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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant: /X/
Filed by a Party other than the Registrant: / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE HALLWOOD GROUP INCORPORATED
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(Name of Registrant as Specified in Its Charter)
THE HALLWOOD GROUP INCORPORATED
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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/ / 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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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
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THE HALLWOOD GROUP INCORPORATED
NOTICE OF ANNUAL MEETING
To the Stockholders of The Hallwood Group Incorporated:
The Annual Meeting of Stockholders of The Hallwood Group Incorporated (the
"Company") will be held as follows:
PLACE: 3710 Rawlins
11th Floor, Conference Room
Dallas, Texas 75219
TIME: Thursday, January 19, 1995, at 11:30 a.m.
(Dallas, Texas time)
PURPOSES: 1. To elect two directors to hold office for three years and until their
successors are elected and qualified; and
2. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on November 21, 1994
will be entitled to notice of and to vote at the Annual Meeting.
December 12, 1994
By order of the Board of Directors
MELVIN J. MELLE
Secretary
YOU ARE URGED TO VOTE UPON THE MATTERS PRESENTED AND TO COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IT IS
IMPORTANT FOR YOU TO BE REPRESENTED AT THE MEETING. THE EXECUTION OF YOUR PROXY
WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
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THE HALLWOOD GROUP INCORPORATED
3710 RAWLINS
SUITE 1500
DALLAS, TEXAS 75219
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 19, 1995
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GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Hallwood Group Incorporated (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held on Thursday, January 19, 1995, at 11:30 a.m., Dallas, Texas time, at
3710 Rawlins, 11th Floor, Conference Room, Dallas, Texas 75219, and any
adjournment thereof. This Proxy Statement and the form of proxy to be utilized
at the Annual Meeting are to be mailed or delivered to the stockholders of the
Company on or about December 12, 1994.
MATTERS TO BE CONSIDERED
The Annual Meeting has been called (i) to elect two directors, each to hold
office for three years, and (ii) to transact such other business as may properly
come before the meeting. See "Election of Directors" and "Other Business."
RECORD DATE AND VOTING
The directors have fixed the close of business on November 21, 1994 as the
record date for the determination of stockholders entitled to vote at the Annual
Meeting and any adjournment thereof. As of the record date, there were 6,383,267
shares of common stock, $0.10 par value per share ("Common Stock"), outstanding.
As of the record date, 896,000 of such outstanding shares of Common Stock were
owned by Hallwood Energy Corporation ("HEC"), an oil and gas corporation of
which the Company owns approximately 63% of the outstanding capital stock on a
fully diluted basis.
The presence at the Annual Meeting, either in person or by proxy, of the
holders of outstanding shares of Common Stock having a majority of the voting
power of the Company is necessary to constitute a quorum for the transaction of
business.
VOTE REQUIRED AND RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of the holders of shares of Common Stock having a
majority of the voting power of the Company present in person or represented by
proxy at the Annual Meeting is required to elect directors. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE FOR DIRECTOR. HEC, which owns
approximately 14% of the outstanding Common Stock, has informed the Company that
it will vote all of its shares of Common Stock for each nominee for director. In
addition, Alpha Trust and Epsilon Trust, which own approximately 18.6% and 12.4%
of the outstanding Common Stock, respectively, have informed the Company that
they will vote all of their shares of Common Stock for each nominee for
director.
PROXY, SOLICITATION, REVOCATION AND EXPENSES
All proxies that are properly completed, signed and returned prior to the
Annual Meeting will be voted. Any proxy given by a stockholder may be revoked at
any time before it is exercised by (i) filing with the Secretary of the Company
an instrument revoking it, (ii) a duly executed proxy bearing a later date or
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(iii) the stockholder attending the Annual Meeting and expressing a desire to
vote his shares of Common Stock in person.
Shares represented by proxies will be voted for or against the election of
each nominee director named in the proxy in accordance with the specifications
made on the proxy by the stockholder and, if no specification is made, will be
voted in favor of the election of each of the nominee directors. Abstentions,
broker non-votes and proxies directing that the shares are not to be voted will
not be counted as a vote in favor of a matter called for a vote.
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the enclosed proxy form and the cost of soliciting proxies related
to the Annual Meeting will be borne by the Company. The Company will request
banks and brokers to solicit their customers who are beneficial owners of shares
of Common Stock listed of record in names of nominees, and will reimburse such
banks and brokers for the reasonable out-of-pocket expenses of such
solicitation. The original solicitation of proxies by mail may be supplemented
by telephone, telegram and personal solicitation by officers and other regular
employees of the Company and its subsidiaries, but no additional compensation
will be paid to such individuals on account of such activities. In addition, the
Company has retained Morrow & Co., Inc. to assist in the solicitation of
proxies, for which such firm will be paid a fee of $2,500 plus reimbursement of
reasonable out-of-pocket expenses.
ELECTION OF DIRECTORS
Two persons are to be elected to the Board of Directors at the Annual
Meeting and the three remaining directors will continue in office for the terms
specified below. The persons named in the enclosed proxy intend to vote for the
election of the nominees listed below, unless instructions to the contrary are
given therein. The nominees have indicated that they are able and willing to
serve as directors. However, if some unexpected occurrence should require the
substitution of some other persons for the nominees, the person voting the
proxies will vote for such nominees as the Company may select.
