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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
FIRST KEYSTONE FINANCIAL, INC.
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(Name of Registrant as Specified In Its Charter)
NOMINATING STOCKHOLDERS
Lawrence Partners, L.P.
Lawrence Offshore Partners, LLC
Lawrence Garshofsky
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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 14(a)-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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THE NOMINATING STOCKHOLDERS
January __, 2007
Dear Fellow Stockholders:
We are current stockholders (the "Nominating Stockholders") of First
Keystone Financial, Inc. (the "Company"). We are asking for your vote at the
2007 annual meeting of stockholders of the Company in order to elect three
highly qualified nominees, Crit Stuart DeMent, Lawrence Garshofsky and Jeffrey
E. Susskind, to the Company's Board of Directors.
In our view, the Company's current Directors and senior management have
failed to explore all of the possible methods for maximizing stockholder value
and have instead chosen to perpetuate themselves in office at the stockholders'
expense.
The Nominating Stockholders feel that the Company's Board needs a new
approach. We believe that the best way to do this is to replace a portion of the
current Board with new Directors who will consider new ways for enhancing
stockholder value.
The Nominating Stockholders are seeking your support at the 2007 Annual
Meeting of Stockholders. Please carefully read the enclosed Proxy Statement for
more detailed information about our nominees for Director.
Thank you for your support,
THE NOMINATING STOCKHOLDERS
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GOLD
PROXY CARD OR NEED ADDITIONAL COPIES OF THE NOMINATING STOCKHOLDERS' PROXY
MATERIALS, PLEASE CALL OUR PROXY SOLICITOR, D.F. KING & CO., INC., AT:
D.F. King & Co., Inc.
Attn: Richard Grubaugh
48 Wall Street
New York, New York 10005
(Call Toll Free (888) 628-8208)
FIRST KEYSTONE FINANCIAL, INC.
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ANNUAL MEETING OF STOCKHOLDERS
February 7, 2007
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PROXY STATEMENT
OF
THE NOMINATING STOCKHOLDERS
(OPPOSING THE BOARD OF DIRECTORS OF FIRST KEYSTONE FINANCIAL, INC.)
This Proxy Statement and GOLD proxy card are being furnished to the
holders (the "Stockholders") of the common stock, $.01 par value (the "Common
Stock"), of First Keystone Financial, Inc. (the "Company"), a Pennsylvania
corporation, in connection with the solicitation of proxies by three of the
Company's current Stockholders (the "Nominating Stockholders"). The Annual
Meeting of Stockholders is scheduled to be held on February 7, 2007. Please
refer to the Company's proxy statement for the time and location of the Annual
Meeting. Stockholders who owned the Common Stock on December 12, 2006 (the
"Record Date") are entitled to vote at the Company's Annual Meeting. The
Company's principal executive offices are located at 22 West State Street,
Media, Pennsylvania 19063.
At the Annual Meeting, the Company will be seeking:
o the election of three Directors for terms of four years or until
successors have been elected and qualified and
o ratification of the appointment of Deloitte & Touche LLP as the
Company's independent registered public accounting firm for the
fiscal year ending September 30, 2007.
The Nominating Stockholders beneficially own 155,850 shares of Common
Stock, which represents 6.4% of the Company's outstanding Common Stock, as of
December 12, 2006, based upon the Company's proxy statement. They are soliciting
the votes of other Stockholders at the Annual Meeting on February 7, 2007 or any
adjournment(s) or postponement(s) thereof:
o to elect Crit Stuart DeMent, Lawrence Garshofsky and Jeffrey E.
Susskind, (the "Stockholder Nominees") to four-year terms as
Directors of the Company in opposition to the three Directors
nominated for election by the Company and
o to ratify the appointment of Deloitte & Touche LLP as the
Company's independent registered public accounting firm for the
fiscal year ending September 30, 2007.
This Proxy Statement and GOLD proxy card are being first mailed or
furnished to Stockholders on or about January __, 2007.
The names and addresses of the Nominating Stockholders are:
Lawrence Partners, L.P., a California limited partnership
9665 Wilshire Blvd., Suite 200
Beverly Hills, California 90212
Lawrence Offshore Partners, LLC, a Manx limited liability company
c/o Lawrence Garshofsky and Company LLC
9665 Wilshire Blvd., Suite 200
Beverly Hills, California 90212
Lawrence Garshofsky
c/o Lawrence Garshofsky and Company LLC
9665 Wilshire Blvd., Suite 200
Beverly Hills, California 90212
Each of the Nominating Stockholders has been a beneficial owner of the
Company's Common Stock for over two years. Additional information concerning the
Nominating Stockholders is set forth on Exhibit A.
The Nominating Stockholders' goal is to maximize Stockholder value. We
believe, in light of the Company's performance over the last two years, that one
of the best ways to accomplish this goal is through electing new Directors who
are truly independent of management and who are willing to explore options that
the current Directors do not appear to have seriously considered. Through
representation on the Board of Directors, the Stockholder Nominees will attempt,
among other things, to persuade the Board of Directors to retain an investment
banker to determine the true value of the Company, including in a potential sale
context.
Your last dated proxy is the only one that counts, so return the GOLD
proxy card in the enclosed postage-paid envelope even if you have previously
delivered a proxy card to the Company. We urge you not to return any proxy card
sent to you by the Company.
Your vote is important, no matter how many or how few shares you hold.
If your shares are held in the name of a brokerage firm, bank or nominee, only
they can vote your shares, and only upon receipt of your specific instructions.
Accordingly, please return the proxy card in the envelope provided by your bank
or broker or contact the person responsible for your account and give
instructions for such shares to be voted for the Stockholder Nominees. You
should be aware that if your shares of Common Stock are held through a bank,
brokerage firm or other nominee, you will be unable to change your vote at the
Annual Meeting unless you obtain a "legal proxy" from the bank, brokerage firm
or other nominee.
If your shares are registered in more than one name, the GOLD proxy
card should be signed by all such persons to ensure that all shares are voted
for the Stockholder Nominees.
Holders of record of shares of Common Stock on the Record Date are
urged to submit a proxy, even if such shares have been sold after the Record
Date.
