SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Check the appropriate box:
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6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Nobel Learning Communities, Inc.
(Name of Registrant As Specified in Charter)
(Name of Person(s) Filing the Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
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[_] Fee paid previously with preliminary materials.
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previously. Identify the previous filing by registration statement number, or
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[LOGO OF NOBEL LEARNING COMMMUNITIES]
Notice of Annual Meeting of Stockholders
November 16, 2000
To the Stockholders:
The 2000 Annual Meeting of Stockholders of Nobel Learning Communities, Inc.
will be held at 10:00 a.m. on November 16, 2000 at The Gregg Conference Center
at The American College, 270 South Bryn Mawr Avenue, Bryn Mawr, PA 19010
(telephone: (610) 526-1100)) for the following purposes:
1. To elect three directors to serve for a three-year term.
2. To ratify the selection of PricewaterhouseCoopers L.L.P. as the Company's
independent auditors for fiscal year ended June 30, 2001.
3. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
Only stockholders of record at the close of business on October 9, 2000 will
be entitled to notice of, and to vote at, the Meeting and any adjournment or
adjournments thereof.
Information concerning the matters to be acted upon at the Meeting is set
forth in the accompanying Proxy Statement.
All stockholders are cordially invited to attend the Meeting in person.
However, to assure your representation at the Meeting, we urge you to mark, sign
and return the enclosed proxy card as promptly as possible in the postage-
prepaid envelope enclosed for that purpose. Any stockholder attending the
Meeting may vote in person even if he or she returned a proxy.
Sincerely,
/s/ Yvonne DeAngelo
Yvonne DeAngelo
Corporate Secretary
Media, PA
October 10, 2000
Contents
Solicitation of Proxy, Revocability and Voting.......................... 1
Security Ownership...................................................... 3
Proposal 1: Election of Directors...................................... 7
Proposal 2: Ratification of Appointment of Independent Accountants..... 11
Executive Compensation.................................................. 12
Stock Performance....................................................... 18
Compliance with Section 16(a) of the Securities Exchange Act of 1934.... 19
Certain Relationships and Related Transactions.......................... 19
General Information..................................................... 20
Deadline for Receipt of Stockholder Proposals........................... 20
NOBEL LEARNING COMMUNITIES, INC.
PROXY STATEMENT
SOLICITATION OF PROXY, REVOCABILITY AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of Nobel
Learning Communities, Inc., a Delaware corporation (the "Company"), for use at
the 2000 Annual Meeting of Stockholders (the "Meeting") to be held on November
16, 2000. Only stockholders of record on October 9, 2000 will be entitled to
notice of, and to vote at, the Meeting. Each share of common stock ("Common
Stock") outstanding on the record date is entitled to one vote on each matter to
be considered; and each share of preferred stock ("Preferred Stock") is entitled
to the number of votes on each matter to be considered equal to the number of
full shares of Common Stock into which such share of Preferred Stock is
convertible (calculated by rounding any fractional share down to the nearest
whole number). As of the record date of the meeting, each share of Series A
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock was
convertible into .2940, 0.25 and 0.25 shares of Common Stock, respectively. On
September 20, 2000, the Company had 5,976,599 shares of Common Stock, 1,023,694
shares of Series A Preferred Stock, 2,500,000 shares of Series C Preferred Stock
and 1,063,830 shares of Series D Preferred Stock issued and outstanding.
The Company's principal executive offices are located at Rose Tree Corporate
Center II, 1400 North Providence Road, Suite 3055, Media, Pennsylvania 19063.
The approximate date on which this Proxy Statement and the accompanying proxy
are first being sent to stockholders is October 10, 2000.
Quorum and Voting
The presence at the Meeting, in person or by proxy, of the holders of shares
representing a majority of the votes represented by the Common Stock and
Preferred Stock is necessary to constitute a quorum for the transaction of
business. The holders of the Common Stock and the Preferred Stock vote together,
and not as a separate class, on all matters to be submitted to stockholders at
the Meeting. The election of directors will be determined by a plurality vote
and the three nominees receiving the most "FOR" votes will be elected. Approval
of the proposal to ratify the selection of auditors will require the
affirmative vote of the holders of a majority of the votes represented by the
shares of the Company's Common Stock and Preferred Stock present at the Meeting
in person or by proxy and entitled to vote. Because directors are elected by a
plurality of the votes cast, withholding authority to vote with respect to one
or more nominees will have no effect on the outcome of the election, although
such shares would be counted as present for purposes of determining the
existence of a quorum. Similarly, any "broker nonvotes" (i.e., shares held by a
broker or nominee which are represented at the Meeting, but with respect to
which such broker or nominee is not empowered to vote on a particular proposal)
are not considered to be votes cast and therefore would have no effect on the
outcome of the election of directors, although
they would be counted as present for purposes of determining the existence of a
quorum. Other than with respect to the election of directors, all other matters
that come before the Meeting require an approval of a majority of the votes
represented by the shares of stock present and entitled to vote thereon.
Therefore, abstentions as to particular proposals will have the same effect as
votes against such proposals. Broker non-votes will be treated as shares not
entitled to vote and will not be included in the calculation of the number of
votes represented by shares present and entitled to vote. Accordingly, broker
non-votes will have no effect on the outcome of the proposal to ratify the
selection of auditors.
Revocability of Proxies
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. It may be revoked by
filing with the Corporate Secretary of the Company or by the presentation at the
Meeting of an instrument of revocation or a duly executed proxy bearing a later
date. It also may be revoked by attendance at the Meeting and the casting of a
written ballot in person. Unless so revoked, the shares represented by proxies
will be voted at the Meeting in accordance with instructions or, as to any
matter as to which no instructions are given, for the election of the proposed
nominees and in favor of Proposal 2.
Solicitation
The Company will bear the entire cost of preparing, assembling, printing and
mailing this proxy statement, the accompanying proxy, and any additional
material which may be furnished to stockholders. Copies of solicitation material
will be furnished to brokerage houses, fiduciaries and custodians to forward to
beneficial owners of stock held in their names. The solicitation of proxies will
be made by the use of the mails and through direct communication with certain
stockholders or their representatives by officers, directors and employees of
the Company, who will receive no additional compensation therefor. The Company
has engaged Stocktrans, Inc., the transfer agent for the Company's Common Stock
and Preferred Stock, to solicit proxies and distribute materials to brokerage
houses, banks, custodians and other nominee holders. The Company will pay
Stocktrans approximately $5,000 for these services.