The following table lists the name and age of each nominee and of each of
the three directors whose terms of office will continue after the Annual
Meeting, the annual meeting at which their respective terms of office will
expire (assuming, in the case of each nominee, that he is elected) and the year
in which each director was first elected as a director of the Company:
TERM DIRECTOR
NAME AGE EXPIRES SINCE
- - - ------------------------- --- ---------------------------------------------------- --------
NOMINEE DIRECTORS
Charles A. Crocco, Jr. 56 Third annual meeting following this Annual Meeting 1981
J. Thomas Talbot 58 Third annual meeting following this Annual Meeting 1984
CONTINUING DIRECTORS
Brian M. Troup 47 First annual meeting following this Annual Meeting 1981
Anthony J. Gumbiner 49 Second annual meeting following this Annual Meeting 1981
Robert L. Lynch 76 Second annual meeting following this Annual Meeting 1984
BUSINESS HISTORY OF NOMINEES AND CONTINUING DIRECTORS
Mr. Crocco, a shareholder in Crocco & DeMaio, P.C., attorneys at law, is
Chairman of the Company's Compensation Committee and the Litigation Committee.
He has also served as a director of BancTEXAS Group, Inc., a bank holding
company, since April 1988; and as a director of ShowBiz Pizza Time, Inc., a
corporation engaged in the restaurant business and an affiliate of the Company
("ShowBiz"), since September 1988.
Mr. Talbot is currently Chairman of the Company's Audit Committee. He has
been a partner of Shaw & Talbot, a commercial real estate investment and
development company, since 1975, and of Pacific Management Group, an asset
management firm, since 1986, and is the owner of The Talbot Company. Mr. Talbot
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served as Chairman of the Board and Chief Executive Officer of HAL, Inc., an
airline holding company; and as Chairman of the Board and Chief Executive
Officer of both Hawaiian Airlines, Inc., a commercial airline, and West Maui
Airport between 1989 and July 1991. He was founder and served as Chairman of the
Board of Jet America Airlines between 1980 and 1986. He has served as a director
of Fidelity National Financial, Inc. since December 1990; and as a director of
ShowBiz since September 1988. He has also served as a director of Hemetter
Enterprises, Inc. since May 1993; as a director of The Baldwin Company since
June 1993; and as a director of Koll Real Estate Group (formerly Bolsa Chica
Company) since August 1993. In addition, Mr. Talbot served as a director of
Alliance Bancorporation, a bank holding company that was liquidated in February
1994 ("Alliance"), from April 1988 until its liquidation, and as Chairman and
Chief Executive Officer of Alliance from August 1992 until its liquidation.
Mr. Troup has served as President and Chief Operating Officer of the
Company since April 1986. He has also served as Finance Director of Anglo
Metropolitan Holdings, plc, a real estate holding company located in the United
Kingdom, since 1979; as a director of Hallwood Holdings S.A. ("HHSA") (formerly
Stanwick International Corporation S.A.), a corporation engaged in the real
estate business, since March 1984; as a director of HEC, which serves as the
general partner of Hallwood Energy Partners, L.P. ("HEP"), since May 1994; as a
director of ShowBiz since September 1988; as a director of Hallwood Realty
Corporation ("Hallwood Realty"), which is a wholly-owned subsidiary of the
Company and serves as the general partner of Hallwood Realty Partners, L.P.,
since 1990; and as a director of Hallwood Consolidated Resources Corporation
("HCRC") since 1992. He is an associate of the Institute of Bankers in Scotland
and a member of the Society of Investment Analysts in the United Kingdom. Mr.
Troup also served as a director of Alliance from February 1988 until its
liquidation in February 1994.
Mr. Gumbiner has served as Chairman of the Board of Directors of the
Company since 1981 and Chief Executive Officer of the Company since 1984. He has
also served as Chairman of the Board of Directors and Chief Executive Officer of
HEC since May 1984 and February 1987, respectively; as a director of HHSA, since
March 1984; as a director of ShowBiz since September 1988; as a director of
Hallwood Realty since November 1990; and as a director of HCRC since 1992. Mr.
Gumbiner is also a solicitor of the Supreme Court of Judicature of England.
Mr. Lynch has served as Vice Chairman of the Company since May 1984. He is
Chairman of the Board and Chief Executive Officer of Perpetual Storage, Inc., a
corporation engaged in underground storage and maintenance of business and
personal records and in micrographic services. Mr. Lynch has served as a
director of Perpetual Storage, Inc. since 1969 and as a director of ShowBiz
since September 1988.
Except as set forth above, none of the nominees or continuing directors
holds a directorship in any company with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or subject to the requirements of Section 15(d) of the Exchange
Act or any company registered as an investment company under the Investment
Company Act of 1940, as amended.
No family relationships exist between any of the nominees, the directors
and the executive officers.
COMMITTEES AND MEETINGS OF THE BOARD
Messrs. Talbot (Chairman), Crocco and Lynch served as members of the Audit
Committee during the fiscal year ended July 31, 1994. The Audit Committee met
twice during the fiscal year and was charged with the responsibility of
reviewing the annual audit report and the Company's accounting practices and
procedures and recommending to the Board of Directors the firm of independent
public accountants to be engaged for the ensuing year.
The Compensation Committee is comprised of Messrs. Crocco (Chairman) and
Lynch. The Compensation Committee met twice during the fiscal year ended July
31, 1994, and is responsible for the formulation and implementation of the
Company's compensation policy. For additional information relating to amounts
paid under certain consulting agreements, see "Certain Relationships and Related
Transactions -- Consulting and Management Agreements."
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The Board of Directors does not have a standing nominating committee.
During the fiscal year ended July 31, 1994, the Board of Directors held
four meetings. Each director attended at least 75% of (i) the total number of
meetings held by the Board of Directors and (ii) the total number of meetings
held by all committees of the Board of Directors on which he served.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the close of business on November 21,
1994, information as to the beneficial ownership of shares of Common Stock for
each director and nominee for director and for all directors and executive
officers as a group.
