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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
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
THE SPORTS CLUB COMPANY, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[THE SPORTS CLUB LOGO]
THE SPORTS CLUB COMPANY, INC.
11100 SANTA MONICA BOULEVARD
SUITE 300
LOS ANGELES, CALIFORNIA 90025
June 25, 1996
Dear Stockholder:
You are cordially invited to attend the Company's 1996 Annual Meeting on
Tuesday, August 6, 1996.
The meeting will begin promptly at 2:00 p.m.(Los Angeles time), in the
Coliseum Room of The Sports Club/LA, located at 1835 Sepulveda Boulevard, Los
Angeles, California.
The official Notice of Meeting, proxy statement and form of proxy are
included with this letter. The matters listed in the Notice of Meeting are
described in detail in the proxy statement.
The vote of every stockholder is important and we hope you will use this
opportunity to take an active part in the affairs of the Company by voting on
the business to come before the Annual Meeting. In order to ensure maximum
stockholder representation, I urge each of you, whether or not you expect to
attend the meeting in person, to sign your proxy and return it promptly in the
enclosed envelope. Mailing your completed proxy will not prevent you from voting
in person at the meeting if you wish to do so.
Your Board of Directors and management look forward to greeting personally
those stockholders who are able to attend.
Sincerely,
/s/ David Michael Talla
------------------------
David Michael Talla
Chairman, and
Chief Executive Officer
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[THE SPORTS CLUB LOGO]
THE SPORTS CLUB COMPANY, INC.
11100 SANTA MONICA BOULEVARD
SUITE 300
LOS ANGELES, CALIFORNIA 90025
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, AUGUST 6, 1996
TO THE STOCKHOLDERS OF THE SPORTS CLUB COMPANY, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of The
Sports Club Company, Inc. (the "Company") will be held in the Coliseum Room of
The Sports Club/LA, located at 1835 Sepulveda Boulevard, Los Angeles,
California, on Tuesday, August 6, 1996, at 2:00 p.m. (Los Angeles time), for the
following purposes:
1. To elect two directors of the Company to serve as Class II
directors until the Annual Meeting of Stockholders to be held in 1999,
until each such director's successor has been duly elected and qualified or
until each such director has otherwise ceased to serve as a director;
2. To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
Only stockholders of record at the close of business on June 20, 1996, will
be entitled to notice of and to vote at the Annual Meeting and any postponements
or adjournments thereof. A list of stockholders entitled to vote at the Annual
Meeting will be available at the offices of the Company for ten (10) days prior
to the Annual Meeting.
YOUR VOTE IS VERY IMPORTANT. TO ENSURE THAT YOUR STOCK IS REPRESENTED, WE
URGE YOU TO VOTE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED,
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. IF YOU RECEIVE
MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES
OR ADDRESSES, EACH PROXY CARD SHOULD BE COMPLETED AND RETURNED. IF YOU DO ATTEND
THE ANNUAL MEETING, YOU MAY, IF YOU PREFER, VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
/s/ Nanette Pattee Francini
----------------------------
Nanette Pattee Francini
Secretary
Los Angeles, California
June 25, 1996
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THE SPORTS CLUB COMPANY, INC.
11100 SANTA MONICA BOULEVARD
SUITE 300
LOS ANGELES, CALIFORNIA 90025
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 6, 1996
-------------------------------
PROXY STATEMENT
-------------------------------
This Proxy Statement is being mailed on or about June 28, 1996, in
connection with the solicitation of proxies by the Board of Directors of The
Sports Club Company, Inc., a Delaware corporation (the "Company"). The proxies
are for use at the Annual Meeting of Stockholders to be held at 2:00 p.m. (Los
Angeles time), on August 6, 1996, in the Coliseum Room of The Sports Club/LA,
located at 1835 Sepulveda Boulevard, Los Angeles, California, and any
postponements or adjournments thereof (the "Annual Meeting") for the purposes
set forth in the accompanying Notice of Annual Meeting. The record date for the
Annual Meeting is the close of business on June 20, 1996 (the "Record Date").
Only holders of record of the Company's Common Stock, par value $0.01 per share
(the "Common Stock") on the Record Date are entitled to notice of the Annual
Meeting and to vote at the Annual Meeting.
A proxy card is enclosed. Whether or not you plan to attend the Annual
Meeting in person, please date, sign and return the enclosed proxy card as
promptly as possible, in the postage prepaid envelope provided, to ensure that
your shares will be voted at the Annual Meeting. Any stockholder who returns a
proxy has the power to revoke it at any time prior to its effective use by
filing an instrument revoking it, or a duly executed proxy bearing a later date,
with the Secretary of the Company, or by attending the Annual Meeting and voting
in person. Unless otherwise instructed, any such proxy, if not revoked, will be
voted at the Annual Meeting "FOR" the nominees for election as directors as set
forth in this Proxy Statement, and as recommended by the Board of Directors, in
its discretion, with regard to all other matters which may properly come before
the Annual Meeting. The Company does not currently know of any such other
matters.
At the Record Date, there were outstanding 11,355,000 shares of the
Company's Common Stock, the only class of stock of the Company outstanding as of
the Record Date. The presence, either in person or represented by proxy, of
persons entitled to vote a majority of the Company's outstanding Common Stock is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting.
Each share of Common Stock issued and outstanding on the Record Date is
entitled to one vote on any matter presented for consideration and action by the
stockholders at the Annual Meeting. With respect to all matters other than the
election of the directors, the affirmative vote of a majority of shares of the
Company's Common Stock present in person or represented by proxy at the Annual
Meeting and entitled to vote on the subject matter will be the act of the
stockholders. Directors will be elected by a plurality of the votes of the
shares of the Company's Common Stock present in person or represented by proxy
and entitled to vote on the election of directors. Abstentions will be treated
as the equivalent of a negative vote for the purpose of determining whether a
proposal has been adopted and will have no effect for the purpose of determining
whether a director has been elected. Broker non-votes will not be counted as
cast.
