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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 [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Point West 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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previously. Identify the previous filing by registration statement number,
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Notes:
POINT WEST CAPITAL CORPORATION
1700 MONTGOMERY STREET, SUITE 250
SAN FRANCISCO, CALIFORNIA 94111
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
MAY 11, 1998
----------------------
To the Stockholders of Point West Capital Corporation (the "Company" or "Point
West"):
You are cordially invited to attend the annual meeting of stockholders of
the Company (the "Meeting") to be held at 8:00 a.m. on May 11, 1998 at Business
Wire, 44 Montgomery Street, 39th Floor, San Francisco, California 94104 to (i)
elect one director to serve until 2001 and until his successor is elected, (ii)
to act on a proposal to amend and restate the Company's 1995 Stock Option Plan
(the "Option Plan") and (iii) to transact such other business as may properly
come before the Meeting.
All stockholders are urged to attend the Meeting or to vote by proxy. If
you do not expect to attend the Meeting in person, please sign and return the
accompanying proxy in the enclosed postage prepaid envelope. If you later find
that you can be present or for any other reason desire to revoke your proxy, you
can do so at any time before the voting. See "General."
This Notice of Annual Meeting and Proxy Statement (this "Notice") is
furnished in connection with the solicitation of proxies by the Board of
Directors of the Company from the holders of the Company's common stock, $.01
par value (the "Common Stock"), in connection with the Meeting and all
postponements or adjournments thereof. This Notice, the accompanying proxy card
and the Company's Annual Report on Form 10-K for the year ended December 31,
1997 (the "Form 10-K") are first being mailed to stockholders on or about April
17, 1998, for the purposes set forth above.
GENERAL
Only stockholders of record at the close of business on April 7, 1998 (the
"Record Date") are entitled to receive notice of the Meeting and to vote the
shares of Common Stock held by them on the Record Date at the Meeting or any
postponements or adjournments thereof.
If the accompanying proxy card is properly signed and returned to the
Company and is not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote the shares of Common
Stock represented thereby for the election as director of the Company of the
nominee proposed by the Board of Directors, for the proposed amendment and
restatement of the Option Plan and with regard to all other matters as may
properly come before the Meeting, as recommended by the Board of Directors or,
if no such
recommendation is given, in their own discretion. Each stockholder may revoke a
previously granted proxy at any time before it is voted by filing with the
Secretary of the Company a revoking instruction or a duly executed proxy bearing
a later date. The powers of the proxy holders will also be suspended if the
person executing the proxy attends the Meeting and requests to vote in person.
Attendance at the Meeting will not, in itself, constitute revocation of a
previously granted proxy.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. The Company will also request brokerage firms, banks, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares of Common Stock as of the Record Date and will reimburse the cost of
forwarding the proxy materials in accordance with customary practice.
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding at the close of business on
the Record Date will constitute a quorum. As of the Record Date, 3,253,324
shares of Common Stock were outstanding. Each outstanding share entitles its
holder to cast one vote on each matter to be voted upon at the Meeting. Under
Delaware law, properly executed proxies that are marked "abstain" or are held in
"street name" by brokers that are not voted on one or more particular proposals
(if otherwise voted on at least one proposal) will be counted for purposes of
determining whether a quorum has been achieved at the Meeting. Abstentions will
have the same effect as a vote against the proposal to which such abstention
applies. Broker non-votes will be treated neither as a vote for nor as a vote
against any of the proposals to which such broker non-votes apply. Proxy cards
that are timely signed and returned with no other marking will be voted in
accordance with the recommendation of the Board of Directors. Proxies and
ballots will be received and tabulated by the transfer agent for the Common
Stock. A list of stockholders of record as of the Record Date will be available
at the Company's executive offices for 10 days prior to the Meeting and will
also be available at the Meeting. Such list may be examined during ordinary
business hours by any stockholder of record for any purpose germane to the
Meeting.
ELECTION OF DIRECTORS
The Board of Directors presently consists of five members, divided into
three classes, with one class of directors elected each year for a three-year
term. The term of the director in Class 3 expires in 1998. John Ward Rotter,
who is currently serving as a director of the Company in Class 3, has been
nominated by the Board of Directors for re-election to a term expiring in 2001.
At the Meeting, stockholders will elect one director to Class 3. Proxies
cannot be voted for more than one person. Under Delaware law, the one nominee
who receives the most votes at the meeting will be elected as director. Unless
authority to do so is specifically withheld, the persons named in the
accompanying proxy will vote for the election of John Ward Rotter. See
"Directors and Executive Officers" for information regarding John Ward Rotter
and the other four directors whose terms of office extend beyond the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
AS A DIRECTOR OF JOHN WARD ROTTER.
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DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS
The name, age and current position(s) of each director and executive
officer of Point West are as follows:
NAME Age Positions and Offices with the Company
- ------------------------------------ ---------- -------------------------------------------------------
Bradley N. Rotter (1) 42 Director and Chairman of the Board of Directors
Alan B. Perper 39 Director and President
John Ward Rotter (1) 40 Director, Executive Vice President and Chief
Financial Officer
Stephen T. Bow 66 Director
Paul A. Volberding, M.D. 48 Director
_______________
(1) Bradley Rotter and John Ward Rotter are brothers.
Bradley N. Rotter has served as a director and as Chairman of the Board of
Directors since the Company's formation in September 1992. Mr. Rotter is the
managing member of The Echelon Group of Companies, LLC ("New Echelon LLC"), a
Delaware limited liability company which provides investment and financial
services. See "Security Ownership of Certain Beneficial Owners and Management."
He was the majority stockholder of The Echelon Group Inc. ("Echelon"), a
financial service company which was merged into Point West in 1995, and served
as a director and Chairman of the Board of Echelon from 1988 until the merger.
From 1986 to 1988, he was a founding member of Rotter, Mawhorter & Gruye, Inc.,
a fixed income trading firm. Prior thereto, Mr. Rotter served in various
positions with a number of financial services firms, including Merrill Lynch,
E.F. Hutton and A.G. Becker. He received an M.B.A. from the University of
Chicago.
Alan B. Perper has served as a director and as President since the Company's
formation. Mr. Perper is a member of New Echelon LLC and was a stockholder and
director of Echelon and its Senior Vice President from 1991 until the merger.
From 1990 to 1991, he was a founding partner in Steinberg & Perper, a
partnership that traded in foreign currencies and stock index futures. Prior
thereto, he was a corporate associate at the law firms of Jones, Day, Reavis &
Pogue (from 1988 to 1990) and Isham, Lincoln & Beale (from 1985 to 1988). He
received an M.B.A. from the University of Chicago and a J.D. from Duke
University.
John Ward Rotter has served as a director and as an executive officer since
the Company's formation. He has served as Executive Vice President (since 1994)
and Chief Financial Officer (since September 1995). Mr. Rotter is a member of
New Echelon LLC, was a stockholder and director of Echelon and served as
Echelon's President from 1988 until the merger. From 1987 to 1988, he was an
Administrator Researcher at Rotter, Mawhorter & Gruye, Inc. Prior thereto, Mr.
Rotter served as an officer in the United States Army (Corps of Engineers) after
graduating from the United States Military Academy in 1979. He has a
Professional Engineering license from the Commonwealth of Virginia.
