SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant: |X|
Filed by a Party other than the Registrant: |_|
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 Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FirstPlus Financial Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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 is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously by written preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
NOTICE OF
2005 SPECIAL MEETING OF SHAREHOLDERS
& PROXY STATEMENT
LETTER TO SHAREHOLDERS
5100 N. O'Connor Boulevard, 6th Floor
Irving, Texas 75039
, 2005
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
FIRSTPLUS Financial Group, Inc.
The Special Meeting of Shareholders will be held at Peppermill Hotel Casino,
2707 South Virginia Street, Reno, Nevada 89502, at 10:00 a.m., Wednesday,
November 16, 2005.
At the Special Meeting, shareholders will be asked to:
o Elect four (4) directors, and
o Transact any other business properly brought up at the meeting.
The record date has been set as October 7, 2005, and holders of FIRSTPLUS common
stock at the close of business on that date may vote at the Special Meeting.
Your vote is important and we hope you will be able to attend.
Sincerely,
/s/ Jack (J.D.) Draper
Jack (J.D.) Draper
President and Chief Executive Officer
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
To Be Held November 16, 2005
FIRSTPLUS FINANCIAL GROUP, INC.
5100 N. O'Connor Boulevard, 6th Floor
Irving, Texas 75039
SPECIAL MEETING INFORMATION
The Board of Directors of FIRSTPLUS Financial Group, Inc. (the "Company")
is soliciting proxies for its Special Meeting of Shareholders. The Special
Meeting of Shareholders will be held at Peppermill Hotel Casino, 2707
South Virginia Street, Reno, Nevada 89502, at 10:00 a.m., Wednesday,
November 16, 2005. This proxy statement contains important information for
you to consider when deciding how to vote on the matters brought before
the meeting. Please read it carefully.
The Board set October 7, 2005, as the record date for the meeting.
Shareholders who owned Company common stock on that date are entitled to vote at
the meeting, with each share entitled to one vote. There were 45,340,090 shares
of Company common stock outstanding on the record date.
Special Meeting materials, which include this proxy statement, a proxy
card or voting instruction form, and the 2004 Annual Report, are being mailed to
shareholders on or about ______, 2005. The Company's Annual Report for the year
ended December 31, 2004 does not form any part of the materials for solicitation
of proxies.
QUESTIONS AND ANSWERS
Why am I receiving this special meeting information and proxy?
You are receiving this special meeting information and proxy because you
owned shares of common stock in FIRSTPLUS Financial Group, Inc. as of the record
date for the meeting. This proxy statement describes issues on which you may
vote and provides you with other important information so that you can make
informed decisions. This proxy statement and the accompanying form of proxies
are being mailed to record holders on or about , 2005.
You may own shares of the Company's common stock in several different
ways. If your stock is represented by one or more stock certificates registered
in your name, you are a shareholder of record. If you hold your shares in a
brokerage, trust or similar account, you are a beneficial owner, not a
shareholder of record.
In March 2005, a group of shareholders filed a lawsuit in the District
Court of the State of Nevada, styled Martin. et al. v. FirstPlus Financial
Group. Inc. et al (the "Court Action"), asking the court to compel an election
since the Company had not held an election of directors in more than eighteen
months since the last election of directors. The Company agreed to treat the
lawsuit as a valid request for a special meeting by shareholders in accordance
with the Company's bylaws and insisted in its pleadings with the court and its
discussions with the petitioner's counsel that all appropriate laws, regulations
and procedures be followed in the conduct of the special meeting and election.
The court ordered that an election be held on November 16, 2005 in Reno, Nevada.
Although it was not required to do so, the Company has already paid the
petitioners' attorney's fees in an aggregate amount of $25,000, which the
parties have stipulated fully satisfies any and all requests the petitioners
have made or could have made in the future concerning reimbursement for
petitioners attorney's fees and expenses associated with the Court Action. In
addition, although it was not required to do so, the Company has also agreed to
pay printing and distribution costs for the petitioners' proxy materials in an
amount not to exceed $20,000.
What am I voting on?
You are being asked to vote on the election of four directors. When you
sign and mail the proxy card, you appoint Robert P. Freeman and Jack (J.D.)
Draper as your representatives at the meeting. When we refer to the "named
proxies" in this proxy statement we are referring to Messrs. Freeman and Draper.
This way, your shares will be voted even if you cannot attend the meeting.
How does the Board of Directors recommend I vote on each of the proposals?
FOR the Board's director nominees.
How do I vote my shares?
Record holders may vote by using the proxy card. Persons who beneficially
own stock held:
o in a brokerage account can vote by using the voting instruction form
provided by the broker;
o by a bank and have the power to vote or to direct the voting of the
shares can vote using the proxy or the voting information form
provided by the bank; or
o in trust under an arrangement that provides the beneficial owner
with the power to vote or to direct the voting of the shares can
vote in accordance with the provisions of such arrangement.
Persons who beneficially own stock can vote at the meeting provided that
they obtain a "legal proxy" from the person or entity holding the stock for him,
typically a broker, bank, or trustee. A beneficial owner can obtain a legal
proxy by making a request to the broker, bank, or trustee. Under a legal proxy,
the bank, broker, or trustee confers all of its rights as a record holder (which
may in turn have been passed on to it by the ultimate record holder) to grant
proxies or to vote at the meeting.
Simply sign and date the proxy card or voting instruction form received
with this proxy statement and mail it in the enclosed prepaid and addressed
envelope. If you mark your choices on the card or voting instruction form, your
shares will be voted as you instruct.
If you return a signed proxy card but do not mark your choices, your
shares will be voted in accordance with the recommendations of the Board of
Directors shown above. If you do not mark your choices on the voting instruction
form, the voting of your shares will be subject to rules relating to broker
non-votes.
A person who has already voted may vote again and the later-dated vote
will have the effect of revoking the earlier-dated vote. Thus a person who votes
on November 1, 2005 can change his or her vote on November 2, 2005 and the
effect of the voting on November 2, 2005 would be to revoke the earlier November
1, 2005 vote. A record holder can also attend the meeting and vote, which will
have the effect of revoking a previously given proxy. A beneficial holder who
has been given a legal proxy by the record holder can attend the meeting and
vote, which will have the effect of revoking a previously given proxy or voting
information form.
What business may be properly brought before the meeting and what discretionary
authority is granted?
