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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Checkers Drive-In Restaurants, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
CHECKERS DRIVE-IN RESTAURANTS, INC.
4300 West Cypress Street, Suite 600
Tampa, Florida 33607
May 2, 2002
Dear Stockholder:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
of Checkers Drive-In Restaurants, Inc. The Meeting will be held May 29, 2002 at
9:00 a.m., Eastern Daylight Savings Time, at the Tampa Westshore Marriott,
located at 1001 North Westshore Boulevard, Tampa, Florida.
The Notice of the Meeting and the Proxy Statement on the following pages
cover the formal business of the Meeting. We will also report on the progress
of the Company and comment on matters of current interest.
It is important that your shares be represented at the Meeting. We ask that
you promptly sign, date and return the enclosed proxy card in the envelope
provided, even if you plan to attend the Meeting. Returning your proxy card to
us will not prevent you from voting in person at the Meeting if you are present
and choose to do so.
If your shares are held in street name by a brokerage firm, your broker will
supply you with a proxy to be returned to the brokerage firm. It is important
that you return the form to the brokerage firm as quickly as possible so that
the brokerage firm may vote your shares. You may not vote your shares in person
at the Meeting unless you obtain a power of attorney or legal proxy from your
broker authorizing you to vote the shares, and you present this power of
attorney or proxy at the Meeting.
Your Board of Directors and management look forward to greeting you
personally at the Meeting.
Sincerely,
/s/ Brian R. Doster
-------------------
Brian R. Doster
Secretary
CHECKERS DRIVE-IN RESTAURANTS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 29, 2002
Notice is hereby given that the Annual Meeting of Stockholders of Checkers
Drive-In Restaurants, Inc., a Delaware corporation, will be held at the Tampa
Westshore Marriott located at 1001 North Westshore Boulevard, Tampa, Florida,
on May 29, 2002 at 9:00 a.m. Eastern Daylight Savings Time for the following
purposes:
1. To elect two Directors to serve until the Annual Meeting in 2005, until
their successors are elected and qualified or until their earlier
resignation, removal from office or death;
2. To ratify and approve the appointment of KPMG LLP as the Company's
independent auditors for fiscal 2002; and
3. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete description of the matters to be acted upon at the Meeting.
The 2001 Annual Report of the Company is also enclosed. Stockholders of record
at the close of business on April 15, 2002 are entitled to receive notice of
and to vote at the Meeting and any adjournment thereof. A list of such
stockholders will be available for examination by any stockholder, for any
purpose germane to the Meeting, during ordinary business hours, at Checkers
Drive-In Restaurants, Inc., at 4300 West Cypress Street, Suite 600, Tampa,
Florida 33607.
All stockholders are cordially invited to attend the Meeting. Whether or not
you expect to attend, please sign and return the enclosed Proxy promptly in the
envelope provided to assure the presence of a quorum. You may revoke your Proxy
and vote in person at the Meeting if you desire. If your shares are held in
street name by a brokerage firm, your broker will supply you with a proxy to be
returned to the brokerage firm. It is important that you return the form to the
brokerage firm as quickly as possible so that the brokerage firm may vote your
shares. You may not vote your shares in person at the Meeting unless you obtain
a power of attorney or legal proxy from your broker authorizing you to vote the
shares, and you present this power of attorney or proxy at the Meeting.
By order of the Board of Directors,
/s/ Brian R. Doster
-------------------
BRIAN R. DOSTER
Secretary
CHECKERS DRIVE-IN RESTAURANTS, INC.
4300 West Cypress Street, Suite 600
Tampa, Florida 33607
PROXY STATEMENT
This Proxy Statement is furnished by the Board of Directors and management
of Checkers Drive-In Restaurants, Inc. (the "Company") in connection with the
solicitation of proxies to be voted at the Company's 2002 Annual Meeting of
Stockholders, which will be held on May 29, 2002 at 9:00 a.m., at the Tampa
Westshore Marriott located at 1001 North Westshore Boulevard, Tampa, Florida
(the "Meeting").
Any proxy delivered pursuant to this solicitation may be revoked, at the
option of the person executing the proxy, at any time before it is exercised by
delivering a signed revocation to the Company, by submitting a later-dated
proxy, or by attending the Meeting in person and casting a ballot. If proxies
are signed and returned without voting instructions, the shares represented by
the proxies will be voted as recommended by the Board of Directors.
The close of business on April 15, 2002, has been designated as the record
date for the determination of stockholders entitled to receive notice of and to
vote at the Meeting ("Stockholders"). As of February 25, 2002, 10,933,069
shares of the Company's Common Stock, par value $.001 per share (the "Common
Stock") were outstanding. Each Stockholder will be entitled to one vote for
each share of Common Stock registered in his or her name on the books of the
Company as of the close of business on April 15, 2002, on all matters that come
before the Meeting.
The affirmative vote of the majority of the votes cast at the Meeting will
be required for the election of Directors. A properly executed proxy marked
"WITHHOLD AUTHORITY" with respect to the election of one or more Directors will
not be treated as voted with respect to the Directors indicated, although it
will be counted for purposes of determining whether there is a quorum. For each
other item to be acted upon at the Meeting, the affirmative vote of the holders
of a majority of the shares of Common Stock represented in person or by proxy
at the meeting and entitled to vote on the item will be required for approval.
A properly executed proxy marked "ABSTAIN," although counted for purposes of
determining whether there is a quorum, will not be voted. Accordingly, an
abstention will have the same effect as a vote cast against such other matters.
In accordance with the rules of the NASDAQ National Market, brokers and
nominees may be precluded from exercising their voting discretion with respect
to certain matters to be acted upon (e.g., any proposal which would
substantially affect the rights or privileged of the Common Stock) and thus, in
the absence of specific instructions from the beneficial owner of shares, will
not be empowered to vote the shares on such matters. If a broker indicated that
it does not have discretionary authority as to certain shares to vote on a
particular matter, such shares will not be considered as present and entitled
to vote with respect to that matter. Shares represented by such broker non-
votes will, however, be counted for purposes of determining whether there is a
quorum.