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the accompanying form of proxy, and the cost of soliciting proxies
relating to the Annual Meeting, will be borne by the Company. The Company
intends to request banks and brokers to solicit their customers who beneficially
own Common Stock listed of record in names of nominees, and will reimburse such
banks and brokers for their reasonable out-of-pocket expenses for such
solicitations. The solicitation of proxies by mail may be supplemented by
telephone, telegram and personal solicitation by officers, directors and regular
employees of the Company, but no additional compensation will be paid to such
individuals.
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ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Pursuant to the Bylaws of the Company, the Board of Directors shall consist
of not less than four nor more than seven members. The specific number of Board
members within this range is determined by the Board of Directors and is
currently set at six. The Board is divided into three equal classes of two
directors each, which classes serve staggered three-year terms. The terms of the
Class II directors expire this year and their successors are to be elected at
the Annual Meeting for a three-year term expiring in 1999. The terms of the
Class III and Class I directors do not expire until 1997 and 1998, respectively.
The Board of Directors is proposing Nanette Pattee Francini and Dennison
Veru, who both now serve as Class II directors, for election as Class II
directors at the Annual Meeting.
To the Company's knowledge, each nominee is and will be available to serve,
but if any of them should decline or be unable to act as a director, the proxy
holders will vote for the election of another person or persons as the Board of
Directors recommends.
PRINCIPAL OCCUPATION DURING THE LAST 5 YEARS,
OTHER BUSINESS
The nominees have supplied the following background information to the
Company:
DIRECTOR
NAME AGE EXPERIENCE AND DIRECTORSHIPS SINCE
- - --------------------------- --- ----------------------------------------------- --------
Nanette Pattee Francini.... 47 Currently serves as a Director and Executive 1994
Vice President of the Company. In 1977, Ms.
Francini co-founded the Company.
Dennison Veru.............. 35 Mr. Veru serves as a Director of the Company 1996
and has been President of Awad & Associates, a
money management division of Raymond James
Financial since November 1992.
BOARD COMMITTEES
The Board has a standing Audit Committee (the "Audit Committee") that
reviews the audit and control functions of the Company, the Company's accounting
principles, policies and practices and financial reporting, the scope of the
audit conducted by the Company's auditors and the independent auditor's opinion
and letter of comment to management and management's response thereto. The Audit
Committee met once during 1995. The Audit Committee is currently comprised of
Messrs. Turner, Licklider, and Veru.
The Board has a Compensation Committee (the "Compensation Committee") that
is authorized to review and recommend to the Board the salaries and bonuses of
the Company's executive officers. The Compensation Committee also administers
the Company's 1994 Stock Incentive Plan. During 1995 the Compensation Committee
met once. The Compensation Committee is currently comprised of Messrs. Turner,
Licklider, and Veru.
The Board does not have a nominating committee, or a committee performing
similar functions.
DIRECTOR ATTENDANCE
In 1995, the Company held five meetings of the Board of Directors. Except
for Mr. Turner who missed one meeting, during 1995 each incumbent director
attended all meetings of the Board and all committee meetings of the Board of
which they were members. The Audit Committee and the Compensation Committee held
one meeting each in 1995, both of which were attended by Messrs. Licklider and
Turner.
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DIRECTOR COMPENSATION
Effective February 1995, non-employee directors of the Company are entitled
to receive an annual fee of $10,000, paid quarterly, and a fee of $500 for each
meeting attended. Non-employee directors who are members of the Audit Committee
or Compensation Committee are entitled to receive $500 for each meeting they
attend. In addition, non-employee directors receive 1,000 shares of the
Company's Common Stock each year pursuant to the Company's 1994 Stock
Compensation Plan. Mr. Licklider, Mr. Veru and Mr. Turner currently serve on the
Board as non-employee directors. The Company provides Mr. Licklider with health
insurance under its group insurance plan. All directors receive reimbursement of
reasonable out-of-pocket expenses incurred in connection with meetings of the
Board. No amount was paid to directors during 1994 and $36,000 was paid to
directors during 1995. In March 1995 and November 1995, 3,000 and 2,000 shares
of Common Stock, respectively, were issued to the non-employee directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE
ELECTION OF THE ABOVE NOMINEES
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The names of the directors and executive officers of the Company, as well
as their respective ages as of February 29, 1996, and positions with the
Company, are as follows:
NAME AGE POSITION
- - ----------------------------------- ---- ------------------------------------
D. Michael Talla................... 49 Chairman of the Board, and Chief
Executive Officer
Rex A. Licklider................... 52 Vice Chairman of the Board
John M. Gibbons.................... 47 President, Chief Operating Officer
and Director
Nanette Pattee Francini............ 47 Executive Vice President, Secretary
and Director
Mark S. Spino...................... 41 Vice President -- Director of
Development
Philip J. Swain.................... 38 Vice President -- Director of
Operations
Timothy M. O'Brien................. 44 Chief Financial Officer and
Assistant Secretary
Andrew L. Turner................... 49 Director
Dennison Veru...................... 35 Director
D. MICHAEL TALLA co-founded the Company in 1977, has served as the Chief
Executive Officer since that time and has served as Chairman of the Board of
Directors since February 1994. Mr. Talla has been in the sports and fitness
industry for more than 20 years and has developed or participated in the
development of more than 20 clubs in the United States, including all Clubs
owned by the Company. Mr. Talla holds a Bachelor of Arts Degree in Business
Administration from the University of Arizona.