Under the Company's articles of incorporation and bylaws, a special
meeting is limited to the purposes described in the Notice of the meeting which
is attached to this proxy statement. A shareholder may nominate persons for
election of directors at the meeting only if the shareholder has given written
notice to the Company on or before 10 days after the Notice of the meeting in
accordance with the Company's bylaws. The only such business as to which the
Company received notice are the matters described under the heading "Other
Matters to Come Before the Meeting." Under SEC Rule 14a-4(c)(6), the form of
proxy may grant discretionary authority regarding proposals omitted under SEC
Rule 14a-8 and the proxy card does grant such authority. As to matters that
properly come before the meeting and are not on the proxy card, the named
proxies will vote the shares for which they hold proxies in accordance with
their best judgment.
What if I change my mind after I submit my proxy?
You may revoke your proxy and change your vote by delivery of a
later-dated proxy or voting at the meeting. You may do this at a later date or
time by:
o signing and delivering a proxy card with a later date, or
o voting at the meeting. (If you hold your shares beneficially through
a broker, you must bring a legal proxy from the record holder in
order to vote at the meeting.)
If you are a registered shareholder, you may obtain a new proxy card by
contacting the Company's Corporate Secretary, FIRSTPLUS Financial Group, Inc.,
5100 N. O'Connor Boulevard, 6th Floor, Irving, Texas 75039, telephone (214)
231-7600. If your shares are held by a broker, trustee or bank, you may obtain a
new voting instruction materials by contacting your broker, trustee or bank. If
you sign and date the proxy card or voting instruction and submit it in
accordance with the accompanying instructions and in a timely manner, any
earlier proxy card or voting instructions will be revoked and your choices on
the proxy card or voting instruction will be voted as you instruct.
What is a broker non-vote?
As indicated above, if you are a shareholder of record who submits a proxy
but does not indicate how the proxies should vote on one or more matters, the
named proxies will vote as recommended by the Company. However, if your shares
are held by a broker and you do not provide voting instructions to the broker,
the absence of instructions may cause a "broker non-vote" on the matters for
which you do not provide instructions. Accordingly, if you want to vote your
shares on a matter, it is important that you provide voting instructions on that
matter.
May I vote in person at the meeting?
The inspector of election will pass out a ballot to anyone who requests
one at the meeting. If you hold your shares through a broker, you must bring a
legal proxy from your broker in order to vote at the meeting. You may request a
legal proxy from your stockbroker by indicating on your voting instruction form
that you plan to attend and vote your shares at the meeting, or at the Internet
voting site to which your voting materials direct you. Please allow sufficient
time to receive a legal proxy through the mail after your broker receives your
request.
How many shares must be present to hold the meeting?
A majority of the Company's outstanding shares as of the record date must
be present at the meeting and entitled to vote in order to hold the meeting and
conduct business (i.e., to constitute a quorum). Shares are counted as present
at the meeting if the shareholder of record attends the meeting, if the
beneficial holder attends with a legal proxy from the record holder, or the
record holder has granted a proxy without regard to whether the proxy actually
casts a vote, withholds or abstains from voting.
How many votes must the nominees have to be elected?
Directors are elected by a plurality, and the four nominees who receive
the highest number of for votes will be elected. There is no cumulative voting
for the Company's directors. A properly executed proxy marked "Withheld for all"
or withholding authority to vote for one or more nominees with respect to the
election of directors will not be voted for the directors from whom authority to
vote is withheld. However, the shares represented will be counted for purposes
of determining whether there is a quorum. Withheld votes and broker non-votes,
if applicable, will not be taken into account in determining the outcome of the
election of directors.
How are votes counted?
Voting results will be tabulated by Mellon Investor Services, the transfer
agent for our common stock. Election results will be certified by Carl Hagberg,
who will serve as the inspector of elections at the meeting. Mr. Hagberg was an
expert witness in the Court Action who discussed the election process for public
companies in his testimony. The Company paid Mr. Hagberg approximately $8,400
for fees and expenses related to his acting as an expert witness in the Court
Action.
Who pays the costs of proxy solicitation?
The Company pays for distributing and soliciting the Company's proxies and
reimburses brokers, nominees, fiduciaries and other custodians their reasonable
fees and expenses in forwarding the Company's proxy materials to beneficial
owners. The Company has engaged Mellon Investor Services ("Mellon") and Buck
Consultants ("Buck") to assist in the solicitation of proxies for the meeting.
Mellon and Buck may use one of the Company's employees in connection with the
solicitations. It is intended that proxies will be solicited by the following
means: additional mailings, personal interview, mail, telephone and electronic
means. Proxies may also be solicited by the persons identified as Participants
under the heading "Participants in the Solicitation," who will receive no
additional compensation therefor, except for reimbursement of expenses. Although
no precise estimate can be made at this time, we anticipate that the aggregate
amount we will pay to Mellon and Buck in connection with the solicitation of
proxies will be $12,500 and $50,000, respectively, of which $12,500 and $25,000,
respectively, has been incurred to date. This amount includes fees payable to
Mellon and Buck, but excludes salaries and expenses of our officers, directors
and employees. In addition, although it was not required to do so, the Company
has also agreed to pay printing and distribution costs for the petitioners'
proxy materials in an amount not to exceed $20,000.
Is a list of shareholders entitled to vote at the meeting available?
A list of shareholders of record entitled to vote at the special meeting
will be available at the special meeting. It will also be available Monday
through Friday from November 4, 2005 through November 15, 2005, between the
hours of 9 a.m. and 4 p.m., local time, at the offices of the Corporate
Secretary, 5100 N. O'Connor Boulevard, 6th Floor, Irving, Texas 75039. A
shareholder of record may examine the list for any legally valid purpose related
to the special meeting.
Where can I find the voting results of the meeting?
The Company will publish the final results in a Current Report on Form
8-K. You can read or print a copy of that report by going to the Company's
website, www.firstplusgroup.com. You will be able to find the same Form 8-K by
going directly to the SEC EDGAR files at www.sec.gov. You can also get a copy by
calling us at (214) 231-7600, or by calling the SEC at (800) SEC-0330 for the
location of a public reference room.
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
The Company currently has four directors. Directors are elected to hold
office until their successors are elected and qualified, or until resignation or
removal in the manner provided in the Company's bylaws. Four directors are
nominees for election this year.
The Company's bylaws provide that the number of directors shall be fixed
from time to time by the Board of Directors. The Board has set the number of
directors at four. The four nominees for director listed below will stand for
election at the meeting for a one year term of office expiring at the 2006
Annual Meeting of Shareholders or until their successors are duly elected and
qualified. Three of the nominees of the Board, Messrs. Fitzgerald, Freeman and
Ward, are "independent" as such term is defined by the Securities and Exchange
Commission.