The cost of soliciting proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited personally or by telephone by
regular employees of the Company. The Company does not expect to pay any
compensation for the solicitation of proxies, but may reimburse brokers and
other persons holding stock in their names, or in the names of nominees, for
their expense in sending proxy materials to their principals and obtaining
their proxies. The approximate date on which this Proxy Statement and enclosed
form of proxy has been first mailed to stockholders is May 2, 2002.
ELECTION OF DIRECTORS
There are currently nine seats on the Board of Directors, with no vacancies.
The Board is divided into three classes of Directors serving staggered three-
year terms. Directors hold their positions until the annual meeting of
stockholders in the year in which their term expires and until their respective
successors are elected and qualified or until their earlier resignation,
removal from office or death. The terms of office of two of the Company's
Directors, William P. Foley, II and Clarence V. McKee, will expire at the
Meeting. The Board of Directors has determined, pursuant to the authority
granted to it in the Certificate of Incorporation, to reduce, at this time, the
number of seats on the Board of Directors from nine to seven, effective as of
the date of the Meeting. The Company's Certificate of Incorporation requires
that the Board of Directors be divided into three classes, each class
consisting, as nearly as possible, of one-third of the total number of
directors. Accordingly, to comply with the staggered term requirement, two of
the four members whose terms expire at the annual meeting in 2004 are running
for election until the annual meeting in 2005, resulting in one class of three
directors whose terms expire in 2003, a second class of two directors whose
terms expire in 2004, and a third class of two directors whose terms expire in
2005. The Board of Directors unanimously recommends that you vote "FOR" the
election of Messrs. O'Hara and Dorsch as Directors, to hold office until the
Company's annual meeting in 2005 and until their successors shall be duly
elected and qualified or until their earlier resignation, removal from office
or death. See "Management--Directors and Executive Officers" and Security
Ownership of Management and Others" for further information on each nominee.
Stockholders may vote for up to two nominees. Stockholders may not vote
cumulatively in the election of Directors.
MANAGEMENT
The following table sets forth the names and ages of the Directors and
executive officers of the Company and the positions they hold. Executive
officers serve at the pleasure of the Board of Directors.
Directors and Executive Officers
Name Age Position
---- --- --------
Chairman of the Board of Directors (term expiring
Ronald B. Maggard..... 52 in 2003)
Peter C. O'Hara....... 46 Vice Chairman of the Board of Directors and
Director
(term expiring in 2004) Nominee for Director with
term expiring in 2005
Daniel J. Dorsch...... 49 President, Chief Executive Officer and Director
(term expiring in 2004) Nominee for Director with
term expiring in 2005
Terry N. Christensen.. 61 Director (term expiring in 2004)
Willie D. Davis....... 67 Director (term expiring in 2004)
David Gotterer........ 73 Director (term expiring in 2003)
William P. Foley, II.. 57 Director (term expiring in 2002)
Clarence V. McKee..... 59 Director (term expiring in 2002)
Burt Sugarman......... 63 Director (term expiring in 2003)
Directors
RONALD B. MAGGARD has served as a director since August 1999, and as
Chairman of the Board since September 2001. For more than the past five years,
Mr. Maggard has been President of Maggard Enterprises, Newport Beach, CA, which
owns 20 franchised Long John Silver. Mr. Maggard also served as a director of
Santa Barbara Restaurant Group, until its merger with CKE Restaurants, Inc.
PETER C. O'HARA has served as a director since June 1998 and Vice Chairman
since September 1999. He has served as president of Capital Management of L.I.,
N.Y., Inc., a Checkers franchise area developer for Long Island, New York,
since March 1994.
2
DANIEL J. DORSCH has served as the Chief Executive Officer, President and a
director since December 1999. Mr. Dorsch was also Chief Executive Officer and
President of Jordan, Nicholas, Elliott, Inc. from November 1993 to November
1999 in Tampa, Florida, a multi-unit franchise owner for Papa John's Pizza.
Since 1994, Mr. Dorsch has also owned and operated franchises with Honda,
Kawasaki, Yamaha, Suzuki, & Seadoo.
BURT SUGARMAN has served as a director since June 1997. Mr. Sugarman has
been the Chairman of the Board, President and Chief Executive Officer of Giant
Group, Ltd. for the past five years and also served as a director of Santa
Barbara Restaurant Group until its merger with CKE Restaurants, Inc. Mr.
Sugarman served as Chairman of the Board of Rally's Hamburgers, Inc. from
November 1994 to October 1997.
TERRY N. CHRISTENSEN has served as a director since November 1996. Mr.
Christensen has been a partner in the law firm of Christensen, Miller, Fink,
Jacobs, Glaser, Weil & Shapiro, LLP since May 1988. Mr. Christensen is a
director of Giant Group, Ltd. and MGM Mirage. Christensen, Miller, Fink,
Jacobs, Glaser, Weil & Shapiro, LLP performed legal services for us in 2000 and
2001. Such services have related to litigation, compliance with securities laws
and other business matters.
WILLIE D. DAVIS has served as a director since August 1999. Mr. Davis has
been the President and a director of All-Pro Broadcasting, Inc., a holding
company operating several radio stations, for more than the past five years.
Mr. Davis currently also serves on the board of directors of Sara Lee
Corporation, K-Mart Corporation, Dow Chemical Company, Metro-Goldwyn-Mayer
Inc., MGM Mirage, Basset Furniture Industries, Incorporated and the Strong
Fund.
DAVID GOTTERER has served as a director since August 1999. Mr. Gotterer has
been a partner in the accounting firm of Mason & Company, LLP, New York, New
York, for more than the past five years. Mr. Gotterer is a director and Vice
Chairman of Giant Group, Ltd.
The following two individuals were members of the Board of Directors during
the Company's 2001 fiscal year whose terms expire at the Meeting and who are
not standing for re-election.
