SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, For Use
of the Commission Only
|X| Definitive Proxy Statement (as permitted by
|_| Definitive Additional Materials Rule 14a-6(e)(2))
|_| Soliciting Material Under Rule 14a-12
OFFICIAL PAYMENTS CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
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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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As filed with the Commission on April 9, 2002
[OPC LOGO]
Three Landmark Square
Stamford, Connecticut 06901-2501
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 7, 2002
------------------------------
To the Stockholders:
The Annual Meeting of Stockholders of Official Payments
Corporation, a Delaware corporation, will be held on Tuesday, May 7, 2002
at 10:00 a.m., local time, at the Landmark Club, One Landmark Square, 22nd
Floor, Stamford, Connecticut 06901 for the following purposes:
1. To elect six members of the Board of Directors, each to
serve until the 2003 Annual Meeting of Stockholders and
until a successor is elected and qualified;
2. To ratify the selection of the firm of KPMG LLP as
independent auditors for the fiscal year ending December 31,
2002; and
3. To transact such other business as may properly come before
the meeting and any adjournments thereof.
Only stockholders of record at the close of business on March 27,
2002 are entitled to notice of and to vote at the Annual Meeting and at any
and all adjournments or postponements thereof.
By Order of the Board of Directors,
Mitchell H. Gordon
Senior Vice President, General Counsel
and Secretary
April 9, 2002
OFFICIAL PAYMENTS CORPORATION
Three Landmark Square
Stamford, Connecticut 06901-2501
PROXY STATEMENT
April 9, 2002
This Proxy Statement and the accompanying proxy card are being
mailed to stockholders beginning on or about April 9, 2002. They are
furnished in connection with the solicitation by the Board of Directors of
Official Payments Corporation (the "Company") of proxies from the holders
of the Company's common stock, par value $.01 per share ("Common Stock"),
for use at the Annual Meeting of Stockholders to be held at the time and
place and for the purposes set forth in the accompanying notice (the
"Annual Meeting").
Purpose of the Meeting
At the Annual Meeting, stockholders will act upon the election of
six directors and ratification of the selection of KPMG LLP as the
Company's independent auditors for the fiscal year ending December 31,
2002.
Record Date and Voting Securities
Only holders of record of Common Stock at the close of business on
March 27, 2002 (the "Record Date") will receive notice of, and be entitled
to vote at, the Annual Meeting. At the close of business on the Record
Date, 22,222,651 shares of Common Stock were outstanding and entitled to
vote. The Common Stock is the only class of outstanding voting securities
of the Company.
Quorum and Voting
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the votes entitled to be cast by the stockholders
entitled to vote generally as of the Record Date is necessary to constitute
a quorum to transact business. Abstentions and broker non-votes, if any,
will be counted for purposes of determining the presence of a quorum. In
deciding all matters, a holder of Common Stock on the Record Date shall be
entitled to cast one vote for each share of Common Stock then registered in
such holder's name.
Election of the director nominees named in Proposal No. 1 requires
the affirmative vote of a plurality of the votes cast by the stockholders
entitled to vote thereon at the Annual Meeting, who are present in person
or represented by proxy. Votes may be cast in favor of or withheld with
respect to any or all of the director nominees. Abstentions and broker
non-votes, if any, will not be counted as having been voted and will have
no effect on the outcome of the vote on the election of directors.
Ratification of the selection of KPMG LLP as the Company's
independent auditors for fiscal year 2002, as specified in Proposal No. 2,
requires the affirmative vote of a majority of the votes cast by the
stockholders entitled to vote thereon at the Annual Meeting, who are
present in person or represented by proxy. Abstentions and broker
non-votes, if any, will not be counted as having been voted and will have
no effect on the outcome of the vote on Proposal No. 2.
Expenses of Proxy Solicitation
The Company is soliciting the proxies and will bear the entire
cost of this solicitation, including the preparation, assembly, printing
and mailing of this Proxy Statement and any additional materials furnished
to the Company's stockholders. Copies of solicitation material will be
furnished to brokerage houses, fiduciaries and custodians holding shares in
their names that are beneficially owned by others so that they may forward
this solicitation material to such beneficial owners. In addition, if
asked, the Company will reimburse such persons for their reasonable
expenses in forwarding the solicitation materials to such beneficial
owners. The original solicitation of proxies by mail may be supplemented by
telephone, telegram, facsimile, Internet and personal solicitation by
directors, officers or other regular employees of the Company. The Company
has retained Innisfree M&A Incorporated to assist it in the solicitation of
proxies for approximately $6,000, plus out-of-pocket expenses.
Voting Procedures
Stockholders of record should sign, date and return the proxy card
in the enclosed pre-paid envelope. By so casting a vote in such manner, you
are authorizing the individuals listed on the proxy to vote your shares in
accordance with your instructions. If you want to vote in person at the
Annual Meeting and you hold Common Stock in "street name," you must obtain
a proxy from your broker and bring that proxy to the Annual Meeting.
If the enclosed proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with
the instructions specified therein. If the proxy does not specify how the
shares represented thereby are to be voted, the shares represented by the
proxy will be voted: (i) "FOR" the election of the director nominees
proposed by the Board of Directors and (ii) "FOR" the ratification of the
selection of KPMG LLP as the Company's independent auditors for the fiscal
year ending December 31, 2002.
You may revoke your proxy by doing any of the following:
- File a written notice of revocation with the Secretary of the
Company, dated later than the proxy but before the vote is
taken at the Annual Meeting;
- Execute a later dated proxy before the vote is taken at the
Annual Meeting; or
- Vote in person at the Annual Meeting (your attendance at the
Annual Meeting, in and of itself, will not revoke the earlier
proxy).
Any written notice of revocation, or later dated proxy, should be
delivered to:
Official Payments Corporation
Three Landmark Square
Stamford, CT 06901-2501
Attention: Mitchell H. Gordon, Secretary
If you have any questions or need assistance in voting your
shares, please call:
INNISFREE M&A INCORPORATED
Toll Free: 1-888-750-5834
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
Six directors are to be elected at the Annual Meeting, each to
serve until the 2003 Annual Meeting of Stockholders and until a successor
is elected and qualified. In response to the vacancies on the Board of
Directors resulting from the resignation of Vernon Loucks Jr. in August
2001 in order to spend more time with his family and the death in January
2002 of Kenneth Stern, the Company's founder and a director, the Board of
Directors determined (in accordance with the Company's bylaws) in March
2002 to reduce the size of the Board from nine members to seven members.