The following table sets forth certain information as to the nominees for
directors of the Company:
Positions and
Offices With the
Name Age Company Director Since
---- --- ------- --------------
Robert P. Freeman 74 Director and
Chairman of the Board 1998
John R. Fitzgerald 57 Director 1995
Daniel T. Phillips 56 Director 1994
David B. Ward 65 Director 1999
Robert P. Freeman. Robert P. Freeman has served as a Director since 1998.
Mr. Freeman has served as President and founder of Hennessy Freeman Associates
since 1985. His major area of expertise is developing and implementing
customized, interactive Process Management Programs, which he describes as the
best real-world methodology to optimize decision-making, quality improvement.
Previously, Mr. Freeman was Senior Vice President and a member of the Management
Committee at Beneficial Corporation, a $15 billion diversified financial
services firm. Mr. Freeman holds a Bachelor of Science degree in Marketing and a
Master of Business Administration from Rutgers University. He also completed the
Advanced Management Program at Harvard. Mr. Freeman is also an Adjunct Associate
Professor of Management at Fairleigh Dickinson Graduate School of Business.
John R. Fitzgerald. John R. Fitzgerald has served as a Director since
1995. Mr. Fitzgerald has been Executive Vice President of Dexter & Company since
1989. Previously, Mr. Fitzgerald served as Account Executive for Corrigan-Jordan
Insurance Agency from 1981 to 1989. From 1970 to 1981, Mr. Fitzgerald played
with the National Football League's Dallas Cowboys, including two Super Bowl
championship teams. He was elected as player representative during contract
negotiations and served on the players association Executive Committee in 1975.
Mr. Fitzgerald earned a Bachelor of Science, Business Administration from Boston
College in 1970. Mr. Fitzgerald has served as speaker and consultant for Xerox
Corporation, Lion Funding Corporation, Equities International, Grand Bank-Dallas
and The Associates Corporation of North America. Mr. Fitzgerald's current and
former professional experience and affiliations include the following:
o NFL Alumni Association
- President, Dallas Chapter, 1993
- Member, Board of Directors, 1985 - 1992
o Board of Governors, Canyon Creek Country Club, 1990 - 1994
o Participant, Muscular Dystrophy Association's Jerry Lewis Telethon
o Chairman, Celebrity Selection Committee, PGAS and MDA Golf
Tournaments
o Board Member, Big Brothers and Big Sisters of Arlington
o Consultant, Tournament Committee for Celebrities, Colonial National
Invitation PGA Golf Tournament's Pro-Am Tournament
Daniel T. Phillips. Daniel T. Phillips has served as a Director since
1994. Mr. Phillips is co-founder of FIRSTPLUS Financial Group, Inc. From 1996 to
2003, Mr. Phillips served as Chairman and CEO of FIRSTPLUS, overseeing the
operations of its subsidiaries, which combined had 6,000 employees producing,
securitizing and servicing up to $7.7 billion dollars of loans. Currently, Mr.
Phillips serves as Manager of Capital Lending Strategies, LLC, a position he has
held since 2003. Mr. Phillips has also served as Chairman of the Board of
Renaissance Acceptance Group, Inc. since 2001. From 1993 to 1996, Mr. Phillips
served as President and CEO of RAC Financial Group, Inc., the parent of
FIRSTPLUS Financial Inc., FIRSTPLUS Financial West, Inc., First Security
Mortgage Corporation and State Financial Acceptance Corporation. He is also
former President and CEO of LinCo Financial Corporation and served in the United
States Marine Corps from 1967 to 1970. Mr. Phillips is responsible for the
development of sophisticated risk scorecards for the high loan to value second
mortgage business and in his career he has successfully securitized $9 billion
of business rated by S&P, Moody's and Fitch.
David B. Ward. David B. Ward has served as a Director since 1999. Mr. Ward
has been a partner of Ward & Gross, a law firm in Flanders, New Jersey, since
1989. The firm's practice currently emphasizes residential property purchase and
sale closings, and government relations consulting and representation, primarily
in the credit area. The firm handles refinance and purchase money mortgage
closings in New Jersey for corporate and individual clients. The firm expects to
be involved in more than 200 such transactions in 2005. Previously, Mr. Ward was
Senior Executive and Attorney for Beneficial Corporation for 14 years. He served
as a member of the Executive Committee, as Senior Vice President of Government
Relations for 12 years, and as Chairman and CEO of Real Estate operations for
several years in the 1980s. Prior to taking over the Government Relations
function, Mr. Ward was counsel to Beneficial's insurance companies and a member
of the corporate legal department. Prior to joining Beneficial, Mr. Ward
practiced law in Pittsburgh, Pennsylvania from 1965 to 1976. Mr. Ward has been
Counsel to the New Jersey Financial Services Association ("NJFSA") since 1989,
and was Executive Director from 1994 to 2004. The NJFSA represents national and
local companies engaged in mortgage banking, secondary mortgage lending,
consumer lending, credit insurance and sales finance activities in New Jersey.
Mr. Ward holds a Juris Doctorate from the Dickinson School of Law and a Bachelor
of Arts degree from Harvard College. He also completed the Harvard School of
Business Administration's Advanced Management Program. Mr. Ward's current and
former professional experience and affiliations include:
o Member of New Jersey Department of Banking Advisory Board, 1990 -
1996
o Member of Federal Reserve Board Consumer Advisory Council, 1989 -
1991
o Member of American Financial Services Association Law Committee
o Member of the New Jersey and American Bar Associations
o Military Service: Lt. j.g U.S. Coast Guard, active duty 1966 - 1969
While it is not anticipated that any of the nominees will be unable to
serve, if any nominee should decline or become unable to serve as a director for
any reason, votes will be cast instead for a substitute nominee designated by
the Board of Directors or, if none is so designated, will be cast according to
the judgment of the person or persons voting the proxy.
The Board unanimously recommends a vote FOR each of the four nominees named
above. Proxies executed and returned will be so voted unless contrary
instructions are indicated on the proxy card.
CORPORATE GOVERNANCE
Structure of the Board of Directors
In accordance with the Nevada Revised Statutes and the Company's Articles
of Incorporation and Bylaws, the Company's business affairs are managed under
the direction of its Board of Directors. Directors meet their responsibilities
by, among other things, participating in meetings of the Board, discussing
matters with the Company's President and Chief Executive Officer and other
officers, reviewing materials provided to them, and visiting the Company's
facilities. The Board of Directors held four meetings during 2004, and each
Director attended each of the meetings. The Company expects its directors to
attend meetings of the Board of Directors, shareholders meetings and meetings of
any committees of the Board on which they serve. All directors then serving on
the Board attended the Company's prior Annual Meeting of Shareholders held in
1998.