WILLIAM P. FOLEY, II has served as a director since November 1996. Mr. Foley
has been Chairman of the Board of Santa Barbara Restaurant Group, Inc. since
July 1997. He has been the Chairman of the Board and Chief Executive Officer of
Fidelity National Financial, Inc. which, through its subsidiaries, is a title
insurance underwriting company, since its formation in 1984. He has been
Chairman of the Board and Chief Executive Officer of Fidelity National Title
Insurance Company since April 1981. Mr. Foley is also currently serving as
Chairman of the Board of Directors of CKE Restaurants, Inc., owner, operator
and franchisor of quick-service restaurants, primarily under the Carl's Jr. and
Hardee's brand names, and is a director of Micro General Corporation, Miravant
Medical Technologies and Fresh Foods, Inc.
CLARENCE V. McKEE has served as a director since June 1996. Mr. McKee has
been the President and Chief Executive Officer of McKee Communications, Inc., a
Tampa, Florida based company engaged in the acquisition and management of
communications companies, since October 1992. He is a former chairman of the
Florida Association of Broadcasters and former director of Florida Progress
Corporation and its subsidiary Florida Power Corporation.
Executive Officers
Set forth below is a description of the business experience and the ages of
our executive officers, other than Mr. Dorsch, whose experience is described
above. Executive officers serve at the discretion of our Board of Directors.
STEVE COHEN (50) has served as our Senior Vice President of Human Resources
since December 1997. From May 1995 to December 1997, Mr. Cohen was the Field
Human Resources Manager for EZCorp in Austin, Texas.
DAVID G. KOEHLER (44) has served as our Chief Financial Officer, Vice
President of Finance and Treasurer since August 2001. Mr. Koehler is a
certified public accountant with over 17 years of experience in
3
Accounting, Investment Banking, Corporate Finance, and Information Technology.
Previously he was Vice President of Finance at Pinnacle Towers from 1999 to
2001, and Chief Financial Officer of Fauquier Bank from 1994 to 1999.
Additionally, he worked in PricewaterhouseCoopers LLP's and Ernst & Young's
consulting practices.
ADAM NOYES (32) has served as Vice President of Purchasing and Operations
since August 2000. He served as Vice President of Purchasing and Quality
Assurance from October 1998 to August 2000. He was Senior Director of
Purchasing from May 1998 to September 1998 and Director of Purchasing from June
1996 to April 1998. Prior to this, Mr. Noyes served Checkers in the capacity of
restaurant support services from April 1991 to May 1996.
KEITH SIROIS (50) has served as Vice President of Franchise Operations since
September 1999. From September 1998 to September 1999, he served as Checkers'
Director of Franchise Operations. Mr. Sirois served as a franchise business
consultant with Checkers from August 1996 to September 1998. From March 1992 to
September 1996, Mr. Sirois served as Vice President of Franchise Operations for
Heartwise Express, Inc. in Chicago, Illinois.
RICHARD TURER (40) has served as Vice President of Marketing since September
1999. From July 1998 to September 1999, Mr. Turer served as Director of
Marketing for Checkers and Rally's brands. From May 1995 to July 1998, he was
self-employed and operated Mill House McCabe, a marketing and promotional
company, in Sparta, New Jersey.
BRIAN R. DOSTER (43) has served as Vice President, Corporate Counsel and
Secretary since November, 2000. He served previously as Assistant General
Counsel and Assistant Secretary of Checkers since April 1999 and September
1999, respectively. From November 1985 to April 1999, he was a corporate
attorney for Amoco Corporation in Chicago, Illinois. Mr. Doster is also a
Director of Tampa Community Health Centers, Inc., a not for profit provider of
health services, since January 2002.
No family relationships exist between any of the directors and the executive
officers of the Company. There are no arrangements or understandings between
any director and any other person concerning service or nomination as a
director.
The Board of Directors held seven meetings during 2001 and acted one time by
unanimous written consent without a meeting. In 2001, each incumbent Director
attended at least 75% of the meeting of the Board of Directors and of each
committee of which he was a member. The Chairman and other Board members
periodically communicate with one another during the year regarding Company
business in between meetings.
Committees of the Board of Directors
The Board of Directors has Executive, Audit, Compensation and Stock Option
and Nomination Committees.
During 2001, the Audit Committee consisted of Ronald B. Maggard, Clarence V.
McKee, and David Gotterer who was elected to the Committee in January 2000. The
Committee held four meetings. The Audit Committee recommends the appointment of
the independent auditors of the Company, discusses and reviews the scope and
fees of the prospective annual audit and reviews the results thereof with the
independent auditors, reviews and approves non-audit services of the
independent auditors, reviews compliance with existing major accounting and
financial policies of the Company, reviews the adequacy of the financial
organization of the Company, reviews management's procedures and policies
relative to the adequacy of the Company's internal accounting controls and
compliance with federal and state laws relating to accounting practices, and
reviews and approves (with the concurrence of the majority of the disinterested
Directors of the Company) transactions, if any, with affiliated parties. During
the year, the Board examined the composition of the Audit Committee in
4
light of the adoption by the Securities and Exchange Commission and the NASDAQ
Exchange rules governing audit committees. Based upon this examination, the
Board confirmed that all members of the Audit Committee are "independent"
within the meaning of the listing standards of the NASDAQ Stock Market. In
addition, the Committee reviewed its Charter and declared it effective for the
current year.
During 2001, the Executive Committee consisted of Ronald Maggard, who
replaced Mr. Foley upon becoming the Chairman of the Board, Peter O'Hara and
Daniel J. Dorsch and held one meeting. The Executive Committee has the
authority between meetings of the Board, to take all actions with respect to
the management of the Company's business that require action by the Board,
except with respect to certain specified matters that by law must be approved
by the entire Board.