REX A. LICKLIDER joined the Company as an unpaid consultant in 1991, has
served as a director of the Company since February 1994 and was named Vice
Chairman of the Board in May 1994. Prior to his involvement with the Company,
Mr. Licklider served at various times as Chairman, President and Chief Executive
Officer of Com Systems, Inc., an AMEX-listed long-distance telecommunications
company which he founded with two other individuals in 1975. Mr. Licklider is a
director of Deckers Outdoor Corporation, Golden-Tel, Inc. and Associated Travel
Services, Inc. He also serves on the Board of Directors of the Children's Bureau
of Southern California and Los Angeles Youth Programs, Inc. Mr. Licklider holds
a Bachelor of Arts Degree in Business Administration from the University of
Arizona and a Masters in Business Administration from the University of
California at Los Angeles.
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JOHN M. GIBBONS was engaged by the Company to serve as Chief Financial
Officer in May 1994 and became Executive Vice President in February 1995 and
President and Chief Operating Officer on July 1, 1995. Mr. Gibbons was elected
to the Board of Directors effective August 14, 1995. From September 1993 until
May 1994, Mr. Gibbons was a financial and business consultant whose clients
included the Company. From February 1990 until September 1993, Mr. Gibbons was
employed as a Vice President by Com Systems, Inc., an AMEX-listed long-distance
telecommunications company located in Westlake Village, California, serving as
General Manager and Senior Vice President from December 1992 to September 1993,
and as Chief Financial Officer from August 1991 through December 1992. From
January 1988 through February 1990, Mr. Gibbons was employed as Chief Financial
Officer of TMC Communications, a long-distance telecommunications company
located in Santa Barbara, California, which was acquired by Com Systems, Inc. in
February 1990. Mr. Gibbons has a Bachelors of Business Administration from Notre
Dame and a Masters of Business Administration from the University of Southern
California, and is a Certified Public Accountant.
NANETTE PATTEE FRANCINI, Executive Vice President, co-founded the Company
in 1977, has been principally responsible for overseeing all advertising and
marketing for the Company since 1978 and has served as a director of the Company
since February 1994. Ms. Pattee Francini has been in the sports and fitness
industry for more than 20 years and has developed or participated in the
development of more than 20 sports and fitness clubs, including all Clubs owned
by the Company. Ms. Pattee Francini holds a Bachelor of Arts Degree from the
University of Arizona.
MARK S. SPINO has served as Director of Development of the Company from
1980 to the present and as a Vice President since 1984. Mr. Spino has been in
the sports and fitness industry for more than 15 years and has developed or
participated in the development of more than 15 sports and fitness clubs in the
United States, including many of the Clubs owned by the Company. From July 1979
to June 1980, Mr. Spino was Assistant Manager, and later Manager, of the
Mid-Valley Athletic Club in Reseda, California. Mr. Spino holds Bachelor of Arts
and Master of Arts Degrees in Physical Education from the University of Southern
California.
PHILIP J. SWAIN has been employed by the Company since 1982 and has served
as Vice President - Director of Operations since 1988. Mr. Swain has been in the
sports and fitness industry for more than 15 years and has developed or
participated in the development of more than 15 clubs in the United States,
including many of the Clubs owned by the Company. Mr. Swain served as Regional
General Manager from 1986 until 1988. From December 1979 to November 1982, Mr.
Swain was the Director of Marketing and Membership at the Mid-Valley Athletic
Club in Reseda, California. From February 1975 to December 1979, Mr. Swain was
employed by Health & Tennis Corporation of America, managing different
facilities in Detroit and Los Angeles.
TIMOTHY M. O'BRIEN has been employed by the Company since February 1995 as
Chief Financial Officer. From July 1993 until February 1995, Mr. O'Brien was
employed as Vice President/Controller of WCT Communications, Inc., a publicly
traded long-distance telecommunications company located in Santa Barbara,
California. From May 1989 until July 1993, Mr. O'Brien was Controller for Com
Systems, Inc., an AMEX-listed long-distance telecommunications company located
in Westlake Village, California. Mr. O'Brien has a Bachelors of Business
Administration Degree from the University of Wisconsin-Madison and is a
Certified Public Accountant.
ANDREW L. TURNER has been a director of the Company since September 1994
and has been Chairman of the Board of Directors, President and Chief Executive
Officer of Sun Healthcare Group, Inc. since its formation in 1989. Sun
Healthcare Group, Inc., of which Mr. Turner was a founder, is a long-term health
care services provider. Mr. Turner was also a founder and previously served as
Chief Operating Officer of Horizon Healthcare Corporation, a health care
services provider, from 1986 to 1989. Prior to 1986, Mr. Turner was a Senior
Vice President of Operations of the Hillhaven Corporation.
DENNISON VERU has been President of Awad & Associates, a money management
division of Raymond James Financial since November 1992. From February 1990 to
November 1992 he served as Executive Vice President, Investments of Smith
Barney, Inc. specializing in small and medium capitalization stocks. Prior to
that, Mr. Veru was Vice President of Broad Street Investment Management and an
Assistant Vice President at Drexel Burnham Lambert. Mr. Veru is a graduate of
Franklin and Marshall College.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company to the
Chief Executive Officer and to the four other most highly compensated executive
officers for the years ended December 31, 1994 and 1995. Current salaries of the
Company's executives are described below under "Employment Agreements."
1994 AND 1995 SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS (SHARES) COMPENSATION
----------------------------- ---- --------- ------ ------------ ------------
D. Michael Talla
Chairman of the Board...... 1995 $ 205,250 $ -- -- $ --
and Chief Executive
Officer.................... 1994 31,154(2) -- -- --
Nanette Pattee Francini
Executive Vice
President,................. 1995 122,200 -- -- --
Secretary and Director..... 1994 104,400 -- -- --
John M. Gibbons
President, Chief
Operating.................. 1995 218,933(3) -- -- --
Officer and Director....... 1994 26,586 -- 450,000(4) 133,396(5)
Mark S. Spino
Vice President............. 1995 111,855 -- -- --
and Director of
Development................ 1994 81,535 -- -- --
Philip J. Swain
Vice President............. 1995 127,000 -- -- --
and Director of
Operations................. 1994 105,450 20,000 -- --
- - ---------------
(1) Includes automobile allowance.