The Board of Directors has the authority to create or terminate committees
to assist it with its duties. Due to the small size of the Board and the
Company's limited operations, currently, there are no standing committees or
committee charters. However, the full Board of Directors reviews, discusses and
acts on matters that would otherwise be the subject of typical committee
meetings. As the Company evolves, the Board may use working committees with
functional responsibility in areas where committee oversight is deemed
necessary. The Board will adopt charters for each committee it creates. Each
committee will have the authority to hire, at Company expense, independent
legal, financial, or other consultants as it may deem necessary, without
consulting or obtaining the approval of any Company officer in advance. Possible
committees may include:
o Audit Committee
o Compensation Committee
o Nominating Committee
o Corporate Governance Committee
Director Independence
Robert B. Freeman, John R. Fitzgerald and David B. Ward meet the
independence requirements set forth in the new corporate governance listing
standards of the NYSE and the applicable rules of the Securities and Exchange
Commission. As a small company with limited operations, the Board of Directors
does not believe that it is necessary to actively search for an outside person
to serve on the Board of Directors to qualify as an audit committee financial
expert. The Board of Directors has authority to engage legal counsel, other
experts or consultants as it deems appropriate to carry out its
responsibilities. The Board of Directors includes one individual with varied
experience in the finance industry, including responsibilities for analysis of
financial statements in connection with the financial services industry and as
chief executive officer of public companies in the financial services industry,
and one individual with varied experience in management consulting and as
President of a management consulting firm and has a Masters in Business
Administration degree. The Board of Directors believes all four members of the
Board of Directors have the ability to read and understand financial statements
to perform their duties as Directors. The Board of Directors does not have a
standing audit committee and has not determined whether any of the current
members of the Board meet the definition of audit committee financial expert.
The Company may consider the addition of a Board member in the future meeting
the definition of audit committee financial expert.
Director Resignation in Fiscal Year 2004
On December 22, 2004, George Davis resigned from his position as director
of the Company. On December 30, 2004, the Board of Directors accepted Mr. Davis'
resignation. Mr. Davis did not hold any positions on any committee of the Board
of Directors at the time of his resignation.
In his letter to Robert Freeman, Chairman of the Board of Directors of the
Company, attached as Exhibit 99.1 to the Company's Current Report on Form 8-K
filed with the SEC on January 5, 2005 (the "Form 8-K"), Mr. Davis stated that
since he received a summons to appear in court to test the validity of his
appointment as sole trustee of the FIRSTPLUS Financial Group, Inc. Grantor
Residual Trust (the "Grantor Trust"), he was compelled to hire an attorney to
plead his case, and this put him at odds with the decision of the Board of
Directors to add two additional trustees to the Trust.
In addition, in his letter to the Board of Directors of the Company,
attached as Exhibit 99.2 to the Form 8-K, Mr. Davis stated that the Company has
taken actions which led The FPFI Creditor Trust to bring an interpleader action
against the Grantor Trust and other members of the Board. Rather than recusing
himself with respect to the anticipated votes as a director of the Company on
matters related to this interpleader action, Mr. Davis decided to resign from
the Board.
In Exhibit 99.3 to the Form 8-K, counsel for The FPFI Creditor Trust
stated that Mr. Davis' communications to the trustee of The FPFI Creditor Trust
were the reason for the filing of the interpleader.
Mr. Davis did not resign as trustee of the Grantor Trust. In November
2004, the Company appointed two additional trustees for the Grantor Trust. Davis
challenged the appointment of the additional trustees and refused to agree to a
distribution of funds from the Grantor Trust to the shareholders of the Company.
The Company and the additional trustees filed suit in Texas state court in
Dallas (FirstPlus Financial Group, Inc., Michael Montgomery, Jack Draper and The
FirstPlus Financial Group Grantor Residual Trust v. George T. Davis and The FPFI
Creditor Trust; Civil Action No. 05-02962; in the 298th District Court of Dallas
County, Texas) (the "Trust Suit") seeking declaratory relief against Davis and
the FPFI Creditor Trust to the effect that the additional trustees had been
properly appointed and were authorized to act. However, in 2005, the
interpleader action was pending, the Company, as settlor of the Grantor Trust,
terminated Davis for cause pursuant to the terms of the trust agreement
governing the Grantor Trust and appointed a successor trustee. Mr. Davis has
sought declaratory relief in the Trust Suit to the effect that he has not been
terminated.
Procedures for Director Nominations
The Company's articles of incorporation provide that a shareholder may
nominate one or more candidates for the election as directors if the shareholder
gives the Company written notice of the intent to make the nomination at least
ten (10) days after the date of the notice of the special meeting sent to
shareholders. The shareholder notice must set forth:
o the name and address of the shareholder who intends to make the
nomination and the persons to be nominated;
o a representation that the shareholder is a holder of record stock of
the Company entitled to vote at the meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons
specified in the notice;
o a description of all arrangements or understandings between the
shareholder and each of his or her nominees;
o such other information regarding each nominee as would be required
to include in a proxy statement filed pursuant to the proxy rules of
the SEC, had the nominee been nominated by the Board of Directors;
and
o the consent of each nominee to serve as a director of the Company if
so elected.
Although the Board of Directors is willing to consider candidates
recommended by shareholders, it has not adopted a formal policy with regard to
the consideration of any director candidates recommended by security holders.
The Board of Directors believes that a formal policy is not necessary or
appropriate because of the small size of the Board of Directors and because the
Company's current Board of Directors already has a diversity of business
background, shareholder representation and industry experience. The members of
the Board of Directors have each served in that capacity for a number of years.
No replacement of these directors is currently contemplated.
The Board of Directors does not have specific minimum qualifications that
must be met by a candidate for election to the Board of Directors in order to be
considered for nomination. In identifying and evaluating nominees for director,
the Board of Directors will consider each candidate's qualities, experience,
background and skills, as well as any other factors which the candidate may be
able to bring to the Board that the Board of Directors currently does not
possess. The process is the same whether the candidate is recommended by a
shareholder, another director, management or otherwise. The Company does not pay
a fee to any third party for the identification of candidates.
With respect to the nominees for director at the Special Meeting, each of
the nominees is a current director nominated by the full Board of Directors
standing for re-election.