2
SECURITY OWNERSHIP
Common Stock
The following table shows information concerning the beneficial ownership of
the Company's Common Stock as of August 22, 2000 by each director, by each
executive officer named in the Summary Compensation Table appearing elsewhere in
this proxy statement, by all directors and executive officers as a group, and by
each person who is known to the Company to be the beneficial owner of more than
5% of the Company's Common Stock. The number of shares beneficially owned by
each person is determined under the rules of the Securities and Exchange
Commission and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which the person has sole or shared voting power or investment
power and also any shares which the person has the right to acquire within 60
days of August 22, 2000 through the exercise of any stock option or right or
conversion of any convertible security or otherwise. As of August 22, 2000, the
only persons or group of persons known to the Company as beneficially owning
more than 5% of the outstanding Common Stock of the Company were the following:
A. J. Clegg; Allied Capital Corporation and its affiliates; Edison Venture Fund
II, L.P.; Dimensional Fund Advisors I; and KU Learning, L.L.C. The address of
each such holder of more than 5% of the outstanding Common Stock is set forth in
the footnote relating to its holdings.
Number of Shares of
Common Stock Percent of
Name of Beneficial Owner Beneficially Owned Class (1)
------------------------ ------------------- ----------
William E. Bailey 34,400 (2) *
A. J. Clegg 627,906 (3) 9.89%
Edward H. Chambers 22,730 (4) *
Daryl A. Dixon 50,000 (5) *
B. Robin Eglin 46,600 (6) *
John R. Frock 93,988 (7) *
Peter H. Havens 15,109 (8) *
Eugene G. Monaco 5,500 (9) *
Pamela S. Lewis 0 *
William L. Walton 1,108,483 (10) 15.65%
Robert E. Zobel 10,265 (11) *
Allied Capital Corporation 1,106,256 (12) 15.62%
Dimensional Fund Advisors I 340,100 (13) 5.69%
Edison Venture Fund II, L.P. 654,032 (14) 9.90%
KU Learning, L.L.C. 1,883,500 (15) 31.51%
All directors and executive 2,004,716 (16) 26.10%
officers as a group
(11 persons)
* Less than 1%. [See notes on following page]
3
(1) The percentages of class set forth in the table reflect the percentage of
outstanding Common Stock currently owned by each holder listed and the
percentage of outstanding Common Stock which would be owned by each such
holder giving effect to the conversion of all shares of Preferred Stock and
exercise of all currently exercisable options and warrants held by such
holder, but not to such conversion or exercise by any other person.
(2) Consists of 30,000 shares of Common Stock which Mr. Bailey has the right to
purchase upon the exercise of currently exercisable options and 4,400
shares of Common Stock held by Mr. Bailey.
(3) Consists of 254,887 shares of Common Stock currently outstanding, 140,385
shares issuable upon conversion of the Company's Series A Preferred Stock,
100,806 shares issuable upon conversion of the Company's Series C Preferred
Stock, 20,161 shares issuable upon the exercise of warrants and 111,667
issuable upon exercise of currently exercisable stock options. Of the
254,887 shares of Common Stock currently outstanding, Mr. Clegg's
beneficial owner of 66,572 shares arises by virtue of his right to vote
shares held of record by his children and of 5,500 shares arises by virtue
of ownership of shares of record by his spouse. Does not include shares
owned by Mr. Clegg's adult children with respect to which he has no voting
rights, as to which he disclaims beneficial ownership. A. J. Clegg's
address is c/o Nobel Learning Communities, Inc., Rose Tree Corporate Center
II, 1400 North Providence Road, Suite 3055, Media, Pennsylvania 19063.
(4) Consists of 9,750 shares of Common Stock which Mr. Chambers has the right
to purchase upon the exercise of currently exercisable options, 1,470
shares of Common Stock issuable upon the conversion of the Company's Series
A Preferred Stock, and 11,510 shares of Common Stock held by Mr. Chambers.
(5) Consists of 50,000 shares of Common Stock which Mr. Dixon has the right to
purchase upon the exercise of currently exercisable options.
(6) Consists of 45,600 shares of Common Stock which Mr. Eglin has the right to
purchase upon the exercise of currently exercisable options and 1,000
shares of Common Stock held by Mr. Eglin.
(7) Consists of 61,788 shares of Common Stock which Mr. Frock has the right to
purchase upon the exercise of currently exercisable options, 14,700 shares
of Common Stock issuable upon the conversion of the Company's Series A
Preferred Stock and 17,500 shares of Common Stock held by Mr. Frock.
(8) Consists of 9,750 shares of Common Stock which Mr. Havens has the right to
purchase upon the exercise of currently exercisable options, 3,234 shares
of Common Stock issuable upon the conversion of the Company's Series A
Preferred Stock, and 2,125 shares of Common Stock held by Mr. Havens.
(9) Consists of 2,500 shares of Common Stock which Mr. Monaco has the right to
purchase upon the exercise of currently exercisable options and 3,000
shares of Common Stock held by Mr. Monaco.
(10) Mr. Walton owns 1,000 shares of Common Stock directly and has the right to
purchase 1,227 shares of common stock upon the exercise of currently
exercisable options. By virtue of his position as Chief Executive Officer
of Allied Capital Corporation, Mr. Walton may under the SEC's rules also be
deemed a beneficial owner of the shares owned by Allied Capital Corporation
and its affiliates (see footnote 12). Accordingly, these shares are also
reflected in the table as shares beneficially owned by Mr. Walton. Mr.
Walton disclaims beneficial ownership of such shares.
(11) Consists of 1,561 shares of Common Stock which Mr. Zobel has the right to
purchase upon the exercise of currently exercisable options, 4,000 shares
of Common Stock held by Mr. Zobel, 4,704 shares of Common Stock issuable
upon the conversion of shares of the Company's Series A Preferred Stock
held by a partnership of which Mr. Zobel is general partner. Does not
include 1,000 shares of Common Stock held in a custodian account for Mr.