(2) Until October 21, 1994, Mr. Talla received income from the Predecessors in
his capacity as a partner, and did not receive a salary. Therefore, the
amount set forth above is not indicative of compensation to be received by
Mr. Talla in future periods. Mr. Talla also receives, on an annual basis,
49.9% of the first $300,000 of The Sports Club/LA's net cash flow (See
"Certain Relationships"). This amount is not included in Mr. Talla's
compensation.
(3) Includes an allowance for living expenses paid to Mr. Gibbons under the
terms off his employment agreement.
(4) Options to purchase 225,000 shares at the exercise price of $9.00 per share
issued on February 27, 1995, were canceled in connection with the issuance
on July 5, 1995, of options to purchase 225,000 shares at the exercise price
of $5.00 per share.
(5) Prior to joining the Company, Mr. Gibbons was retained as an outside
consultant and received payment for his services.
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OPTION GRANTS, EXERCISES AND YEAR-END VALUES
The following table provides information concerning stock options granted
by the Company to the Named Executive Officers during the year ended December
31, 1995.
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1995
INDIVIDUAL GRANTS
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES OF
NUMBER OF PERCENT OF TOTAL STOCK PRICE
SHARES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(1)
OPTIONS EMPLOYEES IN OR BASE EXPIRATION -
NAME GRANTED(2) FISCAL YEAR PRICE DATE 5% 10%
------------------ ----------- ---------------- ---------------- ---------- -------- ----------
John M. Gibbons... 225,000(3) 43.1% $ 9.00 N/A N/A N/A
John M. Gibbons... 225,000(4) 43.1% $ 5.00 7/5/2005 $707,000 $1,793,000
- - ---------------
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% annual rates of stock appreciation prescribed by the Securities
and Exchange Commission and are not intended to forecast possible future
appreciation, if any, of the Company's stock price. No gain to the optionee
is possible without an increase in the price of the Company's stock, which
will benefit all stockholders commensurately.
(2) All of such options are governed by the Company's 1994 Stock Incentive Plan.
(3) Granted on February 27, 1995, and canceled upon the grant to Mr. Gibbons on
July 5, 1995.
(4) Granted on July 5, 1995, and exercisable 75,000 shares on the date of grant,
with the remaining 150,000 shares vesting in 24 equal monthly installments
commencing October 21, 1995.
The following table provides information as of December 31, 1995, with
respect to unexercised stock options. None of the Named Executive Officers
exercised stock options during the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF ALL
NUMBER OF UNEXERCISED UNEXERCISED IN-
OPTIONS UNDER THE-MONEY OPTIONS
THE OPTION PLAN AT FY-END(2)
EXERCISABLE/ EXCERCISABLE/
NAME UNEXERCISABLE(1) UNEXERCISABLE
---------------------------------------------- --------------------- -----------------
John M. Gibbons............................... 93,753/131,247 $0/$0
- - ---------------
(1) All such options are governed by the Company's 1994 Stock Incentive Plan.
(2) An in-the-money option is an option which has an exercise price for the
common stock which is lower than the fair market value of the common stock
on a specified date. The fair market value of the Common Stock on December
29, 1995, was $3.125, which was the closing price per share on the American
Stock Exchange.
REPORT OF OPTION REPRICING
The Compensation Committee canceled and reissued options to purchase
225,000 shares of Common Stock to Mr. Gibbons, the Company's President on July
5, 1995. The exercise price of the reissued options is $5.00 per share, the fair
market value of the Common Stock on the date of reissue, while the exercise
price for the canceled options was $9.00 per share. The Committee felt that the
cancellation and the reissuance of options to Mr. Gibbons was appropriate in
light of the fact that the potential appreciation in value of his
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options was a material component in the overall compensation package negotiated
with Mr. Gibbons, and the Committee determined that it would be in the best
interests of the Company to provide Mr. Gibbons options which will appreciate in
value to the extent the market value of the Common Stock increases over $5.00
per share. For the same reasons, the exercise price of the options granted to
Mr. Gibbons on July 5, 1995, was reduced to $3.00 per share on April 24, 1996.
In exchange Mr. Gibbons agreed to waive 50% of the $100,000 bonus that is to be
paid to him in 1996 pursuant to the terms of his employment agreement. The
Compensation Committee believes that the repricing of such options will cause
such options to, once again, provide Mr. Gibbons with an opportunity for
increased equity ownership and a meaningful incentive to remain in the
employment of the Company for the long term.
Compensation Committee
Rex A. Licklider
Andrew L. Turner
Dennison Veru
The following table provides information with respect to stock options
which have been repriced for any executive officer since the Company's initial
public offering, in October 1994.
TEN-YEAR OPTION/SAR REPRICING
LENGTH OF
NUMBER OF MARKET PRICE ORIGINAL
SECURITIES OF EXERCISE OPTION TERM
UNDERLYING STOCK PRICE REMAINING AT
OPTIONS/SARS AT TIME OF AT TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- - -------------------- ------ ------------ ------------ ------------ -------- ------------
John M. Gibbons..... 7/5/95 225,000 $ 5.00 $ 9.00 $ 5.00 9.67 years
President & Chief
Operating Officer
EMPLOYMENT AGREEMENTS
Effective August 10, 1994, the Company entered into Employment Agreements
with D. Michael Talla, as Chief Executive Officer, and Nanette Pattee Francini,
as Executive Vice President, each of which expire on December 31, 2000. Certain
terms of Mr. Talla's employment agreement were amended by the Board of Directors
as of February 27, 1995. The Agreements provide for annual compensation of
$200,000 payable to Mr. Talla, and $120,000 payable to Ms. Pattee Francini,
subject to upward adjustment at the discretion of the Board of Directors. The
Company may terminate either Employment Agreement for cause or upon the
disability of the employee.