Shareholder Communication Policy
Any shareholder or interested party who wishes to communicate with our
Board of Directors or any specific directors, including non-management
directors, may write to:
FIRSTPLUS Financial Group, Inc.
5100 N. O'Connor Boulevard, 6th Floor
Irving, Texas 75039
Attn: Corporate Secretary
or
jd@firstplusgroup.com.
Depending on the subject matter, management will:
o forward the communication to the director or directors to whom it is
addressed;
o attempt to handle the inquiry directly (for example, where it is a
request for information about the Company or the Company's
operations or it is a stock-related matter that does not appear to
require direct attention by the Board of Directors or an individual
director); or
o not forward the communication if it is primarily commercial in
nature or if it relates to an patently offensive, improper or
irrelevant topic.
Director Compensation
The Company pays our directors $600 for each meeting in which the director
participates. In June 2004, the Company paid each director $3,700 representing
accrued and unpaid director fees for previous meetings. The Company does not pay
directors who are also employees of the Company, if any, any additional
compensation for their service as directors, except for the reimbursement of
expenses incurred in attending meetings. Directors may also receive stock
options for their services as directors; however, the issuance of options to
directors was suspended for 2003 and 2004.
Code of Ethics
The Board of Directors has adopted a Code of Ethics for all directors and
officers which is attached as an exhibit to the Company's Form 10-KSB for the
year ended December 31, 2004. The primary goal of the Code of Ethics is to
establish precepts which govern business decisions and to preserve the integrity
by which businesses are created. As the Company continues to evolve and
re-emerge in the financial services industry, the officers and directors strive
to attain the highest possible standards in all aspects of business activity.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's executive offices are shared with the facilities leased by
Capital Lending Strategies, LLC ("Capital Lending"), which incurs the cost and
full responsibility of the lease. There is no formal agreement between the
Company and Capital Lending with respect to the lease arrangement. The Company
has outstanding loans to Capital Lending in an outstanding amount of $160,050.
The loans are not documented by a formal agreement. Daniel T. Phillips, our
Director, is a Manager and Member of Capital Lending.
In June 2002, Capital Lending acquired 25,639 shares of the Company's
Series D Convertible Preferred Stock (the "Series D Preferred"). The sale of
Series D Preferred to Capital Lending was unanimously approved by the Board of
Directors of the Company, with the exception of Daniel T. Phillips, then
Chairman and Chief Executive Officer of the Company, who abstained from the vote
because of his affiliation with Capital Lending. As a result of the transaction,
Capital Lending acquired control of the Company and held approximately 51% of
the outstanding voting securities of the Company. In connection with the
transaction, the Company agreed to expand its Board of Directors to seven
members. Consequently, George T. Davis, a significant shareholder of the Company
became a member of the Board of Directors and agreed to serve as Vice
President--Investor Relations for the Company. The Company acquired 42.3% of the
outstanding limited liability company interests for shares of Series D Preferred
acquired by Capital Lending.
In August 2001, the Company invested seed capital for a one-third profits
interest in Capital Lending. In connection with the above described transaction,
the profits interest was converted to an equity interest in Capital Lending. Mr.
Phillips provided consulting advice and direction to Capital Lending in
connection with its formation and development and, for such services, an
affiliate of Mr. Phillips received a one-third profits interest in Capital
Lending. As a result of the transaction, and after accounting for certain
employee interests, the Company held a 40.2% equity interest in Capital Lending.
The terms of the Series D Preferred provided that neither Capital Lending,
nor any of its affiliates or assigns, would be entitled to any of the Company's
rights in the cash flow from the derivative interests in mortgage-backed or
asset-backed securitization transactions of FirstPlus Financial, Inc., a
subsidiary of the Company, which had been set aside for the benefit of the
Company's shareholders and creditors in the Grantor Trust. The beneficiary of
the Grantor Trust is the Company, with its shareholders' and creditors' rights
recognized through their status as Designated Recipients under the Grantor
Trust, but excluded Capital Lending and its affiliates and assigns. George T.
Davis was appointed as the initial trustee of the Grantor Trust.
In 2003, the Company entered into a "reciprocal swap" with Capital Lending
whereby the Company transferred most of its ownership interests in Capital
Lending to Capital Lending in exchange for all of the shares of Series D
Convertible Preferred Stock of the Company then owned by Capital Lending, which
represented approximately 51% of the voting stock of the Company. The Company
did not transfer back to Capital Lending the ownership interests assigned to the
plaintiffs' co-lead counsel in escrow on behalf of the authorized claimants
under the settlement of the Company's consolidated class action lawsuit styled
In re: FirstPlus Financial Group, Inc. Securities Litigation, Civil Action No.
3:98-CV-2551-M.
Prior to the reciprocal swap, the mutual ownership positions of the
Company and Capital Lending resulted in Capital Lending holding a controlling
interest in the Company and approximately 12% of the Company's ownership of
Capital Lending "attributing back" to Capital Lending. Following the reciprocal
swap, the Company retained the same economic interest in Capital Lending since
none of its ownership interest then "attributed back" to Capital Lending via
Capital Lending's ownership of Company stock. However, Capital Lending no longer
owns any shares of the Company and is no longer in a position to control the
Company through its stock ownership. In May 2004, the Company sold its remaining
interest in Capital Lending, other than the interest assigned on behalf of the
claimants in the class action lawsuit, for $796,580.
In May 2004, the Company reimbursed United Lending Partners an amount of
$37,681.18 for payments United Lending Partners made on behalf of the Company to
the Company's stock transfer agent. In August 2004, the Company made a loan of
$100,000 to United Lending Partners. The original term of the note was for 60
days with an interest rate of 15 percent. The note was renewed twice and became
due in February 2005. All of the outstanding principal amount and accrued
interest from December 2004 remains due. The loan is currently in default.
United Lending Partners is a subsidiary of Renaissance Acceptance Group, Inc.
Daniel T. Phillips, our Director, is a director and shareholder of Renaissance
Acceptance Group, Inc.
The Company has a insurance policy with American Financial Services
covering its directors and officers. The total premium for the policy is
$59,260. Dexter & Company was the broker for the policy. John R. Fitzgerald, a
Director of the Company, is Executive Vice President of Dexter & Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and certain of its officers to send reports of their
ownership of Company common stock and changes in such ownership to the SEC. The
Company assists its directors and officers by preparing forms for filing. SEC
regulations also require the Company to identify in this proxy statement any
person subject to this requirement who failed to file a report on a timely
basis. Based on a review of copies of reports furnished to the Company and
written representations that no reports were required, the Company believes that
all of its directors and officers subject to Section 16(a) complied with the
reporting requirements with respect to transactions during 2004.
INDEPENDENT AUDITORS
Engagement of Independent Auditors
On June 3, 2005, the Company engaged Lightfoot Guest Moore & Co., PC, as
its independent auditor for the year ending December 31, 2004. The Company had
not formally had an independent auditor since September 1999, when Ernst & Young
LLP resigned as the Company's principal accountant. The resignation of Ernst &
Young LLP was discussed in a Current Report on Form 8-K filed with the SEC on
October 6, 1999.
On June 3, 2005, FirstPlus Financial Group, Inc. (the "Company") engaged
Lightfoot Guest Moore & Co., PC as its new independent registered public
accounting firm.
The Company disclosed the engagement of Lightfoot Guest Moore & Co., PC in
a Current Report on Form 8-K filed with the SEC on September 22, 2005 (the "Form
8-K"), which included the following information:
During the fiscal years ended December 31, 2004 and 2003 and through June
3, 2005, the Company had not consulted Lightfoot Guest Moore & Co., PC regarding
either (i) the application of accounting principles to a specific completed or
contemplated transaction, or the type of audit opinion that might be rendered on
the Company's financial statements, and neither written nor oral advice was
provided to the Company that was an important factor considered by the Company
in reaching a decision as to the accounting, auditing or financial reporting
issue; or (ii) any manner that was either the subject of a disagreement or event
identified in response to paragraph (a)(1)(iv) of Item 304 of Regulation S-B.
Selection of Independent Auditors for the Current Fiscal Year
The Board of Directors has selected Lightfoot Guest Moore & Co., PC as
the Company's independent public auditors for the current fiscal year.
Representatives of Lightfoot Guest Moore & Co., PC are not expected to attend
the meeting.
Audit Fees
The following table sets forth fees billed to us during the fiscal years
ended December 31, 2004 and 2003 by our independent auditors:
December 31, 2004 December 31, 2003
----------------- -----------------
(i) Audit Fees $ 0 $0
(ii) Audit Related Fees $ 0 $0
(iii) Tax Fees $ 0 $0
(iv) All Other Fees $15,046 $0
Audit Fees. Consists of fees billed for professional services rendered for
the audit of the Company's financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by our auditors in connection with statutory and
regulatory filings or engagements.
Audit-Related Fees. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's financial statements and are not reported under "Audit Fees."
Tax Fees. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. There were no tax services provided in
fiscal 2004 or 2003.
All Other Fees. Consists of fees for products and services other than the
services reported above. There were no management consulting services provided
in fiscal 2004 or 2003.
Policy on Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
The Board of Directors' policy is that the Company's auditor performs its
services independently and with the highest integrity and professionalism. There
is no formal written policy. Any engagement of the Company's outside auditor
must be consistent with principles determined by the SEC, namely, that the
independent auditor cannot audit its own work, perform management functions or
act as an advocate for the client.
The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-approve all
audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or category of
services and is generally subject to a specific budget. The independent auditors
and management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.
AUDIT REPORT OF THE BOARD OF DIRECTORS
The Board of Directors has not established an Audit Committee. Due to the
small size of the Board, and the Company's limited operations, the Board of
Directors did not consider establishing an Audit Committee to be necessary.
However, the full Board of Directors has reviewed, discussed and acted on
matters that would otherwise be the subject of Audit Committee meetings.
The following report of the Board of Directors shall not be deemed to be
soliciting material or to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or incorporated by reference in any document so filed.
Review of the Company's Audited Financial Statements
The Board of Directors has reviewed and discussed the audited financial
statements with management. The Board of Directors has discussed with the
independent auditors the matters required to be discussed by SAS 61, as may be
modified or supplemented. The Board of Directors has received the written
disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1 (Independence Standards Board
Standard No. 1, Independence Discussions with Board of Directors), as may be
modified or supplemented, and has discussed with the independent accountant the
independent accountant's independence. Based on the review and discussions
described above, the Board of Directors approved the audited financial
statements to be included in the Company's Annual Report on Form 10-KSB for the
last fiscal year for filing with the Commission.
Robert P. Freeman
John R. Fitzgerald
Daniel T. Phillips
David B. Ward
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of July 28, 2005, by (1) each
director and named executive officer of the Company, (2) all officers and
directors of the Company as a group, and (3) all persons who are known by the
Company to be beneficial owners of 5% or more of the Company's outstanding
common stock. The Company is also aware of an additional purported "committee"
of shareholders who constitute part of the petitioner group in the Election Suit
described in Item 3 of this Form 10-KSB. As of the date of filing of this Form
10-KSB, neither the "committee" nor the petitioner group have filed a Schedule
13D as required by the Securities Exchange Act of 1934.
Name and Address of Beneficial Owner Shares Owned Percent of Class(1)
- ------------------------------------ ------------ -------------------
Daniel T. Phillips 350,000(2) *
Robert P. Freeman 337,000(3) *
John R. Fitzgerald 313,724(4) *
David B. Ward 300,000(5) *
Jack (J.D.) Draper -- --
FPFX Shareholder Value Committee(6) 4,800,155(6) 10.6%
All directors and officers as a group (5 persons) (2)(3)(4)(5) 1,300,724 2.8%
* Indicates less than one percent (1%).
(1) The percentage of ownership is based on 45,340,090 shares of common stock
outstanding as of July 28, 2005. Except as otherwise indicated, the
persons named in the table possess sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them.
Beneficial ownership as reported in the above table has been determined
according to Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The amounts shown in the table include shares of
common stock issuable upon exercise of outstanding options exercisable
within 60 days of July 28, 2005. Except as otherwise noted, the address of
the named individuals is 5100 N. O'Connor Boulevard, 6th Floor, Irving,
Texas 75039.
(2) Consists of 50,000 shares of common stock held by Phillips Partners, Ltd.,
over which Mr. Phillips has voting and dispositive control, and 300,000
shares of common stock issuable upon the exercise of options.
(3) Includes 300,000 shares of common stock issuable upon the exercise of
options.
(4) Includes 324 shares of common stock held by Mr. Fitzgerald's wife and
300,000 shares of common stock issuable upon the exercise of options.
(5) Consists of 300,000 shares of common stock issuable upon the exercise
of options.
(6) The purported "committee" is in no way affiliated with the Company.
According to Schedule 13D, filed on August 26, 2005. Consists of (i)
11,297 shares of common stock held by James T. Capretz, (ii) 265,699
shares of common stock held by Robert D. Davis, (iii) 210,759 shares of
common stock held by George R. Ebertings, (iv) 2,039,900 shares of common
stock held by Rupan Gulenyan, (v) 430,000 shares of common stock held or
controlled by James P. Hanson, and (vi) 1,842,500 shares of common stock
held by Danford C. Martin. The address of the "committee" is 7 Egret Lane,
Aliso Viejo, California 92656.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by
the Company for services rendered during each of the three years ended December
31, 2004 to the Company's President and Chief Executive Officer, referenced to
in this Proxy Statement as "named executive officers." The Company does not
currently have any other executive officers and had no executive officers whose
compensation exceeded $100,000 in 2004.
Annual Compensation Long-Term Compensation
---------------------------------------------- --------------------------------
Awards
-----------
Securities
Other Annual Underlying All Other
Name & Principal Year Salary ($) Bonus ($) Compensation ($)(1) Options/SARS Compensation ($)
Position ---- ---------- --------- ------------------- ------------ ----------------
- ----------------
Jack (J.D.) Draper
President and Chief
Executive Officer 2004 $33,000 ___ $ 7,606(1) ___ ___
2003 2,500(2) ___ ___ ___
- ------------------
(1) Consists of $6,606 in premiums paid by the Company for health insurance
and $1,000 in fees related to Mr. Draper's appointment as trustee of the
FIRSTPLUS Financial Group, Inc. Grantor Residual Trust.
(2) Mr. Draper's employment with the Company began in October 2003.
Stock Option/SAR Grants
There were no grants of stock options or stock appreciation rights made
during the year ended December 31, 2004 to any named executive officer.
Option Exercises and Holdings
There were no option exercises during 2004 or options held at December 31,
2004 by the named executive officers of the Company.
Report on Executive Compensation
The following Report of the Board of Directors does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Company specifically incorporates
this Report by reference therein. The Board of Directors has provided the
following report on the compensation policies of the Company as they apply to
its executive officers and the relationship of Company performance to executive
compensation and the Chief Executive Officer's compensation.
During 2004, there was no formally designated Compensation Committee of
the Company's Board of Directors. The entire Board of Directors performed the
function of a Compensation Committee and has overall responsibility for the
Company's executive compensation policies and practices. In this regard, the
Board of Directors functions include:
o determining the compensation of the President and Chief Executive
Officer of the Company,
o upon recommendation of the Chief Executive Officer, reviewing and
approving any other executive officers' compensation; however,
during 2004 and as of the date of this Report there is no other
officer of the Company, and
o reviewing, approving and granting awards under stock incentive
plans.
The Company currently has only one executive officer, Mr. Jack (J.D.)
Draper, the Company's President and Chief Executive Officer. The Company intends
to hire additional personnel as circumstances require.
If the Board of Directors decides to hire additional personnel, it intends
to determine compensation according to the following five elements:
o establishing objectives for compensation,
o defining appropriate competitive reference points,
o creating an appropriate linkage between compensation programs and
Company objectives and values,
o describing the roles of various elements of compensation, and
o maintaining good governance practices concerning compensation.
The Board of Directors will work with senior management to develop and
implement the Company's executive compensation philosophy. Generally, the
Company's philosophy on executive compensation will be to provide base cash
compensation and to provide additional incentive compensation in the form of
cash bonuses and grants of options based on the realization of stated
objectives, expected to result in improvements in total shareholder return.
Stated another way, the Company's executive compensation policy is based on
pay-for-performance.
During 2004, Mr. Draper, the Company's President and Chief Executive
Officer, received base compensation related primarily to level of the Company's
operations, his level of responsibility and the Company's ability to pay his
compensation. Mr. Draper does not have an employment agreement with the Company.
The Board of Directors endorses the view that equity ownership by
management is beneficial in aligning management and shareholders' interests in
the enhancement of shareholder value. The Board of Directors intends to
implement equity-based compensation plans to facilitate equity ownership by
management as the Company evolves and begins to resume ongoing operations.
As the Company moves forward in its efforts to create shareholder value in
the years ahead, the Board of Directors will continue to review, monitor and
evaluate the Company's program for executive compensation to ensure that it is
internally effective in support of the Company's strategy, is competitive in the
marketplace to attract, retain and motivate the talent needed to achieve the
Company's objectives, and appropriately rewards the creation of value on behalf
of the Company's shareholders.
Section 162(m) of the Internal Revenue Code eliminates the Company's
ability to deduct certain compensation over $1 million paid to the named
executives unless such compensation is based on performance objectives meeting
certain criteria or is otherwise excluded from the limitation. The Company
strives whenever possible to structure its compensation plans such that they are
tax deductible by the Company. At this time, none of the Company's executive
officers' compensation subject to the deductibility limits exceeds $1 million,
and it is the Board's view that the Company will not likely be affected by the
deductibility rules in the near future.
Robert P. Freeman
John R. Fitzgerald
Daniel T. Phillips
David B. Ward
OTHER MATTERS TO COME BEFORE THE MEETING
Other Matters; Opposing Solicitation
Other than the election of directors included in this proxy statement the
Company is not aware of any matters to be properly presented for a vote at the
meeting. However, counsel for the petitioners in the Court Action provided the
Company with a letter notifying the Company of its intention to nominate seven
persons to be elected as directors at the meeting and later amended the notice
to include only four nominees. Certain petitioners also filed a preliminary
proxy statement on July 28, 2005 referencing their intention to solicit proxies
for the nomination of Danford L. Martin, James T. Capretz, James P. Hanson and
Robert D. Davis to be elected as directors. The nominators did not request in
that notice that the Company include their nominees in the Company's proxy
materials, and the Company believes it otherwise would have been permitted to
exclude such a request under SEC Rule 14a-8(i)(8). However, the nominators
referenced the Company's articles of incorporation, which allow for shareholders
entitled to vote in the election of directors to nominate one or more persons
for the election as directors at a meeting if written notice is provided to the
Company by the close of business on the tenth day following the date on which
notice of the meeting is first given to shareholders. The Company notified the
petitioners that the Company will hold the notice and deem it received upon
appropriate commencement of the applicable notice period and the petitioners
would not have to resubmit the notice at the appropriate time.