During 2001, the Compensation Committee, inclusive of the Stock Option
Committee, consisted of Peter C. O'Hara, William P. Foley, II and Burt Sugarman
and held one meeting. Its principal function is to make recommendations to the
Board of Directors with respect to compensation and benefits to be paid to
officers, and perform other duties prescribed by the Board with respect to
employee stock plans and benefit programs.
During 2001, the Nomination Committee consisted of Peter C. O'Hara, William
P. Foley, II and Willie D. Davis. During the 2001, the committee held one
meeting. The Nomination Committee proposes a slate of directors for election by
the shareholders at each annual meeting, and candidates to fill vacancies on
the Board of Directors. The Nomination Committee will consider written
recommendations from stockholders for nominations to the Board of Directors in
accordance with the procedures set forth in the By-Laws of the Company. See
"Stockholder proposals for presentation at the 2003 Annual Meeting."
Compensation of Directors
Directors who are our employees receive no extra compensation for their
services as directors. Directors who are not employees receive a director's fee
of $2,500 per quarter. In addition, these independent directors receive $2,500
for each board meeting, $1,000 for each committee meeting they attend, plus out
of pocket expenses. Non-employee directors also participate in the 1994 Stock
Option Plan for Non-Employee Directors, which provides for the automatic grant
to each non-employee director, upon election to the board of directors, of a
non-qualified, ten-year option to acquire 8,333 shares of the common stock,
with the subsequent automatic grant on the first day of each fiscal year
thereafter of a non-qualified, ten-year option to acquire an additional 1,667
shares of common stock. All such options have an exercise price equal to the
closing sale price of the common stock on the date of grant. One-fifth of each
initial option granted pursuant to the plan before August 6, 1997 become
exercisable on a cumulative basis on each of the first five anniversaries of
the date of the grant of the option. One-third of each annual option granted
pursuant to the plan before August 6, 1997 becomes exercisable on a cumulative
basis on each of the first three anniversaries of the date of the grant of the
option. Pursuant to a proposal approved by stockholders at the Annual Meeting
in 1999, the Chairman of the Board received an option to purchase 40,000
shares, the Vice-Chairman received an option to purchase 20,000 shares and all
other non-employee directors received options to purchase 10,000 shares of the
Company's common stock. Pursuant to a proposal approved by stockholders at the
Annual Meeting in 2000, the Chairman of the Board received an option to
purchase 125,000 shares, the Vice Chairman received an option to purchase
25,000 shares and all other non-employees directors received options to
purchase 50,000 shares of the Company's common stock. All options granted
pursuant to this plan on or after August 6, 1997 are exercisable immediately
upon grant. Options are exercisable whether or not the non-employee director,
at the time of exercise, is a member of the Board of Directors, unless the
director is removed for cause.
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro LLP, a law firm in
which Mr. Christensen is a named partner, performed legal services for the
Company during 2001 and 2000 amounting to $45,000 and $457,000, respectively.
Such services were related to the defense of certain litigation, compliance
with securities laws and other business matters.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, officers and holders of more than 10% of the Company's
common stock to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership. David G. Koehler, the
Company's Chief Financial Officer, Vice President of Finance and Treasurer, was
delinquent in filing an initial Statement of Beneficial Ownership on Form 3
upon appointment as an executive officer of the Company, although at the time
such filing was due, Mr Koehler did not beneficially own any shares of the
Company. Terry N. Christensen, a director of the Company, was late in filing a
required Form 5 with respect to the Company's 2001 fiscal year. Based solely on
a review of forms, reports and certificates filed with the Company by such
persons, all other Section 16(a) filing requirements were complied with by such
persons in 2001.
The following table sets forth certain information as of March 25, 2002,
relating to the beneficial ownership of the common stock by (a) all persons
known by us to beneficially own more than 5% of the outstanding shares of the
common stock, (b) each director, director nominee and executive officer and,
(c) all officers and directors as a group. We had 11,176,310 shares outstanding
as of March 25, 2002.
Number of
Shares Percentage of
Beneficially Shares
Name and Address of Beneficial Owner(1)(2)(3) Owned(1) Outstanding(4)
--------------------------------------------- ------------ --------------
CKE Restaurants, Inc.(5).......................... 1,158,893 9.8%
3916 State Street, Suite 300, Santa Barbara, CA
93105
Giant Group, LTD(6)............................... 994,699 8.7%
9440 Santa Monica Blvd, #407, Beverly Hills, CA
90210
Calm Waters Partnership........................... 988,500 8.8%
100 Heritage Reserve, Menomonee Falls, WI 53051
FMR Corp.......................................... 944,700 8.5%
82 Devonshire Street, Boston, MA 02109
FleetBoston Financial Corporation................. 714,100 6.4%
100 Federal Street, Boston, MA 02110
Burt Sugarman(7).................................. 325,606 2.8%
Daniel J. Dorsch(8)............................... 310,360 2.8%
Peter C. O'Hara(9)................................ 273,751 2.4%
William P. Foley, II(10).......................... 200,040 1.8%
Ronald B. Maggard(11)............................. 160,999 1.4%
Terry N. Christensen(12).......................... 148,497 1.3%
Willie Davis(13).................................. 147,256 1.3%
David Gotterer(14)................................ 142,281 1.3%
Clarence V. McKee(15)............................. 77,518 *
Steven Cohen(16).................................. 27,555 *
Adam Noyes(17).................................... 9,529 *
Keith Sirois(18).................................. 6,351 *
Richard Turer(19)................................. 5,000 *
All officers and directors as a group (15 1,837,472 16.2%
persons)(20).....................................
--------
* Represents less than 1% of our outstanding common stock.
(1) Unless otherwise noted, we believe that all shares are beneficially owned
and that all persons named in the table have sole voting and investment
power with respect to all shares of common stock owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from March 25, 2002, upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person
6
(but not those held by any other person) and which are exercisable within
60 days from March 25, 2002 have been exercised.
(3) Unless otherwise indicated, the address of each stockholder listed is 4300
West Cypress Street Suite 600, Tampa, Florida 33607.
