PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS SEPTEMBER 10, 2002
Tommy A. Moore, Jr., and Roberto Marchesini, and each or any of them, with
full power of substitution and revocation in each, are hereby appointed as
Proxies authorized to represent the undersigned, with all powers which the
undersigned would possess if personally present, to vote the Common Stock of
the undersigned at the Annual Meeting of Shareholders of FIRST INVESTORS
FINANCIAL SERVICES GROUP, INC. to be held at 675 Bering Drive, Suite 710,
Houston, Texas 77057 on Tuesday, September 10, 2002 at 10:00 a.m., and at any
postponements or adjournments of that meeting, as set forth below, and in
their discretion upon any other business that may properly come before the
meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES NAMED AND FOR EACH OF THE OTHER
PROPOSALS SPECIFIED HEREIN.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<Page>
<Table>
- PLEASE DETACH HERE -
- ------- -------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4.
1. Election of directors: 01 Tommy A. Moore, Jr. 05 Roberto Marchesini [ ] Vote FOR [ ] Vote WITHHELD
02 Walter A. Stockard 06 Seymour M. Jacobs all nominees from all nominees
03 Walter A. Stockard, Jr. 07 John H. Buck (except as marked)
04 Robert L. Clarke
_________________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE,
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) _________________________________________________
2. Proposal to increase, by 200,000 shares, the number of shares [ ] For [ ] Against [ ] Abstain
of Common Stock available for issuance under the 1995
Employee Stock Option Plan.
3. Proposal to establish the 2002 Non-employee Director [ ] For [ ] Against [ ] Abstain
Stock Option Plan.
4. Ratification of the appointment of Grant Thornton LLP as [ ] For [ ] Against [ ] Abstain
independent accountants of the Company and its subsidiaries
for the fiscal year ending April 30, 2003.
5. In their discretion the proxies are authorized to vote upon
such other matters as may come before the meeting or any
adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date _________________________________________
_________________________________________________
_________________________________________________
Signature(s) in Box
Please sign exactly as your name(s) appears on
Proxy. If held in joint tenancy, all persons must
sign. Trustees, administrators, etc., should
include title and authority. Corporations should
provide full name of corporation and title of
authorized officer signing the proxy.
- ------- -------
</Table>