Although it was not required to do so, and does not expect to do so in the
future, the Company has notified the nominators of certain defects identified by
the Company in their notice of nomination. The nominators, nominees and filing
persons of the proxy statement with respect to opposing solicitation are
responsible for the truth, accuracy and completeness of such disclosures and for
making any corrections to false or misleading disclosures. If any information
comes to the Company's attention that any of such information is false or
misleading with respect to any material fact, or that such disclosures omit to
state any material fact necessary in order to make such disclosures not false or
misleading, the Company reserves all rights available to it under its articles
of incorporation, bylaws and all applicable federal and state laws and
regulations. If it is determined at the meeting that such proposals are properly
presented, the named proxies will use the discretionary authority granted to
them to vote the shares for which they hold proxies against these nominees.
Participants in the Solicitation
Each member of the Board of Directors may be deemed to be a "Participant"
in the Company's solicitation of proxies in connection with the Special Meeting.
Set forth below are the names and principal occupations of each member of the
Board (each of whom are also nominees), and the name, principal business and
address of any corporation or other organization in which that director's
occupation or employment is carried on. For additional information concerning
each of the directors, see "Election of Directors" and "Certain Relationships
and Related Transactions" in this Proxy Statement.
Name Business Address Principal Business of Employer
- ---- ---------------- ------------------------------
Robert P. Freeman 5100 N. O'Connor Boulevard, Business Consulting
6th Floor, Irving, Texas
75039.
John R. Fitzgerald 5100 N. O'Connor Boulevard, Insurance
6th Floor, Irving, Texas
75039.
Daniel T. Phillips 5100 N. O'Connor Boulevard, Lending Programs
6th Floor, Irving, Texas
75039.
David B. Ward 5100 N. O'Connor Boulevard, Legal Services
6th Floor, Irving, Texas
75039.
Other Participants
Jack (J.D.) Draper, President and Chief Executive Officer of the
Company, may also be deemed to be a Participant. Mr. Draper's principal
business address is that of the Company, 5100 N. O'Connor Boulevard, 6th
Floor, Irving, Texas 75039.
Information Regarding Ownership of the Company's Securities by Participants
The number of shares of common stock held by each director and named
executive officer and their associates at July 28, 2005 is set forth in the
"Security Ownership of Certain Beneficial Owners and Management" section of this
proxy statement.
Information Regarding Transactions in the Company's Stock by Participants;
Understandings with Respect to Securities of the Company
The Company granted options to purchase 300,000 shares of the Company's
common stock to each of Messrs. Freeman, Fitzgerald, Phillips and Ward in their
capacity as directors of the Company in June, 2002. The options vested
immediately upon grant, had an exercise price of $0.10 per share and a term of
ten years.
Except as described in this proxy statement, no Participant has any
arrangement or understanding with any person with respect to any securities of
the Company.
Understandings with Respect to Future Employment by the Company
See "Executive Compensation" in this Proxy Statement. No other
Participant, nor any Associate of any Participant, has any understanding with
respect to future employment. No Participant or any Associate of any Participant
has any arrangement or understanding with respect to future transactions to
which the Company or any of its affiliates will or may be a party.
Costs of Solicitation
The engagement of Mellon and Buck as proxy solicitors and consultants is
described under "Special Meeting Information" above. Expenses related to the
solicitation of proxies for this meeting in excess of those normally spent for a
special meeting are not expected to exceed approximately $12,500 and $50,000,
respectively, of which $12,500 and $25,000, respectively, has been incurred to
date. In addition, although it was not required to do so, the Company has also
agreed to pay printing and distribution costs for the petitioners' proxy
materials in an amount not to exceed $20,000.
SUBMISSION OF PROPOSALS FOR NEXT ANNUAL MEETING
The Company expects to hold its next annual meeting on or about September
1, 2006. Shareholder proposals to be included in the proxy statement for the
next annual meeting must be received by the Company at its principal executive
offices on or before , 2006 for inclusion in the Company's proxy
statement relating to that meeting. The Company's articles of incorporation
provides that a shareholder seeking to have a proposal included in the Company's
proxy statement shall comply with the requirements of Regulation 14A under the
Securities Exchange Act of 1934, as amended.
For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company, not less than twenty (20) days nor more than fifty (50) days prior to
the meeting; provided, however, that in the event that less than thirty (30)
days' notice or prior public disclosure of the date of the meeting is given or
made to the shareholders, notice by the shareholder to be timely must be
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed or
such public disclosure was made. A shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting the following information:
o a brief description of the business proposed to be brought before
the annual meeting and the reasons for conducting such business at
the annual meeting;
o the name and address, as they appear on the Company's books, of the
shareholder proposing such business;
o the number of shares of the Company which are beneficially owned by
the shareholder; and
o any material interest of the shareholder in such business.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR AND AT THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE MEETING.
Please |_|
Mark Here
For Address
Change or
Comments
SEE REVERSE SIDE
ITEM 1. ELECTION OF FOR WITHHELD
DIRECTORS FOR ALL
Nominees: |_| |_|
01 Robert P. Freeman
02 John R. Fitzgerald
03 Daniel T. Phillips
04 David B. Ward
Withheld for the nominees you list below: (Write that nominee's name in the
space provided below.)
- --------------------------------------------------------------------------------
Signature____________________ Signature ____________________ Date_______________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
FIRSTPLUS FINANCIAL GROUP, INC.
The undersigned hereby appoints Robert P. Freeman and Jack (J.D.) Draper, and
each of them, with power to act without the other and with power of
substitution, as proxies and attorneys-in-fact and hereby authorizes them to
represent and vote, as provided on the other side, all the shares of FIRSTPLUS
Financial Group, Inc. Common Stock which the undersigned is entitled to vote,
and, in their discretion, to vote upon such other business as may properly come
before the Special Meeting of Shareholders of the company to be held November
16, 2005 or at any adjournment or postponement thereof, with all powers which
the undersigned would possess if present at the Meeting.
(Continued and to be marked, dated and signed, on the other side)
- --------------------------------------------------------------------------------
Address Change/Comments (Mark the corresponding box on the reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
You can now access your FIRSTPLUS Financial Group, Inc. account online.
Access your FIRSTPLUS Financial Group, Inc. shareholder account online via
Investor ServiceDirect(R) (ISD).
Mellon Investor Services LLC, Transfer Agent for FIRSTPLUS Financial Group, Inc,
now makes it easy and convenient to get current information on your shareholder
account.
o View account status o View payment history for dividends
o View certificate history o Make address changes
o View book-entry information o Obtain a duplicate 1099 tax form
o Establish/change your PIN
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect(R) is a registered trademark of Mellon
Investor Services LLC
- --------------------------------------------------------------------------------