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL PERCENTAGE OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS(1)
----------------------------------------------------------- ------------ -------------
Charles A. Crocco, Jr...................................... 2,257 *
Anthony J. Gumbiner........................................ --(2) --
William L. Guzzetti........................................ --(3) --
Robert L. Lynch............................................ 27,925(4) *
Melvin J. Melle............................................ 60,000(5) *
J. Thomas Talbot........................................... -- --
Brian M. Troup............................................. -- --
All directors and executive officers
as a group (7 persons)................................... 90,182 1.4%
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* Less than 1%
(1) Assumes, for each person or group listed, the conversion of all convertible
securities owned and the exercise of all stock options held by such person
or group that are convertible or exercisable within 60 days, in accordance
with Rule 13d-3(d) (1) (i) of the Exchange Act, but the conversion of none
of the convertible securities owned by any other holder of such securities.
(2) Excludes 896,000 shares of Common Stock held by HEC, of which Mr. Gumbiner
is the Chairman of the Board of Directors and Chief Executive Officer,
1,188,670 shares of Common Stock held by Alpha Trust and 792,448 shares of
Common Stock held by Epsilon Trust. Mr. Gumbiner has the power to designate
and replace the trustees of Alpha Trust and Epsilon Trust.
(3) Excludes 896,000 shares of Common Stock held by HEC, of which Mr. Guzzetti
is the President.
(4) These shares are owned beneficially and of record by Perpetual Storage, Inc.
Mr. Lynch is deemed to beneficially own such shares by virtue of his
ownership of 96.7% of the outstanding shares of Perpetual Storage, Inc.
(5) Includes currently exercisable options to purchase 60,000 shares of Common
Stock.
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Except as set forth below, the Company does not know of any person or
"group" (as that term is used in Section 13(d)(3) of the Exchange Act) who or
which owns beneficially more than 5% of its outstanding shares of Common Stock
as of the close of business on November 21, 1994.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(1)
------------------------------------------------------- ------------ -------------
Alpha Trust 1,188,670(2) 18.6%
c/o Radcliffes Trustee Company SA
9 Rue, Charles Humbert
1205 Geneva, Switzerland
Hallwood Energy Corporation 896,000(3) 14.0%
4582 South Ulster Street Parkway
Suite 1700
Denver, Colorado 80237
Epsilon Trust 792,448(4) 12.4%
c/o IBC International Business Consult Ltd.
80 Broad Street
Monrovia, Liberia
FMR Corp. 368,000(5) 5.8%
82 Devonshire Street
Boston, Massachusetts 02109
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(1) Assumes, for each person or group listed, the conversion of all convertible
securities owned and the exercise of all stock options held by such person
or group that are convertible or exercisable within 60 days, in accordance
with Rule 13d-3(d)(1)(i) of the Exchange Act, but the conversion of none of
the convertible securities owned by any other holder of such securities.
(2) Based on the Amendment to Schedule 13D provided to the Company by Alpha
Trust as of November 9, 1994. Mr. Gumbiner has the power to designate and
replace the trustees of Alpha Trust.
(3) Mr. Gumbiner is the Chairman of the Board of Directors and Chief Executive
Officer and Mr. Guzzetti is the President of HEC.
(4) Based on information provided to the Company by Epsilon Trust. Mr. Gumbiner
has the power to designate and replace the trustees of Epsilon Trust.
(5) Based on the Amendment to Schedule 13D provided to the Company by FMR Corp.
as of November 11, 1994.
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EXECUTIVE COMPENSATION
The total compensation paid for each of the last three fiscal years ended
July 31, 1992, 1993 and 1994 to the Chief Executive Officer, and the other
executive officers who received cash compensation in excess of $100,000 for
fiscal 1994 (collectively, the "named Executive Officers"), is set forth on the
following Summary Compensation Table.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------------------------------
FISCAL OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) COMPENSATION($)(2)
- - - ----------------------------------- ------ --------- -------- ------------------ ------------------
Anthony J. Gumbiner................ 1994 300,000(3) 0 0 6,200
Chairman and Chief 1993 300,000(3) 0 0 6,200
Executive Officer 1992 100,000(3) 0 0 6,200
Brian M. Troup..................... 1994 100,000(3) 0 0 3,800
President and Chief 1993 100,000(3) 0 0 3,800
Operating Officer 1992 68,000(3) 0 0 3,800
William L. Guzzetti................ 1994 412,743 80,000 0 6,004
Executive Vice 1993 412,500 46,491 0 3,502
President 1992 412,500 50,000 0 0
Melvin J. Melle.................... 1994 208,333 0 3,228 5,680
Vice President, Chief 1993 200,000 0 2,341 58,009
Financial Officer and 1992 179,167 25,000 2,360 10,044
Secretary
- - - ---------------
(1) Represents reimbursements to compensate for the income tax effect of payment
for life and/or disability insurance.
(2) Consists of the following items of compensation:
Company or
Subsidiary
Contributions Premium Payments
to Tax Favored for Term Life Relocation
Savings Plan($) Insurance($) Reimbursement($)
----------------------- ----------------------- ------------------------
Name 1994 1993 1992 1994 1993 1992 1994 1993 1992
----------------------------------------- ----- ----- ----- ----- ----- ----- ----- ------ -----
Mr. Gumbiner............................. 0 0 0 6,200 6,200 6,200 0 0 0
Mr. Troup................................ 0 0 0 3,800 3,800 3,800 0 0 0
Mr. Guzzetti............................. 6,004 3,502 0 0 0 0 0 0 0
Mr. Melle................................ 0 4,497 4,364 5,680 5,680 5,680 0 47,832 0
(3) In addition to the compensation paid to Messrs. Gumbiner and Troup, the
Company paid Hallwood Securities Limited or HSC Financial Corporation,
entities with which Messrs. Gumbiner and Troup are associated, consulting
fees of $600,000 for each of fiscal 1994 and fiscal 1993 and $832,000 for
fiscal 1992, primarily in connection with those entities' activities on
behalf of the Company's subsidiaries. The Company also received from the
Hallwood Energy entities consulting fees of $300,000 for each of fiscal
1994, 1993 and 1992, which the Company paid to Hallwood Securities Limited
or HSC Financial Corporation to provide the associated consulting services
to the Hallwood Energy entities. See "Certain Relationships and Related
Transactions."
