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 (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ISOLYSER COMPANY, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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previously. Identify the previous filing by registration statement number,
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ISOLYSER COMPANY, INC.
650 ENGINEERING DRIVE
TECHNOLOGY PARK
NORCROSS, GEORGIA 30092
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 1998
To the Shareholders:
The Annual Meeting of Shareholders of Isolyser Company, Inc. (the "Company")
will be held at the Crown Plaza Ravinia, 4355 Ashford-Dunwoody Road, Atlanta,
Georgia, on Wednesday May 27, 1998, at 2:00 p.m. for the following purposes, all
as set forth in the attached Proxy Statement:
1. To elect seven directors to serve for one-year terms expiring at the
annual meeting in 1999 and until their successors are elected and qualified.
The Board of Directors' nominees are named in the attached Proxy Statement.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record on the books of the Company at the close of
business on April 13, 1998, are entitled to receive notice of and to vote at the
meeting.
Shareholders are cordially invited to attend the meeting in person. However,
whether or not you expect to attend, we urge you to read the accompanying Proxy
Statement and then complete, sign, date and return the enclosed proxy card in
the enclosed postage-prepaid envelope. It is important that your shares be
represented at the meeting, and your promptness will assist us to prepare for
the meeting and to avoid the cost of a follow-up mailing. If you receive more
than one proxy card because you own shares registered in different names or at
different addresses, each proxy card should be completed and returned.
Sincerely,
[SIGNATURE]
Terence N. Furness
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Norcross, Georgia
April 24, 1998
ISOLYSER COMPANY, INC.
650 ENGINEERING DRIVE
TECHNOLOGY PARK
NORCROSS, GEORGIA 30092
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 27, 1998
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GENERAL INFORMATION
This Proxy Statement is furnished to shareholders of Isolyser Company, Inc.,
a Georgia corporation ("Isolyser" or the "Company"), in connection with the
solicitation by the Board of Directors of Isolyser (the "Board of Directors" or
"Board") of proxies for use at its Annual Meeting of Shareholders (the
"Meeting") scheduled to be held on Wednesday, May 27, 1998, at 2:00 p.m.,
Atlanta time, at the Crown Plaza Ravinia, 4355 Ashford-Dunwoody Road, Atlanta,
Georgia, and at any and all adjournments or postponements thereof. This Proxy
Statement and the accompanying form of proxy were first mailed to shareholders
on or about April 24, 1998.
At the Meeting, shareholders of Isolyser will vote upon: (1) the election of
seven directors; and (2) such other business as may properly come before the
Meeting and any and all adjournments thereof.
VOTING RIGHTS AND VOTES REQUIRED
The close of business on April 13, 1998, has been fixed as the record date
for the determination of shareholders entitled to receive notice of and to vote
at the Meeting. As of the close of business on such date, Isolyser had
outstanding and entitled to vote 40,004,411 shares of Common Stock, $.001 par
value per share ("Common Stock").
A majority of the outstanding shares of Common Stock on the record date must
be represented in person or by proxy at the Meeting in order to constitute a
quorum for the transaction of business. The record holder of each share of
Common Stock entitled to vote at the Meeting will have one vote for each share
so held. Abstentions will be treated as Common Stock present and entitled to
vote for purposes of determining the presence of a quorum.
Directors are elected by a plurality of the votes cast. Shareholders may not
cumulate their votes. The seven candidates receiving the highest number of votes
will be elected. In tabulating the votes, abstentions and broker nonvotes will
be disregarded and have no effect on the outcome of the vote.
VOTING OF PROXIES
Shares represented by all properly executed proxies will be voted at the
Meeting in accordance with the instructions specified thereon. If no
instructions are specified, the shares represented by any properly executed
proxy will be voted FOR the election of the nominees listed below under
"Election of Directors."
The Board of Directors is not aware of any matter that will come before the
Meeting other than as described above. However, if any such other matter is duly
presented, in the absence of instructions to the contrary, such proxies will be
voted in accordance with the judgment of the proxy holders with respect to such
matter properly coming before the Meeting.
REVOCATION OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by a
shareholder at any time before it is exercised. Any proxy may be revoked by a
writing, by a valid proxy bearing a later date delivered to Isolyser or by
attending the Meeting and voting in person.
SOLICITATION OF PROXIES
The expenses of this solicitation will be paid by Isolyser. To the extent
necessary to ensure sufficient representation at the Meeting, proxies may be
solicited by any appropriate means by officers, directors and regular employees
of Isolyser, who will receive no additional compensation therefor. Isolyser will
pay persons holding shares in their names or in the names of their nominees, but
not owning such stock beneficially (such as brokerage houses, banks and other
fiduciaries), for the expense of forwarding soliciting material to their
principals.
DIRECTORS AND EXECUTIVE OFFICERS
Proxies will be voted for the election of the following seven nominees as
directors to serve until the 1999 Annual Meeting of Shareholders or until their
successors are elected and qualified. The election of each nominee for director
requires the affirmative vote of the holders of a plurality of the shares cast
in the election of directors. All of the nominees, except Mr. McKinley, are
presently members of the Board. The Board of Directors has no reason to believe
that any of the nominees will be unavailable for service if elected, but if any
are unavailable, proxies will be voted for such substitute as the Board may
designate.
NAME AGE DIRECTOR SINCE
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Gene R. McGrevin......................................................... 55 1997
Terence N. Furness....................................................... 50 1998
Travis W. Honeycutt...................................................... 55 1987
Dan R. Lee............................................................... 50 1996
Rosdon Hendrix........................................................... 58 1994
Kenneth F. Davis......................................................... 47 1996
John E. McKinley......................................................... 54 --
GENE R. MCGREVIN was elected Chairman of the Board of Directors and acting
President of the Company in April 1997, and currently serves as Chairman of
Isolyser. Mr. McGrevin also serves as chairman and chief executive officer of
P.E.T.Net Pharmaceutical Services, LLC, a manufacturer and distributor of
radiopharmaceuticals. Mr. McGrevin previously served as Vice Chairman and Chief
Executive Officer of Syncor International Corp., a public company in the nuclear
medicine industry, with which Mr. McGrevin was associated since 1987. Prior to
running Syncor, Mr. McGrevin served in executive positions with various health
care businesses including President of the Health Care Products Group of
Kimberly-Clark Corporation, founder and President of a consulting firm
specializing in the health care industry and an executive officer of VHA
Enterprises, Inc.