On April 5, 2002, the Board of Directors accepted the resignations
of George L. Graziadio, Jr., a director and Chairman of Comerica
Bank-California (a wholly owned subsidiary of Comerica Incorporated, the
record owner of approximately 54% of the outstanding Common Stock), for
personal health reasons, and Christos M. Cotsakos, Chairman of the Board
and Chief Executive Officer of E*Trade Group, Inc., for personal reasons
unrelated to the Company. On the same date, the Board appointed John
Haggerty, Executive Vice President of Comerica Incorporated, to fill one of
the vacancies until the Annual Meeting and has also nominated him for
election as a director at the Annual Meeting. In addition, the Board
further reduced its size to six members.
Each of the nominees of the Company has consented to serve as a
director if elected at the Annual Meeting and, to the best knowledge of the
Company as of the date of this Proxy Statement, is and will be able to
serve if so elected. In the event that any of the nominees listed below
should be unavailable to stand for election before the Annual Meeting, the
persons named in the accompanying proxy intend to vote for such other
person, if any, as may be designated by the Board of Directors, in the
place of any nominee unable to serve.
Set forth below is the name, age and principal occupation of each
person nominated as a director by the Board of Directors, as well as such
individuals' positions with the Company and business experience during at
least the last five years and the year each was first elected or appointed
a director.
ANDREW COHAN. Mr. Cohan has served as a director of the Company
since November 1999. Since November 1, 2001, Mr. Cohan has served as
President, Co-Chief Executive Officer of Access Licensing Group, an
entertainment licensing and marketing company. He was Senior Vice
President, Licensing, Marketing and Merchandising for Hyper Entertainment
Inc., an entertainment licensing and marketing company, from July 2000
through August 2001. From September 1999 to July 2000, Mr. Cohan was
Chairman and Chief Executive Officer of Artist Marketing Corp., a marketing
company for artists and entertainment/celebrity figures. From August 1997
to September 1999, Mr. Cohan was Senior Vice President, Worldwide
Entertainment, Licensing and Marketing for Sony Signature, an entertainment
licensing and marketing company. From January 1996 to July 1997, Mr. Cohan
was Senior Vice President, Chief Merchandising Officer for Beverages and
More, a start-up beverages retailer. Before that, Mr. Cohan was Vice
President, Merchandising for Emerson Radio Corporation from February 1994.
Age: 47.
THOMAS R. EVANS. Mr. Evans has served as Chairman of the Board and
Chief Executive Officer of the Company since August 1999. From April 1998
to May 1999, Mr. Evans was the President and Chief Executive Officer of
GeoCities, Inc., which was acquired by Yahoo! Inc. in May 1999. From 1992
to April 1998, Mr. Evans served as President and Publisher of U.S. News &
World Report. From January 1997 to April 1998, Mr. Evans also served as
President and Publisher of The Atlantic Monthly. In addition, from May 1995
to April 1998, Mr. Evans served as President and Publisher of Fast Company,
a magazine that showcases business people and ideas. Age: 47.
JOHN R. HAGGERTY. Mr. Haggerty has served as a director of the
Company since April 2002. Since March 2001, he has served as Executive Vice
President in charge of Small Business Banking & Personal Financial Services
for Comerica Incorporated. Mr. Haggerty joined Comerica in July 1994 and
served as President and Chief Executive Officer of Comerica Mortgage
Corporation until December 1997. From August 1997 until August 2000, Mr.
Haggerty was Chairman and President of Comerica Acceptance Corporation and
served as Chairman and President of Comerica Bank, National Association
from August 1998 until March 2001. Prior to joining Comerica in 1994, Mr.
Haggerty served as Executive Vice President of Banc One Mortgage
Corporation. Age: 58.
JOHN D. LEWIS. Mr. Lewis has served as a director of the Company
since May 2001. He has served as Vice Chairman and a director of Comerica
Incorporated since January 1994 and Vice Chairman of Comerica Bank since
March 1995. Mr. Lewis also held these officer positions with Comerica
Incorporated and Comerica Bank between January 1990 and June 1992 and
served as a director of Comerica Incorporated between 1989 and 1992. Mr.
Lewis was Executive Vice President of Comerica Incorporated from June 1992
to January 1994. Age: 53.
LEE E. MIKLES. Mr. Mikles has served as a director of the Company
since November 1999. Mr. Mikles is the Chairman of Mikles/Miller Management
Inc., a registered investment advisor, and Chairman of Mikles/Miller
Securities, LLC, a registered broker/dealer. Mr. Mikles served as a
director of Imperial Bancorp from 1996 until 2000 and its wholly owned
subsidiary, Imperial Bank, from 1993 to 2000. Mr. Mikles currently serves
on the board of directors of Coastcast Corp. Age: 46.
BRUCE S. NELSON. Mr. Nelson has served as a director of the
Company since November 1999. Since September 2000, Mr. Nelson has served as
Executive Vice President, Chief Marketing Officer of The Interpublic Group
of Companies, Inc. From March 1998 through September 1999, he was Vice
Chairman, Chief Knowledge Officer of Young & Rubicam Inc. Prior to that
position, he worked at McCann-Erickson Worldwide for 19 years in various
positions, including as Director of Worldwide Accounts, Director of
Strategy for Worldwide Accounts and Creative Director for Worldwide
Accounts. From September 1999 to October 2001, Mr. Nelson served as a
marketing and advertising consultant to the Company (see "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS"). Age: 50.
Certain Information Concerning the Board of Directors
Board of Directors and Committees of the Board. The Board of
Directors held six meetings during 2001. In 2001, all incumbent directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and committees of the Board on which they served that were held
after their appointment.
The Board has established an Audit Committee and a Compensation
Committee. The Company has no nominating or similar committee; the full
Board of Directors performs that function.
The current members of the Audit Committee, which held five
meetings in 2001, are Messrs. Cohan, Nelson and Mikles (Chairman). Mr.
Cotsakos was also a member of the Audit Committee in 2001 (continuing until
his resignation from the Board in April 2002). Mr. Nelson was appointed to
the Audit Committee on April 5, 2002, and the Audit Committee has not met
since his appointment. The Audit Committee meets from time to time with the
Company's independent auditors and has general responsibility for reviewing
the accounting and auditing affairs of the Company.
The current members of the Compensation Committee, which held four
meetings in 2001, are Messrs. Cohan, Lewis and Nelson. Mr. Graziadio was
also a member of the Compensation Committee in 2001 (continuing until his
resignation from the Board in April 2002). Mr. Lewis was appointed to the
Compensation Committee on April 5, 2002, and the Compensation Committee has
not met since his appointment. The Compensation Committee has general
responsibility for management and other employee compensation, including
incentive compensation and stock option plans.