Stephen T. Bow has served as a director of the Company since March 1996. He
has been the owner and president of Steve Bow & Associates, Inc., a business
consulting firm, since January 1, 1997. He served as Chairman and Chief
Executive Officer of Anthem Life Insurance Companies from October 1995 to
December 1996 (served as President and Chief Executive Officer of Anthem from
June 1993 to
3
December 1996) and Community National Assurance Company from October 1995 to
December 1996. He also served as Executive Vice President and a director of
Associated Insurance Companies, Inc. (from June 1993 to December 1996) and
Chairman of Acordia of San Francisco, a subsidiary of Acordia, Inc., an
insurance broker (October 1993 to August 1996). From 1993 to June 1994, Mr. Bow
served as Chairman of the Board and Chief Executive Officer of Southeastern
Group, Inc. and Southeastern United Corporation, each of which is a health
insurance company. From 1989 to 1993, he was President and Chief Executive
Officer of Blue Cross and Blue Shield of Kentucky (renamed Southeastern Mutual
in 1990) and President and Chief Executive Officer of Delta Dental of Kentucky.
Prior to 1989, Mr. Bow held a number of management positions with Metropolitan
Life Insurance Company and its affiliated companies.
Paul A. Volberding, M.D. has served as a director of the Company since
March 1996. Dr. Volberding has been a professor or associate professor of
medicine at the University of California, San Francisco since 1987 and the
director of the Center for AIDS Research at that institution since 1988. He has
also served as the chief of the Medical Oncology Division and the AIDS Program
at San Francisco General Hospital for over ten years.
The Board of Directors elects executive officers annually and such officers
serve at the discretion of the Board of Directors.
BOARD OF DIRECTORS
CLASSIFICATION OF BOARD
The Board of Directors, which presently consists of five members, is
divided into three classes (designated Class 1, Class 2 and Class 3) as nearly
equal in number as possible. Currently, Class 1 consists of Bradley N. Rotter
and Stephen T. Bow, Class 2 consists of Alan B. Perper and Paul A. Volberding
and Class 3 consists of John Ward Rotter, who serve until the Company's annual
stockholders' meetings to be held in 1999, 2000 and 1998, respectively. At each
annual stockholders' meeting, directors nominated to the class of directors
whose term is expiring at that annual meeting will be elected for a term of
three years, and the remaining directors will continue in office until their
respective terms expire. Accordingly, approximately one-third of the Company's
directors is elected at each annual stockholders' meeting and generally a
director will stand for election only once every three years.
Committees
The Board of Directors has an Audit Committee, currently comprised of
Stephen T. Bow, John Ward Rotter and Paul A. Volberding, and a Compensation
Committee, currently comprised of Stephen T. Bow and Paul A. Volberding. The
functions of the Audit Committee are to recommend annually to the Board of
Directors the appointment of the independent public accountants of the Company,
discuss and review the scope and the fees of the prospective annual audit,
review the results thereof with the Company's independent public accountants,
review compliance with existing major accounting and financial policies of the
Company, review the adequacy of the financial organization of the Company,
review management's procedures and policies relative to the adequacy of the
Company's internal accounting controls and compliance with federal and state
laws relating to accounting practices, and review and approve (with the
concurrence of a majority of the disinterested directors, if any, of the
Company) transactions, if any, with affiliated parties. The functions of the
Compensation Committee are to review and approve annual salaries and bonuses for
all officers, review, approve and recommend to the Board of Directors the terms
and conditions of all employee benefit plans or changes thereto, and administer
the Option Plan. The Board of
4
Directors also has a Director Plan Committee, currently comprised of Bradley
Rotter and Alan Perper, the sole function of which is to administer the Stock
Option Plan for Non-Employee Directors (the "Director Plan"). The Board of
Directors does not have a nominating committee.
MEETINGS
During 1997, six meetings of the Board of Directors were held, one meeting
of the Audit Committee was held and three meetings of the Compensation Committee
were held. The Director Plan Committee did not meet during 1997. During 1997,
all directors attended 100%, in the aggregate, of the number of meetings of the
Board of Directors and the committees of which they were members during their
periods of service as directors and committee members.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3, 4 and 5 furnished to the Company by its
directors and Executive Officers and by persons known to the Company to
beneficially own 10% or more of the outstanding common stock, the Company notes
that there were no deficiencies in Section 16 reports related to 1997 except as
follows: New Echelon LLC reported on a Form 5 three transactions that should
have been reported earlier on a Form 4 and each of Bradley Rotter, John Ward
Rotter and Alan Perper reported on an amended Form 5 (that was filed late) three
transactions by New Echelon LLC that should have been reported earlier on a Form
4.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
The Company pays each non-employee director an annual retainer of $15,000
and a fee of $750 for each board or committee meeting attended. All directors
are reimbursed for expenses incurred to attend meetings of the Board of
Directors or committees thereof.
In addition, the Director Plan provides for the automatic grant of certain
options to non-employee directors. Any person who becomes a non-employee
director automatically receives at such time a non-qualified option to purchase
10,000 shares of Common Stock at an exercise price equal to fair market value on
the date of grant (i.e. the date of becoming a director). Such options vest
33%, 33% and 34% at the first, second and third annual stockholders' meeting
following the date of grant if the non-employee director serves as such through
such meeting. The Director Plan also provides that at each annual stockholders'
meeting, each non-employee director elected at or continuing his term after such
meeting receives automatically a non-qualified option to purchase 5,000 shares
of Common Stock at an exercise price equal to fair market value on the date of
grant (i.e. the date of the stockholders' meeting). Such options vest 100%
after the non-employee director has served as such until the next annual
stockholders' meeting. All options vest immediately (to the extent they would
have vested at the next annual stockholders' meeting) upon a Change of Control
(as defined in the Director Plan). Each option expires after ten years or
earlier upon certain events. During 1997, each of Mr. Bow and Dr. Volberding
received on the date of the 1997 annual stockholders' meeting an option under
the Director Plan to purchase 5,000 shares with an exercise price of $3.4375.
If the stockholders approve the proposed amendment and restatement of the
Option Plan, non-employee directors will also be eligible to receive
discretionary option grants thereunder. See "Option Plan Amendment."
5
SUMMARY COMPENSATION TABLE
The table below provides information relating to compensation for the years
ended December 31, 1997, 1996 and 1995, for each of the Company's executive
officers. The amounts shown below reflect all compensation which was earned in
the respective year by the executive officers.
SUMMARY COMPENSATION TABLE
--------------------------
LONG-TERM
Compensation
------------
ANNUAL COMPENSATION AWARDS
------------------- ------
All Other
NAME AND Securities Underlying COMPENSATION
Principal Position YEAR SALARY ($)(1) BONUS ($) OPTIONS/SARS (#) ($)(2)
- -------------------------- ------ --------------- ------------- --------------------- ------------
Bradley N. Rotter 1997 165,000 17,500 10,000 18,228
Chairman of the Board 1996 115,000 17,250 -- 16,928
1995 115,000 -- -- 2,629
Alan B. Perper 1997 165,000 17,500 10,000 18,228
President 1996 115,000 17,250 -- 16,928
1995 115,000 -- -- 25,638
John W. Rotter 1997 165,000 17,500 10,000 18,228
Executive Vice President 1996 115,000 17,250 -- 14,476
1995 115,000 -- -- 19,707
_______________
(1) Prior to October 1, 1995, all executive salaries were earned but were not
paid until the Company's initial public offering in February 1996.