TERENCE N. FURNESS was elected President and Chief Executive Officer of the
Company effective January 1, 1998. Mr. Furness has 22 years experience in the
medical device industry. Prior to accepting this position with Isolyser, Mr.
Furness served as President of Zimmer, Inc., a wholly owned subsidiary of
Bristol-Myers Squibb, from 1995 to 1997, and as Senior Vice President Strategic
Planning of Bristol-Myers Squibb for a portion of 1997. From 1990 to 1995, Mr.
Furness served as President of the Medical Products Group of Smith & Nephew,
plc, an international healthcare and consumer products firm. He holds a Bachelor
of Science in Physics from the University of North Carolina at Chapel Hill and a
Master in Business Administration from Harvard Graduate School of Business.
TRAVIS W. HONEYCUTT has been Executive Vice President, Secretary and a
Director of the Company since its inception in 1987. Prior to his founding the
Company with Mr. Taylor in 1987, Mr. Honeycutt had over 20 years of experience
in new product development for the industrial and health care markets.
DAN R. LEE became an executive officer of the Company following the
conclusion of Isolyser's acquisition of Microtek Medical, Inc. ("Microtek")
effective September 1, 1996 (the "Microtek Acquisition"), and became a director
of the Company in December, 1996. Prior to accepting such positions with the
Company, Mr. Lee had served as the Vice President and Chief Operating and
Financial Officer of
2
Microtek since 1987. Previous to that time, he was engaged in the public
accounting practice, including more than five years with KPMG Peat Marwick.
ROSDON HENDRIX was elected a Director of the Company in December 1994. Until
he retired in June 1992, Mr. Hendrix served for approximately 30 years in
various financial positions for General Motors Corporation, including serving as
Resident Comptroller from 1975 until his retirement. Since June 1992, Mr.
Hendrix has engaged in efficiency consulting studies with various governmental
authorities and businesses in Georgia.
KENNETH F. DAVIS was elected a Director of the Company in January 1996. Dr.
Davis has been a practicing surgeon on the staff of the Harbin Clinic and
Redmond Regional Medical Center, Rome, Georgia since 1986. In addition, Dr.
Davis serves on the Board of AmSouth Bank of Georgia, a publicly owned bank, as
well as various other companies including a privately held hospital consulting
firm.
JOHN E. MCKINLEY is a nominee as director of the Company and has not
formerly been associated with the Company. Between 1991 and 1996, Mr. McKinley
was the principle operating officer of BankSouth Corporation, Atlanta, Georgia,
where he was a Board member and Chairman of the Credit Policy Committee. Mr.
McKinley also headed the Management Committee of Bank South, which included
direct responsibility for credit policy, business banking and mortgage banking.
From 1969 to 1991, Mr. McKinley worked with Citizens and Southern National Bank
and C&S/Sovran where he was the chief credit officer of C&S Georgia Corporation
and a senior vice president. Additionally, Mr. McKinley has taught in numerous
banking schools and has authored or co-authored numerous books and articles on
banking. Since 1996, Mr. McKinley has been engaged in private consulting
services. Mr. McKinley also serves as a director of Inficorp Holdings, Inc.
Listed below is information regarding the executive officers of the Company
who are not also directors:
MIGIRDIC NALBANTYAN (age 55) was elected as an Executive Vice President of
the Company effective February 1, 1998, and is currently in charge of the
Company's OREX Commercial Development business unit. Prior to accepting such
position, Mr. Nalbantyan served in various executive positions, including
president, of BBA Nonwovens, a division of BBA Group PLC and now one of the
worlds largest manufacturer of nonwoven products, from 1986 to 1997. From 1968
to 1986 he held various manufacturing, process and product development,
marketing and business planning positions at DuPont's Textile Fibers operations.
PETER A. SCHMITT (age 38) was elected Vice President of Finance, Chief
Financial Officer, Treasurer and Assistant Secretary of the Company effective in
May, 1997. Prior to accepting such position, Mr. Schmitt served for two years as
the chief financial officer and general manager of the Company's custom
procedure tray business. From 1993 to 1995 Mr. Schmitt was controller of Digene,
Inc., a biotechnology company. From 1991 to 1993, Mr. Schmitt was part of a
management turnaround team for a private printing company and between 1985 and
1990 Mr. Schmitt was employed by Touche Ross & Company and Coopers & Lybrand as
a senior auditor and audit supervisor, respectively.
LESTER J. BERRY (age 64) became an executive officer of the Company
following the conclusion of the acquisition of Microtek. Prior to that time, Mr.
Berry had served as a director and officer of Microtek since 1994. From 1987
through 1993, Mr. Berry served in various capacities at 3M Corporation,
including service as a National Sales and Marketing Manager, Medical
Specialties, and as the National Sales Manager, Health Care Specialties.
RICHARD SETIAN (age 38) was elected Vice President of Marketing in May,
1996, after working with the Company's marketing department since his
association with the Company in April, 1995. Between December, 1992 and March,
1995, Mr. Setian served as Executive Vice President of Maxxim in its Boundary
division. Prior to his joining Maxxim, Mr. Setian held various sales and
marketing positions with Kendall Healthcare Products.