THIS SOLICITATION IS BEING MADE BY THE NOMINATING STOCKHOLDERS AND NOT
ON BEHALF OF THE COMPANY. THE NOMINATING STOCKHOLDERS ARE NOT AWARE OF ANY OTHER
MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING. SHOULD OTHER MATTERS, WHICH THE
NOMINATING STOCKHOLDERS ARE NOT AWARE OF A REASONABLE TIME PRIOR TO THE ANNUAL
MEETING, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN
THE ENCLOSED GOLD PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
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If you have any questions or need assistance in voting your shares,
please call:
D.F. King & Co., Inc.
Attn: Richard Grubaugh
48 Wall Street
New York, New York 10005
(Call Toll Free (888) 628-8208)
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REASONS FOR OUR SOLICITATION
The Nominating Stockholders believe that the Company's current
management and Board of Directors have failed to discharge their duties to
maximize Stockholder value and that, if the Board's nominees for Director are
reelected, the Board will continue its failures in this regard. In particular,
we note:
o the Company's financial performance in recent years has been
abysmal;
o the Company's poor management has resulted in adverse regulatory
action -- following a 2005 examination the Office of Thrift
Supervision ("OTS") imposed Supervisory Agreements on the Company
and its operating subsidiary (the "Bank") that, among other
things, forced the Company to stop paying dividends and limited
the Bank's growth;
o management and the Board have reacted to these adverse
developments inappropriately, first repeatedly breaching the
Supervisory Agreements and then conducting a private placement of
common stock (the "PIPE Offering") at a discount, diluting
existing Stockholders excessively and unnecessarily;
o this poor performance has been reflected in the Company's stock
price over the last three years, which has significantly
underperformed the Company's peers;
o management and the Board have persistently ignored requests to
actively consider measures that would increase Stockholder value,
including the possibility of a sale to a larger institution; and
o the Board's nominees are particularly disinclined to pursue
value-enhancing measures since:
o each has been closely associated with current management for
years and was part of the Board that has overseen the
Company's poor recent performance and resistance to our
requests that they consider alternatives;
o one is a member, and another is a former member, of the
Company's law firm -- which could lose revenues if the
Company were sold; and
o at 88 years of age, one of them is well past the age at which
other Directors must retire (75); he is eligible for election
only because of a "grandfather clause" in the Company's
bylaws -- a clause that was added by the Board when he was a
member.
If elected, the Stockholder Nominees intend to, among other things:
o work with management to avoid unwise and ill-timed actions, such
as the recent PIPE Offering, that are significantly dilutive to or
otherwise bad for current Stockholders;
o propose amendments to provisions of the Company's charter
documents that the Board has used to perpetuate itself in office.
Those amendments might include eliminating the four classes of
Board members and requiring that all Directors be elected
annually, as well as enacting other needed improvements to the
Company's corporate governance structure;
o try to convince the Board to retain an investment banker to
determine the Company's value, including in a sale context versus
remaining independent; and
o explore other methods for improving the Company's financial
performance and other ways to enhance Stockholder value.
In connection with the Company's recent PIPE Offering, the Board will
get a new Director, whose interests do not appear to be as bound up in
preserving the management status quo at Stockholders' expense as the rest of the
current
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Board. However, we fear that the additional Director will not have an adequate
impact on the Company's direction and believe that additional truly independent
Directors are essential to protect all of the Stockholders' economic interests.
POOR FINANCIAL AND OPERATIONAL PERFORMANCE
The Company's net income fell off the proverbial cliff in 2005,
declining by more than 72% (from $2.2 million or $1.21 per share in 2004 to
$610,000 or $0.33 per share in 2005). This followed a decline in 2004 net income
of almost 20% from 2003. In 2006, net income has "rebounded" to less than
one-half of the 2004 level -- hardly a robust recovery.
ADVERSE REGULATORY DEVELOPMENTS
The 2005 earnings disaster was due to, among other things, an almost
six-fold increase in provisions for loan losses (from $300,000 in 2004 to $1.78
million in 2005). The Company described that increase in its recently filed Form
10-K Annual Report as
"reflect[ing] management's assessment of a number of factors,
including, among other things, the substantial increase in the level of
the Company's non-performing loans including migration in the Company's
classification of such assets in substandard, doubtful and special
mention categories . . . the changing commercial and multi-family real
estate and commercial business loan portfolios as well as discussions
with the examination staff in connection with the examination of the
Company by the [Office of Thrift Supervision] in 2005."
In 2006, the provision for loan losses declined to $1.21 million, but
this was accompanied by a net loans charge-off of $1.31 million, an increase of
$970,000 from the net loans charge-off for 2005. Thus, it appears that, as a
result of a regulatory examination, the Company had to hugely reassess its
provisions for loan losses and loans charge-off, including, importantly, in the
commercial real estate area, one of the areas the Company seeks to emphasize if
it is able to emerge from the Supervisory Agreements. Interestingly, in 2004 the
Company had decreased its provision for loan losses "primarily due to its
assessment of the amount of losses and charge-offs it would incur with respect
to non-performing commercial real estate loans."
The OTS examination that was "a factor" in management's readjustment of
the Company's loan loss provision also resulted in the OTS imposing Supervisory
Agreements on both the Company and the Bank in February 2006. Under that
sanction, the Company is prevented from paying dividends. The Company states
that it may resume paying dividends upon reducing its debt-to-equity ratio to
below 50%, if the OTS does not object. Because of its recent private placement
of stock, the Company believes it may be able to resume paying dividends by the
end of September 2007.
Among other things, the Supervisory Agreements also severely limit the
Company's ability to grow, primarily by prohibiting the Bank from growing in
certain key respects. The Bank violated these prohibitions for the quarters
ended March 31, 2006 and June 30, 2006. It was able to obtain clemency from the
OTS for those violations provided it finally complied by September 20, 2006. It
managed that accomplishment by reducing assets.
The Company discloses in its latest Form 10-K that it and the Bank
recently underwent a follow-up examination by the OTS. It describes the OTS's
findings as a determination that the Company and the Bank were "in full or
partial compliance with substantially all of the provisions of the supervisory
agreements." That is, the Company and the Bank still were not in compliance with
requirements imposed by their regulator. The Company conceded that "the
examination did note a number of areas for improvement with respect to the
Bank's loan underwriting, credit analysis and asset classification policies and
procedures."