The Employment Agreements with Mr. Talla and Ms. Pattee Francini entitle
each employee to annual performance bonuses in the discretion of the Board of
Directors, to be paid within 120 days for Mr. Talla and 150 days for Ms.
Francini following the end of each fiscal year. The Employment Agreements also
include severance provisions which entitle each executive officer to severance
pay if his or her employment is terminated by the Company without cause; if the
employee dies or is disabled; or if the employee terminates the Agreement as a
result of a material breach by the Company of its obligations thereunder (six
months' pay for Ms. Francini and twelve months' pay for Mr. Talla). In addition,
the Employment Agreements provide Mr. Talla and Ms. Pattee Francini with
additional severance benefits upon the occurrence of any one of the following
events without the approval of a majority of the Board of Directors: (i) the
consolidation or merger of the Company with any other corporation or other
entity; (ii) the sale or other transfer of all or substantially all of the
assets of the Company; (iii) the approval by the stockholders of the Company of
a plan of liquidation or dissolution of the Company; (iv) any person becomes the
beneficial owner directly or indirectly of 25% or more of the Company's
outstanding Common Stock; or (v) a change occurs in the composition of a
majority of the Board of Directors of the Company (unless approved by two-thirds
of the Board of Directors of the Company). If at any time within two years after
the occurrence of any one of the foregoing events Mr. Talla's or Ms. Pattee
Francini's employment is terminated (other than for cause, disability or death),
or Mr. Talla or
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Ms. Pattee Francini elects to terminate his or her employment for "good reason"
(as that term is defined in the Agreements), he or she is entitled to receive
severance compensation equal to the lesser of: (i) the maximum amount which does
not constitute a "parachute payment" as defined in Section 280G of the Internal
Revenue Code of 1986, as amended; or (ii) an amount equal to three times the
aggregate of (A) his or her base annual salary then in effect, (B) the car
allowance, club memberships and dues, and insurance benefits paid for the
employee during the one-year period immediately prior to termination, and (C)
bonuses accrued but unpaid through the date of termination of employment. Under
the Agreements, "good reason" means the assignment of any duties inconsistent
with the employee's position or any other action which diminishes the employee's
position, authority or duties, which determination shall be made in good faith
by the employee. If the employment of Mr. Talla or Ms. Pattee Francini were
terminated within such period as a result of the occurrence of any of the
foregoing events (assuming that neither would be entitled to any performance
bonus), the aggregate approximate amounts payable to Mr. Talla and Ms. Francini
would be $678,408 and $376,932, respectively.
Effective as of July 1, 1995, the Company entered into a three-year
Employment Agreement with John M. Gibbons. The Employment Agreement provides for
annual base compensation of $200,000, subject to annual review and upward
adjustment at the discretion of the Board of Directors. In addition to his base
salary Mr. Gibbons is entitled to participate in any management bonus program
the Board of Directors may implement from time to time. The Employment Agreement
also includes a severance provision which entitles Mr. Gibbons to receive
payments equal to his base compensation until the earlier of 12 months following
his termination date or the expiration of the agreement, if his employment is
terminated prior to the expiration date other than for cause or by Mr. Gibbons
himself. Mr. Gibbons will be paid $25,000 each year through March 1997 for
living expenses and $7,800 each year as an auto allowance payable in equal semi
monthly installments. Pursuant to the terms of the Employment Agreement, the
Compensation Committee of the Board of Directors effective July 1, 1995, granted
Mr. Gibbons an option to purchase 225,000 shares of the Company's Common Stock
at an exercise price of $5.00 per share ("Option Shares"). One-third of the
Option Shares became immediately vested upon the grant with the remaining
two-thirds vesting in 24 equal monthly installments commencing October 21, 1995.
Upon any merger, acquisition or other reorganization in which the Company is not
the surviving corporation, or upon a change in control of the Company, the
Option Shares will be fully exercisable. Concurrent with the grant of these
options to purchase shares of Common Stock, options for the purchase of 225,000
shares of Common Stock which were granted to Mr. Gibbons on February 27, 1995,
at a price of $9.00 per share were canceled. Effective April 24, 1996, the
Compensation Committee of the Board of Directors amended the Employment
Agreement to lower the exercise price of the Option Shares to $3.00 per share,
the fair market price of a share of the Company's Common Stock, as evidenced by
the closing price on the American Stock Exchange on April 24, 1996. In exchange
Mr. Gibbons agreed to waive 50% of the $100,000 bonus that is to be paid to him
in 1996 pursuant to the terms of the Employment Agreement. (See "Report on
Option Repricing").
The Company does not have written employment agreements with Messrs. Spino
and Swain, who currently receive annual base salaries of $105,500 and $120,000,
respectively.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Introduction
The Company's Compensation Committee (the "Committee") is comprised
entirely of non-employee members of the Company's Board of Directors. Currently,
Messrs. Turner, Licklider and Veru serve on the Committee. The Committee reviews
and approves each of the elements of the executive compensation program of the
Company and assesses both the competitiveness and effectiveness of the program.
In addition, the Committee administers the 1994 Stock Incentive Plan.
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Compensation Philosophy
The Company's overall executive compensation philosophy seeks to achieve
the following three goals:
- To reward the achievement of the Company's strategic goals and the
creation of stockholder value
- To maintain a close relationship between compensation and stockholder
value
- To secure, develop, motivate and retain a high quality management team
This philosophy is used not only in determining executive compensation, but is
also evident in the Company's overall salary structure.