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The following table discloses for each of the named Executive Officers who
have been granted options to purchase shares of the Company or its subsidiaries
the number of such options held by each of the named Executive Officers and the
potential realizable values for their options at July 31, 1994. None of the
named Executive Officers exercised any options during fiscal 1994 and the
Company has not granted SARs.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL
YEAR 1994 AND OPTION/SAR VALUES AT JULY 31, 1994
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT JULY 31, 1994 (#) OPTIONS/SARS AT JULY 31, 1994 ($)
--------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - -------------------------------- ----------- ------------- ----------- -------------
Melvin J. Melle................. 60,000(1) 0 0 0
- - - ---------------
(1) Options to purchase shares of the Company.
The following table discloses each of the named Executive Officers who
received long-term incentive plan awards during the fiscal year ended July 31,
1994 and the estimated future payouts of the awards:
LONG TERM INCENTIVE PLANS -- AWARDS IN FISCAL YEAR ENDED JULY 31, 1994
PERFORMANCE OR OTHER ESTIMATED FUTURE
NUMBER OF SHARES, UNITS PERIOD UNTIL PAYOUTS UNDER NON-STOCK
NAME OR OTHER RIGHTS(#) MATURATION OR PAYOUT PRICE-BASED PLANS($)(1)
- - - --------------------------------- ----------------------- -------------------- -----------------------
William L. Guzzetti.............. .1425 1999 16,084
- - - ---------------
(1) Awards were made under the HEC Phantom Working Interest Plan. There are no
minimum, maximum or target amounts payable under the plan. Payments under
the awards will be equal to the indicated percentage of net cash flow from
certain wells for the first five years after an award and the indicated
percentage of 40% of the remaining net present value of estimated future
production from the wells for the sixth year. The amount shown above is an
estimate based on estimated reserve quantities and future prices. Because
of the uncertainties inherent in estimating quantities of reserves and
prices, it is not possible to predict cash flow or remaining net present
value of estimated future production with any degree of certainty.
COMPENSATION OF DIRECTORS
For the fiscal year ended July 31, 1994, Messrs. Crocco and Talbot received
director fees of $27,500 per year and are entitled to receive $500 for each day
spent on business of the Company, other than at board meetings. In addition, Mr.
Crocco received an additional fee of $25,000 as the Chairman of the Litigation
Committee, and Mr. Talbot received an additional fee of $6,500 for services
rendered to HCRC and HEC in connection with a proposed transaction by these
entities. Each director is also reimbursed for expenses reasonably incurred in
connection with the performance of his duties. Additional information regarding
consulting agreements with or services provided by Mr. Gumbiner, an entity
controlled by him, Mr. Lynch and Mr. Talbot is included in "Certain
Relationships and Related Transactions" and "Compensation Committee Interlocks
and Insider Participation," below.
EMPLOYMENT AGREEMENTS
During fiscal 1994, the Company or its subsidiaries had employment
agreements with Messrs. Melle, Troup and Gumbiner.
Mr. Melle's employment agreement provides for payment of a salary of
$200,000 per year plus an annual bonus in an amount as may be determined by the
Board of Directors of the Company. In addition, the employment agreement
provides that the Company will maintain $500,000 of life insurance benefits on
behalf of Mr. Melle and, for the fiscal year ended July 31, 1994, the Company
paid premiums in the amount of
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$5,680 for such life insurance. Mr. Melle's employment agreement has been
extended until December 31, 1995.
Pursuant to an agreement entered into January 1, 1993, Mr. Troup is
compensated for services rendered to certain subsidiaries of the Company at the
rate of $100,000 per year. Under the agreement, Mr. Troup is required to devote
substantially all of his time and attention to consulting with respect to the
business and investments of the Company and its subsidiaries and associated
companies situated outside the United States. The agreement may be terminated by
either party on one month's notice.
Pursuant to an agreement with a subsidiary of the Company, Mr. Gumbiner
receives compensation of $300,000 per year for providing consulting services in
relation to the Company's business outside the United States. Effective August
1, 1994, Hallwood Petroleum, Inc. ("HPI"), an affiliate of HEC, entered into a
Compensation Agreement with Mr. Gumbiner pursuant to which HPI pays Mr. Gumbiner
$250,000 per year for providing consultation and assistance in maintaining its
relationships with foreign governments and negotiating transactions outside the
United States. An advance payment of $62,500 was made in July 1994 in connection
with the Compensation Agreement. The Compensation Agreement is to continue in
effect until terminated by either party on not less than six month's notice.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Messrs. Crocco (Chairman) and
Lynch. During the fiscal year ended July 31, 1994, HEC, a subsidiary of the
Company, retained Lunney, Crocco, De Maio & Camardella, P.C., a predecessor of
Crocco & DeMaio, P.C., attorneys at law, of which Mr. Crocco is a partner, as
its special counsel on certain legal matters for which HEC paid $4,266
(excluding expense reimbursements). Mr. Lynch is Vice Chairman of the Board of
Directors of the Company. Under a month-to-month extension of a consulting
agreement, Mr. Lynch received a consulting fee of $120,000 for the fiscal year
ended July 31, 1994, and a car allowance of $3,852. He also received
compensation for serving as a director of the Company of $12,500 per year, $750
for each of the four meetings of the Board he attended (other than telephonic
meetings, for which no fee was paid) and $250 for each of the two Audit
Committee meetings and the two Compensation Committee meetings he attended.