(4) Percentage calculation assumes owners' derivative securities exercisable
within 60 days from March 25, 2002 have been exercised.
(5) Includes 612,536 shares issuable upon the exercise of presently
exercisable warrants.
(6) Includes 237,416 shares issuable upon the exercise of presently
exercisable warrants held by KCC Delaware, a wholly-owned subsidiary of
Giant Group, LTD.
(7) Includes 322,274 shares subject to options and warrants. Excludes 994,699
shares and warrants held to purchase shares held by Giant Group, Ltd., as
to which Mr. Sugarman disclaims beneficial ownership. Mr. Sugarman is
Chairman of the Board and Chief Executive Officer of Giant Group Ltd.
(8) Includes 75,000 shares issuable upon the exercise of presently
exercisable stock options.
(9) Includes 256,668 shares issuable upon the exercise of presently
exercisable stock options.
(10) Includes 166,649 shares subject to options and warrants. Excludes the
1,158,893 shares and warrants to purchase shares held by CKE Restaurants,
Inc. as to which Mr. Foley disclaims beneficial interest. Mr. Foley is
Chairman of the Board of CKE Restaurants, Inc. Also excludes 175,688
shares held by Fidelity National Financial, Inc., as to which Mr. Foley
disclaims beneficial ownership. Mr. Foley is Chairman of the Board and
Chief Executive Officer of Fidelity National Financial, Inc.
(11) Includes 128,344 shares issuable upon the exercise of presently
exercisable stock options.
(12) Includes 143,990 shares issuable upon the exercise of presently
exercisable stock options.
(13) Includes 147,256 shares issuable upon the exercise of presently
exercisable stock options.
(14) Includes 142,281 shares issuable upon the exercise of presently
exercisable stock options.
(15) Includes 73,335 shares issuable upon the exercise of presently
exercisable stock options.
(16) Includes 26,637 shares issuable upon the exercise of presently
exercisable stock options.
(17) Includes 9,088 shares issuable upon the exercise of presenting
exercisable stock options.
(18) Includes 5,833 shares issuable upon the exercise of presenting
exercisable stock options.
(19) Includes 5,000 shares issuable upon the exercise of presenting
exercisable stock options.
(20) Includes an aggregate of 1,504,022 shares issuable upon the exercise of
presently exercisable stock options and warrants held by officers and
directors of the company.
7
EXECUTIVE COMPENSATION
The following table is a summary of the compensation earned for the last
three fiscal years for services in all capacities to each of the persons who
qualified as a "named executive officer" under item 402(a)(3) of Regulation S-
K. All amounts shown before the Merger between the Company and Rally's
Hamburgers, Inc. in August 1999 include compensation paid by both Checkers and
Rally's pursuant to the management service agreement between the companies.
Long-Term
Compensation
---------------------
Annual Compensation Awards Payouts
---------------------- ---------- ----------
Securities
Underlying
Name and Principal Other Annual Options LTIP All Other
Position Year Salary Bonus ($) Compensation($) SARs(#) Payouts($) Compensation($)
------------------ ---- ------- --------- --------------- ---------- ---------- ---------------
Daniel J. Dorsch(1)..... 2001 441,692 220,000 -- -- -- 333(2)
Chief Executive Officer 2000 219,998 70,000 -- 500,000 -- 10,245(3)
1999 9,315 -- -- 100,000 -- --
Steven Cohen............ 2001 145,904 71,428 -- 30,000 -- 82(2)
Vice President, Human 2000 134,968 7,000 -- 15,000 -- 243(2)
Resources 1999 134,432 -- -- -- -- 481(2)
Adam Noyes.............. 2001 125,000 71,428 -- 30,000 -- 6,300(4)
Vice President, 2000 107,984 7,000 -- 15,000 -- 2,190(5)
Purchasing and 1999 91,006 -- -- -- -- 179(2)
Operations
Keith Sirois............ 2001 125,000 71,428 41,179(6) 30,000 -- 6,114(7)
Vice President of 2000 110,354 7,000 -- 15,000 -- 6,096(8)
Franchise Operations 1999 84,432 -- -- -- -- 3,249(9)
Richard Turer........... 2001 120,481 71,428 -- 30,000 -- 60(2)
Vice President of 2000 117,212 7,000 -- 15,000 -- 217(2)
Marketing 1999 95,234 -- -- -- -- 107(2)
--------
(1) Mr. Dorsch was appointed as our Chief Executive Officer on December 14,
1999.
(2) Consisting of term life insurance premiums.
(3) Consisting of automobile allowance ($9,849) and term life insurance
premiums ($396).
(4) Consisting of automobile allowance ($6,300) and term life insurance
premiums ($64).
(5) Consisting of automobile allowance ($1,989) and term life insurance
premiums ($201).
(6) Consisting of relocation expenses paid.
(7) Consisting of automobile allowance ($6,060) and term life insurance
premiums ($64).
(8) Consisting of automobile allowance ($5,893) and term life insurance
premiums ($203).
(9) Consisting of automobile allowance ($3,090) and term life insurance
premiums ($159).