Compensation of Directors. Directors who are not employees of the
Company or Comerica Incorporated (or its affiliates) receive an annual
retainer of $20,000. Directors are reimbursed for out-of-pocket expenses
incurred in connection with their service as directors. In addition, Mr.
Mikles received, upon consummation of the Company's initial public offering
in November 1999, options to purchase 75,000 shares of the Common Stock at
an exercise price per share equal to $15.00 and Messrs. Cohan and Nelson
received 93,750 and 95,000 options, respectively, to purchase the Common
Stock at the $15.00 per share exercise price. Mr. Nelson also received
options to purchase 15,000 shares of Common Stock at an exercise price per
share equal to $1.33. Non-employee directors (other than employees of
Comerica Incorporated or its affiliates) are also eligible to receive
option grants under the Company's 1999 Stock Incentive Plan at the
discretion of the Board. Directors who are officers or employees of the
Company or Comerica Incorporated (or its affiliates) do not receive any
additional compensation for their services as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE NOMINEES LISTED ABOVE.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF KPMG LLP AS
THE COMPANY'S INDEPENDENT AUDITORS
The Company has selected KPMG LLP ("KPMG") as its independent
auditors for the fiscal year ending December 31, 2002. The Company is
submitting its selection of independent auditors for ratification by the
stockholders at the Annual Meeting. KPMG has audited the financial
statements of the Company (and its predecessor business, U.S. Audiotex,
LLC) since 1996. The Company expects that representatives of KPMG will be
present at the Annual Meeting, will have an opportunity to make a statement
if they wish and will be available to respond to appropriate questions.
The Company's Bylaws do not require that the stockholders ratify
the selection of the independent auditors, but this item is being submitted
to the stockholders for ratification as a matter of good corporate
practice. If the stockholders do not ratify the selection, the Board of
Directors and the Audit Committee will reconsider whether or not to retain
KPMG. Even if the selection is ratified, the Board of Directors and the
Audit Committee, in their discretion, may change the appointment at any
time during the year if they determine that such a change would be in the
best interests of the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF KPMG LLP AS
THE COMPANY'S INDEPENDENT AUDITORS.
EXECUTIVE OFFICERS
Set forth below is information regarding the current executive
officers of the Company, who serve at the discretion of the Board of
Directors:
NAME AGE POSITION(S)
- ---- --- -----------
Thomas R. Evans 47 Chairman of the Board and Chief
Executive Officer
Michael P. Presto 48 Chief Operating Officer
Edward J. DiMaria 36 Chief Financial Officer
Mitchell H. Gordon 36 Senior Vice President, General
Counsel and Secretary
The biographical information for Mr. Evans is provided in the
biographical information of the directors of the Company set forth in the
section above discussing Proposal No. 1.
Michael P. Presto has served as the Company's Chief Operating
Officer since September 1999, and is responsible for the technology,
customer service and business operations of the Company. Mr. Presto was
Senior Vice President, Circulation and Business Development at Curtis
Circulation Company from April 1998 to September 1999, where he was
responsible for worldwide circulation sales and marketing strategies. From
January 1993 to April 1998, Mr. Presto was Vice President of Consumer
Marketing and Senior Vice President of Consumer Marketing and Distribution
for The New York Daily News, during which time he also served as President
of Data Comm Services Inc., an affiliated telemarketing/fulfillment
customer service business. In addition, Mr. Presto has held executive
management positions at U.S. News & World Report and Newsweek.
Edward J. DiMaria has been the Company's Chief Financial Officer
since August 2000. From August 1994 to August 2000, Mr. DiMaria was
employed by Best Friends Pet Care, Inc., where his final position was
Executive Vice President and Chief Financial Officer. Mr. DiMaria has also
held finance and accounting positions with Business Express, Inc., Advanced
Network & Services, Inc. and KPMG Peat Marwick.
Mitchell H. Gordon has served as the Company's General Counsel
since February 2000, and is responsible for managing the Company's legal
affairs and supervising the Company's outside legal counsel. From September
1995 to February 2000, Mr. Gordon was an attorney at Skadden, Arps, Slate,
Meagher & Flom LLP, concentrating on mergers and acquisitions and general
corporate law.
SIGNIFICANT EMPLOYEE
Kevin C. Connell has served as Vice President, Sales of the
Company since December 2001 and is responsible for supervising the
Company's sales and business development activities. From the commencement
of his employment with the Company in November 1999 until to assuming his
new responsibilities, Mr. Connell served as Vice President, East Coast
Sales. Mr. Connell was Vice President-New Business Development of Discover
Financial Services, Inc. from November 1996 through October 1999, and in
such position served as National Government Sales Manager. Prior to
assuming such position, Mr. Connell held various sales and management
positions at Discover from 1985. Age: 35.
EXECUTIVE OFFICER COMPENSATION
The following table sets forth the compensation awarded to, earned
by or paid to (i) the person serving as the Company's Chief Executive
Officer during 2001, (ii) the four other most highly compensated executive
officers of the Company in 2001 who were employed in such positions as of
December 31, 2001, and (iii) Kenneth Stern, who served as the Company's
President until December 26, 2001. The compensation indicated is for
services rendered in all capacities to the Company during 2001, 2000 and
1999, as applicable. Except asset forth below, perquisites and other
personal benefits, securities and property did not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus reported for the named
executive officers.
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------------------------------------- -----------------
Awards
-----------------
Securities
Underlying
Name and Other Annual Options All Other
Principal Position Year Salary($) Bonus($) Compensation($) (#) Compensation($)(a)
- --------------------------- ------- ----------- ----------- ----------------- ----------------- --------------------
Thomas R. Evans 2001 350,000 - - - -
Chairman and Chief 2000 200,000 100,000 - - 7,598
Executive Officer 1999 76,955 500,000 - 1,370,328 -
Michael P. Presto 2001 200,000 100,000 - - 5,250
Chief Operating Officer 2000 200,000 100,000 - 200,000 12,848
1999 50,000 - - 685,164 -
Edward J. DiMaria 2001 195,000 85,000 - 50,000 5,250
Chief Financial Officer 2000 56,875 60,000 - 200,000 -
1999 - - - - -
Mitchell H. Gordon 2001 185,000 30,000 - 50,000 4,731
Senior Vice President, 2000 151,891 43,750 - 180,000 11,435
General Counsel 1999 - - - - -
Michael Barrett 2001 200,000 - - - -
Chief Internet and 2000 200,000 100,000 - - 11,397
Sales Officer (b) 1999 50,000 - - 822,196 -
Kenneth Stern 2001 212,519 100,000 22,924 (d) - 1,520,615 (e)
President (c) 2000 215,000 100,000 28,202 (d) - 18,167
1999 198,046 - 32,058 (d) 219,252 9,728
(a) Except as otherwise indicated, "All Other Compensation" represents
the aggregate amount of contributions made per listed individual
by the Company or its ultimate parent company, Comerica
Incorporated (beginning January 30, 2001) or Imperial Bancorp
(prior to January 30, 2001), to various employee benefit plans
offered to eligible Company employees: the Imperial Bancorp Salary
Investment Plan (the "Imperial 401(k) Plan"), the Company's
Retirement Incentive Plan (the "Company 401(k) Plan"), the
Imperial Bancorp Employee Stock Ownership Plan (the "Imperial
ESOP") and the Imperial Bancorp Profit Sharing Plan (the "Imperial
PS Plan"). The Imperial 401(k) Plan, the Imperial ESOP and the
Imperial PS Plan were terminated in 2001.