COMPENSATION COMMITTEE
REPORTS ON EXECUTIVE COMPENSATION
GENERAL
The Company is a diversified holding company with several subsidiaries and
associated companies. Of the named executive officers, Messrs. Gumbiner and
Troup are involved in the activities of all of the subsidiaries and associated
companies, but for fiscal 1994 received compensation only from the Company or
its wholly owned foreign subsidiaries; Mr. Melle is involved in the activities
of the Company and of certain subsidiaries and associated companies, but for
fiscal 1994 received compensation only from the Company; and Mr. Guzzetti is
involved in the activities of Hallwood Realty, Hallwood Management Company
("Hallwood Management"), a wholly owned subsidiary of the Company, and HEC, HCRC
and their subsidiaries and controlled entities. Accordingly, the compensation of
Messrs. Gumbiner, Troup and Melle were determined solely by the Company's
Compensation Committee. The compensation of Mr. Guzzetti with respect to his
services to Hallwood Realty is determined by the Board of Directors of Hallwood
Realty, the compensation to Mr. Guzzetti for his services with respect to
Hallwood Management is determined by the Compensation Committee of the Company'
Board of Directors and Mr. Guzzetti's compensation with respect to his services
to HEC and HCRC is determined by the Compensation Committees of HEC's and HCRC's
Boards of Directors.
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COMPENSATION BY THE COMPANY
The members of the Compensation Committee of the Company's Board of
Directors are appointed by the Board of Directors. During fiscal 1994, the
members of the Compensation Committee were Messrs. Crocco and Lynch. The
Company's Compensation Committee annually determines the compensation of the
Company's executive officers after discussions with each officer and bases the
amount of compensation on the Committee's subjective determination of the
reasonable compensation for that officer. Although the members of the
Compensation Committee, through their business experience, are generally aware
of prevailing compensation practices, they do not specifically compare the
compensation of the Company's officers to the compensation of any other specific
group of companies. Similarly, although the members of the Compensation
Committee, as members of the Board, review and remain informed about the recent
financial and operating experience of the Company, they do not specifically
consider any financial or other factors in establishing compensation.
Substantially all of the executive officers' compensation is paid as salary,
although from time to time the Compensation Committee has awarded substantial
bonuses upon completion of significant acquisitions or other transactions that
provide material benefits to the Company.
The Company operates primarily through its subsidiaries. Accordingly, the
compensation of Mr. Gumbiner, the Company's Chief Executive Officer, is based in
large part on his activities on behalf of the various subsidiaries, including
consultation with respect to acquisitions and financings and identifying and
negotiating investment opportunities. Mr. Gumbiner currently receives
compensation of $300,000 per year as an employee of a foreign subsidiary of the
Company. In addition, as described in "Certain Relationships and Related
Transactions" below, during fiscal 1994, Messrs. Gumbiner and Troup were
associated with Hallwood Securities Limited ("Limited"), which provided
consulting services to the Company pursuant to a consulting agreement entered
into in 1992 (the "1992 Consulting Agreement"), under which Limited received
consulting fees of $600,000 in fiscal 1994. The 1992 Consulting Agreement
terminated July 31, 1994. In addition, in July 1993, the Company renewed a
financial consulting agreement with HEC and its affiliates and assigned this
Agreement to Limited, under which Limited received consulting fees of $300,000
per year. This agreement was terminated effective June 30, 1994, and the Company
entered into a new financial consulting agreement with HPI, an affiliate of HEC,
dated as of June 30, 1994, which provides that the Company or its agent shall
provide consulting services to HPI for compensation of $300,000 per year. The
Compensation Committee determined that these services would be most
appropriately provided by HSC Financial Corporation ("HSC"), a corporation with
which Messrs. Gumbiner and Troup are associated, acting as the Company's agent,
through the services of Mr. Gumbiner and Mr. Troup, and that as consideration
for these services the Company would pay to HSC the fee to which the Company is
entitled under the agreement. The Compensation Committee's determination was
based primarily on the fact that Messrs. Gumbiner and Troup had previously
provided similar services through Limited on substantially the same terms.
Hallwood Management has contracted with Hallwood Realty to manage the
properties controlled by Hallwood Realty. Mr. Guzzetti is the President and is
primarily responsible for the operations of Hallwood Management. Hallwood
Management's Executive Incentive Plan authorizes Hallwood Management to pay
annual cash bonuses in an amount up to 10% of Hallwood Management's net
operating income for the prior year. The actual amount to be paid and the
allocation of the total amount to individual employees is recommended by the
Chief Executive Officer of Hallwood Management, Mr. Gumbiner, and approved by
the Board of Directors of Hallwood Management, which consists of Messrs.
Gumbiner, Troup and Guzzetti. Any amount to be paid to an executive officer of
the Company is subject to the approval of the Company's Compensation Committee.
Pursuant to the Executive Incentive Plan, Mr. Gumbiner recommended that a total
bonus of $50,000 (1.3% of Hallwood Management's net operating income for 1993)
be paid to four employees of Hallwood Management, including $15,000 to Mr.
Guzzetti. The total amount of the awards under the Executive Incentive Plan was
determined by Mr. Gumbiner based on his subjective determination that the amount
was reasonable in light of Hallwood Management's net operating income and was
allocated to the employees based on Mr. Gumbiner's judgement of the overall
contribution of each employee to Hallwood Management and the compensation the
individual otherwise receives. The Board of Directors of Hallwood
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Management and the Company's Compensation Committee approved the bonuses as
recommended by Mr. Gumbiner.
Fiscal 1994 Compensation Committee Members:
Charles A. Crocco, Jr.
Robert L. Lynch
HALLWOOD REALTY COMPENSATION
Compensation of the executive officers of Hallwood Realty is determined by
the entire Board of Directors of Hallwood Realty in consultation with Mr.