Zobel's children, of which Mr. Zobel's wife is custodian, as to which Mr.
Zobel disclaims beneficial ownership.
(12) Consists of 265,958 shares of Common Stock issuable upon the conversion of
the Company's Series D Preferred Stock and 840,298 issuable upon the
exercise of warrants held by Allied Capital Corporation and
4
Allied Investment Corporation. Allied Capital Corporation and its
affiliates have their principal executive offices at 1666 K St., N.W.,
Suite 901, Washington, DC 20006.
(13) Based on a Schedule 13G filed with the SEC on December 10, 1999.
Dimensional Fund Advisors, an investment advisor registered under Section
203 of the Investment Advisors Act of 1940, furnishes investment advice to
four investment companies registered under the Investment Company Act of
1940, and serves as investment manager to certain other commingled group
trusts and separate accounts (collectively, the "Funds"). In its role as
investment adviser or manager, Dimensional possesses voting and/or
investment power over the shares of Nobel Common Stock that are owned the
Funds. All such shares are owned by the Funds. Dimensional Funds Advisors
disclaims beneficial ownership of such shares.
(14) Based on information most recently reported to the Company. Consists of
104,839 shares of Common Stock which Edison Venture Fund II, L.P. has the
right to purchase upon the exercise of warrants, 524,193 shares of Common
Stock issuable upon the conversion of the Company's Series C Preferred
Stock, and 25,000 shares of Common Stock held by the Edison Venture Fund
II, L.P. Edison Venture Fund II, L.P. has its principal executive office at
997 Lenox Drive #3, Lawrenceville, New Jersey 08648.
(15) Based on a Schedule 13D filed with the SEC on January 16, 1998 and amended
on June 2, 1998 and November 10, 1999. Shares are beneficially owned by KU
Learning, L.L.C. and its affiliates. The business address of such persons
is 844 Moraga Drive, Los Angeles, CA 90049.
(16) Consists of shares shown as beneficially held by all natural persons in
this table.
5
Preferred Stock
The following table shows information concerning the beneficial ownership
of the Company's Series A Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock as of August 22, 2000 by each director, by each executive
officer named in the Summary Compensation Table appearing elsewhere in this
proxy statement, by all directors and executive officers as a group and by each
person who is known to the Company to be the beneficial owner of more than 5% of
any series of Preferred Stock. Directors and executive officers omitted from a
section of the following table do not beneficially own any shares of the series
of Preferred Stock to which such section relates.
Number of Shares
Name of of Preferred Stock Percent
Security Name of Beneficial Owner (1) Beneficially Owned of Class
--------------------------------------------------------------------------------
Series A Edward H. Chambers 5,000 0.49%
Preferred A. J. Clegg 477,500 46.64%
Stock John R. Frock 50,000 4.88%
Peter H. Havens 11,000 1.07%
Emanuel Shemin 101,487 9.91%
Robert E. Zobel 16,000 (2) 1.56%
All directors and executive 559,500 54.66%
officers
as a group (15 persons)
--------------------------------------------------------------------------------
Series C A. J. Clegg 403,226 16.13%
Preferred Edison Venture Fund II, L.P. 2,096,774 83.87%
Stock All directors and executive 2,500,000 100.00%
officers
as a group (15 persons)
--------------------------------------------------------------------------------
Series D Allied Capital Corporation 1,063,830 (3) 100.00%
Preferred William L. Walton 1,063,830 (3) 100.00%
Stock All directors and executive 1,063,830 (3) 100.00%
officers
as a group (15 persons)
--------------------------------------------------------------------------------
(1) As reflected on the records of the Company's transfer agent, Mr. Shemin's
address is 800 South Ocean Blvd. LPH4, Boca Raton, FL 33432. Mr. Clegg's
address is c/o Nobel Learning Communities, Inc., Rose Tree Corporate Center
II, 1400 North Providence Road, Suite 3055, Media, Pennsylvania 19063.
Edison Venture Fund II, L.P. has its principal executive office at 997 Lenox
Drive #3, Lawrenceville, New Jersey 08648. Allied Capital Corporation and
affiliates have their principal executive offices at 1666 K St., N.W., Suite
901, Washington, DC 20006.
(2) By partnership of which Mr. Zobel is a general partner.
(3) Shares are owned by Allied Capital Corporation and Allied Investment
Corporation. Mr. Walton, a director of the Company, is Chief Executive
Officer of Allied Capital Corporation. By virtue of his position as Chief
Executive Officer, Mr. Walton may under the SEC's rules also be deemed a
beneficial owner of the shares owned by Allied Capital Corporation and its
affiliates. (These shares are also included in shares reflected as owned by
Mr. Walton in the table.) Mr. Walton disclaims beneficial ownership of such
shares.
6
PROPOSAL 1
Election of Directors
(Item 1 on Proxy Card)
Nominees
At the Meeting, three directors are to be elected to serve for a three year
term and until their successors have been duly elected and qualified. The entire
Board of Directors consists of eight persons. Each nominee is currently a
director. Directors will be elected by a plurality of the shares present and
voting at the meeting. If so authorized, the persons named in the accompanying
proxy card intend to vote for the election of each nominee. Stockholders who do
not wish their shares to be voted for a particular nominee may so indicate in
the space provided on the proxy card. If any of the nominees are not available
to serve at the time of the Meeting, the persons named in the proxies may vote
the proxies for such other persons as they may choose unless the Board of
Directors reduces the number of directors to be elected.
The names of the nominees and the continuing directors, and certain
information about them, are set forth below:
Name of Nominee Director
or Director Age Principal Occupation Since
- ----------------------------------------------------------------------------------------------
Nominees for a term expiring in 2003 (Class I Directors):
John R. Frock 57 Executive Vice President - Corporate 1992
Development of the Company
Eugene G. Monaco 72 Judge, Delaware County Court (retired) 1995
Robert E. Zobel 52 Chief Financial Officer of MARS, Inc. 1998
Continuing Directors with a term expiring in 2001 (Class II Directors):
Pamela S. Lewis 43 Dean of the McColl School of Business at 1999
Queens College
William L. Walton 51 Chairman, President and Chief Executive 1998
Officer of Allied Capital Corporation
Continuing Directors with a term expiring in 2002 (Class III Directors):
Edward Chambers 63 Executive Vice President - Finance and 1988
Administration of Wawa, Inc.