(b) Mr. Barrett's employment with the Company terminated as of January
27, 2002.
(c) Mr. Stern's employment with the Company terminated as of December
26, 2001. Mr. Stern passed away in late January 2002.
(d) The amounts shown in 2001, 2000 and 1999 include automobile
allowances of $22,924, $24,445 and $27,196, respectively.
(e) The amount shown reflects the Company's contribution of $5,250
under the Company 401(k) Plan and the aggregate severance payable
to Mr. Stern's lawful heir(s) pursuant to his employment agreement
in connection with the termination of his employment from the
Company.
The table below discloses information concerning individual grants
of stock options made during the last completed fiscal year to the
executive officers named in the Summary Compensation Table, which stock
options were granted with exercise prices equal to the market price of the
Common Stock on the date of grant. Stock options granted generally vest
over a three-year period.
Option Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term
-------------------------------------- ------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration 5% 10%
Name Granted (#) Fiscal Year ($/Share) Date ($)(a) ($)(a)
- ------ ------------ ------------- --------- ---------------- ----------- --------------
Thomas R. Evans - - - - - -
Michael P. Presto - - - - - -
Edward J. DiMaria 50,000 5.6% $3.29 8/27/11 $103,453 $262,170
Mitchell H. Gordon 50,000 5.6% $7.00 2/20/11 $220,113 $557,809
Michael Barrett - - - - - -
Kenneth Stern - - - - - -
- ----------
(a) These amounts represent hypothetical gains that could be achieved for
the options if they are executed at the end of their respective terms.
The assumed 5% and 10% rates of stock price appreciation are mandated
by the rules of the Securities and Exchange Commission. They do not
represent the Company's estimate or projection of future prices of the
Common Stock.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The table set forth below discloses certain information concerning
the number and value of unexercised options for the last completed fiscal
year by the executive officers named in the Summary Compensation Table.
None of the executive officers named in the Summary Compensation Table
exercised options to purchase shares of the Common Stock during the last
completed fiscal year.
Aggregated Fiscal Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End(#) at FY-End($)(a)
--------------------- ---------------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
Thomas R. Evans...................... 1,370,328/0 $2,891,392/0
Michael P. Presto.................... 885,164/0 $1,445,696/0
Edward J. DiMaria.................... 200,000/50,000 $0/7,500
Mitchell H. Gordon................... 212,917/17,083 (b) $0/0
Michael Barrett...................... 822,196/0 $1,734,834/0
Kenneth Stern........................ 219,252/0 $462,622/0
- ----------
(a) The value of unexercised options was determined using the $3.44
closing price of the Common Stock on December 31, 2001, the last
Nasdaq trading day in 2001.
(b) The first ("exercisable") amount shown includes 16,251 non-qualified
stock options granted under the Company's 1999 Stock Incentive Plan,
which options are immediately exercisable but subject to a right of
repurchase by the Company, which right lapses periodically through
December 2003 in accordance with the terms of such plan. The second
("unexercisable") amount shown represents incentive stock options
granted under the 1999 Stock Incentive Plan, which are not exercisable
prior to vesting.
Employment Agreements
Thomas R. Evans. The Company has entered into an employment
agreement with Thomas R. Evans, the Company's Chairman and Chief Executive
Officer. The employment agreement provides for a minimum annual base salary
of $200,000, which the Compensation Committee increased to $350,000 as of
January 1, 2001. In addition, Mr. Evans is eligible to receive unspecified
annual bonuses at the discretion of the Compensation Committee. In
accordance with the employment agreement, Mr. Evans was also granted
options (the "Initial Evans Options") to purchase 1,370,328 shares of the
Common Stock at $1.33 per share under the 1999 Stock Incentive Plan. Under
the terms of the employment agreement, Comerica Bank-California (as
successor to Imperial Bank) has guaranteed that the "value" - as defined in
the agreement - of Mr. Evans' vested options will be $10,000,000 on or
before August 26, 2002, and Comerica Bank-California will pay Mr. Evans an
amount equal to the difference between $10,000,000 and the highest value of
the vested options calculated on certain specified dates during such
three-year period. This guarantee is solely the obligation of Comerica
Bank-California and is not an obligation of the Company. If Mr. Evans'
employment is terminated by the Company without "cause" or if he terminates
his employment for "good reason," including a "change in control," as these
terms are defined in the agreement, the Company will be required to pay him
his base salary and benefits for one year, and all of his then unvested
options will vest immediately. The merger of Imperial Bancorp (the then
parent holding company of Imperial Bank) with and into a wholly owned
subsidiary of Comerica Incorporated in January 2001 constituted a change of
control of the Company for purposes of the preceding sentence and also
resulted in the full vesting of the Initial Evans Options. If Mr. Evans'
employment is terminated by the Company with cause, the Company will be
required to pay him any compensation, benefits or reimbursements accrued
through the date of termination. Mr. Evans' employment under the agreement
may be terminated by the Company on 30 days' notice without cause, or
immediately upon notice with cause, and may be terminated by Mr. Evans on
60 days' notice without good reason, or upon 30 days' notice for good
reason.
Michael P. Presto. The Company has entered into an employment
agreement with Michael P. Presto, the Company's Chief Operating Officer.