Guzzetti, the President of Hallwood Realty. The amount of compensation is based
on the Board's subjective determination of the reasonable compensation for that
officer. Although the members of the Board, through their business experience,
are generally aware of prevailing compensation practices, they do not
specifically compare the compensation of the Company's officers to the
compensation of any other specific group of companies. Similarly, although the
members of the Board review and remain informed about the recent financial and
operating experience of Hallwood Realty, they do not specifically consider any
financial or other factors in establishing compensation. The Board bases its
determination of specific amounts to be paid to individual executive officers
primarily on Mr. Guzzetti's and the Board's subjective assessments of the
individual performance of each officer. Substantially all the compensation paid
by Hallwood Realty to its executive officers consists of salary, although the
Board of Directors may determine to pay bonuses from time to time based on the
Board's determination that Hallwood Realty has experienced favorable operating
results or completed transactions that benefit Hallwood Realty. For fiscal 1994,
Mr. Guzzetti and the Board of Directors determined that no change was required
in the salaries of the executive officers from the prior year.
Fiscal 1994 Members of the Board of Directors:
Anthony J. Gumbiner William L. Guzzetti
Alan G. Crisp William F. Forsyth
Brian M. Troup
HEC COMPENSATION
General. HEC's fiscal year ends December 31. Therefore, this report is
presented with respect to compensation paid during HEC's latest completed fiscal
year ended December 31, 1993. The members of the Compensation Committee of HEC's
Board of Directors are appointed by the Board of Directors. During 1993, the
members of the Compensation Committee were Anthony J. Gumbiner, Brian M. Troup
and Hans-Peter Holinger.
HEC's primary activity is to serve as general partner of HEP, which in turn
controls several other entities (collectively, the "Energy Companies"). HEC has
no employees; all management is provided by employees of HPI, which provides
services to all of the Energy Companies. Accordingly, HEC does not directly pay
any compensation but reimburses HPI for its costs and expenses. Individual
compensation is based on the individual's responsibilities and performance
relating to all of the Energy Companies, and is allocated to these entities
based on a procedure that takes into account both the amount of time spent on
management and the number of properties owned by each entity. HEC's Compensation
Committee reviews and approves the compensation of the Energy Companies'
management and supervisory employees, including executive officers, at least
annually. These employees are referred to as "Exempt Employees." In determining
compensation, HEC's Compensation Committee evaluates the Energy Companies'
performance and compensation levels and compares them with those of other
companies that are believed to be comparable to the Energy Companies. In January
1994, the full Board of Directors of HEC acted as the Compensation Committee in
determining cash bonuses paid with respect to 1993. In 1993, HEC's Exempt
Employees' compensation consisted of three primary components: salary and annual
bonus, cash bonus and Long-Term Incentive Plans awards.
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The combination of salary and annual bonus, cash bonus and Phantom Working
Interest Plan awards is intended to result in the Exempt Employees receiving
total compensation of approximately 80% to 90% of the average compensation paid
to similarly situated employees in other oil and gas companies with comparable
revenues and capital budgets in those years in which the Energy Companies'
results, as measured by finding costs and reserve replacement, are comparable to
the average results for those companies. In those years in which the Energy
Companies' results are substantially above the average results for comparable
companies, it is intended that the Exempt Employees' total compensation would be
above the average compensation paid to similarly situated employees in
comparable companies. In addition, the Board has authorized the Compensation
Committee to award as cash bonuses an amount up to the amount, if any, that HEC
receives in cash as a fee from HEP in connection with any acquisitions by HEP.
During 1993, HEC did not receive any significant acquisition fees from HEP.
Therefore, HEC did not award any cash bonuses to its executive officers relating
to acquisition fees received.
Salary. Exempt Employees' salaries and annual bonuses are determined based
on the individual employees' level of responsibility and comparisons to similar
positions in comparable companies and are generally set at approximately 80% of
the average salaries paid by those comparable companies.
Cash Bonus. The Compensation Committee has determined to award certain
Exempt Employees, including executive officers, cash bonuses based on an
assessment of a number of quantitative and qualitative factors. The primary
quantitative factors are performance in reserve finding, considering overall
reserves found and effectiveness of capital expenditures, in comparison to the
historical performance of independent oil and gas companies as a group and
comparison of general and administrative expenses and operating costs to budget.
Based on comparisons of the Energy Companies' performance with the historical
performance of other independent oil and gas companies as a group as reported by
generally published industry statistics, the Compensation Committee determined
that the Energy Companies had a better than average year in the overall reserves
found and effectiveness of capital expenditures. Therefore, the cash bonuses
paid to management employees as a group were set at levels that would result in
their total annual compensation being slightly higher than that paid by
comparable companies. The aggregate cash bonuses are allocated among the Exempt
Employees based on the recommendations of senior management and a determination
of the employees' relative contributions to the Energy Companies during the
year.
The Long-Term Incentive Plans. The Energy Companies Long-Term Incentive
Plans consist of a Phantom Working Interest Plan for domestic properties and an
International Incentive Plan for international projects. Both plans are intended
to provide incentive and motivation to the Energy Companies' key employees,
including HEC's executive officers, to increase the oil and gas reserves of the
Energy Companies and to enhance the Energy Companies' ability to attract,
motivate and retain key employees upon whom, in large measure, the success of
the Energy Companies depends. Under the Phantom Working Interest Plan, HEC's
Board annually determines the portion of the Energy Companies' collective
interests in the cash flow from wells completed during that year (the "Plan
Year") that will be allocated to participants in the plan. The portion allocated
to participants in the plan is referred to as the Plan Cash Flow. The
Compensation Committee then determines which key employees may participate in
the plan for the Plan Year and allocates the Plan Cash Flow among the
participants. Awards under the plan do not represent any actual ownership
interest in the wells. Awards are made in the Compensation Committee's
discretion.