The Committee is aware of the limitations imposed by Section 162(m) of the
Internal Revenue Code of 1986, as amended, on the deductibility of compensation
paid to certain senior executives to the extent it exceeds $1 million per
executive. The Company currently intends to recommend compensation amounts and
plans which will meet the requirements of deductibility in that no executive
will exceed the million dollar threshold of Section 162(m) of the Internal
Revenue Code.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
Base Salaries
Base salary levels for all executive officers are reviewed annually. As
part of this review, the Company takes into account the compensation packages
offered by other companies. The Company also gives consideration to the
experience, responsibilities, management and leadership abilities of its
individual executive officers and their actual performance on behalf of the
Company, as well as compensation policies prevailing generally in the industry
and particularly with the Peer Group described under "Stockholder Return
Performance Presentation."
Incentive Compensation
The Committee may also supplement base compensation through discretionary
performance based bonuses. In 1994 the Company awarded Philip Swain, Vice
President-Director of Operations, a bonus of $20,000, primarily for his
performance in relation to the development and opening of the Reebok Sports
Club/NY.
In February 1996, as part of its annual review of salaries the Committee
adopted a program under which bonuses are to be awarded based on operational
earnings increases. Operational earnings for 1996 must be increased by at least
7% over those achieved in 1995 prior to implementation of this bonus program.
The Committee retains discretionary authority to award additional bonuses based
on individual performance.
Stock Options
The Committee believes that long-term incentive compensation in the form of
stock options motivate officers and key employees to improve the long-term
performance of the Common Stock on the market and thus directly increase
stockholder value. Stock options may also be used to attract new executives. The
Company's stock plans provide a means by which executive officers and other key
employees can build an investment in the Company which will align such
employee's economic interests with the interests of the stockholders. Such
options are granted at the prevailing market price of the Common Stock and will
only have value if the stock price increases. Generally, stock options vest over
a period of time from date of grant, and the optionee must be associated with
the Company at the time of vesting in order to exercise the option. In addition
to providing performance incentives to employees, stock options provide the
Company with a form of non-cash compensation which allow it to provide benefits
to employees without making cash expenditures. Accordingly, the Committee views
the grant of options as an effective component of the over-all executive
compensation program.
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In determining an option grant the Committee also takes into account the
outstanding options held by each individual executive officer and the projected
value of the options based on historical and assumed appreciation rates for the
Company's Common Stock.
As of December 31, 1995, options for 297,000 shares of the Common Stock of
the Company were outstanding. Of this total amount, Mr. Gibbons holds an option
for 225,000 shares; Mr. O'Brien, the Company's Chief Financial Officer, holds an
option for 25,000 shares; and the remaining 47,000 shares are held by sixteen
key employees of the Company, with the average grant being approximately 3,000
shares.
Compensation of Chief Executive Officer
The Committee is responsible for recommending the compensation of the Chief
Executive Officer and Mr. Talla's compensation package is based upon the same
factors as those employed by the Committee for executive officers, generally. In
determining Mr. Talla's salary the Committee focuses on the achievement of the
above described goals.
Mr. Talla received a base salary of $200,000 in 1995 in accordance with the
terms of his employment agreement with the Company. No bonus or stock options
were awarded during the last fiscal year. Future compensation for Mr. Talla may
include performance bonuses and stock option grants. The Committee may in the
future establish specific quantitative and/or qualitative goals, the
accomplishment of which will be considered in fixing Mr. Talla's compensation,
In addition, the Committee will take into account amounts received by Mr. Talla
in respect of his interest in The Sports Club/LA's net cash flow (See "Certain
Relationships").
Compensation Committee
Rex A. Licklider
Andrew L. Turner
Dennison Veru
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The executive compensation for the Company is administered by the
Compensation Committee of the Board, whose members are currently Messrs.
Licklider, Turner and Veru. Prior to his resignation from the Board, Dr. William
Janss, Jr. also served as a member of the Compensation Committee. None of these
individuals has ever been an officer or employee of the Company. Mr. Licklider
serves as an unpaid consultant to the Company. Mr. Licklider and MKDG Partners
were parties to an agreement pursuant to which Mr. Licklider was granted the
right to acquire the interests of MKDG Partners in The Sports Club/LA and The
Sports Club/Irvine. In October 1994, Mr. Licklider assigned his rights under
this agreement upon the Company's reimbursing Mr. Licklider the $1.0 million
which he previously deposited with MKDG Partners. In April 1996 the Company paid
Mr. Licklider an additional $107,138 representing an effective interest payment
related to the $1.0 million deposited by Mr. Licklider with MKDG Partners.
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The chart below sets forth line graphs comparing the performance of the
Company's Common Stock against the American Stock Exchange (the "AMEX") market
index and an appropriate peer group of companies (the "Peer Group") consisting
of Callaway Golf Company, Carnival Corp, Ben & Jerry's Homemade, Inc., Sports &
Recreation, Inc., Golf Enterprises, Inc., Supercuts, Inc., Bally's Entertainment
Corporation, Professional Sports Care Management, and Baby Superstore, Inc. all
of which engage in the sports and leisure business. Previously, Club Med had
been included as a member of the Peer Group, but in August 1995 Club Med was
bought out by its parent, CMSA, and is no longer a publicly traded company. The
graph compares the cumulative total stockholder return on the Company's Common
Stock against the cumulative total return for all AMEX listed companies and the
Peer Group for the period since the date of the Company's initial public
offering (October 13, 1994). The graph assumes an initial investment of $100 and
reinvestment of all dividends. These indices are included for comparative
purposes only and do not necessarily
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reflect management's opinion that such indices are an appropriate measure of the
relative performance of the stock involved, and are not intended to forecast or
be indicative of possible future performance of the Company's Common Stock.