3
MICHAEL MABRY (age 35) was elected Vice President of Operations of the
Company effective in May, 1997, and now serves as Vice President and General
Manager for the Company. Prior to accepting such position, Mr. Mabry served in
various positions with the Company (including Chief Information Officer) since
his joining the Company in September, 1995. From 1984 to 1995, Mr. Mabry was
employed by DeRoyal Industries where his career advanced from software engineer
to vice president of information systems and operations.
DAVID W. VELMOSKY (age 48) was appointed Vice President of Human Resources
of the Company effective in May, 1997. Prior to accepting such position, Mr.
Velmosky served in a non-executive capacity as Vice President of Human Resources
of the Company since his joining the Company in July, 1996. Mr. Velmosky was
formerly employed as Vice President of Human Resources for Atlantis Plastics,
Inc. from 1994 to 1996. Between 1992 and 1994, Mr. Velmosky was in the human
resources department of Pittsburg Plate and Glass. In addition to a bachelors
degree in industrial psychology, Mr. Velmosky holds numerous advanced
certifications in employment law, ERISA benefits and compensation practices.
THEODORE M. DUBOSE, IV (age 52) was elected Vice President of Industrial
Sales for the Company effective in May, 1997. Prior to accepting such position,
Mr. DuBose served in various non-executive capacities on behalf of the Company
including manager of Industrial Sales and President of SafeWaste Corporation,
since the date of his joining the Company as result of the Company's acquisition
of SafeWaste Corporation in May, 1995. Mr. DuBose founded the predecessor of
SafeWaste in 1992. Prior to SafeWaste, Mr. DuBose served in various executive
capacities with both entrepreneurial and large construction industry companies.
The Company's Articles of Incorporation adopt the provisions of the Georgia
Business Corporation Code (the "Corporation Code") providing that no member of
the Company's Board of Directors shall be personally liable to the Company or
its shareholders for monetary damages for any breach of his duty of care or any
other duty he may have as a director, except liability for any appropriation, in
violation of the director's duties, of any business opportunity of the Company,
for any acts or omissions that involve intentional misconduct or a knowing
violation of law, for liability under the Corporation Code for unlawful
distributions to shareholders, and for any transaction from which the director
receives an improper personal benefit.
The Company's Bylaws provide that each officer and director shall be
indemnified for all losses and expenses (including attorneys' fees and costs of
investigation) arising from any action or other legal proceeding, whether civil,
criminal, administrative or investigative, including any action by and in the
right of the Company, because he is or was a director, officer, employee or
agent of the Company or, at the Company's request, of any other organization. In
the case of an action by or in the right of the Company, such indemnification is
subject to the same exceptions, described in the preceding paragraph, that apply
to the limitation of a director's monetary liability to the Company. The Bylaws
also provide for the advancement of expenses with respect to any such action,
subject to the officer's or director's written affirmation of his good faith
belief that he has met the applicable standard of conduct, and the officer's or
director's written agreement to repay any advances if it is determined that he
is not entitled to be indemnified. The Bylaws permit the Company to enter into
agreements providing to each officer or director indemnification rights
substantially similar to those set forth in the Bylaws, and such agreements have
been entered into between the Company and each of the members of its Board of
Directors. Although the form of indemnification agreement offers substantially
the same scope of coverage afforded by provisions in the Articles of
Incorporation and Bylaws, it provides greater assurances to officers and
directors that indemnification will be available, because, as a contract, it
cannot be modified unilaterally in the future by the Board of Directors or by
the shareholders to eliminate the rights it provides.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors maintains standing Audit and Compensation Committees.
The Board has not established a standing nominating committee.
4
The Audit Committee, currently consisting of Rosdon Hendrix and a vacant
seat (such seat had been filled by Olivia Kirtley, a former independent director
who recently resigned due to other commitments), recommends to the Board the
firm of independent public accountants that audits the consolidated financial
statements of Isolyser and its subsidiaries, reviews the plan and scope of any
audit of the Company's financial statements, reviews the financial statements,
and reviews matters pertaining to the audit. The primary function of the Audit
Committee is to strengthen the independence and objectivity of the external
auditors and to monitor the accuracy and completeness of the Company's financial
statements and matters which relate to them. It should be noted, however, that
the members of the Committee are not necessarily experts in the fields of
auditing and accounting and do not provide special assurances on such matters.
The Audit Committee met four times during 1997.
The Compensation Committee, consisting of Rosdon Hendrix and Kenneth F.
Davis, makes recommendations to the Board regarding the compensation of
executive officers and administers Isolyser's incentive plans, including the
Stock Option Plan and the Stock Purchase Plan. The Compensation Committee's
report on executive compensation begins at page 14 of this Proxy Statement. The
Compensation Committee met five times during 1997.
The Board of Directors held eight meetings during 1997. Each incumbent
director attended at least 75 percent of the aggregate of the meetings of the
Board of Directors and of the committees of which he was a member.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, Isolyser's executive officers and directors and any
persons holding more than ten percent of the Company's Common Stock are required
to file with the Securities and Exchange Commission (the "Commission") and The
Nasdaq Stock Market reports of their initial ownership of the Company's Common
Stock and any changes in ownership of such common stock. Specific due dates have
been established and the Company is required to disclose in its Annual Report on
Form 10-K and Proxy Statement any failure to file such reports by these dates.