The employment agreement provides for a minimum annual base salary of
$200,000, which the Compensation Committee increased to $250,000 as of
January 1, 2002. In addition, under the terms of his agreement, Mr. Presto
is eligible to receive unspecified annual bonuses in the future at the
discretion of the Compensation Committee. In accordance with the employment
agreement, Mr. Presto was also granted options (the "Initial Presto
Options") to purchase 685,164 shares of the Common Stock at $1.33 per share
under the 1999 Stock Incentive Plan. If Mr. Presto's employment is
terminated by the Company without "cause" or if he terminates his
employment for "good reason," including a "change in control," as these
terms are defined in the agreement, the Company will be required to pay him
his base salary and benefits for one year, and all of his then unvested
options will vest immediately. The Imperial Bancorp/Comerica Incorporated
merger in January 2001 constituted a change of control of the Company for
purposes of the preceding sentence and also resulted in the full vesting of
the Initial Presto Options. If Mr. Presto's employment is terminated by the
Company with cause, the Company will be required to pay him any
compensation, benefits or reimbursements accrued through the date of
termination. Mr. Presto's employment under the agreement may be terminated
by the Company on 60 days' notice without cause, or immediately upon notice
with cause, and may be terminated by Mr. Presto on 60 days' notice without
good reason, or upon 30 days' notice for good reason.
Kenneth Stern. Prior to Mr. Stern's death in late January 2002,
the Company terminated Mr. Stern's employment as President of the Company
as of December 26, 2001. This action, which was part of the Company's
corporate restructuring, constituted a "termination without cause" under
the terms of Mr. Stern's employment agreement. Accordingly, through August
23, 2006, the Company is required to pay Mr. Stern's lawful heir(s) his
minimum annual base salary of $215,000 and minimum annual bonus of
$100,000.
Edward J. DiMaria. The Company has entered into an employment
agreement with Edward J. DiMaria, the Company's Chief Financial Officer.
The employment agreement provides for a minimum annual base salary of
$195,000, which the Compensation Committee increased to $220,000 as of
January 1, 2002. In addition, under the terms of his agreement, Mr. DiMaria
is eligible to receive unspecified annual bonuses in the future at the
discretion of the Compensation Committee. In accordance with the employment
agreement, upon the commencement of his employment, Mr. DiMaria was also
granted options (the "Initial DiMaria Options") to purchase 200,000 shares
of the Common Stock under the 1999 Stock Incentive Plan at $7.12 per share,
and in August 2001, he received an additional grant of options to purchase
up 50,000 shares of the Company's common stock at $3.29. If Mr. DiMaria's
employment is terminated by the Company without "cause" or if he terminates
his employment for "good reason," including a "change in control," as these
terms are defined in the agreement, the Company will be required to pay him
a lump-sum amount equal to one year of his base salary, provide him his
other employment benefits for one year. The Imperial Bancorp/Comerica
Incorporated merger in January 2001 constituted a change of control of the
Company for purposes of the preceding sentence and resulted in the full
vesting of the Initial DiMaria Options. If Mr. DiMaria's employment is
terminated by the Company with cause, the Company will be required to pay
him any compensation, benefits or reimbursements accrued through the date
of termination. Mr. DiMaria's employment under the agreement may be
terminated by the Company immediately upon notice with or without cause,
and may be terminated by Mr. DiMaria on 30 days' notice with or without
good reason.
Michael Barrett. As part of its corporate restructuring, the
Company terminated "without cause" Mr. Barrett's employment as Chief
Internet and Sales Officer, effective January 27, 2002. Under the terms of
Mr. Barrett's employment agreement with the Company, the Company will pay
Mr. Barrett his $200,000 base salary and employee benefits through January
27, 2003.
Mitchell H. Gordon. In November 2001, the Company entered into an
agreement with Mr. Gordon, Senior Vice President, General Counsel of the
Company. Under the terms of this agreement, if Mr. Gordon's employment is
terminated by the Company without "cause" or if he terminates his
employment for "good reason," including a "change in control," as these
terms are defined in the agreement, the Company will be required to pay him
his base salary and benefits for one year, and all of his then unvested
options will vest immediately. Under the agreement, Mr. Gordon's employment
may be terminated by the Company immediately with or without cause, and may
be terminated by Mr. Gordon on 30 days' notice with good reason.
All of the aforementioned agreements (except Mr. Gordon's)
generally contain confidentiality provisions and covenants not to compete
during the term of employment and for one year after termination of
employment.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
General
The following is the Report of the Compensation Committee of the
Board of Directors, describing the compensation policies and rationale
applicable to the Company's executive officers with respect to compensation
paid to such executive officers for the calendar period ended December 31,
2001. The Compensation Committee was established in January 2000 and
currently consists of Andrew Cohan, John Lewis and Bruce Nelson. Mr.
Graziadio served as a member of the Compensation Committee until his
resignation from the Board in early April 2002 and, since he was a member
at the time this Report was approved, his name appears at the end of this
Report (rather than Mr. Lewis' name, since Mr. Lewis joined the Committee
after the Committee approved this Report). The information contained in
this Report shall not be deemed "soliciting material" or to be "filed" with
the Securities and Exchange Commission nor shall such information be deemed
incorporated by reference into any future filing under the Securities Act
of 1933, as amended (the "Securities Act"), or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), except to the extent the Company
specifically incorporates it by reference into such filing.
The goals of the Company's compensation program are to align
compensation with business objectives and performance and to enable it to
attract, retain and reward executive officers and other key employees who
contribute to the Company's long-term success and to motivate them to
enhance long-term stockholder value. The Compensation Committee is
particularly mindful of the extremely competitive environment for
attracting senior level management in the technology sector, and the
continuous and extraordinary efforts which have been made by other
technology companies to lure away management and key personnel. To meet
these goals, the Company has adopted a mix of the compensation elements of
salary, bonus and stock incentive awards.
Base Salary
The base salary of the Company's executive officers was
individually negotiated at the time each officer joined the Company or
assumed his current position. The Compensation Committee reviews each
executive officer's base salary periodically (and at least annually), and
when doing so, considers individual and corporate performance, levels of
responsibility, prior experience, breadth of knowledge and competitive pay
practices. The Compensation Committee believes that the current executive
salaries are comparable to the salaries in effect at companies that compete
with the Company for executive talent.
Bonus
The Company's bonus policy has been to award bonuses to executive
officers and key employees based on the achievement of specific goals set
by the Company, and the level of contribution made by these individuals. In
calculating bonus awards, certain Company performance objectives will be
considered, including operating, strategic and financial goals necessary
for the achievement of the Company's short and long-term objectives.
Certain executive officers have employment agreements providing for minimum
bonus awards.
Stock Incentive Awards
The purpose of the Company's stock incentive plans is to provide
employees of the Company with the opportunity to share, along with
stockholders of the Company, in the long-term performance of the Company.