A. J. Clegg 61 Chairman of Board of Directors and Chief 1992
Executive Officer of the Company
Peter H. Havens 46 Chairman of Baldwin Management, LLC 1991
7
The following description contains certain information concerning the
nominees, including current positions and principal occupations during the past
five years.
Edward H. Chambers. Mr. Chambers has served as Executive Vice President -
Finance and Administration of Wawa, Inc. since March 1988. During the period
April 1984 through March 1988, he served as President and Chief Executive
Officer, and as a director, of Northern Lites, Ltd., an owner and operator of
quick-service restaurants operating pursuant to a franchise from D'Lites of
America, Inc. From 1982 to July 1984, Mr. Chambers was President - Retail
Operations of Kentucky Fried Chicken Corp., a franchiser of quick-service
restaurants. He is also a director of Riddle Memorial Hospital.
A.J. Clegg. Mr. Clegg was named Chairman of the Board and Chief Executive
Officer of the Company in May 1992. Since 1996, Mr. Clegg has also served as a
member of the Board of Trustees of Drexel University. From June 1990 to December
1997 (but involving immaterial amounts of time between 1994 and 1997), Mr. Clegg
served as the Chairman and CEO of JBS Investment Banking, Ltd., which provided
investment management and consulting services to businesses, including the
Company. In 1979, he formed Empery Corporation, an operator of businesses in the
cable television and printing industries, and held the offices of Chairman,
President and CEO during his tenure (1979-1993). In addition, Mr. Clegg served
as Chairman and CEO of TVC, Inc. (1983-1993), a distributor of cable television
components; and Design Mark Industries (1988-1993), a manufacturer of electronic
senswitches. Mr. Clegg has also served on the board of directors of Ferguson
International Holdings, PLC, a United Kingdom company, from March 1990 to April
1991; and was Chairman and CEO of Globe Ticket and Label Company from December
1984 to February 1991. In August 2000, Mr. Clegg was recognized as "Education
Entrepreneur of the Year" by the Association of Education Practitioners and
Providers.
John R. Frock. Mr. Frock was named Executive Vice President - Corporate
Development in August 1994. Mr. Frock was elected to the Board of Directors of
the Company in May 1992. From 1992 to 1995, Mr. Frock was the President and
Chief Operating Officer of JBS Investment Banking, Ltd., which provided
investment management and consulting services to businesses (which included the
Company). Mr. Frock served as the Chairman and Chief Executive Officer of Avant
Guarde Enterprises, Ltd. from March 1992 through August 1996. Prior to that, Mr.
Frock was President and Chief Operating Officer of SBF Communications Graphics,
a business forms printer located in Philadelphia, Pennsylvania; President of
Globe Ticket and Label Company; and President of the Graphics Group of Empery
Corporation.
Peter H. Havens. Mr. Havens is Chairman of Baldwin Management, LLC, an
investment management concern. Previously, he was the Executive Vice President
of Bryn Mawr Bank Corporation overseeing the Investment Management and Trust
Division. From 1982 through May 1995, Mr. Havens served as manager of Kewanee
Enterprises, a private investment firm located in Bryn Mawr, Pennsylvania. He is
also Chairman of the Board of Directors of Petroferm, Inc., a director of
Independence Seaport Museum and Lankenau Hospital Foundation, and a Trustee
Emeritus of Ursinus College.
8
Pamela S. Lewis. Dr. Lewis currently serves as Dean of the McColl School of
Business at Queens College in Charlotte, North Carolina. Prior to joining the
McColl School, Dr. Lewis served as Professor of Management and Dean of the
Bennett S. LeBow College of Business at Drexel University from June 1997 to June
2000. From 1987 to 1997, Dr. Lewis was a professor at the University of Central
Florida, serving in a variety of administrative positions. Her professional
specialization is in the field of strategic planning with a particular emphasis
on competitive and marketing strategy. She has written and lectured on these
topics extensively. Dr. Lewis also serves on the board of directors of C & D
Technologies, Inc. and Charming Shoppes, Inc.
Eugene G. Monaco. Mr. Monaco has both a J.D. from Temple Law School and M.S.
in Mechanical Engineering from the University of Delaware and, from January 1,
1990 until his retirement in late 1995, served as a Judge for the Delaware
County District Court. He also served as an Instructor in Kinematics and
Dynamics at Drexel University, a Lecturer in child abuse at Penn State
University, and was the Chief Negotiator for the Rose Tree Media School Board.
He also served as Assistant District Attorney in Media, Pennsylvania and
Engineering Negotiator for Westinghouse Electric for 32 years.
William L. Walton. Mr. Walton has been President, Chairman and Chief Executive
Officer of Allied Capital Corporation since 1997 and is Chairman of Business
Mortgage Investors, Inc. Mr. Walton was chief executive officer of Success Lab,
Inc., which engages in children's educational services, from 1993 to 1996; chief
executive officer of Language Odyssey, which engages in educational publishing
and services from 1992 to 1996; and managing director of Butler Capital
Corporation from 1987 to 1991.
Robert E. Zobel. Mr. Zobel has been Vice President of Finance, Chief Financial
Officer, Treasurer and Secretary of MARS, Inc. since February 1996. From 1974
through February 1996, Mr. Zobel was associated with Deloitte & Touche LLP
(formerly Touche Ross & Co.) as an employee and since September 1981 as a
partner. Mr. Zobel earned a B.A. degree from Claremont McKenna College, a J.D.
degree from Willamette University College of law and a LLM degree in tax from
Boston University.
William L. Walton serves on the Board as the designee of Allied Capital
Corporation, the holder of all of the Series D Convertible Preferred Stock, a
$10,000,000 subordinated promissory note and warrants.
The Board of Directors recommends a vote FOR the nominees listed above.
Meetings of the Board of Directors and Committees
The Board of Directors of the Company held a total of eleven meetings during
the fiscal year ended June 30, 2000 (not including actions adopted by unanimous
consent). Each member of the Board of Directors attended at least 75% of the
aggregate of the number of meetings of the Board and Board Committees of which
he or she was a member during the 2000 fiscal year, except Mr. Walton who
attended six Board meetings and all Compensation Committee meetings.