The Sports Sports and
Measurement Period Club Com- Leisure Peer AMEX Market
(Fiscal Year Covered) pany,Inc. Group Value
10/13/94 100 100 100
12/31/94 75 94 95
3/31/95 71 98 101
6/30/95 57 103 109
9/30/95 58 104 119
12/31/95 35 115 119
3/31/96 36 127 125
- - ---------------
Notes
(1) The lines represent index levels derived from closing stock prices.
(2) If the last day of the period was not a trading day, the preceding trading
day was used.
(3) The index level for all series was set to 100.00 on October 13, 1994.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 1, 1996,
regarding the beneficial ownership of the Company's Common Stock, by (i) each
person known by the Company to be the beneficial owner of more than five percent
of its Common Stock; (ii) each director; (iii) each executive officer listed in
the 1995 Summary Compensation Table; and (iv) all directors and executive
officers as a group. Unless otherwise indicated, each of the following
stockholders has sole voting and investment power with respect to the shares
beneficially owned, except to the extent such authority is shared by spouses
under applicable law.
NUMBER OF
SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER(1) OWNED SHARES(5)
---------------------------------------------------------- ------------ -----------
D. Michael Talla(2)....................................... 4,853,904 42.75%
The Licklider Living Trust dated May 2, 1986.............. 1,284,562 11.31%
Mona Talla(2)............................................. 4,853,904 42.75%
Nanette Pattee Francini(2)................................ 4,853,904 42.75%
Mark S. Spino(2).......................................... 4,853,904 42.75%
Phil Swain(2)............................................. 4,853,904 42.75%
The Jared R. Talla Irrevocable Trust dated January 4,
1993(2)................................................. 4,853,904 42.75%
The Brett M. Talla Irrevocable Trust dated January 4,
1993(2)................................................. 4,853,904 42.75%
John M. Gibbons(3)........................................ 140,757 1.23%
Andrew Turner............................................. 2,000 *
All directors and executive officers as a group (8
persons)(4)............................................. 6,289,556 54.78%
- - ---------------
* Less than one percent.
(1) The address of each of the foregoing persons is 11100 Santa Monica
Boulevard, Suite 300, Los Angeles, California 90025.
(2) Includes shares with respect to which the named beneficial owner shares
voting power pursuant to a voting agreement which requires each party to
vote their shares in the manner determined by a majority of all holders.
The agreement is effective until October 20, 2004, or until terminated by
persons holding 66-2/3% of the Common Stock held by all persons subject to
the agreement. Mr. Talla, Mona Talla, The Jared R. Talla Irrevocable Trust
dated January 4, 1993, The Brett M. Talla Irrevocable Trust dated January
4, 1993, Ms. Pattee Francini, Mr. Spino and Mr. Swain are record owners of
3,980,487, 30,953, 58,362, 58,362, 286,107, 237,969, and 201,664 shares of
the Company's Common Stock, respectively. Mr. Talla (including members of
his immediate family and trusts for their benefit) is the record owner of
4,128,164 shares.
(3) Includes 17,000 shares owned by Mr. Gibbons, 5,000 shares owned by Mr.
Gibbons' spouse and 118,757 shares of Common Stock issuable within 60 days
upon the exercise of options granted under the Company's 1994 Stock
Incentive Plan.
(4) Includes 127,090 shares of Common Stock issuable within 60 days upon the
exercise of options granted under the Company's 1994 Stock Incentive Plan.
(5) All shares not currently outstanding that are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed to be
outstanding for the purpose of computing the "Percent of Outstanding
Shares" held by the holder thereof, but are not deemed to be outstanding
for the purpose of computing the "Percent of Outstanding Shares" held by
any other shareholder, pursuant to Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, as amended.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and persons who own more than ten percent
of a registered class of the Company's equity securities
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to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with copies of such reports.
Based on the Company's review of the copies of those reports and written
representations which it has received, the Company believes that all such
filings required to be made from January 1, 1995, through March 15, 1996, were
made.
CERTAIN RELATIONSHIPS
The Company possesses a 50.1% interest in the partnership which owns The
Sports Club/LA; Mr. Talla, the Company's Chief Executive Officer and Chairman of
the Board, in effect owns the remaining 49.9% interest. The partnership
agreement provides that, on an annual basis, the partners will share in the
first $300,000 of The Sports Club/LA's net cash flow in proportion to their
percentage interests. The next $35.0 million of net cash flow will be
distributed to the Company (the "Priority Distribution"). All distributions of
net cash flow thereafter, if any, will be made to the partners in proportion to
their percentage interests. In addition, the partnership agreement provides the
Company with an option to purchase Mr. Talla's interest, exercisable at any time
after January 1, 1997, except that such option may be exercised in any earlier
year if it is determined that the Priority Distribution will be satisfied in
such earlier year. The purchase price of Mr. Talla's interest will be equal to
the product of four (4) times the amount of distributions received by Mr. Talla
in the year immediately preceding the year in which the option is exercised.
The property on which the Sports Connection/West Hollywood is located is
leased from a partnership in which Mr. Talla and his affiliates hold a
controlling interest. The lease expires in August 2022, provides for monthly
rental payments of $48,228, provides for increases in rent based upon increases
in the CPI, and requires the lessee to pay all taxes, utilities, insurance and
maintenance. The Company believes this lease contains terms that are no less
favorable than those that could have been obtained from independent third
parties
As of December 31, 1995, Mr. Talla is either the guarantor of, or the named
debtor with respect to, approximately $715,000 in other debts of the Company.
The Company has agreed with Mr. Talla to make all payments due with respect to
all such debts, and to indemnify him with respect to all costs incurred in
connection therewith. These debts have been reflected in the Company's financial
statements.