(2) Represents contributions to the Company's profit sharing plan related to
compensation earned during the indicated year.
OPTIONS
The Option Plan authorizes the granting of options to purchase shares of
Common Stock to employees (including officers) and consultants of the Company
and its subsidiaries. The Compensation Committee is authorized to grant
options with such terms, including price, vesting, termination and other, as
they deem appropriate.
6
The following tables provide information relating to stock options granted to
the executive officers during 1997 under the Option Plan and options held by the
executive officers at the end of 1997. No executive officer exercised a stock
option during 1997. No SARs have been granted to the executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
INDIVIDUAL GRANTS (1) POTENTIAL
- ----------------------------------------------------------------------------------- REALIZABLE
NUMBER OF VALUE AT ASSUMED RATES
SECURITIES PERCENT OF TOTAL OF STOCK PRICE
UNDERLYING OPTIONS/SARS APPRECIATION FOR
OPTIONS/ GRANTED TO EXERCISE OPTION TERMS (2)
SARS EMPLOYEES IN OR EXPIRATION ----------------
NAME GRANTED FISCAL YEAR BASE PRICE DATE 5% ($) 10% ($)
- -------------------- -------------- ----------------- ------------- -------------- ------ -------
Bradley N. Rotter 10,000 12.3% $3.438 11/17/07 21,621 54,793
Alan B. Perper 10,000 12.3% $3.438 11/17/07 21,621 54,793
John Ward Rotter 10,000 12.3% $3.438 11/17/07 21,621 54,793
_______________
(1) Options are incentive stock options. Options vest with respect to 20% of
the shares covered thereby on each of the first through fifth anniversaries
of the date of grant. Options will vest in full upon a Change of Control
(as defined in the agreements evidencing the options).
(2) Based on a ten-year option term and annual compounding, the 5% and 10%
calculations are set forth in compliance with Securities and Exchange
Commission rules. The appreciation calculations are not necessarily
indicative of future values of stock options or of the Common Stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
----------------------------------------------------
AND FISCAL-YEAR END OPTION/SAR VALUES
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NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
YEAR END (#) YEAR-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
- ---------------------- ------------------------------ --------------------------------
Bradley N. Rotter 0 / 10,000 0 / 3,120
Alan B. Perper 0 / 10,000 0 / 3,120
John Ward Rotter 0 / 10,000 0 / 3,120
_______________
(1) Value is calculated by multiplying the number of shares of Common Stock
underlying the stock option by the difference between the closing price of
a share of Common Stock on December 31, 1997 as reported by The Nasdaq
Stock MarketSM ($3.75) and the exercise price of the stock option.
7
PROFIT-SHARING PLAN
The Company maintains a profit sharing plan (the "Plan") for its employees.
Each employee who has been employed for at least one year becomes a participant
in the Plan. The Plan provides for discretionary annual contributions by the
Company for the account of each participant. In any year in which the Plan is
"top-heavy" within the meaning of the Code, the Plan requires, consistent with
the Code, that a minimum contribution be made for non-key employees. The
contribution is allocated among participants based on their compensation under
an allocation formula integrated with Social Security. Participants vest 20% in
their Plan accounts after two years of service (excluding any service prior to
1993) and an additional 20% after each of the next four years of service. Upon
termination following permanent disability or on retirement at or after age 65,
all amounts credited to a participant's account are distributable, in a lump sum
payment or in installments, as directed by the participant. Upon death, all
amounts credited to a participant's account become fully vested and are
distributed to the participant's surviving spouse or designated beneficiary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the Compensation Committee was comprised of Mr. Bow and Dr.
Volberding.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised of two
non-employee directors. This Committee's responsibilities include approving
compensation for all officers, reviewing and recommending to the Board of
Directors the terms and conditions of all employee benefit plans and changes
thereto and administering the Option Plan.
The Compensation Committee's goals are to assure that executive
compensation is linked to the Company's business strategies, goals and
performance, and that the Company's programs attract, retain and motivate the
high quality executives required for the success of the business. These
objectives are achieved through the programs summarized below.
All three of the Company's executive officers received essentially the same
compensation during 1997 because the Compensation Committee determined that the
officers contributed different, but equally valuable, services to the Company.
BASE SALARY
The Compensation Committee increased the executive officer's base salaries
for the first time since 1993. The Compensation Committee believed that such
increase was warranted in light of current market conditions for employees, such
as the executive officers, of specialty finance companies. The Compensation
Committee obtained information from Jefferies & Company, Inc., the investment
banking firm advising the Company with respect to the Company's strategic
direction, regarding comparable compensation levels for executive officers of
specialty finance companies. The Compensation Committee also believed that such
increase was warranted in light of the successful efforts of the executive
officers to obtain purchase agreements for a large number of the Company's life
insurance policies. Base salaries for the executive officers will continue to
be determined by evaluating the responsibilities of the respective position and
comparing (informally) such salaries to those of other executive positions in
the marketplace.
8
From time to time, the Compensation Committee may survey executive salaries of
companies in the financial services industries for the purposes of such
comparison.
ANNUAL BONUSES
The executive officers have an opportunity to earn annual bonuses based on
financial and non-financial goals. There are no set preferences for any
financial or non-financial performance measure, and the Compensation Committee's
decision regarding the bonus is ultimately subjective. There is no requirement
for an annual bonus. The Compensation Committee awarded each of the executive
officers an annual bonus payout with respect to 1997 equal to approximately 10%
of annual salary in 1997. The significant factors in the decision for the 1997
bonus were the successful consummation of the sale of a large number of the
Company's life insurance policies and the initiation of two new businesses
during 1997.
STOCK OPTIONS
The Compensation Committee has the authority to grant stock options to the
executive officers under the Option Plan and to determine the terms of such
options. The Compensation Committee believes that stock options can serve to
focus the executive officers on long-term objectives, including maximization of
stockholder value. The Compensation Committee's decision regarding stock option
grants is ultimately subjective. There is no requirement for stock option
grants. During 1997, the Compensation Committee granted each of the executive
officers a stock option for 10,000 shares of Common Stock which will vest over a
five-year period. The exercise price of the options is equal to the fair market
value on the date of grant. The significant factors in the decision for the
stock option grants were the successful consummation of the sale of a large
number of the Company's life insurance policies and the initiation of two new
businesses during 1997.
PROFIT SHARING PLAN
The Company's profit sharing plan also provides long term incentive for the
executive officers and other employees. The Compensation Committee decides the
Company's overall annual contribution percentage for all plan participants. In
1997, the Company made a contribution of 10% of the eligible compensation base.
The contribution is allocated among participants based on their compensation
under an allocation formula integrated with Social Security. See "Profit-
Sharing Plan."