Each award under the plan represents the right to receive for five years a
specified share of the Plan Cash Flow attributable to wells completed during the
Plan Year. In the sixth year after the award, the participant is paid an amount
equal to a specified percentage of the remaining net present value of estimated
future production from the wells and the award is terminated. Accordingly, the
value of awards under the plan depends primarily on the Energy Companies'
success in drilling, completing and achieving production from new wells each
year and from certain recompletions and enhancements of existing wells. The
percentage of the Energy Companies' cash flow from wells completed in any Plan
Year to be allocated to the Plan Cash Flow each Plan Year, the percentage of the
remaining net present value of estimated future production for which the
participants will receive payment in the sixth year of an award, and the amount
to be awarded to individual participants is determined by the Compensation
Committee each year, after taking into consideration the recommendation of the
Energy Companies' executive officers.
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The awards for the 1993 Plan Year were made in January 1993. For this Plan
Year, the Compensation Committee determined that the total Plan Cash Flow would
be equal to 1% of the cash flow of the wells completed during the Plan Year. The
Compensation Committee also determined that the participants' interests for the
1993 Plan Year would be purchased in the sixth year at 40% of the remaining net
present value of the wells completed in the Plan Year. The Compensation
Committee also determined that the total awards would be allocated among key
employees primarily on the basis of salary, to the extent of 70% of the total
award, and on individual performance, to the extent of 30% of the total award.
The International Incentive Plan was adopted by the Board in January 1994
and the first awards were made with respect to the 1994 Plan Year. Under the
plan, for each Plan Year awards will be made entitling the participants to
receive for ten years from the date of first production an aggregate of 3% of
the gross revenues, net of the costs of transportation and marketing, from
international projects active during the Plan Year. HEC's Board determines which
key employees may participate in the plan for the Plan Year and allocates the
awards among the participants. Awards under the plan do not represent any actual
ownership interests in any international projects and are made in HEC's Board's
discretion. No awards were made under the plan in 1993.
1993 Compensation Committee Members:
Anthony J. Gumbiner
Brian M. Troup
Hans-Peter Holinger
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PERFORMANCE GRAPH
The following performance graph compares the 5-year cumulative return of
the Common Stock with that of the Russell 2000 Index and a peer group of
issuers. The issuers included in the peer group are all publicly traded
companies included in Standard Industrial Classification Code 6512 "Operators of
Nonresidential Buildings," with market capitalization of less than $100,000,000
as of August 15, 1994, which consist of Equitable Real Estate Shopping Centers,
L.P., Hallwood Realty Partners, L.P., Milestone Properties, Inc., Pacific
Gateway Properties, Inc. and Shopco Laurel Centre, L.P.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE HALLWOOD GROUP INCORPORATED,
THE RUSSELL 2000 INDEX AND A PEER GROUP
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) HALLWOOD PEER GROUP RUSSELL 2000
--------------------- -------- ---------- ------------
7/89 100 100 100
7/90 127 79 95
7/91 137 45 104
7/92 100 33 119
7/93 110 36 147
7/94 59 38 154
* $100 invested on July 31, 1989 in stock, index or peer group, including
reinvestment of dividends. Fiscal year ending July 31.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CONSULTING AND MANAGEMENT AGREEMENTS
Pursuant to the 1992 Consulting Agreement, Limited, a corporation with
which Anthony J. Gumbiner, the Company's Chairman and Chief Executive Officer
and Brian M. Troup, the Company's President and Chief Operating Officer, are
associated, provided consulting services to the Company with respect to
strategic and tactical advice regarding the Company's assets and investments and
proposed transactions involving the Company and its affiliates. As compensation
for its services under the 1992 Consulting Agreement, Limited was paid a fee of
$600,000 (excluding reimbursement for out-of-pocket and other reasonable
expenses of Limited) for the fiscal year ended July 31, 1994. The 1992
Consulting Agreement terminated July 31, 1994. Effective August 1, 1994, the
Company entered into an agreement (the "1994 Consulting Agreement"), with
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HSC, a corporation with which Messrs. Gumbiner and Troup are associated,
pursuant to which HSC agreed to provide international consulting and advisory
services to the Company and its affiliates for an annual fee of $350,000,
excluding reimbursement for out-of-pocket and other reasonable expenses of HSC.
The initial term of the 1994 Consulting Agreement expires July 31, 1995, and is
to be automatically extended for successive one-year terms unless notice of
termination is provided by either party no less than thirty-one (31) days prior
to the expiration of the end of its term or an extension thereof.
In July 1993, the Company renewed a financial consulting agreement with
HEC, pursuant to which the Company or Limited furnished consulting and advisory
services to HEC and its affiliates, including HEP. The Company assigned this
renewed contract to Limited at its inception. No payments were made under this
agreement in fiscal 1994. This agreement was terminated June 30, 1994. The
Company entered into a new financial consulting agreement with HPI, dated as of
June 30, 1994, which provides that the Company or its agent shall provide
consulting services to HPI for compensation of $300,000 per year. The
Compensation Committee determined that these services would be most
appropriately provided by HSC, acting as the Company's agent, through the
services of Mr. Gumbiner and Mr. Troup, and that as consideration for these
services the Company would pay to HSC the fee to which the Company is entitled
under the agreement. Of the $300,000 payment made in June 1994, HEC paid
approximately $7,000, and HEP and other affiliates of HEC paid the remainder.
During the Company's fiscal year 1994, Mr. Talbot served as a consultant to
the Energy Companies, for which Mr. Talbot received total fees of $6,500 and was
reimbursed for expenses.
Pursuant to an existing agreement, the Company reimburses HSC for
reasonable and necessary expenses in providing office space and administrative
services used by Mr. Gumbiner. For the fiscal year ended July 31, 1994, the
Company reimbursed HSC in the amount of $271,000. Of the amounts paid in fiscal
1994, approximately $65,000 was paid by the Company, $3,000 was paid by HEC, and
the remainder by HEP and other affiliates of HEC.