The Board of Directors has an Audit Committee and a Compensation Committee.
9
The Audit Committee of the Board of Directors presently consists of Mr.
Chambers (Chairman), Mr. Havens and Mr. Zobel. It held four meetings during the
2000 fiscal year. The Audit Committee recommends the engagement of the Company's
independent accountants and is primarily responsible for approving the services
performed by the Company's independent accountants and for reviewing and
evaluating the Company's accounting principles and its system of internal
accounting controls.
The Compensation Committee of the Board of Directors presently consists of Mr.
Chambers (Chairman), Mr. Walton and Mr. Zobel. The Committee reviews and
recommends compensation and compensation changes for executives of the Company
and the Board of Directors and administers the Company's stock option and stock
grant plans. The Committee met six times during the 2000 fiscal year, and each
member attended all such meetings.
Compensation of Directors
The Company pays directors an annual retainer of $10,000 (except directors who
are also employees of the Company, who receive $6,000), which is paid quarterly,
and pays members of committees of the Board $750 per meeting for each committee
meeting attended. (Executive officers' compensation reported in the Summary
Compensation Table does not include these fees.)
The Company's 1995 Stock Incentive Plan, as amended, provides that as of the
date 90 days following the closing of each fiscal year that the Plan is in
effect, each individual serving as a director of the Company who is not an
officer or employee of the Company will be granted a nonqualified stock option
to purchase 5,000 shares of Common Stock if the Company's pre-tax income for
such fiscal year increased at least 20% from the prior fiscal year and if the
individual served as a director for the entire fiscal year then ended (or a
proportionate lesser number of shares if the individual served as a director for
less than the entire fiscal year). In the fiscal year ended June 30, 1999, the
number of shares subject to annual grant equaled 2,000 shares, and pursuant to
the Plan, Messrs. Chambers, Havens and Monaco each received an option to
purchase 2,000 shares of Common Stock, Mr. Walton received an option to purchase
1,227 shares of Common Stock, and Mr. Zobel received an option to purchase 1,561
shares of Common Stock. On September 28, 2000, Messrs. Chambers, Havens, Monaco,
Walton and Zobel each received option to purchase 5,000 shares of Common Stock,
and Dr. Lewis received an option to purchase 3,088 shares of Common Stock.
10
PROPOSAL 2
Ratification of Appointment of Independent Accountants
(Item 2 on Proxy Card)
The Board of Directors has selected PricewaterhouseCoopers L.L.P.,
independent accountants, to audit the consolidated financial statements of the
Company for its 2001 fiscal year and recommends that the stockholders vote for
ratification of such appointment. If the stockholders do not ratify this
appointment, the Board of Directors will reconsider its selection. A
representative of PricewaterhouseCoopers, L.L.P. is expected to be present at
the Annual Meeting and will have the opportunity to make a statement if desired
and is expected to be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR Proposal 2.
11
EXECUTIVE COMPENSATION
Report of the Compensation Committee of the Board of Directors
The Company's Compensation Committee is comprised of three outside directors
of the Company, currently Messrs. Chambers (Chairman), Walton and Zobel. At
least annually, the Compensation Committee reviews the compensation levels of
the Company's executive officers and certain other key employees and makes
recommendations to the Board of Directors regarding compensation of such
persons. In general, the Compensation Committee endeavors to base the
compensation of the executive officers on individual performance, performance
against established financial goals based on the Company's strategic plan, and
comparative compensation paid to executives of direct competitors and of non-
financial service companies.
The Compensation Committee's review of compensation, other than that of the
Chairman and Chief Executive Officer, is based on the recommendations of the
Company's internal compensation committee, which consists of A.J. Clegg
(Chairman) and John R. Frock (Executive Vice President). Executive officers'
compensation generally consists of base salary (which comprises a significant
portion of total compensation), bonus (which is based on the Company's
performance and/or specific goals), fringe benefits and stock options. All
executive officers are reviewed annually for performance. Salary changes are
effective in October. Bonuses are distributed after the results of the audit of
the financial statements have been verified.
In 1995, Towers and Perrin conducted a compensation survey for the Company.
Each year since 1995, the Compensation Committee has utilized the Towers and
Perrin survey, together with inflation data and other current compensation data
for executives of direct competitors to establish appropriate salary ranges for
the Company's executive positions. The Compensation Committee has established
actual salaries and other compensation within these salary ranges, based on
subjective evaluations of the executive's and the Company's performance both
during the current year and over time.
In 2000, the Company engaged William M. Mercer, Inc. ("Mercer") to perform an
updated compensation survey for the Company's executive positions. In assessing
the competitiveness of compensation for the Company's executives, Mercer
referenced compensation data for organizations of similar size in the private
education and professional / business services industries. Also, Mercer met with
the Company's executive management to learn about the Company's executives'
responsibilities. The Compensation Committee first used the Mercer survey for
October 1999 salary adjustments.
The Chairman and Chief Executive Officer's compensation commencing in October
1999 included an annual base salary of $320,000, a bonus plan based on the
Company's net income as compared to the annual plan submitted to and approved by
the Board of Directors in December 1999 and the Compensation Committee's
subjective evaluation of the Company's and the Chief Executive Officer's
performance, and customary fringe benefits. Mr. Clegg's salary reflected a
$42,000 increase over the prior period. The increase was based on the
Compensation Committee's subjective evaluation of the Company's performance. In
November 1999, in order to provide additional incentive to Mr. Clegg, the
Compensation Committee entered into a Special Incentive
12
Agreement with Mr. Clegg which provides that on each of the first, second and
third anniversaries of the date of such agreement, if employed by the Company on
such anniversary date, Mr. Clegg will receive an incentive payment (apart from
any other compensation) in the amount of $137,333.
In Fiscal 2000, the bonus plan of each executive officer included a formula
component, providing a bonus of up to 100% of base salary based on the Company's
performance as compared to the Company's Business Plan. Based on such formula,
each executive officer received a bonus equal to 40.5% of his base salary.