THE COMPENSATION COMMITTEE
Stephen T. Bow
Paul A. Volberding
9
PERFORMANCE GRAPH
The following graph compares the yearly change in the Company's cumulative
return on its Common Stock during 1997 and 1996 with that of the Nasdaq
Financial Stock Index and the Nasdaq Stock Market Index. The comparison assumes
$100 was invested on February 14, 1996 (the date of the Company's initial public
offering) in Common Stock and in each of the foregoing indices and that
dividends were reinvested.
Point West Capital Corporation
1998 Proxy
Performance Graph Data
Measurement Period Point West Nasdaq Financial Nasdaq Stock
(Fiscal Year Covered) Capital Corporation Stock Index Market Index
For period ending 2/14/96 $100 $100 $100
For period ending 12/31/96 $20 $126 $119
For period ending 12/31/97 $29 $193 $146
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1997, certain
information with respect to the beneficial ownership of the Company's Common
Stock by: (a) each person owning of record or known by the Company to own
beneficially more than five percent of the outstanding shares of Common Stock;
(b) each director; (c) each executive officer and (d) all of the executive
officers and directors of the Company as a group. All information with respect
to beneficial ownership has been furnished by the respective director, executive
officer or stockholder, as the case may be, or has been derived from documents
filed with the Securities and Exchange Commission. See "Directors and Executive
Officers" and "Certain Relationships and Related Transactions."
NUMBER OF PERCENT OF
NAME Shares (1) Shares
- -------------------------------------------------------- ----------- ----------
Bradley N. Rotter (2)................................... 1,080,178 33.2
John Ward Rotter (2) (3)................................ 611,681 18.8
Alan B. Perper (2) (4).................................. 524,265 16.1
Perper/Raiche Revocable Trust........................... 317,665 9.8
Janet G. Raiche (4)..................................... 317,665 9.8
Lodestone Capital Fund, LLC............................. 206,600 6.4
The Echelon Group of Companies, LLC (5)................. 206,600 6.4
Lodestone Partners, LLC (5)............................. 206,600 6.4
Michael Fitzsimmons (5)................................. 206,600 6.4
Stephen T. Bow (6)...................................... 11,666 *
Paul A. Volberding, M.D (6)............................. 11,666 *
Heartland Advisors, Inc. (7)............................ 600,000 18.4
Fleet Financial Group, Inc. (8)......................... 225,000 6.9
All directors and executive officers as a group (9)..... 1,826,256 55.6
___________________
* Less than 1%
(1) Beneficial ownership was determined in accordance with Rule 13d-3 under the
Exchange Act.
(2) Includes 206,600 shares held by Lodestone Capital Fund, LLC ("Lodestone
Capital"). See " New Echelon LLC."
(3) Includes 8,000 shares of Common Stock subject to a stock option granted to
Mr. Rotter's wife and exercisable within 60 days of December 31, 1997. Mr.
Rotter disclaims beneficial ownership of these shares.
(4) Includes 317,665 shares held by the Perper/Raiche Revocable Trust (the
"Perper/Raiche Trust"). See " New Echelon LLC."
(5) Represents shares held by Lodestone Capital. See " New Echelon LLC."
(6) Represents shares issuable within 60 days of December 31, 1997 pursuant to
the exercise of stock options granted under the Director Plan.
(7) According to its most recently filed Schedule 13G, as of December 31, 1997,
Heartland Advisors, Inc., a registered investment advisor, had sole voting
and dispositive power over these shares, which are held in investment
advisory accounts. The interests of one account, Heartland Small Cap
Contrarian Fund, relates to more than 5% of the class. The address for
Heartland Advisors, Inc. is 790 North Milwaukee Street, Milwaukee,
Wisconsin 53202.
(8) According to its most recently filed Schedule 13G, as of December 31, 1997,
Fleet Financial Group, Inc. had sole voting and dispositive power over
these shares. Its address is One Federal Street, Boston, Massachusetts
02110.
(9) See footnotes (2), (3), (4) and (6) above.
NEW ECHELON LLC
Lodestone Capital, Lodestone Partners, LLC ("Lodestone Partners"), New
Echelon LLC, Bradley N. Rotter, John Ward Rotter, Alan B. Perper, the
Perper/Raiche Trust and Janet G. Raiche file a Schedule 13D as a group.
Lodestone Capital holds of record 206,600 shares of Common Stock. New Echelon
LLC
11
and Lodestone Partners are each members of Lodestone Capital. New Echelon LLC is
also a member of Lodestone Partners. Lodestone Partners is managed by a board of
managers composed of John Ward Rotter and Michael Fitzsimmons, who is the other
a member of Lodestone Partners.
Pursuant to the Lodestone Partners Operating Agreement between New Echelon
LLC and Mr. Fitzsimmons, Mr. Fitzsimmons has sole investment power with respect
to the investments of Lodestone Capital. The Operating Agreement is, however,
silent on the subject of voting power with respect to securities held by
Lodestone Capital. Therefore, through John Ward Rotter, New Echelon LLC may be
deemed to share voting power with respect to securities held by Lodestone
Capital and, thus, to be the beneficial owner of the shares of Common Stock held
of record by Lodestone Capital. New Echelon LLC disclaims beneficial ownership
of the shares of Common Stock held of record by Lodestone Capital, except to the
extent of its equity interest in Lodestone Capital.
Bradley N. Rotter, John Ward Rotter and Alan B. Perper constitute all of
the members of New Echelon LLC and, as such, may be deemed to be the beneficial
owners of the shares of Common Stock held of record by Lodestone Capital. Alan
B. Perper and John Ward Rotter disclaim beneficial ownership of the shares of
Common Stock held of record by Lodestone Capital, except to the extent of their
respective equity interests in New Echelon LLC and New Echelon LLC's respective
equity interest in Lodestone Capital. Bradley N. Rotter acknowledges beneficial
ownership of approximately 137,733 shares of Common Stock held of record by
Lodestone Capital, which are attributable to the equity interest in Lodestone
Capital of the Bradley N. Rotter Self-Employed Pension Plan and Trust, but
otherwise disclaims beneficial ownership of the shares of Common Stock held of
record by Lodestone Capital, except to the extent of his respective equity
interest in New Echelon LLC and New Echelon LLC's respective equity interest in
Lodestone Capital. Bradley N. Rotter is the record holder of 873,578 shares of
Common Stock, and John Ward Rotter is the record holder of 397,081 shares of
Common Stock.
Lodestone Partners is the manager of Lodestone Capital and, as such, may be
deemed to be the beneficial owner of the shares of Common Stock held of record
by Lodestone Capital. Lodestone Partners, however, currently has only a
nonparticipating (or "carried") interest in Lodestone Capital and, therefore,
disclaims beneficial ownership of the shares of Common Stock held of record by
Lodestone Capital.
The Perper/Raiche Trust is the record holder of 317,665 shares of Common
Stock. Alan B. Perper and Janet G. Raiche, as trustees of the Perper/Raiche
Trust, may be deemed to be the beneficial owners of the shares of Common Stock
held of record by the Perper/Raiche Trust, but each of them disclaims beneficial
ownership of such shares, except to their respective beneficial interests under
the Perper/Raiche Trust.