Employment Agreements
Effective November 20, 2000, we entered into an employment agreement with
Daniel J. Dorsch, pursuant to which Mr. Dorsch serves as our Chief Executive
Officer and as a Director. This agreement amended the 1999 employment agreement
that we entered into with Mr. Dorsch. Under the terms of the November, 2000
employment agreement, we loaned $100,000 to Mr. Dorsch towards the exercise of
the 100,000 stock options granted to him pursuant to the 1999 employment
agreement at an exercise price of $1.28 per share. The loan, which bears
interest at 5%, is payable by Mr. Dorsch in three equal principal installments,
beginning on January 1, 2002. Mr. Dorsch's term of employment is for three
years, subject to renewal by us for one-year periods thereafter, at an annual
base salary of $440,000. In each successive year of the term, the base salary
8
shall be increased by 5% over the prior year's base salary. Mr. Dorsch is also
entitled to participate in our incentive bonus plans whereby Mr. Dorsch may be
entitled to receive a bonus of up to 50% of his base salary, payable 50% in
cash and 50% in our common stock. Mr. Dorsch is also entitled to participate in
our benefit plans. Upon execution of the November, 2000 employment agreement,
Mr. Dorsch was granted an option to purchase 400,000 shares of our common
stock, which shall fully vest on November 20, 2003. Mr. Dorsch may be
terminated at any time for cause. If Mr. Dorsch is terminated without cause, he
will be entitled to receive his base annual salary, and any earned unpaid
bonus, through the unexpired terms of the agreement, payable in a lump sum or
as directed by Mr. Dorsch. Cause is defined as (i) a material default or breach
under the agreement, (ii) the willful and habitual failure to perform duties
under the agreement or corporate policies, or (iii) misconduct, dishonesty,
insubordination or other act that has a direct substantial and adverse effect
on our reputation or our relationships with our customers or employees.
Option Grants in Fiscal Year 2001
The following table sets forth information regarding options granted to the
named executive officers during fiscal year 2001 pursuant to our stock option
plans:
Individual Grants
----------------------
Potential
Realizable
Rates of Stock
% of Total Price
Number of Options Appreciation
Securities Granted to Exercise for Option
Underlying Employees or Base Term(1)
Options in Price Expiration ---------------
Name Granted(#) Fiscal Year ($/Share) Date 5%($) 10%($)
---- ---------- ----------- --------- ---------- ------- -------
Daniel J. Dorsch... -- 0.00% -- -- -- --
Steven Cohen....... 30,000 14.29% 5.55 6/14/11(2) 104,711 265,358
Adam Noyes......... 30,000 14.29% 5.55 6/14/11(2) 104,711 265,358
Keith Sirois....... 30,000 14.29% 5.55 6/14/11(2) 104,711 265,358
Richard Turer...... 30,000 14.29% 5.55 6/14/11(2) 104,711 265,358
--------
(1) The 5% and 10% assumed annual rates of stock price appreciation are
provided in compliance with Regulation S-K under the Exchange Act. We do
not necessarily believe that these appreciation calculations are
indications of annual future stock option values or that the price of our
common stock will appreciate at such rates.
(2) One third of these options will vest on June 14, 2002, 2003 and 2004,
respectively.
9
Aggregated Option Exercises in Fiscal Year 2001 and Fiscal Year End Option
Values
Set forth below is information with respect to our common stock options
exercised by the named executive officers during fiscal year 2001 and the
number and value of unexercised stock options held by such executives at the
end of the fiscal year.
Value of Unexercised
Number of Unexercised In-the Money Options at
Shares Options at FY-End(#) FY-End($)(1)
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------- ------------------------- -------------------------
Daniel J. Dorsch........ -- -- 50,000/450,000 $204,938/452,250
Steven Cohen............ -- -- 26,637/40,000 $62,829/57,450
Adam Noyes.............. -- -- 9,088/40,000 $26,668/57,450
Keith Sirois............ -- -- 5,833/40,000 $21,383/57,450
Richard Turer........... -- -- 5,000/40,000 $20,025/57,450
--------
(1) Based upon the difference between the exercise price and closing price of
our common stock as reported on the NASDAQ National Market on December 31,
2001 of $6.13.
Transactions with Management and Others
Pursuant to our current employment agreement with Mr. Dorsch, the Company
accepted a $100,000 note on December 14, 2000 in connection with the exercise
of 100,000 stock options. The Company will receive 3 equal annual payments on
January 1, beginning in 2002. Interest on the unpaid principal portion
accumulates at a rate of 5% per annum.
On July 1, 1996, the Company entered into a ten-year operating agreement
with Carl Karcher Enterprises, Inc., the subsidiary of CKE that operates the
Carl's Jr. restaurant chain. Pursuant to the agreement, CKE began operating 29
Rally's owned restaurants located in California and Arizona, two of which were
converted to a Carl's Jr. format. Including closures from prior periods, there
were 23 remaining restaurants as of July 3, 2001, when we repossessed and began
operating 21 of the 23 restaurants. CKE continues to operate the two converted
to the Carl's Jr. format. During fiscal year 2001, the Company collected
$333,000 from CKE related to this agreement. The original agreement was
approved by a majority of the independent Directors of the Company. Prior to
the agreement, the Company's independent Directors had received an opinion as
to the fairness of the agreement, from a financial point of view, from an
investment banking firm of national standing.
10
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee 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.
As set forth in more detail in the charter, the Audit Committee's primary
responsibilities fall into three (3) broad categories:
First, the Committee is charged with monitoring the preparation of
quarterly and annual financial reports by the Company's management,
including discussions with management and the Company's independent
auditors about its annual financial statements and key accounting and
reporting matters;
Second, the Committee is responsible for matters concerning the
relationship between the Company and its independent auditors, including
recommending their appointment or removal; reviewing the scope of their
audit services and related fees, as well as any other services being
provided to the Company; and determining whether the independent auditors
are independent (based in part on the annual letter provided to the Company
pursuant to Independence Standards Board Standard No. 1); and
Third, the Committee oversees management's implementation of effective
systems of internal controls, including review of policies relating to
legal and regulatory compliance, ethics and conflicts of interests; and
review of the activities and recommendations of the Company's internal
auditing program.
The Committee has implemented procedures to ensure that during the course of
each fiscal year it devotes the attention that it deems necessary or
appropriate to each of the matters assigned to it under the Committee's
charter. To carry out its responsibilities, the Committee met four times during
fiscal year 2001.
In overseeing the preparation of the Company's financial statements, the
Committee met with both management and the Company's independent auditors to
review and discuss the financial statements prior to their issuance and to
discuss significant accounting and reporting matters. Management advised the
Committee that the financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, and
the Committee discussed the statements with both management and the independent
auditors. The Committee's review included discussion with the independent
auditors of matters required to be discussed pursuant to Statement on Auditing
Standards No. 61 (Communication With Audit Committees), as amended.