In April 1995, The Company's Board of Directors approved a loan to Mr.
Talla in the amount of $600,000, secured by 200,000 shares of the Company's
Common Stock. The loan became due and payable on April 3, 1996, and bears
interest at 6.8%, the applicable federal rate as defined in Internal Revenue
Code Section 1274, during the month in which the loan was made. In April 1996
Mr. Talla paid $41,253.33 in interest accrued through March 31, 1996, and also
delivered to the Company as added collateral an additional 184,000 shares of the
Company's Common Stock to extend the loan for one additional year. As of April
30, 1996, the outstanding balance, including principal and interest was
$602,650.
The Company has entered into agreements with its directors and officers
providing for the indemnification of such directors and officers by the Company
to the maximum extent permitted under Delaware law, in the event such persons
are the subject of lawsuits or otherwise suffer losses as a result of their
activities on behalf of the Company. These agreements include, among other
things, indemnity for judgments and settlements in derivative actions, prompt
payment of legal expenses in advance of indemnification and equitable
contribution by the Company in certain instances in the event a director or
officer is not entitled to full indemnification. In addition, the
indemnification agreements between the Company and Messrs. Talla and Licklider
provide that the Company shall indemnify each against any losses incurred as a
result of guarantees extended for the benefit of the Company or any of the
Clubs.
With the exception of the loan to Mr. Talla, the Company believes that each
of the foregoing transactions has been on terms no less favorable to the Company
than could have been obtained from unaffiliated third parties. All transactions
between the Company and any of its directors or officers are subject to the
approval of the disinterested directors.
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INDEPENDENT PUBLIC ACCOUNTANTS
For the 1995 fiscal year, KPMG Peat Marwick LLP provided audit services
which included examination of the Company's annual consolidated financial
statements. Upon the recommendation of the Audit Committee, the Board has
approved a resolution retaining KPMG Peat Marwick LLP as its independent
auditors for fiscal 1996. A representative of KPMG Peat Marwick LLP is expected
to attend the Annual Meeting to make any statements he or she may desire and to
respond to appropriate questions.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal which a stockholder intends to present for action at the
Company's 1997 Annual Meeting of Stockholders and which such stockholder wishes
to have included in the Company's proxy materials for such meeting must comply
with the provisions of Rule 14a-8 promulgated under the Exchange Act. Proposals
must be received by the Secretary of the Company at its principal office (11100
Santa Monica Boulevard, Suite 300, Los Angeles, California 90025) no later than
February 28, 1997. It is suggested that any such proposal be submitted by
certified mail, return receipt requested.
GENERAL
The Board of Directors knows of no matters other than those matters
described above which are likely to be brought before the Annual Meeting.
However, if any other matter properly comes before the Annual Meeting the
proxies confer discretionary authority with respect to acting thereon. The
proxies holders will vote the proxies thereon in accordance with their best
judgment, provided that, to the extent the Company becomes aware a reasonable
time before the Annual Meeting of any matter to come before such meeting, the
Company will provide stockholders an opportunity to vote by proxy directly on
such matter. Upon receipt of such proxies in time for voting, the shares
represented thereby will be voted as indicated thereon and as described in this
Proxy Statement.
Financial Statements for the fiscal year ended December 31, 1995, are not
made a part of this Proxy Statement. However, financial statements are included
in the annual report for the year ended December 31, 1995, enclosed with this
Proxy Statement. The annual report is not to be regarded as proxy soliciting
material or as a communication by means of which any solicitation is made.
Each stockholder is urged to complete, date, sign and promptly return the
enclosed proxy card.
Any questions should be directed to the Company, care of Lois Barberio,
Assistant Secretary, 11100 Santa Monica Boulevard, Suite 300, Los Angeles,
California 90025, telephone (310) 479-5200.
By Order of the Board of Directors,
/s/ Nanette Pattee Francini
-----------------------------
Nanette Pattee Francini
Secretary
Los Angeles, California
June 25, 1996
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE SPORTS CLUB COMPANY, INC.
I/We hereby appoint D. Michael Talla, John M. Gibbons, Rex A.
Licklider, or any one of them acting in the absence of the others, as
proxyholders, each with the power to appoint his or her substitute, and hereby
authorize them to represent and to vote, as designated on the reverse side, all
the shares of common stock of The Sports Club Company, Inc. held of record by
me/us on June 20, 1996, at the Annual Meeting of Stockholders to be held on
August 6, 1996, or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
on the reverse side. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH
OF THE NOMINEES LISTED ON THE REVERSE SIDE. This proxy will be voted in the
discretion of the proxyholders, upon such other business as may properly come
before the Annual Meeting of Stockholders or any adjournment thereof.
(PLEASE VOTE AND SIGN ON THE OTHER SIDE)
- - -------------------------------------------------------------------------------
Please mark your
A [X] votes as in this
example.
The Board of Directors recommends a vote "FOR" the following:
FOR WITHHOLD AUTHORITY
1. Election of The undersigned hereby acknowledges receipt of the Proxy
Class II [ ] [ ] Statement dated June 25, 1996 and hereby revokes any proxy
Directors or proxies heretofore given to vote shares at said
meeting or any adjournment thereof.
NOMINEES: Nanette Pattee Francini and Dennison Veru
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE
(INSTRUCTION: To withhold authority to vote for ENCLOSED SELF-ADDRESSED, POSTAGE ENVELOPE.
any individual, write that nominee's name on the
line provided):
____________________________________________________
SIGNATURE___________________________________________ DATE____________ __________________________________ DATE____________
Please sign exactly as name appears hereon Signature if held jointly
NOTE: Both should sign if shares held in joint tenancy. If signing as attorney, executor, administrator, trustee of guardian
give full title. If corporation, sign full corporate name by President or authorized officer. If partnership, sign
partnership name by authorized person.