Copies of such reports are required to be furnished to Isolyser. Based solely on
its review of the copies of such reports furnished to Isolyser, or written
representations that no reports were required, Isolyser believes that, during
1997, all of its executive officers (including the Named Executive Officers),
directors and persons owning more than 10% of its common stock complied with the
Section 16(a) requirements except Mr. Schmitt filed a Form 4 late, Mr. DuBose
amended a timely filed Form 3 to correct a typographical error and Jamal Silim
(a former director) filed a Form 5 late reporting an exempt option grant.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 23, 1998, certain information
regarding the beneficial ownership of common stock by (i) each person known by
the Company to be the beneficial owner of more than five percent of the
outstanding shares of common stock, (ii) each director nominee and Named
5
Executive Officer identified under "Executive Compensation" below, and (iii) all
directors and executive officers as a group:
PERCENTAGE OF
COMMON
SHARES STOCK
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED OWNED
- ---------------------------------------------------------------------------- ----------------- ----------------
Robert L. Taylor (1)........................................................ 2,789,750 7.0%
Travis W. Honeycutt (2)..................................................... 2,900,388 7.3%
Gene R. McGrevin (3)........................................................ 170,000 *
Dan R. Lee (4).............................................................. 352,610 *
Lester J. Berry (5)......................................................... 92,974 *
Rosdon Hendrix (6).......................................................... 102,000 *
Kenneth Davis (7)........................................................... 89,243 *
Terence N. Furness (8)...................................................... 50,000 *
Peter A. Schmitt (9)........................................................ 36,500 *
John E. McKinley............................................................ 120,000 *
Dimensional Fund Advisors, Inc. (10)........................................ 2,131,925 5.3
All directors and executive officers as a group (14 persons) (11)........... 4,087,152 10.0%
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* Represents less than 1% of the common stock
(1) As reported by Mr. Taylor in a Statement on Schedule 13G filed with the
Commission. Includes 2,600 shares of common stock over which Mr. Taylor acts
as custodian under the Georgia Transfers to Minors Act, and options to
acquire 26,666 shares exercisable within 60 days.
(2) Includes options to acquire 26,666 shares exercisable within 60 days.
(3) Includes options to acquire 150,000 shares exercisable within 60 days.
(4) Includes options to acquire 342,545 shares exercisable within 60 days.
(5) Includes options to acquire 82,500 shares exercisable within 60 days.
(6) Includes options to acquire 56,000 shares exercisable within 60 days.
(7) Includes options to acquire 54,000 shares exercisable within 60 days.
(8) Includes options to acquire 50,000 shares exercisable within 60 days.
(9) Includes options to require 35,000 shares exercisable within 60 days.
(10) As reported by Dimensional Fund Advisors, Inc. ("DFA") in a Statement on
Schedule 13G filed with the Commission. All such shares are held by advisory
clients of DFA. The address of DFA is 1299 Ocean Street, 11th Floor, Santa
Monica, CA 90401.
(11) Includes options to acquire 967,377 shares exercisable within 60 days.
EXECUTIVE COMPENSATION
COMPENSATION TABLES
The following table sets forth the cash and non-cash compensation paid by
the Company (or Microtek for services rendered during the years ended December
31, 1996 and 1995), to the two individuals serving as the Company's chief
executive officer during portions of 1997, and each of the four most highly
compensated executive officers of the Company other than such chief executive
officers who were serving as executive officers at December 31, 1997
(collectively, the "Named Executive Officers").
6
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM
-------------------------------------------------- COMPENSATION
OTHER ANNUAL AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION
- ----------------------------------------------- --------- ---------- ---------- --------------- ------------- -------------
Gene R. McGrevin............................... 1997 $ 67,874 -- -- 150,000 --
Chairman, Former President
Robert L. Taylor,.............................. 1997 $ 150,000 -- -- -- $ 2,998(1)
Former Chairman, President and Chief 1996 $ 150,000 -- -- 40,000 $ 2,453(1)
Executive Officer 1995 $ 150,000 -- -- -- $ 2,570(1)
Travis W. Honeycutt............................ 1997 $ 150,000 -- -- -- $ 3,235(2)
Executive Vice President 1996 $ 150,000 -- -- 40,000 $ 3,235(2)
1995 $ 150,000 -- -- -- $ 3,235(2)
Dan R. Lee..................................... 1997 $ 150,000 -- -- 100,000 $ 4,978(4)
Executive Vice President (3) 1996 $ 150,000 $ 100,000 -- 50,000 $ 4,417(4)
1995 $ 150,000 $ 100,000 -- 41,250 $ 5,093(4)
Lester J. Berry................................ 1997 $ 150,000 -- -- -- $ 9,302(5)
Vice President (3) 1996 $ 150,000 $ 100,000 -- -- $ 7,539(5)
1995 $ 150,000 $ 74,000 -- 16,500 $ 6,427(5)
Peter A. Schmitt............................... 1997 $ 137,000 $ 25,587 -- -- $ 9,114(6)
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(1) This amount represents the Company's payment ($2,125) for $500,000 of term
life insurance and contributions to a 401(k) plan ($873, $328 and $445 in
1997, 1996 and 1995 respectively).
(2) This amount represents the Company's payment on Mr. Honeycutt's behalf, for
$500,000 term life insurance policies.
(3) Compensation earned prior to 1997 by Messrs. Lee and Berry stated in the
table is based upon compensation plans of Microtek as these individuals were
executive officers of Microtek prior to the Microtek acquisition effected
September 1, 1996.
(4) This amount represents payment ($2,036 per year) for $250,000 term life
insurance and contributions for a 401(k) plan for the balance of the amount
stated.
(5) This amount represents the Company's payment ($5,158 per year) for $250,000
term life insurance and contributions for a 401(k) plan for the balance of
the amount stated.
(6) This amount represents relocation expenses ($6,969) and contributions to a
401(k) plan for the balance ($2,145) of the amount stated.
EMPLOYMENT ARRANGEMENTS
The Company is a party to employment agreements with all of its Named
Executive Officers, except Travis W. Honeycutt. In connection with Mr.
McGrevin's acceptance of his position as Chairman of the Board of Directors and
acting President of the Company, the Company and Mr. McGrevin entered into an
employment agreement pursuant to which Mr. McGrevin agreed to serve in such
capacities until December 31, 1997, or such later date as the Company and Mr.