The address for New Echelon LLC, Bradley N. Rotter, John Ward Rotter and
Alan B. Perper is 1700 Montgomery Street, Suite 250, San Francisco, California
94111. The address for Lodestone Capital and Michael Fitzsimmons is 31 Davies
Street, 5th floor, London WIY 1FN, England. The address for Lodestone Partners
is 917 Tahoe Boulevard, Suite 204A, Incline Village, Nevada 89452. The address
for the Perper/Raiche Trust and Janet G. Raiche is 17 Reed Ranch Road, Tiburon,
California 94920.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ALLOCATION AND ACCRUAL OF EXPENSES
New Echelon LLC, which is controlled by Bradley N. Rotter, Alan B. Perper
and John Ward Rotter, shares office space and other expenses with the Company.
In February 1996, the Company
12
executed an agreement with New Echelon LLC which governs the allocation of
certain shared expenses. The agreement provides that, so long as New Echelon LLC
uses a portion of the space leased by the Company in San Francisco, New Echelon
LLC will pay an amount equal to 35% of the amount of rent and required liability
insurance premiums paid by the Company in connection with such space. New
Echelon LLC's right to use the space will terminate on the earlier of (i) the
date the agreement terminates, (ii) three days after New Echelon LLC notifies
the Company that New Echelon LLC no longer desires to use any portion of the
space, or (iii) three days after the Company notifies New Echelon LLC that New
Echelon LLC may no longer use any portion of the space. The agreement also
acknowledges that the Company currently employs, and may hereafter hire,
individuals who regularly perform functions on behalf of both the Company and
New Echelon LLC ("shared employees"). Pursuant to the agreement, New Echelon LLC
(i) pays directly to (or on behalf of) each shared employee a designated
percentage of such shared employee's salary and any contributions to defined
benefit plans, and (ii) reimburses the Company a specified percentage of the
Company's costs of all other benefits paid to (or on behalf of) such shared
employee. Such percentage is determined by reference to the percentage of time
such shared employee devotes to each entity. Once a month, the Company and New
Echelon LLC reassess the identity of shared employees. The provisions regarding
shared employees will terminate on the date the agreement terminates, which will
be the earlier of (i) April 1998, subject to one-year automatic extensions in
the absence of 30 days' written notice of termination by the Company, or (ii)
the date the lease for the shared office space terminates or expires. Under the
agreement, each party is responsible for providing, at its sole cost and
expense, all supplies it will need. During 1997, pursuant to this agreement, New
Echelon LLC paid rent and insurance in the amount of $34,070 and paid $70,998 of
compensation for shared employees.
INDEMNIFICATION
As the Company has disclosed more fully in its Form 10-K, purported class
action lawsuits under federal and California securities laws and naming the
Company and its executive officers and directors as defendants are pending. In
accordance with the Company's certificate of incorporation and Delaware law, the
Company is paying expenses (including attorneys' fees) incurred by each
executive officer and director in defending such cases in advance of the final
disposition of such cases on the condition that each such individual shall repay
the amounts advanced if it is ultimately determined that such individual is not
entitled to be indemnified by the Company.
OPTION PLAN AMENDMENT
In November 1997 the Board of Directors unanimously approved and adopted,
subject to stockholder approval, amendments to and a restatement of the Option
Plan (as amended and restated, the "Restated Plan") to (i) increase by 100,000
the maximum number of shares of Common Stock available for issuance, and (ii)
permit grants of stock options to non-employee directors of the Company and its
subsidiaries. The affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Meeting is required for approval of the
Restated Plan. The Restated Plan grants to the Compensation Committee greater
flexibility to address compensation issues for directors and executive officers.
The following summary describes the Option Plan (as currently in effect) and
notes the provisions affected by the Restated Plan.
13
Option Plan
DESCRIPTION OF PLAN
The purpose of the Option Plan is to enable the Company and its
subsidiaries to attract and retain officers and other employees and consultants
and to provide them with appropriate incentives and rewards for superior
performance. The Option Plan provides for the plan to be administered by a
committee (the "Committee") comprised solely of non-employee directors (within
the meaning of Rule 16b-3 under the Exchange Act ("Rule 16b-3")) or, at any time
that such a committee cannot be created, by the entire Board. The Compensation
Committee, which is currently comprised of two directors who are non-employee
directors, currently acts as the Committee. The Option Plan affords the
Committee the flexibility to respond to changes in competitive and legal
environments, thereby protecting and enhancing the Company's current and future
ability to attract and retain officers and other employees and consultants.
The Option Plan authorizes the granting of options to purchase shares of
Common Stock. All employees, including officers who are members of the Board of
Directors, and consultants to the Company or its subsidiaries (or any person who
has agreed to commence serving in such capacity) may be selected by the
Committee to receive options under the Option Plan. At March 31, 1998, 13
individuals were eligible to receive options under the Option Plan. The
Restated Plan also permits non-employee directors of the Company and its
subsidiaries (and any person who has agreed to commence serving in such
capacity) to receive options. The Restated Plan would increase by 3 (at March
31, 1998) the number of individuals eligible to receive options. Subject to
adjustment as provided in the Option Plan, the number of shares of Common Stock
that may be issued or transferred upon exercise of options granted under the
Option Plan plus the number of shares of Common Stock covered by outstanding
options granted under the Option Plan (the "Maximum Share Number") may not in
the aggregate exceed 350,000. The Restated Plan increases the Maximum Share
Number from 350,000 shares to 450,00 shares. Shares of Common Stock covered by
an option which is canceled or terminated will again be available to be issued
or to be the subject of a stock option granted under the Option Plan. The
Maximum Share Number, the number of shares covered by outstanding options and
the option prices per share applicable thereto, are subject to adjustment in the
event of stock dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, spin-offs, split-offs, spin-outs,
split-ups, reorganizations, partial or complete liquidations, issuances of
rights or warrants, and similar transactions or events. In the event of any
such transaction or event, the Committee may in its discretion provide in
substitution for any or all outstanding options under the Option Plan such
alternative consideration (including options of the surviving entity) as it may
in good faith determine to be equitable in the circumstances and may require the
surrender of all options so replaced. Shares of Common Stock issued upon
exercise of options granted under the Option Plan may be authorized but unissued
shares or shares held in treasury. The Company may repurchase shares of Common
Stock in the open market or otherwise in connection with the issuance or
transfer of shares pursuant to the Option Plan.
Options granted under the Option Plan may be options that are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code (the "Code") or options that are not intended to so
qualify. No "incentive stock option" can be granted under the Option Plan after
February 2006 (November 2007 under the Restated Plan). The Committee may grant
options that entitle the optionee to purchase shares of Common Stock at a price
less than, equal to or greater than market value on the date of grant; provided
that the exercise price of any incentive stock option is at least equal to
market value of the Common Stock on the date of grant. The closing price of the
Common Stock on March 31, 1998, as reported by The Nasdaq Stock MarketSM was
$4.406. The Committee may also grant "re-load" options which provide that
additional stock options will automatically be granted to an optionee upon the
14
exercise of previously granted stock options. The option price is payable at the
time of exercise (i) in cash or cash equivalent, (ii) by the transfer to the
Company of shares of Common Stock that are already owned by the optionee and
have a value at the time of exercise equal to the option price, (iii) with any
other legal consideration the Committee may deem appropriate or (iv) by any
combination of the foregoing methods of payment. Any grant may provide for
deferred payment of the option price from the proceeds of sale through a broker
on the date of exercise of some or all of the shares of Common Stock to which
the exercise relates. Fractional shares will not be issued in connection with
the exercise of a stock option, and cash in lieu thereof will be paid by the
Company.