The Compensation Committee makes periodic grants of stock options or
restricted stock to eligible employees, generally upon commencement of
employment, following a significant change in job responsibilities or in
recognition of a significantly noteworthy accomplishment. Stock options
usually vest over three years and expire ten years from the date of grant
(provided the employee remains employed with the Company). The exercise
price of options is normally 100% of fair market value of the underlying
stock on the date of grant (other than stock options granted prior to
completion of the Company's initial public offering). The Company's
executive officers are not eligible to receive grants of stock options or
restricted stock under the 2000 Stock Incentive Plan and only receive
grants of stock options under the 1999 Stock Incentive Plan. In awarding
stock options and restricted stock, the Compensation Committee considers
individual performance, overall contribution to the Company, the
competitive climate for recruiting personnel and the total number of stock
options and shares of restricted stock to be awarded.
CEO Compensation
Compensation in 2001 for Mr. Evans, the Company's Chairman and
Chief Executive Officer, was initially established in his employment
agreement with the Company and was increased by the Compensation Committee
in January 2001 (See "EXECUTIVE OFFICER COMPENSATION - Employment
Agreements"). Mr. Evans' total compensation is heavily weighed toward
equity incentives, consisting of the stock options granted to him in 1999
when he commenced employment with the Company. Mr. Evans' compensation was
designed to align his interests with those of the Company's stockholders by
tying the value of the awards and his eligibility for annual cash bonuses
to the success qualitatively of his efforts toward building the Company's
management, business and infrastructure and promoting the operating and
financial performance of the Company.
Section 162(m) of the Code imposes limitations on the
deductibility for federal income tax purposes of compensation over $1
million paid to certain executive officers in a taxable year. Compensation
above $1 million may be deducted if it is "performance-based compensation"
within the meaning of the Code. While the Company does not expect this
limitation to affect the Company with respect to the 2001 tax year, the
Compensation Committee intends to continue to evaluate the effects of the
statute and any U.S. Treasury Department regulations and to comply with
Section 162(m) of the Code in the future to the extent consistent with the
best interests of the Company.
Compensation Committee:
Andrew Cohan
George L. Graziadio, Jr.*
Bruce Nelson
- --------
* As noted elsewhere in this Proxy Statement, Mr. Graziadio resigned
from the Board of Directors in early April 2002.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee was established in January 2000 and
consists solely of the following non-employee directors: Messrs. Cohan,
Lewis (beginning in April 2002) and Nelson. Mr. Graziadio served on the
Compensation Committee through the time of his resignation from the Board
in April 2002. Mr. Graziadio served as the Company's Chief Executive
Officer from April 16, 1999 to July 15, 1999. Mr. Lewis is an executive
officer of Comerica Incorporated, the record owner of approximately 54% of
the Company's outstanding common stock, and Mr. Graziadio is Chairman of
Comerica Bank-California, a wholly owned subsidiary of Comerica
Incorporated. During the year ended December 31, 2001, none of the
Company's executive officers served:
o as a member of the compensation committee (or other board
committee performing equivalent functions or, in the
absence of any such committee, the entire board of
directors) of another entity, one of whose executive
officers served on the Company's compensation committee;
o as a director of another entity, one of whose executive
officers served on the Company's compensation committee;
or
o as a member of the compensation committee (or other board
committee performing equivalent functions or, in the
absence of any such committee, the entire board of
directors) of another entity, one of whose executive
officers served as a director of the Company.
INFORMATION REGARDING INDEPENDENT AUDITORS
Audit Fees. KPMG's aggregate fees billed for professional services
rendered for the annual audit of the Company's 2001 financial statements
and review of the Company's interim financial statements in 2001 were
$144,000. KPMG has informed the Company that all of the aforementioned
auditing services were performed by persons employed by KPMG on a full-time
basis.
Financial Information Systems Design and Implementation Fees. KPMG
did not perform any professional services relating to the design and
implementation of the Company's financial information systems.
All Other Fees. KPMG's aggregate fees for all other professional
services rendered to the Company in 2001 were $34,000, relating to tax
compliance and consulting services.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is comprised of
three directors and operates under a written charter adopted by the Board
of Directors in June 2000. Messrs. Cohan, Nelson and Mikles (Chairman) are
the current members of the Audit Committee. Mr. Cotsakos served as a member
of the Audit Committee until his resignation from the Board in early April
2002 and, since he was a member at the time this Report was approved, his
name appears at the end of this report (rather than Mr. Nelson's name,
since Mr. Nelson joined the Committee after the Committee approved this
Report). The information contained in this Report shall not be deemed
"soliciting material" or to be "filed" with the Securities and Exchange
Commission nor shall such information be deemed incorporated by reference
into any future filing under the Securities Act or the Exchange Act, except
to the extent the Company specifically incorporates it by reference into
such filing.
The Board of Directors has determined that each of the members of
the Audit Committee is "independent" and possesses the requisite financial
literacy as prescribed by the Marketplace Rules of the Nasdaq Stock Market.
The Committee has recommended to the Board of Directors, subject
to stockholder ratification, the selection of the Company's independent
auditors.
Management is responsible for the Company's financial reporting
process and internal controls. KPMG, the Company's independent auditors, is
responsible for performing an independent audit of the Company's financial
statements in accordance with generally accepted accounting principles and
for issuing a report in connection with that audit. The Audit Committee is
responsible for monitoring and supervising these processes.
In this context, the Audit Committee has met and held discussions
with the Company's management and representatives of KPMG. Management
represented to the Audit Committee that the Company's financial statements
were prepared in accordance with generally accepted accounting principles,
and the Audit Committee has reviewed and discussed the financial statements
with management and the independent auditors. The Audit Committee discussed
with the representatives of KPMG the matters required to be discussed by
Statement on Auditing Standards No. 61 ("Communication with Audit
Committees").
KPMG also provided to the Audit Committee the written disclosures
required by Independence Standards Board Standard No. 1 ("Independence
Discussions with Audit Committees") and the Audit Committee discussed with
KPMG its independence. The Audit Committee has also considered whether the
provision of certain non-audit services provided by KPMG to the Company in
2001 (See the section of this proxy statement entitled "INFORMATION
REGARDING INDEPENDENT AUDITORS") is compatible with maintaining auditor
independence.
Based on the Audit Committee's discussion with management and the
independent auditors and the Audit Committee's review of the
representations of management and the report of the independent auditors to
the Audit Committee, the Audit Committee recommended that the Board of
Directors include the audited financial statements in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001 filed with the
Securities and Exchange Commission.
Audit Committee:
Lee E. Mikles (Chairman)
Andrew Cohan
Christos M. Cotsakos**
- --------
** As noted elsewhere in this Proxy Statement, Mr. Cotsakos
resigned from the Board of Directors in early April 2002.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors
and executive officers, and persons who own more than ten percent of the
Common Stock, to file initial reports of ownership and changes in ownership
with the Securities and Exchange Commission and the Nasdaq National Market.
Such persons are required by Securities and Exchange Commission regulations
to furnish the Company with copies of all Section 16(a) forms they file. To
the best of the Company's knowledge, the reports for all officers,
directors and holders of more than ten percent of the Common Stock were
timely filed during the year ended December 31, 2001, except that (i) in
2002 Mr. DiMaria filed late a Form 5 regarding a grant of stock options
that he received in 2001 and (ii) Mr. Graziadio did not file three Forms 4
covering a total of fifteen sale transactions in mid-2001, all of which
transactions were subsequently reversed (due to mistake) through the
applicable broker's errors account.
STOCK PERFORMANCE GRAPH
The performance graph below compares the annual percentage change
in the Company's cumulative total stockholder return on its Common Stock
during a period commencing on November 23, 1999, the date on which the
Company's common stock began publicly trading, and ending on December 31,
2001 (as measured by dividing (i) the sum of (A) the cumulative amount of
dividends for the measurement period, assuming dividend reinvestment and
(B) the difference between the Company's share price at the end and the
beginning of the measurement period; by (ii) the share price at the
beginning of the measurement period) with the cumulative total return of
each of: (a) the Nasdaq Composite Index (Nasdaq); and (b) the Dow Jones
Internet Index during such period, assuming a $100 investment on November
23, 1999. The Company's share price at the beginning of the measurement
period was the closing price for the Common Stock on November 23, 1999, and
not the price at which the Company's shares of common stock were initially
offered for purchase in its public offering. It should be noted that the
Company has not paid any dividends on the Common Stock, and no dividends
are included in the representation of the Company's performance.
The information contained in the performance graph shall not be
deemed "soliciting material" or to be "filed" with the Securities and
Exchange Commission nor shall such information be deemed incorporated by
reference into any future filing under the Securities Act of 1933, as
amended, or the Exchange Act, except to the extent the Company specifically
incorporates it by reference into such filing.
[GRAPHIC OMITTED]
Official Dow Jones
Date Payments Corp. Nasdaq Index Internet Index
---- -------------- ------------ --------------
11/23/99 $100.00 $100.00 $100.00
12/31/99 $231.11 $121.73 $126.10
6/30/00 $ 19.17 $118.64 $ 90.44
12/29/00 $ 30.56 $ 73.90 $ 42.84
6/29/01 $ 22.89 $ 64.65 $ 25.86
12/31/01 $ 15.29 $ 58.35 $ 19.92
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Comerica Bank-California, a wholly owned subsidiary of Comerica
Incorporated ("Comerica Bank"), is one of the merchant banks the Company
uses to process credit card transactions and perform traditional merchant
credit card settlement services. The Company has an agreement with Comerica
Bank in which the Company agrees to use its best efforts to use Comerica
Bank as its provider of credit card settlement services. Under the
agreement with Comerica Bank for processing and settlement services,
Comerica Bank is paid from the Company's sales revenues customary merchant
discount fees usually charged for similar processing services, on a product
by product basis as negotiated between the Company and Comerica Bank.
During 2001, the Company paid Comerica Bank approximately $8.2 million for
performing these processing and settlement services, which represents 33%
of the total merchant discount fees paid by the Company in 2001.
John D. Lewis and John R. Haggerty, directors of the Company, are
both senior officers of Comerica Incorporated.
Comerica Bank guarantees the performance of the Company's
obligations under six equipment leases. These leases are comprised of a
master lease agreement with one lessor for five leases for various
furniture and computer equipment and a separate lease agreement for network
equipment. Comerica Bank will continue to guarantee the six leases until
the leases expire.
Starting in November 2001, as a majority-owned subsidiary of
Comerica Incorporated, the Company has obtained its corporate insurance as
part of Comerica's master policies, and pays its allocated premiums for
coverage to independent third-party carriers. In addition, in 2001 the
Company incurred $11,560 of premiums payable to Comerica Assurance Ltd.,
another Comerica subsidiary, for insurance on certain deductibles which
otherwise would be payable by the Company in the event of casualty losses
under these master policies.
In 1999, the Company entered into an agreement with Bruce Nelson,
one of the Company's directors, pursuant to which, among other things, Mr.
Nelson provided consulting services in connection with the Company's
marketing and advertising campaigns, analyst and other presentations and
corporate positioning strategy. Prior to the termination of that agreement
(effective October 1, 2001), the Company paid Mr. Nelson an annual fee of
$50,000 for these services. Also in connection with these services, in 1999
Mr. Nelson received a one-time grant of options to purchase 15,000 shares
of the Company's common stock at an exercise price of $1.33 per share, as
well as options to purchase 20,000 shares of the Company's common stock at
$15.00 per share. While these options initially had a three-year vesting
schedule, they fully vested in January 2001 upon the change of control of
the Company effected through the Imperial Bancorp/Comerica Incorporated
merger.
Executive officers, directors and employees of the Company may
utilize the Company's credit card payment services in order to pay federal,
state and/or municipal tax or other obligations in the ordinary course of
business, and the Company provides these persons a discount from the
convenience fee charged to unaffiliated third parties utilizing similar
services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the close of business on
April 2, 2002, certain information regarding the beneficial ownership
(determined in accordance with Rule 13d-3 promulgated under the Exchange
Act) of (i) the Common Stock of each person (including any "group" as that
term is used in Section 13(d)(3) of the Exchange Act) known to the Company
to beneficially own more than 5% of the Common Stock, (ii) the Common Stock
and the common stock of Comerica Incorporated, the Company's parent, of
each of the Company's directors, director nominees and named executive
officers, and (iii) the Common Stock and the common stock of Comerica
Incorporated of each of the Company's directors and executive officers as a
group. None of the Company's directors, director nominees or executive
officers own any shares of Comerica Incorporated's Series E Preferred
Stock. Except as indicated below, information with respect to beneficial
ownership is based upon information furnished by each director, director
nominee or officer. Except as noted below, all persons referenced below
have sole voting and investment power over the shares beneficially owned by
them. All shares of Common Stock subject to options currently exercisable
or exercisable within 60 days after April 2, 2002 are deemed to be
outstanding and to be beneficially owned by the person holding such options
for the purpose of computing the number of shares beneficially owned and
the percentage ownership of such person, but are not deemed to be
outstanding and to be beneficially owned for the purpose of computing the
percentage ownership of any other person.