McGrevin might mutually agree. Such agreement, which expired effective December
31, 1997, provided for a fixed salary, allowed Mr. McGrevin to participate in
Company sponsored employee benefit plans and set forth Mr. McGrevin's agreement
to certain restrictive covenants relating to the protection of confidential
information. The agreement was terminable by the Company at any time with or
without cause and without any obligation in respect of severance.
Subsequent to Mr. Taylor's retirement as Chairman, Chief Executive Officer
and President of the Company, the Company and Mr. Taylor concluded the terms of
an employment agreement pursuant to
7
which the Company retained the continuing services of Mr. Taylor as a
non-executive employee through August 30, 1999 and obtained Mr. Taylor's
agreement to certain restrictive covenants including covenants relating to the
protection of confidential information and restricting Mr. Taylor's ability to
compete against the Company. In consideration of the foregoing, the Company
agreed to continue Mr. Taylor's salary ($150,000 per year) and certain
Company-funded health and life insurance benefits through the term of such
employment agreement.
In the fourth quarter of 1997, the Company and Dan R. Lee concluded an
employment agreement providing that Mr. Lee agrees to continue to serve as an
employee of the Company through March 31, 2000, and specifies a certain minimum
salary and benefits. The agreement also includes certain restrictive covenants
including covenants relating to the protection of confidential information and
restricting competition against the Company. The agreement is terminable by the
Company with or without cause. In the event of any termination of Mr. Lee's
employment by the Company without cause, the Company remains obligated to pay
the base salary provided in the agreement through March 31, 2000.
Mr. Berry is a party to an employment agreement with Microtek expiring on
January 3, 1999. Such employment agreement specifies a minimum salary and
benefits payable to him during the term of the employment agreement and, in
consideration therefore, contains certain provisions restricting his ability to
compete against the Company after termination of the agreement or to use or
disclose confidential information. In connection with the Microtek acquisition,
Mr. Berry agreed to delete certain compensatory provisions of such agreement
otherwise arising in the event of certain events constituting a change of
control.
Effective March 12, 1998, Mr. Schmitt entered into an employment agreement
with the Company expiring on March 12, 2001. Such employment agreement specifies
a minimum salary and benefits payable
to him during the term of the employment agreement. The agreement also includes
certain restrictive covenants including covenants relating to the protection of
confidential information and restricting competition against the Company. The
agreement is terminable by the Company or the employee with or without cause. In
the event of termination of the agreement by the Company without cause, or by
the employee for good reason (as defined), the employee would be entitled to
specified severance of between six months and one year of salary. In the event
of any termination of Mr. Schmitt's employment occurring within six months after
a change of control (as defined) of the Company, other than a termination of
employment as a result of death, disability or for cause, then the Company is
obligated to pay a severance in amount equal to 2.99 times Mr. Schmitt's annual
base salary as then in effect plus certain other amounts primarily involving
continuation of health insurance for up to one year following the date of such
termination of employment. In the event any such payments would be subject to
the excise tax imposed under the Internal Revenue Code, then such amount would
be reduced to the extent necessary so that no payment shall be subject to such
excise tax unless any such reduction would net the employee a lesser amount on
an after-tax basis.
EMPLOYEE BENEFIT PLANS
STOCK OPTION PLAN. In April 1992, the Board of Directors and shareholders
of the Company adopted a Stock Option Plan (the "Plan"). The Plan currently
provides for the issuance of options to purchase up to 4,800,000 shares of
common stock (subject to appropriate adjustments in the event of stock splits,
stock dividends and similar dilutive events). Options may be granted under the
Plan to employees, officers or directors of, and consultants and advisors to,
the Company who, in the opinion of the Compensation Committee, are in a position
to contribute materially to the Company's continued growth and development and
to its long-term financial success. The Plan is administered by a committee
appointed by the Board of Directors. The Compensation Committee has been
designated by the Board of Directors as the committee to administer the Plan.
The purposes of the Plan are to ensure the retention of existing executive
personnel, key employees and consultants of the Company, to attract and retain
new executive personnel,
8
key employees and consultants and to provide additional incentives by permitting
such individuals to participate in the ownership of the Company.
Options granted to employees may either be incentive stock options (as
defined in the Internal Revenue Code (the "Code")) or nonqualified stock
options. The exercise price of the options shall be determined by the Board of
Directors or the committee at the time of grant, provided that the exercise
price may not be less than the fair market value of the Company's common stock
on the date of grant as determined in accordance with the limitations set forth
in the Code. The terms of each option and the period over which it vests are
determined by the committee, although no option may be exercised more than ten
years after the date of grant and all options become exercisable upon certain
events defined to constitute a change of control. To the extent that the
aggregate fair market value, as of the date of grant, of shares with respect to
which incentive stock options become exercisable for the first time by an
optionee during the calendar year exceeds $100,000, the portion of such option
which is in excess of the $100,000 limitation will be treated as a nonqualified
stock option. In addition, if an optionee owns more than 10% of the total voting
power of all classes of the Company's stock at the time the individual is
granted an incentive stock option, the purchase price per share cannot be less
than 110% of the fair market value on the date of grant and the term of the
incentive stock option cannot exceed five years from the date of grant. Upon the
exercise of an option, payment may be made by cash, check or, if provided in the
option agreement, by delivery of shares of the Company's common stock having a
fair market value equal to the exercise price of the options, or any other means
that the Board or the committee determines. Options are non-transferable during
the life of the option holder. The Plan also permits the grant of alternate
rights defined as the right to receive an amount of cash or shares of common
stock having an aggregate fair market value equal to the appreciation in the
fair market value of a stated number of shares of common stock from the grant
date to the date of exercise. No alternate rights have been granted under the
Plan.
As of March 24, 1998, options to purchase 4,308,829 shares of common stock
were outstanding under the Plan.