See "Compensation Committee Interlocks and Insider Participation," for
information concerning members of the Company's Compensation Committee.
STANWICK HOLDINGS, INC.
The Company shares common offices, facilities and staff with, and certain
executive officers of the Company also served as executive officers or directors
of Stanwick Holdings, Inc. ("Stanwick"). The Company pays the common general and
administrative expenses of the two companies and charges Stanwick a fee for its
allocable share of such expenses, which totalled $25,000 in fiscal 1994.
Stanwick is a subsidiary of HHSA. Messrs. Gumbiner and Troup are directors
of HHSA. Under United States securities laws, Limited, with which Messrs.
Gumbiner and Troup are associated, could be considered to share beneficial
ownership of substantially all of the outstanding shares of HHSA.
PURCHASE AGREEMENT
Pursuant to a Purchase Agreement dated as of September 19, 1994, among
Agoit Partners, L.P. ("Agoit"), Hallwood Hotels, Inc. and The Lido Beach Hotel,
Inc., which are subsidiaries of the Company, Agoit has agreed to purchase two
hotels from these subsidiaries for an aggregate purchase price of $20,000,000.
Mr. Talbot serves as an officer and director of the general partner of Agoit.
Agoit subsequently agreed to permit the Company to pursue a sale of one of these
hotels to an unrelated third party, but retained its rights under the Purchase
Agreement in the event the transaction with the third party is not completed.
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AUDITORS
Deloitte & Touche LLP served as the Company's independent auditors for the
fiscal year ended July 31, 1994, and have been selected to serve in that
capacity again for the fiscal year ending July 31, 1995. A representative of
Deloitte & Touche LLP will be available at the Annual Meeting to respond to
appropriate questions and will be given an opportunity to make a statement if
desired.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder who wishes to present a proposal for action at the next
Annual Meeting of Stockholders and who wishes to have it set forth in the proxy
statement and identified in the form of proxy prepared by management must notify
management of the Company in such a manner so that such notice is received by
management by August 15, 1995, and in such form as required under the rules and
regulations promulgated by the SEC.
OTHER BUSINESS
The Company is not aware of any other business to be presented at the
Annual Meeting. All shares represented by Company proxies will be voted in favor
of the nominees for director set forth herein unless otherwise indicated on the
form of proxy. If any other matters properly come before the meeting, Company
proxy holders will vote thereon according to their best judgment.
By order of the Board of Directors
MELVIN J. MELLE
Secretary
December 12, 1994
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____________________________________________________________________________________________________________________________________
THE HALLWOOD GROUP INCORPORATED
P
R 3710 RAWLINS, SUITE 1500
O DALLAS, TEXAS 75219
X
Y THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Anthony J. Gumbiner and Robert L. Lynch, and each of them, as Proxies, each with the
power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse
side hereof, all of the shares of Common Stock, par value $0.10 per share ("Common Stock"), of The Hallwood Group
Incorporated held of record by the undersigned on November 21, 1994, at the Annual Meeting of Stockholders to be held
on January 19, 1995 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
PLEASE MARK BOXES IN BLUE OR BLACK INK.
1. Election of Directors
NOMINEES: Charles A. Crocco, Jr. and J. Thomas Talbot 2. In their discretion, the Proxies are authorized to vote upon
such other business as properly may come before the meeting.
/ / FOR both nominees (except as indicated)
MARK HERE
/ / WITHHOLD AUTHORITY to vote for both nominees FOR ADDRESS / /
CHANGE AND
To Withhold Authority to vote for an individual NOTE AT LEFT
nominee, strike through that nominee's name above.
Please sign exactly as name appears at left. When shares are held
by joint tenants, both should sign, or if one signs he should
attach evidence of his authority. When signing as attorney,
executor, administrator, agent, trustee or guardian, please give
full title as such. If a corporation, please sign full
corporate name by President or other authorized officer. If a
partnership, please sign full partnership name by authorized
person.
Signature:______________________________ Date ____________
COMPLETE, SIGN AND DATE THE PROXY CARD AND RETURN
PROMPTLY USING THE ENCLOSED ENVELOPE. Signature:______________________________ Date ____________
____________________________________________________________________________________________________________________________________
19
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PROXY
THE HALLWOOD GROUP INCORPORATED
3710 RAWLINS, SUITE 1500
DALLAS, TEXAS 75219
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Anthony J. Gumbiner and Robert L. Lynch, and
each of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side hereof, all of the shares of Common Stock, par value $.10 per share
("Common Stock"), of The Hallwood Group Incorporated held of record by the
undersigned on November 21, 1994, at the Annual Meeting of Stockholders to be
held on January 19, 1995 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR EACH OF THE PROPOSALS LISTED.
(Continued and to be signed on reverse side)
- - - --------------------------------------------------------------------------------
- - - --------------------------------------------------------------------------------
PLEASE MARK BOXES / / OR /X/ IN BLUE OR BLACK INK.
1. ELECTION OF DIRECTORS FOR both nominees listed WITHHOLD AUTHORITY
Nominees: (except as indicated) / / to vote for both
Charles A. Crocco, Jr. and nominees listed / /
J. Thomas Talbot
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below:
- - - --------------------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as properly may come before the meeting.
Please sign exactly as name
appears at left. When shares are
held by joint tenants, both
should sign, or if one signs he
should attach evidence of his
authority. When signing as
attorney, executor,
administrator, agent, trustee or
guardian, please give full title
as such. If a corporation, please
sign full corporate name by
President or other authorized
officer. If a partnership, please
sign full partnership name by
authorized person.
Dated: ................... , 19..
.................................
Signature
.................................
Signature, if held jointly
COMPLETE, SIGN AND DATE THE PROXY CARD AND RETURN PROMPTLY USING THE ENCLOSED
ENVELOPE.
- - - --------------------------------------------------------------------------------