No option may be exercised more than ten years from the date of grant. Each
grant must specify the number of shares of Common Stock subject to the option
and the conditions, including as and to the extent determined by the Committee,
the period of continuous employment or continuous engagement of consulting
services by the Company or any subsidiary, or the achievement of Management
Objectives (as described below) that are necessary before the options will
become exercisable, and may provide for the earlier exercise of the options,
including, without limitation, in the event of a change in control of the
Company or other similar transaction or event. The Restated Plan states that
references to employment are deemed to include service as a non-employee
director. Successive grants may be made to the same optionee regardless of
whether options previously granted to him or her remain unexercised. The
Committee determines whether options may be transferred.
Management Objectives means the achievement of performance objectives
established pursuant to the Option Plan, which may be described in terms of
either Company-wide objectives or objectives that are related to the performance
of the individual optionee or the subsidiary, department or function within the
Company or a subsidiary in which the optionee is employed. The Committee may
adjust Management Objectives and related minimum acceptable levels of
achievement if events or transactions have occurred after the date an option was
granted that are unrelated to the performance of the optionee and result in
distortion of the Management Objectives or the related minimum levels.
In connection with its administration of the Option Plan, the Committee is
authorized to interpret the Option Plan and related agreements and other
documents. The Committee may provide for special terms for options to
participants who either are foreign nationals or are employed by or provide
consulting services to the Company or any of its subsidiaries outside of the
U.S., as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. The Committee may with the
concurrence of the affected optionee cancel any agreement evidencing an option
granted under the Option Plan. In the event of any such cancellation, the
Committee may authorize the granting of a new option under the Option Plan
(which may or may not cover the same number of shares that had been the subject
of the prior option) in such manner, at such price and subject to such other
terms and conditions as would have been applicable under the Option Plan had the
canceled award not been granted.
The Option Plan may be amended from time to time by the Board of Directors,
but without further approval by the stockholders of the Company no such
amendment (unless expressly allowed pursuant to the adjustment provisions
described above) may increase the Maximum Share Number.
BENEFITS
The types of options which may be granted in the future are subject to the
discretion of the Committee and, therefore, cannot be determined. Each
executive officer received an option for 10,000 shares under the Option Plan
during 1997 (see "Executive Compensation Options") with an exercise price equal
to the fair market value at the date of grant. Other current employees have
received under the
15
Option Plan stock options for 198,000 shares of Common Stock, each of which had
an exercise price equal to the fair market value at the date of grant thereof,
and none of which have been exercised. Non-employee directors are not eligible
to receive options under the Option Plan, but may receive options in the future
if the Restated Plan is approved by stockholders.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Option Plan based on federal
income tax laws in effect on January 1, 1998. This summary is not intended to
be exhaustive and does not describe state or local tax consequences.
Tax Consequences to Optionees
Non-qualified Options. In general: (i) no income will be recognized by an
optionee at the time a non-qualified option is granted; (ii) at the time of
exercise of a non-qualified option, ordinary income will be recognized by the
optionee in an amount equal to the difference between the option price paid for
the shares and the fair market value of the shares if they are nonrestricted on
the date of exercise; and (iii) at the time of sale of shares acquired pursuant
to the exercise of a non-qualified option, any appreciation (or depreciation) in
the value of the shares after the date of exercise will be treated as a capital
gain (or loss).
Incentive Stock Options. No income generally will be recognized by an
optionee upon the grant or exercise of an incentive stock option. If shares of
Common Stock are issued to an optionee pursuant to the exercise of an incentive
stock option and no disqualifying disposition of the shares is made by the
optionee within two years after the date of grant or within one year after the
exercise of the option, then upon the sale of the shares any amount realized in
excess of the option price will be taxed to the optionee as a capital gain and
any loss sustained will be a capital loss.
If shares of Common Stock acquired upon the exercise of an incentive stock
option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to any excess of the fair market value of
the shares at the time of exercise (or, if less, the amount realized on the
disposition of the shares in the sale or exchange) over the option price paid
for the shares. Any further gain (or loss) realized by the optionee generally
will be taxed as a capital gain (or loss).
Tax Consequences to the Company
To the extent that a participant recognizes ordinary income in the
circumstance described above, the Company or subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income meets the test of reasonableness,
is an ordinary and necessary business expense, is not an "excess parachute
payment" within the meaning of Section 280G of the Code, and is not disallowed
by the $1 million limitation on certain executive compensation.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO AMEND AND RESTATE THE OPTION PLAN.
INDEPENDENT ACCOUNTANTS
The Company has appointed KPMG Peat Marwick LLP ("Peat Marwick") as the
Company's independent accountants for the fiscal year ending December 31, 1998.
Peat Marwick has served as the
16
Company's independent accountants since 1995. Representatives of Peat Marwick
are expected to be present at the Meeting to respond to appropriate questions
and to make such statements as they desire.
OTHER MATTERS
As of the date of this Notice, the Company knows of no business that will
be presented for consideration at the Meeting other than the election of a
director and the proposed amendment and restatement of the Option Plan referred
to above. Proxies will be voted in respect of any other matters as may properly
come before the Meeting in accordance with the recommendation of the Board of
Directors or, if no such recommendation is given, in the discretion of the
person or persons voting the proxies.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
1999 annual meeting of stockholders (the "1999 Meeting") must be received by the
Secretary of the Company by December 18, 1998, to be included in the Company's
proxy, notice of meeting and proxy statement relating to the 1999 Meeting.
Any stockholder wishing to submit a proposal at the 1999 Meeting must also
comply with certain provisions of the Certificate of Incorporation and the
Company's Amended and Restated By-Laws (collectively, the "Charter Documents").
The Charter Document require written notice of any such proposal (and certain
other information) to be delivered to the Secretary of the Company generally not
later than 60 days in advance of the date of the meeting. The Company will
provide (without charge) a copy of the Charter Documents to any holder of record
of Common Stock. Requests for copies should be directed to: Secretary, Point
West Capital Corporation, 1700 Montgomery Street, Suite 250, San Francisco,
California 94111.
By order of the Board of Directors,
/s/ John Ward Rotter
--------------------------------
John Ward Rotter
Secretary
April 17, 1998
17
POINT WEST CAPITAL CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
POINT WEST CAPITAL CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
Table of Contents
-----------------
1. Purpose...................................... 1
2. Definitions.................................. 1
3. Shares Available under the Plan.............. 2
4. Options...................................... 3
5. Transferability Restrictions................. 4
6. Adjustments.................................. 4
7. Fractional Shares............................ 5
8. Withholding Taxes............................ 5
9. Certain Terminations of Employment, Hardship
and Approved Leaves of Absence............... 6
10. Foreign Optionees............................ 6
11. Administration of the Plan................... 6
12. Amendments and Other Matters................. 7
13. Limitation on Grants of Tax-Qualified Options 8
POINT WEST CAPITAL CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to attract and retain
directors and officers and other employees of and consultants to Point West
Capital Corporation (the "Corporation") and its Subsidiaries and to provide such
persons with incentives and rewards for superior performance.