Of the Total
Number of Shares
Beneficially
Total Amount of Owned, Shares
Shares Which May Be Percent
Title and Class Beneficially Acquired Within of Class
Name of Security Owned (b) 60 Days Owned
- ----------------------------- ------------------------- ----------------- ---------------- -------------
Principal Stockholders:
Comerica Incorporated........ Company Common Stock 12,000,000 (c) - 53.6%
Comerica Tower at Detroit Ctr.
500 Woodward Avenue
Detroit, MI 48226
Directors and Executive Officers:
Thomas R. Evans......... Company Common Stock 1,370,328 1,370,328 5.8%
Comerica Common Stock 115 - *
Andrew Cohan............ Company Common Stock 93,750 93,750 *
Comerica Common Stock - - *
John R. Haggerty........ Company Common Stock - - *
Comerica Common Stock 87,798 (d) 66,275 *
John D. Lewis........... Company Common Stock - - *
Comerica Common Stock 406,807 (e) 311,675 *
Lee E. Mikles........... Company Common Stock 77,000 75,000 *
Comerica Common Stock - - *
Bruce S. Nelson......... Company Common Stock 110,000 110,000 *
Comerica Common Stock - - *
Michael P. Presto....... Company Common Stock 885,664 885,164 3.8%
Comerica Common Stock 288 - *
Edward J. DiMaria....... Company Common Stock 200,000 200,000 *
Comerica Common Stock 10 - *
Mitchell H. Gordon...... Company Common Stock 212,917 (f) 212,917 *
Comerica Common Stock 224 - *
Kenneth Stern (a)....... Company Common Stock 2,891,252 (g) 219,252 12.8%
Comerica Common Stock 534 - *
Michael Barrett......... Company Common Stock 455,790 455,790 2.0%
Comerica Common Stock 172 - *
Directors and Executive Officers
as a Group (9 individuals) Company Common Stock 2,949,659 2,947,159 11.6%
Comerica Common Stock 495,242 377,950 *
_______________
* Less than 1%
(a) Mr. Stern passed away in late January 2002. Ownership references in
this table to Mr. Stern herein shall be deemed to refer to his
lawful heir(s).
(b) With respect to shares of Comerica Incorporated common stock, unless
otherwise indicated below, represents the number of shares held in
accounts for the listed persons under the Company 401(k) Plan.
(c) Based on information contained in its Schedule 13D, dated March 28,
2001, Comerica Incorporated beneficially owned 12,000,000 shares of
the Common Stock with sole power to vote and dispose of all such
shares. On January 30, 2001, Imperial Bancorp, the parent holding
company of Imperial Bank (the then owner of the referenced shares of
Common Stock), was acquired by Comerica Incorporated in a
transaction pursuant to which shareholders of Imperial Bancorp
received .46 of a share of Comerica Incorporated common stock for
each of their shares of Imperial Bancorp common stock, representing
an aggregate of approximately 21 million shares of Comerica
Incorporated common stock. Imperial Bank transferred ownership of
its shares of Common Stock to Comerica Incorporated on March 20,
2001.
(d) Includes 1,750 shares held jointly with his wife; 9,500 shares of
restricted stock; 5,638 shares held in the Comerica Incorporated
3-Year ROE Plan; 625 shares held in the Comerica Incorporated
Preferred Savings Plan; 511 shares held in the Comerica Incorporated
Employee Stock Purchase Plan; and options to purchase 66,275 shares
that Comerica Incorporated granted to Mr. Haggerty under its
Long-Term Incentive Plan.
(e) Includes 18,000 shares of restricted stock; 13,604 shares held in
the Comerica Incorporated 3-Year ROE Plan; 23 shares held in the
Comerica Incorporated Employee Stock Purchase Plan; 766 shares held
in the Comerica Incorporated Preferred Savings Plan; and options to
purchase 311,675 shares that Comerica Incorporated granted to Mr.
Lewis under its Long-Term Incentive Plan.
(f) Includes 16,251 non-qualified stock options granted under the
Company's 1999 Stock Incentive Plan, which options are immediately
exercisable but are subject to a right of repurchase by the Company,
which right lapses periodically through December 2003 in accordance
with the terms of such plan.
(g) Consists of 219,252 shares of the Common Stock underlying presently
exercisable options held by Mr. Stern; and 2,672,000 shares of the
Common Stock held by Beranson Holdings, Inc., a California
corporation controlled by Kenneth Stern (prior to his death in
January 2002) and his wife Michaella Stern (as joint tenants), with
Lauren Stern (a minor and the daughter of Mr. Stern) as the only
other stockholder. According to information provided to the Company
as of March 14, 2002, Michaella Stern and Lauren Stern continue to
maintain their respective Beranson ownership interests.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2003 Annual
Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must
be received by the Company at its principal executive offices not later
than December 10, 2002 and must otherwise comply with the requirements of
Rule 14a-8 in order to be considered for inclusion in the 2003 Proxy
Statement and proxy.
In order for proposals of stockholders submitted outside of Rule
14a-8 for consideration at the 2003 Annual Meeting to be considered
"timely" for purposes of Rule14a-4(c) under the Exchange Act, such proposal
must be received at the Company's principal executive offices not less than
90 days prior to the date of such meeting.
The Bylaws of the Company provide that in order for a stockholder
to bring business before, or propose director nominations at, an annual
meeting of stockholders, the stockholder must give written notice (either
by personal delivery or by United States mail) to the Secretary of the
Company not less than 90 days prior to the date of that annual meeting. To
be in proper written form a stockholder's notice must set forth information
specified in the Bylaws.
ANNUAL REPORT
A copy of the Company's 2001 Annual Report is being mailed to
stockholders of the Company concurrently with this Proxy Statement. The
Annual Report is not incorporated into this Proxy Statement and shall not
be deemed solicitation material.
Stockholders may request a copy of the Annual Report, without
charge, by contacting the Company's solicitation agent, Innisfree M&A
Incorporated, at 501 Madison Avenue, New York, New York 10022 or calling
toll-free 1-888-750-5834.
OTHER MATTERS
The Company's Board of Directors knows of no other matters that
have been submitted for consideration at the Annual Meeting. If any other
matters come before the stockholders at the Annual Meeting, the persons
named on the enclosed proxy intend to vote the shares they represent in
accordance with their best judgment.