Further, at the discretion of the Company's internal executive committee, and
the Compensation Committee together, bonuses could be awarded based on
accomplishments of individual goals, which is in addition to the bonus
percentage awarded under the formula component, up to a maximum total bonus
(together with the formula-based component) of 100% of base salary.
Discretionary bonuses were approved amounting to $293,250 but not awarded until
the annual management's performance reviews are completed.
Compensation Committee
Mr. Edward H. Chambers
Mr. William L. Walton
Mr. Robert E. Zobel
13
Compensation Tables
The following tables contain compensation data for the Chief Executive Officer
and the Company's four other most highly compensated executive officers (based
on total annual salary and bonus for the fiscal year ended June 30, 2000). (Note
that Fiscal Year 1998 consisted of only six months.)
Summary Compensation Table
-------------------------------------------------------------------
Long Term
Compensation
Annual Compensation Awards
--------------------------------------------------
Other
Annual Securities
Name and Fiscal Compens- Underlying All Other
Principal Position Year/1/ Salary Bonus ation/2/ Options/ SARs Compensation/3/
- ------------------------------------------------------------------------------------------------------------
A.J. Clegg 2000 $314,007 $141,477 - 110,000 $ 6,391
Chairman, President and 1999 263,769 0 - 40,000 6,311
Chief Executive Officer 1998 125,887 0 - 20,000 1,645
1997 231,778 0 - 40,000 3,217
- ------------------------------------------------------------------------------------------------------------
William E. Bailey/4/ 2000 $140,979 $ 68,659 - 0 $ 445
Chief Financial Officer; 1999 112,307 0 - 30,000 573
Executive Vice President 1998 46,538 0 - 25,000 277
- ------------------------------------------------------------------------------------------------------------
Daryl A. Dixon/4/ 2000 $269,615 $117,205 $49,858 0 $ 302
President and Chief 1999 77,885 0 18,353 125,000 0
Operating Officer
- ------------------------------------------------------------------------------------------------------------
B. Robin Eglin 2000 $144,792 $ 68,659 - 0 $ 872
President of Nobel 1999 120,976 0 14,815 40,000 2,488
Learning Solutions 1998 57,699 0 7,357 13,900 550
1997 108,106 0 13,988 20,000 1,067
- ------------------------------------------------------------------------------------------------------------
John R. Frock 2000 $141,846 $ 66,636 - 0 $ 2,676
Executive Vice President - 1999 129,156 0 15,017 40,000 3,754
Corporate Development 1998 62,348 0 7,168 12,682 1,153
1997 119,530 0 13,690 40,000 1,645
- ------------------------------------------------------------------------------------------------------------
(1) The 1998 fiscal year consisted of the six months ended June 30, 1998.
(2) The amounts reported for: Daryl Dixon consist of $35,303 and $12,288 in
respect of loan forgiveness in fiscal 2000 and 1999, respectively, $8,400
and $3,500 for automobile expenses in fiscal 2000 and 1999, respectively,
and $6,155 and $2565 for health insurance in fiscal 2000 and 1999,
respectively; Robin Eglin consist of $7,800, $3,900 and $7,800 for
automobile expenses in fiscal 1999, 1998 and 1997, respectively, and $7,015,
$3,457 and $6,188 for health insurance in fiscal 1999, 1998 and 1997,
respectively. The amounts reported for John R. Frock consist of $7,800,
$3,900 and $7,800 for automobile expenses in fiscal 1999, 1998 and 1997,
respectively, and $7,217, $3,268 and $5,890 for health insurance in fiscal
1999, 1998 and 1997, respectively. Perquisites and other personal benefits
for Messrs. Clegg and Bailey for all years and Messrs. Eglin and Frock in
fiscal 2000 did not exceed 10% of the executive officer's salary and bonus,
and accordingly have been omitted from the table as permitted by the rules
of the Securities and Exchange Commission.
(3) Other compensation in fiscal 2000 for A.J. Clegg, William E. Bailey, Daryl
A. Dixon, B. Robin Eglin and John R. Frock consisted of payments of (i)
$4,696, $445, $302, $488 and $1868, respectively, in respect of life
insurance and (ii) $1,695, $0, $0, $384 and $808, respectively, in respect
of Employer matching 401(k) plan contributions.
(4) William Bailey joined the Company in January 1998. Daryl Dixon joined the
Company in February 1999.
14
Options/Stock Appreciation Rights Granted in Fiscal 2000
----------------------------------------------------------------------------------------
Individual Grants
-------------------------------------------------------- Potential Realized Value at
Assumed Annual Rates of
Stock Price Appreciation for
Number of % of Total Option Term (10 yrs)/3/
Securities Options/
Underlying SARs ----------------------------
Option/ Granted to all Exercise or At 5% At 10%
SARs Employees Base Price Expiration Annual Annual
Name of Executive Granted/1/ in F 2000/2/ per Share Date Growth Rate Growth Rate
- ---------------------------------------------------------------------------------------------------------------------
A. J. Clegg 110,000 80.29% $8.1250 11/18/09 $562,075 $1,424,407
No grants of stock options or stock appreciation rights were made in the 2000
fiscal year to William E. Bailey, Daryl A. Dixon, B. Robin Eglin or John R.
Frock.
(1) Options granted vest in increments of one-third of the total number of
options granted on the first, second and third anniversary dates of the date
of grant.
(2) During Fiscal 2000, the Company granted to employees options to purchase an
aggregate of 137,000 shares of Common Stock.
(3) The potential realizable values are based on an assumption that the stock
price of the shares of Common Stock of the Company appreciate at the annual
rate shown (compounded annually) from the date of grant until the end of the
option term. These values do not take into account contractual provisions of
the options which provide for termination of an option following termination
of employment, nontransferability, or vesting. These amounts are calculated
based on the requirements promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth of the shares of the Company's Common Stock.