In sum, management's recent conduct of the Bank's highly regulated
business has been dreadful.
STOCK PRICE UNDERPERFORMANCE
Management's financial and operational performance has, predictably,
been reflected in the Company's stock price. The stock price performance table
in the Company's proxy statement tells much of the story. Between
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September 30, 2003 and September 30, 2006, the Company's stock price declined by
over 25%. Over the same period, the Nasdaq Bank Index increased approximately
26% and the S&P Bank Index increased approximately 29%.
INAPPROPRIATE RESPONSE TO REGULATORY PROBLEMS
The February 2006 Supervisory Agreements not only prevented the Bank
from growing its business in the way management has said it wants to, it
indicated that the Bank was not in a good position to do so. Rather than seeking
a way to maximize the value of the Company's and the Bank's existing franchise
- -- by exploring a sale or strategic alliance -- management dug in to protect
itself. By late summer 2006, facing deadlines under the Supervisory Agreements,
it began pursuing an equity financing to improve its debt-to-equity ratio. Such
a financing, done from a position of weakness, was destined to result in severe
dilution for existing Stockholders. That is what happened. Finally, months
later, in December, the Company sold 400,000 shares in the PIPE Offering --
16.5% of the Company -- with 368,790 of those shares being sold for $16.00 per
share, a 20% discount to the closing stock price of the stock on the date on
which the transaction was signed up and a price equal to only 60% of the
Company's closing price on September 30, 2003.
REFUSAL TO CONSIDER ALTERNATIVES
Beginning in September of 2005, certain of the Nominating Stockholders
have repeatedly and consistently implored management and the Board to consider
taking action to enhance Stockholder value. At that time, Lawrence Garshofsky,
on behalf of himself and certain other Nominating Stockholders, wrote a
letter to the Board (and filed it as an exhibit to a Schedule 13D) indicating
his belief that a sale to a larger institution could be beneficial for
Stockholders. The Company did not reply.
In February 2006, after the Company announced the OTS's imposition of
the Supervisory Agreements, Mr. Garshofsky again wrote to the Board, this time
to address the actions the Company said it was considering in response to the
OTS's indictment of management's strategy. Management said it would try to
enhance capital and reduce the Company's debt-to-equity ratio, including raising
additional equity capital combined with redeeming a portion of the Company's
subordinated debt. Mr. Garshofsky pointed out that management's statements
glaringly omitted an alternative that could be, and can still be, highly
beneficial to Stockholders -- selling the Company or merging with a converting
mutual or mutual holding company. He contended that, as part of a larger
institution -- a healthy one -- the Company could avoid the capital and
operational difficulties that gave rise to the Supervisory Agreements. Again,
the Company did not reply.
As noted below, what the Company has done is, apparently, preclude
accounts Mr. Garshofsky manages from investing in the PIPE Offering.
MANAGEMENT NOMINEES ARE ILL-SUITED TO THE TASKS AT HAND AND HAVE SOUGHT TO
PERPETUATE THEMSELVES IN OFFICE
The Nominating Stockholders believe that the Company's nominees for
Director are, in effect, so much a part of the Company's problems that they
cannot effectively be part of the solution. They have all participated in the
Company's decline and management's refusal to consider value-enhancing measures.
Two of the nominees are classic examples of entrenchment --Directors with
incentives to resist the types of change that the Company needs.
Edmund Jones (88) has been a Director since 1947. He was Chairman of
the Bank's Board from 1979 until 1993. He is a member of the law firm of Jones,
Strohm & Guthrie, P.C., which provides legal services to the Company and,
according to the Company's latest Form 10-K, "prepares mortgage documents and
attends loan closings for which it is paid directly by the borrower." We suspect
that Mr. Jones' firm could experience reduced revenues from the Company and in
connection with Bank transactions if the Company were sold. While the Board has
determined that this association does not, under Nasdaq rules, prevent him from
being considered technically independent, on an issue of particular importance
to Stockholders -- a potential sale of the Company -- Mr. Jones appears to have
a disincentive.
If he had not already been a member of the Company's Board, Mr. Jones
would have become ineligible for election to the Company's Board 13 years ago
under the terms of the Company's bylaws, which prohibit a person from
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being elected, reelected or appointed to the Board if he or she is more than 75
years of age. However, Mr. Jones remains eligible because the bylaws, which were
approved while he was sitting on the Board, provide a "grandfather clause" for
any person who was sitting on the Board on September 21, 1994. We generally
applaud a Company's loyalty to a long-time Director. However, at some point an
exception from the age limitation becomes inappropriate. It is time to thank Mr.
Jones for his very long involvement with the Company and elect a new, truly
independent Director.
Donald S. Guthrie (71) was the Company's President from 1994 until 2002
and was its Chief Executive Officer from 2002 until 2005. He was the President
and Chief Executive Officer of the Bank from 1993 until 2005. That is, he was at
the helm during the period that led to the Company's current financial and
regulatory difficulties. His ties to the current management and its course of
ignoring value-enhancing opportunities are strong. In addition, he was
previously a member of Mr. Jones' law firm, Jones, Strohm & Guthrie, P.C., which
as noted above might suffer if the Company were to be sold.
In addition to the other strategies discussed above, the current
Directors have sought to perpetuate themselves in office as follows:
o The Board has been divided into four classes with the Directors
serving four-year terms, the maximum time period contemplated
under Pennsylvania corporate law. Classified boards extend each
member's term to multiple years and make it harder to replace the
incumbent Board in a timely fashion. Even among public companies
with classified boards, four classes with four-year terms for each
director are unusual.
o The Company's articles of incorporation impose a cumbersome
process on non-insiders who seek to nominate new Directors for
election. Two of the Nominating Stockholders followed this
process, sending to the Company on November 21, 2006 the detailed
required notice of their intent to nominate the Stockholder
Nominees. They have not received any communication back from the
Company regarding their nomination notice.
o In the summer of 2006, Mr. Garshofsky was contacted about
investing in the PIPE Offering by the Company's investment banking
firm. He expressed his interest in investing and asked for a copy
of the offering materials. Shortly thereafter, he was told he
could not be provided those materials without the Company's
consent. He never received any materials and neither the
Nominating Stockholders nor any other accounts Mr. Garshofsky
manages were afforded the right to invest in the PIPE Offering;
they instead were denied the opportunity to mitigate the dilutive
effects of that offering.
o The Company does not permit cumulative voting for Directors and
there is no requirement that any Director receive a majority of
the votes cast in order to remain on the Board -- a plurality is
sufficient.
o As discussed in this Proxy Statement, the Company has repeatedly
ignored suggestions and inquiries from the Nominating
Stockholders.
The Nominating Stockholders' nominees are not bankers. They are
businessmen and investors with substantial experience evaluating businesses
(including holding companies for banks and other financial institutions) and the
effects of management decisions on Stockholder value. That is what this
Company's Board has been missing. The only way Stockholders can be assured that
true value-enhancing proposals receive appropriate consideration is through
Board representation.
The Nominating Stockholders urge you to vote "FOR" Messrs. DeMent,
Garshofsky and Susskind.
PROPOSAL NO. 1 -- ELECTION OF STOCKHOLDER NOMINEES
The Company's Board of Directors is currently composed of eight
Directors who are divided into four classes with members of each class serving
four-year terms. The Company has nominated three incumbent Directors for
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election at the Annual Meeting. The Nominating Stockholders are seeking your
support at the Annual Meeting to elect the Stockholder Nominees to serve for
four-year terms or until their successors are duly elected and qualified.
When you return the Nominating Stockholders' GOLD proxy card, you will
be voting for Messrs. DeMent, Garshofsky and Susskind to be members of the
Company's Board of Directors. Each of Messrs. DeMent, Garshofsky and Susskind
has consented to being named in this Proxy Statement and has agreed to serve as
a Director of the Company, if elected.
The shares of Common Stock are traded on the Nasdaq Global Market. Each
of the Stockholder Nominees is independent of the Company in accordance with SEC
and Nasdaq Global Market rules on board independence.
Crit Stuart DeMent is 54 years old and his residence address is 1010
Lambourne Road, West Chester, Pennsylvania 19382. Since November 2001, Mr.
DeMent has been the Chairman and Chief Executive Officer of LEAF Financial
Corporation, a commercial finance and equipment leasing company and subsidiary
of Resource America, Inc. Prior to November 2001, Mr. DeMent was President of
Fidelity Leasing Corp., an equipment leasing company. Mr. DeMent's present
business address is 1818 Market Street, Ninth Floor, West Philadelphia,
Pennsylvania 19103.
Lawrence Garshofsky is 52 years old and his residence address is 704 N.
Hillcrest Road, Beverly Hills, California 90210. Since February, 1996, he has
been a member and manager of Lawrence Garshofsky and Company LLC ("LGC"), an
investment adviser registered with the California Department of Corporations
that manages private investment funds and accounts. He has the authority to
cause LGC to exercise its powers. LGC is the sole general partner of Lawrence
Partners, L.P. and is the sole investment manager of Lawrence Offshore Partners,
LLC. In those capacities, LGC has the power and authority to cause each of the
Nominating Stockholders to make the nominations described in this Proxy
Statement. Mr. Garshofsky's present business address is 9665 Wilshire Blvd.,
Suite 200, Beverly Hills, California 90212.
Jeffrey E. Susskind is 53 years old and his private residence and
business address is 282 N. Saltair Avenue, Los Angeles, California 90049. From
January 2006 to the present, Mr. Susskind has been a private investor and
independent consultant to Kayne Anderson Capital Advisors, LP in the areas of
external manager evaluation, selection and monitoring. From 2002 to 2005, Mr.
Susskind was the Founder and Chief Investment Officer of Zenith Asset
Management, a manager of multi-strategy fund of hedge funds, and was primarily
responsible for manager selection and portfolio construction. From 1999 to 2002,
Mr. Susskind was a private investor. From 2000 to 2001, Mr. Susskind was a
director of Bank Plus Corporation, the parent holding company for Fidelity
Federal Bank, a $2 billion savings and loan based in Los Angeles, California.
From 1991 to 1997, he served as a director of Sheridan Energy, Inc., a publicly
traded independent oil and gas producer, serving as chairman from 1998 to 1999,
and from 1993 to 1997, he was a director of ACC Consumer Finance, Inc., a
publicly traded company that financed consumer installment contracts for
automobile purchases.
None of the Stockholder Nominees has ever been employed by the Company
in any capacity or has ever been a Director of the Company.
On November 21, 2006, Lawrence Partners, L.P. and Lawrence Offshore
Partners, LLC each sold to the Susskind Family Trust, of which Mr. Susskind is
the trustee, 2,500 shares of the Company's Common Stock for $19 per share. The
sale to the Susskind Family Trust was pursuant to an oral agreement and was in
connection with Mr. Susskind's agreeing to be nominated for election as a
Director of the Company.
The Nominating Stockholders are seeking the authority to vote for the
Stockholder Nominees. Directors of the Company are elected by a plurality of the
votes cast with a quorum present. At the Annual Meeting, the three persons who
receive the greatest number of votes of the Stockholders represented in person
or by proxy at the annual meeting will be elected Directors. Stockholders may
not vote their shares cumulatively for the election of Directors. Abstentions
are considered in determining the presence of a quorum, but will not affect the
plurality vote required for the election of Directors. If the three Stockholder
Nominees are elected to the Board, they will replace Donald S. Guthrie, Edmund
Jones and Jerry A. Naessens as Directors. Each of Messrs. Guthrie, Jones and
Naessens has been nominated by the Company for election at the Annual Meeting to
an additional four-year term. Information about the
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three Company nominees may be found in the proxy statement filed by the Company
with the SEC on January __, 2007.
The GOLD proxy card being furnished to you by the Nominating
Stockholders provides you with an opportunity to withhold authority with respect
to any of the Stockholder Nominees by writing in the name of such nominee in the
appropriate place on the proxy card. There is no assurance that, if elected, the
nominees of the Company's management will agree to serve with any of the
Stockholder Nominees who may be elected.
The Stockholder Nominees understand that, if elected as Directors of
the Company, each of them will have an obligation under Pennsylvania law to
discharge his duties as a Director in good faith, consistent with his fiduciary
duties to the Company and its Stockholders.
The Stockholder Nominees, if elected, will constitute a minority of the
Company's Board of Directors, at least until the 2008 Annual Meeting or some
other change in composition of the Board occurs. Accordingly, the Stockholder
Nominees typically will not be able to adopt any measures without the support of
at least some of the members of the current Board of Directors. The Stockholder
Nominees would be expected to articulate and raise their concerns about the
Company's operations with the rest of the Company's Board members. The
Stockholder Nominees would seek to work with the existing members of the
Company's Board to implement change.
There can be no assurance that the actions the Stockholder Nominees
intend to take as described in this Proxy Statement will be implemented if they
are elected or that the election of the Stockholder Nominees will improve the
Company's business or otherwise enhance Stockholder value. Your vote to elect
the Stockholder Nominees will only have the legal effect of replacing three
incumbent Directors with the Stockholder Nominees.
The Nominating Stockholders do not expect that the Stockholder Nominees
will be unable to stand for election, but, in the event that such persons are
unable to serve or for good cause will not serve, the shares of Common Stock
represented by the enclosed GOLD proxy card will be voted for substitute
nominees. In addition, the Nominating Stockholders reserve the right to nominate
substitute persons if the Company makes or announces any changes to the
Company's bylaws or certificate of incorporation or takes or announces any other
action that has, or if consummated would have, the effect of disqualifying the
Stockholder Nominees. In any such case, shares of Common Stock represented by
the enclosed GOLD proxy card will be voted for such substitute.
THE NOMINATING STOCKHOLDERS STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE ELECTION OF THE STOCKHOLDER NOMINEES
PROPOSAL NO. 2 -- AUDITORS
At the Annual Meeting, the Company will be soliciting proxies to ratify
the Company's appointment of Deloitte & Touche LLP as the Company's independent
registered public accounting firm for the fiscal year ending September 30, 2007.
The Nominating Stockholders have no objection to the ratification of the
appointment of Deloitte & Touche LLP. The affirmative vote of the holders of a
majority of the total votes present in person or by proxy is required for
approval of the proposal to ratify the appointment of the independent registered
public accounting firm. Abstentions will have the effect of a vote against the
proposal to ratify the appointment of the independent registered public
accounting firm.
THE NOMINATING STOCKHOLDERS RECOMMEND THAT YOU VOTE
"FOR" THE APPOINTMENT OF DELOITTE & TOUCHE LLP
OTHER PROPOSALS
The Nominating Stockholders are not aware of any other proposals to be
brought before the Annual Meeting. However, we intend to bring before the Annual
Meeting such business as may be appropriate, including, without limitation,
nominating additional persons for directorships, or making other proposals as
may be appropriate to address any action of the Company's Board of Directors not
publicly disclosed prior to the date of this Proxy Statement. Should
9
other proposals be brought before the Annual Meeting, the persons named as
proxies in the enclosed GOLD proxy card will vote on such matters in their
discretion. The persons named as proxies may exercise discretionary authority
only as to matters unknown to the Nominating Stockholders a reasonable time
before this proxy solicitation.
RECORD DATE AND VOTING
According to the Company's proxy statement, as of December 12, 2006
(the "Record Date"), the Company had outstanding 2,427,928 shares of Common
Stock entitled to be voted at the Annual Meeting. Each share is entitled to one
vote on each matter submitted to a vote of Stockholders. Only Stockholders of
record at the close of business on the Record Date will be entitled to vote at
the Annual Meeting. If your shares are registered directly in your name with the
Company's transfer agent, you are considered with respect to those shares the
Stockholder of record, and these proxy materials are being sent directly to you.
As the Stockholder of record, you have the right to submit your voting proxy
directly to the Company using the enclosed proxy card or to vote in person at
the Annual Meeting.
If your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the beneficial owner of shares held in "street
name." These proxy materials are being forwarded to you by your broker who is
considered, with respect to those shares, the Stockholder of record. As the
beneficial owner, you have the right to direct your broker to vote your shares,
and your broker or nominee has enclosed a voting instruction card for you to
use. If your shares are held by a broker or nominee, please return your voting
card as early as possible to ensure that your shares will be voted in accordance
with your instructions. You are also invited to attend the Annual Meeting;
however, since you are not the Stockholder of record, you may not vote these
shares in person at the Annual Meeting unless you specifically request a
document called a "legal proxy" from your broker and bring it to the Annual
Meeting.
Under Pennsylvania law and the Company's bylaws, the presence of a
quorum is required to transact business at the Annual Meeting. At the Annual
Meeting, a quorum will require the presence, either in person or by proxy, of a
majority of the shares entitled to vote.
Brokerage firms have the authority to vote clients' unvoted shares on
some "routine" matters under applicable stock exchange rules. When a brokerage
firm votes its clients' unvoted shares on routine matters, these shares are
counted to determine if a quorum exists to conduct business at the meeting. A
brokerage firm cannot vote clients' unvoted shares on non-routine matters, which
results in a broker non-vote. Since there is a contested election for Directors,
the election should be treated as a non-routine matter. Thus, if you do not give
your broker specific instructions, under Pennsylvania Business Corporation Law
your shares will not be considered to be present or votes cast and will have no
effect on the election of Directors at the Annual Meeting.
Shares of Common Stock represented by a valid, unrevoked GOLD proxy
card will be voted as specified. You may vote for the Stockholder Nominees or
withhold authority to vote for the Stockholder Nominees by marking the proper
box on the GOLD proxy card. Shares represented by a properly executed GOLD proxy
card where no specification has been made will be voted for the Stockholder
Nominees, for the appointment of Deloitte & Touche LLP and in the discretion of
the persons named as proxies on all other matters as may properly come before
the Annual Meeting. The persons named as proxies in the enclosed proxy card may
exercise discretionary authority only as to matters unknown to the Nominating
Stockholders a reasonable time before the Annual Meeting.
If your shares are held in the name of a custodian and you want to vote
in person at the Annual Meeting, you may specially request a document called a
"legal proxy" from the custodian and bring it to the Annual Meeting.
If you need assistance, please contact our proxy solicitor,
D.F. King & Co., Inc., toll-free at (888) 628-8208.
You are being asked to elect the Stockholder Nominees and to approve
the other proposal described in this Proxy Statement. Stockholders should refer
to the Company's proxy statement for the names, backgrounds, qualifications and
other information concerning the Company's nomination for Director.
10
IF YOU WISH TO VOTE FOR THE ELECTION OF THE STOCKHOLDER NOMINEES TO THE
COMPANY'S BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
REVOCATION OF PROXIES
Stockholders may revoke their proxies at any time prior to exercise by
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute revocation of a proxy) or by
delivering a written notice of revocation. The delivery of a subsequently dated
proxy which is properly completed will constitute a revocation of any earlier
proxy. The revocation may be delivered either to (i) the Nominating Stockholders
in care of D.F. King & Co., Inc. at 48 Wall Street, New York, New York 10005 or
(ii) the Secretary of First Keystone Financial, Inc., Ms. Carol Walsh, Corporate
Secretary, First Keystone Financial, Inc., 22 West State Street, Media,
Pennsylvania 19063. Although a revocation is effective if delivered to the
Company, the Nominating Stockholders request that either the original or
photostatic copies of all revocations be mailed to the Nominating Stockholders
in the care of D.F. King & Co., Inc., 48 Wall Street, New York, New York 10005,
so that the Nominating Stockholders will be aware of all revocations and can
more accurately determine if and when proxies have been received from the
holders of record on the Record Date of a majority of the outstanding shares of
Common Stock. Additionally, D.F. King & Co., Inc. may use this information to
contact Stockholders who have revoked their proxies in order to solicit later
dated proxies for the election of the Stockholder Nominees and approval of the
other proposal described herein.
ADDITIONAL INFORMATION
The principal executive offices of the Company are located at 22 West
State Street, Media, Pennsylvania 19063. Except as otherwise noted herein, the
information concerning the Company has been taken from or is based upon
documents and records on file with the Securities and Exchange Commission,
including the Company's proxy statement for the Annual Meeting, and other
publicly available information.
The principal executive offices of the Nominating Stockholders are
located at 9665 Wilshire Blvd, Suite 200, Beverly Hills, California 90212.
Additional information about the Nominating Stockholders may be found
in Exhibit A to this Proxy Statement and in the Schedules 13D filed by certain
of the Nominating Stockholders with the Commission on November 29, 2006,
available at the SEC's website at www.sec.gov.
PROXY SOLICITATION; EXPENSES
Proxies may be solicited by the Nominating Stockholders by mail,
advertisement, telephone, facsimile, telegraph and personal solicitation. Phone
calls will be made to individual Stockholders by the Nominating Stockholders and
their affiliates and employees of D.F. King & Co., Inc. Certain of the employees
of affiliates of the Nominating Stockholders may perform secretarial work in
connection with the solicitation of proxies, for which no additional
compensation will be paid. Banks, brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward the Nominating
Stockholders' solicitation material to their customers for whom they hold shares
and the Nominating Stockholders will reimburse them for their reasonable
out-of-pocket expenses. The Nominating Stockholders have retained D.F. King &
Co., Inc. to assist in the solicitation of proxies and for related services. The
Nominating Stockholders will pay D.F. King & Co., Inc. a fee of approximately
$25,000 and have agreed to reimburse it for its reasonable out-of-pocket
expenses. In addition, the Nominating Stockholders have agreed to indemnify D.F.
King & Co., Inc. against certain liabilities and expenses, including liabilities
and expenses under the federal securities laws. The Securities and Exchange
Commission deems such an indemnification to be against public policy.
Approximately twenty-five (25) persons will be used by D.F. King & Co., Inc. in
its solicitation efforts.
11
The entire expense of preparing, assembling, printing and mailing this
Proxy Statement and related materials and the cost of soliciting proxies will be
borne equally by Lawrence Partners, L.P. and Lawrence Offshore Partners, LLC.
The Nominating Stockholders do not intend to solicit proxies using Internet
voting. Although no precise estimate can be made at the present time, the
Nominating Stockholders currently estimate that the total expenditures relating
to the Proxy Solicitation incurred by the Nominating Stockholders will be
approximately $100,000 of which $40,000 has been incurred to date. The
Nominating Stockholders intend to seek reimbursement from the Company for those
expenses incurred by the Nominating Stockholders, if the Stockholder Nominees
are elected, but does not intend to submit the question of such reimbursement to
a vote of the Stockholders.
For the proxy solicited hereby to be voted, the enclosed GOLD proxy
card must be signed, dated and returned to the Nominating Stockholders, c/o D.F.
King & Co., Inc., in the enclosed envelope in time to be voted at the Annual
Meeting. If you wish to vote for the Stockholder Nominees, you must submit the
enclosed GOLD proxy card. Do NOT submit the Company's proxy card. If you have
already returned the Company's proxy card, you have the right to revoke it as to
all matters covered thereby and may do so by subsequently signing, dating and
mailing the enclosed GOLD proxy card. ONLY YOUR LATEST DATED PROXY WILL COUNT AT
THE ANNUAL MEETING.
Only holders of record of the Common Stock on the Record Date will be
entitled to vote at the Annual Meeting. If you are a Stockholder of record on
the Record Date, you will retain the voting rights in connection with the Annual
Meeting even if you sell such shares after the Record Date. Accordingly, it is
important that you vote the shares of Common Stock held by you on the Record
Date, or grant a proxy to vote such shares on the GOLD proxy card, even if you
sell such shares after such date.
Proxies solicited by this Proxy Statement may be exercised only at the
Annual Meeting and any adjournment or postponement of the Annual Meeting and
will not be used for any other meeting.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Each of the Nominating Stockholders and each of the Stockholder
Nominees is a participant in this solicitation.
For additional information concerning the Nominating Stockholders, see
Exhibit A. For information regarding ownership of the Company's stock by the
Nominating Stockholders, see Exhibit A.
For information regarding purchases and sales of the Company's
securities during the past two years by the Nominating Stockholders and the
Stockholder Nominees, see Exhibit B.
No Stockholder Nominee is involved in any material pending legal
proceedings with respect to the Company. Except as set forth in this Proxy
Statement, there is no other arrangement or understanding between any
Stockholder Nominee and any other person pursuant to which he was or is to be
selected as a Stockholder Nominee or Director. None of the Stockholder Nominees
currently holds any position or office with the Company or has ever served
previously as a Director of the Company.
The Nominating Stockholders reserve the right to retain one or more
financial advisors and proxy solicitors, who may be considered participants in a
solicitation under Regulation 14A of the Securities Exchange Act of 1934.
Lawrence Partners, L.P. and Lawrence Offshore Partners, LLC. will split the
expenses of any such solicitation.
Except as set forth in this Proxy Statement (including Exhibits A and
B), (i) during the past 10 years, no participant in this solicitation has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this solicitation directly or indirectly
beneficially owns any of the Company's securities; (iii) no participant in this
solicitation owns any of the Company's securities which are owned of record but
not beneficially; (iv) no participant in this solicitation has purchased or sold
any of the Company's securities during the past two years; (v) no part of the
purchase price or market value of the Company's securities owned by any
participant in this solicitation is represented by funds borrowed or otherwise
obtained for the purpose of acquiring or holding such securities; (vi) no
participant in this solicitation is, or within the past year was, a party to any
contract, arrangements or understandings with any person with respect to any of
the Company's securities, including, but not limited to, joint
12
ventures, loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or
withholding of proxies; (vii) no associate of any participant in this
solicitation owns beneficially, directly or indirectly, any of the Company's
securities; (viii) no participant in this solicitation owns beneficially,
directly or indirectly, any securities of any parent or subsidiary of the
Company; (ix) no participant in this solicitation or any of his/its associates
was a party to any transaction, or series of similar transactions, since the
beginning of the Company's last fiscal year, or is a party to any currently
proposed transaction, or series of similar transactions, to which the Company or
any of its subsidiaries was or is to be a party, in which the amount involved
exceeds $60,000; and (x) no person, including the participants in this
solicitation, who is a party to an arrangement or understanding pursuant to
which the Stockholder Nominees are proposed to be elected has a substantial
interest, direct or indirect, by security holdings or otherwise in any matter to
be acted on at the Annual Meeting.
I M P O R T A N T
If your shares are held in "street name," only your bank or broker can
vote your shares and only upon receipt of your specific instructions. Please
return the proxy provided to you or contact the person responsible for your
account and instruct them to vote for the Stockholder Nominees on the GOLD proxy
card.
If you have any questions, or need further assistance, please call our
proxy solicitor: D.F. King & Co., Inc. Attn: Richard Grubaugh, 48 Wall Street,
New York, New York 10005, at (888) 628-8208.
THE NOMINATING STOCKHOLDERS HAVE OMITTED FROM THIS PROXY STATEMENT
CERTAIN DISCLOSURE REQUIRED BY APPLICABLE LAW THAT IS INCLUDED IN THE COMPANY'S
PROXY STATEMENT. THIS DISCLOSURE INCLUDES, AMONG OTHER THINGS, SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT, INFORMATION
REGARDING STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING, BIOGRAPHICAL INFORMATION
ON THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS, INFORMATION CONCERNING
EXECUTIVE COMPENSATION AND AN ANALYSIS OF CUMULATIVE TOTAL RETURNS ON AN
INVESTMENT IN SHARES DURING THE PAST FIVE YEARS. STOCKHOLDERS SHOULD REFER TO
THE COMPANY'S PROXY STATEMENT IN ORDER TO REVIEW THIS DISCLOSURE. WE URGE YOU TO
SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE ELECTION OF OUR
NOMINEES.
Dated: January ____, 2007
Sincerely,
THE NOMINATING STOCKHOLDERS
Lawrence Partners, L.P.
Lawrence Offshore Partners, LLC
Lawrence Garshofsky
13
EXHIBIT A
INFORMATION CONCERNING THE NOMINATING STOCKHOLDERS
The names and addresses of the Nominating Stockholders are:
Lawrence Partners, L.P., a California limited partnership
("LP Domestic")
9665 Wilshire Blvd., Suite 200
Beverly Hills, California 90212
Lawrence Offshore Partners, LLC, a Manx limited liability company
("LP Offshore")
c/o Lawrence Garshofsky and Company LLC
9665 Wilshire Blvd., Suite 200
Beverly Hills, California 90212
Lawrence Garshofsky
c/o Lawrence Garshofsky and Company LLC
9665 Wilshire Blvd., Suite 200
Beverly Hills, California 90212
Lawrence Garshofsky and Company LLC, a California limited liability
company ("LGC"), is the sole general partner of LP Domestic and is the sole
investment manager of LP Offshore. In those capacities, LGC has the power and
authority to cause each of the Nominating Stockholders to make the nominations
described below. Lawrence Garshofsky is the managing member of LGC and, in that
capacity, has the authority to cause LGC to exercise its powers described in the
preceding sentence.
The following entity is a Stockholder that the Nominating Stockholders
believe will support the Stockholder Nominees:
The Value Realization Fund, L.P., a Delaware limited partnership
("VRF")
c/o Lawrence Garshofsky and Company LLC
9665 Wilshire Blvd., Suite 200,
Beverly Hills, California 90212
LGC is a sub-investment adviser to VRF, a private investment fund. In
that capacity LCG manages an account in VRF's name and currently has the
authority to direct the voting of securities VRF owns in that account. Other
than LGC and the Susskind Family Trust, the Nominating Stockholders do not know
that any other Stockholder supports the nomination of its nominees for Director.
The Nominating Stockholders hold their shares of Common Stock in "street name"
with brokerage firms, so they do not know whether their names or addresses
appear on the Company's books and records.
The following sets forth the name and the number of shares of Common
Stock of the Company beneficially owned as of January 2, 2007, by each of the
Nominating Stockholders and certain persons the Nominating Stockholders expect
to vote in favor of the Nominating Stockholders' nomination.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Amount and Nature Percent of Common
Name of Beneficial Owner (1) of Beneficial Ownership (3) Stock Owned (2)
- ---------------------------------- --------------------------- -----------------
Lawrence Partners, L.P. 125,680 5.2%
Lawrence Offshore Partners, LLC 125,680 5.2%
The Value Realization Fund, L.P.
("VRF") 30,170 1.2%
Lawrence Garshofsky and Company
LLC ("LGC") (4) 155,850 6.4%
Lawrence Garshofsky (5) 155,850 6.4%
Jeffrey E. Susskind (6) 5,000 0.2%
(1) The principal business address of each of the beneficial owners is 9665
Wilshire Blvd., Suite 200, Beverly Hills, California 90212.
(2) Percentage of outstanding is calculated in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 and is based on 2,427,928
shares of Common Stock outstanding as of the Record Date as set forth
in the Company's proxy statement.
(3) The beneficial owner has shared voting and shared dispositive power
with regard to each share of common stock listed. There are no shares
of Common Stock listed that are owned of record, but not beneficially.
(4) LGC is not a Stockholder, but controls the Nominating Stockholders and
has been granted the authority to dispose of and vote the securities
reflected above as owned by the Nominating Stockholders and VRF, in its
capacity as investment adviser (and, in one case, general partner). The
Nominating Stockholders and VRF, or persons or entities that own them,
have the right to receive, or the power to direct the receipt of,
dividends from, or the proceeds from the sale of, the securities held
in their respective accounts.
(5) Lawrence Garshofsky, as managing member of LGC, has the authority to
exercise LGC's authority described above. Shares held by Mr. Garshofsky
include 10,000 shares he holds as a grantor and trustee of the
Garshofsky Family Trust, U/A/D March 31, 2000, as amended. He shares
voting and dispositive power over those shares with the co-trustee, his
wife. He and the co-trustee have the right to receive or the power to
direct the receipt of dividends from or the proceeds from the sale of
the securities held in the trust. The Nominating Stockholders expect
that the shares of Common Stock held by the Garshofsky Family Trust
will be voted "For" the Stockholder Nominees.
(6) Mr. Susskind, a Stockholder Nominee, is the trustee of the Susskind
Family Trust which owns 5,000 shares of Common Stock. The Nominating
Stockholders expect that the shares of Common Stock held by the
Susskind Family Trust will be voted "For" the Stockholder Nominees.
EXHIBIT B
STOCK TRANSACTIONS BY NOMINATING STOCKHOLDERS, STOCKHOLDER NOMINEES
AND OTHERS DURING LAST 2 YEARS
PURCHASE (P) OR
DATE NUMBER OF SHARES SALE (S)
-------- ---------------- ---------------
Lawrence Partners, L.P. 12/06/04 300 P
12/07/04 100 P
02/17/05 1,320 P
08/24/05 12,120 P
08/25/05 1,320 P
08/29/05 2,080 P
12/12/05 11,400 P
11/21/06 2,500 S
Lawrence Offshore Partners, LLC 11/24/04 240 P
12/07/04 100 P
12/31/04 100 P
02/17/05 1,220 P
08/24/05 12,120 P
08/25/05 1,320 P
08/29/05 2,080 P
12/12/05 11,400 P
11/21/06 2,500 S
The Value Realization Fund, L.P. 11/12/04 260 P
12/07/04 56 P
02/17/05 660 P
08/24/05 6,060 P
08/25/05 660 P
08/29/05 1,040 P
12/12/05 5,700 P
Susskind Family Trust 11/21/06 2,500 P
11/21/06 2,500 P
The Nominating Stockholders and VRF did not specifically borrow to
purchase the shares of Common Stock identified above. However, those shares
where purchased and are held in margin accounts, together with all the other
portfolio securities of the respective holders. As of December 29, 2006,
Lawrence Partners, L.P. had an outstanding debit balance in its account of
approximately $1.64 million.
P R O X Y
THIS PROXY IS SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS OF FIRST
KEYSTONE FINANCIAL, INC. BY LAWRENCE PARTNERS, L.P., LAWRENCE OFFSHORE PARTNERS,
LLC AND LAWRENCE GARSHOFSKY TO PRESERVE STOCKHOLDER VALUE AND FOR THE
STOCKHOLDER NOMINEES LISTED BELOW. THIS PROXY IS NOT BEING SOLICITED BY THE
BOARD OF DIRECTORS OF FIRST KEYSTONE FINANCIAL, INC.
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Crit Stuart DeMent, Lawrence Garshofsky, Jeffrey
E. Susskind and Richard Grubaugh, and each of them, with full power of
substitution as proxy for the undersigned, to vote all shares of common stock of
First Keystone Financial, Inc. (the "Company"), which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on February 7,
2007, or any adjournment(s) or postponement(s) thereof (the "Meeting"), as
follows:
1. ELECTION OF DIRECTORS
To elect: CRIT STUART DEMENT, LAWRENCE GARSHOFSKY and JEFFREY E. SUSSKIND
____ FOR ALL ___ WITHHOLD FOR ALL
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF CRIT STUART
DEMENT, LAWRENCE GARSHOFSKY OR JEFFREY E. SUSSKIND, WRITE THE RESPECTIVE NAME(S)
IN THE FOLLOWING SPACE(S) OR WITHHOLD AUTHORITY FOR ALL OF THEM BY PLACING AN
"X" NEXT TO WITHHOLD.
- --------------------------------------------------------------------------------
2. APPOINTMENT OF DELOITTE & TOUCHE LLP, AS THE COMPANY'S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2007:
____ FOR ____ AGAINST ____ ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF EACH OF THE STOCKHOLDER NOMINEES AS A DIRECTOR AND
"FOR" THE APPOINTMENT OF DELOITTE & TOUCHE LLP, AS THE COMPANY'S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM. THIS PROXY REVOKES ALL PRIOR PROXIES GIVEN BY
THE UNDERSIGNED.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting, or any adjournments or postponements
thereof, as provided in the proxy statement provided herewith. The proxies may
exercise discretionary authority only as to matters unknown to the Nominating
Stockholders a reasonable time before the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
Please sign exactly as your name appears hereon or on your proxy cards
previously sent to you. When shares are held by joint tenants, both should sign.
When signing as an attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporation name by the President or other duly authorized officer. If a
partnership, please sign in partnership name by authorized person. This proxy
card votes all shares held in all capacities.
(FOR YOUR PROXY TO BE VALID, IT MUST BE DATED)
Dated: __________________________________
-----------------------------------------
(Signature)
-----------------------------------------
(Signature, if jointly held)
Title: __________________________________
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD TODAY.