EMPLOYEE STOCK PURCHASE PLAN. In February 1995 the Board approved and in
April 1995 the Company's shareholders ratified, the adoption of the Company's
Employee Stock Purchase Plan for employees of the Company and its subsidiaries
(the "Stock Purchase Plan"). The Stock Purchase Plan was established pursuant to
the provisions of Section 423 of the Code. The purpose of the Stock Purchase
Plan is to provide a method whereby all eligible employees of the Company may
acquire a proprietary interest in the Company through the purchase of common
stock. Under the Stock Purchase Plan payroll deductions are used to purchase the
Company's common stock.
An aggregate of 300,000 shares of common stock of the Company have been
reserved for issuance under the Stock Purchase Plan, and an aggregate of 113,090
shares of common stock have been purchased and issued under the Stock Purchase
Plan. All employees (including officers of the Company) who have been
continuously employed for three months or more by the Company or its designated
subsidiaries (during which such employee's hours of employment were 1,000 or
more) as of the commencement of any offering period under the Stock Purchase
Plan are eligible to participate in the Stock Purchase Plan. An employee
electing to participate in the Stock Purchase Plan must authorize a whole
percentage (not less than 1% nor more than 10%) of the employee's compensation
to be deducted by the Company from the employee's pay during each pay period.
The price for common stock which is purchased under the Stock Purchase Plan is
equal to 85% of the fair market value of the common stock on either the first
business day or last business day of the applicable offering period, whichever
is lower.
A participant may voluntarily withdraw from the Stock Purchase Plan at any
time by giving at least 30 days notice to the Company prior to the end of the
offering period and will receive on withdrawal the cash balance, without
interest, then held in the participant's account. Upon termination of employment
for any reason, including resignation, discharge, disability or retirement, or
upon the death of a participant, the balance of the participant's account,
without interest, will be paid to the participant or his or her designated
beneficiary. However, in the event of the participant's death, the participant's
beneficiary may elect to exercise the participant's option to purchase such
number of full shares which such participant's accumulated payroll deductions
will purchase at the applicable purchase price.
9
STOCK OPTIONS
The Company granted options to its Named Executive Officers in 1997 as set
forth in the following table. The Company has no stock appreciation rights
("SARs") outstanding.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO OR BASE TERM(1)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION --------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------------ ------------- ----------------- ----------- ----------- --------------- ---------------
Gene R. McGrevin.................... 150,000 23% $ 4.75 04/04/02 $ 196,850(1) $ 435,000(1)
Dan R. Lee.......................... 100,000 16% $ 4.75 04/04/02 $ 131,234(1) $ 290,000(1)
- ------------------------
(1) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall market conditions.
The following table sets forth the value of options exercised during 1997
and of unexercised options held by the Company's Named Executive Officers at
December 31, 1997.
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/ IN-THE-MONEY OPTIONS/
SARS SARS
SHARES ACQUIRED VALUE AT FY-END (#) AT FY-END ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------------------------- ------------------- --------------- ----------------------- -----------------------
Gene R. McGrevin...................... -0- -0- 150,000/0 0/0(1)
Robert L. Taylor...................... -0- -0- 13,333/26,667 0/0(2)
Travis W. Honeycutt................... -0- -0- 13,333/26,667 0/0(2)
Dan R. Lee............................ -0- -0- 309,211/133,334 389,507/0(3)
Lester J. Berry....................... -0- -0- 82,500/0 0/0(4)
Peter A. Schmitt...................... -0- -0- 35,000/40,000 0/0(5)
- ------------------------
(1) The indicated value is based on an exercise price of $4.75 per share and
value per share at December 31, 1997 of $2.38.
(2) The indicated value is based on an exercise price of $14.45 per share and
value per share at December 31, 1997 of $2.38.
(3) The indicated value is based on exercise prices of $0.83 per share on
251,295 shares, $3.49 per share on 41,250 shares and $7.125 per share on
16,666 shares for exercisable options and $7.125 per share on 33,334 shares
and $4.75 per share on 100,000 shares for unexercisable options, and a value
per share on December 31, 1997 of $2.38
(4) The indicated value is based on exercise prices of $2.73 per share on 16,500
shares and $3.15 per share on 65,000 shares, and a value per share at
December 31, 1997 of $2.38.
(5) The indicated value is based upon an exercise price of $7.125 per share and
value per share at December 31, 1997 of $2.38.
10
DIRECTOR COMPENSATION
Nonemployee directors of the Company who are not affiliated with greater
than five percent shareholders of the Company ("Nonemployee Directors") are
compensated $1,000.00 and $250.00 for each meeting of the Board of Directors and
Committee of the Board of Directors, respectively, requiring travel for
attendance and are reimbursed upon request for the reasonable expenses incurred
in attending Board of Directors or committee meetings. In addition, the
Company's 1995 Nonemployee Director Stock Option Plan (the "Director Option
Plan") provides for automatic grants to each Nonemployee Director of
nonqualified stock options covering 2,000 shares of common stock at an exercise
price equal to the fair market value of the Company's common stock on the date
of grant. The date of grant under the Director Option Plan for each Nonemployee
Director then serving as such is at each of the following times: (1) on the
effective date of adoption of the Director Option Plan, (2) on the election of a
Nonemployee Director to the Board of Directors (except at an annual meeting of
shareholders) and (3) following each annual meeting of shareholders occurring
subsequent to the first anniversary of the effective date of the Director Option
Plan and the date of any option granted to such Nonemployee Director under the
Director Option Plan. Options granted under the Director Option Plan may be
exercised only by the optionee beginning six months after the date of grant
until the earliest of five years after the date of grant, 30 days after ceasing
to be a director of the Company (other than due to death or disability) and one
year after death or disability.
During 1996, the Board of Directors, with each Nonemployee Director
abstaining, adopted a policy to increase the equity interest of its Nonemployee
Directors in the Company by awarding to each such director a stock option for
25,000 shares of Company common stock provided such director had attended at
least 75% of the sum of all meetings of the Board of Directors and any
committees on which that director served during the first year following his or
her election to the Board. Accordingly, each then incumbent Nonemployee Director
was awarded at the end of 1996 a non-qualified stock option under the Company's
Stock Option Plan covering 25,000 shares of the Company's common stock at an
exercise price of $8.00 per share (being the fair market value of the Company's
common stock on the grant date) and being exercisable immediately upon the date
of grant until the earliest of five years after the grant date or one year after
ceasing to be a director of the Company.
During 1997 in connection with the formation by the Board of Directors of
its Executive Committee to assist in the transition of certain duties and the
search for a permanent replacement chief executive of the Company, both arising
as a result of the retirement of the former President and Chief Executive
Officer of the Company, the Board of Directors awarded each of Mr. Hendrix and
Dr. Davis, the two Nonemployee Directors on such Executive Committee, a
non-qualified stock option under the Company's Stock Option Plan covering 25,000
shares of the Company's common stock at an exercise price of $5.25 per share
(being the fair market value of the Company's common stock on the grant date),
and being exercisable immediately upon the date of grant until the earliest of
five years after the grant date or one year after ceasing to be a director of
the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
P.E.T. Net Pharmaceutical Services, LLC ("PETNet"), a limited liability
company which develops and operates facilities to distribute pharmaceuticals to
provide diagnostic services through an advanced technology known as positron
imaging, leases approximately 3,500 square feet of space included within the
Company's administrative headquarters located in Norcross, Georgia. Mr.
McGrevin, the Chairman of the Company, serves as the Chairman and Chief
Executive Officer of PETNet and is a substantial investor in PETNet. The lease
between the Company and PETNet provides for a rental rate of $15.00 per square
foot per year ($52,500 per year) which includes certain basic services such as
utilities and maintenance within such rental rate. The lease expires June 30,
2000, but may be terminated earlier at the discretion of either party upon six
months notice. Prior to entering into such lease, representatives of the Company
evaluated rental rates for comparable office space in order to advise the
Company's Board of Directors relative to
11
the fairness of the transaction. With Mr. McGrevin abstaining, the Board of
Directors approved and authorized the lease transaction.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
IN THE NEXT SECTION SHALL NOT BE DEEMED TO BE "SOLICITING MATERIAL" OR TO BE
"FILED" WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR
SUBJECT TO REGULATIONS 14A OR 14C OF THE COMMISSION OR TO THE LIABILITIES OF
SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND SHALL
NOT BE DEEMED INCORPORATED BY REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT
OF 1933 OR THE EXCHANGE ACT, NOTWITHSTANDING ANY GENERAL INCORPORATION BY
REFERENCE OF THIS PROXY STATEMENT INTO ANY OTHER DOCUMENT.
Two outside directors and no inside directors comprise the Compensation
Committee of the Board of Directors. Neither of the outside directors serves on
the board of any other committee member's company or organization and none of
the executive officers of Isolyser serve on the board of any committee member's
organization. The Committee has access to outside consultants and counsel at the
discretion of the Committee.
The Committee oversees three elements of executive compensation: base pay or
salary, annual performance bonus, and long-term compensation, which currently
consists of a stock option plan approved by shareholders. The Committee seeks to
provide a competitive compensation package that enables the Company to attract
and retain key executives, to integrate pay programs with the business
objectives of the Company, and to link individual executive compensation with
the Company's performance. The Compensation Committee's responsibilities
include: (i) participating in the determination of goals for the Company's
executive officers; (ii) participating in the selection and design of
compensation packages and programs relating to such goals; (iii) monitoring the
effectiveness of the compensation packages and programs; and (iv) monitoring
compensation-related developments generally and considering their application to
the Company's executive officers.
BASE PAY. The salary paid to the Company's executives is targeted to be in
line with related industry companies of similar size, while taking into account
the experience of individual officers and the requirements of attracting
prospective key executives to join Isolyser. In general, the Committee attempts
to fix base salaries at levels deemed appropriate by the Committee in order that
compensation packages may also emphasize result-oriented factors reflected in a
bonus potential and the value of stock options and stock ownership. The
Committee reviews salaries and pay ranges for its executives, and salaries may
be increased based on the Committee's assessment of an individual's performance
and contributions to Isolyser goals. Salary adjustments are generally based on
historical performance. In the second quarter of 1997, Mr. Taylor, a co-founder
of the Company, retired as Chief Executive Officer, and Mr. McGrevin was elected
as acting Chief Executive Officer. In connection with Mr. Taylor's retirement,
the Compensation Committee approved an Employment Agreement with Mr. Taylor
pursuant to which Mr. Taylor agreed to provide continued services to the Company
through August 30, 1999 and agreed to certain restrictive covenants including
covenants relating to the protection of confidential information and restricting
competition against the Company. In exchange for such agreements, the Company
agreed to continue Mr. Taylor's base salary as currently in effect through
August 30, 1999 and to continue certain life and health insurance benefits for
Mr. Taylor. In connection with the employment of Mr. McGrevin as acting Chief
Executive Officer and President of the Company, the Company entered into an
Employment Agreement with Mr. McGrevin approved by the Compensation Committee
pursuant to which Mr. McGrevin agreed to serve in such capacities until December
31, 1997 at a fixed salary of $90,000 per year. The salary of all the Company's
incumbent executive officers remained unchanged from such salary for the
previous year. Two of the Company's newly appointed executive officers received
a modest salary increase during 1997 in connection with such officers'
assumption of increased responsibilities and duties. As a part of a
restructuring plan implemented by the Company in 1997 and approved by the Board
of Directors, the Company promoted certain of its key managerial staff to
positions as executive officers.
12
Except for the salary adjustments described above, salaries of the employees
promoted to executive positions were not adjusted as a part of such
restructuring.
BONUS. During 1997, the Company reviewed and considered a new annual
incentive bonus plan structure for the Company, but did not approve any such
bonus plans for executive officers generally. Based on recommendations from the
senior executive officers, five of the Company's Vice Presidents received
bonuses for 1997. No other executive officers of the Company received bonuses
for 1997.