With respect to the Company's independent auditors, the Committee, among
other things, discussed with KPMG LLP matters relating to its independence,
including the disclosures made to the Committee as required by the Independence
Standards Board Standard No. 1 (Independence Discussions With Audit
Committees).
On the basis of these reviews and discussions, the Committee recommended to
the Board of Directors that the Board approve the inclusion of the Company's
audited consolidated financial statements in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, for filing with the
Securities and Exchange Commission.
Members of the Audit Committee
/s/ David Gotterer, Chairman
/s/ Ronald Maggard
/s/ Clarence V. McKee
11
REPORT OF THE COMPENSATION COMMITTEE
The following Report was prepared by the members of our compensation
committee at the end of fiscal year 2001.
Annual compensation for all of our executive officers is determined by the
compensation committee of our Board of Directors, subject to the terms of any
applicable employment agreement negotiated between us and an executive officer.
During fiscal year 2001, annual compensation was set with the intent of
reasonably compensating the executive officers including the Chief Executive
Officer, in line with industry norms, based upon the committee members'
subjective evaluation of each officer and his respective assigned
responsibilities and individual performance. The committee also considered
growth of the company, earnings of the company and increases in the cost of
living.
During fiscal year 2001, awards of stock options under our 1991 Stock Option
Plan to all executive officers, excluding the Chief Executive Officer, were
made at the discretion of the members of the committee pursuant to the terms of
the plan. In determining awards under the plan, the committee makes a
subjective evaluation of individual responsibilities, past and anticipated
potential individual productivity and performance and past and anticipated
contributions to the profitability of the company, both direct and indirect.
The committee does not give particular weight to a specific factor or use a
formula in determining awards under the plan. While not required under the
terms of the plan, all existing stock options were granted with an exercise
price at least equal to the market value of the stock at the time of the grant
and generally include vesting periods which the committee believed would
encourage the employee to remain with the company. The benefits derived from
each stock option granted under the plan is directly attributable to a future
increase in the value of the company's common stock.
We are required to disclose our policy regarding qualifying executive
compensation deductibility under Section 162(m) of the Internal Revenue Code of
1986, as amended, which provides that, for the purposes of the regular income
tax and the alternative minimum tax, the otherwise allowable deduction for
compensation paid or accrued with respect to a covered employee of a public
corporation is limited to no more than $1 million per year. It is not expected
that the compensation to be paid to our executive officers for fiscal year 2001
will exceed the $1 million limit per officer. Our 1991 and successor 2001 Stock
Option Plans were structured so that any compensation deemed paid to an
executive officer when he exercises an outstanding option under the plan with
an exercise price equal to the fair market value of the option shares on the
grant date, will qualify as performance-based compensation that will not be
subject to the $1 million limitation.
COMPENSATION COMMITTEE MEMBERS
/s/ Peter C. O'Hara
/s/ William P. Foley, II
/s/ Burt Sugarman
12
COMPARISON OF FIVE YEAR TOTAL RETURN(/1/)
FOR CHECKERS DRIVE-IN RESTAURANTS, INC.(/2/), S & P 500 INDEX AND PEER GROUP
INDEX(/3/)
1996 1997 1998 1999 2000 2001
------- ------ ------ ------ ------ ------
Checkers Drive In Restaurants,
Inc........................... $100.00 54.17 20.83 11.83 20.50 34.06
S & P 500 Index................ 100.00 131.01 165.95 198.35 178.24 154.99
Peer Group..................... 100.00 127.47 131.58 117.66 156.38 183.71
--------
(1) The foregoing graph assumes $100 invested on December 31, 1996, in the
Company, the S&P 500 Index and a peer group made up of five companies in
the same industry.
(2) Total return is adjusted for a one-for-12 reverse stock split of the
Company's common stock in August 1999, and assumes reinvestment of any
dividends for all companies.
(3) The peer group consists of Wendy's International, Sonic Corporation, Jack
in the Box, Inc., CKE Restaurants, Inc. and Papa John's International,
Inc. The rate of return for the peer group is based upon their relative
market capitalization as of March 19, 2002.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is responsible for
executive compensation decisions. During fiscal year 2001, the committee was
comprised of Messrs. Foley, Davis and O'Hara. Mr. Foley is chairman of the
Board and Chief Executive Officer of Fidelity National Financial, Inc. and
Chairman of the Board of CKE Restaurants, Inc. which, as of March 25, 2002,
beneficially owned approximately 1.4% and 9.8%, respectively, of the
outstanding shares, or warrants to purchase shares, of our common stock.
On July 1, 1996, the Company entered into a ten-year operating agreement
with Carl Karcher Enterprises, Inc., the subsidiary of CKE that operates the
Carl's Jr. restaurant chain. Pursuant to the agreement, CKE began operating 29
Rally's owned restaurants located in California and Arizona, two of which were
converted to a Carl's Jr. format. Including closures from prior periods, there
were 23 remaining restaurants as of July 3, 2001, when we repossessed and began
operating 21 of the 23 restaurants. CKE continues to operate the two converted
to the
13
Carl's Jr. format. During fiscal year 2001, the Company collected $333,000 from
CKE related to this agreement. The original agreement was approved by a
majority of the independent Directors of the Company. Prior to the agreement,
the Company's independent Directors had received an opinion as to the fairness
of the agreement, from a financial point of view, from an investment banking
firm of national standing.
INDEPENDENT AUDITORS
The Company has engaged KPMG LLP as its independent auditors since becoming
a publicly traded company. KPMG LLP reported on the consolidated financial
statements of the Company for the fiscal year ended December 31, 2001 and it is
currently anticipated that KPMG LLP will be selected by the Board of Directors
to audit and report on the financial statements of the Company for the year
ending December 30, 2002.