2. DEFINITIONS. (a) As used in this Plan,
"BOARD" means the Board of Directors of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITTEE" means the committee or the Board, as the case may be,
administering the Plan pursuant to the provisions of Section 11(a).
"COMMON SHARES" means (i) shares of Common Stock, $.01 par value, of
the Corporation and (ii) any security into which Common Shares may be converted
by reason of any transaction or event of the type referred to in Section 6.
"DATE OF GRANT" means the date specified by the Committee on which a
grant of an Option shall become effective, which shall not be earlier than the
date on which the Committee takes action with respect thereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"INCENTIVE STOCK OPTION" means an Option that is intended to qualify
as an "incentive stock option" under Section 422 of the Code or any successor
provision thereto.
"MANAGEMENT OBJECTIVES" means the achievement of a performance
objective or objectives established pursuant to this Plan, which may be
described in terms of Corporation-wide objectives or objectives that are related
to the performance of the individual Optionee or the Subsidiary, division,
department or function within the Corporation or Subsidiary in which the
Optionee is employed. The Committee may adjust Management Objectives and the
related minimum acceptable level of achievement if, in the sole judgment of the
Committee, events or transactions have occurred after the Date of Grant that are
unrelated to the performance of the Optionee and result in distortion of the
Management Objectives or the related minimum acceptable level of achievement.
"MARKET VALUE PER SHARE" means the fair market value of the Common
Shares as determined by the Committee from time to time.
"NONQUALIFIED OPTION" means an Option that is not intended to qualify
as a Tax-qualified Option.
"OPTION" means the right to purchase Common Shares from the
Corporation upon the exercise of a Nonqualified Option or a Tax-qualified Option
granted pursuant to Section 4.
"OPTIONEE" means a person who is selected by the Committee to receive
an Option under this Plan and who (i) is at that time a director (including but
not limited to a director who is not also an officer or employee of, or a
consultant to, the Corporation or any Subsidiary) of the Corporation or any
Subsidiary or an officer (including but not limited to an officer who is also a
member of the Board) or other employee of, or a consultant to, the Corporation
or any Subsidiary or (ii) has agreed to commence serving in any such capacity.
"PLAN" means the Point West Capital Corporation Amended and Restated
1995 Stock Option Plan, as the same may be amended from time to time.
"OPTION PRICE" means the purchase price payable upon the exercise of
an Option.
"RELOAD OPTION" means an additional Option automatically granted to an
Optionee upon the exercise of Options pursuant to Section 4(e).
"RULE 16B-3" means Rule 16b-3, as promulgated and amended from time to
time by the Securities and Exchange Commission under the Securities Exchange Act
of 1934, or any successor rule to the same effect.
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest; provided, however, for purposes
-------- -------
of determining whether any person may be an Optionee for purposes of any grant
of Incentive Stock Options, "Subsidiary" means any corporation in which the
Corporation directly or indirectly owns or controls more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation at the time of the grant.
"TAX-QUALIFIED OPTION" means an Option that is intended to qualify
under particular provisions of the Code, including without limitation an
Incentive Stock Option.
2
(b) As used in this Plan, the terms "employed" and "employment" shall
be deemed to refer to service as a nonemployee director or as a consultant, as
well as to a traditional employment relationship, as the case may be.
3. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to Section 6, the
number of Common Shares issued or transferred upon exercise of Options, plus the
number of Common Shares covered by outstanding Options, shall not in the
aggregate exceed 450,000 Common Shares, which may be Common Shares of original
issuance or Common Shares held in treasury or a combination thereof. In
connection with the issuance or transfer of Common Shares pursuant to the Plan,
the Corporation may repurchase Common Shares in the open market or otherwise.
(b) For purposes of this Section 3, any Common Shares subject to an Option
that has been cancelled or terminated prior to exercise shall again be available
for the grant of Options to the extent of such cancellation or termination.
4. OPTIONS. The Committee may from time to time authorize grants of
Options to Optionees upon such terms and conditions as the Committee may
determine in accordance with the following provisions:
(a) Each grant shall specify the number of Common Shares to which the
Option pertains.
(b) Each grant shall specify an Option Price per Common Share, which
may be less than, equal to or greater than the Market Value per Share on
the Date of Grant; provided, however, that (i) the Option Price per share
-------- -------
of an Incentive Stock Option shall be equal to or greater than the Market
Value per Share on the Date of Grant and (ii) the Option Price per Common
Share shall be at least equal to the per share stated par value of the
Common Shares.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check
or other cash equivalents acceptable to the Corporation, (ii) Common Shares
which are already owned by the Optionee and have a value at the time of
exercise that is equal to the Option Price, (iii) any other legal
consideration that the Committee may deem appropriate, on such basis as the
Committee may determine in accordance with this Plan and (iv) any
combination of the foregoing.
(d) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a broker on the
3
date of exercise of the Option of some or all of the Common Shares to which
the exercise relates.
(e) On or after the Date of Grant of any Option, the Committee may
provide for the automatic grant to the Optionee of Reload Options upon the
exercise of Options including Reload Options for Common Shares or any other
noncash consideration authorized under Section 4(c).
(f) Successive grants may be made to the same Optionee regardless of
whether any Options previously granted to the Optionee remain unexercised.
(g) Each grant shall specify the conditions, including as and to the
extent determined by the Committee the period or periods of continuous
employment of the Optionee by the Corporation or any Subsidiary, or the
achievement of Management Objectives, that are necessary before the Option
or installments thereof shall become exercisable, and any grant may provide
for the earlier exercise of the Option, including, without limitation, in
the event of a change in control of the Corporation or other similar
transaction or event.
(h) Options granted pursuant to this Plan may be Nonqualified Options
or Tax-qualified Options or combinations thereof.
(i) No Option granted pursuant to this Plan may be exercised more than
10 years from its Date of Grant.
(j) Each grant shall be evidenced by an agreement, which shall (i) be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Optionee, (ii) contain such terms and provisions as
the Committee may determine consistent with this Plan, and (iii) specify
the manner in which the Options granted thereunder may be transferred and
the persons entitled to exercise such Options. Any such agreement may
provide that the Option evidenced thereby shall not be transferable except
by will or the laws of descent and distribution.
5. TRANSFERABILITY RESTRICTIONS. Any grant of Options under this
Plan may provide that all or any part of the Common Shares that are to be issued
by the Corporation upon the exercise thereof shall be subject to further
restrictions upon transfer.
6. ADJUSTMENTS. The Committee may make or provide for such
adjustments in the number of Common Shares covered by outstanding Options, the
Option Prices per Common Share applicable
4
to any such Options, and the kind of shares (including shares of another issuer)
covered thereby, as the Committee may in good faith determine to be equitably
required in order to prevent dilution or expansion of the rights of Optionees
that otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Corporation or (b) any merger, consolidation, spin-off, spin-out, split-
off, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of warrants or other rights to purchase
securities or any other corporate transaction or event having an effect similar
to any of the foregoing. In the event of any such transaction or event, the
Committee may provide in substitution for any or all outstanding Options such
alternative consideration as it may in good faith determine to be equitable
under the circumstances and may require in connection therewith the surrender of
all Options so replaced. Moreover, the Committee may on or after the Date of
Grant provide in the agreement evidencing any Option that the holder of the
Option may elect to receive an equivalent Option in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect, or the Committee may provide that the holder will
automatically be entitled to receive such an equivalent Option. The Committee
may also make or provide for such adjustments in the maximum number of Common
Shares specified in Section 3(a) as the Committee may in good faith determine to
be appropriate in order to reflect any transaction or event described in this
Section 6.