LONG-TERM INCENTIVE. The Company's only current method of awarding
long-term compensation is its stock option plan, approved by shareholders. All
officers are eligible to receive grants under the stock option plan. Grants
under the plan generally extend for five to ten years, are priced at not less
than fair market value on the date of grant, and are generally intended to
provide incentive for future performance rather than reward past performance.
Three of the Company's executive officers, including its interim Chief Executive
Officer during 1997, were granted stock options in 1997. Mr. McGrevin was
awarded a non-qualified stock option for the purchase of up to 150,000 shares of
the Company's common stock at an exercise price $4.75 per share, which was the
current fair market value of such stock at the time of grant, in order to induce
Mr. McGrevin to accept his employment as Chairman and interim Chief Executive
Officer of the Company, as well as to incentivize Mr. McGrevin and link his
compensation with the Company's operating result. In addition, two other
executives officers of the Company received stock option awards in 1997. In
awarding stock options, the Compensation Committee considers (i) the
contribution to the performance of the Company of eligible employees, sales
representatives and other eligible persons, (ii) stock options held by and
previously awarded to eligible employees and (iii) stock ownership of eligible
employees, in addition to other factors the Compensation Committee may from time
to time deem relevant.
One of the factors in the Compensation Committee's consideration of
compensation matters is the anticipated tax treatment to the Company and to its
executive officers of various components of compensation. However, amendments to
and interpretations of the tax laws and other factors beyond the control of the
Compensation Committee affect the tax treatment of compensation. For these
reasons, the Compensation Committee will not necessarily and in all
circumstances limit executive compensation to that deductible under Section
162(m) of the Internal Revenue Code. The Compensation Committee will consider
various alternatives to preserving the deductibility of other components of
compensation to the extent reasonably practicable and to the extent consistent
with other compensation objectives of the Company.
The Compensation Committee intends to continually evaluate the Company's
compensation policies and procedures with respect to executive officers.
Although the Compensation Committee believes that current compensation policies
align the financial interests of executive officers with those of the Company's
shareholders and with Company performance, it will continue to examine what
modifications, if any, should be implemented to further link executive
compensation with both individual and Company performance.
COMPENSATION COMMITTEE
Rosdon Hendrix
Kenneth F. Davis
13
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total returns (changes in stock price
plus reinvested dividends) on a hypothetical investment of $100 in the Common
Stock of Isolyser, the S&P 500 Index and the S&P Health Care Sector Index
(formerly known as the S&P Health Care Composite Index), for the period
commencing October 20, 1994 (the effective date of the Company's initial public
offering) and ending December 31, 1997.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ISOLYSER COMPANY, INC. S & P 500 S & P HEALTH CARE SECTOR
10/20/94 $ 100 $ 100 $ 100
12/94 100 100 103
12/95 156 138 163
12/96 78 169 197
12/97 26 226 283
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, the Company's independent auditors since 1987, have
been appointed by the Board of Directors as the Company's independent auditors
for 1998. A representative of Deloitte & Touche LLP is expected to be present at
the Meeting, to be available to answer appropriate questions and to make a
statement if desired.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals to be presented at the 1999 Annual Meeting of
Shareholders of Isolyser must be received at Isolyser's executive offices at 650
Engineering Drive, Technology Park, Norcross, Georgia 30092, addressed to the
attention of the Secretary, by December 24, 1998, in order to be included in the
proxy statement and form of proxy relating to such meeting.
14
ANNUAL REPORT
Isolyser's 1997 Annual Report is concurrently being mailed to shareholders.
The Annual Report contains consolidated financial statements of Isolyser and the
report thereon of Deloitte & Touche LLP, independent public accountants.
By Order of the Board of Directors
[SIGNATURE]
Travis W. Honeycutt
SECRETARY
April 24, 1998
15
PROXY SOLICITED FOR
ANNUAL MEETING OF SHAREHOLDERS OF
ISOLYSER COMPANY, INC.
TO BE HELD MAY 27, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gene R. McGrevin, Terence N. Furness and
Travis W. Honeycutt, and each of them, with full power of substitution, proxies
to represent and vote, as indicated below, all of the shares of Common Stock of
Isolyser Company, Inc. ("Isolyser") that the undersigned would be entitled to
vote at the Annual Meeting of Shareholders to be held May 27, 1998, and at any
adjournment, upon the matters described in the accompanying Notice of Annual
Meeting of Shareholders and Proxy Statement, receipt of which is acknowledged,
and upon any other business that may properly come before the meeting or any
adjournment. Said proxies are directed to vote on the matters described in the
Notice of Annual Meeting of Shareholders and Proxy Statement as follows, and
otherwise in their discretion upon such other business as may properly come
before the meeting or any adjournment thereof.
1. ELECTION OF DIRECTORS:
/ / FOR the election as directors of all nominees listed / / WITHHOLD AUTHORITY to vote for all nominees listed
below (except as marked to the contrary below) below
Gene R. McGrevin Gene R. McGrevin
Terence N. Furness Terence N. Furness
Travis W. Honeycutt Travis W. Honeycutt
Dan R. Lee Dan R. Lee
Rosdon Hendrix Rosdon Hendrix
Kenneth F. Davis Kenneth F. Davis
John E. McKinley John E. McKinley
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY OF THE ABOVE LISTED
NOMINEES, PLEASE STRIKE THROUGH THAT INDIVIDUAL'S NAME)
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
DATED: , 1998
------------------------------------
------------------------------------
Signature of Shareholder
Please sign exactly as your name or names appear
hereon. Where more than one owner is shown, each
should sign. Persons signing in a fiduciary or
representative capacity shall give full title.
If this proxy is submitted by a corporation,
please sign in full corporate name by authorized
officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.