Aggregated Option/Stock Appreciation Rights Exercised in Fiscal 2000 and Value
of Options at June 30, 2000
Value of Unexercised
Number of Unexercised In-the-Money
Exercised in Fiscal 2000 Options at June 30, 2000 Options at June 30, 2000
---------------------------------------------------------------------------------------
Shares
Acquired on Value
Name of Executive Exercise Realized Exercisable Unexerciseable Exercisable Unexerciseable
- -------------------------------------------------------------------------------------------------------------------
A. J. Clegg 0 0 111,667 143,333 $ 80,000 $103,750
William E. Bailey 0 0 30,000 25,000 $ 35,000 $ 64,531
Daryl A. Dixon 0 0 50,000 100,000 $151,563 $303,125
B. Robin Eglin 0 0 45,600 31,300 $ 68,563 $ 98,031
John R. Frock 0 0 61,788 30,894 $ 66,279 $ 96,889
None of the above named executive officers held any stock appreciation rights at
June 30, 2000.
15
Senior Executive Severance Plan
In February 2000, the Company adopted an amended Senior Executive Severance
Pay Plan (the "Executive Severance Pay Plan"), which replaced the Executive
Severance Pay Plan adopted in March 1997, for the five Company's five executive
officers. Under the Senior Executive Severance Pay Plan, if the employment of an
Executive Officer with the Company terminates following a Change in Control (as
defined therein) of the Company, under specified circumstances, the Executive
Officer will be entitled to receive the severance benefit specified in the
Severance Pay Plan. The amount payable to an Eligible Executive would equal (a)
the Eligible Executive's salary for a period of months equal to (i) twelve plus
the number of years of service of the Eligible Executive as of the date of
termination if he has completed less than three years of services, (ii) twelve
plus two times the number of years of service, if he has completed three or four
years of service as of the termination date or (iii) twelve plus 2.99 times the
number of years of service, if he has completed at least five years of service
as of the termination date; but in no event more 35.99 months, plus (b) the
bonus which would have been payable to the Eligible Executive for the year in
which employment was terminated pro rated based on the number of months of
employment in the year of termination.
Employment Agreements with Executive Officers
Daryl A. Dixon - President and Chief Operating Officer
The Company entered into a three year employment agreement with Daryl Dixon
upon his commencement of employment in February 1999. Mr. Dixon's annual base
salary is $250,000, and will be reviewed annually. Beginning in fiscal year
1999/2000, Mr. Dixon is eligible to receive an annual bonus of up to 50% of his
base salary for achieving the Company's business plan and up to an additional
50% of his base salary for achieving above business plan targets. Pursuant to
his employment agreement, on his first day of employment, the Company granted
Mr. Dixon options to purchase 150,000 shares of the Company's common stock,
vesting over a three year period. The Company also agreed to provide Mr. Dixon
with a $8,400 per year car allowance, term life insurance in the amount of
$260,000 for his benefit and other benefits provided to the Company's senior
executives. Further, upon commencement of his employment, the Company loaned Mr.
Dixon the sum of $90,000 (to repay a loan with his prior employer), accruing
interest at a rate of 8% per annum. Each month during Mr. Dixon's employment,
the Company will forgive 1/36 of the principal amount and associated interest of
this loan. Mr. Dixon has agreed not to compete against the Company during the
term of his employment and for two years thereafter.
If prior to February 18, 2002, the Company terminates Mr. Dixon's
employment other than for cause or his death or disability, the Company will pay
to Mr. Dixon, as severance, an amount equal to his base salary plus a pro rata
portion (based on the portion of the bonus period he was employed by the
Company) of the bonus which he would have received for the period had he
continued in the Company's employment. Also, the Company will forgive any
remaining balance on Mr. Dixon's loan from the Company. If upon termination, Mr.
Dixon is also entitled to payments under the Severance Pay Plan, the Company may
credit payments under the Severance Pay Plan against this contractual severance
obligation, but the Company must also continue to pay him his base salary and
bonuses until February 18, 2002 (taking credit for the other severance payments
and any compensation received by him from others for his services following the
date of termination and prior to February 18, 2002). In such circumstance, the
Company will also
16
continue Mr. Dixon's benefits as an executive of Nobel (until he receives a
comparable benefit from a new employer). Under certain circumstances, if Mr.
Dixon terminates his employment with the Company following a Change in Control
(as defined in the Severance Pay Plan), he will also receive these severance
benefits. If the Company terminates Mr. Dixon for cause, he is entitled to
receive his base salary only through the effective date of termination. If on or
after February 18, 2002, the Company terminates Mr. Dixon's employment other
than for cause or his death or disability, then the Company will pay to Mr.
Dixon, as a severance payment, an amount equal to his base salary plus a pro
rata portion (based on the portion of the bonus period he was employed by the
Company) of the bonus which he would have received for the period had he
continued in the Company's employment.
William (Rusty) E. Bailey - Executive Vice President and Chief Financial
Officer
William E. Bailey and the Company have agreed to a three year employment
agreement beginning on the commencement of his employment in January 1998. Mr.
Bailey's base salary ($145,000 as of October 1999) is reviewed annually, but any
adjustment is in the Company's sole discretion. Mr. Bailey is eligible to
receive an annual bonus to be determined in the Company's sole discretion of the
Company. Upon commencement of Mr. Bailey's employment with the Company, the
Company granted Mr. Bailey options to purchase 25,000 shares of the Company's
common stock, vesting over a three year period (10,000 after each of one and two
years and 5,000 in the third year). The Company also agreed to provide Mr.
Bailey with a $6,000 per year car allowance, term life insurance in the amount
of his base salary plus $10,000 for his benefit and other benefits provided to
the Company's senior executives. Further, the Company paid Mr. Bailey $10,000 to
reimburse him for relocation expenses, and the Company will pay him an
additional $15,000 for relocation expense if he sells his former home.
Other Agreements with Executive Officers
The Company and A. J. (Jack) Clegg are parties to a Special Incentive
Agreement entered into November 20, 1999 which provides that on each of the
first, second and third anniversaries of the date of such agreement, if Mr.
Clegg is employed by the Company on such anniversary date, the Company will pay
him an incentive payment in the amount of $137,333. Such agreement also provides
that if is a Change in Control (as defined in the Agreement) of the Company,
within 30 days of the occurrence of such Change in Control, the Company will pay
to Mr. Clegg any such incentive payments which have not yet been paid (in lieu
of making payment on the applicable anniversary date).
The Company and John R. Frock are parties to a Noncompete Agreement which
provides that the Company will make a payment to Mr. Frock of $255,000 following
his termination for any reason if, within 30 days of his termination date, Mr.