7. FRACTIONAL SHARES. The Corporation shall not be required to
issue any fractional Common Shares pursuant to this Plan. The Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
8. WITHHOLDING TAXES. To the extent that the Corporation is
required to withhold federal, state, local or foreign taxes in connection with
any payment made by an Optionee or other person under this Plan, and the amounts
available to the Corporation for the withholding are insufficient, it shall be a
condition to the receipt of any such payment that the Optionee or such other
person make arrangements satisfactory to the Corporation for payment of the
balance of any taxes required to be withheld. The Corporation and any Optionee
or such other person may also make similar arrangements with respect to the
payment of any taxes with respect to which withholding is not required.
5
9. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES
OF ABSENCE. Notwithstanding any other provision of this Plan to the contrary,
in the event of termination of employment by reason of death, disability, normal
retirement, early retirement with the consent of the Corporation, termination of
employment to enter public service with the consent of the Corporation or leave
of absence approved by the Corporation, or in the event of hardship or other
special circumstances, of an Optionee who holds an Option that is not
immediately and fully exercisable, the Committee may take any action that it
deems to be equitable under the circumstances or in the best interests of the
Corporation, including but not limited to waiving or modifying any limitation or
requirement with respect to any Option under this Plan.
10. FOREIGN OPTIONEES. In order to facilitate the granting of any
Option, the Committee may provide for such special terms for Options granted to
Optionees who are foreign nationals, or who are employed by the Corporation or
any Subsidiary outside of the United States of America, as the Committee may
consider necessary or appropriate to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to, or
amendments, restatements or alternative versions of, this Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of this Plan as in effect for any other purpose and the Secretary or
other appropriate officer of the Corporation may certify any such document as
having been approved and adopted in the same manner as this Plan; no such
supplements, amendments, restatements or alternative versions shall include
provisions that are inconsistent with the terms of this Plan as then in effect,
unless this Plan could have been amended to eliminate such inconsistency without
further approval by the stockholders of the Corporation.
11. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered
(i) by a committee of the Board that is comprised solely of two or more Non-
Employee Directors (as that term is defined in Rule 16b-3) or (ii) at any time
that such a committee does not exist and cannot be created, by the entire Board
(in which case, all references in this Plan to the Committee shall refer to the
Board).
(b) The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document evidencing
the grant of Options, and any determination by the Committee pursuant to any
provision of this Plan or any such agreement, notification or document, shall
be final and conclusive. No member of the Committee shall be liable for any
such action taken or determination made in good faith.
6
12. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from
time to time by the Committee; provided, however, that except as provided in
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Section 6, no such amendment shall increase the number of Common Shares
specified in Section 3(a).
(b) With the concurrence of the affected Optionee, the Committee may
cancel any agreement evidencing Options granted under this Plan. In the event
of any such cancellation, the Committee may authorize the granting of new
Options hereunder, which may or may not cover the same number of Common Shares
as had been covered by the cancelled Option, at such Option Price, in such
manner and subject to such other terms, conditions and discretion as would have
been permitted under this Plan had the cancelled Option not been granted.
(c) The Committee may require any Optionee, as a condition to
receiving an Option, to give written assurances in form and substance
satisfactory to the Corporation and its counsel to the effect that such person
is acquiring the Common Shares subject to the Option for his own account for
investment and not with any present intention of selling or otherwise
distributing the same and to such other effects as the Corporation and its
counsel deem necessary or appropriate in order to comply with federal and
applicable state securities laws.
(d) Each grant of Options shall be subject to the requirement that, if
at any time counsel to the Corporation shall determine that the listing,
registration or qualification of the Common Shares subject to such Option upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance of shares thereunder, such grant of Options
may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to such counsel. Nothing herein shall be
deemed to require the Corporation to apply for or to obtain such listing,
registration or qualification.
(e) This Plan shall not confer upon any Optionee any right with
respect to continuance of employment or other service with the Corporation or
any Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any Optionee's
employment or other service at any time.
(f) To the extent that any provision of this Plan would prevent any
Option that was intended to qualify as a Tax-qualified Option from so
qualifying, any such provision shall be null and void with respect to any such
Option; provided, however, that any
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7
such provision shall remain in effect with respect to other Options, and there
shall be no further effect on any provision of this Plan.
(g) No Optionee shall have any rights as a stockholder with respect
to Common Shares subject to an Option until a certificate or certificates
representing such Common Shares has been issued.
13. LIMITATION ON GRANTS OF TAX-QUALIFIED OPTIONS. No further Tax-
qualified Options shall be granted under this Plan after the later of (a) 10
years from the date on which this Plan is first approved by the Board or (b) 10
years from the date on which an amendment to this Plan that increases the
maximum number of Common Shares specified in Section 3(a) is approved by the
Board.
8
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
POINT WEST CAPITAL CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 11, 1998
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Stockholders and Proxy Statement and the Annual Report on Form 10-K
for the year ended December 31, 1997 of POINT WEST CAPITAL CORPORATION (the
"Company") and hereby appoints Bradley N. Rotter, Alan B. Perper and John Ward
Rotter, and each of them, attorneys and proxies, with full power of substitution
and resubstitution, to vote all shares of common stock of the Company held of
record by the undersigned at the close of business on April 7, 1998, at the
annual meeting of stockholders of the Company to be held at 8:00 a.m. on May 11,
1998, and at any adjournment thereof, as follows:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
If this proxy is properly executed, the shares represented hereby will be voted
in the manner directed and, in the absence of direction as to the manner of
voting, will be voted FOR the election as director of the nominee listed, and
FOR the proposal to amend and restate the Company's 1995 Stock Option Plan, all
as set forth in the Notice of Annual Meeting of Stockholders and Proxy
Statement.
Please mark
your votes [X]
as this
1. ELECTION OF DIRECTORS:
AUTHORITY TO WITHHOLD
VOTE FOR authority
nominee vote for
listed nominee
listed.
[_] [_]
NOMINEE: JOHN WARD ROTTER
2. Proposal to amend and FOR AGAINST ABSTAIN
restate the Company's 1995
Stock Option Plan. [_] [_] [_]
3. As recommended by the Board of
Directors, or if no such recommendation
is given in their discretion, to vote
upon such other business as may properly
come before said meeting or any
adjournment thereof.
I plan to attend
the meeting
[_]
STOCKHOLDERS ARE URGED TO
MARK, DATE, SIGN AND
RETURN THIS PROXY PROMPTLY
IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
SIGNATURE(s) DATE:
--------------------------------------- ---------------------
Please date this proxy and sign exactly as name(s) appears above and return
signed proxy in enclosed envelope. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.