Audit Fees. The aggregate fees billed by KPMG LLP for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2001 (the "2001 fiscal year") and the reviews of
the financial statements included in the Company's Form 10-Q's for the 2001
fiscal year totaled $268,000.
Financial Information Systems Design and Implementation Fees. There were no
fees billed for professional services related to financial information systems
design and implementation by KPMG LLP for the 2001 fiscal year.
All Other Fees. The aggregate fees billed for services rendered by KPMG LLP,
other than for audit and information technology services, described in the
preceding two paragraphs, totaled $94,000 for fiscal 2001. These other fees
were primarily for statutory audits and other regulatory compliance reporting.
PROPOSAL NO. 2
RATIFICATION AND APPROVAL OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company has engaged the firm of KPMG LLP, independent certified public
accountants, to report upon the financial statements included in the Annual
Report submitted herewith. A representative from said firm will be in
attendance at the Meeting, will have the opportunity to make a statement if
desired, and will be available to respond to any questions from those in
attendance. The Company has appointed KPMG LLP to report upon its financial
statements for the fiscal year ending December 30, 2002, subject to
ratification of such appointment by the stockholders at the Meeting.
Stockholder ratification of the Company's independent certified public
accountants is not required by the Company's By-Laws or otherwise. The Board of
Directors has elected to seek such ratification as a matter of good corporate
practice and unanimously recommends that you vote "FOR" such ratification. If
the stockholders do not ratify this appointment, other certified public
accountants will be considered by the Board of Directors upon recommendation of
the Audit Committee.
14
OTHER BUSINESS
Management of the Company does not know of any other business that may be
presented at the Meeting. If any matter not described herein should be
presented for stockholder action at the Meeting, the persons named in the
enclosed Proxy will vote the shares represented thereby in accordance with
their best judgment.
STOCKHOLDER PROPOSALS FOR
PRESENTATION AT THE 2003 ANNUAL MEETING
The Board of Directors requests that any stockholder proposals intended for
presentation at the 2003 Annual Meeting be submitted to Brian Doster,
Secretary, in writing no later than March 14, 2003, for consideration for
inclusion in the Company's proxy materials for such meeting.
The Company's By-Laws require certain advance notice to the Company of any
nominations by stockholders of persons to stand for election as directors at
stockholders' meetings. Notice of director nominations must be timely given in
writing to the Secretary of the Company prior to the meeting at which the
directors are to be elected. To be timely, notice must be received at the
principal executive offices of the Company not less than 60 nor more than 90
days prior to the meeting of stockholders; provided, however, that in the event
that less than 70 days' notice or prior public disclosure of the date of the
meeting us given or made to the stockholders, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the tenth day following the day on which such notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual meeting was
made, whichever first occurs.
A stockholder's notice with respect to a director nomination must set forth
(i) certain information about the nominee, (ii) the consent of the nominee to
serve as a director if elected, (iii) the name and record address of the
nominating stockholder, iv) the class or series and number of shares of the
Company which are beneficially owned by such stockholder, (v) a description of
all arrangements or understandings between such stockholder and each proposed
nominee and any other person pursuant to which the nominations are to be made,
(vi) a representation that such stockholder persons named, and (vii) certain
other information.
The complete By-Law provisions governing these requirements are available to
any stockholder without charge upon request from the Secretary of the Company.
15
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
2001. WRITTEN REQUESTS, ACCOMPANIED BY A GOOD FAITH REPRESENTATION THAT, AS OF
APRIL 15, 2002, THE PERSON MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF
COMMON STOCK, SHOULD BE DIRECTED TO CHECKERS DRIVE-IN RESTAURANTS, INC., 4300
WEST CYPRESS STREET, SUITE 600, TAMPA, FL 33607, ATTENTION: CORPORATE
SECRETARY.
By Order of the Board of Directors,
/s/ Brian R. Doster
-------------------
BRIAN R. DOSTER
Secretary
Dated: May 2, 2002
16
PROXY
CHECKERS DRIVE-IN RESTAURANTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS--May 29, 2002
The undersigned hereby appoints Ronald B. Maggard, Peter C. O'Hara and Daniel
J. Dorsch, and each of them, proxies with full power of substitution, for and
in the name of the undersigned to vote all shares of Common Stock of Checkers
Drive-In Restaurants, Inc., a Delaware corporation (the "Company"), that the
undersigned would be entitled to vote at the Company's 2002 Annual Meeting of
Stockholders to be held on May 29, 2002 (the "Meeting"), and at any
adjournments thereof, upon the matters set forth in the Notice of the Meeting
as stated hereon, hereby revoking any proxy heretofore given. In their
discretion, the proxies are further authorized to vote upon such other business
as may properly come before the Meeting or any adjournments thereof.
The undersigned acknowledges receipt of the Notice of the Meeting and the
accompanying Proxy Statement, Annual Report and Form 10-K.
--------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
ADMISSION TICKET
ANNUAL MEETING OF STOCKHOLDERS
OF
CHECKERS DRIVE-IN RESTAURANTS, INC.
May 29, 2002 @ 9:00 A.M, EASTERN DAYLIGHT SAVINGS TIME
---------------------
TAMPA, FLORIDA
(Continued from other side)
PROXY
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
Please mark your vote as indicated in this example [X]
DIRECTORS
Directors recommend: A
vote for election of
the following nominees
1. 01-Peter C. O'Hara,
02-Daniel J. Dorsch
For, except vote withheld from the following nominee(s):
--------------------------------------------------------
PROPOSAL(S)
FOR WITHHELD ABSTAIN
2. Ratify and approve
the appointment of
KPMG LLP as
independent auditors [_] [_] [_]
THIS PROXY WILL BE VOTED AS DIRECTOR OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS LISTED
ABOVE, FOR APPROVAL OF THE PROPOSALS SET FORTH ABOVE AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
SIGNATURE _____________________________ SIGNATURE ______________________________
Date: _________________________________ Date: __________________________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.