Frock delivers a letter to the Company agreeing not to engage in specified
activities in competition with the Company for four years. The Company and Mr.
Frock are also parties to a Contingent Severance Agreement which provides that
if Mr. Frock's employment is terminated because (i) the Company terminates Mr.
Frock's employment without Cause (as defined in the agreement) or (ii) Mr. Frock
resigns following a Change in Control (as defined in the agreement), within 20
days following the date of termination, the Company must make a severance
payment to Mr. Frock in such amount. The Company will not under any circumstance
be required to make a payment to Mr. Frock under both the Noncompete Agreement
and the Contingent Severance Agreement.
17
STOCK PERFORMANCE
The following line graph compares the cumulative total stockholder return on
the Company's Common Stock with the total return of the Nasdaq Stock Market
(U.S. Companies) and an index of peer group companies for the period June 30,
1995 through June 30, 2000 as calculated by the Center for Research in Security
Prices. The graphs assume that the value of the investment in the Company's
Common Stock and each index was $100 at June 30, 1995 and that all dividends
paid by the companies included in the indexes were reinvested.
Comparison of Five Year Cumulative Total Return
[LINE GRAPH APPEARS HERE]
6/95 6/96 6/97 6/98 6/98 6/00
Nobel Learning Communities, Inc. 100.0 193.1 117.2 124.1 69.0 108.6
Nasdaq Stock Market 100.0 128.4 156.1 205.5 295.6 436.8
(U.S. Companies)
Self-Determined Peer Group 100.0 189.9 240.0 355.2 313.3 261.7
The self determined peer group includes: Bright Horizons Family Solutions, Inc.;
Childtime Learning Centers, Inc.; DeVry Inc.; ITT Educational Services, Inc.;
Sylvan Learning Systems, Inc. and Tesseract Group Inc.
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization of the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100 at 6/30/95.
18
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
its Common Stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of the Company's Common
Stock. Executive officers, directors and ten percent stockholders are required
by SEC regulations to furnish the Company with a copy of all Section 16(a) forms
("Forms 3, 4, and 5") that they file. To the Company's knowledge, based solely
on a review of copies of the Forms 3, 4 and 5 furnished to the Company and
written representations as to all transactions in the Company's securities
effected during the period from July 1, 1999 through June 30, 2000, all
applicable Section 16(a) filing requirements were complied with, except for
filings with respect to certain stock options grants
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In July 1998, the Company issued a $10,000,000 10% senior subordinated note to
Allied Capital Corporation, of which William L. Walton, a director of the
Company, is President, Chairman and Chief Executive Officer. Payments on the
senior subordinated note are subordinate to the Company's senior bank debt. In
connection with the financing transaction, the Company also issued to Allied
Capital Corporation warrants to acquire 531,255 shares of the Company's common
stock and granted to Allied Capital Corporation certain rights to require the
Company to register the shares of Common Stock issuable upon exercise of the
warrants under the Securities Act of 1933.
The Company loaned to Daryl Dixon, the Company's President and Chief Operating
Officer, the sum of $90,000 upon the commencement of his employment (to repay a
loan with his prior employer). The loan accrues interest at a rate of 8% per
annum. Each month during Mr. Dixon's employment, the Company forgives 1/36 of
the principal amount and associated interest of this loan.
19
GENERAL INFORMATION
Stockholders who wish to obtain, free of charge, a copy of the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2000, as filed
with the Securities and Exchange Commission, may do so by writing or calling
Yvonne DeAngelo, Corporate Secretary, Nobel Learning Communities, Inc., Rose
Tree Corporate Center II, 1400 North Providence Road, Suite 3055, Media,
Pennsylvania 19063, telephone (610) 891-8200 or by sending an electronic mail
message to nobel@educating.com.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented by
such stockholders at the Company's 2000 Annual of Meeting of Stockholders must
be received by the Company no later than June 10, 2001 and be otherwise in
compliance with applicable laws and regulations in order for such proposals to
be included in the Proxy Statement. In addition, the Company's Certificate of
Incorporation requires that any stockholder who wishes to make a nomination for
the office of director or to initiate a proposal or other business at the 2001
Annual Meeting must give the Company advance notice by September 2, 2001 (or, if
the date of the 2001 Annual Meeting is before October 27, 2001 or after December
6, 2001, by the date ten days following the date that the Company first mails to
stockholders the Company's notice of the meeting), and that notice must meet
certain other requirements set forth in the Company's Certificate of
Incorporation.
By Order of the Board of Directors
Yvonne DeAngelo
Corporate Secretary
October 10, 2000
20
e
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NOBEL LEARNING COMMUNITIES, INC.
The undersigned hereby appoints A.J. Clegg, Yvonne DeAngelo and William E.
Bailey proxies for the undersigned, each with power to appoint his or her
substitute, and authorizes each of them acting alone, or together if more than
one is present, to represent and to vote, as specified below, all of the shares
of the undersigned held of record by the undersigned on October 9, 2000, at the
2000 Annual Meeting of Stockholders of Nobel Learning Communities, Inc. (the
"Company") on November 16, 2000, and at all adjournments thereof, on the
matters set forth herein and in the discretion of the proxies for the
transaction of such other business as may come before the meeting.
1. Election of three directors to serve for a three year term (until the Annual
Meeting of Stockholders in the year 2003)
[_] FOR all nominees listed below (except as marked to the contrary below):
[_] WITHHOLD AUTHORITY to vote for all nominees
listed below
John R. Frock Eugene G. Monaco Robert E. Zobel
INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name in the following space:
---------------------------------------------------------------------
2. Ratification of the selection of PricewaterhouseCoopers L.L.P. as the
Company's independent auditors for fiscal year 2001.
[_] FOR [_] AGAINST [_] ABSTAIN
(OVER)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH
NOMINEE AND "FOR" RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS L.L.P
AS AUDITORS FOR THE COMPANY'S FISCAL YEAR 2001.
Date: __________________________ , 2000
---------------------------------------
---------------------------------------
Your name should appear exactly as
your name appears in the space at the
left. For joint accounts, any co-owner
may sign. When signing in a fiduciary
or representative capacity, please
give your full title as such. If a
corporation or partnership, sign in
full corporate or partnership name by
authorized officer or partner.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE.